measure and monitor the processes and report results ... - Refresco.de

integration, optimization and organization”
It is anticipated that retailers will increasingly use lower value
private label propositions in their promotions towards consumers
and their fight against competitive players.
Results 2011
The Executive Board expects that 2011 results will be up on
2010, and show a further increase at EBITDA level. The acquisition
of Soft Drinks International (SDI) in September 2010 and the
planned acquisition of Spumador (signed, in the process of being
closed) are expected to contribute positively to 2011 results.
Revenue will increase substantially due to the acquisitions as
well as significantly higher input costs. The margin pressure
seen in the second half of 2010, caused by soaring raw material
and packaging prices, will continue in the first half of 2011.
Selling prices will be adjusted, and margins are expected to
recover, later in the year. The positive trend in volumes is expected
to continue, with the relative position of Refresco companies
in their respective markets improving. Refresco is fully compliant
with all the bank covenants and expects to remain so in 2011.
Strategic focus 2011
The focus for 2011 will be very much on integration, optimization
and organization. Though we have no intention of abandoning
our acquisition strategy in 2011, and we do not exclude further
acquisitions if any potential targets come along, we think it is
essential to focus in 2011 on further consolidating our market
share and profitability, adding value to our shareholders.
The integration of both Soft Drinks International and Spumador
(signed, in the process of being closed) requires a lot of
attention. In order to integrate them successfully we will need
to realize synergies in operations (manufacturing/logistics/supply
chain) and purchasing, to leverage market opportunities, and
to rationalize organizations.The challenge will be to optimize
processes and to achieve organic growth, implement best
practices and explore additional synergies. Senior management
will pay great attention to the company’s cost base and the
organization will be further rationalized. Indeed, if we wish to
lead the industry we need to demonstrate our cost leadership in
the business. We will also use 2011 to prepare our organization
for further growth in the years to come by further expanding
our functional expertise and by further strengthening our local
management teams.
The financial markets seem to offer a window of opportunity
to refinance Refresco Group as a whole. There is no need for
refinancing, as the first part of existing facility ends in 2014,
but market conditions look attractive. At the time of writing, our
refinancing possibilities in the current financial market are being
explored. Refinancing will give us a longer horizon, more flexibility
for integration and new acquisition headroom.
Buy & Build strategy
Since its foundation, Refresco has pursued a Buy & Build
strategy, which needs the financial support of shareholders.
Now that the financial situation of the Icelandic consortium has
stabilized and 3i has come aboard, our shareholders can give
us support for further execution of our Buy & Build strategy,
the first project of course being Soft Drinks International and
secondly Spumador (signed, in the process of being closed).
Our Buy & Build strategy remains in place and in the coming
years we expect to focus on further expansion of our business
within our current geographic presence and adjacent countries.
In conclusion
We are convinced that we have established a sound platform
for leadership in our industry and will continue to grow from
here. The integration, optimization and rationalization focus for
2011 should further strengthen the company. As a leader in this
business, we acknowledge our responsibility to our partners
and the impact we have on the environment. Despite a tough
economic forecast for 2011 we intend to pay more attention to
sustainable growth and environmental issues conjointly with
our supply chain partners. We are confident about the prospects
of our business and we will remain mindful of our mission
statement, to become Europe’s No. 1 manufacturer of soft
drinks and fruit juices, by pursuing our Buy & Build strategy,
serving international and national retailers and A­brands.
page _ 32 / 33