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Coca-Cola HBC AG on Thursday said its first half was ‘strong’ despite a severe drop in profit, knocked back by the significant costs involved in exiting from Russia.
Shares in the FTSE 100-listed bottling partner of Coca-Cola Co were up 3.1% in London on Thursday morning at 2,042.00 pence each.
In the six months to July 1, net profit was down 34% at €152.9 million from €233.1 million. Operating profit slumped 21% to €275.7 million from €350.1 million.
Coca-Cola HBC noted it booked a €188 million non-cash charge in the first half due it restructuring its Russia business. The firm stopped taking orders in Russia in March, so seen volumes plunge 46% in the second quarter. It expects further declines in the second half.
Coca-Cola HBC expects to incur further charges in the second half, currently estimated at €82 million.
‘Going forward we expect to have significantly smaller presence in Russia focused on local brands which will be immediately operationally and financially self-sufficient,’ it added.
Net sales revenue in the first half were up 30% to €4.21 billion from €3.25 billion, as group volume was up 18% in the first half to 1.33 billion cases from 1.13 billion the year prior.
‘All price increases have been executed according to plan. We continue to take advantage of all revenue growth management capabilities, the strength and breadth of our portfolio, as well as data, insights and analytics, to support affordability in a profit accretive way, while also 'premiumising' to enhance revenue per case,’ the firm explained.
Net sales revenue per unit case was up 9.8% to €3.16 from €2.88.
Chief Executive Zoran Bogdanovic said: ‘We delivered strong performance in the first half as we continued to execute our growth strategy with focus and discipline, including making progress on our sustainability commitments.’
Looking ahead, Coca-Cola HBC reinstated guidance for 2022 and expects to generate comparable earnings before interest and tax in the range of €740 million to €820 million. Comparable Ebit was €462.5 million in the first half, up 32% from €350.3 million a year before.
‘Consistent investment in high-potential opportunities, prioritised capabilities and capacity over years is delivering growth today. And we stay the course, with targeted investments for growth,’ Bogdanovic continued.
‘We have high confidence that our close customer partnerships, strong portfolio and the capabilities of our people will allow us to continue to create value even as we face a period of macro-economic and geo-political uncertainty.’
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