Top Banner
Corporate Presentation May 2014
27

Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

May 28, 2018

Download

Documents

nguyenquynh
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

Corporate PresentationMay 2014

Page 2: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

Forward Looking Statements

1

The material that follows presents general background information about Organización Cultiba, S.A.B. de C.V.(“CULTIBA” or the “Company”) as of the date of the presentation. This information consists of publiclyavailable information concerning the Company and the industries in which it participates. It is information insummary form and does not purport to be complete. It is not intended to be relied upon as advice topotential investors and does not form the basis for an informed investment decision.

This presentation includes forward-looking statements. All statements other than statements of historical factincluded in this presentation, including, without limitation, those regarding our prospective resources,contingent resources, financial position, business strategy, management plans and objectives, futureoperations and synergies are forward-looking statements. These forward-looking statements involve knownand unknown risks, uncertainties and other factors, which may cause our actual resources, reserves, results,performance or achievements to be materially different from those expressed or implied by these forward-looking statements. These forward-looking statements are based on numerous assumptions regarding ourpresent and future business operations and strategies and the environment in which we expect to operate inthe future. Forward-looking statements speak only as of the date of this presentation and we expresslydisclaim any obligation or undertaking to release any update of or revisions to any forward-lookingstatements in this presentation, any change in our expectations or any change in events, conditions orcircumstances on which these forward-looking statements are based.

Page 3: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

2

Our Company

Page 4: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

3

Organización Cultiba, S.A.B. de C.V. (“Cultiba”) is a holding company with a majority interest in GEPP;one of Mexico’s largest bottlers of soft drinks and jug water, and the exclusive bottler of PepsiCobeverage products in Mexico. As a holding company Cultiba also owns and operates GAM sugarmills; located in the western region of Mexico. The Company is listed on the Bolsa Mexicana deValores, where it trades under the symbol CULTIBA.

GEPP commercializes carbonated, non-carbonated soft drinks, and jug water underits own brands as well as third party brands. GEPP is the exclusive bottler ofPepsiCo’s brands in Mexico, it owns 44 bottling facilities and is the only Mexicanbottler with nationwide distribution. The Company produces, sells, and distributesan inclusive portfolio of non-alcoholic drinks; comprising: sodas, juices, bottledwater, iced tea, flavored water, and isotonic drinks. Within the water segment,GEPP also commercializes 10.1 and 20 liter jugs via Direct-to-Home delivery.

GAM is the third largest private sugar producer in Mexico. It operates and owns100% of three sugar mills in the country; located in Jalisco (Tala), Michoacan(Lazaro Cardenas), and Sinaloa (El Dorado). It also owns 49% of Benito Juarez Mill(located in Tabasco). GAM Mills have a combined crushing capacity of ~30,000sugar cane tons per day; its main clients are Industrial manufacturers in Mexico –with strong focus on PepsiCo affiliates (including GEPP). GAM also exports sugar toclients in the US.

Page 5: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

2013: EquityOffering(Follow on)

4

1978

2012

1990

2000

2010

1980

Company trajectory focused on corebusiness sustainability and value creation

Established in 1978as InmobiliariaTrieme

1987: InmobiliariaTrieme & GEUSAMerge

1989: GAM isestablished

1993-2000: GeographicAcquisitions: South &Garci Crespo, Metro,Southeast, and North;Chihuahua & EMVASAterritories

1992: GEUSA & PepsiCostart Méxicorelationship

2004-2006: GEUSAacquires BRET anddistribution rights inChiapas and Oaxaca

2008: 51% of BenitoJuarez Sugar Mill sold toINCAUCA

2010: GEUSAmerges intoGEUPEC

2011: PBC merges

with Gatorade

GEPP is established

GAM merges withCONASA

CONASA

2013:Local DebtCertificatesPlacement

Page 6: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

5

Corporate structure supports an integratedbusiness model

100%

20%29% 51%

L. CárdenasSugar Mill

ElDoradoSugar Mill

TalaSugar Mill

Benito JuarezSugar Mill

Beverages Sugar

100%

100% 100% 100% 49%

51%

100%

SteviaHoldings

Beverages$31.293%

Sugar$2.37%

2013 Revenue by segment(Ps$ Million)

TalaElectric

PolmexHolding S.L.

