Coca-Cola HBC raises profit guidance as price increases offset costs
- The firm revealed that first-half operating profit more than doubled to 557.3 million euros.
- Increased prices helped lead bottling company’s net sales revenue to exceed 5 billion euros
- Coca-Cola HBC sells dozens of brands, including Fanta, Fuze Tea, and Powerade
Coca-Cola Hellenic Bottling Company has upgraded its annual guidance after strong performance in the first half of the year.
The lead bottler revealed that operating profit more than doubled to €557.3m (£480m) for the six months to June, despite consumer weakness and higher energy and ingredient costs. .
The price increase helped push the company’s net sales revenue to over €5 billion, with organic revenue growth of 17.8% and an additional boost provided by the consolidation of its business in Russia.
Drink: Coca-Cola HBC revealed that operating profit more than doubled to 557.3 million euros for the six months ending in June, despite widespread cost-of-living pressures.
Billings across all market segments increased by double-digit percentage levels, offsetting unfavorable exchange rate movements and a drop in organic volumes largely caused by lower demand in the stills category.
It also expects cost of goods sold per unit case to expand by a high single-digit percentage, below an initial forecast in the ‘low teens.’
Consequently, the group now forecasts organic sales growth for the full year in the “mid-teens”, compared to a previous forecast of 5 to 6 percent.
The blue chip company has maintained its full-year earnings outlook, which it raised last month after seeing a “stronger-than-expected finish” to the first half of the year.
Zoran Bogdanovic, chief executive of Coca-Cola HBC, said on Wednesday: “It’s been a very good first half of the year with progress on our strategic pillars.”
He added: “While some markets continue to face a challenging consumer environment, revenue per case has been improved through careful price management and mix enhanced by data, insights and analytics.
“At the same time, volumes have remained resilient, which is a testament to the quality of our execution.”
Headquartered in Switzerland but listed in London, Coca-Cola HBC packages and sells dozens of brands, including Fanta, Fuze Tea, Costa Coffee and Powerade, in 29 countries.
The business has its origins in the 1950s in Nigeria, but was forged into its current form in 2000 through the merger of Coca-Cola Beverages and the Hellenic Bottling Company.
Although known primarily for selling soft drinks, the company has been expanding its presence in the spirits sector, recently agreeing to spend $220m (£172m) on the acquisition of Brown-Forman Finland, the owner of the Finland premium vodka brand.
It believes the acquisition will enhance its premium spirits offering and strengthen customer partnerships in “strategically important” channels, including the hotel, restaurant and catering industries.
Neil Shah, Edison Group’s director of content and strategy, said: “Continued consumer demand for Coca-Cola HBC products has helped the bottler not only weather the difficult macroeconomic climate of recent months, but thrive. in it.
“In addition, the company benefits from the continuous launch of new products, such as Jack Daniel’s and Coca-Cola, which enjoy the benefits of immediate brand recognition not available for other new beverages on the market.”
Coca-Cola HBC Stock they were 1.5 per cent, or 34p, higher at £22.94 on Wednesday morning and have grown roughly 19 per cent since the start of the year.