Coca-Cola HBC ends year on a high


Coca-Cola HBC AG, the parent company of the Nigerian Bottling Company Limited (NBC) and group bottler in 27 European countries said 2018 full year revenue grew by 2.1% to €6.7bn.

Sales growth was driven by a 4.2% volume growth across all segments, buoyed by Sparkling beverages. However, Italy and Nigeria saw volume declines, with the company faced with a competitive environment in Nigeria.

The company benefited from revenue growth management initiatives including product innovation, price increases and better package mix.

Commenting on the results, Zoran Bogdanovic, Chief Executive Officer of Coca-Cola HBC AG, said: “In 2018, we delivered another very good performance with revenue growth above our target range and another step up in margins. Strong volume growth in all our segments was helped by a record number of new product launches, whilst price/mix improved for the eighth consecutive year. This growth supported margin progress, which we delivered while increasing our investment in marketing.”

Emerging market volume grew by 4.3%, with strong growth in all countries except Nigeria. The company notes that continued intense competition in Nigeria coupled with price increases taken in October resulted in weak volumes for the fourth quarter, turning volume performance from a small growth in the first nine months to a decline of 1.9% for the full year. The positive performance of Water, Juice and Energy was offset by the poor performance of Sparkling. The company said that further price/pack architecture changes it made yielded encouraging results in December.

Net sales revenue in emerging markets declined by 1.1% while Operating Profit grew 6.5% to €276.6m.

Developing markets, which includes Poland, Hungary and the Czech Republic, among others saw 8.8% volume growth, driven by strong performance in Poland with a 9.9% volume growth followed by Hungary, 7.2% and 4% in the Czech Republic. Net sales revenue for developing markets grew 11.4% for the year, the best in all market segments, with a 48.4% increase in Operating Profit to €137m.

Established markets grew volume by 1%, driven by good performance in Greece and Ireland. Net sales revenue for the market segment grew 1.4% to €2.5bn, from €2.44bn, while operating profit grew by 2.6% to €232m.

Comparable net profit for the full year rose to €480.4m from €449.7m in the previous year, a 6.8% increase.

Looking forward to 2019, the company said that economic growth is expected to slow in a number of its markets, which would likely have a negative impact on consumer spending in established and developing markets. However, it expects volumes to continue to grow in all three market segments with Developing and emerging market segments accelerating marginally, as Nigeria returns to volume growth, and Developing markets moderate to more normalised levels. The company expects emerging market segment to remain under pressure with the affordability and competitive pressures in Nigeria.

It also expects the refinancing cost of an €800 million Euro bond which will mature in June 2020 to double in 2019 when compared to 2018. It noted that its comparable effective tax rate will be in the 24% and 26% range. Finally, it expects adverse currency translations to amount to approximately €50 million for the full year.

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