Coca-Cola HBC's Q2 & H1 Performance by Region

Coca-Cola Hellenic Bottling Company has released its Q2 and H1 results.

Half-year net profits jump by 45.2% to EUR95.1m (US$127.1m)
Sales in six months to end of June slip by 5.9% to EUR3.18bn
H1 operating profits climb by 22.5% to EUR164.1m
Second-quarter net profits leap by 49.5% to EUR134.4m
Sales in three months to end of June drop by 5% to EUR1.9bn
Q2 operating profits rise by 33% to EUR193.3m

Coca-Cola HBC has warned that 2014 will be a difficult year.

Coca-Cola HBC has seen a slower fall in Q2 volumes contribute to a lift in profits in its half-year, although 2014 looks set to be a difficult year for the company.

The Coca-Cola bottler saw second quarter volumes fall at a slower rate to the first quarter, when volumes were down by 4%. The company noted an "overall improvement in established and developing markets", while Nigeria also performed well.

The Czech Republic, Italy, Poland, Romania and Russia were blamed, however, for driving the 3% fall in second-quarter volumes.

The company warned that it does not expect to see an improvement in trading conditions throughout 2014

The following is a closer look at the company's performance by region.

Established markets

Half-year volumes were down by 4%, with sales by value from established markets slipping by 3%. In the three months to the end of June, volumes dipped by 2%, while sales in value terms were flat.

Volume decline in Italy moderated to mid single-digits in Q2, "in line with our expectations". Coca-Cola Zero saw sales increase by 6%. CCHBC flagged a still-challenging trading environment in the country.

Greece saw volumes slip by low single-digits in the quarter, with half-year volumes growing by low single-digits. "Trading conditions are still challenging, unemployment remains at near-historic highs of 26% and disposable income is not forecast to return to growth until 2015."

Switzerland was down by low single-digits in both Q2 and H1, while volumes in Ireland were up by mid single-digits in Q2 and by low single-digits in H1.

Developing markets

Volumes struggled in developing markets, falling by 7% in the half-year and by 5% in Q2. Consequently, sales in value terms were down by 4% and 4% in H1 and Q2, respectively.

"Volume performance in the (developing markts) segment has been impacted by our strategic decision to focus on value-accretive volume, particularly in Poland and the Czech Republic," the company said.

In Poland, sales fell by high single-digits in both periods, as CCHBC has not yet seen positive trends in unemployment and disposable income translate into consumer spending. In Czech, the company struggled, with high single-digit falls in second quarter volume and a low teens decline in H1.

Hungary, however, posted growth of low single-digit volumes in the two periods. "This is the third sequential quarterly improvement (from Hungary) and the first positive quarter following eight consecutive quarters of decline."

Emerging markets

In the half-year, volumes from emerging markets fell by 2% and by 3% in Q2. Sales in value terms fared worse, dropping by 9% in H1 and by 10% in the quarter. "Positive pricing and package mix were not enough to compensate for the negative impact from currency translation and volume weakness."

A low single-digit decrease in Q2 volumes in Russia contributed to a similar fall in half-year volumes. CCHBC blamed the "current geopolitical developments impacting the economy" for the quarterly performance.

Nigeria volumes were up by mid single-digits in Q2 and by low single-digits in the half-year. In Romania, volumes (-10% in Q2, high single-digit fall in H1) were pressured by a difficult trading environment and competitive promotional pressures.

Ukraine saw volumes drop by high single-digits in the second quarter and by low double-digits in the first six months of 2014. "The current political environment remains very difficult, severely impacting consumer demand," CCHBC said.

The original news is here.

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