YEAR REVIEWIN
TABLE OF CONTENTS
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Message from our CFO
CONA
Board of
By the
People and Culture
Celebrates 5 Years
Overview
Message from
our CEO
Numbers
Directors
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CONA
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Despite supply shortages caused by COVID and customer price increases, across the board our Bot tlers’ sales volume and revenue grew significantly. CONA Services continued to deliver strong results in system stability, operations and implementing new solutions along the CONA 2.0 strategy.
We experienced a learning curve in 2021 with the BlueYonder planning platform. Today, it is a very well accepted new system for the bottlers and delivers the expected business value.
CONA Services is a preferred partner to work with which led to several beneficial co-development and go-to-market agreements. For instance, Capgemini agreed to invest with CONA Services in de veloping the strategic critical CONA DOM solution. DOM, the Distributed Order Management will be connected to the growing omni-channel ordering opportunities of our customers, but also provides a configurable rules-engine to evaluate the most optimal logistic partner for each order execution.
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2021 has been an amazing year for CONA Bottlers and CONA Services LLC.
The CONA team is stable, well engaged and continues to deliver strong results as the IT/Beverage industry expert group for our Bottlers. Even through the COVID times we were able to run value op timization sessions and consulted the Bottlers on how to better use the current CONA solution. This resulted in efficiencies and savings in the Bottler P&Ls.
We added more emphasis on agile delivery methodology and are proud to report that our delivery time of new capabilities improved by more than 50%. We also managed to refine the cost estimate accuracy of the change requests.
The new focus of North American Operating Unit (NAOU) on digital/eCommerce go-to- market channel drove a series of tests to engage with consumers through multi-category product offerings, e.g. Wabi2B. While the tests are still on-going, CONA Services started working with the bottlers on an integrated, holistic digital customer engagement strategy.
MESSAGE FROM OUR CEO
b. Osapiens to invest in building the new DSD / FSV solution which operates backend inde pendent (SAP ECC and S4) and enables highest implementation flexibility.
Cyber Security kept big focus every day. In 2021, we drove harmonized, external security assessment of CONA and Bottlers IT environments. This resulted in transparency of the total IT environment vulnerability and led to clear action items to further protect our business against cyber security at tacks. The Security team continued patching our systems timely and mitigating network and system Oncevulnerability.more,it has been an amazing year and we are proud of our good results.
b. Bottler specific, self-service data analytics platform realized by Snowflake.
9. Hardened Cyber-Security protection.
2021 CONA Services key deliverables
2. Created additional business value through new best-in-class solutions following the CONA 2.0
3. Achieved increased agility:
b. In fast delivery of new ecommerce business models (Wabi2B).
a. In faster delivery (>50%) of new business capabilities through DevOps.
7. Kept financial goals in line with total budget.
8. Achieved year over year system availability of higher than 99% and continuing to improve SLAs.
strategy:a.
a. Capgemini to reduce cost and speed to market of a DOM solution (Distributed Order Man agement) and enable new business models on a rule-based engine to determine best way of delivery.
6. Growing solution usage through CONA expert consulting (value optimization).
4. Descaled our legacy SAP environment through archiving and are prepared for the backend migra tion to S4.
1. Established co-development agreements with IT partner organizations:
c. Quantiphi to market CONA’s Ordersmart solution outside of the bottler world
SKU & customer based end-to-end demand, supply, transportation, production, and in ventory planning system by BlueYonder.
c. Continuing C360 program by implementing two new components for optimized field ser vice (salesforce FSL) and merchandizing (PACE Merch) activities.
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5. Partnered on Innovation solutions with true business value, e.g. OrderSmart, PickSmart, Price check, Blockchain and others.
