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03 Nov 2021 | 08:01

Coca-Cola HBC sees 'sharp acceleration' on pre-Covid revenue

(Sharecast News) - Drinks bottler Coca-Cola HBC reported 17.1% currency-neutral revenue growth in its third quarter on Wednesday, and a "sharp acceleration" on a two-year basis, closing 16.8% higher than the third quarter of 2019, pre-pandemic, or 8.9% ahead year-to-date on a like-for-like basis. The FTSE 100 company, the world's third-largest bottler of Coca-Cola Company products, said "targeted execution" captured the summer season, as it benefited from the reopening of the out-of-home channel, while strength in its emerging segment continued.

It said 70 basis points of value share was gained in the non-alcoholic ready-to-drink (NARTD) market for the year so far.

Volume growth came in at 13.1% for the quarter, which was supported by priority categories in its '24/7' portfolio, with sparkling up 13.1%, low- and no-sugar sparkling growing by 54.6%, adult sparkling rising 27.5%, and energy products advancing 29.4%.

Price-mix was 5.1% higher for the year-to-date and up 3.5% in the third quarter on a tougher comparator, with all three of the firm's segments seeing price-mix expansion gain pace compared to the pre-Covid comparator in 2019.

Coca-Cola HBC said it maintained "rigorous" management of its cost of goods sold (COGS), and "disciplined" control of its operational expenditure.

The company was on track to complete the acquisition of the Coca-Cola Bottling Company of Egypt by the first quarter of 2022.

Looking at its market segments, HBC said it saw sustained positive price-mix development and volume recovery in its established markets, propelled by good execution during the summer season, and the reopening of out-of-home channels.

In its developing markets, third quarter segment volumes were "slightly ahead" of 2019 despite the new sugar tax in Poland, and in emerging markets, strong momentum was reported from Nigeria and Russia in the period, despite higher comparators.

"We delivered a strong acceleration of performance in the third quarter, the result of targeted and well-prepared execution during the summer season, as well as continued growth momentum in the emerging segment," said chief executive officer Zoran Bogdanovic.

"We accelerated foreign exchange-neutral revenue growth across all segments on a two-year basis and drove a faster pace of market share gains in the quarter.

"This performance is due to the strength of our 24/7 portfolio, our revenue growth management capabilities, the adaptability of our route-to-market and most critically also thanks to the agility of our people who bring our strategy to life in the marketplace through close partnership with our customers."

Bogdanovic said that in the current inflationary environment impacting all industries, the firm's revenue growth management tools, as well as its ability to take price in the context of "robust" insights and analytics, would be critical.

"Our actions in 2021, as well as the plans we have for the fourth quarter and beyond will help us to mitigate the current challenging cost environment.

"I am pleased to reiterate our guidance for 2021 of a strong recovery in foreign exchange-neutral revenues and a 20-to-30 basis point EBIT margin expansion."

At 0940 GMT, shares in Coca-Cola HBC were down 0.73% at 2,586p.
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