CCA sees stable earnings in 2015
Earnings should stabilise in 2015, chief executive Alison Watkins said.
Hot Topic
Hawke’s Bay
Coca-Cola Amatil (CCA) is targeting a return to mid single-digit growth in earnings a share over the next few years, with no further decline expected after 2014.
Earnings should stabilise in 2015, chief executive Alison Watkins told shareholders at last week’s annual meeting. This follows a 25.3% slide in full-year profit last year to $A375.5 million, the worst result in more than two decades.
Ms Watkins reconfirmed guidance given in October when she presented her strategic plan to investors.
But she warned the pace of that recovery would rest on new revenue initiatives such as Coke Life and economic conditions in Indonesia, where the company has a controlling stake in the local Coca-Cola bottler.
CCA faces a potential price squeeze from major supermarket chains Woolworths and Coles in Australia as both have pledged cheaper prices to retain market share.
Ms Watkins wouldn’t comment on that but said CCA would continue to watch its own costs, stripping out $A100 million in savings over the next few years.
“The focus of our [cost-cutting] is very much on back-office support areas, rationalising excess capacity in our system, and we are actually investing more in innovation, in our brands, we are equipping our sales force with the latest productivity,” she says.
Last month, Lion warned it would not swallow lower prices as part of any renewed price war between Woolworths and Coles unless it was guaranteed greater shelf space for its brands and a lift in sales at the check-out.
Ms Watkins says both chains have been supportive of its new brand, Coke Life, which has the potential to grab as much as 2% of total Coke volumes in Australia after already capturing a 13% share of the sugar cola segment.
Coke Life is already the company’s second most bought pack in the 1.25L and 250ml sizes. More than 3.5% of supermarket shoppers have now tasted the low-sugar drink.
Nevil Gibson for NBR Food Industry Week
Thu, 21 May 2015
Thu, 21 May 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
CCA sees stable earnings in 2015
47782