- Coca-Cola bottler boosts 2023 profit forecast
- June sales proved ‘very good overall’
- Double-digit first half sales growth delivered
Investors had a thirst on for Coca-Cola HBC (CCH) stock on Friday, shares in the beverages behemoth popping 5% to £23.73 after the company upgraded its full year earnings expectations following a stronger than expected finish to the first half to June.
A strategic bottling partner of The Coca-Cola Company (KO:NYSE) with a focus on Eastern Europe, Coca-Cola HBC continues to stage an impressive recovery following last year’s withdrawal from Russia, where it now solely sells local brands in the wake of the Ukraine invasion, with the shares fizzing 20% higher year-to-date.
STRONG SUMMER START
Performance in June, one of the Switzerland-based group’s seasonally stronger months, was ‘very good overall’, said Coca-Cola HBC.
The drinks group also highlighted double digit sales growth for the first half to June driven by price increases and an improving sales mix.
The resilient consumer goods goliath now expects to deliver organic earnings before interest and tax (EBIT) growth of between 9% to 12% for 2023. This represents a significant upgrade on previous expectations, which ranged from EBIT growth of up to 3% to a decline of up to 3%.
Despite the upgrade to 2023 guidance and the momentum in the business, Coca-Cola HBC left its mid-term guidance from 2024 onwards unchanged, expecting annual organic revenue growth of between 6% to 7% on average and annual organic EBIT margin expansion of between 20 to 40 basis points.
PORTFOLIO EXPANSION
Together with its customers, Coca-Cola HBC serves a colossal 715 million consumers across 29 countries on three continents.
It sells a strong and burgeoning band of Coca-Cola drinks brands including the eponymous fizzy drink, Costa Coffee, Schweppes, Sprite and Fanta to name a few.
Coca-Cola HBC recently agreed to buy the owner of Finlandia, a leading vodka brand in Central and Eastern Europe, from Brown Forman (BF.B:NASDAQ) for US$220 million subject to regulatory approvals.
Commenting on the deal last month, CEO Zoran Bogdanovic said that having been associated with the distribution of Finlandia for 17 years in several markets, ‘we are excited by this unique and regionally relevant opportunity that will support the acceleration of our on-premise business across more of our markets.’
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