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2023 Half Year Results

Strong execution underpins growth for 2023 and beyond

Coca-Cola HBC AG, a growth-focused Consumer Packaged Goods business and strategic bottling partner of The Coca-Cola Company, reports its financial results for the six months ended 30 June 2023.

Half-year highlights

  • Focused execution of strategic priorities and revenue growth management drives strong organic growth1

o   Organic revenue up 17.8%, driven by organic revenue per case growth of 19.0%, led by the effective delivery of price and mix improvements across all categories and segments

o   Organic volume growth across our strategic priorities, with Sparkling +1.6%, Energy +20.9% and Coffee +21.9%; while Stills declined 11.2%, led by Water; overall organic volumes -1.0%

o   Reported revenue up 19.3%, reflecting strong organic growth and the consolidation of Multon, which more than offset FX headwinds in Nigeria and Egypt

o   Value share gains of 60bps in Non-Alcoholic Ready-To-Drink (NARTD); maintained value share in Sparkling

  • Organic EBIT up 17.7%, with margin unchanged on an organic basis at 11.2%

o   Stronger than expected operating leverage from double-digit top-line growth

o   Comparable gross profit margin grew 90 basis points despite comparable Cost of Goods Sold (COGS) per unit case up 13.1%

o   Disciplined management of operating costs while increasing resources to further enhance execution in the market with our customers

o   Comparable EBIT margin grew 20 basis points

  • Segmental highlights: Strong double-digit organic revenue and EBIT growth across all segments

o   Established: Organic revenue increased by 16.9%, led by revenue-per-case expansion and a resilient volume performance in key markets; organic EBIT grew 20.8%

o   Developing: Organic revenue up 23.6%, driven by revenue-per-case expansion; organic EBIT up 27.2%

o    Emerging: Organic revenue up 16.0%, despite pressure on consumer spending from macro headwinds in several markets; organic EBIT grew 13.9%

  • Strong EPS growth and robust balance sheet

o   Comparable EPS up 22.3%, led by EBIT growth and lower net finance costs

o   Strong balance sheet and liquidity; dividend of €0.78 paid in June

  • Investor Day 2023: Strategic priorities and medium-term financial targets

o   At our Investor Day in May, we reaffirmed our commitment to our five strategic growth pillars and the investments we are making in our prioritised capabilities, positioning the company for higher levels of growth over the medium term

o   Financial targets were updated to cover the period beyond 2023:

Average annual organic revenue growth of 6-7% (previously 5-6%)

Average annual organic EBIT margin expansion of 20-40 basis points per annum

Continued focus on growing ROIC

  • Continued investment behind our 24/7 portfolio and strategic priorities

o   Further investment in Sparkling brands across flavours and variants, including the further roll-out of Coke Zero Zero, underpinning our low/no sugar strategy

o   Successful launch of Jack Daniel’s & Coca-Cola in Poland, Ireland and Hungary in Q2

o   Development of the Energy category in Egypt, adding the Monster brand in Q2

o  Announced an agreement to acquire Finlandia Vodka from Brown-Forman for $220 million2; a unique opportunity with significant geographic overlap in CCH territories, enhancing our premium spirits credentials and driving mixability opportunities with our NARTD portfolio; completion expected in Q4 2023

1For details on APMs refer to ‘Alternative Performance Measures’ and ‘Definitions and reconciliations of APMs’ sections.
2Purchase price is subject to customary closing price adjustments and completion is subject to regulatory clearances.

“It has been a very good first half of the year with progress across our strategic pillars. Our priority categories of Sparkling, Energy and Coffee, together with a strong performance across all segments, have driven organic revenues and EBIT growth ahead of expectations.

“While some markets continue to face a challenging consumer environment, revenue per case has been improved through careful price and mix management enhanced by data, insights and analytics. At the same time, volumes have remained resilient which is testament to the quality of our execution.

“We continue to invest in the activation of our 24/7 portfolio and targeted expansion, underpinned by our leading position in and focus on Sparkling. In the first half of the year we reached an agreement to acquire Finlandia Vodka, successfully launched new innovations including Jack Daniel’s and Coca-Cola in three of our markets, further developed the energy category in Egypt, and added 2,200 new distribution points for our Coffee business.

“Our second quarter performance enabled us to upgrade our earnings expectations for 2023 in July, creating a stronger platform for the future growth ambitions we set out in our Investor Day in May. I am grateful to our customers, suppliers and partners, particularly The Coca-Cola Company, for their collaboration as we drive growth together. I especially want to thank all our people for their drive and dedication to make our business stronger every day.”

Zoran Bogdanovic Chief Executive Officer
Half-Year        
  2023 2022 % Change Reported % Change Orangic1

Volume (m unit cases)

1,383.1

1,330.2

4.0%

-1.0%

Net sales revenue (€ m)

5,021.5

4,209.9

19.3%

17.8%

Net sales revenue per unit case (€)

3.63

3.16

14.7%

19.0%

Operating profit (EBIT)2 (€ m)

557.3

275.7

>100%

 

Comparable EBIT1 (€ m)

560.7

462.5

21.2%

17.7%

EBIT margin (%)

11.1

6.5

450bps

 

Comparable EBIT margin1 (%)

11.2

11.0

20bps

Net profit3 (€ m)

385.7

152.9

>100%

 

Comparable net profit1,3 (€ m)

388.9

316.9

22.7%

 

Basic earnings per share (EPS) (€)

1.050

0.418

>100%

 

Comparable EPS1 (€)

1.058

0.865

22.3%

 

Free cash flow1 (€ m)

256.6

332.9

-22.9%

 

1For details on APMs refer to ‘Alternative Performance Measures’ and ‘Definitions and reconciliations of APMs’ sections.

2Refer to the condensed consolidated income statement.

3Net Profit and comparable net profit refer to net profit and comparable net profit respectively after tax attributable to owners of the parent.