EX-99.1 3 ex99-1.txt PRESENTATION JP Morgan Conference [Panamco Logo] New York, November 4-5, 2002 Forward Looking Statements This presentation includes forward looking statements which reflect management's current analysis and expectations, based on reasonable assumptions. Actual results may differ materially from the statements made depending on a variety of factors, including business climate, economic and competitive uncertainties, higher operating costs, reduced levels of beverage consumption in the overall market, risks in developing new products and technologies, foreign exchange rates, and adverse changes in economic and political climates around the world. This presentation does not constitute an offer to sell, an offer to purchase or a solicitation of an offer to purchase any securities. TABLE OF CONTENTS o Panamco Overview o Latin American Operations o Principles o Strategic Imperatives o Growth Drivers - Pricing Strategy - Packaging o Managing for the Long-Term o Innovation and Growth o Financial Performance o Strategic View PANAMCO OVERVIEW o LARGEST SOFT DRINK BOTTLER in Latin America and third largest Coca-Cola bottler in the world o ANCHOR BOTTLER with 60-Year relationship with Coca-Cola; 25% shareholder o COUNTRIES: presence in 8 countries in Latin America o SHARE OF SALES: 80% colas, 45% flavors, 36% water o VOLUME: 1.2 billion unit cases in 2001; 0.9 billion unit cases as of September 2002 o NET SALES: $2.6 billion in 2001; $1.8 billion as of September 2002 o PUBLICLY TRADED: in NYSE, ticker PB VAST OPERATIONAL EXPERIENCE IN LATIN AMERICA ANDEAN REGION ------------- NOLAD REGION COLUMBIA ------------ AND MEXICO [MAP OF LATIN AMERICA] VENEZUELA AND CENTRAL AMERICA GUATEMALA NICARAGUA BRAZIL COSTA RICA ------ PANAMA VAST OPERATIONAL EXPERIENCE IN LATIN AMERICA 2002 DATA MEXICO CENTRAL ANDEAN BRAZIL COMPANY AMERICA* Franchise Population (MM) 18 14 67 25 124 CSD 8oz Per Capita Consumption 377 123 107 220 171 CSD Share of sales 79% 64% 66% 56% 66% Cold drink equipment per 10,000 pop 77 47 46 32 48 Cooler Penetration 65% 50% 51% 67% 55% YTD as of September 2002 ------------------------ Volume (MMUC) 362 58 262 221 903 Net Revenue ($MMUS) $ 810 $176 $548 $278 $1,811 Net Revenue Per Unit Case ($US) $2.24 $3.02 $2.09 $1.26 $2.01 *Central America excludes data from Panama, since it was incorporated in October 2002 Panama 2002 Data Panama 2001 Data ---------------- ---------------- Population (MM) 3 CSD Per Capita Consumption 247 Volume (MMUC) 19 Share of Sales 60% Net Revenue ($MMUC) $62 Cold Drink Equipment per 10K pop 32 Net Revenue Cooler Penetration 60% Per Unit Case ($US) $3.29 PRINCIPLES o Managing the business for the long-term o Protecting and increasing share of sales o Maximizing profitability in a consistent way o Improving operational performance in difficult macroeconomic environments STRATEGIC IMPERATIVES o Single-serve growth o Profitable take-home growth o Productivity and cost control o Flawless execution GROWTH DRIVERS o Price/Value Management o Channel & Mix Management o Cost Control o Execution PRICING STRATEGY o BY CHANNEL o Growing volume and share [arrow graphic] o BY PACKAGE o Maximizing revenues o BY BRAND o BY TERRITORY
Volumes Trend Local Currency Rev/Case Growth 8.0%-| [Y= YTD] 20.0%|- [Y= YTD] 16.6% | 6.0% [3Q= 3Q02] | [3Q= 3Q02] 15.2%__ 6.0%-| __ 4.1% | __|3Q| | |Y |__ [3Q= 3Q02] 15.0%|- |Y | | 4.0%-| | |3Q| | 11.4% 11.0% | | | | | | | 0.3% 0.1% | __ __ | | | 2.0%-| | | | __ __ 10.0%|- |Y |8.4% |Y |8.5% | | | | | | | |3Q| |3Q| | | |__ | |__ | | | 0.0%-|------------------------------------------ | | |3Q| | |3Q| | | | | | |3Q| | | | | 5.0%|- 1.6% | | | | | | | | | -2.0%-| | |__| | | | | | __ | | | | | | | | | | | |-1.6% | | | | | |3Q| | | | | | | | | | -4.0%-| |Y | | | | | 0.0%|----------------------------------------- | |__| | | |Y | | |Y | -6.0%-| -5.1% | | |__| | |__| | |Y | -6.9% -5.0%|- -1.4% -8.0%-| |__| | -8.7% -10.0%-| Mexico Colombia Venezuela Brazil Mexico Colombia Venezuela Brazil * % growth vs. same period last year * % growth vs. same period last year
