Eric Foss        Al Drewes
Chairman & CEO    SVP & CFO
Cautionary Statement

Statements made in this presentation that relate to future performance or
financial results of PBG a...
REFRESH   RETHINK   REDEFINE
AGENDA
SNAPSHOT
OF PBG
           THE EVOLVING
           LANDSCAPE
                          STRATEGIC
                  ...
67,000                  2 MILLION                    85 BILLION
                                                     SERVI...
Snapshot of PBG

               Successful Portfolio Repositioning… With Clear Opportunities

                         Geo...
Snapshot of PBG

               Great Portfolio of Brands… Strong #1 or #2

 Colas




 Flavors




 Water


 Non-Carbs


...
Snapshot of PBG

             Capable, Motivated, Experienced Workforce




            Capability                        ...
Snapshot of PBG

                                                  Operational
Best-In-Class Execution                    ...
Snapshot of PBG

                                               Proven Financial Track Record

                           ...
The Evolving Landscape… Consumer

 Relevance
    • Craving Humanity, Optimism & Energy
    • Embracing Modern, Simple & Ic...
Evolving Landscape… Channel & Customer


               Big Getting Bigger




               Continued Channel Migration
...
Evolving Landscape… Category

                  Big, Growing and Powerful Category

    US Retail         Retail Sales    ...
Strategic Priorities to Drive Shareholder Value




  REFRESH              RETHINK               REDEFINE



    Repositio...
Reposition and Strengthen Global Brand Portfolio
REFRESH




                 FILL PORTFOLIO
                             ...
REFRESH


           Transformational
          Re-Launch of Pepsi
Invest in Core Brands
REFRESH
REFRESH




             Aligns Portfolio Across
                U.S. and Canada

              Strengthens Flavor
       ...
REFRESH




          Expand Energy Portfolio
Muscle Milk
REFRESH




          Expands PBG’s Portfolio into White Space

          Leading Brand in High Growth Segment...
Lebedyansky Acquisition
REFRESH




          Largest Juice Producer; #1 Share Position


                Growth Category ...
Transform Performance Through Operating Excellence
RETHINK




    Re-Conceptualize Consumer               Step Change in
...
Transform Performance Through Operating Excellence
RETHINK




           Re-Conceptualize Consumer Value Architecture

  ...
Transform Performance Through Operating Excellence
RETHINK




            Step Change in Cost Structure and Productivity
...
Capitalize on Geographic Growth Opportunities
REDEFINE




                                  Domestic

     Organic Growth...
Capitalize on Geographic Growth Opportunities
REDEFINE




             International Markets… Positive Long-Term Potentia...
Agenda



  PBG’S APPROACH
 TO CREATING
 SHAREHOLDER
 VALUE             MANAGING
                   IN THE CURRENT
       ...
PBG’s Approach to Creating Shareholder Value




    • Sustainable Topline and Bottomline Growth

    • Focused Cash Flow ...
PBG’s Approach to Creating Shareholder Value

                                  Sustainable Topline and Bottomline Growth
...
PBG’s Approach to Creating Shareholder Value

                     Focused Cash Flow Priorities



                       ...
PBG’s Approach to Creating Shareholder Value

                           Focused Cash Flow Priorities


                  ...
Managing in the Current Environment


           Environment                              Priorities

  • Global GDP Press...
Managing in the Current Environment


               Liquidity                          Bond Maturity Ladder
             ...
Managing in the Current Environment

                                 Risk Management

                          • Balance...
Managing in the Current Environment

                   New Approach to Planning

  • Real-Time Decision Making


  • Mult...
Managing in the Current Environment


     Productivity Initiatives     Productivity Savings
                             ...
Managing in the Current Environment


          Capital Spending                         Working Capital
              (in...
2009 Guidance

                                 Currency Neutral          U.S. Dollar


                                  ...
Financial Outlook Summary


             Strong Track Record of Results


                 Clear Priorities for 2009


   ...
Summary



                                STRATEGIC
STRENGTHENING
                BEST-IN-CLASS
BRAND                    ...
PBG presentation at CAGNY 2009
PBG presentation at CAGNY 2009
PBG presentation at CAGNY 2009
PBG presentation at CAGNY 2009
PBG presentation at CAGNY 2009
PBG presentation at CAGNY 2009
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PBG presentation at CAGNY 2009

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Presentation by senior management at PBG.

