Insight - Coca-Cola Enterprises confident of volume recovery
Coca-Cola Enterprises (CCE) said it remains confident it can generate “flat-ish” volume growth in North America in 2010 after booking a decline in full-year volumes in the region today (10 February).
Speaking on the company’s earnings conference call, CEO and chairman John Brock said the firm expects a “much better” performance in 2010 than it achieved in 2009. For the 12-month period to the end of December, comparable North American volume declined 5%.
“Over time we remain confident that we can generate an effective balance of volume and pricing in North America,” Brock told analysts. “It will require higher levels of market place execution. We will continue to strengthen our revenue capabilities.”
“We are striving to get to a flat-ish performance [in 2010]. In 2009, we faced strong economic headwinds and we also faced the problem of channel shifting, which was very very difficult. That being said, we expect 2% to 3% pricing growth in North America. We’re confident we can deliver,” Brock said.
CCE reported a swing to full-year profits this morning as volume growth in Europe offset a decline in North America.
The US bottler reported a net income of US$731m for 2009, compared to a loss of $4.39bn in 2008. Full-year sales were down 0.5%, however, as North American sales declined 0.5% and European sales declined 1.5%.
Brock blamed the impact of “weak macroeconomic conditions” on the firm’s overall results, adding that key channels, such as the on-trade, remain “soft”.
“We will continue to execute several key operating and brand initiatives to counter these conditions,” he said.
Despite this, Brock told analysts the company has “more financial flex” than it has had previously, and said it would consider expansion geographically, citing North America and Europe as target destinations.
“We have made it very clear to all out there that we are interested but the value has to be right,” he insisted.
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