Coca-Cola Amatil maintains momentum in Q3, capex to rise

Posted by James Ferre on 21st October 2009

Australia’s largest soft drink bottler, Coca-Cola Amatil, yesterday informed delegates at the Citigroup Australian Investment Conference that strong sales growth in the first half of 2009 had continued in the third quarter, while capital expenditure is set to rise.

Nessa O’Sullivan, Chief Financial Officer – Operations, gave a brief insight into the third quarter trading performance of the firm prior to the official results presentation on November 5. Her assertions that strong momentum continued was well received by the market.

Ms O’Sullivan advised that the strong performance had been driven by higher prices, growth in value market share and savings from their Project Zero strategy to improve efficiency.

Project Zero is progressing well, she said, with cumulative capital spend now reaching $240 million and set to grow as the company increases capex from 7.5% of sales this year to 8-8.5% next year.

“This will include an additional 1%, or approximately $50 million, on new initiatives including Project Zero, cold drink equipment and up-weighted Project Zero,” Ms O’Sullivan reported.

The company has previously outlined their confidence in building the company through organic growth rather than acquisitions, with their SABMiller beer joint venture and their presence in Indonesia seen as two areas where growth is likely to come from.