Background
Coca-Cola Beverages Ltd. is the largest bottler of soft drink products in Canada and one of the largest Coca-Cola bottlers in the world. The Company, through its subsidiary Coca-Cola Bottling Ltd., sells, distributes and produces under license Coca-Cola soft drink products and non-carbonated beverages, as well as various Canada Dry, Schwepps, A&W and Nestea trade-mark products. The Company also distributes Evian and Volvic natural spring waters and is responsible for approximately 98 percent of all production of Coca-Cola soft drink brands in the country and accounts for 95 percent of all sales of Coca-Cola products. Coca Cola Beverages operates in all ten provinces with over 3,700 employees. The Company markets and distributes beverages to Canadian retail consumers and customers, as well as to wholesalers and other bottlers.
Five Year Financial Analysis
In 1995, Coca-Cola Enterprises experienced their first annual profit since 1991. (see exhibit #1 for financial graphs) Their profit was $4 million compared to a loss of $16 million in 1994. Their three years of losses totaled over $200 million with their largest in 1993 at $139 million.
Coca-Cola's sales volume increased for the second consecutive year with an 8% increase over 1994 totaling $232.8 million. Their stock price nearly doubled over the previous year with a closing market price of $4.30 in 1994 and a closing market price of $8.50 in 1995. The earnings per share for 1995 was 0.01 per common share compared to a net loss of $0.47 in 1994. The earnings per share had a net loss since 1991.
Throughout 1995 Coca-Cola also embarked upon and continued various programs to cut costs and increase revenues. The company succeeded, by decreasing their operating ...