Forex takes some fizz out of Coca-Cola HBC

The FTSE 100 company said currencies were continuing to impact adversely, leading to a 3.6% decline in net sales revenue to €1.193bn.

It posted a “robust increase” in FX-neutral revenue per case of 2.4% to €4.02, mainly due to better pricing trends across all segments compared to the prior-year period and a 110 basis point improvement in package mix.

Volumes increased marginally on a strong prior-year period - taking into account the one less selling day in Q1, HBC said volume grew by 0.7%.

The established markets performed poorly, however, with volumes declining 2.8%, which HBC said was partly impacted by unseasonably cool weather.

Its developing segment continued to demonstrate “good volume growth momentum” with all key categories contributing to the 3.5% volume growth.

Nigeria, Romania and Serbia were said to be key drivers of a 0.5% volume growth in the emerging markets segment, which continued to be negatively impacted by Russia.

HBC said cost efficiencies and revenue leverage resulted in a 45 basis point reduction in comparable operating expenses as percentage of net sales revenue.

Comparable EBIT margin increased by 60 basis points to 7.5%, benefiting from the company’s revenue growth management initiatives, favourable input costs and cost efficiencies, which more than offset the adverse currency impact.

Its EBIT margin improved by 90 basis points to 7.2% on a reported basis.

Net profit improved 11.8% to €140m, while comparable net profit was up 6.1% to €150.4m.

Comparable earnings per share were €0.416 - a 6.9% increase on the prior-year period, while basic earnings per share were €0.387 - a 12.5% increase.

“We are pleased with the strong performance in the first half of the year,” said chief executive Dimitris Lois.

“The business delivered robust revenue growth and significant margin expansion, driven by improved pricing and mix trends, good progress on operating costs and a favourable input cost environment.

“We remain confident that 2016 will be another year of currency-neutral revenue and operating margin growth,” Lois explained.