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Investor Presentation
November 2013
Disclaimer
Unless otherwise indicated, the condensed consolidated interim financial statements and the financial and operating data or other information included herein relate to Coca-Cola HBC AG and its subsidiaries (“Coca-Cola HBC” or the “Company” or “we” or the “Group”).
This document contains forward-looking statements that involve risks and uncertainties. These statements may generally, but not always, be identified by the use of words such as “believe”, “outlook”, “guidance”, “intend”, “expect”, “anticipate”, “plan”, “target” and similar expressions to identify forward-looking statements. All statements other than statements of historical facts, including, among others, statements regarding our future financial position and results, our outlook for 2013 and future years, business strategy and the effects of the global economic slowdown, the impact of the sovereign debt crisis, currency volatility, our recent acquisitions, and restructuring initiatives on our business and financial condition, our future dealings with The Coca-Cola Company, budgets, projected levels of consumption and production, projected raw material and other costs, estimates of capital expenditure, free cash flow, effective tax rates and plans and objectives of management for future operations, are forward-looking statements. You should not place undue reliance on such forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect our current expectations and assumptions as to future events and circumstances that may not prove accurate. Our actual results and events could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in the annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (File No 1-31466.) for Coca-Cola Hellenic Bottling Company S.A. and its subsidiaries for the year ended 31 December 2012.
Although we believe that, as of the date of this document, the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we, nor our directors, employees, advisors nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. After the date of the condensed consolidated interim financial statements included in this document, unless we are required by law or the rules of the UK Financial Conduct Authority to update these forward-looking statements, we will not necessarily update any of these forward-looking statements to conform them either to actual results or to changes in our expectations.
2.1 billion unit
cases sold or
50 billion servings per annum
581 million
population growing at a ~1%
per annum
28 countries of
operation over 3
continents with significant exposure in
Emerging Markets
40,232 employees 71 plants in operation and
366 warehouses & distribution centers
18,000 vehicles fleet 84,000 suppliers
Coca-Cola HBC at a glance
3 Source: All numbers are FY2012 data unless otherwise stated
# 1 in Sparkling
Beverages in all of our 28 markets
€7 billion
revenues Nine consecutive
quarters of currency neutral revenue per
case growth (as at Q3 2013)
Milestones
4
Hellenic Bottling Company S.A.
(HBC) is incorporated in
Greece
CCH listed on NYSE through a
sponsored ADR programm
HBC listed on the Athens Exchange
Formation of Coca-Cola Hellenic (CCH) through the
combination of HBC and CCB. Listings in Athens, London and
Sydney Stock Exchanges
Acquisition of SOCIB, second
largest franchise
bottler of TCCC in Italy
Kar-Tess acquired HBC
CCH expands to cover whole of
Russia in addition to Lithuania, Estonia
and Latvia
CCH acquires Russian fruit juice company Multon, together with The
Coca-Cola Company (TCCC)
Delisting from Australian Stock
Exchange
Formation of Coca-Cola Beverages
(CCB) from de-merger of European
operations of Coca-Cola Amatil
Limited
Admitted to trading in the
premium segment of the London
Stock Exchange
Inclusion in the FTSE 100 and FTSE
ALL-SHARE indices
Partners in Growth
for 60 years
Owners of the Trademarks
Concentrate supply
Brand development
Consumer marketing
The Coca-Cola system
5
Bottling
Sales and distribution
Customer management
In-outlet execution
Investment in production
facilities, equipment,
vehicles
Hellenic is the second largest Coca-Cola bottler globally