10. CONA Services is SOC 1 and SOC 2 compliant with no material weakness.
Maria Galic Liberty BeveragesCoca-Cola
Jeff Turney Coca-Cola Consolidated
Paul Herring Coca-Cola Beverages Northeast
Vice-Chair of the Board Coca-Cola Canada Bottling Limited, Heartland Coca-Cola Bottling Company
Simon Parkinson Coca-Cola Southwest Beverages
05BOARD DIRECTORSOFEricSteadman
Chairman of the Board
Scott Bedows
Coca-Cola Bottling Company UNITED
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Leigh Crum Abarta Coca-Cola Beverages
Barry Simpson The Coca-Cola Company
The CONA Board of Directors oversees the strategic, financial, and operational success of the company. The Board consists of an executive leader from eight of the participating bottlers and an At-Large seat representing the remaining bottlers. These leaders each bring a unique perspective, deep industry knowledge, and diverse business experience.
James Sloan Swire Coca-Cola
Coca-Cola Bottling Florida
Darin Coca-ColaRiceNorth America
Terrence Gee
Michael Kennaugh Reyes Holdings
CONA CELEBRATESSERVICES5YEARS
2021 marked CONA Services’ fifth year as an independent company. Our company took the opportunity to acknowledge all that CONA has accomplished in a short amount of time. Together we have delivered world-class services solutions across The Coca-Cola System and solidified our position as a valued strategic partner to our Bottlers. None of this would be possible without the hard work, dedication, and collaboration of each one of our associates.
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CONA OVERVIEWSERVICES
Be more innovative.
Be more entrepreneurial
When a Bottler needs an innovation product and the assurance of a strategic partner, they know that they can always rely on CONA Services to deliver.
We were developed by the Bottlers for the Bottlers. CONA is not merely a vendor, but an invaluable strategic partner.
Be more people focused. Secure the future
Our Priorities
Our OurTrustPurposeITtoUsVision
CONA Services is the premiere IT services company, unlocking technology to deliver innovative solutions and unparalleled customer support.
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We will grow our people, partnerships, capabilities and custom er base to a profitable business model returning dividends to our owners while maintaining a stable core technology at the right cost.
10 BY THE NUMBERS Business Revenue New Capability vs Run # of Facilities Served Total IT TCO in % of NSR CONA Team End of Year Cost Per Case Employee Engagement Team Growth Client Satisfaction $27.65013%Billion 1384.12Employees74.24outof5 $0.054901.3 14 New Hires
The Diversity, Equity, and Inclusion Council worked hard, with the continued sup port from partner Fundamental Advisory, to further implement their cause into the culture of CONA. Through executing training and learning sessions, a book club, and highlighting holidays, the DEI Council continued to showcase their com mitment to creating a safe, diverse, and inclusive work space. Their efforts were rewarded with 0 DEI incidents reported in 2021.
CONA Services continued its commitment to inspiring the next generation of work ers by providing a formal Internship program for the 6th consecutive year. Even with the ongoing challenges of the COVID-19 pandemic, CONA brought in 4 interns who completed the 10-week program in a hybrid-model. The structure of the pro gram once again proved to be very successful, hiring one and providing the others with a valuable learning experience.
EMPLOYEE ENGAGEMENT
In 2021, CONA Services slowly and safely worked toward welcoming employees back into the office. Through this and the continued hard work from employees at home, CONA was able to grow together, achieve promising results, and deliver successful business outcomes to partners and Bottlers.
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The CONA Services team continued to grow in 2021. We welcomed an additional fourteen new team members while maintaining an above average retention rate. The third annual Employee Engagement Survey was executed. Feedback from the survey stayed in line with previous years. The CONA Services team expressed positive feedback in almost all areas including Professional Development, Psychologi cal Safety, and Leadership Integrity.
PEOPLE & CULTURE
Part of the CONA Services culture is our team’s commitment to helping the community. Below are some events that CONA had the pleasure of being apart of in 2021:
Habitat for Humanity
We partnered with Habitat for Humanity- North Central Georgia Inc. to help build a home for the wonderful, Ervin Family, in Gainesville, Ga. We are so grateful to be given the means to help others who deserve it and want to thank all those who supported this thoughtful initiative.
