Coca-Cola HBC raises profit expectations as price increases offset costs
- The company revealed that its operating profit more than doubled to €557.3 million in the first half of the year
- Rising prices drove the anchor bottler’s net sales to exceed €5 billion
- Coca-Cola HBC sells dozens of brands, such as Fanta, Fuze Tea and Powerade
Coca-Cola Hellenic Bottling Company has raised its full-year outlook after an excellent performance in the first half of the year.
The anchor bottler revealed operating profit more than doubled to €557.3m (£480m) for the six months ended June, despite consumer weakness and higher energy and ingredient costs.
Rising prices drove the company’s net sales to exceed €5 billion, with organic sales growth of 17.8 percent and further boosted by the consolidation of its Russian operations.
Drink up: Coca-Cola HBC revealed operating profit more than doubled to €557.3m for the six months ended June despite widespread cost of living pressure
Sales in all market segments increased by double-digit percentages, offsetting adverse currency movements and a decline in organic volumes, largely driven by weaker demand in the stills category.
It also expects cost of goods sold per unit of packaging to increase by high single digits, down from an initial forecast in the low teens.
As a result, the group now expects full-year organic sales growth in the mid-teens, compared to an earlier forecast of 5 to 6 percent.
The blue-chip company is maintaining its annual earnings forecast, which it raised last month after seeing a “stronger-than-expected” end to the first half of the year.
Zoran Bogdanovic, CEO of Coca-Cola HBC, said Wednesday: “It was a very good first half of the year with progress on our strategic pillars.”
He added, “While some markets still face a challenging consumer environment, revenue per case has improved through careful pricing and mix management, enhanced by data, insights and analytics.
“At the same time, volumes have remained resilient, a testament to the quality of our execution.”
It is headquartered in Switzerland, but listed in London. Coca-Cola HBC packages and sells dozens of brands, such as Fanta, Fuze Tea, Costa Coffee and Powerade, in 29 countries.
The company has its roots in 1950s Nigeria, but was forged into its current form in 2000 through the merger of Coca-Cola Beverages and the Hellenic Bottling Company.
Although best known for selling soft drinks, the company has expanded its presence in the alcoholic beverage sector and recently agreed to spend $220 million (£172 million) on the acquisition of Brown-Forman Finland, the owner from the Finlandia premium vodka brand.
It believes the acquisition will enhance its premium spirits offering and strengthen partnerships with customers in “strategically important” channels, including the hotel, restaurant and catering industries.
Neil Shah, the director of content and strategy at Edison Group, said: “Continued consumer demand for Coca-Cola HBC’s products has not only helped the bottler weather the difficult macroeconomic environment of recent months, but also thrive in it.
“In addition, the company benefits from the continued rollout of new products, such as Jack Daniel’s & Coca-Cola, which enjoy the benefits of instant brand recognition not available for other new beverages on the market.”
Coca-Cola HBC Stocks were 1.5 per cent, or 34 pence, higher at £22.94 on Wednesday morning and have grown by around 19 per cent since the start of the year.