Sun and football make for effervescent first half at Coca-Cola HBC

Coca-Cola HBC reported its financial results for the six months ended 29 June on Thursday, claiming “strong” revenue growth of 6.4% in the first half on a foreign exchange-neutral basis; with acceleration in the second quarter supported by new product launches, good weather and the FIFA World Cup.

The FTSE 100 soft drinks bottler - the world’s second-largest bottler of Coca-Cola products, with a focus on central, southern and eastern Europe - said foreign exchange-neutral revenue per case increased 1.8%, which was delivered through pricing as well as continued improvements in category and package mix in all three segments.

Volume reportedly accelerated in the second quarter, resulting in 4.6% growth in the first half, with the board saying sparkling beverages volume was “particularly strong”, also up by 4.6%.

Established markets volume increased 0.9%, with good performances reported from Greece and Ireland.

There was also continued strong growth in the company’s developing markets, with volume up 8.9%, led by Poland and Hungary.

Emerging markets delivered 5.1% volume growth, supported by a return to growth in Nigeria and Russia in the second quarter.

Revenue growth, coupled with cost control, resulted in a 60 basis point improvement in comparable operating expenses as a percentage of net sales revenue, Coca-Cola HBC said.

Net sales revenue itself was 0.5% higher year-on-year at €3.23bn.

The firm’s comparable operating profit margin increased by 60 basis points to 9.6%, notwithstanding a 30 basis point increase in marketing investments to support product launches and FIFA World Cup activations.

Discounting for that, the operating profit margin increased by 110 basis points to 9.4%, with operating profit itself rising 14.1% to €303.9m.

Comparable earnings per share were 60.3 euro cents - a 4.7% increase on the prior-year period, while basic earnings per share rose 12.2% to 59 cents.

“The evolution of our portfolio is gathering pace and gaining traction with customers across our markets,” said chief executive Zoran Bogdanovic.

“We have delivered a strong set of results as product launches and tailored commercial activation enabled us to capitalise on favourable market conditions and the FIFA World Cup.”

Bogdanovic said revenue growth was “excellent”, driven by both volume and price/mix improvements across all three of the company’s geographic segments.

“Margins continue to improve as we keep our focus on driving top-line growth and cost control.

“We continue to make good progress against the 2020 targets and expect to deliver another year of revenue growth and improvement in margins.”