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During this presentation management may discuss certain forward-lookingstatements concerning Arca Continental’s future performance that should beconsidered as good-faith estimates made by the Companies. These forward-looking statements reflect management expectations and are based uponcurrently available data. Actual results are subject to future events anduncertainties, which could materially impact Arca Continental’s actualperformance
One of the most profitable, with over 20% EBITDA margin
Leadership in NARTD market and relevant position in other categories
Growing portfolio of sparkling & still beverages and snacks
Optimum franchise location in Mexico.Contains the gas, automotive, manufacturing and steel industrial centers. Poised to take advantage of the U.S. economic recovery
Billion unit
cases
3rd largest Coca-Cola bottler in the world...
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Total 1,350
Volume (MUC)
78%
11%Ecuador
11%
Argentina
Total $60,359
Sales (Mxp)
70%
10%
Ecuador
Mexico & Exports
13%
Argentina
BEVERAGES SNACKS
Mexico Argentina Ecuador MX-US-EC Total
Plants 20 3 4 6 33
Distribution Centers 116 25 52 62 255
Population (MM) 30 9 15 194
Routes 3,208 345 1,004 3,275 7,832
Points of sale (‘000) 401 90 167 251
Employees (M) 29.3 2.3 7.5 4.0 43.1
Mexico & Exports
7%
Snacks
...with a varied portfolio and geographic balance
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A solid ownership structure…
9%The Coca-ColaCompany
20%FloatBMV: AC
71%Arca ContinentalControl Group
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Balanced Board of Directors (20 members,
5 independent)
Majority shareholders at Board level
Professional Management Team focused
on growth and value creation
The Coca-Cola Company appoints one
member of the Board
Audit Committee comprised of
independent members only
No transactions with related parties
Quarterly financial reports and constant contact with investors and analysts
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…with best in class Corporate Governance
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40brands+ SKUs600+8
Successful brand portfolio to satisfy every consumption
occasion...
Arca Merger
SnacksMexico and
Vending
Argentina & Jugos del
Valle
Ecuador
Contal Merger
Snacks Intl. & Santa
Clara
Nogales
ToniCorp
20022007
20082010
20112012
20132014
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...with a solid organic growth and M&A track record
6,084
6,478
3,610 3,824
2013 2014 2Q13 2Q14
EBITDA
2,9673,097
1,878 1,935
2013 2014 2Q13 2Q14
Net Profit
29,200 29,328
15,825 15,958
2013 2014 2Q13 2Q14
Sales
Consolidated Results(Million pesos)
+4.4% +6.5%+0.4%
+0.8% +3.1% +5.9%
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Solid sales and profit performance...
Note: As of June 2014
8,505
9,591
11,322
12,845
2010 2011 2012 2013
44,048
50,802
56,26960,359
2010 2011 2012 2013
1,2121,310
1,354 1,349
2010 2011 2012 2013
EBITDA
Margin % 19.3 18.9 20.1 21.3
Sales Volume
(MUC)
Sales
(Million MXP$)
EBITDA
(Million MXP$)
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...despite a challenging environment
Coolers
Returnable bottles
Infrastructure
Engineering
Information Technology
$4,000MM MX
CAPEX 2014
Leveraging results of long-lasting capital
investments...
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MEXICO
52%Multi Serve
13%C-Stores
11% On Premise
7%S-Markets 4%
Stills
6% Water
12% Flavors
1%Vending
65%Non Returnable
35%Returnable
8%Other
16% Jug
Category
Format Package
Channel
62% Colas
60% Traditional
48%SingleServe
A balanced mix of categories, packs/formats &
distribution channels in our Mexico operation
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$5.00MXP
$28.00MXP
Low Elasticity SKU’s Protect Affordability(Multi-serve & Returnable)
Transfer to Consumer Keep Magic Prices Leverage on Diet & Single Serve Presentations
+12%
Price/Pack architecture, key element to successful
execution and market leadership
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Productivity program to achieve $500
million pesos of total incremental
annualized savings by the end of the
year
Action plans showing results,
improving our cost structure and
enhancing operating efficiencies
Four major areas of focus: raw
materials, packaging, production &
logistics and SG&A
2014 Productivity Program
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NogalesReached an agreement with Bebidas Refrescantes de Nogales to acquire a minority stake in their franchise in northern Mexico
Proximity of our territories allows further opportunities for synergies, strengthen collaboration and find better ways to serve our customers and consumers
Continue participating in the consolidation of the
KO system in Latin America
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SOUTH AMERICA
Consistent value creation: EBITDA from US$95 million in 2010 to US$191 million in 2013
Increased execution capabilities and cooler coverage:
- Argentina 43%, +18 p.p.
