TIDMCCH
RNS Number : 7927E
Coca-Cola HBC AG
11 May 2017
FIRST QUARTER 2017 TRADING UPDATE
YEAR STARTS WELL WITH GOOD REVENUE GROWTH
Coca-Cola HBC AG, a leading bottler of the brands of The
Coca-Cola Company, today announces its 2017 Q1 trading update.
First quarter highlights
-- Good progress on FX-neutral revenue growth, up 5.2%.
-- Volumes increased by 0.7% in the quarter. Excluding the
impact of the timing of Easter, which shifted into Q2 this year,
volumes grew in the majority of our countries.
- Established markets volume down 2.2%, reflecting an improving
trend, excluding the impact of Easter. Volume growth in Greece and
Ireland partly offset lower volume in Switzerland, and Italy
following the de-listing of low-value water brands.
- Developing markets segment volume down 3.6%, largely driven by
lower volume in Poland, where our focus continues to be on driving
value.
- Emerging markets segment volume up 4.0%, with broad-based
growth across our markets. Russia returned to growth, outperforming
a weak market, and Nigeria volume continued to grow, despite
macro-economic challenges and significant price increases.
-- FX-neutral revenue per case increased by 4.5%, reflecting our
continued focus on revenue growth management through improved
package and category mix as well as price increases.
- In Established markets, positive category and package mix was
more than offset by adverse channel mix and an increase in
promotional activity, leading to a decrease in FX-neutral revenue
per case of 0.2%.
- In Developing markets, FX-neutral revenue per case improved by
4.1% driven by better category and package mix.
- Price increases taken in the Emerging markets segment, mainly
in Nigeria, drove the 10.3% FX-neutral revenue per case growth.
FX-neutral
Net sales net sales
Net sales revenue revenue per
Q1 2017 vs. Volume revenue per unit unit case(1)
Q1 2016 (%) (%) case (%) (%)
------------------ ------- ---------- ---------- --------------
Total Group 0.7 4.5 3.8 4.5
Established
markets -2.2 -2.5 -0.3 -0.2
Developing
markets -3.6 1.1 4.9 4.1
Emerging markets 4.0 12.6 8.3 10.3
------------------ ------- ---------- ---------- --------------
(1) For details on Alternative Performance Measures ('APMs')
refer to 'Alternative Performance Measures' and 'Definitions and
reconciliations of APMs' sections.
Dimitris Lois, Chief Executive Officer of Coca-Cola HBC AG,
commented:
"The business has delivered good revenue growth in the first
quarter, strong momentum in price and mix and improvement in volume
despite the late Easter impact.
"We are pleased with the underlying trends in the business. Our
commercial initiatives continue to deliver good results, and add to
our confidence going into the remainder of the year."
Trading
Group volume was up 0.7% in the quarter with varied trading
conditions across our 28 countries. Improving underlying
performances in many of our countries compared to the prior-year
quarter were partially offset by the timing of Easter, which
shifted into Q2 this year, and the impact of our focus on driving
value in certain markets such as Poland and Italy.
The benefits of our continued focus on revenue growth management
through improved category and package mix in all segments, coupled
with price increases, predominantly in Nigeria and other Emerging
markets, resulted in a substantial improvement in FX-neutral net
sales revenue per unit case, which grew by 4.5% in the quarter. Net
sales revenue grew by 4.5%, after a 0.7% adverse currency
impact.
Established markets segment
Established markets volume declined by 2.2% in the quarter,
compared to a 2.7% decline in the prior-year quarter. This year's
performance was impacted by the shift in the timing of Easter,
which is an important volume driver in countries such as Italy,
Austria and Switzerland, and the de-listing of low-value water
brands in Italy. Moderate volume growth in Greece and Ireland
helped offset some of the volume decline.
Italy volume declined by mid single digits, impacted by the
delisting of low-value water brands. Coca-Cola Zero and Sprite,
were the two brands which grew in the otherwise declining sparkling
category. Energy continued to grow, driven mainly by Monster's good
performance in the organised trade channel.
Volume in Greece increased by mid single digits, driven by
growth in low-calorie Sparkling drinks, continued positive momentum
in Water and increased Monster sales. Macroeconomic conditions and
the trading environment remain challenging.
Austria volume declined marginally. A good performance across
most Sparkling beverage brands was more than offset by a decline in
Still drinks.
In Switzerland, declines were posted across all categories,
driven by the timing of promotional activity and an increase in
cross-border shopping. Good growth in Fanta helped arrest the
decline to mid single digits.
Net sales revenue in Established markets declined by 2.5% in the
quarter. Volume decline and adverse channel mix with higher
contribution of the organised trade, more than offset the benefits
of favourable category and package mix. FX-neutral net sales
revenue per case decreased by 0.2% in the quarter.
Developing markets segment
Volume in Developing markets declined by 3.6%, compared to a
1.9% increase in the prior-year period. The shift in the timing of
Easter had a large part to play in volume performance, particularly
in Poland.
