2005 Half Year Results Presentation 6 months to 1 July 2005 10 - - PDF document

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2005 Half Year Results Presentation 6 months to 1 July 2005 10 - - PDF document

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2005 Half Year Results Presentation 6 months to 1 July 2005 10 August 2005 1 10 August 2005 Driving customers and CCAs profitability through the key drivers Product innovation; Non-carbonated beverage and food expansion;

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1 10 August 2005

2005 Half Year Results Presentation

6 months to 1 July 2005

10 August 2005

2 10 August 2005

Product innovation; Non-carbonated beverage and food expansion; Growing product availability through cold drink placements and outlet expansion; Delivering levels of customer service which cannot be profitably matched by our competitors; Backed by pricing and cost discipline. Driving customers and CCA’s profitability through the key drivers

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3 10 August 2005

EPS Growth – Outstanding Progress Continues

H1 EPS 69% since 2001

$0.25 $0.29 $0.34 $0.40

$0.12 $0.13 $0.16 $0.18 $0.20 $0.19 $0.22 $0.16 $0.14

2001 2002 2003 2004 2005

H1 H2

4 10 August 2005

$0.07 $0.08 $0.10 $0.13 $0.14 $0.07 $0.11 $0.13 $0.16

2001 2002 2003 2004 2005

Dividend Growth – Outstanding Progress Continues

H1 Dividend 100% since 2001

$0.14 $0.185 $0.23 $0.28

H1 H2

$0.14

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5 10 August 2005

H1 2005 – 9th Consecutive Half Year of Double-Digit Earnings Growth

11.9% to 19.8c (8.8% on a pre IFRS basis)

EPS

remaining solid with strong beverage cash flow of $137.8 million (up $24.9 million) and a seasonal cash

  • utflow of $73.1 million for SPC Ardmona

Free Cash Flow

0.6 pts to 19.9% (or up 0.3 pts to 11.0% on a pre IFRS basis)

ROCE

10.2% to $267.4m

EBIT

16.8% (13.7% on a pre IFRS basis)

Net Profit

Group Net Profit 16.8% to $145.2m

6 10 August 2005

2005 Interim 14.0 cents per share 71% payout ratio 100% franked 2004 Interim 12.5 cents per share 69% payout ratio 100% franked 2003 Interim 10.0 cents per share 63% payout ratio 50% franked

Target Dividend Payout Ratio

70% to 80% of Net Profit

Improving Overall Shareholder Returns

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7 10 August 2005

Group EBIT 10.2% to $267.4m

Beverage EBIT margin healthy 15.4% Food EBIT margin 12.1% (first 4 months)

Strong earnings result for Indonesia and PNG

8.7% to $11.3m Indonesia & PNG

Consumer confidence impacting results but solid progress in restructuring

93.0% to $0.9m South Korea

Business review completed and integration ahead of expectations

$17.2m (4 months) SPC Ardmona

Competitive trading conditions in New Zealand

0.0% to $37.5m Pacific

Strong EBIT margin in a competitive market

9.8% to $217.8m Australia

Strong Group Performance Continues

8 10 August 2005

Australia – Strong EBIT Growth & Margin Improvement

4.6% 4.4% Capital Expenditure / Sales Revenue 1.2pts 20.1% 21.3% EBIT Margin 9.8% 198.4 217.8 EBIT

  • 0.9%

156.3 154.9 Volume (million unit cases) 4.4% $6.32 $6.60 Sales revenue / case 3.5% 988.0 1,023.0 Sales revenue % Chg H1 2004 H1 2005

A$m

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9 10 August 2005

Low sugar Sprite aimed at the growing health & wellbeing trend

Zero Australia CCA Continuing to Lead through Innovation

diet Flavours Market

CCA Share Rest of Market

10 10 August 2005

Australia Innovative Packaging – Lighter and Cheaper

From July 2005, Powerade bottle: 10% less resin $2m savings from 2006

New improved packaging same look and feel New Powerade 3 x 600ml pack

Sports Market

CCA Share Rest of Market

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11 10 August 2005

Packaged Water Market

CCA Share Rest of Market

Australia 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’

New 4x1.5L pack New 6x600mL pack 1L pack Ambient Racks

12 10 August 2005

Australia Water Growth Accelerating – Neverfail

  • New commercial sales force created

to focus on growing business

  • New home dispensing unit to be

launched in Oct – kitchen friendly

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  • 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.

