Providing an update on the implementation of initiatives to stabilise earnings and return to growth, Coca-Cola Amatil (CCA) has announced a restructure that will involve the retrenching of up to 260 staff.
“Our Strategic Review announced in October was designed to address the structural challenges that CCA is facing and I am pleased to report that we are making good progress in implementing the initiatives identified as part of that review with three priorities: strong category leadership, a step-change in productivity and in-market execution, and better alignment with the Coca-Cola Company,” Group Managing Director Alison Watkins said.
In August, CCA announced that it was targeting more than $100 million in savings in Australia from procurement, reduced support costs and improved productivity from the significant investment made in the supply chain and in IT investment over the past five years.
Since then, the company has finalised plans to restructure its back office support costs with a range of process improvement and automation initiatives. The restructure will lead to the removal of up to 260 non-frontline positions, with the majority of those occurring next year.
“This latest restructure, together with cost initiatives already in train, gives us a high level of confidence we will achieve our savings targets,” Ms Watkins said.
However, Ms Watkins revealed that solid progress had been made in the development and implementation of a range of growth initiatives to strengthen the brand portfolio.
“The recent launch of the 250ml cans, supported by the #colouryoursummer campaign, is tracking above expectations in terms of ranging, transactions and, most importantly, recruitment of the next generation of Coca-Cola consumers,” she said.
“We have a great line-up of new product launches and marketing initiatives, including the launch of Coke Life in the first half of 2015.”
Trading conditions in Australia continue to be challenging, though.
“While we have not yet seen the anticipated improvements in the grocery channel and operational accounts, we continue to expect second half group earnings before interest and tax to exceed first-half earnings of $316.7 million, before significant items,” Ms Watkins said.
