CAGE 2011: Dr Pepper Snapple Group confident on 2011 profit growth

By | 30 March 2011

Dr Pepper Snapples CFO, Martin Ellen, told attendees that the company starts 2011 “on a very firm footing”

Dr Pepper Snapple's CFO, Martin Ellen, told attendees that the company starts 2011 “on a very firm footing”

Dr Pepper Snapple Group (DPSG) has said that it is capable of delivering up to mid single-digit sales growth and high single-digit EPS growth in 2011 through an improvement in operating efficiencies and its innovation line-up.

Speaking at the Consumer Analyst Group of Europe conference in London today (30 March), DPSG's CFO, Martin Ellen, told attendees that the company has started 2011 "on a very firm footing". He added that strategies the company has laid out will allow it to capture growth in the North American beverage market.

"Over the long-term," Ellen said, "we believe this business is capable of delivering 3% to 5% net sales growth and high single-digit EPS growth. We remain focused on growing the business organically with three priorities for cash.

"First, we will maintain our target capital structure," he told analysts. "Second, we will keep a modest cash reserve to meet the demands of the business and ensure we maintain financial flexibility. Third, and most importantly, remaining excess cash will be returned to our shareholders in the form of dividends and share repurchases."

DPSG's CEO, Larry Young told analysts that the firm's R&D team is developing an innovation pipeline designed to fuel growth for the firm going forward.

"To support this growth, we've made strategic investments in areas such as flavour technology, sensory and consumer guidance research, and ingredient science," Young said. "We're aggressively leveraging our expertise and capability to develop products that address consumer trends head on. Projects in the pipeline focus on flavour, variety, functionality, caloric reduction and freshness. Our 2011 innovation line-up is one of the strongest I've seen."

Young added that DPSG's focus will be on the Hispanic markets in the US through the addition of more brands, as well as a major marketing campaign for its Sun Drop brand.

"Our 2011 innovation is front-loaded, so you should expect higher marketing support in the beginning part of the year," Young said. "We believe that, in the next five years, non-cola CSDs will grow to 55% of total CSDs. This shift is worth US$4bn dollars at retail and as the leader in flavours, DPS will benefit."

Sectors: Soft drinks, Water

Companies: Dr Pepper

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