We have many opportunities for future improvement and growth Australia New Zealand & Fiji Indonesia & PNG Alcohol & Coffee • Continue to • Continue driving New Zealand Indonesia rebalance the growth within each • Deliver additional • Continue portfolio segment growth through implementing the • Create closer • Identify and incremental revenue strategy across the alignment with The and volume initiatives country implement initiatives Coca-Cola Company to grow volumes and • Invest for today and Fiji relevance • Identify and tomorrow • Continue to increase implement further PNG accessibility of cost optimisation products initiatives • Continue to increase accessibility of products Coca-Cola Amatil 2016 Investor Day | 21
We are focussed on delivering against the financial targets we set for 2015-2017 Balance Capital Group EPS Expenditure Dividend Sheet • Targeting to maintain • Group capex around • Continue to target • Balance Sheet to mid single-digit EPS $300M pa during this medium term remain conservative growth levels business cycle dividend payout ratio with flexibility to fund of over 80% future growth • Level of performance • 2016 capex expected opportunities will depend on the to be around $300M success of revenue • 2017 capex expected initiatives in Australia to be closer to $375M and Indonesian which will include economic factors additional investment at Richlands in Queensland Coca-Cola Amatil 2016 Investor Day | 22
Our approach to sustainability will underpin our future performance Our People Wellbeing Our Environment Our Community We provide a safe, open, We provide choices and We operate responsibly We partner with our flexible and inclusive the information communities to deliver a in all we do to minimise workplace where our consumers need to make shared benefit from our our impact on the people are energised by their choice. presence. environment and ensure the opportunities they we deliver a positive have. lasting legacy. Coca-Cola Amatil 2016 Investor Day | 23
Continuing to work with The Coca-Cola Company to shape choice Marketing Lead Promote clear Shape choice Innovate responsibly engagement facts Coca-Cola Amatil 2016 Investor Day | 24
The safety of our people is paramount and we are proud of the contribution we make Safety How we contribute Annual Total Recordable Injury Frequency Rate (TRIFR) 16 14 12 10 8 6 4 2 0 FY12 FY15 Coca-Cola Amatil 2016 Investor Day | 25
We are delivering on our promises and have an eye to the future Perform Grow Lead Execute Partner Potential system growth Potential non-system growth Coca-Cola Amatil 2016 Investor Day | 26
Indonesia & Papua New Guinea Kadir Gunduz | Managing Director Indonesia & PNG Coca-Cola Amatil 2016 Investor Day | 27
Indonesia & Papua New Guinea Indonesia is a developing market with strong growth potential Operating environment continues to be challenging Strong product portfolio supports our position to capture growth Complex supply chain which we are now navigating Video: Progress update Accelerate growth to transform the business Close alignment, greater focus, improved performance Coca-Cola Amatil 2016 Investor Day | 28
Indonesia is a developing market with strong growth potential Expanding manufacturing footprint NARTD market (1) and distribution network Approximate market volume composition Approximate CCA share Production Production Brands Warehouses Customers Employees facilities lines (approx.) (approx.) 8 37 9 8 720,000 11,000 Sparkling Juice Sports Tea Dairy 1. Sources: Source: Nielsen; internal estimates. Excludes water ~60% of the NARTD market. YTD 2016. Objective: Expand our market to realise the market’s potential – accelerate to transform Coca-Cola Amatil 2016 Investor Day | 29
Despite economic growth slowing in 2015, market and demographic fundamentals remain solid GDP per capita – 13% CAGR since 2000 Disposable income growth – 12% CAGR since 2000 35.0 60.0 Indonesia GDP per Capita disposable Income per 30.0 50.0 Indonesia Personal Capita (IDR M) 25.0 40.0 (IDR M) 20.0 30.0 15.0 20.0 10.0 10.0 5.0 0.0 0.0 2000 2005 2010 2015 2016F 2017F 2000 2005 2010 2015 2016F 2017F Growing affluent and middle class Favourable age demographic 75+ 4% 2% 8% 70-74 65-69 Male Female 60-64 Household Split 43% 55-59 65% Age Range 50-54 45-49 79% 40-44 35-39 56% 30-34 25-29 31% 63M 20-24 13% 15-19 10-14 2010 2015 2020F 5-9 Lower (<US$5,000pa) Middle (US$5,000-$25,000pa) Upper (>US$25,000) 0-4 -5.00% -3.00% -1.00% 1.00% 3.00% 5.00% Coca-Cola Amatil 2016 Investor Day | 30
Operational environment continues to be challenging and economic volatility is a factor in a developing market Competitive landscape Economic growth • The significant growth potential of the market has • Economic growth in 2014 and 2015 was lower than attracted many new payers across each of the key would have been expected product categories • Starting to see signs of improvement • Volatility in economic growth expected Inflation – tracking at approximately 3-4% Rupiah stabilising after 3 years of depreciation 16,000 20% 15,000 18% 14,000 16% 13,000 14% IDR / USD 12,000 12% 11,000 10% 10,000 8% 9,000 6% 8,000 4% 2% 7,000 6,000 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Regulatory risk also has the potential to create uncertainty Coca-Cola Amatil 2016 Investor Day | 31
