TIDMCCH
RNS Number : 1926O
Coca-Cola HBC AG
03 November 2016
THIRD QUARTER 2016 TRADING UPDATE
SOLID QUARTER CONFIRMS FULL-YEAR EXPECTATIONS
Coca-Cola HBC AG, a leading bottler of the brands of The
Coca-Cola Company, today announces its 2016 Q3 trading update.
Third quarter highlights
-- Volume trends developed as expected in the quarter with a
1.0% decline against very tough comparatives in the prior-year
quarter when volumes were boosted by incremental demand for Water;
volume declined by 0.3% in the first nine months
- Established market volumes continued the trend seen in the
first half of the year on much tougher comparatives in the quarter;
the 2.5% volume decline was driven by Water in Italy and
Austria
- Developing market volumes declined in the quarter by 4.2%,
cycling 10.4% growth in the prior-year quarter
- Volume growth in the Emerging markets was 1.3% - an
improvement on the first-half trend, owing to continued growth in
Nigeria and Romania and a deceleration in volume decline in
Russia
-- Our focus on revenue growth management delivered a 3.8%
improvement in revenue per case on an FX-neutral basis, with better
category and package mix in all segments
- Promotional pressures and adverse channel mix impacted
FX-neutral revenue per case performance in the Established markets,
down 0.3%
- Effective management of promotions and reduced deflationary
pressure drove FX-neutral revenue per case in the Developing
markets segment, up 3.5%, reversing the negative trend in the first
half of the year
- Price increases taken in Emerging markets drove the 8.1%
FX-neutral revenue per case growth, accelerating our progress
compared to the first half of the year
Net sales FX-neutral
Net sales revenue net sales revenue
Q3 2016 vs. Volume revenue per unit per unit case(1)
Q3 2015 growth (%) (%) case (%) (%)
-------------------- ------- ---------- ---------- -------------------
Total Group -1.0 -1.9 -0.7 3.8
Established
markets -2.5 -3.6 -1.0 -0.3
Developing markets -4.2 -2.3 2.0 3.5
Emerging markets 1.3 -0.1 -1.5 8.1
-------------------- ------- ---------- ---------- -------------------
(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:
"Performance in the third quarter was as expected, with lower
volume reflecting the exceptional growth we saw in the third
quarter of 2015. We are pleased with our commercial initiatives,
which delivered an improvement in currency-neutral net sales
revenue per case. The business is trading well and we remain
confident in meeting our expectations for the full year."
Trading
Trading conditions in our markets remained broadly consistent
with the first half of the year, leading to volume performance in
line with our expectations for the quarter. Volume growth rates
were impacted by the tough comparatives in the prior-year quarter
in the Developing and Established market segments, when the
exceptionally hot summer in some of our countries boosted demand,
mainly for Water.
Group volume was down by 1.0% in the quarter compared to 5.4%
growth in the prior-year quarter. Our focus on revenue growth
management and better category and package mix, combined with price
increases taken in Emerging markets, delivered a 3.8% improvement
in revenue per case on an FX-neutral basis. As a result, FX-neutral
net sales revenue growth in the quarter was 2.8%. Including the
4.5% adverse impact from currency movements, net sales revenue
declined by 1.9% compared to the prior-year quarter.
Established markets segment
Established markets volume declined by 2.5% in the quarter,
compared to a 7.4% increase in the prior-year quarter, driven by
Water in Italy and Austria and tough comparatives due to a hot
summer in 2015. A good performance from Coke Zero and Energy along
with successful Coke Life launches in Austria and Italy partly
offset declines led by Water.
Italy volume declined by mid single digits against the very
tough comparatives set by double-digit volume increase in the
prior-year period. Volume increases in Coke Life, Coke Zero and
Fanta partly offset declines in Coca-Cola Regular and Water. Energy
also continued to grow, driven by the distribution expansion of
Monster.
Volume in Greece increased by low single digits, driven by Water
which posted the 12(th) consecutive quarter of growth. Coke Zero,
Schweppes and Monster all performed well despite the sparkling
beverages category posting an overall decrease. Macroeconomic
conditions and the trading environment remain challenging.
Austria volume declined by high single digits, following a very
hot summer in the prior-year quarter. Whilst Coke Life continues to
grow following the launch earlier in the year, it only partly
offset declines in the sparkling category.
In Switzerland, volume declined by low single digits. A good
performance in Sparkling due to successful new listings and
promotions was more than offset by Still beverages.
Net sales revenue in Established markets declined by 3.6% in the
quarter. Volume decline along with the adverse currency impact more
than offset the benefits of favourable category and package mix.
FX-neutral net sales revenue per case decreased by 0.3% in the
quarter.