CONA participated in Ronald McDonald Tournament again in 2021. The mission of RMHC is to create, find, and support programs that directly improve the health and well-being of children and their families. CONA believes in this mission.
CONA played a large part in donations for the Tech Cares, Tech Shares fundraiser this year. The final tally for our team was $5,547. That means we raised enough money to provide 22,188 meals to hungry Georgians.
Working at CONA Services means being part of a talented and diverse team. We value the contribution of every associate. CONA Services is committed to cultivating a culture of diversity and inclusion.
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AtlantaraiserCommunity
Many of CONA’s strategic partners once again supported this fund
CULTURE & COMMUNITY SERVICE
Ronald McDonald House Golf Tournament
Food Bank
Our associates are what make CONA Services a great place to work!
inception, we have continued to prove out that we can deliver world class IT solutions while maintaining a consistent cost per case expense for our CONA bottlers. We will continue to optimize and drive out costs in our operating expenses, although we expect the cost per case to in crease in 2022 given approved additional investments in our Blue Yonder, Salesforce and Snowflake platforms as well rising slightly going forward in future years as we invest in our future CONA 2.0 solutions and migrate to the new SAP S4 platform in 2023.
1. CONA Financial Results Favorable to Plan
Sinceconcerns.our
CONA Services LLC continued its positive cost per case trend in 2021 – achieving an actual cost per case rate of $.050 cents per case for the full year. This was achieved due to two key factors including successful CONA operating expense cost management and favorable bottler volumes, despite COVID
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CONA Services LLC is now in its sixth year of providing best in class IT products and services for our CONA North American Bottlers.
From a financial perspective we have continued to grow and mature as an IT services organization, with our key financial metrics of controllable and consumption-based operating expenses coming in favorable to our business plan targets with a consistent cost per case result for the CONA bottlers. We also continued to improve and advance our balance sheet and cash flow positions during the year which adds depth and strength to our overall net financial position. Given our overall financial strategy of achieving a breakeven position for our financial results, our overall net income came in at $.9 mm for the year including all audit adjustments and end of year price rebates to the bottlers.
MESSAGE FROM OUR CFO
2. Operating Expense Savings
During 2021, we were able to realize ~$5.5mm in operating expense savings for the year versus our approved Business Plan. We achieved this by closely monitoring headcount for both contractors and new hires, administrative expense reductions, negotiating price reductions with key vendors, as well as savings on planned spending from our Infrastructure group. In addition, the decision to move from Salesforce to our new PACE solution helped drive favorability in our licenses expenses vs Plan.
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Overall, CONA Services LLC is in a great financial position as we look now towards 2022 and increas ing our investments in new capabilities to help grow our bottlers profitability. We will continue to invest capital dollars into new technology, specifically now focused on migrating from our core SAP ECC footprint to the new SAP S4 solution over the next two years.
3. Improved Cash Flow and Balance Sheet stability
We continued to strengthen our tax, treasury, and balance sheet activities in 2021. Some key high lights included renewal of our $3mm line of credit with our banking partner Wells Fargo, and contin ued improvements to our regular two-month cash forecast plan to help manage our cash activities. On the balance sheet front, we continued to pay down our Note Payable to The Coca-Cola Company and maintained a strong cash on hand position by December 31. Finally, we continued to make good progress on the tax front including hosting several CONA tax committee calls to review and align on overall CONA tax strategies with the bottlers. We focused our tax work on the Federal and State Research and Development tax credit front and we were able to save the bottlers almost $1.0mm for 2021. We continue to maintain emphasis on the taxability of sales and use taxes in our various bot tler states related to IT services to ensure we have proper coverage across CONA and our bottlers.
CONA Services, LLC 10 10th St NE #1100 Atlanta, GA 30309
