Coca-Cola Hellenic downgrades volume guidance after mixed Q2

7th Aug 2014 08:41

- Revenue in line, earnings ahead of consensus- Russia and Ukraine volumes affected- Management downgrades FY volume expectations- FY results offset by better mix and FX effectsCoca-Cola HBC (CCH) said unfriendly consumer sentiment and foreign exchange headwinds looked unlikely to improve during 2014 and downgraded its volume expectations for the year as a whole, but said lower input costs, growth initiatives and cost cutting were having a positive effect in the second quarter.The FTSE 100 group, Europe's main bottler of Coca-Cola brands, saw volumes decline 3% to 561m cases during the quarter, a slower pace than in the first quarter. It gained or maintained share in volume and value in 15 markets in sparkling beverages, and in 13 markets for non-alcohol ready-to-drink (NARTD) products.Although currency effects dragged statutory net revenue per case down 5% to €1.8bn, growth in net revenue per case accelerated to 3% on a currency-neutral basis, mainly as a result of continued growth initiatives, pricing and "value-accretive volume strategy" in developing markets.Earnings before interest and tax (EBIT) was up 8% to €194m, and earning per share up 9% to €0.37.Chief executive Dimitris Lois said for the full year, management expected the continuing challenging volume environment in our markets to be offset by the positive trends in net sales revenue, input costs and operating costs, combined with less foreign exchange pressure than previously anticipated."We continue to take action to mitigate the impact of the difficult trading conditions caused by depressed consumer sentiment and foreign exchange headwinds, while input cost pressures have abated," he added. "Our ongoing initiatives produced another quarter of growth in currency-neutral net sales revenue per case, and we are pleased with our efforts to reduce operating expenses as a percentage of net sales revenue in a very challenging volume environment."Broker ShoreCap said: "Revenue has come in behind our and the market's expectations but there has been a strong bounce back in profitability in Q2 than expected. Therefore, we believe a broadly flat profit performance year on year looks achievable so we do not anticipate material moves in our or the market's expectations from a profit perspective"Shares in the company were down 3.6% to 1,325p at 08:45 on Thursday. OH