Coca-Cola HBC raises annual earnings outlook
Coca-Cola HBC shares soar as FTSE 100 bottler raises earnings expectations after stellar first half performance
- Victoria Scholar: Coca-Cola HBC ‘battles against broader market negativity’
- The bottler now forecasts underlying revenue growth of 9 to 12% in 2023
- Early Friday afternoon, Coca-Cola HBC shares were the biggest gainers in the FTSE 100
Coca-Cola Hellenic Bottling Company has revised its annual profit forecast upwards after continuing to benefit from price increases and strong demand in the first half of the year.
The FTSE 100-listed anchor bottler now forecasts organic earnings before interest and tax to rise 9 to 12 percent in 2023, after previously forecasting a pre-adverse profit of -3 to 3 percent.
It attributed the new outlook to a “stronger-than-expected end” to the first half of the year, topped by an “overall very good” performance last month.
Forecast: Coca-Cola Hellenic Bottling Company has improved its annual profit forecast after continuing to benefit from price increases and strong demand in the first half
The group also maintained its mid-term guidance for 2024 and beyond of 6 to 7 percent organic sales growth and average organic underlying profit margin growth of 20 to 40 basis points per year.
Coca-Cola HBC Stocks closed 5.1 per cent higher at £23.72 on Friday, making them the second best performing player on the FTSE 100 index behind supermarket chain Ocado Group.
Since the start of 2023, the company’s share price has risen by more than a fifth, thanks to price increases that offset the effects of rising energy and raw material costs.
Trade also benefited from stronger sales in mature and emerging markets and higher volumes of sparkling, energy and coffee drinks.
Victoria Scholar, head of investment at Interactive Investor, said the company “beats broad market negativity” compared to Fevertree Drinks, which has been hit hard by glass shortages in the UK.
Coca-Cola HBC, headquartered in Switzerland but listed in London, sells dozens of brands ranging from Monster Energy to Costa Coffee, Fanta and Sprite in 29 countries.
The company recently agreed to spend $220 million (£172 million) on the purchase of Brown-Forman Finland, the owner of premium vodka brand Finlandia.
It said the move would strengthen its premium spirits offering and improve partnerships with customers in “strategically important” industries, such as hotels, restaurants and caterers.
Finlandia, which is bottled by the Anora Group, was founded in 1970 by Alko, the monopoly of the Finnish alcohol retailer, and was the very first Scandinavian vodka brand to be imported into the US.
Three decades later, Brown-Forman, owner of the Jack Daniels and Old Forester whiskey labels, acquired a 45 percent stake in the brand as part of a deal granting distribution rights outside Scandinavia and parts of Eastern Europe.
It bought another 35 percent stake in 2002 and acquired full control of Finlandia two years later.