TIDMCCH
RNS Number : 2200L
Coca-Cola HBC AG
08 August 2013
RESULTS FOR THE SIX MONTHS ENDED 28 JUNE 2013
SECOND QUARTER AND HALF YEAR HIGHLIGHTS
Q2 Q2 %
2013 2012(1) Change
Volume (m unit cases) 578 587 -2%
Net Sales Revenue (EUR m) 1,949 1,986 -2%
Net Sales Revenue per Unit Case
(EUR) 3.37 3.39 -1%
Currency Neutral Net Sales Revenue
per Unit Case (EUR) 3.43 3.39 1%
Comparable Cost of Goods Sold 1,234 1,247 -1%
Comparable EBIT (EUR m) 179 188 -5%
Comparable Net Profit (EUR m) 127 126 -
Comparable EPS (EUR) 0.34 0.35 -3%
Half year Half year %
2013 2012(1) Change
Volume (m unit cases) 1,004 1,014 -1%
Net Sales Revenue (EUR m) 3,381 3,419 -1%
Net Sales Revenue per Unit Case
(EUR) 3.37 3.37 -
Currency Neutral Net Sales Revenue
per Unit Case (EUR) 3.41 3.37 1%
Comparable Cost of Goods Sold 2,183 2,187 -
Comparable EBIT (EUR m) 178 187 -5%
Comparable Net Profit (EUR m) 111 107 3%
Comparable EPS (EUR) 0.31 0.29 7%
Notes
(1) Comparative amounts 2012 have been adjusted to reflect the
impact of new accounting standards adopted in 2012, as detailed in
note 1 to the condensed consolidated interim financial
statements.
(2) Comparable Net Profit refers to comparable net profit after
tax attributable to owners of the parent.
* Volume: Volume declined by 2% in the second quarter
of 2013. A 2% volume increase in emerging markets was
more than offset by a 6% volume decline in
established markets and a 3% decline in developing
markets. Overall, volume declined by 1% in the first
half of 2013.
* Sales: Net sales revenue declined by 2% in the
quarter and by 1% in the first half, with currency
neutral net sales revenue per case growing by 1% for
both periods.
* Comparable operating profit (EBIT): Our revenue
growth initiatives more than offset total input cost
increases in absolute terms, still they were not
sufficient to prevent a gross margin decline. Lower
volume and unfavourable foreign currency movements
resulted in a 5% decline in comparable operating
profit both in the second quarter and the first half
despite operating expense savings.
* Half Year 2013 market shares: We continued to win in
the marketplace. We gained or maintained volume share
in sparkling beverages in the majority of our markets
including Austria, Ireland, Italy, the Czech Republic,
Romania, Russia and Ukraine.
* Half Year 2013 free cash flow: We generated free cash
flow of EUR98 million in the first half of the year,
delivering a year-on-year increase of 15%.
* Dividend: The Board has decided on a new progressive
dividend policy effective from 2014 onwards with a
targeted payout ratio on comparable net profit in the
range of 35-45% over time.
--------------------------------------------------------------
Dimitris Lois, Chief Executive Officer of Coca-Cola HBC AG,
commented:
"We continued to focus on our top line, with currency neutral
net sales revenue per case increasing for the eighth consecutive
quarter. Our emerging markets were the drivers in terms of volume
growth, albeit at a slower pace. The volume decline in our
established and developing markets reflects the ongoing difficult
macroeconomic environment in most of our European markets. Against
this challenging backdrop, trademark Coca-Cola products grew by
over 2% in the second quarter.
For the remainder of 2013, we anticipate that the current
trading conditions will remain unchanged. We are confident in our
ability to drive operational performance and deliver on our
strategic commitments: winning in the marketplace, increasing
currency neutral net sales revenue per case and focusing on cost
leadership through tight operating expense control and disciplined
working capital management.
The primary listing in London, a key milestone in the history of
our Company, was successfully completed with the settlement of the
statutory buy-out of the minority holdings in Coca-Cola Hellenic
Bottling Company S.A. in June. The refinancing of our upcoming bond
maturities at very competitive rates soon after the completion of
the share exchange offer is a clear testament of our ability to
capture the benefits of our relisting and redomiciliation."
SPECIAL NOTE REGARDING THE INFORMATION SET OUT HEREIN
Unless otherwise indicated, the condensed consolidated interim
financial statements and the financial and operating data or other
information included herein relate to Coca-Cola HBC AG and its
subsidiaries ("Coca-Cola HBC" or the "Company" or "we" or the
"Group").
This document contains forward-looking statements that involve
risks and uncertainties. These statements may generally, but not
always, be identified by the use of words such as "believe",
"outlook", "guidance", "intend", "expect", "anticipate", "plan",
"target" and similar expressions to identify forward-looking
statements. All statements other than statements of historical
facts, including, among others, statements regarding our future
financial position and results, our outlook for 2013 and future
years, business strategy and the effects of the global economic
slowdown, the impact of the sovereign debt crisis, currency
volatility, our recent acquisitions, and restructuring initiatives
on our business and financial condition, our future dealings with
The Coca-Cola Company, budgets, projected levels of consumption and
production, projected raw material and other costs, estimates of
capital expenditure, free cash flow, effective tax rates and plans
and objectives of management for future operations, are
forward-looking statements. You should not place undue reliance on
such forward-looking statements. By their nature, forward-looking
statements involve risk and uncertainty because they reflect our
current expectations and assumptions as to future events and
circumstances that may not prove accurate. Our actual results and
events could differ materially from those anticipated in the
forward-looking statements for many reasons, including the risks
described in the annual report on Form 20-F filed with the U.S.
Securities and Exchange Commission (File No 1-31466) for Coca-Cola
Hellenic Bottling Company S.A. and its subsidiaries for the year
ended 31 December 2012.
Although we believe that, as of the date of this document, the
expectations reflected in the forward-looking statements are
reasonable, we cannot assure you that our future results, level of
activity, performance or achievements will meet these expectations.
Moreover, neither we, nor our directors, employees, advisors nor
any other person assumes responsibility for the accuracy and
completeness of the forward-looking statements. After the date of
the condensed consolidated interim financial statements included in
this document, unless we are required by law or the rules of the UK
Financial Conduct Authority to update these forward-looking
statements, we will not necessarily update any of these
forward-looking statements to conform them either to actual results
or to changes in our expectations.
Reconciliation of Reported to Comparable Financial Indicators
(numbers in EUR million except per share data)
Second quarter 2013
--------------------- ----------------------------------------------------------------------------
EPS(8)
Group Financial Gross Operating Adjusted Finance Net
Results COGS(1) Profit(2) Expenses(3) EBIT(4) EBITDA(5) Costs(6) Profit(7) (EUR)
Reported (1,235.8) 713.4 (551.9) 145.3 244.6 (29.7) 90.0 0.25
Restructuring
costs - - - 16.2 10.8 - 11.9 0.03
Commodity
hedging(9) 1.8 1.8 - 1.8 1.8 - 1.3 -
Non-recurring
items(10) - - 15.9 15.9 15.9 9.2 23.4 0.06
---------- ------------- ------------- -------- ----------- ---------- ----------- ---------
Comparable (1,234.0) 715.2 (536.0) 179.2 273.1 (20.5) 126.6 0.34
Second quarter 2012(11)
--------------------- ----------------------------------------------------------------------------
EPS(8)
Group Financial Gross Operating Adjusted Finance Net
Results COGS(1) Profit(2) Expenses(3) EBIT(4) EBITDA(5) Costs(6) Profit(7) (EUR)
Reported (1,253.4) 732.3 (550.9) 176.7 277.5 (22.0) 117.5 0.32
Restructuring
costs - - - 4.7 3.3 - 4.2 0.01
Commodity
hedging(9) 6.4 6.4 - 6.4 6.4 - 4.5 0.02
Comparable (1,247.0) 738.7 (550.9) 187.8 287.2 (22.0) 126.2 0.35
Half year 2013
--------------------- ----------------------------------------------------------------------------
EPS(8)
Group Financial Gross Operating Adjusted Finance Net
Results COGS(1) Profit(2) Expenses(3) EBIT(4) EBITDA(5) Costs(6) Profit(7) (EUR)
Reported (2,187.3) 1,193.8 (1,037.4) 134.0 327.9 (49.4) 65.6 0.18
Restructuring
costs - - - 22.4 17.0 - 17.3 0.05
Commodity
hedging(9) 4.1 4.1 - 4.1 4.1 - 2.8 0.01
Non-recurring
items(10) - - 17.7 17.7 17.7 9.2 25.0 0.07
---------- ------------- ------------- -------- ----------- ---------- ----------- ---------
Comparable (2,183.2) 1,197.9 (1,019.7) 178.2 366.7 (40.2) 110.7 0.31
Half year 2012(11)
--------------------- ----------------------------------------------------------------------------
EPS(8)
Group Financial Gross Operating Adjusted Finance Net
Results COGS(1) Profit(2) Expenses(3) EBIT(4) EBITDA(5) Costs(6) Profit(7) (EUR)
Reported (2,191.4) 1,227.7 (1,045.2) 164.4 359.2 (43.8) 88.6 0.24
Restructuring
costs - - - 18.1 16.1 - 15.5 0.04
Commodity
hedging(9) 4.2 4.2 - 4.2 4.2 - 2.9 0.01
Comparable (2,187.2) 1,231.9 (1,045.2) 186.7 379.5 (43.8) 107.0 0.29
(1) Reported COGS refers to cost of goods sold.
(2) Reported Gross Profit refers to gross profit.
(3) Reported Operating Expenses refers to operating expenses.
(4) Reported EBIT refers to operating profit.
(5) Adjusted EBITDA refers to operating profit before deductions
for depreciation and impairment of property, plant and equipment
(included both in cost of goods sold and in operating expenses),
amortisation and impairment of intangible assets, employee share
options and other non-cash items, if any (refer to 'Supplementary
information' section).
(6) Reported Finance Costs refers to total net finance costs.
(7) Reported Net Profit refers to profit after tax attributable to owners of the parent.
(8) Reported EPS refers to basic earnings per share.
(9) The Group has entered into certain commodity derivative
transactions in order to mitigate its exposure to commodity price
risk. Although these transactions are economic hedging activities
that aim to manage our exposure to sugar and aluminium price
volatility, they do not qualify for hedge accounting. The fair
value gains and losses on the derivatives are immediately
recognised in the income statement in the cost of goods sold line
item. The Group's comparable results exclude the unrealised gains
or losses resulting from the mark-to-market valuation of this
hedging activity. These gains or losses will be reflected in the
comparable results in the period when the underlying transactions
will occur, to match the profit or loss impact of the underlying
transactions.
(10) Non-recurring items refer mainly to the transactions costs
related to the re-domiciliation and the admission of the Group to
listing on the premium segment of the London Stock Exchange.
Further to that, non-recurring finance costs also relate to the
tender offer for the EUR500 million bond maturing in January
2014.
(11) Comparative amounts have been adjusted to reflect the
impact of new accounting standards adopted in 2012, as detailed in
note 1 to the condensed consolidated interim financial
statements.
Group Operational Review
Coca-Cola HBC AG's ("Coca-Cola HBC" or "we" or the "Company" or
the "Group") unit case volume declined by 2% in the second quarter
and by 1% in the first half of 2013. Macroeconomic and trading
conditions continue to be as challenging as in the previous
quarters across most of our territories, particularly in our
established markets. Disposable income continued to be under
pressure and the level of unemployment continued to rise. In
addition, unseasonably wet weather in Central and Eastern Europe
during May and June, had an adverse impact on our business in the
second quarter, particularly in developing markets and in certain
of our established and emerging markets.
