Ferret's Stock to Watch: COCA-COLA AMATIL LIMITED 08:50,...

Ferret's Stock to Watch: COCA-COLA AMATIL LIMITED
08:50, Wednesday, 16 February 2005


WORKING UP A STRATEGY TO KEEP PROFITS ROLLING ALONG

Sydney - Wednesday - February 16: (RWE)
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OVERVIEW
********

Coca-Cola Amatil is the largest bottler of non-alcoholic
beverages in the Asia Pacific region.

It operates in six countries Australia, Indonesia, Fiji, New
Zealand, Papua New Guinea and South Korea employs 16,845 people and has
access to 281.9 million consumers through 750,000 active customers.

Bringing the background to the foreground gives an indication
what a huge job the chief executive Terry Davis has in ensuring
profitiability continues without interruption.

As chief executive of Coca-Cola Amatil Mr Davis well knows it's
dangerous when you over-reach yourself in being too successful.

Investors and shareholders come to expect bigger and better
performances every year.

And life gets even tougher.

Davis has one ace in the hole in that his contract runs to 2008
so he has time to put strategies into place that will boot earnings
higher enabling the payment of better dividend distributions.

At the moment the chief executive is reviewing the company's
overall business to decide which paths to walk, similar to the December
2001 exercise which has been remarkably successful.

It's a tough call though because chief executive Davis has been
showing an annual average 17 per cent profit growth.

He is looking at opportunities such as potential acquisitions
capable of delivering another leg of growth.

In the light of his past performance analysts are tipping that
Davis will come up with a new policy strategy to fire up enthusiasm for
the company.

Coca-Cola Amatil is again scrutinising some of the company's
Asian investments looking for under-performers such as South Korea and
Indonesia.

CCL took the plunge last year and went into the pure water
business grabbing Neverfail and Peats Ridge.

Its last acquisition SPC Ardmona looks to be a move into the
fruit business along with yogurt.

Flavoured milk is now on the agenda.

The purchase of SPC Ardmona approved by the Supreme Court of
Victoria this week.

SHARE PRICE MOVEMENTS
********************

Shares of CCL traded at $8.14 yesterday. Rolling year high has
been $8.42 and low $6.34. Dividend is 28c a share to yield 3.35 per
cent.

In 2004, Coca-Cola Amatil (CCA) continued to deliver on its
commitment to materially increase shareholder returns, with the fourth
consecutive year of double-digit earnings growth (before significant
items).

* Net profit, pre significant items, increased by 16.4%;

* Net profit, post significant items, increased by 44.3%;

* EBIT, pre significant items, increased by 10.1%;

* EBIT margin, pre significant items, improved by 1.0
percentage point to 15.0%;

* Return on capital employed improved by 1.1 percentage points
to 11.3%;

* Free cash flow was strong at $236.6 million; and

* Dividends per share for the year increased by 21.7% to 28.0
cents and are 100% franked.

Driving this consistent performance was the continued execution
of the key business drivers of profitable revenue generation, reduction
in operating costs, disciplined capital management and improvement in
customer service levels as outlined in the December 2001 strategic
business review when CCA committed to materially accelerate shareholder
returns.

Coca-Cola Amatil's group managing director, said "CCA's
progress in improving shareholder returns is being driven by the
cultural change in the organisation to materially improve our customer
relationships and from its goal to be the beverage supplier
of choice every time.

"In 2004, we continued to expand both the size and value of the
relationship with our customers and consumers.

"The further improvement in EBIT margin of 1.0 percentage point
to 15.0% is testimony to the discipline applied in revenue management,
profitable volume growth and cost control.

"The excellent result was achieved on revenue of $3.4 billion
and a 4.5 per cent increase in sales volume to 626 million unit, Mr
Davis declared.


BACKGROUND
**********

2005: On January 28, 2005, CCA purchased the Northern
Territory soft drink sales, distribution and production assets from
Parmalat Australia. This acquisition makes CCA the sole licensee of
Coca-Cola products in Australia.

2004: On November 3, 2004, CCA finalised the purchase of the
Crusta Fruit Juices Pty Ltd in Australia and its subsidary company
Quenchy Crusta Sales, a cold chain distribution company.

On June 11, 2004, CCA opened a state of the art, automated
materials handling facility in Mentone, Victoria. The facility was
built at a cost of approximately $30 million and is expected to
generate annual savings of $7 million.

2003: On the April 29, CCA announced the acquisition of
Neverfail Springwater Limited. Neverfail specialises in the delivery of
bulk water to Australian homes and offices.

CCA acquired the assets of Peats Ridge Springs on the July 18.

Peats Ridge has over 20% of the bulk packaged water segment
which has increased CCA's water bottling capacity by over 50%.

2002: Acquisition of Rio Beverages in New Zealand increases
CCA's exposure in the important juice and lifestyle beverages segments
in New Zealand and Australia.

Pacific Beverages (PBA) acquired. PBA's business is the
manufacture, marketing and distribution of fruit juices, cordials and
other beverages from a single manufacturing and warehouse facility in
Victoria, Australia.

The sale of CCA's PET manufacturing assets for approximately $157
million reflected the company's core focus on manufacturing,
distribution and sale of non-alcoholic ready-to-drink beverages.

ENDS