Developing markets segment
Volume in Developing markets declined by 4.2%, compared to a
10.4% increase in the prior-year period. The majority of the
countries in the segment saw declines due to tough prior-year
comparatives driven by demand for Water.
Poland volume declined by mid single digits, following a high
single-digit increase in the prior-year period. The weak
performance was mainly due to Water, which was negatively impacted
by unfavourable weather. Energy maintained robust performance,
driven by Monster, with Juice and Coke Zero also performing well.
Fanta grew well following its relaunch with an improved flavour and
new packaging. FX-neutral net sales revenue per case was positive
following seven consecutive quarters of decline.
Volume in Hungary declined by mid single digits versus a
double-digit volume increase in the prior-year period. The decline
was driven by Water, down double digits, though partly offset by
low single-digit increase in Sparkling, primarily Coke Zero and
Sprite. Energy performed well following the nationwide launch of
Monster Ultra.
In the Czech Republic volume declined by mid single digits
driven by Stills, in particular Water. Sparkling beverages
performed well, with volume growth in Trademark Coke and Sprite.
Energy also grew well registering double-digit growth.
Net sales revenue in the Developing markets declined by 2.3% in
the quarter. Volume decline, negative channel mix and the adverse
impact of currencies more than offset an improved category and
package mix. FX-neutral net sales revenue per case improved by
3.5%, reversing the negative trend in the first half of the
year.
Emerging markets segment
Emerging markets volume growth improved to 1.3% in the period
following a stable performance in the first half of the year.
Nigeria and Romania continued to grow, while the rates of decline
we have been experiencing in Russia moderated in the quarter. All
key categories grew in the quarter with the exception of Water.
Russia volume declined by mid single digits in the quarter
following a high single-digit decline in the first half of the
year. Declines moderated in all key categories compared to the
prior-year quarter and package mix improved by 1.9 percentage
points. We are pleased to see that the commercial actions we have
put in place are delivering in an environment where the inflation
rate is moderating and consumer spending is gradually
recovering.
Nigeria volume grew for the tenth consecutive quarter, with
positive performances from all categories. We have successfully
adjusted our commercial plans to the new reality of high inflation
in the country, changing pack sizes and price points to meet the
consumers' needs and address their affordability concerns. Our
investment in new PET lines in recent years has given us
flexibility as well as more value. Despite a worsening consumer
environment, we are on track to deliver mid to high single-digit
volume growth for the year.
In Romania, we started to cycle the VAT reduction on our
products in June 2015, which supported volume growth for several
quarters. Despite these tough comparatives, Romania has maintained
a positive momentum, with strong growth in all categories except
for Water.
Revenue in the segment continued to face a strong headwind from
adverse currency movements. This negative impact was offset by
price increases, mainly in Russia and Nigeria, as well as improved
category and package mix, delivering stable net sales revenue
compared to the prior-year quarter. FX-neutral net sales revenue
per case accelerated its growth compared to the first half of the
year, increasing by 8.1% in the quarter.
Category highlights
Our focus on new packs, an active calendar of marketing
campaigns such as Taste the Feeling and selective affordability
measures supported our commercial initiatives and led to the good
growth in Sparkling beverages, Juice and Energy drinks in the
quarter, as well as improved category and package mix.
Sparkling beverage volume increased by 1.3% in the period
despite cycling 4.0% growth in the prior-year period. Good
performances in Nigeria, Romania, Ukraine and Ireland more than
offset the declines in some of our Established and Developing
markets and Russia. Within the category, trademark Coca-Cola grew
by 0.2%, led by Coca-Cola Regular. Fanta posted 6.7% growth, with
good contributions from all segments.
The Water category had a very high comparative base, having
grown by 12.4% in the prior-year quarter when many of our markets
experienced a very hot summer. Against this backdrop, Water volume
declined by 8.0%. Juice volume increased in the period by 2.0%
driven by our juice business in Russia as well as Romania and
Nigeria. Energy volume grew by 24.0% with strong performances
across our markets driven by the Monster brand.
Single-serve contribution improved by 1.7 percentage points with
good performances from the smaller packs in all segments. Sparkling
single-serve packs improved by 1.1 percentage points while Water
improved by 3.4 percentage points.
Sustainability highlights
On 30 September 2016 we announced seven new sustainability
targets for 2020, including the use of renewable and clean energy
sources for 40% of our total energy needs, recovering an average of
40% of total packaging placed on our markets for recycling,
reducing the amount of primary packaging by 25% per litre of
beverage produced and investing 2% of our annual pre-tax profit in
communities. The seven new targets build on the initial 2020
commitments announced in 2015 to reduce water and direct carbon
emission intensity(1) of our company by 30% and 50%
respectively.
Our approach to sustainability was recognised in September when
we became the first company to be named beverage industry leader in
the Dow Jones World and Europe Sustainability Indices for three
consecutive years.
