Coca-Cola HBC profits fizz as further efficiencies uncorked

16th Feb 2017 07:22

(ShareCast News) - Drinks bottler Coca-Cola Hellenic Bottling Company upped its dividend 10% after a calendar year that saw flat volumes and a dip in sales due to currency but much improved profits thanks to improved costs and efficiencies.With economic conditions anticipated to be slightly better in 2017, the FTSE 100-listed group expects volumes to continue to grow in developing and emerging markets and to stabilise in more established markets, while margins expansion is predicted despite higher input costs.Currency effects are difficult to forecast due to uncertainty around the Nigerian naira and volatility in Russia's rouble, but with some hedging in place for sugar and aluminium and based on current spot rates, management expect the adverse impact on operating profit of around €15m for the full year.For 2016, the impact of currencies saw net sales revenue fall 2% to €6.2bn while on a forex-neutral basis, net sales revenue rose 3% to €6.2bn.This came as volume inched 0.1% higher to 2.1bn cases, with growth in Nigeria and Romania offset by continuing decline in Russia and weaker volume performance in Italy and Austria.FX-neutral revenue per case grew in all geographic segments, up 2.9% overall, which reflects price increases mainly in emerging markets, as well as better package and category mix.However, cost efficiencies resulted in a 100 basis-point reduction in comparable operating expenses as a percentage of net sales revenue, allowing operating profit to increase 21.1% to €506.3m on a reported basis or 9.4% to €517.5m on a comparable basis.Basic earnings per share rose 23% to €0.949 and with free cash flow up 4.7% to €431m the dividend was hiked to €0.44 per share, a 10% increase on the previous year.Chief executive Dimitris Lois said he was delighted the performance and the momentum in the business, with the currency-neutral revenue growth and significant growth in margins and profits, "representing a sustainable and well established recovery"."Cost and efficiency actions continue to improve profitability and enable the business to maximise the gains from top line growth."