Drive profitability

We have a number of initiatives to expand the profit margins our business generates. These initiatives are grouped under two areas: revenue growth management and cost reduction.

 

Improving price and mix to drive revenue growth

Revenue growth management initiatives ensure that we get optimal value from every case we sell. These comprise:

  • Package mix: focusing on single-serve packs
  • Channel mix: developing our presence in the immediate consumption channel
  • Category mix: sparkling, tea and energy are key, supported by water and juice
  • Pricing: capturing opportunities taking affordability into account

Revenue per case growth (FX-neutral)

2.9%
2.2%
1.1%
2.5%
0.3%
2.9%
  • c 2.5x Single-serve packages have higher net sales revenue per unit case
  • +70bps Consistently improving single-serve mix in portfolio (p.a.)

Reducing cost

The fallout from the economic crisis since 2008, combined with unfavourable input costs during 2011-12 and significant FX headwinds, has put pressure on volumes and margins in most of our markets. This forced us to adopt a strong efficiency focus, including infrastructure optimisation and operational cost control.

Infrastructure optimisation

Since 2008, we have been consolidating our plants and distribution centres, increasing efficiency without sacrificing capacity. While Established and Developing markets near completion, our efforts are focusing on our Emerging markets.

  • 45% reduction in number of plants in our established and developing markets
  • 25% reduction in number of distribution centres
  • 34% reduction in number of warehouses

Operating cost control

We have reduced operating expenses as a percentage of revenue by 260 basis points since 2008. We have done this with cost discipline, but also with specific actions and investments. We set up a Shared Services Centre in Bulgaria and we are swiftly moving all back office transactional processes into this highly efficient and specialised team. SAP has been implemented in all of our countries, giving us opportunity for sharing best practices across the group.