We have a strong product portfolio that supports our position to capture growth in the NARTD market Sparkling Beverages Still Beverages Colas Tea Juice Flavours Dairy Sports Water Coca-Cola Amatil 2016 Investor Day | 32
Indonesia has 17,500 islands which makes our supply chain complex Indonesia supply chain complexity 12 days 12 days 9 days 12 days 12 days 12 days 10 days 12 days 10 days 10 days 20 days Coca-Cola Amatil 2016 Investor Day | 33
Our transaction with The Coca-Cola Company established clear growth and return objectives for the business Long-term market leadership Economic returns • Targeting a strong market position (by • ROCE above WACC by 2020 volume and value) in sparkling beverages • EBIT margin of 10% by 2023 • Targeting a market leadership position (by • Cost growth to be less than inflation value) in NARTD • Targeting above market volume growth for the next 10 years Closer alignment, greater focus, improved performance strong progress against the plan Coca-Cola Amatil 2016 Investor Day | 34
And established an effective governance structure, creating even closer alignment Governance Board of Commissioners Board of Commissioners • CCA: 3 nominees • TCCC: 2 nominees David Browning Alison Watkins Martyn Roberts CCA Head of Strategy CCA Group Managing CCA Group Chief President Director / CEO Director Financial Officer Atul Singh (1) Kadir Gunduz Krishnakumar Thirumalai “KK” Managing Director, TCCC Chairman Asia Indonesia & PNG Pacific Group TCCC Region Director India, Bangladesh, Sri Lanka and Nepal 1. Atul Singh is retiring in March 2017. Coca-Cola Amatil 2016 Investor Day | 35
Our senior leadership team has significant system and developing markets experience 25+ years system experience Turkey, Russia, Tanzania, Kadir Gunduz Cambodia, Laos, Vietnam, Nepal, Managing Director Sri Lanka, Middle East, North Africa, Iran, Indonesia, PNG 7+ years system 16+ years system Amit Singhal Edi Isdwiarto experience experience Capability Development Manager Marketing Director India, Indonesia Indonesia 27+ years system 36+ years system Bruce Waterfield Mark Payne experience experience Australia, Indonesia, Business Services Director Sales Director Australia, Indonesia PNG 16+ years system experience 20+ years system Deborah Nova Patrick Pech experience Indonesia, Kenya, Sri HR & IT Director Research & Development Director Indonesia Lanka, Cambodia, Morocco, Algeria 20+ years system 8+ years system Gigy Phillip Simon Unterberger experience experience Australia, Indonesia, Australia, Indonesia, Supply Chain Director Corporate Planning Manager PNG South Korea Lucia Karina 5+ years system 1+ years system Thomas Praming experience Public Affairs & experience Middle East, North Finance Director Indonesia Communications Director Africa, Indonesia, PNG Coca-Cola Amatil 2016 Investor Day | 36
We are accelerating growth to transform the business Focus – how we’ve changed our strategy Niche Mass market Indonesian population Indonesian population Strategic priorities – what we said we’d do 1. Improve product 2. Increase 3. Build brand 4. Build channel strength availability affordability relevance Supported by a number of enablers Investing in Driving effective Driving cost A more agile and capacity to sustain and efficient route competitiveness responsive system growth to market execution Strong progress across all strategic priorities and enablers Coca-Cola Amatil 2016 Investor Day | 37
We are pleased with our progress since 2014 Video: “Accelerate to Transform” Coca-Cola Amatil 2016 Investor Day | 38
Strategic Priority 1 Improve product availability The opportunity Our approach Progress Undertake significant market 1M+ outlets surveyed insights research – proprietary 3.41 Outlet base increased by >120K Off Premise Outlet coverage (millions) knowledge database outlets in ~21 months 2.87 2.73 0.77 1.06 1.61 Establish third party 82 CCODs territories will be warehousing / distribution established by end 2016 network (“CCODs”) 1.72 42 distribution centres will be closed Rationalise our network 0.17 by end 2016 1.63 Expand salesforce 700+ new sales roles 0.63 Increase productivity and Sales Training Academy capability Rollout cold drink equipment ~111K new coolers rolled out Continued cooler placement drive 0.37 0.63 0.14 FMCG NARTD Water Tea Sparkling Juice Outlets Outlets Outlets Outlets Outlets Outlets Java will be completed 2016 Route-to-market program Stocks CCA Stocks category Doesn't stock category Bali & Sumatera commence 2017 Coca-Cola Amatil 2016 Investor Day | 39
Strategic Priority 2 Increase affordability Sparkling Beverages affordability Still Beverages affordability Price Rebase Price Rebase New packaging New packaging New New New New New Flavour 425ml PET 1.5L 1.0L PET 390ml PET 250ml PET packaging packaging packaging packaging Minute Maid Pulpy IDR 5,000 IDR 15,000 IDR 10,000 IDR 4,000 IDR 3,000 300ml cup 350ml PET 900ml PET 750ml PET Apple Crush IDR 11,000 IDR 9,000 IDR 2,000 IDR 4,000 Price reset and introduction of new pack sizes is New pack sizes, new packaging and new products gaining traction Coca-Cola Amatil 2016 Investor Day | 40
