AMERICAS CONFECTIONERY

Transcription

1 AMERICAS CONFECTIONERY

2 Generating Sustainable Profitable Growth Trevor Bond EVP Finance, Americas Confectionery

3 Agenda for the Day Overview Driving our Growth Agenda Growth Bazaars USA: Awakening a Sleeping Giant Canada: Building a Total Confectionery Powerhouse Mexico: Continuing to Deliver World Class Performance Brazil: Transforming the Business Model Q&As

4 Agenda for the Day Overview Driving our Growth Agenda Growth Bazaars USA: Awakening a Sleeping Giant Canada: Building a Total Confectionery Powerhouse Mexico: Continuing to Deliver World Class Performance Brazil: Transforming the Business Model Q&As

5 Agenda for the Day Overview Driving our Growth Agenda Growth Bazaars USA: Awakening a Sleeping Giant Canada: Building a Total Confectionery Powerhouse Mexico: Continuing to Deliver World Class Performance Brazil: Transforming the Business Model Q&As

6 Agenda for the Day Overview Driving our Growth Agenda Growth Bazaars USA: Awakening a Sleeping Giant Canada: Building a Total Confectionery Powerhouse Mexico: Continuing to Deliver World Class Performance Brazil: Transforming the Business Model Q&As

7 Agenda for the Day Overview Driving our Growth Agenda Growth Bazaars USA: Awakening a Sleeping Giant Canada: Building a Total Confectionery Powerhouse Mexico: Continuing to Deliver World Class Performance Brazil: Transforming the Business Model Q&As

8 Agenda for the Day Overview Driving our Growth Agenda Growth Bazaars USA: Awakening a Sleeping Giant Canada: Building a Total Confectionery Powerhouse Mexico: Continuing to Deliver World Class Performance Brazil: Transforming the Business Model Q&As

9 Agenda for the Day Overview Driving our Growth Agenda Growth Bazaars USA: Awakening a Sleeping Giant Canada: Building a Total Confectionery Powerhouse Mexico: Continuing to Deliver World Class Performance Brazil: Transforming the Business Model Q&As

10 Objective of Today s Presentations To demonstrate that Americas Confectionery is building a sustainable growth machine Fueled by outstanding cost management Via a platform of it s people, brands and insights

11 My Agenda Overview of the region Delivering what we said we would Creating the platform for continued superior performance

12 We Have Strong Geographical Participation Across the Americas KEY % of CSAC NSV 22% Canada Population 32m Confy Market Position #1 Mecca Population 182m Confy Market Position #1 37% 23% Southern Cone Population 48m Confy Market Position #2 4% 14% US Population 293m Confy Market Position #4 Brandina Population 300m Confy Market Position Brazil #1 Colombia #1 Venezuela #2 Population Source: 2004 Census data Confectionary Market Position: Euromonitor

13 With Strong Market Positions in Many Categories Canada #1 in Gum & Sugar #1 in Cough #3 in Chocolate Mexico #1 in Gum #1 in Sugar Argentina #1 in Gum #2 in Sugar US #2 in Gum #1 in Cough/Cold #5 in Sugar Brazil #1 in Gum #1 in Sugar Colombia #1 in Gum #2 in Sugar Venezuela #1 in Gum #1 in Sugar Figures are sourced from IRI/Nielsen/Cortinas/Euromonitor - latest 52 weeks

14 Supported by Strong Power Brands That Operate Across the Region

15 October 2003: Key Priorities 2. Generate the Fuel for Growth 3. Create sustainable, profitable, top line growth via Smart Variety 1. Deliver the integration create the new business

16 Integration is Now Behind us Unified invigorated sales force in each market North American warehousing and distribution delivering excellent customer service Shared services established in all markets Two primary SAP platforms cover 80% of the Region

17 Major Elements of FFG Successfully Executed Back Office Head Office rationalization SBS implementation IT consolidation & rationalization Supply Chain 3 factory closures US distribution costs reducing post transition Procurement benefits ahead of expectations Commercial Commercial structures integrated Good early progress on value optimization & SKU rationalization Organizational focus on costs as well as growth

18 The Results: Profitable, Double-Digit Growth 2004 Performance versus Plan Versus Year Ago, Like for Like Sales up 10% Profits up 24% Index Marketing up 25%, or 150 basis points as a % of sales Margins up 140 bps Sales Profit We are Beating the Model

