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View Annual Report Annual Report 2016 BRA ZIL PARA GUAY We are a great Company, where happiness CHI has no borders. LE ARGEN TINA Table of Contents 6 Our Company 8 Mission, Vision and Values Company Identification 10 Message from the Chairman of the Board Embotelladora Andina S.A. 16 Olympic Games Rio 2016 19 Consolidated Financial Highlights Open Stock Corporation 20 History Chilean Tax ID: 91.144.000-8 24 Company Structure Adress: Miraflores 9153, Comuna de Renca, Santiago 7 2 Deeds of Incorporation 28 Corporate Governance 30 Directors’ Committee 32 Board of Directors 4 3 Our Collaborators 6 3 Administrative Structure Corporate Office 7 3 Management Structure Av. Miraflores 9153, piso 7, Renca, Santiago de Chile 0 4 Company Ownership and Dividends Tel. (56 2) 2338 0520 www.koandina.com 42 Our Business 44 Argentina Investor Relations 48 Brazil Paula Vicuña 52 Chile [email protected] 56 Paraguay 1 6 Other Operations Tel (56 2) 2338 0520 *** 66 Corporate Social Responsibility Argentina 68 Additional Information Ruta Nacional 19 – Km 3,7, Córdoba 0 7 Capital Expenditures (54 351) 496 8800 71 Financial Activities 72 Risks Factors Brazil 84 Properties and Facilities 88 Subsidiaries and Equity Investees Rua Andre Rocha 2299. Taquara Jacarepaguá, Rio de Janeiro 96 Controlling Group (55 21) 2429 1530 101 Stock Market Trading Information 102 Compensation – Board of Directors and Principal Officers Chile 104 Statement of Responsibility Av. Miraflores 9153, Renca, Santiago de Chile (56 2) 2462 4286 Financial Statements Paraguay Acceso Sur Km 3,5, San Lorenzo, Asunción (595 21) 959 1000 4 • Coca-Cola Andina • Annual Report 2016 5 our company 6 • Coca-Cola Andina • Annual Report 2016 7 mission Add value growing sustainably, refreshing our consumers and sharing moments of optimism with our clients. Focused on our Customers Austerity Team Work values Oriented Attitude on Results Integrity vision Lead the beverage market, being recognized for our management excellence, people and welcoming culture. This year Coca-Cola Andina saw its Letter from the 70th anniversary and we fully celebrated Chairman of the Board it, strengthening our role as one of the region's largest bottlers. n behalf of the Board I preside, I am we operate, in order to place this year’s of our volume comes from Argentina O pleased to submit the Annual Report results into context. and Brazil, both countries that suffered and Financial Statements of Coca-Cola consumption declines. Simultaneously, volume Andina S.A and its subsidiaries, along In Argentina we saw a strong adjustment there was a stronger trend to consume Paraguay with the Sustainability Report for the 2016 after the change of Government. 2016 was categories different from soft drinks, which 8% Fiscal Year. complex in macroeconomic issues with a include juices, waters, isotonic and energy year-on-year inflation around 40%, while, drinks. Taking this into account, we see a Argentina At Coca-Cola Andina, we are in a process in terms of growth and consumption, the great opportunity to keep on growing these 28% of constant innovation and growth in each year was negative, significantly impacting segments. Along with that, we have the Chile of our markets. Team work, perseverance our volumes. In addition, the exchange challenge of maintaining soft drinks growth, and openness to new and innovative ideas rate devaluation considerably affected our which continues to be our main category. 30% have been the drivers in this task within our cost structure. group. 2016 was marked by a permanent Our EBITDA reached 311,004 million Chilean effort with our different partners on a Brazil suffered the deepening of a mac- pesos, diminishing 1.7% with respect to Brazil steady path to profitability and sustainable roeconomic and political crisis. In terms the previous year. Operating income was 34% growth. This way of working allows us to of growth, 2016 was a negative year for 213,670 million Chilean pesos. However, sales face adverse macroeconomic and political the Brazilian economy, which translated EBITDA margin improved by 65 basis points Paraguay contexts and even so continue delivering in an approximate 3.5% decline in GDP. and operating margin by 54 basis points, 8% positive results. Unemployment exceeded 10%, hitting reflecting the excellent work performed consumption. Political uncertainty has on cost and price management. Despite Argentina This year Coca-Cola Andina saw its 70th affected all social strata, and has delayed the strong impact of volumes, net income Chile anniversary and we fully celebrated it, economic recovery. reached 90,526 million Chilean pesos, 30% 29% strengthening our role as one of the region's representing a 3.0% growth compared to largest bottlers. Much has changed since Chile did not experience the macroeconomic the previous year. the beginning of the 20th century: the new impacts of the other countries. However, consumption trends, the role of technology the country continues with low growth rates Main achievements of our Brazil in society, among other aspects; but what and increased unemployment. The main operations 33% has not changed is that we continue to face challenges were posed by the Labelling In Argentina, we exceeded the expecta- ebitda each challenge eagerly and with a sense Law, where we became leaders in the im- tions of our results thanks to the great Paraguay of urgency, seeking excellence in every- plementation of Government regulations. work accomplished in optimizing costs thing we develop, maintaining a positive and revenue management. The increase 11% performance, capturing opportunities, In Paraguay GDP and consumption remained in margins reflects a significant operating Argentina anticipating adverse environments and stable, without negative relevant impacts. improvement within an adverse scenario. 