Strategic Priority 3 Build brand strength Media spend has been increased Category and brand building Advertising: showcasing consumption occasions Sparkling – increase relevance and occasions • Global one brand campaign – “Taste the Feeling” • Special packs for Ramadan Media Spend • Increased weighting of marketing to Sprite Juice – building a mega brand foundation • Minute Maid Pulpy: best fruit pulp experience • Minute Maid Nutriboost: awareness and trail and launch of multiserve pack Tea – differentiate offering 2014 2016 • Introduced recruitment packs and flavour options Sparkling (excl Sprite) Sprite Stills • New multiserve packaging Coca-Cola Amatil 2016 Investor Day | 41
Strategic Priority 4 Build channel relevance Modern Trade Product range Hypermarkets Supermarkets Minimarkets Price / pack architecture Delivery frequency Call type & frequency Traditional Trade Pushcarts Provision Wholesalers Cooler availability In-store execution Promotional programs Coca-Cola Amatil 2016 Investor Day | 42
Enabler Highlight Cost competitiveness Headcount optimisation & Safety & hazard Logistics Operating efficiencies labour productivity efficiency identification gains • Added 700+ sales • Injury Frequency • System • Logistics function roles Rate (TRIFR) enhancements transforming in improvement has led to line with the • Overall net improved route-to-market • Reduction in reduction ~1,800 operating program consumer • Significant labour efficiency complaints • Significant productivity gains reduction in • Reduction in out handling rates of stocks Our strategy is supported by implementing a range of productivity and efficiency programs across the business to improve competitiveness Coca-Cola Amatil 2016 Investor Day | 43
Enabler Highlight Capability development Training Academies Leadership Leadership Framework Logistics Sales Technical Technical Academy Academy Supply Chain OHS Technical Technical Academy Academy Tailored Leadership Programs Finance & HR CDE Technical Technical Academy Academy Our strategy is supported by a strong focus on developing our people and our leadership capabilities Coca-Cola Amatil 2016 Investor Day | 44
Australian Beverages Barry O’Connell | Managing Director Australian Beverages
Australian Beverages Implementing our strategy in three phases Progress updates on strategic themes • Lead • Execute • Partner Coca-Cola Amatil 2016 Investor Day | 46
Overview We are implementing our strategy in three phases 2015 2016 Phase 2 Phase 3 Shareholder Strategic Phase 1 Cost optimisation to Value Themes Return to growth Stabilise earnings support continued Proposition rebalancing Rebalancing the portfolio Refreshed and strengthened Lead Focus on Sparkling Beverages category growth plan Accelerate Still Beverages Targeting Revenue growth management low single Identified at least a further $100M Execute Route-to-market of cost optimisation opportunities digit EBIT Cost optimisation $100M growth Better alignment with TCCC Planning for incidence Partner pricing from 2017 Monster Energy agreement Coca-Cola Amatil 2016 Investor Day | 47
Lead Rebalancing our portfolio has begun as category demand shifts from Sparkling to Still Beverages Market Volume (1) CCA Australian Beverages Volume (1) 12mths to 1H15; vs 12mths to 1H16 12mths to 1H15 vs 12mths to 1H16 +20.6% +12.5% -0.9% -1.6% 12 months to H1 2015 12 months to H1 2016 12 months to H1 2015 12 months to H1 2016 Sparkling Stills Change last 12 months Sparkling Stills Change last 12 months 1. Measured channels. Combined Grocery and Convenience scan data (Australian Grocery Weighted and AU Convenience scan) Coca-Cola Amatil 2016 Investor Day | 48
Lead With many of the building blocks now in place, we are confident of Coca- Cola’s return to growth Shaping Rebuilding Premium Perfect Product One Brand choice brand affinity packs portion size innovation First step in a New global Acceleration of Optimised pack Pipeline of new New look under “Taste the multi-phase high revenue & portion size flavours for one integrated Feeling” stevia strategy packs Coca-Cola brand campaign Coca-Cola Amatil 2016 Investor Day | 49
Lead Meanwhile, we are leading the way to re-invent the flavoured sparkling category Sustained Kilojoule Re-igniting key Product Brand advertising reduction segments innovation innovation support TCCC Flavoured sparkling Naturally lower sugar, New sophisticated soft drink soft drink organic juice tailored to the adult palette Adult sparkling Coca-Cola Amatil 2016 Investor Day | 50
Lead We are changing the way consumers view the water and enhanced hydration categories The Nation’s The “non - boring” Sports functional Capturing New generation “ Smartwater ” efficacy Hydration water coconut water Leading functional Breaking the mould Availability, flavour Accelerating Driving category benefits supported of typical water expansion and new growth (~60% value growth by by asset based advertising to make advertising to YTD) through expanding the marketing Mount Franklin the maximise sparkling availability and new enhanced water Nation’s own opportunity flavours segment Coca-Cola Amatil 2016 Investor Day | 51