We continue to win in the market place. In the first quarter of
2013, we gained or maintained volume share in sparkling beverages
and value share in the non-alcoholic ready-to-drink beverages
("NARTD") category in the majority of our markets. Markets in which
we gained or maintained volume share in sparkling beverages include
Austria, Ireland, Italy, the Czech Republic, Romania, Russia and
Ukraine. In the NARTD category, we gained or maintained value share
in Austria, Italy, Switzerland, the Czech Republic, Russia and
Romania, among others.
Our premium sparkling beverages registered its fourth
consecutive quarter of volume growth. Volume in premium sparkling
beverages grew by 1% in the quarter, reflecting a 4% increase in
our emerging and 1% increase in our developing markets, more than
offsetting a 3% decline in our established markets. Volume in the
premium sparkling beverages category increased by 2% in the first
half as a result of a 7% increase in emerging, a 1% increase in
developing and a 4% decline in established markets. Volume of
trademark Coca-Cola products increased by 2% in both periods.
Coca-Cola Zero continued to perform strongly, growing by 18% in the
second quarter and 15% in the first half of the year, registering
growth in all three reporting segments.
In the ready-to drink tea category our volume declined by 1% in
the quarter, whereas year-to-date volume was up by 1%, driven by
strong performance in our emerging markets, particularly in Russia.
Our volume in the energy category grew by 4% year-on-year, marking
the thirteenth consecutive quarter of growth, with 9% growth in
developing and 7% growth in emerging markets. For the first half of
2013, our volume in the energy category grew by 6%. Our volume in
the juice category declined by 4% in the second quarter and 3% in
the first half of 2013, as growth in our emerging markets was more
than offset by the decline in our established and developing
markets. Our volume in the water category declined by 8% in the
second quarter and 9% in the first half the year with negative
trends across all three reporting segments.
Package mix improved marginally in both periods, despite the
continuous shift in demand towards at-home consumption and
organised trade, as the volume of single-serve packages declined
less than the volume of multi-serve packages. The positive package
mix is supported by our occasion-based brand, package, price and
channel strategy ("OBPPC") and more specifically in the second
quarter by the launch of our "Share a Coke" marketing campaign in
24 out of 28 markets.
Our OBPPC strategy enabled us to increase currency neutral net
sales revenue per unit case for the eighth consecutive quarter. On
a currency neutral basis, net sales revenue per unit case increased
by 1% in both the second quarter and the first half of 2013.
Currency neutral input costs per case posted a 1% increase in
both the second quarter and the first half of the year. Overall,
the input costs environment has evolved in line with our
expectations. Our revenue growth initiatives more than offset the
increase of total input costs in absolute terms.
Comparable operating expenses as a percentage of net sales
revenue declined by 24 bps in the quarter, reflecting improved
operational efficiency across our business. The improvement in the
quarter was primarily due to reduced warehousing and sales
expenses. On a segmental basis the main drivers of the improvement
in operating expenses as a percentage of net sales revenue were the
developing and established markets, despite the negative operating
leverage due to lower volumes. In the first half of 2013,
comparable operating expenses as a percentage of net sales revenue
declined by 41bps driven by improvements in all three operating
segments.
Our comparable operating profit (EBIT) declined by 5% in both
the second quarter and the first half of 2013. Benefits from our
revenue growth initiatives and lower operating expenses fully
offset higher input costs and the negative impact from currency
movements, however, it was not enough to compensate for the decline
in volume as well.
Group Operational Review (continued)
During the first half of the year, we incurred EUR22 million in
pre-tax restructuring charges, EUR16 million of which was incurred
in the second quarter. We continue to execute our restructuring
plans for 2013, which are expected to improve productivity and
create a more agile and efficient organisation.
Comparable earnings per share were EUR0.34 in the second quarter
and EUR0.31 in the first half of the year, posting a EUR0.02
increase year-on-year in the first half.
We continue to be strongly cash generative. In the second
quarter, we generated EUR137 million of free cash flow, a EUR21
million year-on-year improvement, mainly driven by a reduction in
working capital. The improvement in working capital primarily
resulted from a significant reduction in accounts receivable and to
a lesser extent inventories. Therefore, we were able to reduce our
cash conversion cycle by 8 days year-on-year. Overall, in the first
half of the year, free cash flow was EUR98 million.
We continuously seek to integrate sustainability into all areas
of our business. The next natural step for us was to reflect this
in our reporting and we published our first Integrated Report in
early June. We followed the guidance of the International
Integrated Reporting Council. In preparing the report, we applied
the most stringent criteria and international standards. Our report
has been externally audited for the third consecutive year,
reaching an 'A+' rating in accordance with the Global Reporting
Initiative standard.
Statutory Buy-Out & Delisting
On 17 June 2013, Coca-Cola HBC completed its statutory buy-out
of the remaining shares of Coca-Cola Hellenic Bottling Company S.A
("CCHBC SA") that it did not acquire upon completion of its
voluntary share exchange offer. The cash consideration paid during
the statutory buy-out was EUR1 million. Consequently, CCHBC SA is
now a 100% owned subsidiary of Coca-Cola HBC.
On 23 July 2013, the delisting of CCHBC SA from the Athens
Exchange was approved by the Hellenic Capital Market Commission and
effected as of the same date. Coca-Cola HBC will continue to
maintain a parallel listing of its shares on the Athens
Exchange.
Refinancing
In the second quarter, we successfully issued EUR800 million
principal amount of 7-year fixed-rate notes with a coupon of
2.375%, and completed a fixed price tender offer for our
outstanding EUR500 million notes due in January 2014 with a 7.875%
coupon, (the "2014 Notes"). EUR183 million of the 2014 Notes were
tendered and cancelled. The net proceeds of the new issue, after
financing the repurchase of EUR183 million of the 2014 Notes, will
be used towards the refinancing of certain upcoming bond
maturities, namely the $500 million notes due in September 2013 and
the remaining EUR317 million notes due in January 2014. Following
the completion of the new issue and the fixed price tender offer in
June 2013, we cancelled our EUR500 million bond bridge facility. In
addition, following the successful outcome of the statutory buy-out
of the remaining shareholders in CCHBC SA, we also cancelled our
EUR550 million statutory buy-out facility.
Dividends
In the Extraordinary General Meeting of Coca-Cola HBC held on 19
June 2013, our shareholders approved the distribution of a EUR0.34
dividend per share. The dividend was paid on 23 July 2013 and
amounted to EUR124.7 million.
The Board of Directors of the Company has approved a new
medium-term dividend policy which will be effective for dividend
payments from 2014 onwards. This is a progressive dividend policy
with a targeted payout ratio on comparable net profit after tax in
the range of 35-45% over time. Subject to the availability of
distributable reserves and shareholder approval, dividends are
expected to be paid annually after our annual general meeting in
line with past practice.
Half-yearly financial report
Our half-yearly financial report for the six months ended 28
June 2013 will be released on Monday 12 August 2013 and will be
available from our website www.coca-colahellenic.com with effect
from such date.
Operational Review by Reporting Segment
Established markets
Half
Q2 Q2 % Half year year %
2013 2012 Change 2013 2012 Change
Volume (m unit cases) 177.5 188.2 -6% 319.4 341.4 -6%
Net sales revenue
(EUR m) 697.2 743.9 -6% 1,267.7 1,364.1 -7%
Net Sales Revenue
per Unit Case (EUR) 3.93 3.95 -1% 3.97 4.00 -1%
Currency Neutral
Net Sales Revenue
per Unit Case (EUR) 3.96 3.95 - 3.99 4.00 -
Operating profit
(EBIT in EUR m) 30.5 56.3 -46% 33.9 65.0 -48%
Comparable operating
profit (Comparable
EBIT in EUR m) 50.5 57.6 -12% 61.6 75.3 -18%
Note: Comparative amounts have been adjusted to reflect the
impact of new accounting standards adopted in 2012, as detailed in
note 1 to the condensed consolidated interim financial
statements.
-- Unit case volume in our established markets segment decreased
by 6% in both the second quarter and the first half of 2013,
following an 8% and 5% decline respectively in the comparable prior
year periods. The main driver of the volume decline in the segment
during the quarter was the weakness in all key categories in
Greece, Italy and Austria.
-- Net sales revenue declined by 6% in the second quarter and by
7% in the first half of 2013. Lower volume, unfavourable price mix
and negative currency translation impact more than offset the
benefits of improved category mix on net sales revenue in both
periods. Currency neutral net sales revenue per case was flat in
both periods.
-- Volume in Italy declined by mid single-digits in the second
quarter of 2013, while the decline was in the high single-digit for
the first half of the year. Austerity measures impacted disposable
income, and unemployment continued to rise. In the second quarter,
volume pressure was evident across all categories. A 14% volume
increase in Coca-Cola Zero partially supported volume in the
sparkling beverages category in the second quarter. Package mix
improved in the sparkling category as well as in total volume. We
expect volatility to continue as a result of the ongoing fiscal and
economic developments in the country.
-- Volume in Greece declined by the low-teens in the second
quarter of 2013. Volume for the first half of the year declined by
mid teens. Disposable income is expected to decline further in 2013
while unemployment remains at the historically high level of 27%.
Sparkling beverages were more resilient and declined by mid
single-digits in the quarter.
-- Volume in Switzerland declined by low single digits in both
the second quarter and the first half of the year. Unseasonably
cold weather and heavy rainfalls during May and June had an adverse
impact on demand. Our "Share a Coke" campaign supported a marginal
volume increase in Trademark Coke while Coca-Cola Zero continued
its positive trend, with volume increasing by mid single-digits in
the second quarter of the year.
-- Volume in Ireland was marginally positive in the second
quarter following seven consecutive quarters of decline. Volume in
the first six months of 2013 decreased by low single-digits. The
volume growth was driven by our sparkling category, which increased
by low single digits in the second quarter, supported by the "Share
a Coke" campaign. Package mix continued to improve, driven by
single-serve packages.
-- Comparable operating profit in the established markets
segment declined to EUR51 million in the second quarter of 2013
from EUR58 million in the comparable period last year. Comparable
operating profit declined to EUR62 million in the first half of
2013 from EUR75 million in the comparable period last year.
Benefits from tighter operating expense management and our
restructuring initiatives were more than offset by lower volume and
negative price mix in the second quarter.
Operational Review by Reporting Segment (continued)
Developing markets
Half Half
Q2 Q2 % year year %
2013 2012 Change 2013 2012 Change
Volume (m unit cases) 105.5 108.7 -3% 182.3 188.1 -3%
Net sales revenue
(EUR m) 308.5 319.7 -4% 525.7 548.9 -4%
Net Sales Revenue
per Unit Case (EUR) 2.92 2.94 -1% 2.88 2.92 -1%
Currency Neutral
Net Sales Revenue
per Unit Case (EUR) 2.93 2.94 - 2.89 2.92 -1%
Operating profit
(EBIT in EUR m) 15.4 14.6 5% 0.5 1.0 -50%
Comparable operating
profit (Comparable
EBIT in EUR m) 18.6 15.6 19% 3.9 5.6 -30%
Note: Comparative amounts have been adjusted to reflect the
impact of new accounting standards adopted in 2012, as detailed in
note 1 to the condensed consolidated interim financial
statements.
