Coca-Cola HBC AG (LON:CCH) shares fell on Thursday after the firm warned that growth in some markets will slow in 2019 although it reported a jump in 2018 profits driven by above-target revenue and margin growth after the launch of a record number of new products.
In its full-year results statement, the FTSE 100-listed firm said: “Economic growth in 2019 is forecast to slow down in a number of our markets, which is likely to negatively impact consumer spending in the Established and Developing segments. Taking into account our hedged positions and the current favourable spot rates, we expect the adverse impact on EBIT from foreign currency to amount to approximately €50 million for the full year.”
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It added: “Given that the €800 million Euro bond will mature in June 2020, we would expect to do the refinancing of this bond in 2019. Therefore, we estimate that finance costs in 2019 will be nearly double the amount in 2018, comprising the new cost of the debt and related refinancing expenses, as well as the impact of adoption of IFRS 16 from January 2019.”
For the year ended 31 December 2018, the soft drinks bottler reported comparable underlying earnings (EBIT) growth of 9.6% to €680.7mln, as net profits increased by 5% to €447.4mln.
The firm's reported net sales revenue increased by 2.1%, or 6% on a currency-neutral basis, margin while the margin rose by 60 basis points to 9.6%, driven partly by operating leverage from revenue and volume growth.
Zoran Bogdanovic, Coca Cola HBB's CEO commented: “Strong volume growth in all our segments was helped by a record number of new product launches, whilst price/mix improved for the eighth consecutive year."
He added: “We continue to make good progress towards our 2020 targets. Our revenue growth management initiatives, strong in-market execution with greater sales capability and a record number of new product launches, supported by favourable economic conditions in most of our markets, resulted in the second consecutive year of FX-neutral revenue growth above the 4-5% target range combined with good margin expansion.”
The group said it plans to pay a dividend of €0.57 per share for 2018, a 5.6% increase on the 2017 payout.
In late morning trading, Coca Cola HBC shares were 4.4% lower at 2,575p.