US: Coca-Cola Enterprises ups guidance, cuts US operations
Coca-Cola Enterprises has lifted its earnings guidance for 2008, but said it would close some of its US operations as part of a restructuring plan.
Coca-Cola Enterprises said today (18 December) that full-year earnings per share is likely to be in a range of $1.28 to $1.31, still down on its original forecast of $1.40 to $1.45 but up on the slashed guidance of $1.25 to $1.29 given in October.
Better than expected volumes in North America over the last few weeks have driven the late increase, the Coca-Cola bottler said.
Its revised forecast came as the group announced it planned to close two of its six business units in North America, following a 120-day business review.
As expected, the move is part of a broader strategy by CCE to integrate itself more tightly with The Coca-Cola Co. Today's statement stopped short of announcing a merger between the two, as speculated by some analysts, but did specify the need for a "new integrated supply chain" and also a new, closer relationship with Coca-Cola Co.
CCE said that supply chain savings alone could increase operating income by $150m annually from 2011.
Other main conclusions from the review include the need to offer a wider range of packaging for different occasions. This would then be tied to a new pricing structure for single-serve and multi-serve.
CCE chairman and chief executive John Brock said: "This review has accelerated the pace and scope of change and put into motion essential changes necessary to restore long-term, profitable growth in North America."
The bottler predicted mid-single digit growth in earnings per share and revenue in 2009. In the US, "key 2009 marketplace activities include initiatives for core Coca-Cola brands and Sprite, the addition of Monster energy brands, and initiatives for glacéau and Powerade", CCE said.
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