Volume in Poland declined by high single digits, reflecting the
Easter shift as well as our focus on driving value through
increased revenue growth management initiatives, which boosted
FX-neutral net sales revenue per case in the quarter. Water
declined by high teens following our commercial decision to
downsize the 1.75 litre frequency pack. While Sparkling also
declined, we saw double-digit growth from Coke Zero as well as
Fanta following new flavour launches. Energy, driven by Monster, as
well as Juice, continued to grow well.
In Hungary, volume was broadly flat, with growth in Sparkling
and Water offset by declines in Juice and Ready-to-Drink Tea. In
Sparkling, Coke Zero registered high-teens growth, as did Sprite,
following the launch of Sprite Zero last year. Energy continued to
perform well following the launch of Monster Ultra last year.
Volume in the Czech Republic grew by mid single digits driven by
growth in all categories except Water. A good performance in
Trademark Coke, particularly Coca-Cola Zero, as well as Sprite,
more than offset declines in Fanta and Coca-Cola Light. Energy also
grew well, delivering double-digit growth.
Net sales revenue in Developing markets grew by 1.1% in the
quarter. FX-neutral net sales revenue per case improved by 4.1% as
a result of improved category and package mix, more than offsetting
the decline in volume in the segment.
Emerging markets segment
Emerging markets volume increased by 4.0% with a strong
performance from almost all countries in the segment. Russia grew
in a declining non-alcoholic ready-to-drink (NARTD) market, and
Nigeria volume continued to grow despite macro-economic challenges
and significant price increases. All key categories grew except for
Juice.
Russia volume showed the first signs of recovery, registering
very low single-digit volume growth for the first time in eight
quarters, whilst the NARTD market remained in decline. Growth was
driven by mid single-digit increase in Sparkling whilst all other
major categories declined. Despite these early positive signs, we
expect the recovery to be volatile and maintain our view of 2017 as
the year of volume stabilisation.
In Nigeria, volume grew by mid single digits, a positive
performance in a challenging macroeconomic environment and despite
the significant price increases we have been taking since the
fourth quarter of 2016. Improved product availability and sustained
peace in the North following years of insurgency supported the
positive performance. Volume growth was driven by Sparkling and
Water, partially offset by a decline in Juice. In February, we
entered the Energy category with the launch of Monster.
In Romania, volume grew by mid single digits, registering the
ninth consecutive quarter of growth with all categories growing
except for Water. Sparkling reported strong growth, largely a
result of high single-digit growth in Trademark Coke.
Volume in Ukraine increased by low double digits, driven by
strong growth in Sparkling, particularly in Trademark Coke, which
was supported by the launch of Coke Zero in February.
Net sales revenue increased by 12.6% with benefits from volume
and price increases, improved category and package mix more than
offsetting adverse currency movements, predominantly from the
Nigerian Naira. FX-neutral net sales revenue per case accelerated
its growth, increasing by 10.3% in the quarter.
Category highlights
Our commercial initiatives to enhance revenue growth are
delivering results. Through new Occasion, Brand, Price, Pack and
Channel choices and the One Brand strategy, we are taking proactive
steps to support growth, which is particularly evident in the
sparkling beverages category.
In Sparkling beverages, we achieved 1.3% volume growth with
Nigeria, Russia, Romania and Ukraine, more than offsetting weakness
in Italy, Poland and Switzerland.
Water volume declined marginally, down 0.1%, with growth in the
Emerging and Established segments being offset by declines in
Developing. In the quarter, we continued with the de-listing of
low-value water brands in Italy and made changes to our package
sizes in Poland. Juice declined by 4.4% with losses across all
segments, notably in Russia, Nigeria and Ireland. The Energy
category increased volume by 12.4%, driven by good performance in
Monster and growth in all segments. Ready-to-Drink Tea performance
remained weak with low single-digit declines, driven by Switzerland
and Russia partially offset by growth in Poland, Romania and
Ukraine.
Single-serve contribution continued to improve in the quarter,
up 1.2 percentage points with all segments contributing to the mix
improvement. Single-serve mix improved in both Sparkling, by 0.8
percentage points and Water, by 1.9 percentage points.
Supplementary information
Q1 Q1 %
Group 2017 2016 Change
Volume (m unit cases) 442.8 439.6 0.7%
Net sales revenue (EUR
m) 1,376.7 1,317.0 4.5%
Net sales revenue per
unit case (EUR) 3.11 3.00 3.8%
FX-neutral net sales
revenue per unit case(1)
(EUR) 3.11 2.98 4.5%
Established markets
Volume (m unit cases) 129.1 132.0 -2.2%
Net sales revenue (EUR
m) 521.2 534.5 -2.5%
Net sales revenue per
unit case (EUR) 4.04 4.05 -0.3%
FX-neutral net sales
revenue per unit case(1)
(EUR) 4.04 4.05 -0.2%
Developing markets
Volume (m unit cases) 78.2 81.1 -3.6%
Net sales revenue (EUR
m) 226.6 224.1 1.1%
Net sales revenue per
unit case (EUR) 2.90 2.76 4.9%
FX-neutral net sales
revenue per unit case(1)
(EUR) 2.90 2.78 4.1%
Emerging markets
Volume (m unit cases) 235.5 226.5 4.0%
Net sales revenue (EUR
m) 628.9 558.4 12.6%
Net sales revenue per
unit case (EUR) 2.67 2.47 8.3%
FX-neutral net sales
revenue per unit case(1)
(EUR) 2.67 2.42 10.3%
(1) For details on APMs refer to 'Alternative Performance
Measures' and 'Definitions and reconciliations of APMs'
sections.
