[Panamco Logo]
Forward Looking Statements
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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.
Agenda
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o Company Overview
o Key Growth Drivers
o Strategic Imperatives
o Innovation & Acquisition
o Financial Perspective
o Strategic View
Panamco Overview
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o Largest Bottler in Latin America; Third Largest Coca-Cola Bottler
o Anchor Bottler with 60-Year Coca-Cola Relationship; 25% Shareholder
o Presence in Eight Countries Across Latin America
o Share of Sales: 80% in Colas; 45% in Flavors; 36% in Water
o 1.2 Billion Unit Cases in 2001; 0.9 Billion September YTD
o $2.6 billion Net Sales in 2001; $1.8 billion September YTD
o Publicly Traded on NYSE; Ticker PB
Operations In 8 Latin American Countries
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ANDEAN Region
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NOLAD Region Columbia
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Venezuela
Mexico
[MAP OF LATIN AMERICA]
And
Central America SOLAD Region
Guatemala -------------
Nicaragau Brazil
Costa Rica
Panama
Profile of Key Panamco Markets
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Central
2002 Data Mexico America* Andean Brazil Panamco
--------- ------ ------- ------ ------ -------
Franchise Population 18 14 67 25 124
CSD 8oz Per Cap Consumption 377 123 107 220 171
CSD Share of Sales 79% 64% 66% 56% 66%
Cold Drink Equipment per 10M Pop. 77 47 46 32 48
Cooler Penetration 65% 50% 51% 67% 55%
September 2002 YTD
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Unit Case Volume (MM) 362 58 262 221 903
Net Revenues ($MM U.S.) $ 810 $176 $548 $278 $1,811
Net Revenue Per Unit Case ($U.S.) $2.24 $3.02 $2.09 $1.26 $2.01
* Central America Data Excludes Panama (Acquired October 2002)
Growth Drivers
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o Price / Value Management
o Channel & Mix Management
o Productivity and Cost Control
o Execution
Price Strategy
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o By Geography
o Grow Volume and Share [arrow graphic] o By Channel
o Maximize Revenues o By Package
o By Brand
Volume 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 |__ 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
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1. Single Serve Growth
2. Profitable Take-Home Growth
[down arrow]
Upsizing and Increase Number of Coolers
Manage Package Mix Within Coolers
Grow Large Format Display / Points of Connection
Value Added vs. Price Promotions
Single Serve Mix (%) MEXICO CENTRAL AMERICA ANDEAN BRAZIL
47% 49% 45% 31%
Cooler Penetration MEXICO CENTRAL AMERICA ANDEAN BRAZIL
65% 50% 51% 67%
In Conclusion
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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
Profit Growth
Strategic Imperatives
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o Single Serve Growth
o Profitable Multi Serve Growth
o Productivity and Cost Control
o Flawless Execution
Managing the Business for the Long-Term in Difficult
Macroeconomic Environments
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o NOLAD:
o Sustainable Pricing Architecture to Drive Top Line Growth
o Maintain Share vs. New Entrants (PBG, Kola Real)
o Aggressive Cost Control to Improve COP Margin
o Columbia
o Price Behind Inflation and Invest In Marketing to Restore Category
and Panamco Volume Growth
o Aggressive Cost control to Deliver Profit Growth
o Venezuela
o Price at Parity vs. Pepsi
o Leverage Infrastructure on Returnable Packages
o Aggressive Cost Control to Maximize Profitability in Tough
Macroeconomic Environment
o Brazil
o Top Line Improvement Through an Aggressive Pricing Strategy and
Rebuilding of the Sales Force
o Focus on Profitability and Maintaining Share
Growth and Innovation
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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 Mi1lion.
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
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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
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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
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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
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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.