Lead And challenging the traditional approach to under-exploited Still Beverages categories A new energy partner with a huge Energy pipeline of innovation and marketing assets Value Still the only brand with potential for Added national distribution - now with a Dairy solid innovation pipeline for 2017 and beyond Making the category more Iced Tea accessible through lower sugar and non-traditional flavours Coca-Cola Amatil 2016 Investor Day | 52
Lead Our growth in Still Beverages is orientated towards higher net sales revenue per case categories Market Volume 2014 – 2016 Coca-Cola Amatil 1H16 Shifting category demand Average Revenue Per Case Market volume 2 year compound annual growth rate (1) Indexed to Sparkling Beverages (2) 25% 20% 15% 10% 5% 0% -5% 1. Market data. Combined Grocery and Convenience scan data (Australian Grocery Weighted and AU Convenience scan). Coca-Cola Amatil 2016 Investor Day | 53 2. Coca-Cola Amatil data, based on average revenue per case for the 6 months to 30 June 2016, excluding Neverfail.
Overview We are implementing our strategy in three phases 2015 2016 Phase 2 Phase 3 Shareholder Strategic Phase 1 Cost optimisation to Value Themes Return to growth Stabilise earnings support continued Proposition rebalancing Rebalancing the portfolio Refreshed and strengthened Lead Focus on Sparkling Beverages category growth plan Accelerate Still Beverages Targeting Revenue growth management low single Identified at least a further $100M Execute Route-to-market of cost optimisation opportunities digit EBIT Cost optimisation $100M growth Better alignment with TCCC Planning for incidence Partner pricing from 2017 Monster Energy agreement Coca-Cola Amatil 2016 Investor Day | 54
Execute We will need to continue adapting our route-to- market approach as channel mix continues to evolve YTD Outlet Count % Change vs PY Grocery outlets HORECA outlets National quick Small independent Independent Independent serve restaurant outlets takeaway outlets convenience outlets outlets Coca-Cola Amatil 2016 Investor Day | 55
Execute We are driving systemised, structural improvements to secure sustained revenue growth Promotional Optimisation Portfolio-based Contracts Pack Architecture • Utilising data and analytics led • • Delivering compelling portfolio Accelerated glass, mini cans and offers to customers cold drink packs promotional design optimisation • • Incentivising ranging and Three pack single serve activation architecture with optimised size and price partitions +2.2% 16.6%pts +3.3%pts improvement in volume return on better net contribution where 3 pack better net contribution performance available* promotional investment contracted vs promotional customers * YTD September 2016 vs YTD September 15 (applicable channels) * YTD September 2016 * vs outlets where 3 pack is not available (since 250ml PET launch) Coca-Cola Amatil 2016 Investor Day | 56
Execute Powered by digital sales tools, we are dramatically improving selling power and customer experience A sales force freed to Always on, omni-channel Automated selling tools focus solely on selling customer/CCA interface • • Move to flexible World class online CCA Real-time outlet “shop” for existing and new merchandising model specific business customers, with a tailored performance experience, available on all tracking, • Improved call time focused devices 24/7 executional on business development metrics, outlet • Complemented by other administration and digital channels (customer + + • Additional resource focused order status email, mobile); and on new business • Inbound/outbound call 3D interactive centre (linked to the same • channel specific More efficient approach for selling tools as the rep in the “pictures of our growing base of success” linked to field); and national contracted current customers • Face to face selling and promo/portfolio/ business development. pricing activation Real time automated measurement of ranging and space allocation Coca-Cola Amatil 2016 Investor Day | 57
Execute Our new sales model is yielding positive initial results ahead of an accelerated roll-out Digital Business Development New Business Winning Precincts Migration ~20% more time in outlet Winning new business Online orders reached Concentrated focus in focused on business including large, high ~46% by September. On key precincts to win development driving value operational track to surpass 50% by every outlet across improved ranging and accounts year end range, price, activation activation +5.8%pt 1,265 +4.2%pt +18.2%pt improvement in RED score new high value Gold & better RED score versus non improvement vs prior year in last 6 months Silver customers YTD precinct outlets Coca-Cola Amatil 2016 Investor Day | 58
