2005 investor seminar presentation: gil...

AMERICAS BEVERAGES

Introduction

Gil Cassagne

President and CEO,

Cadbury SchweppesAmericas Beverages

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

AMERICAS BEVERAGES

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

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

Regional Integration Complete

� Beginning to see benefits of leveraging combined organization

� No significant disruption

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 ourRoute toMarket

Goal: Become the best beverage business in the Americas



our people

Seek operational


base



relationships


Regional Leadership Team

Chief Marketing Officer

� Joined from outside the group

� Strong consumer goods background

� Sharp technical marketing skills

Chief Financial Officer

� Joined Cadbury Schweppes with

Adams in 2003

� Joined Americas Beverages in 2005

� Focus on profitable growth/cost

agenda

Randy Gier

Bert Alfonso

Senior Leadership Team

More than 130 new members

Half are new to their roles

Region Head of Innovation

� Significant impact on innovation

pipeline

− Quality

− Quantity

Cindy Hennessy

Seek operational excellence and reduce

our cost base


our people




relationships


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

Key Enablers

� Replaced old systems with single integrated ERP system

Probe IT 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

� Award-winning redesign of 1 gallon

Hawaiian Punch bottle

� Lighter weight

� Lower cost

Ongoing Supply Chain Optimization

� Consolidated our advertising with Y&R

� Partner with US Confectionery on media buying

� Cut out $35m of non-working media dollars

Maximize Marketing and Trade Spend Effectiveness

Operational Excellence

Create brands

people love

Seek operational


base


our people



relationships


Our Portfolio Has Two Major Segments

CSD Non-CSD

� Finished goods model

− Manufacture and sell to trade

� Concentrate model

− Make concentrate and sell to bottlers

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

Differentiated Brand Equities

Each brand must have unique features and benefits

� Insight

� Innovation

� Impact

Dr Pepper Back on Track

Dr Pepper Volumes 2001-2005

% v

olu

me c

han

ge v

syear

ag

o

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

2002 2003

2004 1H 2005

2001

Cherry Vanilla Adds New Consumers

85% of volumes have been incremental to CSAB

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

7UP in Line with Expectations Through Transfer Period

Volumes 2003 - 2005

% V

olu

me c

han

ge v

syear

ag

o

-20%

-15%

-10%

-5%

0%

H1 '03 H2 '03 H1 '04 H2 '04 H1 '05

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

H196

H296

H197

H297

H198

H298

H199

H299

Profile Resembles Sunkist & A&W Transfer Periods

-10%

-5%

0%

5%

10%

15%

20%

H196

H296

H197

H297

H198

H298

H199

H299

Sunkist Volumes 1996 - 1999 A&W Volumes 1996 - 1999

% V

olu

me

chan

ge

vsye

ar

ago

% V

olu

me

chan

ge

vsye

ar

ago

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

Strong Performance from Diet CSDs

0%

5%

10%

15%

20%

25%

H1 03 H2 03 H1 04 H2 04 H1 05

% V

olu

me c

han

ge v

syear

ag

o

Volumes 2003 - 2005

Consistently Outperforming the CSD Market Share

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

Q104 Q204 Q304 Q404 FY04 Q105 Q205 Q3*05 YTD

Source: AC Nielsen *Q3 is Nielsen periods 19 June to 10 September 2005

Ch

an

ge in

vo

lum

e s

hare

(p

oin

ts)

CSAB share of US CSD: Jan 04 - Sep 04

Portfolio Segments

CSD Non-CSD

� Finished goods model

− Manufacture and sell to trade

� Concentrate business model

− Make concentrate and

sell to bottlers

Our Core 4 Non-Carbonates

Improving Core 4 Non-Carbonate Momentum%

ch

an

ge v

syear

ag

o

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

H104 H204 H105

Volumes Sales

Mott’s: Growing Trademark and Volumes

Q3 is Nielsen periods 19 June to 10 September 2005

Vo

lum

es

% C

han

ge v

syear

ag

o

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

H104 H204 H105 Q3*05

Restoring Growth to Snapple

� Realign priorities and investment

� Increase investment to build brand equity

� Establish value-based innovation strategy

Snapple Volumes are Responding

Base Snapple Volumes 2003 - 2005

% v

olu

me C

han

ge v

syear

ag

o

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

H103 H203 H104 H204 H105

Innovation Key to Restoring Sustainable Growth

Non Carbonate Momentum

� Solid progress since 2003-2004

� Encouraging progress since HY05


relationships

Seek operational


base


our people




Top Ten Food Supplier to US Grocery Trade

$ % Chg vs YAG

1. Altria Group 1.5

2. Pepsico 3.5

3. Nestle Holdings 6.3

4. General Mills 0.7

5. Coca-Cola Company 2.6

6. Conagra -3.8

7. Kellogg Company 1.0

8. Unilever Group 1.3

9. Campbell Soup 0.6

10. Cadbury Schweppes 2.9

Source: Neilsen

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

Strategically align our Route to Market

Seek operational


base


our people




relationships

Route to Market Overview

� CSDs sold through

− Independent bottlers

− Red & Blue cola bottling systems

� Non-CSDs sold through

− Direct store

− Warehouse delivery

− Company owned distribution in

New York City & San Francisco

Improving Bottler Alignment

� Commercial

� Financial

� Portfolio

� Operational

� Aligned planning

Summary

Goal 1 Business combination is complete

Goal 2

Goal 3

Goal 4

Fuel for Growth savings on track

Develop compelling & distinctive portfolio strategy andrestore growth to Dr Pepper & Snapple and stabilize 7UP

Grow business through existing RTM and work tostrengthen RTM for the longer term

2005 investor seminar presentation: gil...

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