Coca-Cola HBC(US:CCHGY)2024-05-01 03:24Financial Data and Key Metrics Changes - Organic revenue grew by 12.6%, volumes increased by 1.8%, and price mix rose by 10.6% in Q1 2024. Reported revenue grew by 1% due to currency headwinds [8][9][10] - The revenue growth management toolkit helped maintain consistent improvement and balance, with pricing being a significant lever amid challenges like currency devaluation and sugar tax [9][10] Performance by Business Line - Sparkling volumes grew low-single-digits, with Trademark Coke leading growth in Developing and Emerging markets. Adult Sparkling volumes grew low-double-digits, driven by Schweppes and Kinley [12][13] - Energy volumes surged over 37%, particularly in Emerging markets, with the launch of Monster Energy Green Zero Sugar contributing to growth [13] - Coffee grew by over 34%, with strong performances in Developing and Emerging markets [13] - Water volumes increased by 2.5%, with a focus on improving profitability through targeted revenue growth management initiatives [14] Performance by Market - Established markets saw net sales revenue grow by 5.1%, driven by a strong price mix of 9.3%, although overall volumes declined [16] - Developing markets experienced a net sales revenue increase of 12.5%, with volume recovery and strong performances from Sparkling and Coffee [17] - Emerging markets expanded organic revenue by 19%, with volume growth of 3.2%, despite currency devaluations in Nigeria and Egypt [18][20] Company Strategy and Industry Competition - The company continues to focus on its three strategic priority categories: Sparkling, Energy, and Coffee, which have shown strong revenue growth [7] - The company is committed to sustainability, with initiatives like deposit return schemes and investments in recycling infrastructure [15] - The company is confident in its full-year guidance and medium-term growth targets, despite macroeconomic challenges [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering against financial guidance for the year, emphasizing the importance of strong execution and adaptability in challenging markets [21] - The company is prepared for potential challenges in markets like Egypt, where a boycott against Western brands has affected performance, but noted a recovery trend [71] Other Important Information - The company is actively monitoring affordability and adjusting its strategies to maintain a balance between price and volume growth [56] - The company is focused on enhancing its single-serve mix, which remains a significant growth opportunity [79] Q&A Session Summary Question: Full year guidance and phasing between H1 and H2 - Management reiterated confidence in full-year guidance, indicating a more normal phasing towards the second half of the year [24][26] Question: Performance in Nigeria and volume growth expectations - Management highlighted consistent investment in capabilities in Nigeria, which has driven strong volume growth, and expressed confidence in maintaining this momentum [28][30] Question: Pricing strategies in Nigeria and Egypt - Management confirmed that pricing adjustments will continue to be made throughout the year based on market dynamics and competitive landscape [85] Question: Monitoring affordability in Established markets - Management emphasized the importance of tailoring strategies to local market conditions and using data insights to inform pricing and promotional strategies [56] Question: Impact of sugar tax in Italy - Management confirmed readiness to implement pricing strategies in response to the upcoming sugar tax, with anticipated price increases [45] Question: Energy drinks market performance and regulations - Management acknowledged the impact of new regulations on the Energy drinks category but remained optimistic about future growth [74]