Investor Day 2017

Coca-Cola Amatil is hosting an Investor Tour and Management Presentations to provide a progress update on the Group strategy and the Indonesian business.

Coca-Cola Amatil is hosting an Investor Tour and Management Presentations to provide a progress update on the Group strategy and the Indonesian business.  
Group Managing Director Alison Watkins said the events are being held in Jakarta, Indonesia, at the heart of one of Coca-Cola Amatil’s major growth markets.

“The venue for this year’s Investor Day recognises the important role Indonesia plays in delivering Coca-Cola Amatil’s future growth plans,” Ms Watkins said.

“Our strong Indonesian team have made solid progress in collaboration with The Coca-Cola Company across all of our strategic priorities. This puts us in an excellent position for driving further growth.  We’ll be taking the opportunity to highlight our progress and outline our plans for the future.”

Group

Ms Watkins said Coca-Cola Amatil remained focused on the Group strategy and delivery of the Shareholder Value Proposition in the medium term.

“As discussed at our half-year results, the majority of our businesses are meeting or exceeding expectations of performance,” Ms Watkins said.

“We have strong earnings growth, in Indonesia, Papua New Guinea, and Alcohol & Coffee. We are delighted with our progress in New Zealand and Fiji. Australian Beverages experienced a challenging start to 2017, but we have seen some improvements.

“On the strength of these outcomes, we reaffirm that FY17 Group underlying NPAT is expected to be broadly in line with FY16, as announced in April and confirmed at our half year results in August.”

Ms Watkins said that the company’s Indonesian business continued to deliver strong results, as reflected in the recent half-year results announced in August 2017.

Indonesia

Coca-Cola Amatil Indonesia President Director Kadir Gunduz reiterated his optimism of the market, “We’re a well-established business and long term operator in this country, so we understand the challenges and, most importantly, the opportunities.”

Marking its 25 years of operating in the country, throughout 2017 Coca-Cola Amatil Indonesia (CCAI) inaugurated several new facilities including a new PET line in North Sumatra, a new Mega Distribution Centre and Preform plant in East Java, and an Affordable Small Sparkling Package (ASSP) line in Cikedokan West Java. The ASSP technology is exclusively developed for The Coca-Cola System to produce high quality-lighter plastic bottles with glass coating that will increase packaging durability. The one installed in CCAI Cikedokan is the second ASSP line in the world, and the first of its kind in Indonesia.

Mr. Gunduz also added that there has been significant investment in people capability building as the foundation of the growth strategy.  Currently CCAI runs eight training academies in six functions, providing more than 51,000 training days per year. “I am pleased with our stronger progress and excited to continue to grow with our people, our communities, and our partners.”

In terms of volume, CCAI is the second biggest contributor to Amatil business. Currently CCAI powered by 10,000 workforces to serve 830,000 customers in traditional and modern market across Indonesia; and operates eight preform production lines in two preform facilities, four Mega Distribution Centres, and 38 production lines in eight world class manufacturing plants.

In addition, the company’s Alcohol & Coffee business was pursuing international opportunities and would be highlighting an opportunity to expand in Indonesia. The opportunity builds on an exclusive master supply agreement between Coca-Cola Amatil’s iconic Grinders business and global machine-capsule company Caffitaly to bring café quality coffee into thousands of Indonesian homes.

The partnership would bring Coca-Cola Amatil’s extensive sales and distribution network together with Caffitaly’s world-class coffee systems. It would be accompanied by a range of premium Grinders café-quality coffees, specifically designed for Indonesian taste.

Outlook

Ms Watkins said Indonesia, Papua New Guinea, New Zealand, Fiji, Alcohol & Coffee & SPC were all on track to deliver in line with the Shareholder Value Proposition.

“Australian Beverages’ and consequently Group near term earnings will be impacted by the accelerated reinvestment of approximately $40 million in cost savings in 2018, and the uncertain impact of container deposit schemes,” Ms Watkins said.

“Despite these impacts, we remain committed to our target of mid-single digit earnings growth per share in the medium term. Delivery will depend on the success of revenue growth initiatives in Australia; economic factors in Indonesia and regulatory conditions in each of our markets.

“At our last investor briefing we outlined our Lead, Execute and Partner strategies for stronger category leadership, step changes in productivity and in-market execution, and better alignment with The Coca-Cola Company and our other partners.

“These strategic themes remain unchanged. While the structural changes in our industry will continue, we know what we need to do, and as we said last year, there’s a lot in our business to be positive about.”