Coca-Cola HBC half-year results rise on volume growth, price increases

Coca-Cola Hellenic Bottling Company (CCHBC), the parent company of the Nigerian Bottling Company (NBC) and bottler in 27 other European countries, on Thursday reported first-half results (Jan – June 2017). The company said that revenue grew 5.6% to €3.2bn ($3.77bn), up from €3bn in 2016. Total volumes rose 1.4%.

The group said that its good performance was driven by volume growth, improved packaging mix and price increases.

The bottling giant noted that volumes in established markets grew 0.8%, benefiting from a late Easter and warm June good performances in Greece and Ireland which offset volume decline in Italy. The main driver of growth was water and energy drinks, which made up for declines in sparkling, juice and RTD tea. Net sales revenue rose to €1.2bn, from €1.19bn.

Similarly, developing market volume rose 0.8% to 188.6m cases, driven by sparkling, energy drinks and juice, partially offsetting declines in water. Net sales revenue rose 5.8% to €557.4m, helped by category and package mix, as well as positive foreign exchange contribution from a stronger Polish Zloty.

Emerging markets saw 1.9% volume increase, buoyed by strong growth in Ukraine, Romania and Serbia. Russia volume declined in the period. Net sales revenue surged 9.8% to €1.45bn, benefiting from higher volume and price increases, along with improved category and package mix, which compensated for the unafavourable currency impact, especially in Nigeria.

Volumes in Nigeria grew in the low single-digit despite a difficult second quarter, impacted by the third round of price increases in April. It notes that sparkling beverages category remained stable, with volume growth in Trademark Coke and Sprite offsetting loses in Fanta and Schweppes. In Stills, juice declined by high teens, although Pulpy 40cl Pet continued its positive performance. Water grew in the low teens, supported by trade incentives and improved availability in the North. Monster Energy drink, which was launched in February continued to grow.

The company’s total profits for the first-half grew 36.9% to €191.6m.

Coca-Cola HBC chief executive officer, Dimitris Lois said, “The excellent progress we have made in the first half of the year is encouraging. The underlying trends in our markets will be supported by the robust plans we have for the remainder of the year. Therefore, we believe that the good volume trends will continue in the second half, with acceleration in the Developing segment.

“We have made another significant step towards achieving our 2020 financial targets in the first six months of the year. Looking ahead, we continue to expect volume and price/mix growth, as well as better than expected foreign exchange and input cost movements. Altogether, these elements lead us to anticipate better revenue and margin performance in 2017 than we had anticipated at the start of the year.”

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