Page 7: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

6

A unique beverageoperation withnationwide presence

Page 8: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

7

From a regional bottler to a leading beveragescompany with nationwide distribution

Note: 2011 includes only 3 months of volume sales from PBC and Grupo Gatorade MexicoSource: CULTIBA & GEPP Management, financial and operating information 2010 – 2013

2010 2011* 20132012

614849

1,560 1,607

CONASA

Geographic coverage

Beverage volume(million 8 oz. uc)

Page 9: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

8

Extensive national network: competitive advantagethat enables greater market penetration

Notes: 1Production lines distributed as follows: 76 soft drinks 46 jug water. Source: CULTIBA & GEPP Management, operating information 2010 – 2013

Page 10: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

9

Proven capabilities tocapture efficienciesthrough an integratedbusiness model

Page 11: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

Three partners with complementary strengths andproven capabilities

1010

Operational expertise in the Foodand Beverage industries

o Portfolio development

o Differentiated GTM2 models

o Proven Pepsi-Cola LatinAmerica experience

Deep market knowledge

1st PepsiCo JV outside the USmarket

Water jugs (5 gal) DTH GTM(1)

Strong nationwide distributionnetworks:Retail + Direct-to-Home

Gatorade portfolio

Strong / leading brands

Product innovation

Shared procurement

Investment commitment(1)Direct-to-Home Strategy (“DTH”), (2) Go-to-market (“GTM”)

PolmexHolding S.L.

Page 12: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

Procurement SupplyChain

Organization

AdditionalSynergiesfound in

execution

Reduce transportation costs Optimize manufacturing and

distribution footprint Incorporate strong brands

logistics into GEPP’s nationalnetwork

Eliminate duplicities/redefine roles

Standardize human capitalratios

Integrate IT

Business strategy leverages nationwideinfrastructure for growth while capturing synergies

Leverage scale (key rawmaterials and other goodsand services)

Integration stagesuccessfully executed

after 2 years of

operation

Leverage vertical integration Process optimization

… to date, Cultiba’s beverages division has realized ~50% of Ps. 900 million in identified synergiesand remains on target to capture 100% by the end of 2014…

11

Integration Synergies / Efficiencies

Page 13: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

12

Fullbeverageportfolio ofstrong andleadingbrands

Page 14: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

13

Brand architecture targets an inclusive andcompetitive beverage portfolio

Colas Multi-flavorsCore flavorsCarbonated

RTD Tea

Non-carbonatedSports drinks Bottled water

5-gallon Jug

From 49 to 22beverage brands;focus in 10 core /strongest brands

Portfolio of GEPP-owned andfranchised brands

(PepsiCo, Fruco, Jumex,Lipton Intl, and Dr.Pepper Snapple GroupMexico)

Juice drinks

Page 15: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

14

Diverse leading brands with national reach

Franchised(Fruco)

Franchised(PepsiCo)

Franchised(Jumex)

Proprietary(GEPP)

Franchised(PepsiCo)

Innovationplans with

local appeal

A singlenational brand

for multi-flavor CSDs

Distributionreach towards

TraditionalChannels

Juice drinkscategory

consolidation

A singlenational brand

for bottledwater

“Multi-franchise” approach seeks to develop local brands nationally

CSDs NCBs

Page 16: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

15

AttractiveMarket

Page 17: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

(millions of 8 oz. cases)

Source: Canadean as of December 2012. Euromonitor as of December 2012; GEPP operating data 2010 – 2013Note: 1 Includes Carbonated Soft Drinks, non-Carbonated Beverages, Water (less than 5 lt. presentations), Flavored Water

Sizeable beverage market

’09-’12 ’12-’16

2.3%

5.0%

2.3%

1.1%

3.7%

1.1%

CAGR

2.7% 1.6%

8,075 8,2098,648 8,737

9,295

38%

8%

45%

9% 4.5% 4.1%

LRBs market evolution

+US$32bn

16

2009 2010 2011 2012 2016E

CSDs NCBs BW 5-gallon jug

47% 47%47% 46%

45%

9%

7% 7% 8% 9%8%

7% 7% 8% 8%

38%

39% 39%39% 38%

163.0 149.0 141.0 139.0 127.0 116.0

Mexico USA Argentina Chile Uruguay Germany

27.0 23.015.4

9.6 7.2 5.8

China Mexico Indonesia Brazil Turkey USA

(liters per capita; 2012)

