KO Cagny 2010
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Transcript of KO Cagny 2010
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 1
Jose Octavio ReyesPresident, Latin America Group
CAGNY 2010
A Growing World of Refreshment in Latin America
Forward-Looking Statements
2
This report contains information that may constitute “forward-looking statements.”
Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,”
“project,” “will” and similar expressions identify forward-looking statements,
which generally are not historical in nature. All statements that address operating
performance, events or developments that we expect or anticipate will occur in the
future — including statements relating to volume growth, share of sales and
earnings per share growth, and statements expressing general views about future
operating results — are forward-looking statements. Management believes that
these forward-looking statements are reasonable as and when made. However,
caution should be taken not to place undue reliance on any such forward-looking
statements because such statements speak only as of the date when made. Our
Company undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as required by law. In addition, forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ materially
from our Company’s historical experience and our present expectations or
projections. These risks and uncertainties include, but are not limited to, those
described in Part II, “Item 1A. Risk Factors” and elsewhere in this report and in our
Annual Report on Form 10-K for the year ended December 31, 2008, and those
described from time to time in our future reports filed with the Securities and
Exchange Commission.
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 2
Coca-Cola Latin America
•Facts and Highlights
•Myths and Misconceptions
•The Opportunity Ahead
3
Facts and Highlights
• 571 MM Inhabitants, 40% Under Age 21
• 39 Countries, 7 Official Languages
• NARTD Industry of 14 Billion
Unit Cases in 2009
• Coca-Cola Has Over 150 Active
Brands and 800 Products
• Managing One of the Most
Intricate Packaging Portfolios
4 Note: NARTD Industry Size excludes Bulk Water and Milk
Source: Population UN
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 3
Four Dynamic Business Units
5
Colombia Central America
Venezuela Caribbean
Ecuador
Mexico44% of LAG volume
+6% vs PY
Brazil24% of LAG Volume
+4% vs PYLatin Center14% of LAG Volume
+12% vs PY
South Latin18% of LAG Volume
+4% vs PY
Argentina Bolivia
Chile Paraguay
Peru Uruguay
Source: Real Latin America GDP Growth from Business Monitor International, January 2010
Latin
America
GDP
KO Volume
Growth
2008 +4.1% +8%
2009 -2.3%(e) +6%
Strong Performance in
All Economic Times
2009 Volume Growth
Consistent, Quality Growth Year After Year
6
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1999 2006 2009
Latin America Group
Total Volume
Note: Equivalent growth in terms of countries based on volume in base year
Last Three Years
+ 1.4 B Unit Cases
Last Ten Years
+ 2.8 B Unit Cases
Adding
Another
Brazil
Adding
Another
Brazil
+ Mexico
+ Peru
MMUC
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 4
Outperforming the Industry
7Note: Growth based on volumes in Key Countries(Mexico, Brazil, Argentina, Chile and Colombia)
31% 32%
45%
52%
68%
2% 3%
9%
28%
36%
9%
Sparkling Packaged Water Sports Drinks Energy Drinks RTD Tea Juice & Juice Drinks
4%
KO vs. Industry GrowthCAGR 2006-2009
KO / Industry
8
Winning Against All Myths and Misconceptions
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 5
99
MYTH #1
We Have Heard This Story Before. . .
10
100
120
140
160
180
200
220
240
260
1999 2002 2006 2009
Total Latin America Group8oz Bottles / Year
Adding
169 MM
Unit Cases
Every Year
KO Sparkling Per Capita
Consumption
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 6
. . .Yet Our Share Keeps Growing, Year After Year
11Note: Volume and Value Share Data FY2009. Includes Mexico, Brazil, Argentina, Chile and
Colombia. Value Share calculated using Year-Average Exchange Rates for 2009
Source: Nielsen
Latin America Sparkling Beverages
VALUE SHARE
68%+ 2 pts vs 2006
VOLUME SHARE
62%+ 2 pts vs 2006
Consumers Prefer Our Brands
12
Favorite Brand
Coca-Cola vs.
