presentación de powerpointbalanced portfolio 3 cagr 14%. our commitment pursue opportunities to...
TRANSCRIPT
Corporate Presentation
1
$10
$11
$13 $14
$17
$20
2011 2012 2013 2014 2015 2016
$51 $56
$60 $62
$76
$94
2011 2012 2013 2014 2015 2016
2
Delivering solid and consistent results
MXP$ billion
EBITDASales
< $5 $5
$6
$7
$8
$9
2011 2012 2013 2014 2015 2016
Net Income
Consolidated Results
99%
1%
2002
Mxp$13 billionMexico Beverages
Exports and Vending Mxp$ 94 billion
Mexico Ecuador Argentina Comp. Bus.Peru
7.2x
10%12%
52%
2016
16%
10%
Complementary
Business
Exports
Rapid and profitable growth achieving a
balanced portfolio
3
CAGR
14%
Our commitment pursue opportunities to create value for our shareholders
4Complementary
Business
CSD’s
Stills
New sparkling
beverage franchises
Emerging still categories
+ Value added dairy
Snacks, and vending
machines
CSDs
An extensive brand portfolio to satisfy
every consumption occasion
50 Brands+
SKUs1,200+201628Brands+
SKUs128+2006
5
Macroeconomics and climatic changes are not
our main concern… our priority is execution
6
60%
E F M A M J J A S O N D
Key SKU’s Coverage
(Unforgivables)
75%
M A M J J A S O N D
Execution Index
3% 1%
E F M A M J J A S O N
Customers without visit
4%
2%
E F M A M J J A S O N
Customers without order
17%
78%
Segmentation
RGM
RTM
Fundamentals
Market tools
Sales School
Sales School Innovation
Mexico Ecuador
Argentina
Peru
Arca Continental: beverage operations
Start date: 1926
• Sales volume (MUC) 1,168
• % KO volume 30%
• Population served (MM) 30
Start date: 2008
• Sales volume (MUC) 130
• % of KO volume 21%
• Population Served (MM) 9
Start date: 2015
• Sales volume (MUC) 300
• % of KO volume 100%
• Population served (MM) 32
Start date: 2010
• Sales volume (MUC) 142
• % of KO volume 100%
• Population Served (MM) 16
7
8
Outstanding operational results in Mexico
1,0381,078
1,168
2014 2015 2016
Volume(MUC)
• Outstanding volume increase in a market
with high per capita consumption and strong
market share
• Gained in NARTD volume and value share
• Sales increased 14% in 2016
• Command #1 or #2 market leadership in
most stills categories
• Received top awards from key retail
customers
• ACT commercial model deployed across of
the organization
MX$5
MX$30
$5 $10 $13 $20$5 $25
Low elasticity SKU’sProtect affordability
(Multi-serve & Returnable)
Keep magic prices Leverage on diet & single serve
presentations
600 PET
3.0 NR2.0
RP
12 OzVR
RGM strategy: sustain profitability & affordability
9
66% Non
Returnable
34% Returnable
12% On Premise1%
Vending
58% Traditional
14%C-Stores
8%Other
7%S-Markets 12%
Flavors
6% Stills
60% Colas
17%Jug
5%Water
48% Single-serve
52% Multi-serve
Channel Category
Format
Package
Mexico
10*As of 2016
Expanding Topo Chico across our territories
generating incremental sales
• Expansion of Topo Chico brand to a territories in Mexico
• Leading brand with close to 20% growth in 2016 with premium price in the mineral water category
• We will capitalize on the strong brand equity developed in the north of Mexico throughout its 122-year history
11
Well-prepared to face a challenging 2017 in Mexico
12
• Drive revenue growth management through an adequate pricing strategy
• Disciplined hedging strategy with a vertically integrated business
• Continue improving our market tools and capabilities
• Strengthen production, commercial and distribution capabilities
• Enhance productivity delivering SG&A efficiencies
Maintain Leadership in
NARTD
Sustain volume growth
Protect profitability
Goals
Strategic Priorities
Investing in core capabilities while increasing profitability in Argentina
Achievements 2016
• RGM initiatives enable us to compensate for high inflation rates
• Maintained profitability despite macroeconomic volatility
• Gained market share across all NARTD categories
Initiatives for 2017
• Continue expanding point-of-sale execution capabilities through ACT commercial model
• Focus on returnable packages and increase cooler coverage
• Strengthen vertical integration of Famaillá sugar mill to optimize our sweetener cost 22
11
20
2009 2016
48
60
2009 2016
EBITDA/Sales
(%)
Market Share
(%)
Argentina
55% Non
Returnable
45% Returnable
2% On Premise
55% Traditional
1%C-Stores
26%Other
16%S-Markets
26% Flavors
4%Stills
61% Colas
9%Water
8%Single-serve
92% Multi-serve
Channel Category
Format
Package14
*As of 2016
Continue deploying AC’s core pillars and best practices in Ecuador
17
19
2010 2016
24
46
2010 2016
15
EBITDA/Sales
(%)
Cooler
Coverage
(%)
Achievements 2016
• Drove innovation in portfolio by reformulating products to offer more low-calorie or zero calorie options (first in the world)
