Earlier today, Coca-Cola Amatil (CCA) reported its full-year results for 2014, revealing a 25% drop in underlying net profits. Here, just-drinks takes a closer look at the Sydney-based company’s performance in the six-month period, by region and sector.
Australian non-alcoholic beverages
- Sales down by 4%, volumes fall by 1%. EBIT before significant items down by 21%
CCA said trading conditions in the region were difficult across all channels. There was a 1.6% decline in the Australian CSD category in the grocery channel, but the company said it held market share. Share in sports and energy drinks in the grocery channel increased but declined by one percentage point in water.
The non-grocery channel continued to be impacted by a shift in demand from high-margin operational accounts to national account chains and quick service restaurants.
New Zealand & Fiji
- Sales up by 8%, volumes flat. EBIT before significant items increases by 7%
According to CCA, the overall grocery channel remained “sluggish” in New Zealand, but the company grew market share in all segments except CSDs. Volumes in the country’s grocery channel declined because of weaker trading across the CSD category due to poor weather and heavier stock in trade carrying over from a strong December.
In Fiji, the company delivered “solid” volumes and earnings growth driven by steady economic growth conditions.
Indonesia & Papua New Guinea
- Sales up by 1%, volumes up 18%. EBIT before significant items down by 65%
CCA said volumes increase in Indonesia came after a focus on expanding availability and affordability. However, profits were hit by “significant” cost inflation driven by the 25% depreciation of the rupiah as well as legislated increases in wages and fuel costs. The decline in the Indonesian Rupiah alone increased input costs by around AUD35m.
The PNG business experienced a “strong rebound” in volumes and earnings growth after declines in 2013. CSDs grew volumes by 24% after new packs were introduced.
Alcoholic beverage earnings were impacted by declines in the dark spirits category, CCA said. However, Jim Beam volumes improved in market share terms and Canadian Club recorded double-digit volume increases.
Last year, CCA re-entered the Australian beer and cider market, and announced a number of new distribution tie-ups with Molson Coors and Swedish cider Rekorderlig. However, today it said its alcohol unit experienced a “slower-than-expected” return to beer and cider.