Coca-Cola HBC rises above volatile rouble

A thirsty clientele saw volumes increase at Coca-Cola HBC in the year ended 31 December, and earnings were slightly ahead despite foreign exchange having an adverse impact on revenues.

Volumes in the FTSE 100 bottler's established markets grew for the first time in five years, with good performance in Italy and Greece, as well as in all developing markets, with the firm reporting particularly positive trends in Poland and Hungary.

All of the company's key categories also grew in terms of volume, with the exception of ready-to-drink tea.

Net sales revenue declined by 2.5% during the year, to €6.35bn (£4.93bn), though Coca-Cola-HBC reported marginal growth on a constant currency basis. Its net sales revenue per unit case was ahead 0.3%, to €3.09, when the effect of the exchange rate was removed.

Comparable EBIT was ahead 11.4% at €473.2m, with pricing actions, favourable input costs and volume leverage more than offsetting the significant adverse affect from currencies for that measure. The company was specifically critical of the Russian rouble for its volatility.

The company's comparable EBIT margin was ahead 100 basis points to 7.5%.

Reported net profit was down 4.9% to €280.3m, and basic earnings per share were down 4.7% to €0.771. On a comparable basis, however, net profit increased 13.3% to €314.3m, and earnings per share were up 13.5% to €0.864.

"I am pleased with our progress in 2015 - volumes grew in all segments for the first time in five years and margins have improved significantly," said chief executive officer Dimitris Lois.

"Our commercial initiatives supported volume expansion and we made further efficiency gains to ensure continued profitable growth," he added.

Lois said conditions in Europe were slowly improving, while countries with large oil exposure - which covered a number of Coca Cola HBC's developing markets - were facing ongoing difficult trading conditions.

Going forward, Lois said the board and management were continuing to take action to address the challenges on a country-by-country basis.

"Overall we think the business is well placed to build further on both the volume growth and margin expansion achieved in 2015," he concluded.

Coca Cola HBC's board recommended a dividend of €0.40 per share, an 11.1% uplift on the 2014 dividend.

On a category basis, sparkling drinks - the company's bread-and-butter - was ahead by 2%, boosted by trade marketing initiatives such as 'Share a Coke in Nigeria, and Coke with Food across its markets. Within the category, Coca-Cola increased by 3.3%, Coke Zero by 23.5% and Fanta by 4.0%.

Juice volumes were up 7.9% during the year, with Russia a key driver of the growth, incorporating the company's newest brand Moya Semya. Increasing investments in Nigeria also paid off with a 19.2% uplift in juice volumes for the country. Water volumes grew by 4.7%.

Coca Cola HBC's premium spirits were down 6.1%, it reported, with revenues in the sector down 8.6% to €181.8m.