Deutsche Bank Australian Companies Tour John Wartig Chief Financial Officer 1 September 2005 1 September 2005 Outstanding Progress Since 2001… Market capitalisation Ç approx $2.2 billion Total shareholder returns Ç 19% CAGR Earnings per share ROCE* Dividends per share 10.6% 11.0% 9.5% 8.4% 21c 16c 7.5% 19c 13c 16c 14c 11c 7c H2 16c H1 12c 2001 18c 20c 13c 13c 2002 2003 2004 2005 7c 8c 2001 2002 14c 10c 2003 2004 2005 2001 2002 2003 2004 H1 05 * Pre IFRS equivalent for H1 2005 September 2005 2 1 Australia’s Best Performing Beverage Business H1 2005 Revenue $1.7bn Beverages 6 Countries 10% 280 million potential consumers 18% EBIT $268m 4% 0% 14% 13% 750,000 active customers 34 beverage bottling plants 81% 59% 16,800 employees Australia Pacific South Korea Indonesia & PNG 3 September 2005 CCA Continues to Drive Brand Leadership in Australia with 17 out of the Top 20 Products COCA-COLA SGR 600 ML PET COCA-COLA SGR 2 L PET COCA-COLA SGR 1.25 L PET COCA-COLA SGR 390 ML PET COCA-COLA SGR 375 ML CAN DIET COKE DIET 600 ML PET COCA-COLA SGR 1.5 L PET COCA-COLA BONUS SGR 2 X 1.25 L PET VANILLA COKE SGR 600 ML PET PEPSI MAX PEPSI DIET 600 ML PET DIET COKE DIET 390 ML PET SOLO LMN SGR 600 ML PET SPRITE SGR 600 ML PET DIET COKE DIET 375 ML CAN DIET COKE DIET 2 L PET FANTA ORNG SGR 600 ML PET LIFT SGR 600 ML PET DIET COKE VANILLA DIET 600 ML PET SOLO LMN SGR 1.25 L PET COCA-COLA SGR 24 X 375 ML CAN 0 2 4 6 CCA Product Other September 2005 8 10 12 14 16 18 National Value % Share Source: ACNeilsen – 2004 Convenience Report 4 2 Bolt-On Beverage Acquisitions Strengthen CCA’s Market Position $366 million invested in bolt-on beverage acquisitions $330 million received from non-core asset sales Northern Territory CocaCola Licence Crusta Juice Quirks Refrigeration Peat’s Ridge Pacific Beverages Neverfail Rio Beverages September 2005 PET manufacturing assets Surplus property 5 Acquisition of SPC Ardmona provides opportunity for expansion into the high growth health and well-being segment Share of SPC Ardmona Revenue SPC Ardmona Market Position Packaged Fruit 60% 1 Henry Jones Spreads 12% 1 Tinned Tomatoes 11% 1 Baked Beans & Spaghetti 9% 2 Source: AC Nielsen – Scan Track. Excludes food service Deciduous Fruit Category 6% CAGR since ‘02 8% growth in ‘04 September 2005 Fruit Snacks Category 6.6% CAGR for last ten years 6.4% growth in ‘04 6 3 Sales Revenue by category Food service & Other 18% Retail branded products 49% International 24% Private label 9% 7 September 2005 CCA becoming a broader based food and beverage company… Revenue Mix Business Mix by Region - H1 2005 Revenue $1.9bn EBIT $267m 8% 6% 4% 10% Capital Employed $3.4bn 0% 8% Food 23% 5% 13% 17% 6% 12% 18% 20% 10% 77% 55% 95% 72% 2001 H1 2005 Non-carbonated beverages Carbonated soft drinks 42% Australia South Korea SPCA September 2005 Pacific Indonesia & PNG 8 4 Key business drivers – Driving customers and CCA’s profitability through… 1. Product and package innovation 2. Non-carbonated beverage and food expansion 3. Growing product availability through cold drink placements and outlet expansion 4. Customer service improvement 5. Revenue management and cost discipline September 2005 9 1 CCA Continuing to Lead through Innovation Growing the diet flavour market CCA Zero Eye Catching Packaging Low sugar Sprite aimed at the growing health & wellbeing trend September 2005 10 5 1 Innovative Packaging – Lighter and Cheaper From July 2005, Powerade bottle: 10% less resin New improved packaging same look and feel $2m savings from 2006 New Powerade 3 x 600ml pack Sports Market CCA 11 September 2005 2 Growing Per Capita Water Consumption is a Key Priority for CCA Australia’s per capita consumption is only a quarter of Europe’s and half of the USA’s Litres Annual bottled water consumption per capita Ita ly Fr an c Be e lg iu m Sp ai n G er m Sw an y itz er Po land rtu Un ga ite l d St at es G re ec Th e ai la nd Ca na Au d st a ra Ar lia ge nt in a Un Br ite az il d Ki n Ph gdo ilip m pi Janes Ne p an w Ze al an So Ch d in ut a h Af ric Vi a et na m Average SOURCE: Perrier Vittel S.A., Canadean September 2005 12 6 2 Water Growth Accelerating – CCA Core Brands 3 out of the top 5 water brands in Australia are CCA’s, with ‘Mount Franklin’ a strong number one, followed by ‘pump’ and ‘Neverfail’ Ambient Racks 1L pack Packaged Water Market CCA New 6x600mL pack September 2005 2 New 4x1.5L pack 13 Fruitopia J – Kick Starting CCA’s Juice Growth Relaunched in June 2005 with improved formulation, new packaging a fresh [2L] offering for grocery. Increased media support targeting a leading share of voice in the juice segment. May 2005 14 7 of Fruitopia Classic in Chilled Juice 2 Launch Section 8 Flavours Premium Orange Pulp Free Orange Orange & Mango Five Fruits Cloudy Apple Orange & Apricot Apple & Blackcurrant Apple & Guava September 2005 3 15 Using equipment innovation and our investment to drive customer profitability Woolworths Coolers Subway Coolers HORECA Mini Retro September 2005 16 8 3 Growing our Customer Base Through Outlet Expansion Potential Customer Growth Australia Potential Cust. Universe CCA’s Coverage 2004 Growth 