Coca-Cola Amatil 2007 Annual Report
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Capital Expenditure
Capital expenditure increased by $19.3 million to $300.3 million or 6.8% of
trading revenue. The increase in capex in Australia was primarily due to
the first stage of construction of the new automated warehouse facility at
the Northmead manufacturing operation, additional beverage can
production capacity in South Australia and New South Wales, a new hot-
fill beverage line in Queensland and the initial spend on the development
of the SAP integrated systems project announced in April 2007.
The decrease in the Food & Services Division capital expenditure was due
to cycling the high first half 2006 investment in cold drink equipment for
the Australian beverage operations and the completion of the warehouse
at SPC Ardmona. The reduction in New Zealand & Fiji is largely due to the
increased capital expenditure in the first half of 2006 on the automated
warehouse project in Auckland, while the reduction in Indonesia & PNG
reflects a similar first half 2006 up-weighted investment in cold drink
equipment and returnable containers.
Capital expenditure / trading revenue 2007 2006 % Chg
Australia
5.4%
10.6%
7.1%
12.0%
3.8%
6.8%
2.8% 2.6 pts
New Zealand & Fiji
14.0% (3.4 pts)
Indonesia & PNG
8.2% (1.1 pts)
Food & Services
18.8% (6.8 pts)
South Korea
2.5% 1.3 pts
CCA Group
6.5% 0.3 pts
CCA remains committed to a significant capital investment program in
order to drive organic growth. Major infrastructure projects, including the
Melbourne, Sydney and Auckland automated distribution centres and
increased beverage production capacity across all regions further
strengthen the growth capability of the business.
Cash Flow
Operating cash flow was very strong, increasing by $55.5 million to
$523.9 million, with much of the improvement driven by improved earnings.
Free cash flow remained very strong at $271.0 million. Higher levels of
capital expenditure and the cycling of the sale of properties in Australia
and South Korea in 2006 drove the broadly flat free cash flow result.
Cash Flow ($A million) 2007 2006 $ Chg
EBIT (before significant items)
653.1
176.8
11.9
(98.0)
(139.8)
(141.5)
61.4
523.9
(300.3)
47.4
271.0
580.5 72.6
Depreciation & amortisation
201.2 (24.4)
Cash impact of Significant Items
(41.1) 53.0
Change in working capital
(69.2) (28.8)
Net Interest paid
(150.9) 11.1
Taxation paid
(129.4) (12.1)
Other
77.3 (15.9)
Operating cash flow
468.4 55.5
Capital expenditure
(281.0) (19.3)
Proceeds from sale of PP&E
& other
84.2 (36.8)
Free cash flow
271.6 (0.6)
Cost of Goods Sold
Higher commodity input costs continued to impact on CCA’s beverage
manufacturing cost base. On a constant currency basis and excluding South
Korea, beverage COGS per unit case increased by 6.3% for both the second
half and the full year, driven by the higher cost of aluminium and PET resin,
partially offset by a stronger Australian dollar.
Significant Items – South Korea
For 2007, CCA reported significant item charges of $59.4 million before tax
and $55.6 million after tax in relation to the 2006 extortion threat and
impairment of the South Korean business in the first half and the disposal
of the business in the second half.
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