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PBG presentation at CAGNY 2009

  1. 1. Eric Foss Al Drewes Chairman & CEO SVP & CFO
  2. 2. Cautionary Statement Statements made in this presentation that relate to future performance or financial results of PBG are forward-looking statements, which inv olv e uncertainties that could cause actual performance or results to materially differ. We undertake no obligation to update any of these statements. Listeners are cautioned not to place undue reliance on these forward-looking statements. These statements should be taken in conjunction with the additional information about risk and uncertainties set forth in PBG’s annual report on Form 10-K for the year ended December 29, 2007. We hav e disclosed certain non-GAAP measures within this presentation. Our 2009 financial outlook also contains non-GAAP measures. “Non-GAAP” measures include those designated as “Comparable” as well as Operating Free Cash Flow (OFCF). Please see reconciliations to their respectiv e measures prescribed by accounting principles generally accepted in the U.S. included on our website at www.pbg.com under Inv estor Relations.
  3. 3. REFRESH RETHINK REDEFINE
  4. 4. AGENDA SNAPSHOT OF PBG THE EVOLVING LANDSCAPE STRATEGIC PRIORITIES TO DRIVE 2009 SHAREHOLDER VALUE PRIORITIES & FINANCIAL OUTLOOK
  5. 5. 67,000 2 MILLION 85 BILLION SERVINGS 1.5 MILLION PIECES OF EMPLOYEES SOLD 3.5 MILLION COLD DRINK DELIVERIES POINTS OF EQUIPMENT PER WEEK ANNUALLY INTERRUPTION
  6. 6. Snapshot of PBG Successful Portfolio Repositioning… With Clear Opportunities Geographies Brands Operating Profit Shifts U.S. Category Shifts 10 15 30 27 40 >35 90 85 70 73 60 <65 2002 2008 2012F 2002 2008 2012F U.S. International CSDs Non-Carbs Operating profit is on a comparable basis
  7. 7. Snapshot of PBG Great Portfolio of Brands… Strong #1 or #2 Colas Flavors Water Non-Carbs Invigoration & Energy
  8. 8. Snapshot of PBG Capable, Motivated, Experienced Workforce Capability Culture • Financial Literacy • Results Oriented • Metric Based Granular Focus • Continuity of Management • Tools, Training & Technology • Appreciation & Recognition
  9. 9. Snapshot of PBG Operational Best-In-Class Execution Excellence Service Excellence Selling Excellence Revenue / Margin Management Excellence Executional Excellence “We Sell Soda.” 1999 2009 & Beyond
  10. 10. Snapshot of PBG Proven Financial Track Record Topline Growth Operating Profit (in billions) (in billions) $13.8 $1.2 $11.7 $1.0 CAGR CAGR +6% +6% 2005 2008 2005 2008 EPS Growth Cash Flow (in dollars) (in millions) $2.27 $526 $504 $1.68 Total Payout CAGR +110% +11% 2005 2008 2005 2008 All figures are on a comparable basis
  11. 11. The Evolving Landscape… Consumer Relevance • Craving Humanity, Optimism & Energy • Embracing Modern, Simple & Iconic Designs Variety • Purchasing Broader Repertoire of Products • Adopting New and Unique Brands & Flavors Health & Wellness • Searching for Better for You and Functional Products • Continuing to Focus on Better Tasting Hydration Value • Shopping Across Channels in Search of Value • Seeking Key Price Points
  12. 12. Evolving Landscape… Channel & Customer Big Getting Bigger Continued Channel Migration Value Rules the Day Escalating Labor Costs
  13. 13. Evolving Landscape… Category Big, Growing and Powerful Category US Retail Retail Sales Household Purchase LRB Sales Growth Penetration Frequency $110B 4% 4% 98% 63 $98B 73% 14 2005 2008 LRB Top 10 LRB Top 10 LRB Top 10 • Top Retail Sales Category • 110 Million Households Buying • Annual Growth of 4% • Top Destination Category • Innovation Fueling Growth • Highest Grocery Purchase Frequency