Australia Fruitopia J – Kick Starting CCA’s Juice Growth

14 10 August 2005

Australia Launch of Fruitopia Classic in Chilled Juice Section

8 Flavours

Premium Orange Pulp Free Orange Orange & Mango Five Fruits Cloudy Apple Orange & Apricot Apple & Blackcurrant Apple & Guava

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15 10 August 2005

RTD Tea Market

CCA Share Rest of Market

Australia Addressing the Health and Wellbeing Market

16 10 August 2005

Australia.. Using equipment innovation and our investment to drive customer profitability

New Subway Coolers New Woolworths coolers New Convenience & Petroleum Coolers

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17 10 August 2005

Australia.. Using equipment innovation and our investment to drive customer profitability

HORECA Mini Retro

18 10 August 2005

Australia – Improved In-Market Execution

Packs and Brands Equipment Sales / Distribution

Horeca Universe (no. of outlets)

CCA Share Rest of Market

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19 10 August 2005

2.0% 4.4% Capital Expenditure / Sales Revenue

  • 1.7pts

18.8% 17.1% EBIT Margin 0.0% 37.5 37.5 EBIT 2.8% 32.1 33.0 Volume (million unit cases) 7.2% $6.21 $6.66 Sales revenue / case 10.2% 199.4 219.8 Sales revenue % Chg HY04 HY05

A$m

Pacific – New Zealand & Fiji

20 10 August 2005

  • Energy and sports drinks continue to achieve strong

double digit growth

  • Launch of ‘Coke with Raspberry’ and ‘Diet Coke with

Raspberry’ on target

  • Water category continuing to grow strongly led by ‘pump’,

‘Kiwi Blue’ and ‘Aquashot’

  • Boosting business development with rollout of customer

service centre and implementation of HORECA strategy KEY DRIVERS

  • Continuing focus on product innovation,

non-carbonated beverages expansion, cold drink placement and new outlet expansion to generate revenue growth

Pacific – New Zealand & Fiji

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21 10 August 2005

8.5% 5.3% Capital Expenditure / Sales Revenue

  • 4.2pts

4.5% 0.3% EBIT Margin

  • 93.0%

12.9 0.9 EBIT

  • 1.1%

63.7 63.0 Volume (million unit cases) 9.1% $4.52 $4.93 Sales revenue / case 7.7% 288.2 310.5 Sales revenue % Chg HY04 HY05

A$m

South Korea – increased marketing not yet flowing through to financials

22 10 August 2005

South Korea – successful launch of Minute Maid Juice

  • Modernising our sales execution practices and

development of model markets

  • Successful launch of ‘Minute Maid’ with

2 million cases sold since June launch

  • Backed by formation of CCA Asia - increasing
  • ur management focus and capability in the

region

KEY DRIVERS

  • Upgrading our sales force capabilities
  • TCCC significantly up weighted spending
  • Expand non-CSD beverage portfolio
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23 10 August 2005

5.3% 9.5% Capital Expenditure / Sales Revenue 0.8pts 5.5% 6.3% EBIT Margin 8.7% 10.4 11.3 EBIT 5.6% 49.7 52.5 Volume (million unit cases)

  • 10.6%

$3.79 $3.39 Sales revenue / case

  • 5.5%

188.4 178.1 Sales revenue % Chg HY04 HY05

A$m

Indonesia & PNG – Strong Result – Indonesian EBIT 27% in local currency

24 10 August 2005

Indonesia & PNG – Strong Result in a Challenging Environment

  • Additional resources deployed to the region by CCA and

TCCC

  • Significant increase in the size of the sales force

supported by training and development programs

  • On track to increase Indonesian cooler base by 20% this

year

KEY DRIVERS

  • Expanding the soft drink culture
  • Improving sales execution
  • Cold drink cooler placement and
  • utlet expansion
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25 10 August 2005

n/a 2.9% Capital Expenditure / Sales Revenue n/a n/a 12.1% EBIT Margin n/a n/a 17.2 EBIT n/a n/a 141.9 Sales revenue % Chg HY04 HY05