(1) Intensity refers to the quantity of water we use or carbon
emissions we emit for the production of one litre of beverage
Supplementary information
Third Third Nine Nine
quarter quarter % months months %
Group 2016 2015 Change 2016 2015 Change
Volume (m unit cases) 571.6 577.1 -1.0% 1,578.9 1,583.7 -0.3%
Net sales revenue (EUR
m) 1,735.3 1,768.7 -1.9% 4,779.2 4,919.6 -2.9%
Net sales revenue per
unit case (EUR) 3.04 3.06 -0.7% 3.03 3.11 -2.6%
FX-neutral net sales
revenue per unit case(1)
(EUR) 3.04 2.93 3.8% 3.03 2.95 2.7%
Established markets
Volume (m unit cases) 175.1 179.6 -2.5% 472.0 484.9 -2.7%
Net sales revenue (EUR
m) 677.3 702.5 -3.6% 1,869.9 1,939.5 -3.6%
Net sales revenue per
unit case (EUR) 3.87 3.91 -1.0% 3.96 4.00 -1.0%
FX-neutral net sales
revenue per unit case(1)
(EUR) 3.87 3.88 -0.3% 3.96 3.95 0.3%
Developing markets
Volume (m unit cases) 105.9 110.6 -4.2% 293.0 291.4 0.5%
Net sales revenue (EUR
m) 316.3 323.8 -2.3% 843.1 852.4 -1.1%
Net sales revenue per
unit case (EUR) 2.99 2.93 2.0% 2.88 2.93 -1.7%
FX-neutral net sales
revenue per unit case(1)
(EUR) 2.99 2.89 3.5% 2.88 2.87 0.3%
Emerging markets
Volume (m unit cases) 290.6 286.9 1.3% 813.9 807.4 0.8%
Net sales revenue (EUR
m) 741.7 742.4 -0.1% 2,066.2 2,127.7 -2.9%
Net sales revenue per
unit case (EUR) 2.55 2.59 -1.5% 2.54 2.64 -3.8%
FX-neutral net sales
revenue per unit case(1)
(EUR) 2.55 2.36 8.1% 2.54 2.37 7.2%
(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 594 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 third quarter of
2016 on 3 November 2016 at 10:00 am Swiss time (9:00 am London,
11:00 am Athens, and 5:00 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
Full-year financial statements
16 February 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 7420 3145
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").
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 2016 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 2015 Integrated Annual Report and the Half-yearly
Financial Report for the six months ended 1 July 2016 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 ("APMs")
The Group uses certain 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, financial condition and cash flow. 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 also 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)
Third quarter 2016
Established Developing Emerging Consolidated
Net sales revenue 677.3 316.3 741.7 1,735.3
Currency impact - - - -
------------- ------------ ---------- -------------
FX-neutral net sales revenue 677.3 316.3 741.7 1,735.3
Volume (m unit cases) 175.1 105.9 290.6 571.6
------------- ------------ ---------- -------------
FX-neutral net sales revenue
per unit case (EUR) 3.87 2.99 2.55 3.04
------------- ------------ ---------- -------------
Third quarter 2015
Established Developing Emerging Consolidated
Net sales revenue 702.5 323.8 742.4 1,768.7
Currency impact (6.5) (3.9) (64.8) (75.2)
------------- ------------ ---------- -------------
FX-neutral net sales revenue 696.0 319.9 677.6 1,693.5
Volume (m unit cases) 179.6 110.6 286.9 577.1
FX-neutral net sales revenue
per unit case (EUR) 3.88 2.89 2.36 2.93
------------- ------------ ---------- -------------
Nine months 2016
Established Developing Emerging Consolidated
Net sales revenue 1,869.9 843.1 2,066.2 4,779.2
Currency impact - - - -
------------- ------------ ---------- -------------
FX-neutral net sales revenue 1,869.9 843.1 2,066.2 4,779.2
Volume (m unit cases) 472.0 293.0 813.9 1,578.9
------------- ------------ ---------- -------------
FX-neutral net sales revenue
per unit case (EUR) 3.96 2.88 2.54 3.03
------------- ------------ ---------- -------------
Nine months 2015
Established Developing Emerging Consolidated
Net sales revenue 1,939.5 852.4 2,127.7 4,919.6
Currency impact (22.7) (16.8) (214.8) (254.3)
------------- ------------ ---------- -------------
FX-neutral net sales revenue 1,916.8 835.6 1,912.9 4,665.3
Volume (m unit cases) 484.9 291.4 807.4 1,583.7
FX-neutral net sales revenue
per unit case (EUR) 3.95 2.87 2.37 2.95
This information is provided by RNS
The company news service from the London Stock Exchange
END
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