23% delivering value to our stakeholders. We We consolidated the new Hot Fill line to Chile are convinced that we will continue doing Financial challenges and results continue strengthening the growth of the 35% so every year. 613 million unit cases of soft drinks and juice and isotonic categories. At the same 166 million unit cases of other beverages time, we inaugurated a new deposit for Macroeconomic context in the were sold in 2016. This represented a drop raw materials that allows us to optimize region of 5.0% compared to the previous year, procurement logistics and processes of Brazil It is important to review the macroeco- attributable to the slowdown in regional key supplies. 31% nomic situation of the countries where economies, since approximately 60% 10 • Coca-Cola Andina • Annual Report 2016 11 argentina In Brazil, we continue consolidating and improving our efficiencies. The project for An important part of the sustainability of our results is a our new plant in Duque de Caxias is strongly 219 517,059 moving forward and seeks to change the consequence of the strengthening of our corporate governance. production paradigm, modernizing the 71,302 productive system and reducing our envi- ronmental footprint. This plant will enable us to significantly increase our returnable Volume Sales EBITDA (MUC) (Ch$ M) (Ch$ M) PET offer, and thus we will be able to extend this format to all our franchise, reaching our brazil consumers with more attractive price points. In Chile the new Labelling Law became effective during 2016, which we addressed more as an opportunity rather than as a 266 590,146 problem. In that sense, we reformulated the ethics practices, in the SIPP Global Compact greater diversity throughout the Company, standing the objectives of common good portfolio in all categories and capitalized Research, Chile chapter. We distinguish the an ongoing process that we will be con- and well-being of our consumers. 96,957 the light segment through Masterbrand. We value of our partners and therefore we put solidating into the Board of Directors and lead changes as protagonists, achieving a special focus on developing relationships hierarchic positions in the organization in In 2016, The Coca-Cola Company announced record 26.5% sales mix in the zero calories with suppliers and outsourced personnel; we the coming years. the purchase of Ades, reinforcing the growth Volume Sales EBITDA beverages within the soft drinks category. understand that without the development tendency of new categories; we expect (MUC) (Ch$ M) (Ch$ M) of these partners we could not be what Commercial challenges and to begin marketing these products in our chile Also in Chile, we renewed a significant we are today and, therefore, our Board of results four franchises during 2017. In addition, part of our fleet of distribution trucks, Directors gives vital importance to building The commercial aspect is one of our vital we successfully began the distribution of incorporating 151 Euro V Bluetec 5 units, growth relationships and synergies with all activities. We had the opportunity of putting Monster in Chile and Brazil, showing the with eco-friendly technology, minimizing of our suppliers. our operation to test during the Olympic ability to work together. We recognize that impacts in the communities where our Games in Rio de Janeiro, once again taking teamwork is not a zero-sum game, and 232 trucks circulate. We received the second place in the ALAS20 part in one of the most important events in thus we coordinate internally and with our 540,427 recognition of leadership in corporate the world, exceeding our expectations. The external partners. Paraguay recorded the best EBITDA margin governance, which takes into account Games were a success, our collaborators 112,499 of our operations, portraying the focus and corporate governance principles involving carried the torch and participated in com- To deepen our coverage and scope of excellence in the work on costs, achieving recognition of shareholders, consideration mercial activities, once more demonstrating returnable packaging is a challenge we Volume Sales EBITDA a 6.7% EBITDA growth compared to the of the interests of the various stakeholders that working at Coca-Cola Andina and in maintain in all our territories, since it (MUC) (Ch$ M) (Ch$ M) previous year, measured in local currency.
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