Source: FY 2012 results based on publicly available information Note: Sales are translated into Euros based on the respective 2012 average exchange rates
Coca-Cola Enterprises (Belgium, France, GB, Netherlands, Luxemburg, Norway, Sweden) Volume 1.25bn uc Sales €6.2bn 7 countries
Coca-Cola Femsa (Mexico,
Central America-Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Brazil, Argentina- Philippines)
Volume 3.0bn uc Sales €8.8bn 9 Countries
Coca-Cola Icecek (Turkey,
Pakistan, Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq, Syria and Tajikistan) Volume 0.85bn uc Sales €1.8bn 10 Countries
Coca-Cola Amatil (Australia, New Zealand, Fiji, Indonesia and Papua New Guinea)
Volume 0.6bn uc Sales €3.5bn 5 Countries
ARCA Continental (Mexico, Ecuador and Northern Argentina)
Volume 1.35 bn uc Sales € 3.3 bn 3 Countries
Coca-Cola HBC Volume 2.1bn uc Sales €7.0bn 28 Countries
6
35%
38%
32%
6%
16%
19%
59%
46%
49%
Comparable EBIT
Net sales revenue
Volume unit cases
A diverse and balanced country portfolio
Total = €453 M
Total = €7,045M
Total = 2,085M
2012 Split
7
Our extensive territorial reach offers a balanced volume profile
8
FY 2012 Volume Split
Russia18%
Italy15%
Nigeria
9%
Poland
8%Romania
8%
Greece
5%
Ukraine
4%
Serbia &
Montenegro4%
Hungary
4%
Switzerland4%
Other Established
8%
Other
Developing7%
Other Emerging6%
Meeting consumer needs with a diverse
product portfolio
9
Juice 5%
61%
10
Emerging markets
Sparkling beverages,
66%Low-calorie
sparkling beverages,
2%
Energy
Drinks, 1%
Water, 18%
Juice, 8%
RTD Tea, 5%Other Still,
0%
2012 Volume
288
218
210
135
103
Industry Sparkling Per Capita
Emerging
Coca-Cola HBC Average
Established
Developing
European Average
Sparkling Volume Market Share: 42% Sparkling Market Size Opportunity : ~1bn unit cases NARTD Volume Market Share: 23% NARTD Market Size Opportunity: ~3.4bn unit cases
Source: The Coca-Cola Company
Source: Nielsen FY12; Adjusted for coverage ratios
Russia37%
Nigeria18%
Romania16%
Ukraine9%
Serbia & Montenegro
9%
Bulgaria6%
Other Countries6%
Poland, 44%
Hungary, 21%
Czech, 14%
Croatia, 7%
Slovakia, 6%
Baltics, 6%
Slovenia, 2%
Developing markets
2012 Volume
Sparkling
beverages, 64%
Low-calorie
sparkling beverages,
6%
Energy
Drinks, 1%
Water, 15%
Juice, 4%
RTD Tea, 8%Other Still,
1%
288
218
210
135
103
Industry Sparkling Per Capita
Emerging
Coca-Cola HBC Markets
Established
Developing
European Average
Sparkling Volume Market Share: 34% Sparkling Market Size Opportunity : ~540m unit cases NARTD Volume Market Share: 14% NARTD Market Size Opportunity: ~2.3bn unit cases
Source: Nielsen FY12; Adjusted for coverage ratios
Source: The Coca-Cola Company
11
288218
210
135
103
Industry Sparkling Per Capita
Emerging
Coca-Cola HBC Markets
Established
Developing
European Average
Sparkling Volume Market Share: 53% Sparkling Market Size Opportunity : ~410 m unit cases NARTD Volume Market Share: 13% NARTD Market Size Opportunity: ~4.4bn unit cases
Italy
46%
Greece16%
Switzerland12%
Austria
14%
Island of
Ireland10%
Cyprus
2%
Established markets
2012 Volume Split
Sparkling beverages,
56%Low-
calorie sparkling
beverages, 13%
Water;
23%
Juice;
4%
RTD Tea;
3%Other Still;
2%
Source: The Coca-Cola Company
Source: Nielsen FY12; Adjusted for coverage ratios
12
Financial highlights
in million unit cases
in million Euros
660 651 687
523453
2008 2009 2010 2011 2012
Comparable EBIT and EBIT margin
9.5% 9.9% 10.1%
7.7%
6.4%
30,8%
30,4% 30,3%30,0%
29,5%
2008 2009 2010 2011 2012
OPEX as a % of revenue
Net Sales Revenue Split by segment
6,981 6,544 6,794 6,824 7,045
Emerging Developing Established
13
2,116
2,069
2,105
2,087 2,085
1, 950
2, 040
2, 130
2008 2009 2010 2011 2012
2.7
04
2.9
28
2.8
35
2.8
35
2.7
02
1.3
48
1.1
49
1.1
40
1.1
62
1.1
48
2.9
28
2.4
67
2.8
19
2.8
28
3.1
95
2008 2009 2010 2011 2012
3,30
3,16 3,23
3,27
3,38
2,50
3,00
3,50
2008 2009 2010 2011 2012
Volume Reported NSR per unit case
40,2% 40,3% 40,4%
37,7%
35,9%
2008 2009 2010 2011 2012
Gross Profit margin
Cost structure
Concentrate 34%
Sugar14%PET
9%Aluminium,5%
Other raw materials 16%
Depreciation4%
Overheads & Haulage
18%Sales 38%
Warehousing & Distribution
31%
Administration21%
Marketing10%
These are based on our FY 2012 numbers
14
15
0.000%
1.000%
2.000%
3.000%
4.000%
5.000%
Jan/12 Mar/12 May/12 Jul/12 Sep/12 Nov/12 Jan/13 Mar/13 May/13
CCHBC 4.250% '16 YTW
Source: Bloomberg as at 1 July 2013.