-- Unit case volume in our developing markets segment decreased
by 3% in both the second quarter and the first half of 2013,
following 7% and 4% declines respectively, in the comparable prior
year periods. Challenging economic conditions impacted volume
performance across the segment, particularly in Hungary.
-- Net sales revenue declined by 4%, in both the second quarter
and the first half of the year. Lower volume and negative price
mix, unfavourable category mix and a marginal negative currency
translation impact drove the performance in the second quarter.
Currency neutral net sales revenue per case was flat in the second
quarter and declined by 1% in the first half of 2013 compared to
the respective prior year periods.
-- Volume in Poland declined by low single-digits in the second
quarter and by mid single-digits in the first half of the year. The
low single-digit volume increase in sparkling beverages was not
enough to offset the decline in still beverages, especially
ready-to-drink tea in the second quarter. Among sparkling
beverages, Trademark Coca-Cola was the biggest contributor
increasing by mid single-digits in the quarter. Juice posted strong
double-digit growth in the quarter mainly as a result of the
continuous successful execution in 1L PET, supported by marketing
activities.
-- Volume in Hungary declined by low teens in the second quarter
of the year driven primarily by a decline in sparkling and water
categories. Volume dropped by high single digits in the first half
of the year. The economic environment remained volatile with
consumer confidence among the lowest in Europe and double-digit
unemployment. Coca-Cola Zero was the only outperformer among
sparkling beverages, posting double-digit growth for another
quarter. Volume in the energy category almost doubled, mainly
reflecting the strong performance of recently launched Burn Blue
and Monster Rehab. Package mix improved, as our "Share a Coke"
campaign supported the performance of single serve packages.
-- Volume in the Czech Republic declined by low single-digits in
the second quarter, while for the first half of the year volume
recorded a low single-digit increase. Overall economic and
political conditions remain volatile. Volume of Trademark Coca-Cola
products grew by mid teens, driven by a 16% increase in brand
Coca-Cola and a strong double-digit increase in Coca-Cola Zero,
supported by increased promotional activities.
-- Developing markets posted a comparable operating profit of
EUR19 million in the second quarter, compared to a comparable
operating profit of EUR16 million in the second quarter of 2012. In
the first half of the year, developing markets posted a comparable
operating profit of EUR4 million, compared to a comparable
operating profit of EUR6 million in the first half of 2012. Lower
operating expenses and favourable currency movements more than
offset lower volume and negative price mix in the second
quarter.
Operational Review by Reporting Segment
(continued)
Emerging markets
Half Half
Q2 Q2 % year year %
2013 2012 Change 2013 2012 Change
Volume (m unit cases) 294.7 289.7 2% 502.7 484.1 4%
Net sales revenue
(EUR m) 943.5 922.1 2% 1,587.7 1,506.1 5%
Net Sales Revenue
per Unit Case (EUR) 3.20 3.18 1% 3.16 3.11 2%
Currency Neutral
Net Sales Revenue
per Unit Case (EUR) 3.29 3.18 3% 3.22 3.11 4%
Operating profit
(EBIT in EUR m) 99.4 105.8 -6% 99.6 98.4 1%
Comparable operating
profit (Comparable
EBIT in EUR m) 110.0 114.6 -4% 112.7 105.8 7%
Note: Comparative amounts have been adjusted to reflect the
impact of new accounting standards adopted in 2012, as detailed in
note 1 to the condensed consolidated interim financial
statements.
-- Unit case volume in our emerging markets segment grew by 2%
in the second quarter of the year, following a 2% increase in the
comparable prior year period. Strong performance in Nigeria and
Russia more than offset volume declines in Romania and Ukraine.
Unit case volume grew by 4% in the first half of the year.
-- Net sales revenue grew by 2% in the second quarter and 5% in
the first half of 2013. Higher volumes, as well as positive price
and category mix more than offset the negative impact from currency
translation in both periods. Currency neutral net sales revenue per
case increased by 3% in the second quarter and by 4% in the first
half of 2013.
-- Volume in Russia grew by mid single-digits in both the second
quarter and the first half of the year, following a low-teens
increase in the second quarter of 2012. This was the seventh
consecutive quarter of volume increase in Russia. Growth was
broad-based with all major categories posting higher volume, except
water. The positive impact of our OBPPC initiatives and strong
execution of the Sochi Winter Olympic Games sponsorship with focus
on the Olympic Torch Relay campaign supported an 11% growth in
brand Coca-Cola, marking the eleventh consecutive quarter of volume
and share expansion. Our RTD-Tea volume registered mid teens
growth, reflecting the increased distribution of 1L PET as well as
the continuous solid performance of 1.75L PET. Volume in our juice
category grew by low teens, with growth coming from both our
mainstream brand Dobry, which posted mid-teens growth, as well as
our premium brand Rich, which was up by strong double-digits in the
quarter.
-- Volume in Nigeria grew by almost double digits in the second
quarter of the year, following a mid single-digit decline in the
corresponding period last year. In the first six months of 2013,
volume increased by mid-teens. In addition to the favourable base
effect from last year's decline, increased marketing activities and
improved availability supported volume growth. Brand Coca-Cola
posted 15% growth, while Sprite grew in the low-teens and Fanta in
high single-digits.
-- Volume in Romania declined by high single-digits in both the
second quarter and the first half of the year, following a low
single digit decline in the comparable prior year period.
Performance was negatively impacted by both poor weather and
competitive promotional pressures, mainly in multi-serve packages.
Volume declined in all key categories, except for our energy
category which posted mid single-digits growth. Coca-Cola Zero
outperformed, recording double-digit volume growth supported by
promotional activity.
-- Volume in Ukraine declined by mid teens in the second quarter
of the year driven by declines in the juice and water categories,
following a high single-digit decline in the comparable prior year
quarter. Volume in the first half of 2013 decreased by high
single-digits. Overall, the economic environment in the country
remains fragile, impacting consumer demand. Volume declined with
low single digits in sparkling beverages, as Trademark Coca-Cola
products posted mid single-digits growth, supported by promotional
activities. Our ready to drink tea volume recorded mid-teens growth
in the quarter mainly due to pre seasonal availability.
Operational Review by Reporting Segment
(continued)
-- Comparable operating profit in the emerging markets segment
reached EUR110 million in the second quarter of 2013, compared to
EUR115 million of operating profit in the same period last year.
Improved category and price mix and higher volume was more than
offset by increased raw material costs, higher operating expenses
and adverse currency movements in the second quarter. Comparable
operating profit reached EUR113 million in the first half of the
year, compared to EUR106 million in the same period last year due
to better volume and price mix performance in the first
quarter.
Business Outlook
For the remainder of the year, we expect the challenging
macroeconomic and trading conditions to persist across most of our
territories. Economic uncertainty and austerity measures are
expected to continue to lead to lower disposable income and high
unemployment across the Eurozone. We do not anticipate the current
trading conditions to change materially in the second half of the
year.
Our strategic priorities remain unchanged. We are focusing on
growing currency neutral net sales revenue per case, through our
OBPPC-driven initiatives, while continuing to reinforce our
position in the marketplace. Addressing affordability remains a key
element of our strategy in order to stay relevant to our
consumers.
We have clear category priorities in pursuing our strategy in
the marketplace. We are focused on growing volume and value shares
in the sparkling beverages, ready-to-drink tea and energy
categories. In the juice category, we maintain a selective approach
focusing on immediate consumption and the most profitable future
consumption packages on a country-by-country basis. In the water
category, our goal is to grow value ahead of volume by focusing on
single-serve packages, as well as the most profitable multi-serve
packages.
We continue to expect currency neutral net sales revenue per
unit case in 2013 to grow year-on-year, albeit at a slower pace
than that registered in 2012, and for currency neutral input costs
per case to increase by low single-digits.
We also continue to execute our 2013 restructuring plans and we
remain confident that we can achieve our targeted benefits. We
expect the initiatives already taken in 2012 and those that we are
taking in 2013 to yield approximately EUR65 million in total
benefits in 2013. We continue to expect costs of approximately
EUR50 million from restructuring initiatives in 2013 that are
expected to yield EUR30 million in annualised benefits from 2014
onwards.
Based on current spot rates, we now expect a negative impact
from currency movements in 2013 in line with the levels in 2012 as
a result of increased volatility in our emerging markets'
currencies.
We reiterate our expectations for a comparable effective tax
rate for the mid-term in the range of 23-25%.
During the three year period ending 31 December 2015, we aim to
generate free cash flow of approximately EUR1.3 billion. Net
capital expenditure over the medium-term is expected to range
between 5.5% and 6.5% of net sales revenue, reflecting our
commitment to investing in the long-term development of our
business. We are committed to maintaining strong discipline in
working capital management, with the aim to drive solid free cash
flow generation in the full year.
We manage our business for the long-term. We are confident that
we have the right strategy to grow in a sustainable and profitable
way, leveraging some of the world's best known and loved brands in
an attractive diversified geographic footprint, characterized by
low per capita consumption and market share growth
opportunities.
Group Financial Review
Selected income statement and other
items Second Quarter
---------------------------------------
2013 2012(3)
EUR million EUR million % Change
------------- ------------- ---------
Volume (m unit cases) 577.7 586.6 -2%
Net sales revenue 1,949.2 1,985.7 -2%
Net Sales Revenue per Unit Case (EUR) 3.37 3.39 -1%
Currency Neutral Net Sales Revenue
per Unit Case (EUR) 3.43 3.39 1%
Cost of goods sold (1,235.8) (1,253.4) -1%
Comparable cost of goods sold(1) (1,234.0) (1,247.0) -1%
Gross profit 713.4 732.3 -3%
Comparable gross profit(1) 715.2 738.7 -3%
Operating expenses (551.9) (550.9) -
Comparable operating expenses(1) (536.0) (550.9) -3%
Operating profit (EBIT) 145.3 176.7 -18%
Comparable operating profit (EBIT)(1) 179.2 187.8 -5%
Adjusted EBITDA(2) 244.6 277.5 -12%
Comparable adjusted EBITDA(1) 273.1 287.2 -5%
Total net finance costs (29.7) (22.0) 35%
Comparable total net finance costs(1) (20.5) (22.0) -7%
Tax (30.1) (40.6) -26%
Profit after tax attributable to owners
of the parent 90.0 117.5 -23%
Comparable profit after tax attributable
to owners of the parent(1) 126.6 126.2 -
Basic earnings per share (EUR) 0.25 0.32 -22%
Comparable basic earnings per share
(EUR)(1) 0.34 0.35 -3%
Net cash from operating activities(2) 237.4 217.9 9%
Capital expenditure(2) (100.2) (101.3) -1%
Free cash flow(2) 137.2 116.6 18%
------------- ------------- ---------
Selected income statement and other
items Half Year
---------------------------------------
2013 2012(3)
EUR million EUR million % Change
------------- ------------- ---------
Volume (m unit cases) 1,004.4 1,013.6 -1%
Net sales revenue 3,381.1 3,419.1 -1%
Net Sales Revenue per Unit Case (EUR) 3.37 3.37 -
Currency Neutral Net Sales Revenue
per Unit Case (EUR) 3.41 3.37 1%
Cost of goods sold (2,187.3) (2,191.4) -
Comparable cost of goods sold(1) (2,183.2) (2,187.2) -
Gross profit 1,193.8 1,227.7 -3%
Comparable gross profit(1) 1,197.9 1,231.9 -3%
Operating expenses (1,037.4) (1,045.2) -1%
Comparable operating expenses(1) (1,019.7) (1,045.2) -2%
Operating profit (EBIT) 134.0 164.4 -18%
Comparable operating profit (EBIT)(1) 178.2 186.7 -5%
Adjusted EBITDA(2) 327.9 359.2 -9%
Comparable adjusted EBITDA(1) 366.7 379.5 -3%
Total net finance costs (49.4) (43.8) 13%
Comparable total net finance costs(1) (40.2) (43.8) -8%
Tax (23.5) (35.3) -33%
Profit after tax attributable to owners
of the parent 65.6 88.6 -26%
Comparable profit after tax attributable
to owners of the parent(1) 110.7 107.0 3%
Basic earnings per share (EUR) 0.18 0.24 -25%
Comparable basic earnings per share
(EUR)(1) 0.31 0.29 7%
Net cash from operating activities(2) 249.8 256.1 -2%
Capital expenditure(2) (152.2) (171.2) -11%
Free cash flow(2) 97.6 84.9 15%
------------- ------------- ---------
(1) Refer to the 'Reconciliation of Reported to Comparable Financial Indicators' section.
