Coca-Cola HBC AG’s share price fizzes on popping profits
A leading Coca-Cola bottler has jumped to the top of the blue chips today as its share price fizzed seven per cent on better-than-expected results.
The figures
Cost efficiencies and better pricing in established markets drove Coca-Cola HBC AG's operating profit up 10.8 per cent to €220.6m (£188.8m) in the six months to 1 July, from €199.1m in the same period of last year.
The Greek bottler's net sales revenue slid 3.4 per cent to €3bn on currency headwinds, while net sales revenue per unit case slid 3.5 per cent to €3. Volume was flat, rising 0.1 per cent to one billion unit cases, declining 2.8 per cent in established markets and rising 3.5 per cent in developing markets.
Sparkling and energy bottling posted a good performance, while water was at a stable volume.
Read more: Coca-Cola sales fall flat on low Chinese and Latin American demand
The company's comparable earnings per share beat analyst estimates by four per cent to come in 6.9 per cent higher, at €0.416.
Its share price popped almost eight per cent to 1,697p in mid-afternoon trading.
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Why it's interesting
Aside from currency headwinds, the continuing macroeconomic difficulties in a small number of markets and poor weather in Europe also had an impact on group revenues.
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Several of the company's beverage types registered a decline in the period, including a fall in premium spirits 11.6 per cent on a revenue basis, to €65.8m, while juice declined five per cent and the ready-to-drink tea segment, which the group said was "weak" overall.
Analysts at Credit Suisse said the group had struck an "upbeat tone on current trends", as it said July trading was holding up well despite tougher comparatives, especially in established markets where the company expects declines to moderate in the second half.
What Coca-Cola HBC AG said
Chief executive Dimitris Lois said:
We are pleased with the strong performance in the first half of the year. 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.