Revenue rises 22pc in Coca-Cola HBC's first quarter

Beverage bottler Coca-Cola HBC reported “consistent execution” of its ‘24/7’ strategy in an update on Wednesday, resulting in first quarter organic revenue growth of 22.2%, excluding Russia and Ukraine.

The FTSE 100 company said its growth was driven by price-mix and volume growth in sparkling, energy and coffee, offset by declines in stills, primarily due to an anticipated weakness in water.

It said iti continued to gain value share, with non-alcoholic ready-to-drink up 70-basis points, and sparkling expanding by 10-basis points.

The group's organic revenue was up 16.2% in the first quarter, and organic net sales revenue per case grew by 21%, more than offsetting a 4% contraction in organic volume.

Its reported net sales revenue was ahead 24.4%, with the consolidation of Egypt and Multon contributing 8.8 percentage points to reported revenue growth.

However, foreign exchange movements negatively impacted reported revenue growth by 0.6 percentage points, mainly due to currency devaluation in Nigeria and Egypt.

All segments of the firm showed strong organic revenue growth, the board said, with the ‘established’ segment's organic revenue up 20.6%, alongside good volume growth.

Its ‘developing’ segment saw organic revenue rise 26%, driven by price-mix expansion, while the ‘emerging’ segment's organic revenue was 9.5% firmer, benefiting from actions taken to mitigate high-cost inflation.

Excluding Russia and Ukraine, organic revenue grew by 21.5%.

Coca-Cola HBC added that it continued to invest in its ‘24/7’ portfolio, including the build-out of the energy category in Egypt, the relaunch of the adult sparkling brand Kinley in the second quarter, and the launch of Jack Daniel's and Coca-Cola in Poland, Ireland and Hungary in April.

The company also prepared for additional Caffè Vergnano launches for the second quarter in Czechia and Slovakia.

“Consistent execution of our strategy has led to a good start to 2023 and we expect to deliver another year of strong performance,” said chief executive officer Zoran Bogdanovic.

“As a result, we now have greater confidence in achieving positive organic EBIT growth in 2023.

“Revenue growth was strong, thanks to our in-market agility and our tailored consumer and customer plans.”

Bogdanovic said market shares improved for both non-alcoholic ready-to-drink and sparkling, while the company implemented “thoughtful” price and mix changes in the face of continued cost inflation.

“Although some markets have been impacted by a tougher consumer environment, our track record of successful revenue growth management and our sustained focus on investing in data enhanced growth capabilities puts us in a strong position to adapt.

“We have continued to invest in our portfolio to strengthen our position as ‘the leading 24/7 beverage partner’.”

In the second quarter, Zoran Bogdanovic said HBC would relaunch Kinley, launch Jack Daniel's and Coca-Cola in selected markets, and further roll out Caffè Vergnano.

“With the talent of our people and the strength of our partnerships, we are well positioned for long-term, sustainable growth throughout 2023 and beyond.”

At 1016 BST, shares in Coca-Cola HBC were up 1.29% at 2,464.5p.

Reporting by Josh White for Sharecast.com.