Warehousing and Transportation. We will redefine the control of warehouses to ensure the right management and accountability. Increase vehicle utilization and productivity (fleet productivity 95%), having the right fleet size and vehicle types, use of advanced planning tools, improve fuel yields and taking advantage of fuel sourcing strategies and tax benefits. Execution of our Plan will require changes to our organization, an upgrade of leadership and capabilities, and improvements in the way we think and work. Our organization strategy will reposition the Coca-Cola Philippines System to focus on critical areas of growth while “right sizing” the business to current levels of volume and making step-change improvements in capability, leadership and workplace culture. In order to monitor improvement and ensure we are delivering against plan, we have defined clear metrics, key goals and accountabilities for 2013-2015 along with our key strategic pillars. This business plan is expected to deliver 650MM UCS by 2015. This represents a +6.2% CAGR from ‘12-‘15 and is in line with our long-term vision. 2011 Volume: 140MM ucs 2011 NARTD Share:16.5% With the Lotte Chilsung Beverage acquisition of 34% of PCPPI in 2010 they have become a more active player in both Sparkling and Stills and they are taking a more aggressive position in the local market with their 2012 plans to invest US$75mm to improve distribution and increase capacity. In terms of its portfolio, Pepsi is focusing on three big bets – Sparkling flavors (mainly Mt. Dew), Gatorade (its key profit driver), and Sting energy drink (its fastest growing product). This could include the launch of new products from the Lotte portfolio. Financially, despite having lower volumes than KO, the Pepsi System is estimated to have an Operating Income of US$2mm in 2011. This is attributed to a more profitable Sparkling business that does not include value brands, a strong high-margin Stills portfolio, and its lean and efficient delivery and sales structure. 2011 Volume: 66MM ucs 2011 NARTD Share: 8.4% It continued to gain share nationally at +0.8ppt vs. PY due mainly to territorial expansion. Expectations are that ARC is likely to accelerate penetration and continue expansion of production capacity and distribution in North Luzon and Mindanao. Operationally, ARC is expected to stick to its current business model of having a simple portfolio focused on two key packs, and in traditional trade, a simple RTM with a heavy reliance on wholesalers . In RTD Juice, its “Zesto” brand is still the biggest juice brand with a market share of 45.2%. In 2011, Zesto regained lost ground outperforming the more premium juice brands such as Del Monte FNR, MM, and Tropicana. 2011 Volume: 58MM ucs 2011 NARTD Share: 6.9% The Asia Brewery Group is now the 4th biggest player in the NARTD industry and it has been growing consistently for the past 5 years, with a CAGR of 25.9%, driven by Cobra energy drink that now accounts for almost 50% of its total portfolio and is the undisputed market leader with a share of 63.7% in the energy category. However, the bulk of their business is still in Water with a total market share of 29.8%. They have recently launched a media campaign for Absolute water that positions it in the same space as ▇▇▇▇▇▇▇, but at a lower price point. Their current strategies are expected to continue. 2011 Volume: 34MM ucs 2011 NARTD Share: 3.7% URC is one of the largest branded food product companies in the Philippines with operations across beverage, snacks, and canned food. It continues to expand its presence in Asia with manufacturing facilities in ASEAN (Thailand, Malaysia, Indonesia, Vietnam) and China. Its C2 brand has 72% share in the RTD tea category, growing in key channels across all regions primarily in traditional trade and schools. C2 continues to evolve its portfolio and has recently launched C2 Milky. We expect URC will continue to defend its RTD tea leadership through product innovation, marketing investments, and health and wellness propositions to drive differentiation. Growth focus is shifting to beverage, with capex expansion geared towards increasing stills capacity. 2011 Volume: 36MM ucs (Pow Tea) 2011 Share: 3.5% (Pow Tea) Nestle is the undisputed leader in powdered coffee (Nescafe) with a 74% share and powdered tea (Nestea) with a 91% share. It also enjoys leadership positions in Milk and Choco, both in RTD and powder formats, and has significant share in value-added dairy segments. With the BPW re-scoping, Nestle is expected to launch and support its own Nestea RTD Tea with a potential supply agreement with a local manufacturing company such as San ▇▇▇▇▇▇ Corporation or Universal Robina Corporation. Nestle will leverage on its strong distribution network, modern trade relationship, and Nestea’s brand equity to build a strong position in the ready to drink tea category and will likely make a strong play to capture the QSR opportunity. We are evolving the RTM Model from the current MEP to a Basic Model Segmented Portfolio according to Service Level Volume (MM ucs) 545 650 Volume & Profit System OI (US$ MM) $ 68 — Sparkling Volume Share 71.1 % 71.1 % Coca-Cola Teens – Brand love 48 % 58 % Coca-Cola Teens – GMA Brand Love 27 % 58 % Coca-Cola – Availability by region 73 % 90 % Winning portfolio Core Flavors – Availability by region 55 % 80 % Retail margin (as% of PRP) 21 % 18 % Price compliance 18 % 60 % RED Scores 70 % Quality Index (BPQI) 89 95 OOS (▇▇ ▇▇▇▇▇▇▇) 6 % 3 %
