Investors are eagerly awaiting the full-year earnings results of Australia's embattled beverage manufacturer Coca-Cola Amatil Ltd (ASX: CCL), which will be made available to the public on 17 February. While they are hopeful of a strong result, many are also nervous following a string of disappointments over the last two years.
Sales and Volumes
One of the key factors investors will look for is an upswing in local sales and volumes. While the company has long been held as the dominant leader in the Australian and New Zealand markets, its position has been challenged recently by Schweppes, which has engaged in aggressive discounting activity. In an update to the market in October, management said it would ramp up its spending on marketing and product development to reignite the brand in its biggest marketplace.
Indonesia
They'll also be looking for stronger results from the company's Indonesian division. Given its enormous population and low consumption levels per capita, Indonesia has long been touted as Coca-Cola Amatil's big growth opportunity but heavy competition and wage inflation in the area have heavily impacted that initiative to date. Coca-Cola Amatil's parent company, The Coca-Cola Company, has said it will invest US$500 million into the division to help accelerate expansion of production, warehousing and cold drink infrastructure in the market.
Promises made
In response to the problems facing the business, management initiated a strategic review in which it revealed up to $100 million in reduced costs per annum over the next three years. Investors will be hoping to see some progress made on this initiative.
Meanwhile, following a string of disappointing results, management recently said it was targeting a "return to mid single-digit growth in earnings per share over the next few years with no further decline expected after 2014" (emphasis added). While the company's shares remain 36% below their all-time high (from March 2013), investors will certainly be holding the company to its word.
