Coca-Cola HBC sees decent growth across markets in 2019

The FTSE 250 company, which bottles products of the US-based Coca-Cola Company in 28 markets, reported strong fourth quarter revenue growth at 7.4% on a currency-neutral basis and 6.0% excluding Bambi, which partially offset the impact of poor weather in the second and third quarters.

All market segments delivered full-year currency-neutral revenue growth, with its established markets growing 1.3% and ongoing strong performance in Italy, while its developing markets were ahead 4.2%, with broad-based acceleration in volumes there in the fourth quarter.

In the emerging markets, growth was 7.1%, with share gains made in Nigeria alongside a 24% rise in volumes in the fourth quarter.

The company noted that the discontinuation of Lavazza had a negative impact of 20 basis points on full-year growth.

Full-year volume was up 3.3% overall, with Coca-Cola HBC noting that volume accelerated in all segments in the fourth quarter.

Sparkling volumes were ahead 3.5% with growth in all segments, with low and no sugar products ahead 26.7% and adult sparkling products growing 7.1%.

The board said innovation drove 4.2 percentage points of volume growth, while currency-neutral revenue per case was up 1.0%, or 2.1% excluding Nigeria where the firm invested in pricing.

Comparable EBIT was 11.5% higher at €758,7m, or 9.5% excluding Bambi, while the company’s comparable EBIT margin rose 60 basis points to 10.8%, or 50 basis points excluding Bambi.

The company’s comparable earnings per share were 10.0% higher at €1.436, and basic earnings per share rose 10.2% to €1.340.

Free cash flow was up 19.6% to €442.6m, with capital expenditure at 6.9% of revenue.

Coca-Cola Hellenic’s board proposed an ordinary dividend of 62 euro cents per share, which was an 8.8% increase on 2018.

“2019 was another year of strong growth with the business recording its highest ever volume and comparable EBIT,” said chief executive officer Zoran Bogdanovic.

“I am particularly pleased with how we finished the year, following the unseasonable weather we faced in the second and third quarters.

“We drove growth across all three market segments as well as in our three largest markets of Russia, Italy and Nigeria.”

Bogdanovic said the company’s core sparkling category was still growing, supported by momentum in low- and no-sugar variants, adding that the firm continued to gain or maintain share in the majority of its markets.

“We were recognised by the Dow Jones Sustainability Index as Europe's most sustainable beverage company for the sixth time in seven years.

“We enter 2020 with considerable momentum and exciting plans that include the roll-out of Costa Coffee in at least 10 of our markets.

“We are confident that we are well on track to deliver our 2020 commitments and to make solid progress on our 2025 growth agenda.”

At 0911 GMT, shares in Coca-Cola HBC were up 4.78% at 2,916p.