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Warehousing and Transportation. We will redefine the control of warehouses to ensure the right management and accountability. Increase vehicle utilization and productivity (fleet productivity 95%), having the right fleet size and vehicle types, use of advanced planning tools, improve fuel yields and taking advantage of fuel sourcing strategies and tax benefits. World Class Capabilities (People) Execution of our Plan will require changes to our organization, an upgrade of leadership and capabilities, and improvements in the way we think and work. Our organization strategy will reposition the Coca-Cola Philippines System to focus on critical areas of growth while “right sizing” the business to current levels of volume and making step-change improvements in capability, leadership and workplace culture. 44 Main Strategies – 18 Months Implementation Plan KEY GOALS FOR 2013-2015 In order to monitor improvement and ensure we are delivering against plan, we have defined clear metrics, key goals and accountabilities for 2013-2015 along with our key strategic pillars. Volume This business plan is expected to deliver 650MM UCS by 2015. This represents a +6.2% CAGR from ‘12-‘15 and is in line with our long-term vision. (See Annex 4 for details on Key Metrics, Volume & Financials) 45 Annex 1 (Competitive Landscape) 2011 Volume: 140MM ucs 2011 NARTD Share:16.5% With the Lotte Chilsung Beverage acquisition of 34% of PCPPI in 2010 they have become a more active player in both Sparkling and Stills and they are taking a more aggressive position in the local market with their 2012 plans to invest US$75mm to improve distribution and increase capacity. In terms of its portfolio, Pepsi is focusing on three big bets – Sparkling flavors (mainly Mt. Dew), Gatorade (its key profit driver), and Sting energy drink (its fastest growing product). This could include the launch of new products from the Lotte portfolio. Financially, despite having lower volumes than KO, the Pepsi System is estimated to have an Operating Income of US$2mm in 2011. This is attributed to a more profitable Sparkling business that does not include value brands, a strong high-margin Stills portfolio, and its lean and efficient delivery and sales structure. 2011 Volume: 66MM ucs 2011 NARTD Share: 8.4% It continued to gain share nationally at +0.8ppt vs. PY due mainly to territorial expansion. Expectations are that ARC is likely to accelerate penetration and continue expansion of production capacity and distribution in North Luzon and Mindanao. Operationally, ARC is expected to stick to its current business model of having a simple portfolio focused on two key packs, and in traditional trade, a simple RTM with a heavy reliance on wholesalers . In RTD Juice, its “Zesto” brand is still the biggest juice brand with a market share of 45.2%. In 2011, Zesto regained lost ground outperforming the more premium juice brands such as Del Monte FNR, MM, and Tropicana. 2011 Volume: 58MM ucs 2011 NARTD Share: 6.9% The Asia Brewery Group is now the 4th biggest player in the NARTD industry and it has been growing consistently for the past 5 years, with a CAGR of 25.9%, driven by Cobra energy drink that now accounts for almost 50% of its total portfolio and is the undisputed market leader with a share of 63.7% in the energy category. However, the bulk of their business is still in Water with a total market share of 29.8%. They have recently launched a media campaign for Absolute water that positions it in the same space as ▇▇▇▇▇▇▇, but at a lower price point. Their current strategies are expected to continue. 2011 Volume: 34MM ucs 2011 NARTD Share: 3.7% URC is one of the largest branded food product companies in the Philippines with operations across beverage, snacks, and canned food. It continues to expand its presence in Asia with manufacturing facilities in ASEAN (Thailand, Malaysia, Indonesia, Vietnam) and China. Its C2 brand has 72% share in the RTD tea category, growing in key channels across all regions primarily in traditional trade and schools. C2 continues to evolve its portfolio and has recently launched C2 Milky. We expect URC will continue to defend its RTD tea leadership through product innovation, marketing investments, and health and wellness propositions to drive differentiation. Growth focus is shifting to beverage, with capex expansion geared towards increasing stills capacity. 2011 Volume: 36MM ucs (Pow Tea) 2011 Share: 3.5% (Pow Tea) Nestle is the undisputed leader in powdered coffee (Nescafe) with a 74% share and powdered tea (Nestea) with a 91% share. It also enjoys leadership positions in Milk and Choco, both in RTD and powder formats, and has significant share in value-added dairy segments. With the BPW re-scoping, Nestle is expected to launch and support its own Nestea RTD Tea with a potential supply agreement with a local manufacturing company such as San ▇▇▇▇▇▇ Corporation or Universal Robina Corporation. Nestle will leverage on its strong distribution network, modern trade relationship, and Nestea’s brand equity to build a strong position in the ready to drink tea category and will likely make a strong play to capture the QSR opportunity. Annex 2 (Channel Gross Profit Opportunity Map) Annex 3 (RTM Model and Segmented Portfolio) We are evolving the RTM Model from the current MEP to a Basic Model Segmented Portfolio according to Service Level 50 Annex 4 (Key Metrics, Volume & Financials) Key Metrics 2013-2015 Strategic Intention Metric Current 2015 Volume (MM ucs) 545 650 Volume & Profit System OI (US$ MM) $ 68 — Sparkling Volume Share 71.1 % 71.1 % Coca-Cola Teens – Brand love 48 % 58 % Coca-Cola Teens – GMA Brand Love 27 % 58 % Coca-Cola – Availability by region 73 % 90 % Winning portfolio Core Flavors – Availability by region 55 % 80 % Retail margin (as% of PRP) 21 % 18 % Price compliance 18 % 60 % RED Scores 70 % Quality Index (BPQI) 89 95 Supply Chain OOS (▇▇ ▇▇▇▇▇▇▇) 6 % 3 %% Volume
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Sources: Shareholder Agreement