  14. 14. Strategic Priorities to Drive Shareholder Value REFRESH RETHINK REDEFINE Reposition and Transform Capitalize on Strengthen Global Performance Through Geographic Growth Brand Portfolio Operating Excellence Opportunities
  15. 15. Reposition and Strengthen Global Brand Portfolio REFRESH FILL PORTFOLIO PURSUE GAPS: GOAL #1 OR #2 SCALE ENTER INVEST IN POSITION CORE WHITE OPPORTUNITIES SPACE BRANDS
  16. 16. REFRESH Transformational Re-Launch of Pepsi
  17. 17. Invest in Core Brands REFRESH
  18. 18. REFRESH Aligns Portfolio Across U.S. and Canada Strengthens Flavor CSD Brand Line-Up Significant Volume Potential
  19. 19. REFRESH Expand Energy Portfolio
  20. 20. Muscle Milk REFRESH Expands PBG’s Portfolio into White Space Leading Brand in High Growth Segment Strong Platform for Health & Wellness
  21. 21. Lebedyansky Acquisition REFRESH Largest Juice Producer; #1 Share Position Growth Category within LRB Juice Drinks Introduction in 2009 Scale Business with Attractive Margins 75/25 Joint Venture with PepsiCo Integration Opportunities and Synergies
  22. 22. Transform Performance Through Operating Excellence RETHINK Re-Conceptualize Consumer Step Change in Value Architecture Cost Structure and Productivity
  23. 23. Transform Performance Through Operating Excellence RETHINK Re-Conceptualize Consumer Value Architecture Weeks in Value • Well-Defined Value Architecture • Best-in-Class Planning Tools Price / Package Architecture • Long-Range Value Migration Planning • Delivers Value Volume & Margin Runway Price Gap Management • Deep Insights & Experience • Understand Private Label Limitations Innovation & Limited Time Offer Packages • Pulse Value at Key Price Points • Big Brands & Big Packs, In & Out
  24. 24. Transform Performance Through Operating Excellence RETHINK Step Change in Cost Structure and Productivity Optimize Transform Maximize Manufacturing Warehouse Go-To-Market Cost Capabilities Effectiveness 2009 Cost Savings of $250 Million
  25. 25. Capitalize on Geographic Growth Opportunities REDEFINE Domestic Organic Growth New/Emerging Segments Geographies Independent Bottlers Other Anchors $1 BILLION OVER BOTTLERS 100 3 TO 5% RETAIL IN RETAIL SALES CATEGORY GROWTH INDEPENDENT • Consumer Value • PepsiCo Partnership • Enhanced Speed to Market • Executional Excellence • Distribution Agreements • Cost Rationalization • Leverage Innovation • Learning Labs • Financially Accretive
  26. 26. Capitalize on Geographic Growth Opportunities REDEFINE International Markets… Positive Long-Term Potential Russia Mexico • Low LRB Per Capita Consumption • Large Population Base • Strong Brand Portfolio • Capitalize on Channel Shifts • Power of One with Frito • Strengthened Management Team • Capability as a Competitive Advantage • Restructuring Plans Being Executed
  27. 27. Agenda PBG’S APPROACH TO CREATING SHAREHOLDER VALUE MANAGING IN THE CURRENT ENVIRONMENT 2009 FINANCIAL OUTLOOK
  28. 28. PBG’s Approach to Creating Shareholder Value • Sustainable Topline and Bottomline Growth • Focused Cash Flow Priorities – Investments Increase ROIC – WACC Spread – Grow Operating Free Cash Flow – Effectively Return Cash to Shareholders