June 2012: •Second Greek Elections •Scenarios on Grexit become stronger •CCH Spreads are at peak levels •Moody’s & S&P downgrade CCH due to Country Risk •CCH access to Debt Capital Market becomes very expensive
Jun/13
May 2012: •First Greek Elections •Scenarios on Grexit •CCH Spreads start to rise
October 2012: • Re-listing & Re-
domiciliation Announcement
April 2013: • Re-domiciliation CCHBC AG • Trading of CCHBC AG shares on
LSE
10th June 2013:
• Announcement and Pricing of the NEW €800M Bond
• Announcement to Tender the 2014 €500m Bond
18th June 2013:
• Settlement of new €800M Bond (& €500M Bond Tender)
Sp
read
of
ou
r 2
01
6 B
on
d (%
) Very Successful Refinancing
500
€317
400
€600
€800
€500
2013 2014 2015 2016 2020
Conservative financial profile
16
Debt maturity profile
Net Debt/EBITDA
Notes: Ratios based on comparable figures
„ Moody’s: L/T Baa1, S/T P2, negative outlook
„ S&P: L/T BBB+, S/T A2, negative outlook
2.0 2.1
1.7
2.0 2.1
2008 2009 2010 2011 2012
Other available facilities
Credit Ratings
•ACTIVE: €500m Revolving Credit Facility until 2016
•CANCELLED: €550m Squeeze-out Bridge Facility
•CANCELLED: €500m Bond Bridge Facility
$
$
in million
Sep Sep Jan Nov June
Shareholder structure
US 19%
UK 23%
Continental Europe
39%
Rest of the world 16%
Retail Investors 3%
Free Float54%
Kar-Tess23%
The Coca-Cola Company
23%
17 Shareholders as of 30 September 2013 * Source: Bloomberg as at 08 Nov 2013; ADV= Average Daily Volume
Corporate governance
18
• ADR program on NYSE since 2002
• Full SOX compliance history
• Enhancement of corporate governance through:
1. Appointment of an additional independent non-executive director
2. Board members subject to re-election on an annual basis
3. Nominations committee, majority of its members independent
• Committed to adhering to the UK Corporate Governance Code
Making good progress towards our sustainability goals
2.48
2.40
2.30
2.24 2.25
2008 2009 2010 2011 2012
Water use ratio l/lpb
- 21% from 2004
baseline
33.7
21.617.6
14.512.3
2008 2009 2010 2011 2012
g/lpb
Landfilled waste
- 70% from 2004
baseline
CO2 ratio Waste ratio Gr/lpb
75.2
71.572.7
66.168.8
2008 2009 2010 2011 2012
gCO2/lpb
-30% from 2004
baseline
12.911.2
10.2 9.48.5
2008 2009 2010 2011 2012
-39% from 2004
baseline
Further details on our sustainability goals and initiatives can be found at www.coca-colahellenic.com 19
An industry leader in Sustainability
Included for a sixth consecutive year in both the Dow Jones Sustainability World Index and Dow Jones STOXX Sustainability Index. 1st on the DJSI Europe Index 2nd on the DJSI World Index of the top ranking beverage companies in sustainability
Member 2012/13
In 2010: The only European non-alcoholic ready-to-drink beverage company to achieve GRI A+ ranking for comprehensiveness and transparency
GRI A+
For more information please see our sustainability reports at http://www.coca-colahellenic.com/sustainability/
Listed on the FTSE4Good index
20
Overview of Our Strategy
21
The Opportunity We See…
• Emerging markets exposure
• Market Share Growth
• Per Capita development
Business Growth
Margin Leverage
• Operating cost control
• Production Infrastructure rationalisation
• Logistics and route-to-market optimisation
• Revenue-generating Capex investments
22
39
98
135 139
173 182
223 226 232 237
298307
340 340
423
468
596
We have a diverse geographical footprint offering long-term attractive growth potential
2012 Total sparkling category servings per capita
Source: The Coca-Cola Company
‘per capita consumption’: Average number of 237ml or 8oz servings consumed per person per year in a specific market. Coca-Cola Hellenic’s per capita consumption is calculated by multiplying our unit case volume by 24 and dividing by the population.