A$m

First 4 months on target

4 months

26 10 August 2005

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

Opportunities identified from SPCA review

KEY DRIVERS

  • Product and package innovation
  • New channel opportunities
  • Key account management skills
  • Supply chain efficiencies
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27 10 August 2005

2005 Half Year Results Presentation

John Wartig, CFO

10 August 2005

28 10 August 2005

H1 2005 – Key Metrics Remain Strong

+12.0% +11.9% +16.8%

  • 0.3pts

+10.2%

chg

post IFRS

70.6% 70.7% Payout

+12.0%

12.5c 14.0c Interim dividend

chg

pre IFRS

HY04 HY05

A$m

+10.2%

242.7 267.4 EBIT

  • 0.3pts

14.6% 14.3% Margin %

+13.7%

124.3 145.2 NPAT

+8.8%

17.7c 19.8c EPS

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29 10 August 2005

H1 2005 – Key Metrics Remain Strong

+0.3pts

10.7% 11.0% ROCE (pro forma pre IFRS)

(73.1)

  • (73.1)
  • SPCA

534.4

1,554.8 2,089.2 Net debt 4.3x 4.3x Interest cover

24.9

(48.2) +0.6pts

Change 112.9 137.8

  • Beverages

112.9 64.7 Free cash flow HY04 HY05

A$m

19.3% 19.9% ROCE

30 10 August 2005

EBIT – Base Business Continues to Deliver Strong Results

242.7 267.4 17.2 (41.4) 58.2 4.3 (13.7)

EBIT HY04 Volume Price & Mix COGS Indirect costs &

  • ther

SPCA EBIT HY05

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31 10 August 2005

EBIT – Base Business Continues to Deliver Strong Results

242.7 267.4 0.9 19.4 (12.0 ) 17.2 (0.8) EBIT HY04 Australia Pacific South Korea Indonesia & PNG SPCA Corporate EBIT HY05

0.0

32 10 August 2005

7.5 (359.8) (352.3) Deferred income tax liability (37.1) 517.0 479.9 Receivables 252.6 384.0 636.6 Inventory 27.4 (406.4) (379.0) Payables 2,469.3 (332.8) 1,445.6 1,221.7 494.6 FY04 892.3 12.4 436.7 192.8 242.9 $ change 1,414.5 Property, plant & equipment 3,361.6 Capital Employed (320.4) Other net assets 1,882.3 IBAs & intangible assets 737.5 Working capital HY05

A$m

Balance Sheet reflects IFRS changes & inclusion of SPCA

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33 10 August 2005

(73.1)

  • (73.1)

SPCA 24.9 112.9 137.8 Beverages (48.2) 112.9 64.7 Free Cash Flow (48.2) 112.9 64.7 Free cash flow (8.8) (83.8) (92.6) Capital expenditure 2.4 5.3 7.7 Sale of assets & other 45.3 (135.6) (90.3) Income tax paid (60.7) (58.7) 91.9 267.4 HY05 9.1 82.8 Depreciation (5.7) (55.0) Net interest (115.2) 56.5 Change in working capital 24.7 242.7 EBIT $ chg HY04

A$m

Free Cash Flow Remaining Strong

34 10 August 2005

First half seasonal influences:

Payment to growers for deciduous fruit Payment for packaging materials (including cans)

  • Approx. two thirds of pa employee costs incurred in first half

due to Jan to May canning operations

SPCA seasonality – working capital peak &

  • perating cash outflows in first half

Jan Jun Dec

Inventory build during deciduous fruit canning season

2004 2005

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35 10 August 2005

0% 20% 40% 60% 80% 100% 2003 2004 H1 2005

Infrastructure Marketing Equipment Other 5.5% 6.1% 4.9%

CCA Group - Capital Expenditure

36 10 August 2005

Commodity and currency exposure in sugar, aluminium, PET resin and tin plate

  • Costs comprise raw material inputs (sugar, PET resin, aluminium

and tin plate) + conversion costs

  • Represents 20-25% of COGS

CCA hedging policy

  • Forward contracts for currency and raw material costs (where

possible)