Nearest NARTD Competitor
Mexico
9X
Brazil
7X
Argentina
7X
Chile
14X
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 7
Sparkling Beverage Commercials
13
“Secretos”
“Happy Kingdom”
“Cielo”
“Big Splash”
14
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 8
Still Beverage Growth Drives Incremental Volume
15
116
1,242
1999 2009
KO Stills VolumeMM Unit Cases
61%KO Incremental Volume
From Stills - 2009
Our Winning Still Portfolio
1616
Water
Juice & Juice Drinks
Sports Drinks
Energy Drinks
Ready to Drink Tea & Coffee
FlavoredWater Active Lifestyle Other Categories
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 9
17
Winning Across Categories
Still Beverage Commercials
18
“Detalles” “Farola”
“Epika”
“Hugo” “Cepita”
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 10
19
A System Like No Other
20
4.3 Million
Customers64 Bottling
Partners450+ Million
Servings Every Day
Note: 64 Bottling Partners excludes JDV, IEQSA, Leao, Suco Valle
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 11
Superb Execution Capabilities
21
Available AffordableVisible
22
Growing Our Opportunities Together
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 12
Investing in Our Business and Ahead of Demand
23
-
0.5
1.0
1.5
2005 2008
InvestmentUS$B Currency Neutral
Capex DME
+29%
CAGR
System Investments for the
Next 5 Years
• $5B in Mexico
• $6B in Brazil
Note: Includes Coca-Cola FEMSA, Coca-Cola Andina, Embotelladoras ARCA
and Grupo Continental
Source: Public Bottlers Annual Reports (2009 data unavailable at time of presentation)
24
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 13
Winning in a Highly Competitive Arena with All Global and Local Players
25
26
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 14
A Highly Relevant Traditional Channel . . .
Over 2 Million Traditional Customers
27
Since 1997
Since 1991
Since 1975
Since 1992
. . . Yet Major Retailers Have Arrived!
28 Source: Retailers Annual Reports, New Stores Growth: RetailNet Group
Presence of Large Retailers is Growing
New StoresCAGR 2005-2009
+7%
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 15
How Relevant is Latin America for Walmart?
29Sources: Figures shown for 2009 Share of Retail Sales are estimates; # Outlets as of 12/31/09 from walmartstores.com; Share from RetailNet Group, within Modern Trade; Formats from RetailNet Group and walmartstores.com
Over 2,700 Outlets
Nine Countries &
Counting . . .
• Mexico• Brazil• Chile • Costa Rica • Guatemala • El Salvador • Nicaragua • Honduras • Argentina
Multiple Formats
• Hypermarket• Supercenter• Discount Grocery• Cash & Carry• Convenience• Membership Club• Wholesale• Soft Discount• Restaurant• Bank• Apparel
2009 Share of
Retail Sales
Latin America 20%
USA 18%
Winning Against All Myths and Misconceptions
30
Sparkling Beverages
Have Yet to Peak
Latin America’s Growth
IS Balanced Between Still
and Sparkling
Our System IS Working Well
LARGE RETAILERS Have Arrived
There IS Competition
Wall Street TimesFRIDAY, FEBRUARY 19, 2010 $2.00VOL. CCLV, NO. 337
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 16
31
The Opportunity Ahead
Emerging Socioeconomic Dynamics
32
Middle Class Growth
+15 MillionYouth Population
227 MillionGDP Growth
+3.9%
Source: Population UN, GDP Euromonitor
By 2013 Latin America Will See . . .
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 17
Latin America Group179 Per Capita
World44 Per Capita
Mexico396 Per Capita
Per Capita Growth Opportunity
Coca-Cola Trademark
Per Capita Consumption 2009
3333
Great Innovation Opportunities
34
vitaminwater
Fanta Pure
Illy Issimo
Pulpy
Plant Bottle
Fuze Minute Maid
Pulpy Super
Milky
Odwalla
BlakOn Premise Coffee
Fruitopia Juice Concentrate
Hugo Value Added Dairy
Valle FrutFruit Still Drink
34
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 18
35
The Size of the Prize
Forecasting Vibrant NARTD Growth
9%
8%
7%
NARTD
Alcoholic Bevs
Packaged Foods
Consumer SpendEstimated CAGR 2010-2013
Source: Euromonitor, Nominal Values, Excluding Venezuela
Note: Opportunity based on 2009 NARTD Industry Size and current KO Volume
7.7 B
Unit Case
Opportunity
14 B Unit Case Industry
36
Winning Together, In A Growing World Of
Refreshment
Jose Octavio Reyes
President, Latin America Group
CAGNY 2010 19
Jose Octavio ReyesPresident, Latin America Group
CAGNY 2010
A Growing World of Refreshment in Latin America