Execute Our $100M cost optimisation target set in 2014 will be delivered in FY16 $100M cost optimisation target set in 2014 Lead Performance Indicators will be delivered in FY16 • Savings were as anticipated: Safety Logistics • ~1/3 supply chain optimisation (eg Bayswater closure) 6.5ppts 0.5ppts improvement in TRIFR improvement in • ~1/3 procurement optimisation (eg packaging) year to date DIFOTAI year to date • ~1/3 support services optimisation Consumers Manufacturing • Approximately 50:50 between cost of goods sold and indirects 3.3ppts 14.3% improvement in reduction in consumer efficiency year to date complaints year to date Reinvested in brand development and price to support our Lead performance indicators leadership position and to enhance our capabilities continue to improve Coca-Cola Amatil 2016 Investor Day | 59
Execute We have identified at least a further $100M of cost optimisation opportunities to be delivered over the next three years Funding & Transformation Office Focus Areas Reinvestment Implications • “Supply chain of the Future” Transformation Office • “Salesforce of the Future” • Expecting ~$50M of established in early restructuring costs and • Richlands automation • Continued rebalancing of 2016 $75M of capex in 2017 the portfolio through • Business Excellence program • Over 300 initiatives innovation • Targeting to offset • Grid optimisation identified across the restructuring costs with • Additional marketing business potential sale and Outsourcing merchandising • Price investment leaseback • and salesforce restructure Early stages of arrangements implementing a Procurement optimisation number of initiatives Support services optimisation This will underpin our return to revenue growth to support Australian Beverages’ delivering its target of low single digit EBIT growth Coca-Cola Amatil 2016 Investor Day | 60
Execute Significant cost optimisation opportunities in “Supply Chain of the Future” Richlands Business Excellence program Grid Optimisation review New Automated Warehouse ~$75M investment • National approach to supply Commenced assessment of: chain • Currently leasing offsite • Production sourcing warehouse • Standardised routines optimisation • Capex to build new fully • Optimised systems and • Fit for purpose manufacturing automated warehouse on the operating procedures footprint site of existing manufacturing • Continued focus on safety, • Enhanced capability to support plant quality and efficiency portfolio rebalancing Targeting • Logistics optimisation • Investing in technology • Reduction in handling costs platforms to track and measure our lean journey to world class • Reduction in warehouse operating costs • Reduction in truck movements Coca-Cola Amatil 2016 Investor Day | 61
Overview We are implementing our strategy in three phases 2015 2016 Phase 2 Phase 3 Shareholder Strategic Phase 1 Cost optimisation to Value Themes Return to growth Stabilise earnings support continued Proposition rebalancing Rebalancing the portfolio Refreshed and strengthened Lead Focus on Sparkling Beverages category growth plan Accelerate Still Beverages Targeting Revenue growth management low single Identified at least a further $100M Execute Route-to-market of cost optimisation opportunities digit EBIT Cost optimisation $100M growth Better alignment with TCCC Planning for incidence Partner pricing from 2017 Monster Energy agreement Coca-Cola Amatil 2016 Investor Day | 62
Partner We are better aligned with The Coca-Cola Company and have established a partnership with Monster Energy The Coca-Cola Company Monster Energy Water arrangements Agreement from May 2016 • In place from 2016 • Significantly improved alignment in the category Penetration 40% Incidence pricing increase in outlet penetration • Plans in place to introduce in 2017 in only four months Coca-Cola Amatil 2016 Investor Day | 63
Partner Incidence pricing will align the system to grow revenue Planning for incidence pricing to be introduced in 2017 Benefits Concentrate pricing Concentrate pricing based on • Better economic alignment based on price per litre a percentage of revenue between pack sizes • Revenue and volume growth focus rather than revenue or volume growth only • System can be more responsive to the market • Improved decision making TCCC • Most developed markets CCA already operate on a similar arrangement Illustrative Illustrative Coca-Cola Amatil 2016 Investor Day | 64
Execute We are engaging with all stakeholders in preparation for the implementation of container deposit schemes Potential pricing impact (1) Container deposit schemes Relative price increase on lower value packs is greater (1) Potential price increase (%) 70% NT Introduced 2012 QLD 60% Targeting implementation 2018 50% WA Illustrative Targeting NSW implementation 40% Targeting 2018 implementation July 2017 SA 30% Introduced 1977 ACT 20% Targeting implementation 2018 10% 0% $0.25 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 Bottle price 1. Illustrative example using 10 cent deposit and 5 cent handling and administration fee. Assumes all fees passed on to the consumer. Coca-Cola Amatil 2016 Investor Day | 65