Coca-Cola HBC Group
Coca-Cola HBC is a leading bottler of The Coca-Cola Company with
an annual sales volume of more than 2 billion unit cases. It has a
broad geographic footprint with operations in 28 countries serving
a population of approximately 595 million people. Coca-Cola HBC
offers a diverse range of primarily non-alcoholic ready to drink
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 is ranked
beverage industry leader in the Dow Jones Sustainably World and
Europe Indices and is also included in the FTSE4Good Index.
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). For more information, please visit
http://www.coca-colahellenic.com.
Conference call
Coca-Cola HBC will host a conference call for investors and
analysts to discuss the trading update for the first quarter of
2017 on 11 May 2017 at 10:00 am Swiss time (9:00 am London, 11:00
am Athens, and 4:00 am New York time). A recording of the call in
downloadable MP3 format and its transcript will be made available
on the Company website
(http://www.coca-colahellenic.com/investorrelations).
Next event
Half-year financial report
10 August 2017 and results announcement
Enquiries
Coca--Cola HBC Group
Basak Kotler
Investor Relations Tel: +44 20 37 444 231
Director basak.kotler@cchellenic.com
Caroline Crampton
Investor Relations Tel: +44 20 37 444 230
Manager caroline.crampton@cchellenic.com
Vasso Aliferi
Investor Relations Tel: +30 210 6183 341
Manager vasso.aliferi@cchellenic.com
International media
contact:
Teneo Blue Rubicon Tel: +44 20 7260 2700
Rob Morgan robert.morgan@teneobluerubicon.com
Anushka Mathew anushka.mathew@teneobluerubicon.com
Greek media contact:
V+O Communications Tel: +30 211 7501219
Argyro Oikonomou ao@vando.gr
Special Note Regarding the Information set out herein
Unless otherwise indicated, this trading update 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").
Forward-Looking Statements
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 2017 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. 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 2016 Integrated Annual Report for Coca-Cola HBC AG
and its subsidiaries. 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 this trading update, 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.
Alternative Performance Measures
The Group uses certain Alternative Performance Measures ("APMs")
in making financial, operating and planning decisions as well as in
evaluating and reporting its performance. These APMs provide
additional insights and understanding to the Group's underlying
operating and financial performance. The APMs should be read in
conjunction with and do not replace by any means the directly
reconcilable International Financial Reporting Standards ("IFRS")
line items.
Definitions and reconciliations of APMs
FX-neutral APMs
The Group evaluates its operating and financial performance on
an FX-neutral basis (i.e. without giving effect to the impact of
variation of foreign currency exchange rates from period to
period). FX-neutral APMs are calculated by adjusting prior period
amounts for the impact of exchange rates applicable to the current
period. FX-neutral measures enable users to focus on the
performance of the business on a basis which is not affected by
changes in foreign currency exchange rates applicable to the
Group's operating activities from period to period.
FX-neutral net sales revenue and FX-neutral net sales revenue
per unit case
FX-neutral net sales revenue and FX-neutral net sales revenue
per unit case are calculated by adjusting prior-period net sales
revenue for the impact of changes in exchange rates applicable in
the current period.
The calculations of the FX-neutral net sales revenue and
FX-neutral net sales revenue per unit case and the reconciliation
to the most directly related measures calculated in accordance with
IFRS is as follows:
Reconciliation of FX-neutral net sales revenue per
unit case (numbers in EUR million unless otherwise
stated)
First quarter 2017
Established Developing Emerging Consolidated
Net sales revenue 521.2 226.6 628.9 1,376.7
Currency impact - - - -
------------- ------------ ---------- -------------
FX-neutral net sales
revenue 521.2 226.6 628.9 1,376.7
Volume (m unit cases) 129.1 78.2 235.5 442.8
------------- ------------ ---------- -------------
FX-neutral net sales
revenue per unit case
(EUR) 4.04 2.90 2.67 3.11
------------- ------------ ---------- -------------
First quarter 2016
Established Developing Emerging Consolidated
Net sales revenue 534.5 224.1 558.4 1,317.0
Currency impact (0.4) 1.6 (9.8) (8.6)
------------- ------------ ---------- -------------
FX-neutral net sales
revenue 534.1 225.7 548.6 1,308.4
Volume (m unit cases) 132.0 81.1 226.5 439.6
FX-neutral net sales
revenue per unit case
(EUR) 4.05 2.78 2.42 2.98
------------- ------------ ---------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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