(2) Refer to 'Supplementary Information' section.
(3) Note: Comparative amounts have been adjusted to reflect the
impact of new accounting standards adopted in 2012, as detailed in
note 1 to the condensed consolidated interim financial
statements.
Group Financial Review (continued)
Net sales revenue
Net sales revenue per unit case decreased by 1% during the
second quarter of 2013 compared to the respective prior year
period, on a reported basis. On a currency neutral basis, net sales
revenue per unit case increased by 1% in the second quarter of 2013
compared to the respective prior year period. For the first half of
2013, net sales revenue per unit case was flat compared to the
respective prior year period, on a reported basis and increased by
1% on a currency neutral basis.
Cost of goods sold
Comparable cost of goods sold decreased by 1% during the second
quarter and was flat for the first half of 2013, compared to the
respective prior year periods. Overall, the input cost environment
has evolved in line with our expectations.
Gross profit
Comparable gross profit margin decreased from 37.2% in the
second quarter of 2012 to 36.7% in the second quarter of 2013 and
from 36.0% in the first half of 2012 to 35.4% in the first half of
2013.
Operating expenses
Comparable operating expenses decreased by 3% during the second
quarter and by 2% during the first half of 2013 versus the
respective prior year periods, mainly reflecting the benefits of
our restructuring initiatives as well as lower period over period
warehouse and sales expenses.
Operating profit
Comparable operating profit decreased by 5% in both the second
quarter and the first half of 2013, compared to the respective
prior year periods, as lower volume, higher input costs and the
negative impact from currency movements more than offset the
benefits from our revenue growth initiatives and the lower
operating expenses.
Total net finance costs
Comparable total net finance costs decreased by EUR1.5 million
during the second quarter and by EUR3.6 million during the first
half of 2013, compared to the respective prior year periods.
Tax
On a comparable basis, Coca-Cola HBC's effective tax rate for
the first half of 2013 was approximately 23% compared to 27% in the
first half of 2012. The Group's effective tax rate varies quarterly
depending on the mix of taxable profits by territory, the
non-deductibility of certain expenses, non-taxable income and other
one-off tax items across its territories.
Profit after tax attributable to owners of the parent
On a comparable basis, profit after tax attributable to owners
of the parent decreased by 2% in the second quarter compared to the
respective prior year period mainly driven by the reduced operating
profitability. Comparable profit after tax attributable to owners
of the parent increased by 1% in the first half of 2013 compared to
the respective prior year period as the reduced taxes more than
offset the operating profitability shortfall.
Net cash from operating activities
Net cash from operating activities increased by 9% in the second
quarter of 2013 compared to the respective prior year period,
reflecting the improvement in working capital and the reduced taxes
paid, that more than offset the negative impact of the reduced
profitability. For the first half of 2013, net cash flow from
operating activities decreased by 2% compared to the respective
prior year period, mainly on the back of the reduced profit during
the period that more than offset the positive effect of the reduced
payments for taxes and the improved working capital.
Group Financial Review (continued)
Cash flow from operating activities net of capital expenditure
increased by 18% during the second quarter versus the respective
prior year period, reflecting mainly the increased cash from
operating activities. For the first half of 2013, cash flow from
operating activities net of capital expenditure increased by 15%
versus the respective prior year period, mainly on the back of
positive phasing of the capital expenditure outflows.
Capital expenditure
Capital expenditure, net of receipts from the disposal of assets
and including principal repayments of finance lease obligations,
reduced by 1% in the second quarter and by 11% in the first half of
2013, compared to the respective prior year periods, mainly due to
positive phasing of the cash outflows in the first half of 2013.
This trend is expected to be reversed in the second half of the
year. In the first half of 2013, capital expenditure amounted to
EUR152.2 million of which 42% was related to investment in
production equipment and facilities and 23% to the acquisition of
marketing equipment. In the first half of 2012, capital expenditure
amounted to EUR171.2 million of which 39% was related to investment
in production equipment and facilities and 35% to the acquisition
of marketing equipment.
Supplementary Information
The financial measures Adjusted EBITDA, Capital Expenditure and
Free Cash Flow consist of the following reported amounts in the
condensed consolidated interim financial statements:
Second quarter
2013 2012(1)
EUR million EUR million
Profit after tax 89.9 118.2
Tax charged to the income statement 30.1 40.6
Total finance costs, net 29.7 22.0
Share of results of equity method investments (4.4) (4.1)
Operating profit (EBIT) 145.3 176.7
Depreciation of property, plant and equipment 97.5 98.5
Amortisation of intangible assets 0.3 0.7
Employee share options 1.5 1.6
Adjusted EBITDA(2) 244.6 277.5
(Gains) / losses on disposal of non-current
assets (1.4) 2.1
Decrease/(increase) in working capital 1.3 (46.2)
Tax paid (7.1) (15.5)
-------------- -------------
Net cash from operating activities 237.4 217.9
-------------- -------------
Payments for purchases of property, plant and
equipment (97.4) (97.0)
Principal repayments of finance lease obligations (4.1) (5.4)
Proceeds from sale of property, plant and equipment 1.3 1.1
-------------- -------------
Capital expenditure (100.2) (101.3)
-------------- -------------
Net cash from operating activities 237.4 217.9
Capital expenditure (100.2) (101.3)
-------------- -------------
Free cash flow 137.2 116.6
-------------- -------------
Half year
2013 2012(1)
EUR million EUR million
Profit after tax 65.5 89.4
Tax charged to the income statement 23.5 35.3
Total finance costs, net 49.4 43.8
Share of results of equity method investments (4.4) (4.1)
Operating profit (EBIT) 134.0 164.4
Depreciation of property, plant and equipment 191.2 190.2
Amortisation of intangible assets 0.6 1.4
Employee share options 2.1 3.2
Adjusted EBITDA(2) 327.9 359.2
(Gains) / losses on disposal of non-current
assets (2.7) 2.5
Increase in working capital (55.9) (68.7)
Tax paid (19.5) (36.9)
-------------- -------------
Net cash from operating activities 249.8 256.1
-------------- -------------
Payments for purchases of property, plant and
equipment (146.9) (160.0)
Principal repayments of finance lease obligations (8.0) (12.7)
Proceeds from sale of property, plant and equipment 2.7 1.5
-------------- -------------
Capital expenditure (152.2) (171.2)
-------------- -------------
Net cash from operating activities 249.8 256.1
Capital expenditure (152.2) (171.2)
-------------- -------------
Free cash flow 97.6 84.9
-------------- -------------
(1) Note: Comparative amounts have been adjusted to reflect the
impact of new accounting standards adopted in 2012, as detailed in
note 1 to the condensed consolidated interim financial
statements.
(2) Adjusted EBITDA refers to operating profit before deductions
for depreciation and impairment of property, plant and equipment
(included both in cost of goods sold and in operating expenses),
amortisation and impairment of intangible assets, employee share
options and other non-cash items, if any.
Coca-Cola HBC Group
Coca-Cola HBC is the second-largest bottler of products of The
Coca-Cola Company in terms of volume with sales of more than 2
billion unit cases. It has a broad geographic footprint with
operations in 28 countries serving a population of approximately
581 million people. Coca-Cola HBC offers a diverse range of NARTD
beverages in the sparkling, juice, water, sport, energy, tea and
coffee categories. Coca-Cola HBC is committed to promoting
sustainable development in order to create value for its business
and for society. This includes providing products that meet the
beverage needs of consumers, fostering an open and inclusive work
environment, conducting its business in ways that protect and
preserve the environment and contribute to the socio-economic
development of the local communities.
Coca-Cola HBC has a premium listing on the London Stock Exchange
(LSE: CCH) and its shares are listed on the Athens Exchange (ATHEX:
EEE). Coca-Cola HBC's American depositary shares (ADSs) are listed
on the New York Stock Exchange (NYSE: CCH). Coca-Cola HBC is
included in the Dow Jones Sustainability and FTSE4Good Indexes. For
more information, please visit
http://www.coca-colahellenic.com/.
Financial information in this announcement is presented on the
basis of
International Financial Reporting Standards ('IFRS').
Conference call
Coca-Cola HBC will host a conference call with financial
analysts to discuss the second quarter and half year 2013 financial
results on 8 August 2013 at 10:00 am, Swiss time (9:00 am London,
11:00am Athens, and 4:00 am New York time). Interested parties can
access the live, audio webcast of the call through Coca-Cola HBC's
website (www.coca-colahellenic.com/investorrelations/webcasts).
Enquiries
Coca--Cola HBC AG Tel: +30 210 618 3255
Oya Gur email:
Investor Relations Director oya.gur@cchellenic.com
Eri Tziveli Tel: +30 210 618 3133
Investor Relations Manager email: eri.tziveli@cchellenic.com
Dimitris Bakas Tel: +30 210 618 3124
Investor Relations Manager email: dimitris.bakas@cchellenic.com
International media contact:
Tel: +44 20 7251 3801
RLM Finsbury
Guy Lamming email: guy.lamming@rlmfinsbury.com
Charles Chichester email: charles.chichester@rlmfinsbury.com
Philip Walters email: philip.walters@rlmfinsbury.com
Charles O' Brien email: charles.o'brien@rlmfinsbury.com
Greek media contact:
V+O Communications Tel: +30 211 7501223
Mary Andreadi email: ma@vando.gr
Condensed consolidated interim balance sheet (unaudited)
As at As at
28 June 2013 31 December 2012
Note EUR million EUR million
------------------------------ ------ ------------- -----------------
Assets
Intangible assets 4 1,924.8 1,944.6
Property, plant and equipment 4 2,968.8 3,041.4
Other non-current assets 308.0 293.3
------------------------------ ------ ------------- -----------------
Total non-current assets 5,201.6 5,279.3
------------------------------ ------ ------------- -----------------
Inventories 585.6 458.0
Trade and other receivables 1,195.0 1,073.7
Cash and cash equivalents 5 1,063.5 439.1
------------------------------ ------ ------------- -----------------
Total current assets 2,844.1 1,970.8
------------------------------ ------ ------------- -----------------
Total assets 8,045.7 7,250.1
------------------------------ ------ ------------- -----------------
Liabilities
Short-term borrowings 5 911.7 555.0
Other current liabilities 2,001.8 1,667.3
------------------------------ ------ ------------- -----------------
Total current liabilities 2,913.5 2,222.3
------------------------------ ------ ------------- -----------------
Long-term borrowings 5 1,876.0 1,604.7
Other non-current liabilities 391.7 416.6
------------------------------ ------ ------------- -----------------
Total non-current liabilities 2,267.7 2,021.3
------------------------------ ------ ------------- -----------------
Total liabilities 5,181.2 4,243.6
Equity
Owners of the parent 2,859.5 2,988.7
Non-controlling interests 5.0 17.8
------------------------------ ------ ------------- -----------------
Total equity 2,864.5 3,006.5
------------------------------ ------ ------------- -----------------
Total equity and liabilities 8,045.7 7,250.1
------------------------------ ------ ------------- -----------------
The accompanying notes form an integral part of these condensed
consolidated interim financial statements
Condensed consolidated interim income statement (unaudited)
Three months
Three months to to
28 June 2013 29 June 2012(1)
Note EUR million EUR million
------------------------------------- ---- --------------- ----------------
Net sales revenue 3 1,949.2 1,985.7
Cost of goods sold (1,235.8) (1,253.4)
------------------------------------- ---- --------------- ----------------
Gross profit 713.4 732.3
Operating expenses (551.9) (550.9)
Restructuring costs 7 (16.2) (4.7)
Operating profit 3 145.3 176.7
Total finance costs, net 8 (29.7) (22.0)
Share of results of equity method
investments 4.4 4.1
------------------------------------- ---- --------------- ----------------
Profit before tax 120.0 158.8
Tax 9 (30.1) (40.6)
Profit after tax 89.9 118.2
------------------------------------- ---- --------------- ----------------
Attributable to:
Owners of the parent 90.0 117.5
Non-controlling interests (0.1) 0.7
------------------------------------- ---- --------------- ----------------
89.9 118.2
------------------------------------- ---- --------------- ----------------
Basic and diluted earnings per share
(EUR) 10 0.25 0.32
(1) Comparative amounts have been adjusted where necessary to
reflect the adoption of accounting standards as detailed in note
1.
