Coke bottler Coca-Cola HBC sees Q3 profits fall amid tough conditions

6th Nov 2014 07:58

Increasing volume pressure, weak macro conditions and unfavourable weather led to a fall in third-quarter profits at Coca-Cola HBC, with the bottling group predicting that "challenging" conditions would stay for the rest of the year.Coca-Cola HBC, the world's second-largest bottler of brands of The Coca-Cola Company, said comparable earnings before interest and tax (EBIT) totaled €200.9m in the three months to 26 September, down 3.1% over the prior year.Volumes declined by 4.8% year-on-year to 547.6m unit cases, much worse than the 3% fall in the first half due to "unseasonably poor weather in established markets and our strategic decision to focus on sustainable value-accretive volume in developing markets", the company said.Net sales fell 5.3% to €1.82bn.The tough trading environment during the quarter was blamed on a deterioration in consumer confidence, high unemployment levels in some markets and a slowdown in Russia, as well as a cold and wet summer in Europe.However, currency-neutral net sales revenue per unit case improved by 2.8% to €3.32 due to improved package mix.Meanwhile, cost-savings actions were said to have gained momentum, resulting in a 30 basis-point (bp) fall in operating expenses as a percentage of net sales revenue.This, along with so-called "revenue growth initiatives" and favourable input costs, meant that the comparable EBIT margin improved by 30bps to 11.1% in the third quarter."Although ongoing weak consumer sentiment and poor summer weather have impacted volumes in many of our markets, we are pleased with our profitability performance this quarter," said chief executive Dimitris Lois."We expect markets to remain challenging for the remainder of the year," he said, but added that the full-year performance is still expected to be "in line with out expectations".The stock was down 0.1% at 1,378p in early deals on Thursday.