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CCA Australasia Premium Beverages
“A Growth Business”
18 April 2007
Warwick White
Managing Director – Australia & New Zealand
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Agenda – Our Growth Strategy
�Our premium beverages strategy
�Our tailored customer strategy
�Our new Australasian business unit
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Our Premium Beverages Our Premium Beverages
StrategyStrategy
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The Australian Business has grown EBIT at +8.1% CAGR over the last 5 years. The last two years have been more challenging due to unprecedented commodity cost increases.
2002 to 2006CAGR +8.1%
1997 to 2001CAGR+6.3%
Total Australia including Neverfail – Published EBIT
CAGR Average Commodity Cost increases per CCA price for Aluminium, Sugar and Resin
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
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Y Published EBIT $
CCA Commodity Cost Increases
1997 to 2001CAGR -2%
2002 to 2004CAGR +3 %
2005 to 2006CAGR +24%
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The NARTD category is a growth market – over $200M revenue growth for manufacturers each year
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Source: AC Neilsen Market Industry Data – Measured & unmeasured markets
Total NARTD (excluding Milk) Market value $M
+5.5%+8.3%
+4.3%
+5.7%
2003 2004 2005 2006 2007 est
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CSDs will continue to be a key category for growth and we are in a strong position to capture the growth in all NARTD categories
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Y 2006 - 2009 Forecast Industry Value Growth by Category
RTDTea
17%
Energy22%
Sports6%
Water7%
Juice8%
CSD25%
Other6%
Flavoured Milk9%
Source: TCCC Australia Fact Book / Canadean 2006
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And we have a great share growth opportunity in the emerging categories by leveraging our strong key customer relationships
Market Share with Large and Small Customers
58
25
44
6 50 3
76
51
59
610
17
30
0
10
20
30
40
50
60
70
80
CSD Water Sports Energy Chilled
Juice
Long life
Juice
RTDTea
Large Customers Small Customers
% Share
Source: AC Neilsen Foodstore/Convenience calendar year 2006
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And we have the new large alcohol profit pool to play in. Our competitive edge is the ability to leverage the CCA sales-force, manufacturing, distribution & procurement capability
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Source Euromonitor September 2005 and CCA Analysis
Total Beer & Spirits EBIT Pool $1.4B
860
200 180125
-
100
200
300
400
500
600
700
800
900
Mainstream
BeerPremium BeerARTD Spirits
$M
EB
IT @
whole
sa
le le
vel
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Tailored Tailored Customer Customer StrategyStrategy
Big Big Powerful Powerful BrandsBrands
Leveraging Leveraging our scaleour scale
= Potential to generate Double Digit EBIT = Potential to generate Double Digit EBIT GrowthGrowth
The key to profit growth is the revenue per case premium we achieve over the COGS increase. This is achieved by:
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And we see an opportunity around innovating to create more premium beverages
�Increased concentration on providing real / instantaneous physiological benefits
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�Focus on innovating with the Coke Trademark where we have Brand strength
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And we see an opportunity around innovating to create more premium beverages
�Increased concentration on channels where we get higher margins e.g HORECA
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� Increased concentration on the packaging that consumers find most appealing
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New Product Development is driving higher revenue per unit case and increased market share
�Coke Zero
�Kirks
�Powerade Isotonic
�Goulburn Valley Juice
�Pumped – Flavoured Water
�385 mL Glass – Coke
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We have increased our Market Share of Cola CSDs by 1.7pts since the successful launch of Coke Zero.
Source: ACNielsen Foodstore 25/03/07
CO
KE
ZE
RO
CC System volume share of Cola
Coke
Diet Coke
Coke Zero
Mega-brandCoca-Cola
75.2% share
Mega-brandCoca-Cola76.9% share
53.2%47.2%
22.0%
17.1%
12.6%
0%
20%
40%
60%
80%
FY 2005 Jan 06 - Mar 07
Mark
et
Sh
are
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Coke Zero has strengthened the Coca-Cola Trademark and allowed us to take a more premium position
Source: AC Neilsen Foodstore w/e 18th March 2007
TCCC v Pepsi Price excluding 600 mL, Share includes 600mL
We maintained market share even though the price gap has increased from 24% to 32%
CO
LA
MA
RK
ET 78% 76%
24%
32%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan - May 06 Jun06 -March 07
CO
KE
ME
GA
BR
AN
D
SH
AR
E O
F C
OL
A M
AR
KE
T
0%
10%
20%
30%
PR
ICE
PE
R V
OL
UM
E
TCCC COLA TCCC Price Premium
* Incl Trial Period
PRICE GAP
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Introducing Kirks Sugar Free to be launched end of April in Grocery
No
n C
ola
CS
D’s
Kirks continues to reposition itself at near Schweppes pricing. The price gap has gone from 11% to 6% whilst maintaining market share
Source: AC Neilsen Foodstore MAT May 06 versus Jun 06 to Mar 07
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Powerade Isotonic has increased market share by +5.6pts since launch
