31 July, 2008 - Coca-Cola Hellenic Bottling Company S.A. reported an earnings per share decline of 5% in first half of 2008 cycling strong growth of 15% in the comparable prior-year period.
HALF YEAR HIGHLIGHTS* Volume of 1,014 million unit cases, 5% above 2007. Net revenue rose to €3,314 million, 7% above 2007.
* Operating profit (EBIT) of €313 million, 5% below prior year.
* Net profit of €210 million, 5% below prior year, and earnings per share of €0.58, 5% below prior year.
SECOND QUARTER HIGHLIGHTS* Volume of 585 million unit cases, 3% above 2007. Net revenue rose to €1,942 million, 5% above 2007.
* Operating profit (EBIT) of €247 million, 9% below prior year.
* Net profit of €182 million, 8% below prior year, and earnings per share of €0.50, 7% below
prior year.
Trading performance in the first half was adversely impacted by poor weather in several countries, challenging economic conditions affecting consumer spending behaviour in a few of our markets, and one-off factors including a third party transportation strike in Greece and early problems with implementing SAP in two of our countries. These factors combined with rapidly escalating PET costs in the second quarter resulted in operating profit declining in the first half by 5%.
Volume grew by 5% in the first half of 2008, successfully cycling 13% volume growth in the comparable prior-year period. Volume growth was achieved across all beverage categories and reporting segments in the first six months. Sparkling beverages volume grew 2% with growth in premium brands partly offset by a planned volume decline in our value brands.
The successful launch of Coca-Cola Zero in 11 additional markets in 2008 contributed to growth in trademark Coca-Cola of 3% during the first six months and growth in light sparkling beverages of 12%. Our burn energy drink grew by over 50% in the first half of the year as we continue to expand brand availability into new consumption occasions and across our expanding network of coolers.
Still beverages and water grew by 9% in the first half of 2008 driven by double-digit growth in the juice and tea categories as we continue to track consumer wellness trends through innovation and marketplace initiatives. We expanded our premium ready-to-drink tea range with the launch of Nestea Vitao in an additional 6 markets including Russia, Romania and the Czech Republic.
During the quarter we launched our Amita brand in Italy as we aim to expand our presence in the juice category in this country. Amita has been introduced in 11 flavour variants in Italy in single-serve packages and is being supported with product sampling, a print campaign and dedicated branded cooler expansion. In line with our strategy of driving higher value in the water category, we recently launched Avra Herbal in Greece, a new range of enhanced waters
available in sage, lemongrass and mint flavours.
Following the finalisation of our three-way coffee joint venture agreement with illycaffè SpA and The Coca-Cola Company, we launched illy ready-to-drink coffee in 9 countries during the second quarter of 2008. The joint venture will enable Coca-Cola Hellenic to capitalise on opportunities in a fast growing, high value category. The illy-branded products are available in three flavours – Caffè, Cappuccino and Latte Macchiato – and are being sold in stylish, premium cans across both the immediate and future consumption channels.
Doros Constantinou, Managing Director of Coca-Cola Hellenic, commented: “Our market update in June highlighted the difficult trading environment that the sector is facing. With the early implementation of several initiatives to meet near term profitability challenges, we believe we can achieve our full year guidance. Clearly, however, the economic climate, together with input costs remains uncertain, and we will continue to be watchful of developments.
"We remain focused on our long-term strategic priorities and our balance sheet retains the flexibility required to pursue additional opportunities. We will continue to invest in future platforms for growth, given our long-term view of the marketplace, and the confidence that we have in our ability to leverage our superior marketplace execution and route-to-market capabilities. In addition, the evolution of our portfolio of products continues to resonate with the long-term wellness trends we are seeing in our territories.”