Introduction. Gil Cassagne President and CEO, Cadbury Schweppes Americas Beverages

Transcription

1 AMERICAS BEVERAGES

2 AMERICAS BEVERAGES

3 Introduction Gil Cassagne President and CEO, Cadbury Schweppes Americas Beverages

4 Agenda Gil Cassagne Overview Randy Gier Creating Brands People Love Cindy Hennessy Accelerating Innovation Jim Johnston Strengthening Retailer Relationships and Route to Market Pedro Herran Bebidas Mexico Q&A Americas Beverages Region

5 AMERICAS BEVERAGES

6 2003 Goals Integrate three North American beverage units into one fully-integrated beverage business Lower the region cost structure in order to re-invest in brands, systems and people Develop a compelling and distinctive portfolio strategy Develop and implement solutions to strengthen our route-to-market

7 Progress Allocating resources against high growth and profit opportunities Leveraging the strengths of our combined structure and portfolio Proactive strategy to ensure we re competitive from factory to shelf Continuing to reduce cost base

8 Regional Integration Complete Beginning to see benefits of leveraging combined organization No significant disruption

9 Five Key Strategic Pillars Goal: Become the best beverage business in the Americas Create sustainable competitive advantage through our people Seek operational excellence and reduce our cost base Create brands people love Build valued retailer relationships Strategically align our Route to Market

10 Five Key Strategic Pillars Create sustainable competitive advantage through our people Seek operational excellence and reduce our cost base Create brands people love Build valued retailer relationships Strategically align our Route to Market

11 Regional Leadership Team Randy Gier Chief Marketing Officer Joined from outside the group Strong consumer goods background Sharp technical marketing skills Bert Alfonso Chief Financial Officer Joined Cadbury Schweppes with Adams in 2003 Joined Americas Beverages in 2005 Focus on profitable growth/cost agenda

12 Senior Leadership Team More than 130 new members Half are new to their roles Cindy Hennessy Region Head of Innovation Significant impact on innovation pipeline Quality Quantity

13 Five Key Strategic Pillars Create sustainable competitive advantage through our people Seek operational excellence and reduce our cost base Create brands people love Build valued retailer relationships Strategically align our Route to Market

14 Fuel For Growth Savings On track to deliver expected $120m savings Indirect Region integration reduced headcount by 250 Hialeah & North Brunswick plants closed Direct Procurement initiatives Value optimization projects

15 Key Enablers Probe IT system Replaced old systems with single integrated ERP system Shared Business Services (SBS) Central back office team for Americas Beverages and Confectionery Savings vs cost of previous structure Tightened management of Accounts Receivable

16 Operational Excellence Ongoing Supply Chain Optimization Award-winning redesign of 1 gallon Hawaiian Punch bottle Lighter weight Lower cost Maximize Marketing and Trade Spend Effectiveness Consolidated our advertising with Y&R Partner with US Confectionery on media buying Cut out $35m of non-working media dollars

17 Five Key Strategic Pillars Create sustainable competitive advantage through our people Seek operational excellence and reduce our cost base Create brands people love Build valued retailer relationships Strategically align our Route to Market

18 Our Portfolio Has Two Major Segments CSD Non-CSD Concentrate model Make concentrate and sell to bottlers Finished goods model Manufacture and sell to trade

19 Our Portfolio Strategy We emphasize consumer-preferred brands in selected beverage segments We only play where we have brand advantage or can build it We focus on brands with competitive advantage and the ability to extend those advantages We spend wisely to extend a relatively fixed pool of resource

20 Differentiated Brand Equities Each brand must have unique features and benefits Insight Innovation Impact

21 Dr Pepper Back on Track Dr Pepper Volumes % % volume change vs year ago 6% 5% 4% 3% 2% 1% 0% -1% -2% H %

22 Cherry Vanilla Adds New Consumers 85% of volumes have been incremental to CSAB

23 More in Store for 2006 Focus on Regular Dr Pepper new advertising, packaging and promotions Expansion of successful Hispanic test Trial blitz for Diet and Diet Cherry Vanilla Dr Pepper Second soda fountain classic: Dr Pepper Cream