CHANNEL AND MIX MANAGEMENT 1. Single Serve Growth 2. Profitable Take-Home Growth [down arrow] Upsizing and increasing coolers Marketplace investments Promotions Single Serve Mix (%) NOLAD COLOMBIA VENEZUELA BRAZIL 42% 53% 38% 31% Cooler Penetration NOLAD COLUMBIA VENEZUELA BRAZIL 59% 44% 62% 67% IN CONCLUSION... Price/Value Management Channel/Mix Management [two arrows pointing diagonally downward] Drive Top Line Growth [plus sign] Execution Cost Control [two arrows pointing diagonally downward] Drive Consistent Profitability Growth MANAGING THE BUSINESS FOR THE LONG-TERM IN DIFFICULT MACROECONOMIC ENVIRONMENTS o NOLAD: Dynamic pricing architecture to drive top line growth while maintaining and increasing share vs. new entrants (PBG, Kola Real). Aggressive cost control which has quarterly improved COP margins. o COLOMBIA: Reactivating volume growth through an adjusted pricing strategy (focusing on single serve CSD, priced line with purchasing power). Strong focus in achieving lower expenses to increase profitability (adjusting sales and distribution, eliminating outsourcing services). o VENEZUELA: Pricing at parity, while leveraging infrastructure on returnable bottles to increase pricing flexibility. Securing low cost structure to strongly position the Company to reap higher benefits when conditions improve. o BRAZIL: Top line improvement through an aggressive pricing strategy and rebuilding of the sales force. Focus on profitability. CONTINUOUS INNOVATION AND GROWTH o PANAMA ACQUISITION: o Panamco, through the joint-venture, CA Beverages, acquired direct control of Coca-Cola de Panama. o Acquisition is expected to be accretive, is strategic, and will reduce overall risk by adding dollar-denominated profits. o Coca-Cola de Panama had estimated share of sales of 60% in 2001, volume sales of 18.9 million unit cases in 2001, and generated revenues and cash operating profit of $62.1 million and $9.2 million, respectively. o CONVERTING RISCO BRAND TO CIEL o Panamco reached agreements with TCCC to convert its Risco water volume in Mexico to Coca-Cola brand Ciel for a total consideration of $65 million. o Growth and profitability will benefit from the marketing and distribution of a nationally available and advertised water brand in Mexico. FINANCIAL PERFORMANCE YTD 2002 FINANCIAL PERFORMANCE FINANCIAL STATISTICS -- NINE MONTHS ENDED SEPTEMBER 30, 2002 (all in millions, unless otherwise stated) 2002 Act* 2001 Act* % Change Volume Growth 1.8% Sales $1,811.4 $1,944.3 -6.8% COP $321.2 $401.6 -20.0% Operating Profit $181.3 $220.5 -17.8% Net Profit $61.1 $91.7 -33.4% EPS $0.13 $0.72 -5.4% * Excludes facilities reorganization and other charges LONG-TERM VALUE CREATION An optimal allocation of capital has improved Free Cash Flow 1998 1999 2000 2001 Net Income $120 ($60) ($505) $118 Free Cash Flow Before Investments $409 $211 $220 $355 Capital Expenditures ($427) ($238) $203 ($136) Investments & Others ($120) ($188) $73 $34 Dividends Paid ($32) ($32) ($32) ($33) FCF After Investment ($169) ($246) $58 $220 FCF as % of Revenues (6.1%) (10.2%) 2.2% 8.3% LONG-TERM VALUE CREATION And allowed us to reduce debt by almost 30% since plan was announced Q3 2000 Q3 2002 Reduction % Reduction Total Debt $1,273 $913* $360 -28.3% Cash & Equivalents $147 $55 $92 -62.6% Net Debt $1,125 $858 $267 -23.7% Note: includes debt from Panamanian transaction STRATEGIC VIEW o Criteria for consolidation: o Accretive to shareholders. o Contiguous territories that drive synergies. o On December, Panamco will present strategic and operating plan for Board of Directors approval.