Overview We are implementing our strategy in three phases 2015 2016 Phase 2 Phase 3 Shareholder Strategic Phase 1 Cost optimisation to Value Themes Return to growth Stabilise earnings support continued Proposition rebalancing Rebalancing the portfolio Refreshed and strengthened Lead Focus on Sparkling Beverages category growth plan Accelerate Still Beverages Targeting Revenue growth management low single Identified at least a further $100M Execute Route-to-market of cost optimisation opportunities digit EBIT Cost optimisation $100M growth Better alignment with TCCC Planning for incidence Partner pricing from 2017 Monster Energy agreement Coca-Cola Amatil 2016 Investor Day | 66
New Zealand & Fiji Chris Litchfield | Managing Director New Zealand & Fiji Coca-Cola Amatil 2016 Investor Day | 67
We have articulated a clear vision for the business which drives performance and engagement Our vision is set and our progress is strong New Zealand Fiji DELIVERING LEAD TODAY E X E C U T E BUILDING PARTNER TOMORROW Targeting double digit Targeting low single EBIT growth digit EBIT growth Coca-Cola Amatil 2016 Investor Day | 68
We are delivering on our objective of volume based growth Strategic objectives reflected in distinct phases Price and cost out led results Volume based growth plans Recession & Recovery Phase Build for growth Earthquake 2009-2012 2013-2014 2015 1H16 Volume Net Sales Revenue Coca-Cola Amatil 2016 Investor Day | 69
Lead We continue to have strong positions across Sparkling and Still Beverages with significant growth potential NARTD market (1) Expanding profit pools within beverage Approximate market volume composition Approximate CCA share Cola Sports Flavours Water Juice Energy Tea Adult 1. Sources: Nielsen Total MM, YE 2015. Coca-Cola Amatil 2016 Investor Day | 70
Overview We are pleased with progress against our strategy since 2014 Grow Sparkling Beverages Route to market Accelerate Still Beverages Transactions Transactions growing Almost Double Digit Improved Execution faster than Volume Volume growth Metrics (RED) Safe & Engaged People, Proudly Inclusive, Fast, Flexible & Efficient Coca-Cola Amatil 2016 Investor Day | 71
Lead Continue to drive Sparkling Beverages transaction growth, innovating to shape choice across the portfolio in pack and product Shaping Rebuilding Premium Perfect Product One Brand choice brand affinity packs portion size innovation First step in a New global Acceleration of Optimised pack Pipeline of new New look under “Taste the multi-phase high revenue & portion size flavours for one integrated Feeling” stevia strategy packs Coca-Cola brand campaign Coca-Cola Amatil 2016 Investor Day | 72
Lead Continue accelerating Still Beverage volumes via investment in product and packaging, portfolio expansion and brand equity Still Beverages Coca-Cola Amatil 2016 Investor Day | 73
Lead Execute MOST organic juice brand delivering relevance and growth in the café and restaurant channel MOST Juice Snapshot • Targeting café / restaurant outlets • Addresses Retailer desires of Organic and Provenance • Penetration of Café Channel up over 30% post launch • Portfolio approach securing cooler placement and range expansion Coca-Cola Amatil 2016 Investor Day | 74
Lead Execute We have made a significant investment in a new juice and sports manufacturing facility Video: Keri Snapshot • Plant consolidation from four sites to one • Improved operational efficiency & increased productivity • Capacity – 800,000 per day • Capability – Powerade fast flow bottle and improved juice quality Coca-Cola Amatil 2016 Investor Day | 75
Execute We are investing in service and capability to expand our retailer partners across multiple channels Customer promise Marketing assets DOORS 8% increase in coolers STORES 7% increase in Customers Service model Field capability Customer MIX Convenience> 50% mix myCCA CUSTOMER NPS score 33 to 62* *NPS YTD June Coca-Cola Amatil 2016 Investor Day | 76
Partner We have a strongly aligned relationship with The Coca-Cola Company and our other partners The Coca-Cola Company Monster Energy Strong relationship and Distribution agreement since alignment May 2016 Coca-Cola Amatil 2016 Investor Day | 77
Our Journey continues… Our vision is set and our progress is strong New Zealand Fiji DELIVERING LEAD TODAY E X E C U T E BUILDING PARTNER TOMORROW Targeting double digit Targeting low single EBIT growth digit EBIT growth Coca-Cola Amatil 2016 Investor Day | 78
79 Alcohol & Coffee Shane Richardson | Managing Director Alcohol & Coffee
Alcohol & Coffee Developing strong relationships with partners and owned businesses Developing a quality portfolio across alcohol and coffee Significant progress since 2014 Category overviews • Spirits & RTDs • Paradise Beverages • Beer • Cider & Bitters Coca-Cola Amatil 2016 Investor Day | 80
Partner Developing strong relationships with exceptional partners and owned businesses Paradise Spirits & RTDs Beer & Cider Coffee Beverages Fiji Bottled spirits and International beers, craft Coffee beans and Domestic beers and ready-to-drink spirit beers, cider based capsules spirits with export based beverages beverages potential Coca-Cola Amatil 2016 Investor Day | 81