Established
Developing
Emerging
210
219
103
23
Winning in the marketplace
Focus on Cost leadership
Generate solid Free Cash Flow
Revenue ahead of volume
Our Strategy
24
Solid track record of winning in the marketplace
25
We are #1 in volume share in sparkling beverages in all of our 28 markets
In 2012 we outperformed our main competitor in total NARTD(1) value share in all our 28 countries
(1) Non-Alcoholic Ready-To-Drink beverages.
Package mix- Channel Mix: Driving revenue ahead of volume
26
40% 60%
*
(*) FY2012 Volume Split
Sparkling beverages,
62%Low calorie
sparkling
beverages, 6%
Water, 20%
Juice, 6%
RTD Tea, 5%
Other still, 1%
Category Mix (Brand)
Package-mix Single serve Multi serve Future Consumption
70%
Channel Mix* Immediate Consumption
30%
We have clear category priorities: Sparkling, RTD-Tea and Energy
Energy
Sparkling •Leverage Trademark Coca-Cola with focus on Regular and Zero
• Increase per capita consumption
• Further grow Fanta, focusing on orange flavour
•Drive Sprite availability in immediate consumption channels
•Single-serve focus, OBPPC
Water
RTD-Tea
Juice • Focus on profitability, capitalising on strong local
brands
• Single serve packs
• Flavoured water and HORECA
• Focus on increasing market penetration and trial
• Bring new people to the category
• Reinforce naturalness and low calorie refreshment
• Best tasting products with premium quality
• Leverage strong brand equity in Cappy, Amita, Dobry
• Innovation
• Approach driven by stage of development of local energy category
• Focus on “on-the-go” channels
Drive Growth in:
Selective approach in:
27
Driving Trademark Coca-Cola is a key priority
4%
2%
4%4%
2%
5%
-2%
2%
-1%
0%
2008 2009 2010 2011 2012
TM Coca-Cola Total Volume
28
Optimising our cost base to enhance competitiveness
Infrastructure optimisation
Logistics excellence
Manage OPEX and Working Capital
SAP is a key enabler
29
Shared Services Centre enables to centralise and standardise processes
Benefits:
• Leverage SAP benefits
• Improve productivity
• Enhance business support
• Improve internal control / governance
• Enable local management to focus on value added activities
Roll Out:
• Phase I: Live in 22 countries for key Finance and HR functions
• Phase II: Live in Q3 2013, starting with Bulgaria, Romania (Finance & HR) , Switzerland (Finance) and Italy (HR)
• Integration of more countries and processes planned ‟ followed by best practice application
Standardising
processes
Consolidating synergies
Applying global best
practice
30
Infrastructure optimisation
1. The right physical distribution network
2. Leverage scale by exploiting collaborative opportunities
3. Efficient solutions matching customer/channel requirements
4. Accurate and automated data exchange
5. With the right people in the right roles
Number of plants
-24% since 2008*
Number of distribution centers
-7% since 2008
Number of warehouses
-8% since 2008
31
(*) In established and developing markets
Strong and sustainable cash flow generation
Note: The financial information for fiscal years 2012, 2011 and 2010 reflects the Group’s early adoption of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interest in Other Entities and the revised IAS 19 Employee Benefits in 2012 (and retrospective adjustments in 2011 and 2010 to reflect the same).
262546 549 427 341
2008 2009 2010 2011 2012
Free Cash Flow
8,8%
6,9% 6,5%5,9% 5,9%
2008 2009 2010 2011 2012
CAPEX as a % of NSR
504
370
259181
83
2008 2009 2010 2011 2012
Working Capital
32
in million Euros
in million Euros
Solid track record of returning cash to shareholders
In the last 13 years we have returned to our
shareholders total cash of more
than €2.1 billion
Overview of Q3 2013 Results
34
Key messages for the third quarter
Continued to win in the marketplace Currency neutral revenue per case increased for the ninth
consecutive quarter
Margin growth both at comparable gross profit and EBIT level Solid free cash flow generation
Volume challenge driven by tough macroeconomic and trading
conditions
Trademark Coca-Cola products were the key growth drivers in Q3
Sparkling declined by 0.5%
Trademark Coca-Cola products grew by 3%
Coca-Cola Zero grew by 18%
Energy grew by 2%
Tea declined by 11%
Juice grew by 2%
Multon grew by 12%
Water declined by 10%
35
36
Established markets – consumer environment remains under pressure
„ Italy: Volume declined by high single-digits in the quarter, with Coca-Cola Zero up by 9%. Ongoing macro economic and political challenges continue to have an adverse effect on trading conditions.