Source: AC Nielsen Combined Foodstores/Convenience RTD only to Mar 25th 07
PO
WE
RD
AE
IS
OT
ON
IC
Powerade
Gatorade
53.1 58.7
40.2 35.0
0
20
40
60
80
100
Pre-LaunchJan – May 06
Post - LaunchJun 06 – Mar 07
Mark
et
Sh
are
%
Powerade +5.6 share pts
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And Goulburn Valley has established a fresh juice play for CCA with a premium product
GO
UL
BU
RN
VA
LL
EY
FR
ES
H J
UIC
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The launch of Pumped flavoured water in October has helped us realise a 7% price improvement for our total water business over the last 6 mths
PU
MP
ED
YTD March Pump +35% YOY volume growth
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Continue to leverage the equity of the Coke glass contour bottle385 m
LG
LA
SS
In Q1 07, the mix shift to
385mL re-sealable glass has
driven 25% of the revenue
per case improvement in the
immediate consumption
channel
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Our Coke Zero success has earned Australia test market status
TCCC Sydney R&D Centre
SHANGHAI
ATLANTA
BELGIUM
Innovation Centres
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200
7 M
OT
HE
R L
AU
NC
HMother has captured +/- 10% of the energy market in the last 8 weeks ending 18th March 2007
Source : AC Nielsen Foodstores/Convenience 8 W/E Mar 18th 2007
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Introducing Tab Energy
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7 T
AB
EN
ER
GY
�Launched in New Zealand in March
�Aimed at style conscious females 16-24
�First 5 weeks in market results:
�Market Share +5.6% in Foodstore
�Volume +51% versus target
Source: AC Neilsen NZ Market Share w/e 30/3/07
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To step up our NPD & service improvement capabilities we will increase manufacturing capacity by 10-15%
QLD HOTFILL
� POWERADE
� NESTEA
� JUICE
NSW WAREHOUSE & SLIM LINE CAN LINE
ADELAIDE ARTD
QLD CAN LINE
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Our Tailored Customer Our Tailored Customer
StrategyStrategy
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Our new sales force structure will step change our execution capability with a shift from State based to Channel based focus
Grocery &Petroleum
Licensed
Immediate Consumption
Vending
NSW
QLD
VIC
WA
SA/NT
NATIONAL
From: State Based To : Channel Based
Benefits:
� Tailored Package/Brand offerings
� National Marketing programs
� Differentiated / tailored customer servicing
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Now we have executional capability in Licensed outlets similar to our other Channels
�186 person dedicated sales-force
�Pin point execution of our expanding premium glass portfolio
�Integrated mixer promotions
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We have created tailored packaging solutions to help deliver higher promotional frequency and improved category margins
Coles Woolworths Independents
1.5 Lt 2.0 Lt 1.25 Lt
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Coles Woolworths Independents
24 pack 30 pack 18 pack
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Tailored Customer Strategy – Deliver higher levels of services to higher value customers in the Immediate Consumption Channel
�Focus on top third of customers who deliver 80% of our Revenue
�Customise Service choices �Ordering
�Delivery
�Credit
�Equipment Services
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And a significant investment has been made to understand the shoppers that will help tailor our market solution
�Why people shop
�When people shop
�What they buy & how much they spend
�Who they are
�How they use channels
Shoppers Beverage Shoppers Beverage LandscapeLandscape
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30
% of Total Shopping Trips
QUICK TRIP
DESTINATION
MEALS
ROUTINE
TREAT
INSTANT
GRATIFICATION
NON-FOOD 9
13
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13
21
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Quick Trip Meal SolutionQuick Trip Meal Solution
Instant Gratification BundlingInstant Gratification Bundling
Working with our Customers to create focused marketing activities
Source: Coca-Cola Company Shopper Beverage Landscape Study, 2006
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Tailored Customer Strategy – Cold Drink Equipment Program continuing to innovate to provide high end solutions to our customers
�Next phase of Cold Drink Equipment focus will be higher value unit placements:
�Glass Fronted Vendor
�Open Air Chillers
�Cashless Machines
�Premium closed door coolers
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Our New Australasian Our New Australasian
Business UnitBusiness Unit
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Aligning Australia and New Zealand targeting $25M earnings
�Better Revenue Management –Harmonising Pack / Price disciplines
�Procurement – Trans Tasman negotiations
�Cost Synergies – One Marketing Strategy
AU
ST
RA
LA
SIA
BU
SIN
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S U
NIT
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Tailored Tailored Customer Customer StrategyStrategy
Big Big Powerful Powerful BrandsBrands
Leveraging Leveraging our scaleour scale
= Potential to generate Double Digit EBIT = Potential to generate Double Digit EBIT GrowthGrowth
The key to profit growth is the revenue per case premium we achieve over the COGS increase. This is achieved by:
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CCA Australasia Premium Beverages
“A Growth Business”
18 April 2007
Warwick White
Managing Director – Australia & New Zealand