Lead Developing a quality portfolio across alcohol and coffee categories Paradise Beer, Cider & Spirits & RTDs Coffee Beverages Fiji Bitters Range complemented by strong Sparkling and Still Beverage portfolio Coca-Cola Amatil 2016 Investor Day | 82
Overview We are pleased with our progress since 2014 Paradise Beer, Cider & Spirits & RTDs Coffee Beverages Fiji Bitters • Innovate to grow • Domestic innovation • Continue to re- • Brand lead growth driving value growth establish presence strategy delivering strong results • Strong export market • Aggressively grow in opportunity targeted segments • • • • Added Miller Genuine Refreshed the New long term Exports to 15 countries Draft and Miller Chill Grinders Brand partnership agreement across beer and rum including the with Beam Suntory • • Australian Beer International Rum reopening of our iconic • Company brands in Expanded spirit range portfolio now in place coffee shop in market within Asia with significant through BATI and Melbourne innovation in RTD RATU • Leading premium cider • Extended the range to • • portfolio Unrivalled yet under Significant recognition capsules developed premium for Rum Co of Fiji in whiskey range industry awards Expanded and developed portfolio across Australia, New Zealand and Fiji Coca-Cola Amatil 2016 Investor Day | 83
Lead Spirits & RTDs – continue to innovate and grow Japanese Core Brand Premium Spirits Canadian Club Jim Beam Whiskey Refresh • • • • • Accelerate the Recently added to Continue to Increase penetration Maintain and enhance Jim Beam’s growth of our the portfolio accelerate the growth of core spirits premium portfolio of Canadian Club #1 position in spirits • • Significant value Recent global brand & RTDs • • redesign – first Exciting growth creation through high NPD launches in • opportunity in high value, high demand 2016 continue change to the Jim Recent innovation in vale categories category annualised double Beam franchise in 50 refreshment and digit growth years premium trends Fastest growing NPD to grow the Most diverse Strongest Japanese #1 spirit RTD Bourbon drinking spirit and RTD now whiskey portfolio whiskey portfolio trademark #4 in Australia occasion Coca-Cola Amatil 2016 Investor Day | 84
Lead Partner Jim Beam Citrus Highball Bringing innovation to the category Video: Jim Beam Citrus Highball Coca-Cola Amatil 2016 Investor Day | 85
Lead Paradise Beverages Fiji – maintain strong local market position and pursue export opportunities Beer Rum • • 2015- Strongest recorded sales year in Full spirits portfolio and innovation in the Brewery’s history local market • • Brand seeding in Export markets - Very strong early signs of Export Australia, Asia, America Samoa & opportunity with globally awarded Rum West Coast USA portfolio Coca-Cola Amatil 2016 Investor Day | 86
Lead Beer – continue to build scale in premium international beer and craft beer segments Premium International Local Craft Available to CCA International Craft Beer Yenda Further Partner Brands Coors Blue Moon • • • • Range of local craft beers Access to current partners Emerging International Worlds largest craft beer broader portfolio of International Premium brand with Millennial • Alehouse #2 craft beer in the US Premium and International Craft consumers • • Available in draught brands Recent innovation with • Consecutive double digit growth seasonal releases Limited Releases since launch Samuel Adams • Yenda Twist & Stoup Miller Genuine Draft & Miller • Chill #1 craft beer in the US • Patchwork IPL International Beer in Australia • #4 largest premium • Beyond the Black Stump International Beer in Australia Coca-Cola Amatil 2016 Investor Day | 87
Partner Exciting new agreement with Molson Coors complements current beer and cider portfolio CCA Portfolio well positioned in Beer New Agreement & Cider Growth Segments • New Agreement from October 2016 • Addition of the Miller brand strengthens CCA’s position in the large and Growing • Includes the addition of Miller Genuine Draft Premium International Segment and Miller Chill to the portfolio • Wider CCA Beer and Cider portfolio well • Miller brand is the fourth biggest Premium positioned in growth segments International beer in Australia • Craft, Craft Int., Low Carb, Cider, Premium Import Coca-Cola Amatil 2016 Investor Day | 88
Lead Partner Molson Coors Coors – Born in the Rockies Video: Coors – Born in the Rockies Coca-Cola Amatil 2016 Investor Day | 89
Lead Cider and Bitters – continue to innovate in these segments to drive further growth Premium Cider Mainstream Cider Bitters • Strong innovation pipeline with • Continue to increase penetration • Recently added additional flavours flavours • Additional innovation • Further innovation potential opportunities Coca-Cola Amatil 2016 Investor Day | 90
Lead Coffee – strong brand-led growth plan under Grinders Coffee Roasters Brand Products Extending reach • Clarity and communication of • Continue growth in traditional • Innovation opportunities right brand for the right outlet roast & ground • Training academy • Coffee capsules in grocery with • Equipment supplier with coffee further portfolio expansion “pull through” opportunities Coca-Cola Amatil 2016 Investor Day | 91
