Catherine Brenner praised as she ends stint as director of Coca-Cola Amatil
She quit AMP amid wrongdoing, but Catherine Brenner was lauded as she left Coca-Cola Amatil.
Coca-Cola Amatil chairman Ilana Atlas has delivered a spirited defence of outgoing director Catherine Brenner, whose corporate career was largely destroyed last year in the wake of the Hayne royal commission.
Ms Brenner resigned in April last year as chairman of AMP, and from a number of other roles, following evidence at the royal commission of misconduct by the wealth manager’s staff, including charging fees for no service.
Amid the storm, there were calls by the Australian Shareholders Association at last year’s Coca-Cola Amatil annual meeting for her to step down from its board, but she stayed on.
Addressing shareholders of the beverage company in Sydney today, Ms Atlas said Ms Brenner had advised the board last year she would not seek re-election to the board when her current term ended, and as such would leave the company now.
Ms Atlas defended Ms Brenner’s corporate and boardroom expertise, and her leadership skills.
”She has consistently taken a leadership position in Amatil’s sustainability agenda and has been a driving force behind the step change we have undertaken in consumer wellbeing, safety and packaging, particularly through her chairmanship of our risk and sustainability committee.
“Catherine’s corporate finance, mergers and acquisitions experience has also been vital in board deliberations.
“On behalf of all members of the board I thank Catherine for her outstanding contribution to the company over the last 11 years.”
Ms Brenner was the longest serving director on the Coca-Cola Amatil board.
Resigning together with a number of other AMP directors last year, Ms Brenner said she was accountable for governance and her departure from the financial services giant was “a step towards restoring the trust and confidence” in the company.
AMP had been under intense pressure following allegations the financial services giant committed crimes by lying to the corporate regulator over a scandal in which it charged customers for services they never received.
Meanwhile, in her address to Coca-Cola Amatil shareholders, chief executive Alison Watkins said the beverage group was in the first stage of its two-year transformation and turnaround and faced a number of headwinds both in Australia and in its offshore markets in Indonesia.
“While our performance in many areas of our shareholder value proposition was strong, challenges remained in Australia and Indonesia,” she said. “The outcome was a group result for 2018 that reflected these challenges as well as our commitment to investing in our businesses for a strong tomorrow.
“It included solid progress in some of our growth markets, and identified some areas where more work was required.”
The company’s flagship Australian arm, which drives around two thirds of total earnings, was hit by a number of economic factors as well as coping with massive changes in consumer tastes, including a switch from sugary soft drinks. This has led Coca-Cola Amatil to invest more capital in the Australian business, Ms Watkins told shareholders.
“Australian beverages’ underlying EBIT declined 8.8 per cent mainly driven by the reinvestment of an additional $40 million into the business in 2018 through the accelerated Australian growth plan,” she said.
“Adjusting for this additional investment, EBIT growth would have been positive for the year. However, we recognise that this investment is important in supporting the long-term growth of our business.”
She said Coca-Cola Amatil was focusing on the “must win” categories of cola and water. She said 2019 was the second year of a two-year transition phase for the company, which would see it rack up one-off costs of up to $30 million in the year.
“We are positioned for growth in Australian beverages in 2020 with the completion of the additional $10 million investment in our accelerated Australian growth plan to increase our salesforce and, with container deposit schemes in NSW and Queensland substantially embedded by the end of 2019.”
Ms Watkins said a strategy to have more sales staff pounding the pavement and engaging directly with customers in cafes and restaurants had helped boost revenue.
“In Australia, some of the accelerated Australian growth plan initiatives are already delivering results,” she said.
“The ‘feet-on-the-street’ rollout in the immediate consumption channel is close to completion,” she said.
“In NSW metro for example, the ramp-up in visitation frequency has resulted in a volume improvement of two per cent year to date compared to an 11 per cent decline prior to commencement of the initiative in fiscal 2018. Most of the benefits from the nationwide rollout are expected to flow through in the second half.”
In Indonesia, Coca-Cola Amatil was “encouraged by the volume growth we’ve achieved from April 2018 and will continue to deliver our accelerate to transform strategy with additional direct marketing expenditure to be invested in 2019”.
“However macroeconomic conditions, weak Indonesian rupiah, higher commodity costs and current consumer spending trends are expected to continue.”
Coca-Cola Amatil also remains in talks to sell its underperforming fruit cannery business SPC.
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