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![Page 1: 03-van Oers MTM FINAL - library.corporate-ir.netlibrary.corporate-ir.net/.../items/314451/VanOersMTMFINALSlides.pdf · Supermarket Hypermarket Discounter Convenience Cash & Carry](https://reader031.fdocuments.us/reader031/viewer/2022030507/5ab60a2a7f8b9ab7638d616a/html5/thumbnails/1.jpg)
International BeverageFrank van Oers
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2
Long-term Growth Will Come from Single-Serve and Instants
38%
12%18%11%8%
7% 6%
$3.2 Billion
Multi-Serve (ex. Brazil)Single-ServeInstantsMulti-Serve (Brazil)LiquidsTeaOther
FY08
56%
12%
1%
4%
24%3%
European RetailRussiaEuropean FoodserviceBrazilAustraliaAsia Pacific Foodservice
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3
Agenda
•Premiumization
•Geographic Expansion
•Drive Foodservice
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4
Agenda
•Premiumization
•Geographic Expansion
•Drive Foodservice
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5
Premiumization
•Leverage and defend #1 and #2 positions to build margin•DRIVE Single-Serve opportunities in key markets
•UPGRADE position in decreasing Multi-Serve segment
•BROADEN existing product range in premium instants & espresso segments
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6
Premiumization
•Leverage and defend #1 and #2 positions to build margin•DRIVE Single-Serve opportunities in key markets
•UPGRADE position in decreasing Multi-Serve segment
•BROADEN existing product range in premium instants & espresso segments
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7
Long-term Growth Will Come from Single-Serve and Instants
38%
12%18%11%8%
7% 6%
FY08$3.2 Billion
31%
13%20%
11%
13% 7% 5%
Multi-Serve (ex. Brazil) Multi-Serve (Brazil)Single-Serve LiquidsInstants TeaOther
38%
12%18%11%8%
7% 6%
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8
Significant Growth Opportunitiesin Single-Serve
• Senseo system growth through added-value appliance and beverage innovation
• Continue to drive switch from drip filter to single-serve
• Increase soft pod consumption and maintain strong“multi-beverage” share within category
• Drive market leadership in appliance and pods in current markets
• Enter in new markets with potential by 2010
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9
SENSEOSENSEO BEANBEAN
Upgrade Senseo
Add fresh milk: LATTE SELECT
Add filter option
Single-serve Will Also Grow Through Machine Innovation
Upgrade Base Senseo
Full-auto coffee systemwith flexible bean
containers
Fresh Beans + Jug
High Pressure Espresso
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10
Premiumization
•Leverage and defend #1 and #2 positions to build margin•DRIVE Single-Serve opportunities in key markets
•UPGRADE position in decreasing Multi-Serve segment
•BROADEN existing product range in premium instants & espresso segments
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11
Consumer Trends Lead to Premium Strategy and A Focus on Value
Consumer Demand Benefit driven/Premium/Health
Value-Driven/Basic
Gro
wth
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12
Discounters have been able to exploit ‘value driven’ trends to gain share
Source: MVI database
45.2% 41.8% 40.6%
24.7% 26.1% 26.8%
14.1% 16.3% 17.4%
9.4% 9.1% 8.5%6.7% 6.7% 6.7%
0%
25%
50%
75%
100%
2003 2008 2013E
Supermarket Hypermarket Discounter Convenience Cash & Carry
Share of grocery formats across Europe
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13
Health & Wellness Is an Important Consumer Trend
Naturalness Cell protection (AOX)
Hydration Mental Performance
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We Have Developed a Profitable Tea Position in Selected Countries
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15
Build One Strong Aroma Lady Brand
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16
We Will Upgrade Our Multi-Serve Assortment Through Innovation
Premium & Enjoyment Health & Wellness
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Pepites d’Arome Represents Another Revolutionary Innovation in Coffee
TV
Shelf Impact
Consumer Education
Promotion
Sampling
Bill Boards
The Product
Coupons
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18
Premiumization
•Leverage and defend #1 and #2 positions to build margin•DRIVE Single-Serve opportunities in key markets
•UPGRADE position in decreasing Multi-Serve segment
•BROADEN existing product range in premium instants & espresso segments
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19
Agenda
•Premiumization
•Geographic Expansion
•Drive Foodservice
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Geographic Expansion
• Invest in high growth regions using appropriate forms of coffee•CONTINUE our ‘volume to value’ strategy in Brazil
•DEVELOP Russia (Instants, later Tea, Ukraine)
•EXPLORE acceleration Asia (Thailand Instants, Vietnam R&G)
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Investments in Emerging Markets Will Change our Portfolio Over the Long-Term
56%
12%
1%
4%
24%3%
FY08$3.2 Billion
51%
13%
4%5%
24%3%
European Retail BrazilRussia AustraliaEuropean Foodservice Asia Pacific Foodservice
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• Profitable incremental sales over the long-termReturn
•Russia is the largest instants market in Europe•Premium segment is growing rapidly
Attractiveness of the
opportunity
The Russian Opportunity
• Well-positioned product and packaging• High investment levels• Strong organization and distributor
Why Int'l. Beveragecan win
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23
Russian Coffee Market Growing Rapidly
* Estimated volume Green, 2003-04Source: The Coffee Market FY06 CBI April 2006
69
89
122
122
134
144
163
252
300
538
Thousands tons Retail value CAGR, 2002 – 2006
-3
-3
-1
-1
-1
-1
0
1
1
16Russia
Italy
Netherlands
France
Spain
Poland
Sweden
U.K.
