Coca-Cola European Partners GB CFO on supporting rapid change

If any brand been able to thrive through the ages, it is Coca-Cola. As one of the world’s most successful brands it has innovated continually to keep abreast of changing market conditions.

Michael Clark, GB VP finance and CFO of bottling giant Coca-Cola European Partners (CEEP)- the world’s biggest bottler and fourth biggest beverages group, says finance has played a key role in supporting innovation.

In a fast-changing world, where he acknowledges “disruptive change is commonplace”, the finance operation is always developing as the group itself is changing rapidly.

CCEP, manufactures and sells the drink and other products across the main European economies including the UK, which alone produces annual revenues of around £2bn.

19% of CCEP, which is the largest bottler, is owned by the Coca-Cola Company that owns the Coke brand. Just over a third of CCEP is owned by a set of Spanish families, a legacy from a three-way merger three years ago, and the rest is institutional and private investors.

A New York listing has recently been complimented by a UK main market listing on the London Stock Exchange, reflecting an increasingly European shareholding and a desire to raise CCEP’s profile in Europe and increase market access to investors.

“One of the roles is obviously to pull finances together and tell the business what it looks like financially, but there’s also a role of challenging the assumptions, kicking the tyres- making sure they’re reasonable,” says Clark.

“Performance for all businesses is becoming more difficult to deliver in a sustained way, and the skills that are required for finance are very different, but equally a lot of the themes are very similar to the ones that we’ve always had to operate in,” he says.

 Thinking broadly

Eight years ago, Clark arrived at Coca-Cola Enterprises, following 11 years at tea giant Tetley Group, which became Tata Global Beverages, including various roles in the US. It followed a period at a small accountancy firm in London before joining Kerry Foods the Irish food group.

The group is aligned to delivering on the Coca-Cola Company’s strategy of ‘Beverages for Life’, diversifying into a broad range of products that reflect a fast-changing consumer environment. “We’ve developed products giving people a wider choice such as Coca-Cola Classic, Zero Sugar and Diet Coke and RTD Teas such as Fuze,” says Clark.

“We’re also launching new products such as SmartWater and the Honest brand of organic drinks,” says Clark. “We’re responding as things are happening to us,” he adds. “Last year is quite a good example of that, where we had the soft drinks tax. But if you look at the industry over a long period of time it has reduced the calories that are being consumed.”

There have been other issues that have impacted on how the business is being run. Last Summer there was a shortage of Co2 gas in the UK, which Clark says the group responded to by tapping the Coca-Cola global network.

There’s also been the problem of failing retailers, “if you look at the retailers that have gone bankrupt, it’s a frightening list in the last 12-18 months,” says Clark, or the consolidation of larger players in the supply chain such as Tesco and Booker and Morrisons with McColl’s. “There’s an awful lot that’s happening in the market,” he adds.

All these issues are borne in mind when CCEP and Coca-Cola Company work together, says Clark.  “We develop new products together with them, meeting at a monthly innovation council, where finance plays a key role in updating the business on where we’re going.

Given its scale, the business knows it must collaborate with The Coca-Cola Company on sustainability as well. Clark says: “We recently launched a new sustainability action plan called This is Forward, which sets out the ambitions we have to address key societal issues around sugar reduction, packaging and climate change. We know these things really matter to our consumers and they are also increasingly important for our trade customers. With policy makers developing new solutions to tackle complex issues, it is more important than ever that we are genuinely leading progress across these areas.”

 Finessing finance

The finance team that Clark leads is increasingly focused on developing tech to enhance its capability. The four arms of finance, comprising commercial finance, supply chain finance, finance projects and FP&A are all involved in a transformation process to deliver greater value.

“Getting data together is one of the group’s key priorities, so we did a project a few years ago to set up a reporting centre, co-located within our shared service centre (SSC) in Sofia, Bulgaria, to pull a lot of the common reporting for finance together in a quite interactive way. As part of that, the master data governance, data definitions are a lot more standardised than they’ve been in the past,” says Clark.

A critical element of the work is helping drive the sales function in a more efficient way. “We’ve started very much at the front end of the business, giving salespeople the tools to succeed, giving them route planning when they visit customers.

“We look at what is it that they want to work on, for example what is it that is going to be mutually beneficial for us as a business. We started there and now we’re fully into the business process, also the back-end stuff, looking at business information (BI) models and performance management,” says Clark- who started out in sales at a division of American Express.

“One of the challenges is getting everyone on the same hymn sheet, so getting similar numbers all across, there’s certain times when that’s not possible and certain times when it is,” says Clark. “Generally, you want one version of the truth, so one sales forecast number, that’s quite key,” he says.

An important priority at finance within CCEP is ensuring finance personnel undertake the roles they were hired to do. “Often, we hired great analysts and commercial finance people and then we ask them to spend half their time putting reports together, so we needed to free them up from that, to automate. You should never offshore something you can automate, you should never automate something you can stop doing,” he remarks.

Clark believes finance should play a key role. “You don’t have to ask questions for the sake of it. It’s better to be seen as part of the business rather than an outsider commenting on the business. Finance should rightly challenge and push but if you do that from an external lens it will put people off, so you need to be part of the solution,” he adds.

Michael Clark is participating at this year’s CFO Agenda.

For Finance, 2019 marks the start of a new world where the proactive leaders will be at the helm, navigating their businesses safely through the changes. Join us at this year’s CFO Agenda on 7th May in London to network with 200+ CFOs, FDs, and Heads of Finance to drive growth and meet the future with confidence and certainty. To learn more and register, please, visit: https://www.thecfoagenda.com/

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