Coca-Cola Amatil 2007 Annual Report
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Directors’ Report continued
Coca-Cola Amatil Limited
For the financial year ended 31 December 2007
Operating and financial review
Principal activities and operations
The principal activities of the Group during the financial year ended
31 December 2007 were –
•
the manufacture, distribution and marketing of carbonated soft drinks,
still and mineral waters, fruit juices, coffee and other alcohol-free
beverages;
•
the processing and marketing of fruit, vegetables and other food
products; and
•
the manufacturing and distribution of premium beer brands and the
premium spirit portfolio of global distributor Maxxium for Pacific
Beverages Pty Ltd, a joint venture entity between CCA and SABMiller
plc.
The Group’s principal operations were in Australia, New Zealand, Fiji,
Indonesia and Papua New Guinea (PNG). The Group’s operation in South
Korea was discontinued on 24 October 2007.
Financial results
The Group’s net profit attributable to members of the Company was
$310.7 million, compared to $282.4 million in 2006. The net profit
attributable to members includes a loss after tax of $56.9 million from the
discontinued South Korean operation.
The Group’s net profit from continuing operations was $367.6 million,
compared to $313.6 million in 2006, representing a 17.2% increase from
last year.
The Group’s trading revenue from continuing operations for the financial
year was $3,931.8 million, compared with $3,641.6 million for 2006.
Earnings before interest and tax (EBIT) from continuing operations
increased by 15.3% to $648.4 million, compared to $562.5 million in 2006.
The Group’s net finance costs from continuing operations for the financial
year were $132.4 million, compared to $134.5 million in 2006.
Operating cash flow increased by 11.8% to $523.9 million compared with
$468.4 million in 2006.
Review of operations
The EBIT contribution from each operating segment of the continuing
operations was as follows –
•
Australian Beverage business EBIT increased by 12.3% to
$446.0 million, compared with $397.3 million in 2006;
•
New Zealand & Fiji Beverage business EBIT increased by 19.5% to
$77.8 million, compared with $65.1 million in 2006;
•
Indonesia & PNG Beverage business EBIT increased by 109.1% to
$36.8 million, compared to $17.6 million in 2006; and
•
Food & Services EBIT increased by 5.1% to $87.0 million, compared
with $82.8 million in 2006.
Further details of the operations of the Group during the financial year are
set out on pages 1 to 5 of the Annual Report.
Significant changes in the state of affairs
On 20 August 2007, CCA announced that it had signed a formal sale and
purchase agreement with LG Household & Health Care Ltd (LGH&H) for
the
sale of CCA’s South Korean business. The disposal of the South Korean
business was completed on 24 October 2007, on which date control of the
business passed to LGH&H.
During the year, CCA acquired a coffee business and related assets for a
total consideration of $10.7 million. CCA also increased its investment in
Pacific Beverages Pty Ltd, the joint venture entity CCA formed with
SABMiller plc in August 2006, to principally fund the acquisition of
Bluetongue Brewery Pty Ltd.
In the opinion of the Directors, there have been no other significant
changes in the Group’s state of affairs or principal activities during the
twelve months to 31 December 2007.
Future developments
Information on the future developments of the Group and its business
strategies are included in the front section of this Annual Report.
While the Company continues to meet its obligations in respect of
continuous disclosure, further information of likely developments, business
strategies and prospects has not been included here because, in the
opinion of the Directors, such disclosure would unreasonably prejudice the
interests of the Group.
Environmental regulation and performance
Management of environmental issues is a core component of operational
management within the Group’s businesses. The Group is committed to
understanding and minimising any adverse environmental impacts of its
beverage and food manufacturing activities, recognising that the key areas
of environmental impact are water use, energy use and post sale to
consumer waste.
Group policy is to ensure all environmental laws and permit conditions are
observed. The Group monitors its environmental issues at an operational
level, overlaid with a compliance system overseen by the Compliance &
Social Responsibility Committee. Although the Group’s various operations
involve relatively low inherent environmental risks, matters of noncompliance
are identified from time to time and are corrected as part of
routine management, and typically notified to the appropriate regulatory
authority.
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