Germany
Austria
Germany
France
Italy
Spain
Russia
Netherlands
U.K.
Poland
Sweden
Austria
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24
• Profitable incremental sales over the long-termReturn
• Russia is the largest instants market in Europe• Premium segment is growing rapidly
Attractiveness of the opportunity
The Russian Opportunity
•Well-positioned product and packaging•High investment levels•Strong organization and distributor
Why Int'l. Beveragecan win
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Well-Positioned Premium Product Line
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26
•Profitable incremental sales over the long-termReturn
• Russia is the largest instants market in Europe• Premium segment is growing rapidly
Attractiveness of the opportunity
The Russian Opportunity
• Well-positioned product and packaging• High investment levels• Strong organization and distributor
Why Int'l. Beveragecan win
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27
Large Investment in Russia
•Market investment of $25 million
•Targeted market share of 15% by FY11
•Sales of $200 million by FY11
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28
The Brazilian Opportunity
BRAZIL
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By 2010 Brazil is expected to bethe largest coffee market in the world
Brazilian Market Very Large and Growing
16%1,108,500 TonsU.S.
13%881,300 TonsBrazil
100%6,927,000 TonsTotal World Market FY07
Source: Latin Panel, June 2008
Basis: green coffee equivalent
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We Have Broad Distribution
Jundiai
Recife
FactoriesDCsOutbound Routes
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31
PREMIUM
MAINSTREAM
VALUE
Segmented Portfolio of Strong Brands
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32
Brazil Retail Coffee Market Share
11.8 11.713.5
6.8 7.4 7.3
16.518.5 19.0
0
5
10
15
20
FY06 FY07 FY08
Sara Lee
Sta Clara
Melitta
Source: Nielsen
+2 pts from Mokaacquisition
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33
Results Are Improving in Brazil
308340Net Sales
214Operating Income
FY07FY08$ in millions
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Agenda
•Premiumization
•Geographic Expansion
•Drive Foodservice
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International Foodservice Overview
•FY08 sales of $860 million, up 10%
•Primary countries include Netherlands, Belgium, Germany, Denmark and Australia
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Foodservice Business Model Improvement
•Rationalization of direct business models
•Attack tail of unprofitable customers
•Develop indirect channels
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Focus on Health Care And Business Segments
Segment NOS (%)Operating Profit(% of NOS)
QSR/Coffeeshops
Education
Medium business
Leisure
Largebusiness
Smallbusiness
Convenienceand retail
Hotelsand
gaming
BaReCaHealthand care
Average
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Roll out C600
Roll out C100
Roll out TQL
Roll out C300
DescriptionActivity
Strong Innovation Pipeline
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International Beverage Performance Overview
+6-8%+1-3%+9.2%OperatingSegment Income
+5-7%+2-4%+8.6%Net Sales
Long-term Guidance
FY09 Guidance
Adjusted FY08 vs. FY07
FY08 Adjusted Net Sales = $3.2 billionFY08 Adjusted Operating Segment Income = $562 million
Note: See table at the end of this presentation deck for a reconciliation to reported numbers.
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International Beverage Net Sales
$2,962
(347)2
$2,617
FY07
$3,215
––
$3,215
FY08
8.6%Adj. Net Sales
Less:Foreign currencyAcquisitions/Divestitures
22.9%Net Sales
Change
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International Beverage Operating Segment Income
$515
(59)(118)(21)
$317
FY07
$562
––
(15)
$547
FY08
9.2%Adj. Operating Segment Income
Less:Foreign currencyImpairment chargesOther significant items, net
72.8%Operating Segment Income
Change