The accompanying notes form an integral part of these condensed
consolidated interim financial statements
Condensed consolidated interim statement of comprehensive income
(unaudited)
Three months Three months
to to
28 June 2013 29 June 2012(1)
EUR million EUR million
--------------------------------------------------- ------------- ----------------
Profit after tax for the period 89.9 118.2
Other comprehensive income:
Items that may be subsequently reclassified
to income statement:
Available-for-sale financial assets:
Valuation gains during the period 0.4 -
Cash flow hedges:
Amounts of gains during the period 3.1 6.5
Amounts of losses reclassified to
profit and loss for the period 2.6 4.3
Foreign currency translation (76.6) (29.5)
Share of other comprehensive income of
equity method investments (0.7) 0.9
Income tax relating to items that may
be subsequently reclassified to income
statement (1.0) (2.3)
--------------------------------------------------- ------------- ----------------
(72.2) (20.1)
Items that will not be subsequently reclassified
to income statement:
Actuarial gains/(losses) 17.6 (9.1)
Income tax relating to components of
other comprehensive income (3.3) 2.3
--------------------------------------------------- ------------- ----------------
14.3 (6.8)
--------------------------------------------------- ------------- ----------------
Other comprehensive income for the period,
net of tax (57.9) (26.9)
--------------------------------------------------- ------------- ----------------
Total comprehensive income for the period 32.0 91.3
--------------------------------------------------- ------------- ----------------
Total comprehensive income attributable
to:
Owners of the parent 32.1 90.6
Non-controlling interests (0.1) 0.7
--------------------------------------------------- ------------- ----------------
32.0 91.3
--------------------------------------------------- ------------- ----------------
(1) Comparative amounts have been adjusted where necessary to
reflect the adoption of accounting standards as detailed in note
1.
The accompanying notes form an integral part of these condensed
consolidated interim financial statements
Condensed consolidated interim income statement (unaudited)
Six months to Six months to
28 June 2013 29 June 2012(1)
Note EUR million EUR million
---------------------------------- ---- ------------- ----------------
Net sales revenue 3 3,381.1 3,419.1
Cost of goods sold (2,187.3) (2,191.4)
---------------------------------- ---- ------------- ----------------
Gross profit 1,193.8 1,227.7
Operating expenses (1,037.4) (1,045.2)
Restructuring costs 7 (22.4) (18.1)
Operating profit 3 134.0 164.4
Total finance costs, net 8 (49.4) (43.8)
Share of results of equity method
investments 4.4 4.1
---------------------------------- ---- ------------- ----------------
Profit before tax 89.0 124.7
Tax 9 (23.5) (35.3)
---------------------------------- ---- ------------- ----------------
Profit after tax 65.5 89.4
---------------------------------- ---- ------------- ----------------
Attributable to:
Owners of the parent 65.6 88.6
Non-controlling interests (0.1) 0.8
---------------------------------- ---- ------------- ----------------
65.5 89.4
---------------------------------- ---- ------------- ----------------
Basic and diluted earnings per
share (EUR) 10 0.18 0.24
(1) Comparative amounts have been adjusted where necessary to
reflect the adoption of accounting standards as detailed in note
1.
The accompanying notes form an integral part of these condensed
consolidated interim financial statements
Condensed consolidated interim statement of comprehensive income
(unaudited)
Six months to Six months to
28 June 2013 29 June 2012(1)
EUR million EUR million
--------------------------------------------------- ------------- ----------------
Profit after tax for the period 65.5 89.4
Other comprehensive income :
Items that may be subsequently reclassified
to income statement:
Available-for-sale financial assets:
Valuation gains during the period 0.3 -
Cash flow hedges:
Amounts of gains / (losses) during the
period 6.6 (8.9)
Amounts of losses reclassified to
profit and loss for the period 6.6 5.3
Foreign currency translation (68.7) 35.7
Share of other comprehensive income of
equity method investments (0.2) (0.1)
Income tax relating to items that may
be subsequently reclassified to income
statement (2.0) 1.3
--------------------------------------------------- ------------- ----------------
(57.4) 33.3
Items that will not be subsequently reclassified
to income statement:
Actuarial gains / (losses) 19.7 (23.2)
Income tax relating to items that will
not be subsequently reclassified to income
statement (3.4) 4.8
--------------------------------------------------- ------------- ----------------
16.3 (18.4)
Other comprehensive income for the period,
net of tax (41.1) 14.9
--------------------------------------------------- ------------- ----------------
Total comprehensive income for the period 24.4 104.3
--------------------------------------------------- ------------- ----------------
Total comprehensive income attributable
to:
Owners of the parent 24.5 103.5
Non-controlling interests (0.1) 0.8
--------------------------------------------------- ------------- ----------------
24.4 104.3
--------------------------------------------------- ------------- ----------------
(1) Comparative amounts have been adjusted where necessary to
reflect the adoption of accounting standards as detailed in note
1.
The accompanying notes form an integral part of these condensed
consolidated interim financial statements
Condensed consolidated interim statement of changes in equity (unaudited)
Attributable to owners of the parent
Reserve
for share
Share capital Share Treasury Exchange Other Retained Non-
capital(3) return Premium(3) shares(3) equalisation reserves earnings Total controlling Total
EUR EUR EUR EUR reserve EUR EUR EUR interests equity
million million million million EUR million million million million EUR million EUR million
--------------- ---------- --------- ---------- --------- ------------ -------- -------- -------- ----------- ------------
Balance as at 1
January 2012 549.8 - 569.2 (55.5) (199.7) 380.0 1,660.6 2,904.4 15.8 2,920.2
Share-based
compensation:
Options - - - - - 3.2 - 3.2 - 3.2
Movement in
treasury
shares - - - - - 0.3 - 0.3 - 0.3
Return of
capital
to
shareholders - (124.6) - 1.2 - - - (123.4) - (123.4)
Extinguishment
of
accumulated
losses - (55.0) - - - - 55.0 - - -
Hyperinflation
impact - - - - - - 3.5 3.5 - 3.5
Appropriation
of
reserves - - - - - 0.4 (0.4) - - -
Share of other
changes
in equity of
equity
method
investments - - - - - - (2.1) (2.1) - (2.1)
--------------- ---------- --------- ---------- --------- ------------ -------- -------- -------- ----------- ------------
549.8 (179.6) 569.2 (54.3) (199.7) 383.9 1,716.6 2,785.9 15.8 2,801.7
Profit for the
period
net of tax - - - - - - 88.6 88.6 0.8 89.4
Other
comprehensive
income for the
period,
net of tax - - - - 35.6 (2.3) (18.4) 14.9 - 14.9
--------------- ---------- --------- ---------- --------- ------------ -------- -------- -------- ----------- ------------
Total
comprehensive
income for the
period,
net of tax(1) - - - - 35.6 (2.3) 70.2 103.5 0.8 104.3
Balance as at
29
June 2012
(adjusted)
(2) 549.8 (179.6) 569.2 (54.3) (164.1) 381.6 1,786.8 2,889.4 16.6 2,906.0
Shares issued
to
employees
exercising
stock options - - 0.1 - - - - 0.1 - 0.1
Share-based
compensation:
Options - - - - - 3.1 - 3.1 - 3.1
Movement in
treasury
shares - - - - - (0.2) - (0.2) - (0.2)
Hyperinflation
impact - - - - - 0.7 0.7 - 0.7
Return of
capital
to
shareholders (124.6) 124.6 - - - - - - - -
Extinguishment
of
accumulated
losses (55.0) 55.0 - - - - - - - -
Appropriation
of
reserves - - - - - 0.1 (0.1) - - -
Dividends - - - - - - - - (1.0) (1.0)
--------------- ---------- --------- ---------- --------- ------------ -------- -------- -------- ----------- ------------
370.2 - 569.3 (54.3) (164.1) 384.6 1,787.4 2,893.1 15.6 2,908.7
Profit for the
period
net of tax - - - - - - 101.8 101.8 2.2 104.0
Other
comprehensive
income for the
period,
net of tax - - - - (4.0) (8.0) 5.8 (6.2) - (6.2)
Total
comprehensive
income for the
period,
net of tax - - - - (4.0) (8.0) 107.6 95.6 2.2 97.8
--------------- ---------- --------- ---------- --------- ------------ -------- -------- -------- ----------- ------------
Balance as at
31
December 2012 370.2 - 569.3 (54.3) (168.1) 376.6 1,895.0 2,988.7 17.8 3,006.5
--------------- ---------- --------- ---------- --------- ------------ -------- -------- -------- ----------- ------------
(1) The amount included in the exchange equalisation reserve of
EUR35.6 million gain for the first half of 2012 represents the
exchange gains attributed to the owners of the parent of EUR35.7
million plus the share of equity method investments of EUR0.1
million loss.
The amount included in other reserves of EUR2.3 million loss for
the first half of 2012 consists of cash flow hedges loss of EUR3.6
million (of which EUR8.9 million represents revaluation losses for
the period and EUR5.3 million represents revaluation losses
reclassified to profit and loss for the period) and the deferred
income tax credit of EUR1.3 million.
The amount of EUR70.2 million gain comprises a gain for the
first half of 2012 of EUR88.6 million, the actuarial losses of
EUR23.2 million plus deferred income tax credit of EUR4.8
million.
The amount of EUR0.8 million gain included in non-controlling
interests for the first half of 2012 represents the share of
non-controlling interests in the retained earnings.
(2) Comparative amounts have been adjusted where necessary to
reflect the adoption of accounting standards as detailed in note
1.
(3) As these condensed consolidated interim financial statements
are a continuation of the consolidated financial statements of
Coca-Cola Hellenic Bottling Company S.A., for the period 1 January
2012 to 25 April 2013 these components of equity reflect the
capital structure of Coca-Cola Hellenic Bottling Company S.A. and
following the reorganisation reflect the capital structure of
Coca-Cola HBC AG.
