Home News Coca-Cola HBC results at top of guidance, shares remain low

Coca-Cola HBC results at top of guidance, shares remain low

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Coca-Cola HBC results at top of guidance, shares remain low

Leading bottler of The Coca-Cola Company, Coca-Cola HBC AG (LON:CCH), has revealed its full-year financial results ended 31 December. Annual performance was at the top of its guidance range, driven by strong volume growth. However, shares in the company were trading over 5% lower on Thursday morning.

This was the second year of FX-neutral revenue growth above the company’s 4-5% target range, allowing Coca-Cola HBC to make good progress towards its 2020 margin targets.

Volume growth accelerated to 4.2%. All segments experienced growth, but it was particularly driven by sparkling beverages.

Net sales revenue was up 6% on an FX-neutral basis and reported net sales increased by 2.1%.

Earnings (EBIT) were up 9.6% to €680.7 million when compared to the year prior. EBIT margin was up 70 basis points to 10.2%, and reported margin was up 60 basis points to 9.6%.

Free cash flow was €370.0 million. Moreover, final dividend was proposed at €0.57 per share, a 5.6% increase compared to the 2017 dividend.

Coca-Cola HBC has, however, forecasted 2019 economic growth to slow down in a variety of its markets.

It does expect volume to continue to grow across all three segments.

Chief Executive Officer of Coca-Cola HBC AG, Zoran Bogdanovic, commented on the results:

“In 2018 we delivered another very good performance with revenue growth above our target range and another step up in margins. Strong volume growth in all our segments was helped by a record number of new product launches, whilst price/mix improved for the eighth consecutive year. This growth supported margin progress, which we delivered while increasing our investment in marketing.”

“Our sharp focus on cost efficiencies continues while we invest in the business for growth. The shape of the business, capabilities and commitment of our people and our overall commercial proposition give us confidence in our ability to continue to grow revenues and margins.”

Last year, The Coca-Cola company set its eyes on the cannabis market, closely watching the cannabis-infused drinks market. Additionally, it purchased the Costa Coffee chain from Whitbread in a £3.9 billion deal, following the announcement from Whitbread earlier in the year that it wanted to spin off its Costa Coffee branch.

At 10:22 GMT Thursday, shares in Coca-Cola HBC AG (LON:CCH) were trading at -5.63%.

Trading is yet to open in the US, but shares in The Coca-Cola Co (NYSE:KO) closed on Wednesday trading 0.26% higher.