SPC Alison Watkins | Group Managing Director Coca-Cola Amatil 2016 Investor Day | 92
SPC update Example of innovation Significant progress on investment in functional food • New capacity • Modern snack line • State of the art tomato processing • Strengthened operations capability • Outsourced merchandising • Sale of surplus site at Mooroopna • Divestment of non-core UK business • Building export focus Investment on track, profitability challenged Coca-Cola Amatil 2016 Investor Day | 93
Finance Overview Martyn Roberts | Group Chief Financial Officer Coca-Cola Amatil 2016 Investor Day | 94
Finance Overview We are applying financial discipline to generate attractive sustainable returns for shareholders Targeting Investment EBIT NPAT & ROCE shareholder case drivers drivers value creation 1 5 Revenue growth plans and Modest capex for Coca-Cola franchisee continuous cost focus Mid single-digit developed markets across the group with leading brands EPS growth Route to Market with scale and reach 2 Targeting low Growth capex for Core developed single-digit Indonesia funded via market franchises Large scale, modern, (Australia and NZ) TCCC equity injection EBIT growth 6 low cost infrastructure Attractive dividend yield Steady cash flow from (>80% payout 3 core Australia and Developing ratio) Targeting Continuous working New Zealand markets double-digit capital management (Indonesia, franchises EBIT growth PNG and Fiji) Growth opportunities 7 including Indonesia 4 Targeting and Alcohol & Coffee Strong balance Alcohol & Coffee double-digit providing upside Bolt on acquisitions sheet and ROCE and SPC EBIT growth Coca-Cola Amatil 2016 Investor Day | 95
1. Modest capex for developed markets Australia and New Zealand capital expenditure (AU$M) and capital expenditure to depreciation (x) • Capex for developed markets is modest $M Depreciation (x) and below depreciation, subject to 350 2.00 Australian supply chain needs. 1.8 1.80 • Main requirements are for cold drink 300 40 equipment and IT investment to support 1.60 strategy 250 1.40 • New robust capex approval process 1.20 • Redesigned business case format 200 1.0 focussing on financial metrics and 14 1.00 returns 150 0.8 0.80 0.7 • New return hurdle rates in place 266 15 0.7 ~25 tailored for country risk, business 25 0.60 100 risk and type of investment (eg 175 growth / stay in business / safety) 0.40 126 50 ~100 98 • Post implementation review program 0.20 initiated to increase accountability - - • FY17 Group capex expected to be FY12 FY13 FY14 FY15 FY16F closer to $375M rather than the $300M Australia New Zealand Capex Multiple identified at 1H16 due to the Richlands project Coca-Cola Amatil 2016 Investor Day | 96
2. Growth capex for Indonesia funded via TCCC equity injection • April 2015 TCCC invested USD500 million 600 Indonesia cumulative capital for a 29.4% interest in the Indonesian expenditure from April 2015 (US$M) business ~US$500M 500 • Funds ring-fenced for growth capex in Indonesia 400 • Identical capex process and rigour for capex in Indonesia as for developed markets Illustrative • Capex is focussed on: 300 • Cold drink equipment (circa 40,000 pieces of equipment per annum) to 200 support route to market strategy • Production plants and lines consistent with capacity requirements from 100 ~US$50M increasing demand • Distribution centres 0 FY15 FY16 FY17 FY18 FY19 ~FY20 • Disciplined use of capital as required • Current forecast is that we have sufficient funds for capital investment through to around 2020 depending on volume growth Coca-Cola Amatil 2016 Investor Day | 97
3. Continuous working capital management Working capital core developed markets and developing & growth markets ($M) • Renewed focus on sustainable $M working capital improvements across 600 the group 500 • Core developed markets stabilised 400 with a view to improve (Australia & 300 New Zealand) 200 • Committed to supporting growth 100 markets such as Indonesia and - FY12 FY13 FY14 FY15 Alcohol & Coffee Core Developed Markets (Aus/NZ) Developing/Growth Markets • Particular focus on inventory in the short term Coca-Cola Amatil 2016 Investor Day | 98
4. Bolt on acquisitions History of bolt-on acquisitions, divestments and significant joint ventures Sufficient balance sheet capacity to pursue bolt on acquisitions Most likely to be in Alcohol & Coffee Coca-Cola Amatil 2016 Investor Day | 99
5. Targeting mid single digit earnings per share growth Earnings per share and EBIT (1) growth FY15 and 1H16 (%) 7.8% • Mid single digit earnings per share (EPS) growth already being achieved, albeit through lower finance costs as a result of TCCC equity injection in Indonesia 4.7% • Aspiration is for mid single digit EPS to 3.2% be largely EBIT driven • Risks to delivery in terms of success of 1.4% revenue initiatives in Australia and economic conditions in Indonesia remain FY15 1H16 EBIT % EPS % 1. Before 2014 significant item. Coca-Cola Amatil 2016 Investor Day | 100
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