- Ecuador 39%, +19 p.p.
Gained market share in Argentina by 11 percentage points since we started operations
Invested in the last five years with cash flows generated by our local operation
Delivering outstanding results in South America
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50/50 Joint Venture with The Coca-Cola Co. reflecting trust and confidence in AC
Consolidating AC as one of the most important consumer companies in Ecuador
Founded in 1967, with a portfolio of top-of-mind, iconic brands in the dairy industry in Ecuador
Leading position in high value-added dairy categories like flavor milk and yogurt
Strengthening our profitable growth in adjacent
categories such as value-added dairy...
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...with a leading position in most categories in value
added dairy products
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52.8%
19.7%
6.8%
5.3%
4.3%4.7%
6.5%
Yogurt Flavored Milk Gelatin
Oatmeal White Milk Cream Cheese
Beverages
Revenue mix
0% 20% 40% 60% 80% 100%
Ice Cream
Milk-Oatmeal
Yogurt
Flavored Milk
Cream Cheese
Gelatin
Market Share
Toni Alpina
Toni Kraft
Toni P. Quito
Toni Alpina
Toni Nestlé
Toni Others
Others
(tea, Isotonics, coffee, plain water and juices)
New revenue streams
Leverages our core competences and is highly complementary to our core business
Cross-fertilization of product portfolio from Bokados, Inalecsa and Wise
Launching Topitos in USA and Wise in Mexico
Expanding coverage in Mexico and USA
Combination of these companies result in net sales of USD$ 400 million in 2013, reaching over 7% of our revenues
Our long-term strategic approach in snacks...
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Over 90 year history
Leading regional brand
#1 brand in NY metro area
USD$7 billion market size in regions served
40 year history
Strong position in the Ecuadorian market
2nd largest player at a national level
3rd largest snack brand in Mexico, 40 year history
Sales tripled in six years
Plan to expand nationwide
One of the largest distribution networks
USA
(2013)
Mexico
(2007)Ecuador
(2013)
...supported by a strong brand portfolio
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Net Sales(millions of pesos)
3x
3rd largest snacks brand
in Mexico
Potential to grow
nationwide and across
other countries
Co-branding initiatives
One of the largest
distribution networks in
Mexico
Bokados has increased its presence throughout
Mexico…
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2.02.9
4.3 4.4
6.6
9.010.6
13.0
3.1
3.94.0
4.5 4.9
5.2
6.4
6.8
6.9
2005 2006 2007 2008 2009 2010 2011 2012 2013
Coca-Cola (Nostalgia) Exports
Exports 2013
USD $110 million
...supporting export of mineral water and Coca-
Cola to the Hispanic US market
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Social Responsibility and Sustainability
98.23% 20% 1.63 26.2of PCR
The highest in KO
Systme Latin
America
Lt. Water/
Lt. Beverages
Lt.
Beverages/
KWH
KO System
Mexico 97.96%
Quality Product Index
Recycling Use Water Energy
2013
17% from
renewable sources
Hermosillo plant
best in class
Strong sustainability performance indicators
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Clear vision and excellence in execution
Maintain profitability and focus our
investments in the marketplace
Strong cash flow generation, financial
strength and flexibility
World-class Corporate Governance
Solid M&A capacity, delivering
synergies and creating shareowner value
Sustainability and Social Responsibility
Key takeaways
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