Market visit Finland 4 May 2015 1 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Agenda 12:00 12:15 Welcome Henrik Brandt 12:15 13:00 Finland, OnTrade, Export Hans Savonije & Tapio Pajuharju 13:00 13:30 Commercial Off trade Marko Airamaa 13:30 14:00 Marketing/Brands Noora Pöyhönen & Meri Vainikka 14:00 14:20 Supply chain Søren Lisbjerg 14:20 14:30 Admin&IT Lars Jensen 14:30 14:45 Strategy and leadership Henrik Brandt 14:45 15:45 Brewery tour Tomas Lindfors & Tomi Korte 15:45 17:00 Bus to Helsinki Airport 2 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Acquisition recap Henrik Brandt, President & CEO Royal Unibrew 3 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Hartwall acquisition takes Royal Unibrew to a new level 5 million more consumers Net revenue EBITDA 7 DKK b 1200 DKK m 6 1000 5 4 3 2 1 3,3 2,3 5,6 6 800 600 400 200 605 373 978 1130 0 0 4 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Finland recap Hans Savonije, COO Royal Unibrew Tapio Pajuharju, Managing Director Hartwall 5 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Finnish market centered around home consumption in an overall slightly declining market Brewery, wine & spirits market size by volume Consumption per capita (L/capita) 14% 7% 79% 300 200 100 0 2010 2011 2012 2013 2014 LAD BEV Wines & spirits Off trade On trade Private import HW Volume split 2012 9% 22% Total beverages volume % Olvi and others 69% Carlsberg Hartwall On trade Off trade Private import Source: Panimoliitto, Valvira, HWL market outlook 6 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Finland excise tax and geographical spread Excise duty, /L 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 2000 2002 2004 2006 2008 2010 2012 2014 Beer 4,5% CSD's, sugar over 0,5% Beer excise and VAT EUR/L 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 60% of population 7 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Hartwall multi-beverage portfolio characterized by iconic brands and innovation Cider & RTD Best known cider market share in cider 26% RTD most preferred brand 48% market share Volume split Beer #2 in branded beer 22% market share 13% 36% Soft drinks & waters #2 in energy drinks 26% market share Strongest water brand 34% market share in CSD 48% 3% Other Top selling wine and spirit products 8% market share 8 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Hartwall integration in good progress Strengthening Hartwall s position as a leading Finnish multi beverage company Increasing agility and customer/market orientated organization Leadership & Organizational change in progress according to the Change Plan Improve efficiency and productivity Continuous improvements following structural changes Focus on the commercial agenda and execution The goal is to grow as a market leading beverage company in Finland 9 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
On trade & Hartwa Trade The Horeca market Volume share of total market is 15% 9.700 outlets High fragmentation and polarization of customers Equipment capabilities are crucial Alcoholic and non-alcoholic volume almost equal Volume split 47% 53% Alcoholic Non alcoholic Hartwall Direct store distribution Full beverage portfolio One stop shop for on-trade customers Hartwall Academy Hartwa Trade wine and spirits portfolio 10 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Duty Free & Export Focus on improving the business in existing markets New organization in place Focus on Lapin Kulta, Original Long Drink and Upcider 11 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Finland Off-trade Marko Airamaa, Sales Director Retail Hartwall 12 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Off trade total Grocery Total Grocery market 17b 3.157 outlets (stable) Hypermarkets 6,5 % 6,5 % 7,3 % 4,6 % 43,6 % Supermarkets Discounters 31,6 % Gas station and convenience Appr. 1.600 stores (declining) SOK Kesko Lidl SLK Other grocery Convenience Beverage Non beverage 13 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Off-Trade Beverage market Total off trade market value 2b or 13% of their business Centralized & sophisticated/automated trade Lack of Nielsen EDI orders Window system for launches and promotions EDLP vs high/low 14 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Hartwall Off Trade Full beverage portfolio strategy Balancing value and volume Clear customer/category segmentation Flexible and effective field Force to enable world class execution Out of appr. 5.000 outlets Hartwall covers: 100% distribution 97% via direct store delivery 70% through sales reps 50% through merchandising Best in class customer satisfaction 2014 #1 beverage company #2 FMCG company (N=31) Lager low end Other beer 15 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Marketing Meri Vainikka, Category Marketing Director alcoholic portfolio 16 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Hartwall s iconic alcoholic portfolio covers all segments of the market SUPER PREMIUM PREMIUM MAINSTREAM PRICE FIGHTER 17 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Complete Beer portfolio Iconic Finnish International Special Occasion Format Perfect serve MAINSTREAM SUPER PREMIUM PREMIUM PRICE FIGHTER 18 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Long Drinks/RTD - a national heritage in Finland Category launched at the Helsinki Olympic Games 1952 High per capita consumption compared to EU standards Original Long Drink The most appreciated brand of all brewery brands in Finland No 1 selling brand in ALKO 19 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Marketing Noora Pöyhönen, Category marketing director non-alcoholic portfolio 20 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Hartwall portfolio of non-alcoholic drinks consists of waters, csd s and speciality drinks Premium Mainstream Price fighter 21 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Novelle - leading the water category through innovation 1990 22 1994 2005 2007 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015 2009 2015
Strong portfolio of CSD s covering all occasions 1949 23 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015 1999
Supply chain Søren Lisbjerg, Supply Chain Director Denmark 24 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Supply chain footprint State of the art production 2 production facilities (Lahti and Karijoki) Well invested Powerful nationwide distribution network 2 primary distribution hubs Lahti and Helsinki x Windmill area Covers Finland via direct distribution 25 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Significant efficiency drive during last 18months Productivity HL/FTE Extract loss (beer) % Inventory levels 54% 8% +14% A2012 A2013 A2014 A2012 A2013 A2014 A2012 A2013 A2014 Syrup loss (soft drinks) % Electricity consumption KWh/HL Distribution utilization rate 32% 3% +9% A2012 A2013 A2014 A2012 A2013 A2014 A2012 A2013 A2014 26 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Admin & IT Lars Jensen, CFO Royal Unibrew 27 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Reducing complexity and insourcing Decrease complexity Reorganization Office move Aligning objectives Active and business oriented procurement OneSap 28 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Strategy and leadership Henrik Brandt, President & CEO Royal Unibrew 29 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Lahti Brewery Q&A DISCLAIMER: This presentation contains forward looking statements. Undue reliance should not be placed on forward looking statements because they relate to and depend on circumstances that may or may not occur in the future and actual results may differ materially from those in forward looking statements. Forward looking statements include, without limitation, statements regarding our business, financial circumstances, strategy, results of operations, financing and other plans, objectives, assumptions, expectations, prospects, beliefs and other future events and prospects. We undertake no obligation, and do not intend to publicly update or revise any of these forwardlooking statements, unless prescribed by law or by stock exchange regulations. 30 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015
Hartwall Lahti Production and logistics centre 31 ROYAL UNIBREW MARKET VISIT FINLAND 4 MAY 2015