Coca-Cola Enterprises released its YTD results yesterday

Coca-Cola Enterprises released its YTD results yesterday

Coca-Cola Enterprises can offest volume sluggishness with upcoming investment and M&A activity, an analyst has said.

The bottler, which posted further losses in YTD results yesterday (26 October), has announced a restructuring programme to stem “market challenges", Stifel Nicolaus said in a note. Money freed up by the programme could be invested in areas such as shopper marketing, digital technology and revenue growth management, the analyst said.

“We expect some of this upside in December, when management plans to communicate more of its plans, and also believe the events themselves will drive upside potential in 2013,” Stifel said.

Stifel added that the company also plans to increase leverage with its share-repurchase programme, which could be used for M&A.

CCE saw net profits in the nine months to the end of September fall by 9.3% year-on-year to US$577m. Net sales were down by 3.8% and operating profits decreased by 8.8%.

Stifel said it has dropped its volumes growth estimate for the company from 3% to 1.5% following the results.

Bernstein Research, however, said gross and EBIT margins were in line or better than expected. “Thank goodness for the balance sheet,” Bernstein said.