(billion liters; 2012)

Highest carbonated soft drinks consumption per capita

Second largest bottled water market world wide

#1market

#2market

(million eight-ounce cases)

Cultiba Beverages Division Volume

219.2 356.7793.1 806.9395

491.8

766.6 800.6

2010 2011 2012 2013

Bottledbeverages1

Jug Water

# 1 per capita consumption

2012 Litersper capita20 198 64 49 96 18

Page 18: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

17

Verticalintegrationprovides anaturalhedge

Page 19: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

Integration at the basis of a competitive andsustainable cost structure

18

• Sources 100% of sugar needs in beverages• Provides competitive cost advantage• Brings natural hedge to commodity price exposure• Sugar business also vertically integrated into sugarcane

• Sources 100% of sugar needs in beverages• Provides competitive cost advantage• Brings natural hedge to commodity price exposure• Sugar business also vertically integrated into sugarcane

GAM Sugar

• Energy co-generation investments within sugar mills• 25MW proprietary plant within Tala Sugar Mill – Phase 1

operating at 30% capacity; expected 78MW by 2014-2016• Continued co-generation projects envisioned for future

years

• Energy co-generation investments within sugar mills• 25MW proprietary plant within Tala Sugar Mill – Phase 1

operating at 30% capacity; expected 78MW by 2014-2016• Continued co-generation projects envisioned for future

years

GAM Energy

• 2 proprietary plastic production plants• Sources +85% of PET preforms and +75% of PET caps• 2 proprietary plastic production plants• Sources +85% of PET preforms and +75% of PET caps

GEPP Plastic

Source: CULTIBA, GAM, and GEPP Management

Page 20: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

Advantageous market and geographic location inthe sugar business

19

Unique business fundamentalsAdvantageous geographic location

Port / point of entryMajor Cities

Road routeShip route

GAM sugar MillsRail route

Tala Guadalajara

Manzanillo

New Orleans

Coatzacoalcos

Benito JuarezDos Bocas

Houston

Nogales

Laredo

El Paso

Mexico City

US Market: 10.5mm TonLong Beach

El Dorado

Lazaro Cardenas

Sinaloa

Corpus Christi

Focused on the North American industrialmarket where the PepsiCo system consumes~70% of GAM's production1. Our mills havean advantageous geographic position toserve this market

Mirrors integration into sugar productionseen with our main competitors in Mexico aswell as in beverage systems in othercountries. Provides wider, more stablemargins and eliminates price volatility

Integration represents approximately 20% ofthe beverage business cost structure. Inaddition, GAM has started to deliverelectricity to GEPP's plants

Well run and highly profitable businessintegrated into sugarcane production (+12%today and 40% expected by 2017) anddiversified into electricity cogeneration

Growth business plan fully funded with cashflows from operations positions GAM as aregional low cost producer

Note: 1Considering both PepsiCo’s beverages and food divisionSource: CULTIBA and GAM Management

Page 21: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

Sugar production by state (%)

Sugar Production by Group / Corporation

Source: Cámara Nacional de la Industria Azucarera Zafra 2012- 13Note: 1Government-owned sugar mills