The accompanying notes form an integral part of these condensed
consolidated financial statements
Condensed consolidated interim statement of changes in equity (unaudited)
Share Share Group Treasury Exchange Other Retained Non- Total
capital(5) premium(5) Reorganization shares equalisation reserves earnings Total controlling equity
EUR EUR reserve(5) EUR reserve EUR EUR EUR interests EUR
million million EUR million million EUR million million million million EUR million million
---------------- ---------- ---------- -------------- -------- ------------ -------- -------- ------- ----------- -------
Balance as at 1
January 2013 370.2 569.3 - (54.3) (168.1) 376.6 1,895.0 2,988.7 17.8 3,006.5
Shares issued to
employees
exercising
stock options 1.6 2.8 - - - - - 4.4 - 4.4
Share-based
compensation:
Options - - - - - 2.1 - 2.1 - 2.1
Hyperinflation
impact - - - - - - 2.1 2.1 - 2.1
Appropriation of
reserves - - - - - 0.3 (0.3) - - -
Purchase of
shares
held by
non-controlling
interest - - - - - - (5.1) (5.1) (8.2) (13.3)
Change of parent
company to
Coca-Cola
HBC AG 1,620.7 4,832.6 (6,472.1) (16.4) - 1.5 - (33.7) - (33.7)
Dividends (note
13) - (124.7) - - - - 1.2 (123.5) (4.5) (128.0)
---------------- ---------- ---------- -------------- -------- ------------ -------- -------- ------- ----------- -------
1,992.5 5,280.0 (6,472.1) (70.7) (168.1) 380.5 1,892.9 2,835.0 5.1 2,840.1
Profit for the
period net of
tax - - - - - - 65.6 65.6 (0.1) 65.5
Other
comprehensive
income for the
period, net of
tax(4) - - - - (68.9) 11.5 16.3 (41.1) - (41.1)
---------------- ---------- ---------- -------------- -------- ------------ -------- -------- ------- ----------- -------
Total
comprehensive
income for the
period net of
tax - - - - (68.9) 11.5 81.9 24.5 (0.1) 24.4
---------------- ---------- ---------- -------------- -------- ------------ -------- -------- ------- ----------- -------
Balance as at 28
June 2013 1,992.5 5,280.0 (6,472.1) (70.7) (237.0) 392.0 1,974.8 2,859.5 5.0 2,864.5
---------------- ---------- ---------- -------------- -------- ------------ -------- -------- ------- ----------- -------
(4) The amount included in the exchange equalisation reserve of
EUR68.9 million loss for the first half of 2013 represents the
exchange loss attributed to the owners of the parent of EUR68.7
million plus the share of equity method investments of EUR0.2
million loss.
The amount included in other reserves of EUR11.5 million gain
for the first half of 2013 consists of gains on valuation of
available-for-sale financial assets of EUR0.3 million, cash flow
hedges gain of EUR13.2 million (of which EUR6.6 million represents
revaluation gains for the period and EUR6.6 million represents
revaluation losses reclassified to profit and loss for the period)
and the deferred income tax loss of EUR2.0 million.
The amount of EUR81.9 million gain comprises a gain for the
period of EUR65.6 million plus actuarial gains of EUR19.7 million
less deferred income tax charge of EUR3.4 million.
The amount of EUR0.1 million loss included in non-controlling
interests for the first half of 2013 represents the share of
non-controlling interests in the retained earnings.
(5) As these condensed consolidated interim financial statements
are a continuation of the consolidated financial statements of
Coca-Cola Hellenic Bottling Company S.A., for the period 1 January
2012 to 25 April 2013 these components of equity reflect the
capital structure of Coca-Cola Hellenic Bottling Company S.A. and
following the reorganisation reflect the capital structure of
Coca-Cola HBC AG.
The accompanying notes form an integral part of these condensed
consolidated interim financial statements
Condensed consolidated interim cash flow statement (unaudited)
Six months Six months
to to
28 June 2013 29 June 2012(1)
Note EUR million EUR million
----------------------------------------------- ----- ------------- ----------------
Operating activities
Profit after tax for the period 65.5 89.4
Total finance costs, net 8 49.4 43.8
Share of results of equity method investments (4.4) (4.1)
Tax charged to the income statement 23.5 35.3
Depreciation of property, plant and equipment 4 191.2 190.2
Employee share options 2.1 3.2
Amortisation of intangible assets 4 0.6 1.4
327.9 359.2
(Gains) / losses on disposal of non-current
assets (2.7) 2.5
Increase in inventories (138.6) (161.8)
Increase in trade and other receivables (139.8) (167.1)
Increase in trade and other payables 222.5 260.2
Tax paid (19.5) (36.9)
----------------------------------------------- ----- ------------- ----------------
Net cash from operating activities 249.8 256.1
----------------------------------------------- ----- ------------- ----------------
Investing activities
Payments for purchases of property, plant
and equipment (146.9) (160.0)
Proceeds from sales of property, plant
and equipment 2.7 1.5
Net payments for investments (6.1) (25.0)
Interest received 2.7 4.1
Net cash used in investing activities (147.6) (179.4)
----------------------------------------------- ----- ------------- ----------------
Financing activities
Payments for buy-out minorities of Coca-Cola
Hellenic Bottling Company SA (1.0) -
Proceeds from shares issued to employees
exercising stock options 4.4 -
Purchase of shares held by non-controlling
interests 12 (15.3) (8.3)
Dividends paid (4.5) -
Proceeds from external borrowings 1,226.8 795.1
Repayments of external borrowings (609.3) (812.5)
Principal repayments of finance lease
obligations (8.0) (12.7)
Interest paid (73.0) (55.9)
Net cash from / (used in) financing
activities 520.1 (94.3)
----------------------------------------------- ----- ------------- ----------------
Increase / (decrease) in cash and cash
equivalents 622.3 (17.6)
----------------------------------------------- ----- ------------- ----------------
Movement in cash and cash equivalents
Cash and cash equivalents at 1 January 439.1 447.4
Increase / (decrease) in cash and cash
equivalents 622.3 (17.6)
Effect of changes in exchange rates - 1.4
Effect of consolidation of Coca-Cola
HBC AG 1.8 -
Hyperinflation impact on cash 0.3 (0.7)
----------------------------------------------- ----- ------------- ----------------
Cash and cash equivalents at the end
of the period 1,063.5 430.5
----------------------------------------------- ----- ------------- ----------------
(1) Comparative amounts have been adjusted where necessary to
reflect the adoption of accounting standards as detailed in note
1.
The accompanying notes form an integral part of these condensed
consolidated interim financial statements
Selected explanatory notes to the condensed consolidated interim
financial statements (unaudited)
1. General information and accounting policies
General information
On 11 October 2012, Coca-Cola HBC AG ('Coca-Cola HBC', the
'Company' or the 'Group') a Swiss company incorporated by Kar-Tess
Holding, announced a voluntary share exchange offer to acquire all
outstanding ordinary registered shares and all American depositary
shares of Coca-Cola Hellenic Bottling Company S.A., ('CCHBC SA').
As a result of the successful completion of this offer, on 25 April
2013 Coca-Cola HBC acquired 96.85% of the issued CCHBC SA shares,
including shares represented by American depositary shares, and
became the new parent company of the Group. On 17 June 2013,
Coca-Cola HBC completed its statutory buy-out of the remaining
shares of CCHBC SA that it did not acquire upon completion of its
voluntary share exchange offer. Consequently, CCHBC SA is now a
100% owned subsidiary of Coca-Cola HBC.
These transactions were treated as a reorganisation of an
existing entity that has not changed the substance of the reporting
entity. The consolidated financial statements of Coca-Cola HBC are
presented using the values from the consolidated financial
statements of CCHBC SA. On the date that the Coca-Cola HBC became
the new parent of the Group, April 25 2013, the statutory amounts
of share capital, share premium and treasury shares of the Company
have been recognized through an adjustment in the Statement of
Changes in Equity under heading 'Change of parent company to
Coca-Cola HBC AG'. The resulting difference has been recognised as
a component of equity under the heading "Group Reorganization
reserve". The shares of Coca-Cola HBC started trading in the
premium segment of the London Stock Exchange on April 29 (Ticker
symbol: CCH) and on the Athens Exchange (Ticker symbol: EEE) and
regular way trading in Coca-Cola HBC ADSs commenced on the NYSE
(Ticker symbol: CCH). On the date that CCHBC SA became subsidiary
of Coca-Cola HBC, the existing stock options were replaced with new
ones with identical terms but with underlying shares of Coca-Cola
HBC instead of CCHBC SA and the exercise price in GBP instead of
Euros using the original exercise price translated at the spot rate
at the date of the modification. The incremental fair value of the
new options over the fair value of the old options at the date of
the modification was immaterial.
Accounting policies
The accounting policies used in the preparation of the condensed
consolidated interim financial statements of Coca-Cola HBC are
consistent with those used in the annual financial statements of
CCHBC SA Group for the year ended 31 December 2012, except for the
adoption, as of 1 January 2013, of the International Financial
Reporting Standard ("IFRS") 13Fair Value Measurement; the amendment
to IFRS 7 Financial Instruments: Disclosures-Offsetting Financial
Assets and Financial Liabilities and the annual improvements to
IFRSs 2009-2011 cycle which included amendments to IAS 1 Financial
Statement Presentation; IAS 16 Property, plant and equipment; IAS
32 Financial Statement Presentation and IAS 34 Interim Financial
Reporting. The adoption of the new and amended standard did not
have a significant impact on the current or prior periods, apart
from additional disclosures resulting from the adoption of IFRS 13,
see note 6.
During the second quarter of 2013, the IASB issued IFRIC
Interpretation 21 Levies; Amendments to IAS 36: Recoverable Amount
Disclosures for Non Financial Assets and Amendments to IAS 39:
Novation of Derivatives and Continuation of Hedge Accounting. The
effective date for the amendments and new IFRIC Interpretation is 1
January 2014 and the Group is current assessing what impact, if
any, they will have on the consolidated financial statements.