  29. 29. PBG’s Approach to Creating Shareholder Value Sustainable Topline and Bottomline Growth Revenue Operating Profit EPS (in billions) (in billions) (in dollars) $2.27 $2.20 ~$1.2 $13.8 $13.6 ~$1.1 $.9 +2% +2% +3% $10.3 $1.41 CAGR CAGR CAGR +7% +5% +12% 2003 2007 2008 2003 2007 2008 2003 2007 2008 Operating profit and EPS are on a comparable basis
  30. 30. PBG’s Approach to Creating Shareholder Value Focused Cash Flow Priorities 1999-2002 2003-2008 Reinvest in the Business $2.3 Billion $4.4 Billion Acquisitions $1.3 Billion $1.1 Billion Share Buybacks & Dividends $700 Million $3.5 Billion
  31. 31. PBG’s Approach to Creating Shareholder Value Focused Cash Flow Priorities OFCF ROIC 7.8% $526 $440 7.0% WACC CAGR +4% 2003 2008 2003 2008 Non-GAAP
  32. 32. Managing in the Current Environment Environment Priorities • Global GDP Pressure = • Ensure Strong Liquidity LRB Category Pressure • Enhance Risk • Double-Digit Foreign Management Capability Currency Devaluation • Accelerate Productivity • Tight Credit Markets • Strengthen Cash Flow • Commodity Costs Improving and Working Capital Goal: Solid Near-Term Results… an Even Stronger PBG Post-Recession
  33. 33. Managing in the Current Environment Liquidity Bond Maturity Ladder (in billions) • Reaffirmed A/A2 Credit Rating $1.3 $1.0 $1.0 • Guarantee Liquidity $0.8 $0.75 – $1.1B Committed Bank Lines Through 2012 $0.4 – $1.3B 5 Year Offering in Oct. 2008 $0.25 – $750 10 Year Offering in Jan. 2009 $0 ’09 -’11 ’12 ’13 ’14 ’15 ’16 ’19 ’29
  34. 34. Managing in the Current Environment Risk Management • Balanced Maturity ladder Liquidity / Refinancing • Committed Bank Lines in Place… $1.1 Billion Through 2012 • Rigorous Cash Conversion Cycle Management Working Capital • Global Receivable & Inventory Controls • Minimum Criteria for Financial Institutions & Global Suppliers Counter Party • Quarterly Review of Exposure • Rigorous Assessment of Suppliers • Smooth Volatility and Manage Risks Hedging • Hedges Matched to Future Needs… No Speculation • Rolling Average Hedge Positions & Centralized Control
  35. 35. Managing in the Current Environment New Approach to Planning • Real-Time Decision Making • Multiple Scenario Plans • Heightened Focus on Productivity • New Working Capital / Capital Spending Approach • Local Currency Profit Targets Balancing the Near-Term Pressures with the Long-Term Attractiveness of PBG
  36. 36. Managing in the Current Environment Productivity Initiatives Productivity Savings (in millions) • Structured to Succeed $250 • Self M anufacturing and $170 Light Weighting $100 • Transform Warehouse Operations 2007 2008 2009F • Optimize Route-To-M arket
  37. 37. Managing in the Current Environment Capital Spending Working Capital (in millions) $869 • Accounts Receivable and $693 Credit M onitoring Enhanced $550 - $600 • Cash Conversion Scorecards and Targets by Country 2007 2008 2009F • US Best Practices to 6.4% 5.0% 4.0% International M arkets Capex as % of Revenues
  38. 38. 2009 Guidance Currency Neutral U.S. Dollar Down Low Top-Line Growth + Low-Single Digits to Mid-Single Digits Down Low Operating Profit Growth* + Low-Single Digits to Mid-Single Digits ~ $(0.18) Earnings Per Share* $2.15 to $2.25 ForEx Impact Operating Free Cash Flow ~ $450 Million *Comparable
  39. 39. Financial Outlook Summary Strong Track Record of Results Clear Priorities for 2009 Financial Flexibility due to Strong Balance Sheet Bright Future as Macros Rebound
  40. 40. Summary STRATEGIC STRENGTHENING BEST-IN-CLASS BRAND REPOSITIONING OPERATING OF GEOGRAPHIC CAPABILITY PORTFOLIO PORTFOLIO

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