Coca-Cola Amatil to focus on its Australian operations as it seeks to return to earnings growth, executive says; company remains committed to Indonesia's growing market but is reviewing its investment plans there
May 13, 2014
(Australian Associated Press)
– Beverages and packaged fruit and vegetables supplier Coca-Cola Amatil will focus on its Australian operations as it seeks to return to earnings growth.
Group managing director Alison Watkins says the company remains committed to Indonesia's growing market but is reviewing its investment plans there.
CCA announced in April it was reviewing all its operations after flagging a 15 per cent fall in first half earnings due to weakness in its Australian operations and higher costs in Indonesia.
Ms Watkins, who has been at CCA for 10 weeks after joining the company from grains marketer GrainCorp, said the strategic review was aimed at restoring the company to sustainable earnings growth and attractive shareholder returns.
There were opportunities to lift revenue, improve productivity and cut costs across many parts of the business.
"Our main focus at this stage is Australia, as the most material contributor of earnings to our group," Ms Watkins told shareholders at the company's annual general meeting in Sydney on Tuesday.
CCA remained very positive about the longer-term opportunity for Indonesia despite it being a volatile developing market.
"In response to the current challenges, we are reviewing our longer-term growth and investment plans for Indonesia with our partner, The Coca-Cola Company," Ms Watkins said.
"We remain committed to investing for growth in Indonesia, but we must do this with a view to delivering solid and sustainable returns."
Ms Watkins said CCA needed a stronger portfolio of products outside of carbonated beverages and to improve its position in the sports, energy and water categories.
It had to be more active in assessing opportunities in new, emerging categories. The company had been a bit slow in innovating outside its core franchise over the past few years, she said.
CCA not only needed to re-assess its portfolio of brands, but also make better use of its production and warehousing capability.
Ms Watkins said CCA was actively looking at its operations across Australia, taking into account workplace flexibility and overall costs at each site.
CCA expects to provide a more detailed list of priorities and objectives when it releases its financial results for the first half of the 2014 calendar year in August.
Shares in CCA were one cent higher at $9.14 at 1216 AEST.
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