Coca-Cola HBC volumes rise while profits slip in first half

Soft drinks bottler Coca-Cola HBC reported a 2.2% improvement year-on-year in its volume for the first half, to 1.09 million cases.

The FTSE 100 company said net sales revenue for the six months ended 28 June was 3.8% higher at €3.35bn, with net sales revenue per case growing 1.7% to €3.07.

Operating expenses as a percentage of net sales revenue rose by 30 basis points to 28.5%.

The firm reported a 4.9% fall in its operating profit, to €288.9m, and a 10.1% drop in net profit, to €195.1m.

Basic earnings per share were down 9.2% at 53.6 euro cents.

Operationally, Coca-Cola HBC said “unseasonably” wet and cold weather conditions in the second quarter were a headwind to revenue growth in all segments, although warmer weather in the second half of June drove stronger performance.

It said volume in its established markets increased by 0.4%, with an “encouragingly positive” performance in Italy, while developing markets volumes grew by 1.4% against a “challenging comparable” in the prior-year period.

Emerging markets volumes grew by 3.4%, with continued strong growth seen in Nigeria.

“We are pleased with this solid first half given the challenging combination of tough comparators and unseasonably cold and wet weather,” said chief executive officer Zoran Bogdanovic.

“We grew revenue and volume across all three segments of our business and delivered further growth in comparable margins.

“Revenue growth management and innovation continue to deliver results, with innovation driving 4.5pp of volume growth in the first 6 months.”

Bogdanovic said the company was driving growth in some of its most important categories including sparkling, water and energy, adding that it was progressing with preparations to launch Costa Coffee in 10 of its markets in 2020.

“We made good progress in the period on our packaging initiatives with three of our water brands now being bottled in 100% recycled plastic.

“Looking forward, we expect to deliver FX-neutral revenue growth within the range of 5-6%, with another year of margin expansion.”