LAST UPDATE 10:36
Coca-Cola HBC announced higher-than-expected revenue for the first quarter of the year.
The Coca-Cola bottling company, which is 23% controlled by Coca-Cola Co., reported net sales of 1.77 billion euros in the quarter.
Estimates spoke of 1.59 billion euros.
As the company explains in a statement, “the focused execution of our strategy and the continued reopening of the markets led to broad-based growth, with first quarter revenues recording an organic increase of 24.2%.
– In the first quarter, the organic growth of revenues excluding Russia and Ukraine amounted to 25.9%.
– The emerging markets sector remains strong, despite the high comparative base.
– The growth rate of our market share in value accelerated, with carbonated soft drinks increasing their market share by 240 basis points and ready-to-consume soft drinks increasing their market share by 190 basis points. “Our market share in sales volume has continued to expand.”
It also emphasizes that the organic increase in sales volume by 11.3% continues to be based on the priority categories of the portfolio of 24-hour / 7-day consumption products: carbonated + 10.0%, carbonated with low or zero sugar + 45.3%, carbonated for adults + 22.9% and energy drinks + 31.7%.
Pricing policy and other revenue management measures led to a 11.6% increase in revenue per box on an organic basis, with an improved mix of product category, packaging and distribution channels. All three markets implemented pricing policies in order to manage the increased inflationary pressures, without having a negative impact on sales volumes.
In the first quarter, Egypt added almost 12 percentage points and 7 percentage points to the growth rate of sales volume and net sales revenue respectively. Its consolidation is evolving faster than expected.
“As we announced earlier, we are working closely with The Coca-Cola Company to implement the decision to suspend its business in Russia.
We can confirm that as of March 8, we stopped ordering concentrated raw materials in Russia and stopped investing in the market. “According to our announcement of March 3, our estimates for the business prospects of the current year have been withdrawn,” he said, referring to the company’s activities in Russia.
Zoran Bogdanovic, CEO of Coca-Cola HBC AG, commented:
“We are shocked by the untold tragedy and the continuing human suffering in Ukraine. We stand with our colleagues, but also with all those who are facing the consequences of the conflict. We continue to prioritize the safety of our people and their families and to provide material and financial support, as well as donations to humanitarian aid initiatives in the region.
At the same time, the people of Coca-Cola HBC continued to implement the growth strategy, achieving a strong revenue growth that is well balanced between sales volume and revenue per box.
management of net revenue growth, including pricing policy, as reflected in our results. There are many more important events this quarter, such as the integration of Egypt into the Group, the continued strong performance of the carbonated soft drinks and energy drinks, and of course the excellent performance in relation to our market share, which continued to accelerate in the first quarter. .
We have high confidence in our product portfolio, in our evolving market penetration strategy, in our customer-centric marketing strategy, in the prospects of our diverse markets, and above all, in the capabilities of our people.
“We remain flexible, as we discipline, we prioritize our investments in the rest of our markets, so that they continue to create sustainable growth despite the volatile environment.”
Key elements by sector
Developed markets: The targeted implementation of the strategy in the out-of-home consumption channel allowed us to take full advantage of the re-opening of this market, which accelerated in this quarter.
Emerging Markets: Broad-based increase in sales volume in all markets and strong recovery in Poland, as we incorporate the impact of the sugar tax on the benchmark.
Emerging Markets: Strong momentum continues, despite the higher comparison base and the impact of the conflict in Ukraine.
Ukraine and Russia
Coca-Cola HBC continues to prioritize the safety of its people and their families affected by the conflict. We provide immediate financial assistance to our people in Ukraine and continue to work with The Coca-Cola Foundation and the Red Cross to provide humanitarian assistance to the region.
This includes financial support for our people through The Coca-Cola Disaster Relief and Coca-Cola HBC Employee Donation Funds, in addition to prepaid wages and refugee assistance centers in Ukraine. Worldwide, Coca-Cola’s system has committed $ 15 million to various humanitarian organizations, while providing more than 1.8 million gallons of soft drinks worth more than € 1 million in Ukraine and neighboring countries.
The Coca-Cola Company suspended its operations in Russia and stopped accepting orders for the purchase of concentrated raw material with immediate effect from March 8, 2022. We are in the process of implementing this decision in close cooperation with The Coca-Cola Company.
Following this decision, we will maintain a much smaller market presence, focusing on local brands. We are evaluating all the relevant options and will share more information in due course, along with the financial implications that will result from any decision on performance for 2022 as well as the level of non-cash expenses.
Organic revenue growth excluding Russia and Ukraine amounted to 25.9%, thanks to the continued strong performance of the Group’s other markets.
Strong collaboration with The Coca-Cola Company
We have been working successfully with The Coca-Cola Company for over 70 years and continue to this day. The strength of this relationship, especially in this period, is further demonstrated by the renewal of the bottling agreements for another decade. Together we will continue to create value and seize opportunities in our industry and markets.
Developed markets: Greece
Tumors in Greece increased by a high single digit percentage. Sales volume on non-carbonated soft drinks increased to the average level of the range of 10-15%, thanks to water, which recorded good performance in the channel of consumption outside the home. The carbonated beverage category grew at a low single-digit rate, mainly due to the performance of carbonated soft drinks for adults, while energy drinks continued to record double-digit growth.
Source: Capital
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