0.3m outlets 35% >5% Targeting nontraditional outlets New Zealand 0.1m outlets 30% 2% Indonesia 1.4m outlets 30% 15% South Korea 0.5m outlets 20% 30% 17 September 2005 4 Targeting expanded availability in traditional outlets Improved In-Market Execution Packs and Brands Horeca Universe (no. of outlets) CCA Share Rest of Market Equipment September 2005 Sales / Distribution 18 9 4 Faultless Customer Service Execution Centralised Call Centres in Australia and New Zealand Re-focus sales force from order taking to conceptual selling September 2005 5 19 Automated Distribution – Reducing Costs and Improving Service Delivering improved customer service Generating annual cost savings of approximately $7 million Planning construction of automated distribution facilities in Sydney and Auckland Due for completion by early 2008 Total combined cost of $200m to $250m September 2005 20 10 Australia & Pacific Current trading conditions Soft start to the year with a solid improvement in May / June 5% price rises taken in February to recover higher COGS holding despite slow response from the major competitor KEY DRIVERS Continuing focus on product innovation, noncarbonated beverages expansion, cold drink placement and new outlet expansion to generate revenue growth 21 September 2005 South Korea Current trading conditions Trading remains impacted by high levels of household debt and continued low consumer demand for non-alcoholic ready to drink beverages Little improvement in first half trading from that experienced in the second half of 2004 Successful launch of ‘Minute Maid’ with 2 million cases sold since June launch KEY DRIVERS Upgrading our sales force capabilities TCCC significantly up weighted spending Expand non-CSD beverage portfolio September 2005 22 11 Indonesia Current trading conditions Luxury goods tax removal expected to benefit trading in the second half However, natural disasters, removal of fuel subsidy and Rupiah devaluation adding strain to the economy 4-5% price rises taken in July KEY DRIVERS Expanding the soft drink culture Improving sales execution Cold drink cooler placement and outlet expansion September 2005 23 Opportunities identified from business review KEY DRIVERS Product and package innovation New channel opportunities Key account management skills Supply chain efficiencies Increasing user-friendliness of packaging and range of products in the high growth plastic resealable containers Leverage CCA’s distribution capabilities to take SPCA products into new channels Supply chain improvements in procurement and manufacturing September 2005 24 12 H1 2005 – 9th Consecutive Half Year of Double-Digit Earnings Growth Group Net Profit Ç 16.8% to $145.2m Net Profit Ç 16.8% (13.7% on a pre IFRS basis) EBIT Ç 10.2% to $267.4m EPS Ç 11.9% to 19.8c (8.8% on a pre IFRS basis) ROCE Ç 0.6 pts to 19.9% (or up 0.3 pts to 11.0% on a pre IFRS basis) Free Cash Flow remaining solid with strong beverage cash flow of $137.8 million (up $24.9 million) and a seasonal cash outflow of $73.1 million for SPC Ardmona Dividend Ç 12% to 14 cents per share (fully franked) September 2005 25 Impact of rising commodity prices 2005 H1 Beverage COGS increase +5.3% (small impact from forex and bolt on acquisitions) Lag affect of effective commodity and forex hedging results in H2 COGS +6-7% Full Year COGS expected to increase 5-6% 2006 Forward rates for aluminium down slightly YOY but significant increases expected in raw sugar No forward market for resin but 2005 YTD has seen reductions in Asian spot prices since beginning of year Currency ($A:$US) – expecting no material impacts Full Year COGS forecast to increase 3-5% September 2005 26 13 2005 Earnings Guidance Aim to deliver low double digit net profit growth Key Factors Driving H2 2005 Performance Momentum in Australia and New Zealand needs to continue Higher raw material costs will result in ~7% increase in COGS in the second half South Korean consumer confidence uplift remains the key SPC Ardmona integration to gain momentum, delivering 15-20% annualised growth (approx $45 million in EBIT) September 2005 27 Continuing to drive customer and CCA profitability through the key drivers… Product and package innovation Non-carbonated beverage and food expansion Growing product availability through cold drink placements and outlet expansion Customer service improvement Revenue management and cost discipline Well positioned to capitalise on the consumer trend to health, wellbeing and lifestyle. September 2005 28 14 September 2005 29 The material in this presentation is general background information about Coca-Cola Amatil and is current at the date of the presentation. It is information given in summary form and does not purport to be complete. This presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. It does not amount to advice or any recommendation in relation to Coca-Cola Amatil shares. For further information visit www.ccamatil.com or contact Kristina Devon Investor Relations Manager +612 9259 6185 (Ph) +612 9259 6614 (fax) [email protected] September 2005 30 15
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