  • Take 80-100% cover 12 months out with reducing cover over

next 2 years

Impact of rising commodity prices on COGS

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37 10 August 2005

Outlook for commodity prices

  • Sugar
  • PET resin
  • Aluminium
  • Tin plate

COGS outlook

  • HY05 up 5.3% driven by higher PET prices
  • FY05 COGS expected to be up 5-6%
  • FY06 COGS expected to be up 3-5%

Lower COGS increases in 2006 vs 2005

38 10 August 2005

IFRS – Major balance sheet impacts as at 31 Dec 2004

Investments in Bottlers’ Agreements – $1.9 billion reversal of the previous revaluation of IBAs Income Taxes – $264 million transition adjustment arising mainly in relation to tax affecting CCA’s Investment in Bottlers’ Agreements Foreign Exchange – under IFRS, CCA elected to reset the foreign currency translation reserve to zero from $422 million

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39 10 August 2005

933 (2)

  • (264)

(1,915) 3,114 Equity (800) 1 (422) (264) (1,915) 1,800 Retained earnings / (accumulated losses) 64 12 422 (370) Reserves 1,669 (15) 1,684 Contributed equity & other 3,013 (54) 264 2,803 Liabilities 1,456 (2) 1,458 Other non-current liabilities 360 13 264 83 Deferred income tax liabilities 1,197 (65) 1,262 Current liabilities 3,946 (56) (1,915) 5,917 Assets 1,274 (40) 1,314 Other non-current assets 1,424 6 (1,915) 3,333 Investment in bottler’s agreements 1,248 (22) 1,270 Current assets Post IFRS Other Reset FCTR to zero Deferred income tax adj IBA Revalua- tion Pre IFRS

$Am

IFRS – Balance Sheet as at 31 Dec 2004

40 10 August 2005

(4.4) (4.4)

Deferred income tax assets

0.2 0.2

Other

276.6 (0.4) (130.7) 407.7 (111.0) 0.4 518.3 3450.1

Post IFRS

0.5 280.3 NPAT (0.4) Outside equity interests (126.3) Income tax paid 407.0 PBT (111.0) Net interest 0.4 Significant items 0.5 517.6 EBIT (before sig items) 0.5 3449.6 Sales revenue

in Nev cooler rev Pre IFRS

$Am

IFRS – Profit & Loss as at 31 Dec 2004

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41 10 August 2005

Free cash flow Debt servicing capability Ability to pay dividends

IFRS adjustments do not impact: CCA’s underlying business remains

  • unchanged. IFRS has no impact on the

economic value of the company.

42 10 August 2005

2005 Half Year Results Presentation

Terry Davis, MD

10 August 2005

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43 10 August 2005

Key Factors Driving H2 2005 Performance

Momentum in Australia and New Zealand needs to continue Higher raw material costs will result in 5-6% increase in COGS – to be recovered by price increases South Korean consumer confidence uplift remains the key SPC Ardmona integration to gain momentum in H2 2005

2005 Earnings Guidance Aim to deliver low double digit net profit growth

44 10 August 2005

Product innovation; Non-carbonated beverage and food expansion; Growing product availability through cold drink placements and outlet expansion; Delivering levels of customer service which cannot be profitably matched by our competitors; Backed by pricing and cost discipline.

Well positioned to capitalise on the consumer trend to health, wellbeing and lifestyle. Driving customers and CCA’s profitability through the key drivers

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45 10 August 2005

2005 Half Year Results Presentation

6 months to 1 July 2005

10 August 2005

46 10 August 2005

Appendix

IFRS – Profit & Loss as at 2 July 2004

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47 10 August 2005

0.1 0.1 0.4

Other

124.3 (0.1) (61.2) 185.6 (57.1) 242.7 1,664.0

Post IFRS

(3.5) 127.7 NPAT (0.1) Outside equity interests (3.5) (57.7) Income tax paid 185.5 PBT (57.1) Net borrowing expenses 242.6 EBIT (before sig items) 1,663.6 Sales revenue

Deferred income tax assets Pre IFRS

$Am

IFRS – Profit & Loss as at 2 July 2004