Coca-Cola HBC AG (LON:CCH) saw its group volumes increase in the first quarter as a shift in the timing of Catholic Easter upped performance in developing markets.
The FTSE 100-bottler of Coca-Cola drinks said group volumes increased 2.3% from the same period a year ago, while volumes in its developing markets segment swung to an 11.8% gain from a 3.6% decline due in part to the timing of Easter in key countries such as Poland, Hungary, and the Czech Republic. Net sales revenue in the segment grew 12.6%.
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The gains offset a less appealing picture in the group’s emerging markets, where volumes declined 0.1% from the same period a year ago as gains in Romania, Serbia and Ukraine were negated by reductions in the Russian and Nigerian markets.
Reported net sales for the segment were a similar picture, declining 8.4% as adverse currency movement from the Nigerian Naira and the Russian Rouble reversed the benefits of price increases, resulting in reported net sales revenue for the group falling 1.7% in the period.
However, in the FX-neutral figures, company net sales revenue grew 4.5% compared to the same period last year.
The figures paint a mixed picture when compared to the company's full year results for 2017, in which it expected volume growth across all segments in 2018 with emerging markets accelerating as Russia and Nigeria returned to growth.
Shore Capital has a mixed outlook on results
Coca-Cola HBC chief executive, Zoran Bogdanovic, said: "Product innovation and our ongoing revenue growth management initiatives continue to deliver balanced growth through volume and price/mix improvements. With strong commercial plans in place and anticipated gradual economic recovery in Russia and Nigeria, we expect our revenue growth to accelerate as the year progresses."
In a note to clients, analysts at Shore Capital had a mixed outlook on the results: Overall, a slight miss on revenue from CCH today but maybe in part due to its own strategic decisions in Russia. Nigeria is more of a worry albeit management expect a volume recovery to begin in Q2 as the underlying economy continues to recover. That said the consumer does still remain under pressure.
They added: “We do not anticipate material changes to consensus expectations post today’s results at this early stage of the year. The market is anticipating EPS growth of c10% year on year. We believe the valuation is looking slightly stretched given the level of volatility in performance especially in the emerging market division. Q2 should be a better quarter for the company given the anticipated recovery in Nigeria and the World Cup in Russia”
In late morning trading Thursday, Coca-Cola HBC shares were up 2.4% at 2,527p.
-- Adds broker comment and updates share price --