KO Cagny 2010
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The document discusses Coca-Cola's business in Latin America. It notes that Latin America represents a growing market of over 500 million people, many of whom are young. Coca-Cola has over 150 brands and 800 products in the region. The business is organized into four dynamic units: Mexico, Brazil, Latin Center, and South Latin. Coca-Cola has consistently grown its volume in Latin America over the last ten years, outperforming regional GDP growth.
KO Cagny 2010
- 1. Jose Octavio Reyes President, Latin America Group A Growing World of Refreshment in Latin America Jose Octavio Reyes President, Latin America Group CAGNY 2010 Forward-Looking Statements 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. 2 CAGNY 2010 1
- 2. Jose Octavio Reyes President, Latin America Group 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 Note: NARTD Industry Size excludes Bulk Water and Milk 4 Source: Population UN CAGNY 2010 2
- 3. Jose Octavio Reyes President, Latin America Group Four Dynamic Business Units 2009 Volume Growth Mexico 44% of LAG volume +6% vs PY Brazil 24% of LAG Volume Latin Center +4% vs PY 14% of LAG Volume +12% vs PY Colombia Central America Strong Performance in Venezuela Caribbean All Economic Times Ecuador Latin KO Volume America Growth GDP South Latin 18% of LAG Volume 2008 +4.1% +8% +4% vs PY 2009 -2.3%(e) +6% Argentina Bolivia Chile Paraguay Peru Uruguay 5 Source: Real Latin America GDP Growth from Business Monitor International, January 2010 Consistent, Quality Growth Year After Year Latin America Group Last Three Years Total Volume + 1.4 B Unit Cases 8,000 Adding 7,000 Another Brazil 6,000 5,000 Last Ten Years 4,000 + 2.8 B Unit Cases 3,000 Adding Another 2,000 Brazil 1,000 + Mexico + Peru - MMUC 1999 2006 2009 Note: Equivalent growth in terms of countries based on volume in base year 6 CAGNY 2010 3
- 4. Jose Octavio Reyes President, Latin America Group Outperforming the Industry KO vs. Industry Growth CAGR 2006-2009 68% 52% 45% 36% 31% 32% 28% 9% 9% 4% 2% 3% Sparkling Packaged Water Sports Drinks Energy Drinks RTD Tea Juice & Juice Drinks KO / Industry Note: Growth based on volumes in Key Countries 7 (Mexico, Brazil, Argentina, Chile and Colombia) Winning Against All Myths and Misconceptions 8 CAGNY 2010 4
- 5. Jose Octavio Reyes President, Latin America Group MYTH #1 9 We Have Heard This Story Before. . . KO Sparkling Per Capita Consumption Total Latin America Group 8oz Bottles / Year 260 240 220 Adding 200 169 MM 180 Unit Cases 160 Every Year 140 120 100 1999 2002 2006 2009 10 CAGNY 2010 5
- 6. Jose Octavio Reyes President, Latin America Group . . .Yet Our Share Keeps Growing, Year After Year Latin America Sparkling Beverages VOLUME SHARE 62% + 2 pts vs 2006 VALUE SHARE 68% + 2 pts vs 2006 Note: Volume and Value Share Data FY2009. Includes Mexico, Brazil, Argentina, Chile and 11 Colombia. Value Share calculated using Year-Average Exchange Rates for 2009 Source: Nielsen Consumers Prefer Our Brands Favorite Brand Coca-Cola vs. Nearest NARTD Competitor Mexico 9X Brazil 7X Argentina 7X Chile 14X 12 CAGNY 2010 6
- 7. Jose Octavio Reyes President, Latin America Group Sparkling Beverage Commercials “Secretos” “Cielo” “Happy Kingdom” “Big Splash” 13 14 CAGNY 2010 7
- 8. Jose Octavio Reyes President, Latin America Group Still Beverage Growth Drives Incremental Volume KO Stills Volume MM Unit Cases 1,242 61% KO Incremental Volume From Stills - 2009 116 1999 2009 15 Our Winning Still Portfolio Water Sports Ready to Drink Drinks Tea & Coffee Energy Drinks Juice & Juice Drinks Flavored Water Active Lifestyle Other Categories 16 CAGNY 2010 8
- 9. Jose Octavio Reyes President, Latin America Group Winning Across Categories 17 Still Beverage Commercials “Detalles” “Farola” “Epika” “Hugo” “Cepita” 18 CAGNY 2010 9
