Coca-Cola HBC AG (LON:CCH) said it is on track to meet its revenue growth target for the year despite poor weather dampening demand in the first half.
The bottler of The Coca-Cola Company (NYSE:KO) said unseasonable wet and cold weather dragged on its performance in the spring an early summer compared to last year when a prolonged heatwave and the FIFA World Cup boosted sales.
Revenue rose 3.4% on a constant-currency basis to €3.35bn in the six months to June 28, below the group’s mid-term goal of 5-6% growth, while revenue per unit edged up 1.2% to €3.07.
The group still expects full-year revenue to rise in line with its guidance range as it sees sales improving in the second half, supported by warmer weather since June.
Profit falls as costs rise
Net profit fell 10.1% to €195.1mln in the first half, reflecting restructuring charges of €30.2mln and higher financing costs.
Volumes in established markets rose by 0.4% in the period as growth in Italy, Ireland and Greece offset declines in Austria and Switzerland.
The developing segment increased volumes by 1.4% with growth from all countries in the segment other than the Czech Republic and Croatia.
Emerging markets prosper
The emerging markets business grew volumes by 3.4%, bolstered by a strong performance in Nigeria.
Sparkling beverages volumes gained 2.4%, driven by low and no calorie soft drinks including Coke Zero. Energy drinks volumes jumped 28.1% on the back of strong sales of Monster and Burn. Water volumes advanced 2.2%.
Juice volumes fell 2.5% due to lower sales in established and emerging markets and ready-to-drink tea volumes dropped 6.2%.
Volumes to improve in second-half
Coca-Cola HBC said it expects to see a pick-up in volumes across all its segments in the second half, although growth in revenue per case on a currency-neutral basis is expected to continue at the pace of the first half.
The company estimates that the adverse impact of foreign exchange movements to be €20mln for the year, but this is €30mln lower than previously anticipated.
"We are pleased with this solid first half given the challenging combination of tough comparators and unseasonably cold and wet weather,” said chief executive Zoran Bogdanovic.
He added: “Looking forward, we expect to deliver FX-neutral revenue growth within the range of 5-6%, with another year of margin expansion.”
Costa Coffee plans 'progressing'
Last month the group announced it will launch Costa Coffee products in 10 of its markets next year months after Coca-Cola Co bought the cafe chain from Whitbread (LON:WTB) in a US$5.1bn deal.
Bogdanovic said on Thursday the company was "progressing with preparations" to launch Costa Coffee in those markets.