Strong positioning in the Mexican sugar market

FEESA, 20%

BSM, 13%

Zucarmex,9%

Santos,7%

Piasa,7%

GAM,7%

Saenz, 7%

Porres, 5%

La Margarita,5%

G. del Trópica,4%

Motzorongo,4%

Other, 12%

Veracruz 38%

Jalisco 12%

San Luis Potosí 10%

Oaxaca 6%

Chiapas 5%

Tamaulipas 4%

Nayarit 4%

Puebla 4%

Tabasco 3%

Other 14%

Total 100%

Group /corporation

# SugarMills

2012-13

FEESA1 9 1,422

BSM 6 942

Zucarmex 5 643

Santos 5 511

Piasa 2 487

GAM 4 464

Group /corporation

# SugarMills

2012-13

Saenz 3 462

Porres 3 354

La Margarita 3 332

G. del Trópico 2 283

Motzorongo 2 250

Other 11 825

Total 55 6,975

1

20

Geographic Coverage

Sugar MillsSugar Cane AreasGAM

Veracruz

Page 22: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

21

FinancialHighlights

Page 23: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

*On May 1, 2011, GAM and CONASA were merged into GEUPEC (today CULTIBA) and on September 30, 2011, CULTIBA completed the acquisition of PBC and Gatorade. Therefore, 2011results include only one quarter of the consolidated company. 4Q11 is first fully comparable quarter.1EBITDA = net income + depreciation & amortization + net financing cost + provision for taxes. **Consolidated figures (sugar + beverages)22013 EBITDA adjusted for one-time non-recurring expenses related to manufacturing footprint optimization (Ps. 2,917 and 8.7% EBITDA margin before adjustment)32013 Net Income includes 372 million in expenses related to fiscal reform: mainly due to IETU and consolidation changes in the new regulations42014 revenues are net of excise tax. With excise tax income 1Q14 revenues were 8,352 (+7.0% vs 1Q13)Source: Financial Information Cultiba

-21.0

-573.0

649.0

204.0-23.0 -314.0

2010 2011* 2012 2013 1Q13 1Q14

744 599

2,3933,029

618 386

2010 2011* 2012 2013 1Q13 1Q14

22

Sustained growth in revenue and margins…

Revenue(Ps$ million)

8,60314,979

31,986 33,453

7,807 7603

2010 2011* 2012 2013 1Q13 1Q14

EBITDA1 margin(%)

8.6%

4.0%

7.5%9.1%

7.9%

5.1%

2010 2011* 2012 2013 1Q13 1Q14

EBITDA1

(Ps$ million)

Net income(Ps$ million)

2

2

3

4

Page 24: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

*On May 1, 2011, GAM and CONASA were merged into GEUPEC (today CULTIBA) and on September 30, 2011, CULTIBA completed the acquisition of PBC and Gatorade. Therefore, 2011results include only one quarter of the consolidated company. 4Q11 is first fully comparable quarter.12013 Net Debt includes Ps.2,750 million of short-term debt incurred to finance anticipated payments in the beverages division for raw materials at attractive prices. Cost of financingembedded in obtained COGS discounts. Pro-forma Net Debt = Ps.$ 3,559 as of December 31, 2013.2As of March 31, 2014 short term debt related to anticipated payments from Dec 2013 in the beverages division was 1,750 MM – to be paid by the en do 1H14Source: Financial Information Cultiba

85

520 589

1,083 981

2010 2011* 2012 2013 1Q14

3,530

15,195 15,84218,869 18,555

2010 2011* 2012 2013 1Q14

1,403

5,4436,075

3,551 4,027

2,750 1,750

2010 2011* 2012 2013 1Q14

6,472

29,024 29,546 31,884 33,067

2010 2011* 2012 2013 1Q14

… while keeping a solid balance sheet

Total assets(Ps$ million)

Net debt(Ps$ million)

Cash & equivalents(Ps$ million)

Equity(Ps$ million)

23

1

6,301 Short-term debt to fundanticipated payments in

Dec 2013 (beveragesDivision)2

5,777

2

Page 25: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

24

Why Cultiba?

Page 26: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

Investment highlights

25

A unique beverage operation with nationwide presence1

Integrated business model with proven capabilities to capture efficiencies and margins2

Full beverage portfolio of strong and leading brands3

Significant opportunities for growth in an attractive market4

Vertical integration provides a natural hedge to commodity price exposure5

Page 27: Corporate Presentationcultibaphp.abardev.net/assets/files/download/4849... ·  · 2015-11-25local appeal A single national ... flavor CSDs Distribution reach towards Traditional

Cultiba (Mexico City):Diana Gonzalez Flores, [email protected]+52-55- 5201-1947

Breakstone Group (New York):Kathleen Heaney / Kalle Ahl, [email protected]@breakstone-group.com+1-646-452-2330

INVESTORCONTACTS

www.cultiba.mx

Thank you

26