- 10. Jose Octavio Reyes President, Latin America Group 19 A System Like No Other 64 Bottling 4.3 Million 450+ Million Partners Customers Servings Every Day 20 Note: 64 Bottling Partners excludes JDV, IEQSA, Leao, Suco Valle CAGNY 2010 10
- 11. Jose Octavio Reyes President, Latin America Group Superb Execution Capabilities Available Visible Affordable 21 Growing Our Opportunities Together 22 CAGNY 2010 11
- 12. Jose Octavio Reyes President, Latin America Group Investing in Our Business and Ahead of Demand Investment System Investments for the US$B Currency Neutral Next 5 Years 1.5 +29% CAGR 1.0 • $5B in Mexico 0.5 • $6B in Brazil - 2005 2008 Capex DME Note: Includes Coca-Cola FEMSA, Coca-Cola Andina, Embotelladoras ARCA 23 and Grupo Continental Source: Public Bottlers Annual Reports (2009 data unavailable at time of presentation) 24 CAGNY 2010 12
- 13. Jose Octavio Reyes President, Latin America Group Winning in a Highly Competitive Arena with All Global and Local Players 25 26 CAGNY 2010 13
- 14. Jose Octavio Reyes President, Latin America Group A Highly Relevant Traditional Channel . . . Over 2 Million Traditional Customers 27 . . . Yet Major Retailers Have Arrived! Since 1992 Presence of Large Since 1975 Retailers is Growing Since 1991 New Stores CAGR 2005-2009 +7% Since 1997 Source: Retailers Annual Reports, New Stores Growth: RetailNet Group 28 CAGNY 2010 14
- 15. Jose Octavio Reyes President, Latin America Group How Relevant is Latin America for Walmart? Over 2,700 Outlets Multiple Formats Nine Countries & • Hypermarket Counting . . . • Supercenter • Discount Grocery • Cash & Carry • Mexico • Convenience • Brazil • Membership Club • Chile • Wholesale • Costa Rica • Soft Discount • Guatemala • Restaurant • El Salvador 2009 Share of • Bank Retail Sales • Nicaragua • Apparel • Honduras Latin America 20% • Argentina USA 18% Sources: Figures shown for 2009 Share of Retail Sales are estimates; # Outlets as 29 of 12/31/09 from walmartstores.com; Share from RetailNet Group, within Modern Trade; Formats from RetailNet Group and walmartstores.com Winning Against All Myths and Misconceptions VOL. CCLV, NO. 337 Wall Street Times FRIDAY, FEBRUARY 19, 2010 $2.00 Sparkling Beverages Have Yet to Peak Our System IS Working Well There IS Competition Latin America’s Growth IS Balanced Between Still and Sparkling LARGE RETAILERS Have Arrived 30 CAGNY 2010 15
- 16. Jose Octavio Reyes President, Latin America Group The Opportunity Ahead 31 Emerging Socioeconomic Dynamics By 2013 Latin America Will See . . . Middle Class Growth Youth Population GDP Growth +15 Million 227 Million +3.9% 32 Source: Population UN, GDP Euromonitor CAGNY 2010 16
- 17. Jose Octavio Reyes President, Latin America Group Per Capita Growth Opportunity Coca-Cola Trademark Per Capita Consumption 2009 Mexico 396 Per Capita Latin America Group 179 Per Capita World 44 Per Capita 33 Great Innovation Opportunities Valle Frut Blak Hugo Fruitopia Fruit Still Drink On Premise Coffee Value Added Dairy Juice Concentrate Fuze Minute Maid Pulpy Fanta Pure Pulpy Super Milky Odwalla Plant Bottle Illy Issimo vitaminwater 34 CAGNY 2010 17
- 18. Jose Octavio Reyes President, Latin America Group The Size of the Prize Forecasting Vibrant NARTD Growth Consumer Spend Estimated CAGR 2010-2013 14 B Unit Case Industry NARTD 9% Alcoholic Bevs 8% Packaged Foods 7% 7.7 B Unit Case Opportunity Source: Euromonitor, Nominal Values, Excluding Venezuela 35 Note: Opportunity based on 2009 NARTD Industry Size and current KO Volume Winning Together, In A Growing World Of Refreshment 36 CAGNY 2010 18
- 19. Jose Octavio Reyes President, Latin America Group A Growing World of Refreshment in Latin America Jose Octavio Reyes President, Latin America Group CAGNY 2010 CAGNY 2010 19