19 Our Vision has Stood the Test of Time Our Vision: Our Goal: Our Culture: Our Focus: Working together to create the Americas fastest growing total confectionery powerhouse. Grow shareholder value by driving our sales growth to double digits A Pack in Every Pocket Every Day A passion for winning beat the competition. Get the facts. Move with speed and courage. Be accountable. Be adaptable. Be aggressive. GENERATE THE FUEL FOR GROWTH BUILD POWER BRANDS INNOVATE TO WIN DRIVE TOTAL AVAILABILITY GROW OUR PEOPLE Working together to create brands people love

20 Sustaining Fuel for Growth Sourcing Leverage the regional supply infrastructure:

21 Manufacturing Network Our current manufacturing network comprises 10 factories producing over 330,000 tons Ewen Ewen (41) Rockford* (35) Gladstone Granby Bertrand Emerald Emerald 2005 Production Volume (k tons) Customers Puebla Canada 122 Canada, US United States 38 US, Canada Cali Cali MeCCA 64 MeCCA, US, Canada Bauru Brandina 81 Brandina, EMEA Buenos Aires Southern Cone 25 S. Cone, Brandina Total Region 330

22 Sustaining Fuel for Growth Sourcing Leverage the regional supply infrastructure: Mexico supply of Splash to NA South American gum base supply

23 Sustaining Fuel for Growth Sourcing Leverage the regional supply infrastructure: Mexico supply of Splash to NA South American gum base supply Simplify to reduce costs SKU rationalization enabling automation

24 SKU/Piece Size Rationalisation: Swedish Fish before after after Reduced Piece Sizes from 14 to 4 (71%), SKUs by 50% Simplification enabled automation, increasing gross margin by 600 basis points No impact on brand growth (H1 05 growth 29%)

25 Sustaining Fuel for Growth Sourcing Leverage the regional supply infrastructure: Mexico supply of Splash to NA South American gum base supply Simplify to reduce costs SKU rationalization enabling automation Value optimization

26 Value Optimization: A Way of Life in Canada From Multiple projects underway which will deliver $3m+ in 2005 Dentyne Ice project alone saved $1m across North America To Further projects already underway, expanding into distribution & merchandising spend

27 Sustaining Fuel for Growth Sourcing Leverage the regional supply infrastructure: Mexico supply of Splash to NA South American gum base supply Simplify to reduce costs SKU rationalization enabling automation Value optimization Non production spend

28 Sustaining Fuel for Growth Sourcing Leverage the regional supply infrastructure: Mexico supply of Splash to NA South American gum base supply Simplify to reduce costs SKU rationalization enabling automation Value optimization Non production spend Further optimisation US distribution network Continuous improvement programmes Procurement practices into Latin America

29 Creating Profitable Growth by Building Power Brands Across the Region Power brand growth is nearly 4x that of pre-acquisition given double-digit increases in marketing spend Marketing Spend Powerbrand Sales CAGR Average Annual Growth 15% 14% 12% 10% 8% 6% 4% 2% 0% 3% 11% *Proforma, at constant currency

30 Underpinned by Great Innovation 2.4% share in Canada #1 Trident SKU Brought novelty to the brand and category Represents 6% of Halls sales in Brazil, highly incremental and margin enhancing

31 Executed by Advantaged RTM Expansion in key growth channels Distribution gains of legacy Cadbury products Sales force now biggest in Canada Conducted largest ever shopper research Investment behind RTM in Mexico Sales force expansion to drive growth See the growth Bazaar Route to market is an investment

32 Enabled by Growing our People Commercial capabilities programme Develop and refresh the talent pool Corporate social responsibility plans across the Region Striving to become The Place To Be

33 Each BU is Playing its Role Continue growth in gum via differentiated, relevant innovations Expand and grow Halls Profitably grow chocolate share Use Total Confectionery position to leverage next chapter of growth Drive gum growth via innovation, RTM and commercial investment Continue the expansion into differentiated sugar Continue focus on core brands Expand profitably into other consumer types and categories

34 Summary We have delivered what we promised In the market place To our colleagues To our shareowners We are well placed to build a track record of profitable growth through our Power Brands RTM scale & insight Ongoing cost agenda