International Beverage. Frank van Oers

Transcription

1 International Beverage Frank van Oers

2 Long-term Growth Will Come from Single-Serve and Instants FY08 $3.2 Billion 6% 7% 8% 11% 18% 12% 38% 4% 24% 12% 3% 56% 1% 2 Multi-Serve (ex. Brazil) Single-Serve Instants Multi-Serve (Brazil) Liquids Tea Other European Retail Russia European Foodservice Brazil Australia Asia Pacific Foodservice

3 Agenda Premiumization Geographic Expansion Drive Foodservice 3

4 Agenda Premiumization Geographic Expansion Drive Foodservice 4

5 Premiumization Leverage and defend #1 and #2 positions to build margin DRIVE Single-Serve opportunities in key markets UPGRADE position in decreasing Multi-Serve segment BROADEN existing product range in premium instants & espresso segments 5

6 Premiumization Leverage and defend #1 and #2 positions to build margin DRIVE Single-Serve opportunities in key markets UPGRADE position in decreasing Multi-Serve segment BROADEN existing product range in premium instants & espresso segments 6

7 Long-term Growth Will Come from Single-Serve and Instants FY08 $3.2 Billion 6% 7% 8% 11% 18% 12% 38% 13% 11% 7% 5% 20% 31% 13% Multi-Serve (ex. Brazil) Single-Serve Instants Other Multi-Serve (Brazil) Liquids Tea 7

8 Significant Growth Opportunities in Single-Serve Senseo system growth through added-value appliance and beverage innovation Continue to drive switch from drip filter to singleserve Increase soft pod consumption and maintain strong multi-beverage share within category Drive market leadership in appliance and pods in current markets Enter in new markets with potential by

9 Single-serve Will Also Grow Through Machine Innovation SENSEO Upgrade Senseo BEAN Full-auto coffee system with flexible bean containers Add fresh milk: LATTE SELECT Fresh Beans + Jug Upgrade Base Senseo High Pressure Espresso Add filter option 9

10 Premiumization Leverage and defend #1 and #2 positions to build margin DRIVE Single-Serve opportunities in key markets UPGRADE position in decreasing Multi-Serve segment BROADEN existing product range in premium instants & espresso segments 10

11 Consumer Trends Lead to Premium Strategy and A Focus on Value Growth Value-Driven/ Basic Consumer Demand Benefit driven/ Premium/Health 11

12 Discounters have been able to exploit value driven trends to gain share 100% 75% Share of grocery formats across Europe 6.7% 6.7% 6.7% 9.4% 9.1% 8.5% 14.1% 16.3% 17.4% 50% 24.7% 26.1% 26.8% 25% 45.2% 41.8% 40.6% 0% E Supermarket Hypermarket Discounter Convenience Cash & Carry Source: MVI database 12

13 Health & Wellness Is an Important Consumer Trend Naturalness Cell protection (AOX) Hydration Mental Performance 13

14 We Have Developed a Profitable Tea Position in Selected Countries 14

15 Build One Strong Aroma Lady Brand 15

16 We Will Upgrade Our Multi-Serve Assortment Through Innovation Premium & Enjoyment Health & Wellness 16

17 Pepites d Arome Represents Another Revolutionary Innovation in Coffee Consumer Education TV Shelf Impact Bill Boards Coupons Promotion Sampling The Product 17

18 Premiumization Leverage and defend #1 and #2 positions to build margin DRIVE Single-Serve opportunities in key markets UPGRADE position in decreasing Multi-Serve segment BROADEN existing product range in premium instants & espresso segments 18

19 Agenda Premiumization Geographic Expansion Drive Foodservice 19

20 Geographic Expansion Invest in high growth regions using appropriate forms of coffee CONTINUE our volume to value strategy in Brazil DEVELOP Russia (Instants, later Tea, Ukraine) EXPLORE acceleration Asia (Thailand Instants, Vietnam R&G) 20