In the fourth quarter of 2012 the Group early adopted IFRS 10
Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS
12 Disclosure of Interest in Other Entities and the revised IAS 19
Employee Benefits and details of the early adoption can be found in
the annual financial statements for the year ended 31 December
2012. The impact from the adoption of IFRS 11 and IAS 19 revised on
the first six months of 2012 is outlined in the tables below:
Selected explanatory notes to the condensed consolidated interim
financial statements (unaudited)
1. General information and accounting policies (continued)
Impact of change in accounting policies on condensed
consolidated interim income statement (unaudited)
Change in accounting Three months
to 29 June
2012
Three months policy (as presented)
to 29 June 2012
IFRS 11 IAS
(before adjustments) 19
Gross profit 740.6 (8.2) (0.1) 732.3
Operating profit 182.7 (5.3) (0.7) 176.7
Profit before tax 161.2 (1.7) (0.7) 158.8
Profit after tax 120.4 (1.7) (0.5) 118.2
Basic earnings per share
(EUR) 0.33 (0.01) - 0.32
Other comprehensive income
for the period, net of tax (27.5) 0.1 0.5 (26.9)
Total comprehensive income
for the period 92.9 (1.6) - 91.3
Change in accounting Six months
to 29 June
2012
Six months to policy (as presented)
29 June 2012
IFRS 11 IAS
(before adjustments) 19
Gross profit 1,237.0 (9.1) (0.2) 1,227.7
Operating profit 169.9 (4.2) (1.3) 164.4
Profit before tax 126.8 (0.8) (1.3) 124.7
Profit after tax 92.1 (1.7) (1.0) 89.4
Basic earnings per share
(EUR) 0.25 (0.01) - 0.24
Other comprehensive income
for the period, net of tax 13.9 - 1.0 14.9
Total comprehensive income
for the period 106.0 (1.7) - 104.3
Impact of change in accounting policies on condensed
consolidated interim statement of changes in equity (unaudited)
As at 29 June
Change in accounting 2012 (as presented)
As at 29 June
2012 policy
(before adjustments) IFRS 11 IAS 19
Total equity 2,900.5 5.9 (0.4) 2,906.0
Impact of change in accounting policies on condensed
consolidated interim cash flow statement (unaudited)
Change in accounting Six months
policy to 29 June
Six months to 2012
29 June 2012 IFRS 11 IAS 19 (as presented)
(before adjustments)
Net cash from operating
activities 269.4 (13.3) - 256.1
Net cash used in investing
activities (162.1) (17.3) - (179.4)
Net cash used in financing
activities (118.0) 23.7 (94.3)
Decrease in cash and cash
equivalents (10.7) (6.9) - (17.6)
---------------------------- ---------------------- ----------------- ---- ----------------
Selected explanatory notes to the condensed consolidated interim
financial statements (unaudited)
1. General information and accounting policies (continued)
Basis of preparation
Operating results for the second quarter of 2013 are not
indicative of the results that may be expected for the year ending
31 December 2013 because of business seasonality. Business
seasonality results from higher unit sales of the Group's products
in the warmer months of the year. The Group's methods of accounting
for fixed costs such as depreciation and interest expense are not
significantly affected by business seasonality. Costs that are
incurred unevenly during the financial year are anticipated or
deferred in the interim report only if it would also be appropriate
to anticipate or defer such costs at the end of the financial year.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual profit or
loss. These condensed consolidated interim financial statements are
prepared in accordance with International Financial Reporting
Standards ("IFRS") as issued by the International Accounting
Standards Board ("IASB") applicable to Interim Financial Reporting
("IAS 34"). These condensed consolidated interim financial
statements should be read in conjunction with the 2012 annual
financial statements of CCHBC SA Group, which include a full
description of the Group's accounting policies.
2. Exchange rates
The Group's reporting currency is the euro (EUR). Coca-Cola HBC
translates the income statements of subsidiary operations to the
euro at average exchange rates and the balance sheet at the closing
exchange rate for the period, except for subsidiaries operating in
a hyperinflationary environment as explained in Note 8.
The principal exchange rates used for transaction and
translation purposes in respect of one euro were:
Average for the six months Closing as at
period ended
28 June 2013 29 June 2012 28 June 2013 31 December
2012
------------------ -------------- ------------- ------------ -----------
US dollar 1.31 1.30 1.31 1.33
UK sterling 0.85 0.82 0.85 0.82
Polish zloty 4.19 4.23 4.32 4.09
Nigerian naira 203.87 202.76 203.50 206.72
Hungarian forint 295.90 292.63 297.28 291.50
Swiss franc 1.23 1.20 1.23 1.21
Russian Rouble 40.68 39.54 42.80 40.42
Romanian leu 4.38 4.39 4.43 4.43
Serbian dinar 111.94 111.13 114.49 113.46
Czech koruna 25.75 25.17 25.83 25.08
Ukrainian hryvnia 10.46 10.38 10.50 10.57
------------------ -------------- ------------- ------------ -----------
3. Segmental analysis
The Group has one business, being the production, distribution
and sale of non-alcoholic,
ready-to-drink beverages. The Group operates in 28 countries and
its financial results are reported in the following three
reportable segments:
Established: Austria, Cyprus, Greece, Italy, Northern Ireland,
Republic of Ireland and Switzerland.
Developing: Croatia, Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Poland, Slovakia and Slovenia.
Emerging: Armenia, Belarus, Bosnia and Herzegovina, Bulgaria,
FYROM, Moldova, Montenegro, Nigeria, Romania, Russia,
Serbia and Ukraine.
Selected explanatory notes to the condensed consolidated interim
financial statements (unaudited)
3. Segmental analysis (continued)
Information on the Group's segments is as follows:
Three months ended Six months ended
28 June 29 June 28 June 29 June
2013 2012 2013 2012
-------------------------------- ----------- ------------ ----------- ------------
Volume in unit cases(1)
(million)
Established countries 177.5 188.2 319.4 341.4
Developing countries 105.5 108.7 182.3 188.1
Emerging countries 294.7 289.7 502.7 484.1
-------------------------------- ----------- ------------ ----------- ------------
Total volume 577.7 586.6 1,004.4 1,013.6
-------------------------------- ----------- ------------ ----------- ------------
(1) One unit case corresponds to approximately 5.678 litres or
24 servings, being a typically used measure of volume. Volume data
is derived from unaudited operational data.
Three months ended Six months ended
28 June 29 June 28 June 29 June
2013 2012 2013 2012
-------------------------------- ----------- ------------ ----------- ------------
Net sales revenue (EUR million)
Established countries 697.2 743.9 1,267.7 1,364.1
Developing countries 308.5 319.7 525.7 548.9
Emerging countries 943.5 922.1 1,587.7 1,506.1
-------------------------------- ----------- ------------ ----------- ------------
Total net sales revenue 1,949,2 1,985.7 3,381.1 3,419.1
-------------------------------- ----------- ------------ ----------- ------------
Operating profit (EUR million)
Established countries 30.5 56.3 33.9 65.0
Developing countries 15.4 14.6 0.5 1.0
Emerging countries 99.4 105.8 99.6 98.4
-------------------------------- ----------- ------------ ----------- ------------
Total operating profit 145.3 176.7 134.0 164.4
-------------------------------- ----------- ------------ ----------- ------------
Reconciling items (EUR million)
Finance costs, net (29.7) (22.0) (49.4) (43.8)
Tax (30.1) (40.6) (23.5) (35.3)
Share of results of equity
method investments 4.4 4.1 4.4 4.1
Non-controlling interests 0.1 (0.7) 0.1 (0.8)
-------------------------------- ----------- ------------ ----------- ------------
Profit after tax attributable
to owners of the parent 90.0 117.5 65.6 88.6
-------------------------------- ----------- ------------ ----------- ------------
4. Tangible and intangible assets
Property, plant Intangible
and equipment assets
EUR million EUR million
------------------------------------------- --------------- ------------
Opening net book value as at 1 January
2013 3,041.4 1,944.6
Additions 169.4 -
Effect from the consolidation of Coca-Cola
HBC AG 0.2 -
Reclassified from assets held for
sale 4.7 -
Disposals (4.3) -
Depreciation and amortisation (191.2) (0.6)
Foreign exchange differences (51.9) (19.2)
Effect of hyperinflation 0.5 -
------------------------------------------- --------------- ------------
Closing net book value as at 28 June
2013 2,968.8 1,924.8
------------------------------------------- --------------- ------------
Selected explanatory notes to the condensed consolidated interim
financial statements (unaudited)
5. Net debt
As at
28 June 2013 31 December 2012
EUR million EUR million
-------------------------- ------------ ----------------
Long-term borrowings 1,876.0 1,604.7
Short-term borrowings 911.7 555.0
Cash and cash equivalents (1,063.5) (439.1)
-------------------------- ------------ ----------------
Net debt 1,724.2 1,720.6
-------------------------- ------------ ----------------
In the second quarter, the Group successfully issued EUR800
million principal amount of 7-year fixed-rate notes with a coupon
of 2.375%, and completed a fixed price tender offer for the
outstanding EUR500 million with a 7.875% notes due January 2014,
(the "2014 Notes"), with EUR183 million of the 2014 Notes having
been tendered and cancelled. The net proceeds of the new issue,
after financing the repurchase of EUR183 million of the 2014 Notes,
will be used towards the refinancing of certain upcoming bond
maturities, namely the $500 million notes due September 2013 and
the remaining EUR317 million notes due January 2014.
During the first quarter of 2013, the EUR500 million bond
maturing in January 2014 was reclassified from long term borrowings
to short term.
In order to affect the exchange offer described in Note 1,
Coca-Cola HBC had available a EUR500 million Bond Bridge facility
(all undrawn), and a Statutory Buy-Out Facility for up to EUR550
million. On 18th June 2013 the EUR500 million Bond Bridge facility
was cancelled, and the Statutory Buy-Out Facility limit was reduced
to EUR55 million. The amount drawn under the Statutory Buy-Out
Facility of EUR45.5 million was repaid on 26 July 2013 and the
facility was cancelled.
6. Fair value
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk, interest rate risk,
commodity price risk), credit risk, liquidity risk and capital
risk. There have been no changes in the risk management policies
since the year end.
The Group's financial instruments recorded at fair value are
included in Level 2 within the fair value hierarchy and comprise
derivatives. There have been no changes in valuation techniques and
inputs used to determine their fair value since 31 December 2012
(as described in the 2012 Annual Report available on the CCHBC SA's
web site: www.coca-colahellenic.com). As at 28 June 2013 the total
financial assets included in Level 2 was EUR43.8 million and the
total financial liabilities EUR140.6 million. There were no
transfers between level 1,2 or 3 during the first half of 2013. The
fair value of bonds and notes payable as at 28 June 2013, including
the current portion, is EUR2,533.6 million, compared to their book
value, including the current portion of EUR2,470.3 million.
7. Restructuring costs
Restructuring costs amounted to EUR16.2 million before tax in
the second quarter of 2013. The Group recorded EUR14.9 million,
EUR0.3 million and EUR1.0 million of restructuring charges in its
established, developing and emerging countries respectively. For
the second quarter of 2012, restructuring costs amounted to EUR4.7
million, of which EUR1.3 million, EUR1.0 million and EUR2.4 million
related to the Group's established, developing and emerging
countries, respectively. The restructuring costs mainly concern
redundancy costs.
Restructuring costs amounted to EUR22.4 million before tax in
the first half of 2013. The Group recorded EUR21.0 million, EUR0.3
million and EUR1.1 million of restructuring charges in its
established, developing and emerging countries respectively. For
the first half of 2012, restructuring costs amounted to EUR18.1
million, of which EUR10.3 million, EUR4.6 million and EUR3.2
million related to the Group's established, developing and emerging
countries, respectively. The restructuring costs mainly concern
redundancy costs.
Selected explanatory notes to the condensed consolidated interim
financial statements (unaudited)
8. Total finance costs, net
Three months ended
28 June 2013 29 June 2012
EUR million EUR million
------------------------------------ ------------ ------------
Interest income (2.6) (3.1)
Finance costs 31.8 24.1
Net foreign exchange losses/(gains) 0.5 (0.1)
Loss on net monetary position - 1.1
Total finance costs, net 29.7 22.0
------------------------------------ ------------ ------------
Six months ended
28 June 2013 29 June 2012
EUR million EUR million
------------------------------ ------------ ------------
Interest income (4.1) (5.3)
Finance costs 52.8 47.6
Net foreign exchange gains (0.3) (0.2)
Loss on net monetary position 1.0 1.7
Total finance costs, net 49.4 43.8
------------------------------ ------------ ------------
Total net finance costs for the second quarter and half of 2013
were higher by EUR7.7 million and by EUR5.6 million respectively,
compared to the same periods last year, mainly due to the higher
interest expense reflecting the tender offer for the EUR500 million
bond that matures in January 2014.
