Coca-Cola HBC sees demand slump amid coronavirus but plans dividend
Coca-Cola HBC has said demand has slumped in countries with heavy coronavirus restrictions such as Italy and that uncertainty around the situation means it cannot provide guidance for its full-year results.
The firm, one of the world’s largest Coca-Cola bottlers, said in an update today that it still intends to propose an ordinary dividend of €0.62 per share to shareholders in June, thanks to a strong balance sheet.
The coronavirus outbreak has hit companies hard across the board as lockdowns cause demand to slump and efforts to contain the outbreak hurt supply chains.
Fast-food restaurants have shut in various countries across Europe, including France and the UK, hitting suppliers such as Coca-Cola.
London-listed Coca-Cola HBC said: “In markets with heavy restrictions, such as Italy as well as central and southern Europe, demand in the ‘out of home’ channel has been severely affected. In these markets, ‘out of home’ represents circa 35 to 40 per cent of sales.”
Coca-Cola HBC said it is looking at cost-saving measures and reassessing marketing and capital expenditure investments in an effort to “support our profitability”.
It added that it is “too early to quantify the impact that the COVID-19 pandemic will have on our full year 2020 results”.
“Given the uncertainty of the duration and economic impact of this global pandemic, we no longer believe that it is prudent to provide guidance for the current financial year.”
Coca-Cola HBC reassured investors that it can withstand the coronavirus slump. “Our strong balance sheet and liquidity position, our leading market shares and largely variable cost base… will allow us to weather this unprecedented crisis,” it said.