„ Greece: Volume declined by high single- digits, with a decelerating trend compared to previous quarters. Sparkling beverages remained more resilient and declined by mid single-digits.
„ Switzerland: Volume increased by mid single-digits. Underlying trading conditions have slightly improved, while cross-border shopping has stabilised.
Trademark Coca-Cola
Flat
Coca-Cola Zero
+11%
RTD-Tea -13%
Volume -4%
Currency neutral net sales revenue per case
-0.8%
37
Developing markets –moderately improving trends in a volatile environment
„ Poland: Volume increased by low single-digits, driven by a low single-digits growth in both sparkling and juice.
„ Hungary: Volume declined by high single-digits, Coca-Cola Zero was the key outperformer growing by double-digits for another quarter.
„ Czech Rep.: Volume declined by low single-digits. Trademark Coca-Cola products grew by mid single- digits supported by our "Share a Coke" campaign.
Trademark Coca-Cola
+5%
Juice +3%
Volume -2%
Currency neutral net sales revenue per case
+1.5%
Coca-Cola Zero
+27%
38
Emerging markets – characterized by varying levels of performance
„ Russia: Volume grew by low single-digits in the third quarter. Growth in sparkling and juice more than offset declines in the water and RTD-tea categories
„ Nigeria: Volume grew by high-single digits, with low double-digit growth in sparkling beverages and a low teens growth in water
„ Romania: Volume declined by mid-teens, mainly due to a deteriorating macroeconomic environment and increased competition; Coca-Cola Zero grew by very strong double-digits
Trademark Coca-Cola
+3%
Water -13%
Juice +3%
Volume -4%
Currency neutral net sales revenue per case
+3.3%
39
2013 Financial outlook
„ Currency neutral net sales revenue per case: Expecting growth year-over-year, albeit
at a slower pace than 2012
„ Currency neutral input costs per case: Expecting low single-digit increase
„ FX: Headwind based on hedged positions and our forecasted rates-decreased versus Q2
expectations and is now estimated to be lower than the 2012 hit on EBIT.
„ Comparable Effective Tax Rate: Between 23-25% for the medium-term
„ Annual Capital expenditure: 5.5-6.5% of net sales revenue for the medium-term
„ Free Cash Flow: Expecting to generate approximately €1.3bn in the 2013-2015 period
(*) Financial indicators on a comparable basis exclude the recognition of restructuring costs, unrealised commodity hedging results and specific non-recurring items.
40
Financial performance overview
Financial indicators on a comparable basis exclude the recognition of restructuring costs, unrealised commodity hedging results and non-
recurring items.
Q3’13 Q3’12 Ch. 9M’13 9M’12 Ch.
Volume (m u.c.) 575 594 -3% 1,579 1,608 -2%
Net Sales Revenue (€m) 1,918 2,021 -5% 5,299 5,440 -3%
Comp. Gross Profit
Margin % 36.8% 36.6% +20bps 35.9% 36.3% -30bps
Comp. EBIT (€ m) 207 211 -2% 386 398 -3%
Comp. EBIT Margin % 10.8% 10.4% +40bps 7.3% 7.3% flat
Comp. Net Profit (€m) 148 156 -5% 259 263 -2%
Comparable EPS (€) 0.41 0.44 -7% 0.71 0.72 -1%
Free Cash Flow (€m) 248 277 -11% 345 362 -5%
41
Restructuring update
FY 2013 targets
„ Benefits from 2013 restructuring initiatives expected at €30m on an annualised basis
„ Total benefits in 2013 (from 2012 and 2013 initiatives) expected at €65m
„ Expecting pre-tax restructuring charges of just over €50m in 2013
„ Restructuring focus continues to be in established markets
Q3 2013
„ We remain on track to deliver our full-year target
„ We incurred approx. €2m in pre-tax restructuring costs in the quarter and €24m YTD
„ Restructuring focus was in our established markets during the quarter
Long-term growth drivers
Strong focus on cost leadership and history of solid cash generation
42
Most known brands in the world!
Low per capita consumption with great potential to grow
Diverse geographic footprint with strong emerging market exposure
Solid track record of winning in the marketplace
43
For further information on Coca-Cola Hellenic please visit our website at:
www.coca-colahellenic.com or contact our Investor Relations team
[email protected] +30.210.6183 100