Coca-Cola HBC tops profit expectations as volume surges

22nd Feb 2022 07:35

(Sharecast News) - Drinks bottler Coca-Cola HBC reported a 13% improvement in volume in its 2021 results on Tuesday, to 2.41 billion unit cases, as net sales revenue improved 16.9% to €7.17bn (£5.98bn).

The FTSE 100 company said net sales revenue per unit case totalled €2.97 for the year through December, which was 3.5% higher than the prior year.

Currency neutral net sales revenue growth, meanwhile, was 19.6%, and net sales revenue per unit case rose 5.8% on a constant currency basis.

Operating expenses as a proportion of net sales revenue narrowed 190 basis points to 25.6%, and comparable operating expenses fell 220 basis points to make up 25.1% of net sales revenue.

Coca-Cola HBC recorded an operating profit of €799.3m for the year, up 21%, while its compatible EBIT was 23.6% higher at €831m.

Its EBIT margin expanded by 40 basis points to 11.2%, and its comparable EBIT margin was 60 basis points higher at 11.6%.

The company's net profit and comparable net profit grew 31.9% to €547.2m and 34% to €578.1m, respectively.

Basic earnings per share were 31.5% higher at 149.9 euro cents, and comparable earnings rose 33.7% to 158.4 cents per share, as Coca-Cola HBC's free cash flow rose 21% to €601.3m.

"The business has delivered a very strong recovery in 2021, with all key metrics above pre-pandemic levels, the result of consistent and disciplined focus on our strategic priorities over the last few years," said chief executive officer Zoran Bogdanovic.

"We finished the year with strong revenue growth, our highest ever EBIT margin and free cash flow while continuing to gain share.

"This performance demonstrates the strength of our 24/7 brand portfolio, revenue growth management capabilities and execution excellence in our markets."

Bogdanovic said the performance was driven by its workforce, as well as a "stronger than ever" partnership with US-based brand owner, the Coca-Cola Company.

"2021 also marked 70 years since our early beginnings in Nigeria and I am more excited than ever by the growth potential of our business, further strengthened with the addition of Egypt to our country portfolio.

"Revenue growth management actions focused behind both premium and affordable offers, as well as pricing and ongoing productivity improvements have enabled us to continue investing behind our strategic priorities, including in capabilities development, whilst achieving EBIT margin expansion."

The board was "encouraged" by the momentum in the business, Zoran Bogdanovic added.

"We expect 2022 to be a year of strong sales supported by ongoing volume momentum, pricing actions and beneficial category mix.

"While mindful of inflationary headwinds and other risks, our track record and continuous focus on efficiencies give me confidence in delivering another year of EBIT growth.

"Given the positive long-term outlook for the business we are increasing our targeted dividend pay-out range to [between] 40% and 50%."

At 0904 GMT, shares in Coca-Cola HBC were down 5.01% at 2,199p.