• Focused on affordability products in key entry packages
• Leveraged distribution centers and expanded cross-selling opportunities between beverages and snacks
Initiatives for 2017
• Generate cost savings by centralizing production capabilities in new Tonicorp’s Aurora plant
• Invest in almost 17 thousands new coolers to capitalize the volume recovery
• Expand RTM model as part of the ACT model deployment
Ecuador
79% Non
Returnable
21% Returnable
12% On Premise
64% Traditional
2%C-Stores
14%Other
8%S-Markets
30% Flavors
10%Stills
50% Colas
10%Water
32% Single-serve
68% Multi-serve
Channel Category
Format
Package
16*As of 2016
Large market with attractive macroeconomic and demographic dynamics in Peru
17
Initiatives for 2017
• Optimize warehouse infrastructure while increasing own
sales force and distribution capabilities
• Improve affordability via returnable presentations and
drive growth in the non-calorie beverages category
• Accelerate innovation in still beverages
• Expanded EBITDA margin 236 bps
• Delivered annualized running rate synergies of US $40
million, 60% above the target originally set
• Reduced debt and exposure to foreign exchange from
our US dollar-denominated debt by 70%
Achievements 2016
18
21
2015 2016
25
40
2015E 2016
EBITDA/Sales
(%)
Synergies RR
(US$ MM)
Peru
73% Non-
Returnable
27% Returnable
8% On Premise
70% Traditional
2%C-Stores
10%Other
9%S-Markets
7% Stills
23% CSDs
4%Jug
18%Water
40% Single-serve
60% Multi-serve
Channel Category
Format
Package
18*As of 2016
48% Flavors
Continue accelerating growth and gaining scale in complementary business
19
632
6,439
2007 2016
Snack Sales(MM MXP)
• Our Vending machine business grew volume, sales and transactions, supported by modern IT systems
• Expanded Vending machine presence in Peru by acquiring a leading company with over 6,000 units across the country
• Strengthening production capabilities with the opening of new facilities
• Improved point-of-sale execution, while expanding market share
• Outstanding year for our exports business, with double-digit sales increase in US dollars
• Topo Chico posted record 22% volume growth, driven by new distribution agreements with major retailers
680
2,022
2007 2016
Vending Sales
(MM MXP)
26
69
2007 2016
Exports Sales
(MM USD)
Solid Balance Sheet and strong credit profile
20
• After Lindley’s transaction,
deleveraged from 1.9x to 1.3x
by year end
• Reduced debt exposure from
$1.2 billion in 2015 to $150
million as of January 2017
• 70% of debt at a fixed interest
rate
• Highest credit rating among
Mexican companies, Global “A”
by Fitch and “A2” by Moody’s
1.9
1.3
2015 2016
Net Debt / EBITDA
Consistent value creation
21
$16
$48
$221
$12 $60$75
$18$239
Market Cap ArcaDec '02
Market Cap ArcaDec '10
Dividend'02 - '10
Total ValueDec '10
Market CapArca+Contal
Dec '10
Market CapMar '17
Dividend'11 - '16
Total ValueMar '17
(MXP$ billion) 219%
+275%
Contal
Arca$48
AC to join the US Coca-Cola System
22
• Approximate value of CCR’s stake in AC Bebidas: US $2.7 billion
• Sales volume: 400 MUC
• Estimated annual sales in 2017: US ~$2.35 billion
• EBITDA margin: ~13.5%
• 9 production facilities, 34 distribution centers and over 7,500 associates
• Transformational and highly value accretive transaction, with an implied valuation multiple below AC currently
• Transaction expected to close in 2Q17 CCSWB franchise
Corporate Structure AC
23
CCSWB
80%20%
EcuadorArgentina
AC Beverages AC Comp. Bus.
Mexico Peru
100%
57%100%
100% 100%
100%
CCR
Coca-Cola Southwest: One of the top KO bottlers in the US
24
• The US Southwest territory is one of the most relevant in the US Coca-Cola System in terms of size, market dynamics and growth potential
• Attractive non-alcoholic beverages retail market and leading position in NARTD
• Young population: 60% Hispanics and 45% of non-Hispanics under 35 years old
• AC will be able to deploy strategic core pillars: ACT commercial practices, Operational Excellence and Supply Chain Management
• Potential to expand snacks business presence in the US and increase sales of Topo Chico mineral water and Coca-Cola “Nostalgia”
32%
31%
10%
9%
11%7%
Increased geographic footprint and diversification
25
Pro-Forma
2017
Mxp$152 billion** Pro-forma with 12 months of CCSWB
• Balanced portfolio of emerging
and developed markets
• Over 43% of our revenues in US
dollars
• Continue to further accelerate
growth in the Fast-Moving
Consumer Products industry
Complementary Business
1325
56
100
>200
2002 2008 2012 2017 2022
SalesMXP$ billion
In 2017 we will exceed our revenue target of $100 billion pesos set 5 years ago
26
2x
2x
2x
2x