Hyperinflation
Belarus has been considered to be a hyperinflationary economy
since the fourth quarter of 2011. The three year cumulative
inflation exceeded 100% and therefore Belarus is consolidated in
terms of the measuring unit at the balance sheet date and
translated at the closing exchange rate. The restatement was based
on conversion factors derived from the Belarus Consumer Price Index
(CPI) as compiled by the National Statistical Committee of the
Republic of Belarus. The conversion factor used for June 2013 was
1.069 which resulted in a net monetary loss for the first half of
2013 of EUR1.0 million.
9. Tax
The Group's effective tax rate for 2013 may differ from the
parent company statutory tax rate as a consequence of a number of
factors, the most significant of which are: the statutory tax rates
of the countries in which the Group operates, the non-deductibility
of certain expenses, non-taxable income and one off tax items.
10. Earnings per share
Basic earnings per share is calculated by dividing the net
profit attributable to the owners of the parent by the weighted
average number of shares outstanding during the period (second
quarter of 2013: 363,203,865, first half of 2013: 363,164,293,
second quarter of 2012: 363,117,207, first half of 2012:
363,114,849). Diluted earnings per share is calculated by adjusting
the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive ordinary shares arising from
exercising employee stock options.
Selected explanatory notes to the condensed consolidated interim
financial statements (unaudited)
11. Share capital
During 2012, the Board of Directors resolved to increase the
CCHBC SA's share capital by issuing 5,334 new ordinary shares on 21
March 2012 and 6,165 new ordinary shares on 27 September 2012,
following the exercise of stock options pursuant to the CCHBC SA's
employees' stock option plan. Total proceeds from the issuance of
the shares under the stock option plan amounted to EUR0.1
million.
On 25 June 2012, the Annual General Meeting of shareholders of
CCHBC SA resolved to decrease the share capital of Coca-Cola
Hellenic Bottling Company S.A. by the amount of EUR124.6 million by
decreasing the nominal value of CCHBC SA's share by EUR0.34 per
share, from EUR1.50 to EUR1.16 per share, and the return of the
amount of the decrease to CCHBC SA's shareholders in cash, i.e. a
return of EUR0.34 per share. Furthermore, on the same date, it was
resolved to decrease the share capital of CCHBC SA's by the amount
of EUR55.0 million by decreasing the nominal value of the CCHBC
SA's shares by EUR0.15 per share, from EUR1.16 to EUR1.01 per
share, in order to extinguish accumulated losses of the parent
company CCHBC SA by an equal amount.
On 25 April 2013, Coca-Cola HBC acquired 96.85% (355,009,014
shares)of the issued CCHBC SA shares, including shares represented
by American depositary shares, following the successful completion
of its voluntary share exchange offer and became the new parent
company of the Group.
On 17 June 2013, Coca-Cola HBC completed its statutory buy-out
of the remaining shares of CCHBC SA that it did not acquire upon
completion of its voluntary share exchange offer. Consequently,
CCHBC SA is now a 100% owned subsidiary of Coca-Cola HBC. Out of
the remaining 3.15% interest acquired in CCHBC SA, representing
11,544,593 shares, 11,467,306 shares were exchanged for equal
number of Coca-Cola HBC shares and 77,287 shares were acquired for
a cash consideration of EUR1.0 million.
In the second quarter of 2013, the Board of Directors resolved
to increase the Coca-Cola HBC's share capital by issuing 273,855
new ordinary shares following the exercise of stock options
pursuant to the Coca-Cola HBC AG's employees' stock option plan.
Total proceeds from the issuance of the shares under the stock
option plan amounted to EUR4.4 million.
Following the above changes, and including the initial 14,925
ordinary shares of Coca-Cola HBC, that are held by the Company as
treasury shares, on June 2013 the share capital of the Group
amounted to EUR1,992.5 million and comprised 366,765,000 shares
with a nominal value of CHF 6.70 each.
12. Non-controlling interests
On 8 June 2011, the Board of Directors of the Coca-Cola HBC's
subsidiary Nigerian Bottling Company plc ("NBC") resolved to
propose a scheme of arrangement between NBC and its minority
shareholders, involving the cancellation of part of the share
capital of NBC. The transaction was approved by the Board of
Directors and General Assembly of NBC on 8 June 2011 and 22 July
2011 respectively and resulted in the acquisition of the remaining
33.6% of the voting shares of NBC bringing the Group's interest in
the subsidiary to 100%. The transaction was completed in September
2011 and NBC was de-listed from the Nigerian Stock Exchange. The
consideration for the acquisition of non controlling interests was
EUR100.2 million, including transaction costs of EUR1.8 million,
out of which EUR72.4 million was paid as of 28 June 2013 (as of 31
December 2012: EUR70.4 million). The difference between the
consideration and the carrying value of the interest acquired
(EUR60.1million) has been recognised in retained earnings while the
accumulated components recognised in other comprehensive income
have been reallocated within the equity of the Group.
On 14 January 2013, the Group acquired 14% of Coca-Cola Hellenic
Bottling Company Bulgaria AD, bringing the Group's interest in the
subsidiary to 99.39%. The consideration paid for the acquisition of
non controlling interests acquired was EUR13.3 million and the
carrying value of the additional interest acquired was EUR8.2
million. The difference between the consideration and the carrying
value of the interest acquired has been recognised in retained
earnings.
Selected explanatory notes to the condensed consolidated interim
financial statements (unaudited)
13. Dividends
On 19 June 2013, the extraordinary general meeting of Coca-Cola
HBC AG approved the distribution of a EUR0.34 dividend per share.
The total dividend amounted to EUR124.7 million and was paid on 23
July 2013.
14. Contingencies
There have been no significant changes in contingencies since 31
December 2012 (as described in the 2012 Annual Report of CCHBC SA
available on the Company's web site:
www.coca-colahellenic.com).
15. Commitments
As of 28 June 2013 the Group has capital commitments of EUR97.1
million (31 December 2012: EUR90.3 million), which mainly relate to
plant and machinery equipment.
16. Number of employees
The average number of full-time equivalent employees in the
first half of 2013 was 38,167 (40,293 for the first half of
2012).
17. Related party transactions
a) The Coca-Cola Company
As at 28 June 2013, The Coca-Cola Company and its subsidiaries
(collectively, 'TCCC") indirectly owned 23.2% (2012: 23.2%) of the
issued share capital of Coca-Cola HBC.
Total purchases of concentrate, finished products and other
materials from TCCC and its subsidiaries during the first half and
the second quarter of 2013 amounted to EUR715.8 million and
EUR394.2 million (EUR702.3 million and EUR400.2 million in the
respective prior year period). Total net contributions received
from TCCC for marketing and promotional incentives during the same
period amounted to EUR42.1 million and EUR26.4 million (EUR27.2
million and EUR16.2 million in the respective prior year
period).
During the first half and the second quarter of 2013, the Group
sold EUR13.8 million and EUR7.7million of finished goods and raw
materials respectively to TCCC (EUR12.2 million and EUR4.4 million
in the respective prior year period) while other income from TCCC
was EUR9.2 million and EUR7.5 million respectively (EUR9.0 million
and EUR5.9 million in the prior year period). Other expenses from
TCCC amounted to EUR2.6 million and EUR1.3 million for the first
half and second quarter of 2013 (EUR2.4 million for both periods
under review).
As at 28 June 2013, the Group had a total amount of EUR79.6
million (EUR49.6 million as at 31 December 2012) due from TCCC, and
had a total amount of EUR219.3 million (EUR154.0 million as at 31
December 2012) due to TCCC.
b) Kar-Tess Holding
Kar-Tess Holding
As at 28 June 2013 Coca-Cola HBC owed EUR1.6 million to Kar-Tess
Holding relating to the acquisition of the initial Coca-Cola HBC
shares.
Selected explanatory notes to the condensed consolidated interim
financial statements (unaudited)
17. Related party transactions (continued)
Frigoglass S.A. ('Frigoglass')
Frigoglass, a company listed on the Athens Exchange, is a
manufacturer of coolers, glass bottles and crowns. Frigoglass is
related to Coca-Cola HBC by way of a 44.1% (2012: 44.1%) ownership
by the parent of Kar-Tess Holding, which as at 28 June 2013 owned
23.3% (2012: 23.3%) of the issued share capital of Coca-Cola HBC.
Frigoglass has a controlling interest in Frigoglass Industries
Limited, a company in which Coca-Cola HBC has a 23.9% effective
interest, through its investment in NBC.
During the first half and the second quarter of 2013, the Group
made purchases of EUR63.9 million and EUR40.4 million respectively
(EUR94.9 million and EUR15.6 million in the prior-year periods) of
coolers, raw materials and containers from Frigoglass and its
subsidiaries and incurred maintenance and other expenses of EUR5.1
million and EUR2.5 million respectively (EUR4.3 million and EUR3.0
million in the prior-year periods). Other income from Frigoglass
both during the first half and the second quarter of 2013 was
EUR0.1 million (EUR0.6 million and EUR0.5 million respectively in
the prior-year periods). As at 28 June 2013, Coca--Cola HBC owed
EUR25.0 million (EUR21.4 million as at 31 December 2012) to, and
was owed EUR0.2 million (EUR1.2 million as at 31 December 2012) by
Frigoglass.
c) Other related parties
During the first half and the second quarter of 2013, the Group
purchased EUR66.8 million and EUR42.3 million of raw materials and
finished goods respectively (EUR70.3 million and EUR49.2 million in
the prior year period). In addition, the Group received
reimbursement for direct marketing expenses incurred of EUR0.4
million for both of the first half and the second quarter of 2013
(EUR0.1 million and EUR0.1 million in the prior year period).
Furthermore during the first half and the second quarter of 2013,
the Group incurred other expenses of EUR18.6 million and EUR9.9
million (EUR3.1 million and EUR0.5 million in the prior year
period) and recorded income of EUR3.4 million and EUR0.3 million
respectively (EUR0.2 million and EUR0.2 million in the prior year
period). As at 28 June 2013, the Group owed EUR19.8 million (EUR8.1
million as at 31 December 2012) to, and was owed EUR2.9 million
(EUR0.4 million as at 31 December 2012) by other related
parties.
d) Joint Ventures
During the first half and the second quarter of 2013, the Group
purchased EUR13.1 million and EUR7.8 million of finished goods
(EUR14.7 million and EUR9.0 million in the prior-year periods) from
joint ventures. In addition, during the first half and the second
quarter of 2013, the Group incurred expenses of EUR0.2 million and
EUR 0.1 million (EUR0.1 million and nil respectively in the
prior-year periods) and recorded other income for the first half
and the second quarter of EUR0.2 million and nil from joint
ventures (EUR0.2 million and nil in the prior-year periods). As at
28 June 2013, the Group owed EUR65.2 million (EUR67.5 million as at
31 December 2012) to, and was owed EUR5.9 million (EUR19.5 million
as at 31 December 2012) by joint ventures.
There were no transactions between Coca-Cola HBC and the
directors and senior management except for remuneration for the
period ended 28 June 2013, as well as the prior year period.
There were no other significant transactions with related
parties for the period ended 28 June 2013.
18. Subsequent events
On 23 July 2013 the delisting of CCHBC SA from the Athens
Exchange was approved by the HCMC and effected as of the same date.
Coca-Cola HBC will continue to have a secondary listing on the
Athens Exchange.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UBVAROSAWRUR
Coca-cola Hbc (LSE:CCH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Coca-cola Hbc (LSE:CCH)
Historical Stock Chart
From Jul 2023 to Jul 2024
