2006 Sustainability Report - Coca-Cola Amatil

Our business
Key Business Drivers
(see 2006 Annual Report)
1. Grow our share of consumption
of non-alcoholic beverages
2. Develop a material presence in
premium alcoholic beverages
3. Grow our customer
relationship capabilities
4. Develop world class
operating systems
5. Ensure the sustainability of
our business platform
Change and expansion
Since 2001 CCA has rapidly diversified
its portfolio of products, growing both
organically and through acquisitions.
In that time, revenue generated from
non-carbonated beverages and food has
grown from 5% to 32% of total revenue.
In the past five years acquisitions
have included New Zealand’s Rio
Beverages; Neverfail Springwater;
Peats Ridge Springs and Palm
Springs water companies; Quirk’s
Refrigeration; Crusta Fruit Juices;
Grinders Coffee; and SPCA, Australia’s
largest producer of packaged ready to
eat fruit and vegetable products.
In 2006, CCA entered the premium
alcoholic beverages sector with the
formation of a joint venture company,
Pacific Beverages, with SABMiller.
Pacific Beverages began selling Peroni
Nastro Azzurro, Miller Genuine Draft
and Pilsner Urquell into the Australian
market in October. CCA entered into
an agreement with global spirits
distributor Maxxium, to sell and
distribute its premium brands,
including Jim Beam, Remy Martin
Cognac and ABSOLUT VODKA. In
April 2007, CCA’s Adelaide operations
at Thebarton began manufacturing
Jim Beam ready-to-drink (RTD)
brands, including Australia’s number
one selling RTD, Jim Beam and Cola.
2006 Results Summary
• Net profit, pre significant items,
up 0.9% to $323.5 million
• EBIT up 1.7% to $580.5 million
• Beverage revenue increased 6.9%
to $3.9 billion
• Total revenue increased by 8.2%
to $4.4 billion
• Full year dividend has been
increased by 3.2% to 32.5 cents
per share, fully franked.
• In the second half EBIT grew
by 8.6%.
Australia: delivered full year revenue
growth of 7.7% on volume growth
of 3% with EBIT of $433.9 million.
The major impact was the increase
in commodity costs with Australia
successfully recovering close to
$100 million in commodity driven
cost increases. The cola category was
a stand out with Coke trademark
revenue growing by a record 9%
driven mainly by the success of
Coca-Cola Zero.
New Zealand and Fiji: in local currency,
New Zealand EBIT was broadly flat,
with second half trading improving
by 15%, driven by the success of
Coca-Cola Zero and the launch of
Powerade Isotonic. Fiji experienced a
small decline in earnings for the year
as a result of reduced consumer
demand following political unrest
in the country.
South Korea: underlying earnings of
$18.0 million were an improvement
after a loss of $9.2 million in 2005.
Indonesia and PNG: a full year EBIT
of $17.6 million was a significant
turnaround in profitability, thanks
to a very strong second half. Second
half earnings were $29.2 million,
only marginally behind the record
$30.6 million result achieved for the
2005 second half.
SPC Ardmona: a strong result with
EBIT of $46.2 million, which was
ahead of expectations. The $15 million
distribution centre opened in
Shepparton in November and is
expected to generate savings of more
than $2 million per annum.
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