21 Investments in Emerging Markets Will Change our Portfolio Over the Long-Term 24% FY08 $3.2 Billion 3% 4% 5% 24% 13% 3% 51% 4% 12% 56% 1% European Retail Russia European Foodservice Brazil Australia Asia Pacific Foodservice 21

22 The Russian Opportunity Attractiveness of the opportunity Russia is the largest instants market in Europe Premium segment is growing rapidly Why Int'l. Beverage can win Well-positioned product and packaging High investment levels Strong organization and distributor Return Profitable incremental sales over the long-term 22

23 Russian Coffee Market Growing Rapidly Thousands tons Retail value CAGR, Germany 538 Russia 16 France 300 Italy 1 Italy 252 Netherlands 1 Spain 163 France 0 Russia 144 Spain -1 Netherlands 134 Poland -1 U.K. 122 Sweden -1 Poland 122 U.K. -1 Sweden 89 Germany -3 Austria 69 Austria -3 * Estimated volume Green, Source: The 23 Coffee Market FY06 CBI April 2006

24 The Russian Opportunity Attractiveness of the opportunity Russia is the largest instants market in Europe Premium segment is growing rapidly Why Int'l. Beverage can win Well-positioned product and packaging High investment levels Strong organization and distributor Return Profitable incremental sales over the long-term 24

25 Well-Positioned Premium Product Line 25

26 The Russian Opportunity Attractiveness of the opportunity Russia is the largest instants market in Europe Premium segment is growing rapidly Why Int'l. Beverage can win Well-positioned product and packaging High investment levels Strong organization and distributor Return Profitable incremental sales over the long-term 26

27 Large Investment in Russia Market investment of $25 million Targeted market share of 15% by FY11 Sales of $200 million by FY11 27

28 The Brazilian Opportunity BRAZIL 28

29 Brazilian Market Very Large and Growing Total World Market FY07 U.S. Brazil Basis: green coffee equivalent 6,927,000 Tons 1,108,500 Tons 881,300 Tons 100% 16% 13% By 2010 Brazil is expected to be the largest coffee market in the world Source: Latin 29Panel, June 2008

30 We Have Broad Distribution Recife Factories DCs Outbound Routes Jundiai 30

31 Segmented Portfolio of Strong Brands PREMIUM MAINSTREAM VALUE 31

32 Brazil Retail Coffee Market Share pts from Moka acquisition Sara Lee Sta Clara Melitta FY06 FY07 FY08 Source: Nielsen 32

33 Results Are Improving in Brazil $ in millions Net Sales Operating Income FY FY

34 Agenda Premiumization Geographic Expansion Drive Foodservice 34

35 International Foodservice Overview FY08 sales of $860 million, up 10% Primary countries include Netherlands, Belgium, Germany, Denmark and Australia 35

36 Foodservice Business Model Improvement Rationalization of direct business models Attack tail of unprofitable customers Develop indirect channels 36

37 Focus on Health Care And Business Segments Operating Profit (% of NOS) Segment NOS (%) Average Health and care Medium business Small business QSR/ Large Coffee business shops Leisure Education BaReCa Hotels and gaming Convenience and retail 37

38 Strong Innovation Pipeline Activity Description Roll out TQL Roll out C600 Roll out C100 Roll out C300 38

39 International Beverage Performance Overview Adjusted FY08 vs. FY07 FY09 Guidance Long-term Guidance Net Sales +8.6% +2-4% +5-7% Operating Segment Income +9.2% +1-3% +6-8% FY08 Adjusted Net Sales = $3.2 billion FY08 Adjusted Operating Segment Income = $562 million Note: See table at the end of this presentation deck for a reconciliation to reported numbers. 39

40 International Beverage Net Sales FY08 FY07 Change Net Sales $3,215 $2, % Less: Foreign currency Acquisitions/Divestitures (347) 2 Adj. Net Sales $3,215 $2, % 40

41 International Beverage Operating Segment Income FY08 FY07 Change Operating Segment Income $547 $ % Less: Foreign currency Impairment charges Other significant items, net (15) (59) (118) (21) Adj. Operating Segment Income $562 $ % 41