24 7UP in Line with Expectations Through Volumes Transfer Period 0% % Volume change vs year ago -5% -10% -15% -20% H1 '03 H2 '03 H1 '04 H2 '04 H1 '05

25 Profile Resembles Sunkist & A&W Transfer Periods Sunkist Volumes A&W Volumes % 12% % Volume change vs year ago 15% 10% 5% 0% -5% -10% H1 96 H2 96 H1 97 H2 97 H1 98 H2 98 H1 99 H2 99 % Volume change vs year ago 10% 8% 6% 4% 2% 0% -2% -4% H1 96 H2 96 H1 97 H2 97 H1 98 H2 98 H1 99 H2 99

26 Building a Foundation for Future Growth Tactical activity to date Increasing placement of cold drink equipment Improving merchandising Increasing feature and display activity Repositioning the brand Better choice Launch of 7UP PLUS

27 Strong Performance from Diet CSDs Volumes % Volume change vs year ago 25% 20% 15% 10% 5% 0% H1 03 H2 03 H1 04 H2 04 H1 05

28 Consistently Outperforming the CSD Market Share CSAB share of US CSD: Jan 04 - Sep 04 1 Change in volume share (points) Q104 Q204 Q304 Q404 FY04 Q105 Q205 Q3*05 YTD -0.4 ource: AC Nielsen Q3 is Nielsen periods 19 June to 10 September 2005

29 Portfolio Segments CSD Non-CSD Concentrate business model Make concentrate and Finished goods model Manufacture and sell to trade sell to bottlers

30 Our Core 4 Non-Carbonates

31 Improving Core 4 Non-Carbonate Momentum 4.5% 4.0% 3.5% % change vs year ago 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% H104 H204 H105 Volumes Sales

32 Mott s: Growing Trademark and Volumes 35% Volumes % Change vs year ago 30% 25% 20% 15% 10% 5% 0% -5% H104 H204 H105 Q3*05-10% Q3 is Nielsen periods 19 June to 10 September 2005

33 Restoring Growth to Snapple Realign priorities and investment Increase investment to build brand equity Establish value-based innovation strategy

34 Snapple Volumes are Responding Base Snapple Volumes % % volume Change vs year ago 2% 0% -2% -4% -6% H103 H203 H104 H204 H105-8% -10%

35 Innovation Key to Restoring Sustainable Growth

36 Non Carbonate Momentum Solid progress since Encouraging progress since HY05

37 Five Key Strategic Pillars Create sustainable competitive advantage through our people Seek operational excellence and reduce our cost base Create brands people love Build valued retailer relationships Strategically align our Route to Market

38 Top Ten Food Supplier to US Grocery Trade Source: Neilsen $ % Chg vs YAG 1. Altria Group Pepsico Nestle Holdings General Mills Coca-Cola Company Conagra Kellogg Company Unilever Group Campbell Soup Cadbury Schweppes 2.9

39 Focus on Category Solutions Supplier of the Year Wal-Mart Target Category captain for premium beverages Co-captain for CSDs Grocery Channel Partnerships with Safeway, Food Lion, Publix, Meijer and Kroger Portfolio approach driving success in fountain food service

40 Five Key Strategic Pillars Create sustainable competitive advantage through our people Seek operational excellence and reduce our cost base Create brands people love Build valued retailer relationships Strategically align our Route to Market

41 Route to Market Overview CSDs sold through Non-CSDs sold through Independent bottlers Direct store Red & Blue cola bottling systems Warehouse delivery Company owned distribution in New York City & San Francisco

42 Improving Bottler Alignment Commercial Financial Portfolio Operational Aligned planning

43 Summary Goal 1 Business combination is complete Goal 2 Fuel for Growth savings on track Goal 3 Develop compelling & distinctive portfolio strategy and restore growth to Dr Pepper & Snapple and stabilize 7UP Goal 4 Grow business through existing RTM and work to strengthen RTM for the longer term