02 Farrell Webcast V1 Kk


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02 Farrell Webcast V1 Kk

  1. 1. Strategic Context For Our 2020 Vision John Farrell Vice President, Strategic Planning
  2. 2. Forward-Looking Statements This presentation may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from The Coca-Cola Company’s historical experience and our present expectations or projections. These risks include, but are not limited to, obesity and other health concerns; scarcity and quality of water; changes in the nonalcoholic beverages business environment, including changes in consumer preferences based on health and nutrition considerations and obesity concerns; shifting consumer tastes and needs, changes in lifestyles and competitive product and pricing pressures; impact of the global credit crisis on our liquidity and financial performance; our ability to expand our operations in developing and emerging markets; foreign currency exchange rate fluctuations; increases in interest rates; our ability to maintain good relationships with our bottling partners; the financial condition of our bottling partners; our ability and the ability of our bottling partners to maintain good labor relations, including the ability to renew collective bargaining agreements on satisfactory terms and avoid strikes, work stoppages or labor unrest; increase in the cost, disruption of supply or shortage of energy; increase in cost, disruption of supply or shortage of ingredients or packaging materials; changes in laws and regulations relating to beverage containers and packaging, including container deposit, recycling, eco-tax and/or product stewardship laws or regulations; adoption of significant additional labeling or warning requirements; unfavorable general economic conditions in the United States or other major markets; unfavorable economic and political conditions in international markets, including civil unrest and product boycotts; changes in commercial or market practices and business model within the European Union; litigation uncertainties; adverse weather conditions; our ability to maintain brand image and corporate reputation as well as other product issues such as product recalls; changes in legal and regulatory environments; changes in accounting standards and taxation requirements; our ability to achieve overall long-term goals; our ability to protect our information systems; additional impairment charges; our ability to successfully manage Company-owned bottling operations; the impact of climate change on our business; global or regional catastrophic events; and other risks discussed in our Company’s filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Coca-Cola Company undertakes no obligation to publicly update or revise any forward-looking statements. Reconciliation To US GAAP Financial Information The following presentation includes certain “non-GAAP financial measures” as defined in Regulation G under the Securities Exchange Act of 1934. A schedule is posted on the Company’s website at thecoca-colacompany.com (in the “investors” section) which reconciles the non-GAAP financial measures included in the following presentation to the most directly comparable financial measures calculated and presented in accordance with Generally Accepted Accounting Principles.
  3. 3. 2020 Roadmap Has Changed Our Internal Dialogue KO System Net Revenues (US$ currency neutral) Implied By KO Long-Term Growth Model 2010 2012 2014 2016 2018 2020
  4. 4. Long-Term Macro-Economic Outlook Remains Positive Global Real GDP Growth (%) Estimated Annual Growth Annual Growth 6% 3.2% 3.4% 3% 0% -3% 1996 2000 2004 2008 2012 2016 2020 Source: IMF/Global Insight
  5. 5. $20 Trillion GDP Growth By 2020 % of Incremental Global GDP Global Real GDP ($T) Country / Region Growth $70 Rest of World 21% $50 China, India, Latin America 39% USA 21% Japan 3% Europe 16% 2008 2020 Source: IMF/Global Insight
  6. 6. 1 Billion New Consumers Entering The Economy By 2020 +0.9 Bn +0.9 Bn +1.0 Bn 6.7 Bn 7.6 Bn 3.3 Bn 4.2 Bn 1.2 Bn 2.2 Bn 2008 2020 2008 2020 2008 2020 World Population Urbanization Growth Middle Class Growth Source: Division of the Department of Economic and Social Affairs of the United Nations Secretariat; World Bank Development Indicators
  7. 7. Resulting In An Increase In NARTD Consumption Germany United States Spain Italy Mexico NARTD France Industry Per Capita United Kingdom Servings Japan Brazil China India Per Capita Personal Expenditure
  8. 8. Giving Us Confidence In The Beverage Industry Long-Term Opportunity 4% 145 Bn Cases 5% $1,100 Bn CAGR CAGR 55 Bn Cases $500 Bn 90 Bn Cases Incremental Incremental Growth $600 Bn Growth 2008 2020 2008 2020 Industry Volume Industry Value
  9. 9. Growth Across All Categories 2008 – 2020 Percentage of NARTD Industry Incremental Growth 25% 20% 15% 10% 5% 0% Vol. Value Vol. Value Vol. Value Vol. Value Vol. Value Vol. Value Sparkling Juice & RTD Energy Packaged Sports Juice Drinks Tea / Coffee Water Volume (∆ 55 Bn Cases) Value (∆ $500 Bn)
  10. 10. More Than Doubling System Revenue While Expanding Margins $200 Bn 15% $105 Bn $95 Bn 2008 2020 2008 2020 KO System Revenue KO System Operating Margin
  11. 11. 2020: A Holistic View Of Our System Our Business Agenda Maximize Company and bottler long-term cash flow Win with Coca-Cola Act now to ensure the next generation of youth falls in love with Coca-Cola Bring innovations to market faster Align our franchise structure to create unsurpassed value for customers
  12. 12. Our Social Agenda Create competitive advantage by fulfilling our Live Positively commitments Global leadership in sustainable water use Industry leadership in package, energy and climate protection Marketplace (beverage benefits and active, healthy living)
  13. 13. We Are Ready For Tomorrow, Today Unrivaled Opportunity Disciplined Strategy Committed To Win