Coca-Cola HBC AG (CCHBF) 2023 First Half Year Results Earnings Call Transcript

Summary of Coca-Cola HBC AG 2023 First Half Year Results Earnings Conference Call Company Overview - Company: Coca-Cola HBC AG (OTCPK:CCHBF) - Date of Call: August 9, 2023 Key Highlights Financial Performance - Organic Revenue Growth: 17.8% in the first half of 2023, driven by strong volume performances and price/mix improvements [8] - Comparable EBIT: €561 million, up nearly 18% on an organic basis, resulting in a margin of 11.2% [8] - Earnings Per Share (EPS): Increased by 22.3% [8] - Volume Performance: Marginal decline of 1% on an organic basis, with strategic priorities performing best [27] Category Performance - Sparkling Beverages: Main growth engine, representing around 70% of group revenues; volumes grew by 1.6% overall [9] - Energy Drinks: Volumes grew by over 20%, particularly in Emerging markets [10] - Coffee: Volume growth of 22%, with expansion in out-of-home customer recruitment [11] - Water: Volumes down 14% due to a focus on more profitable revenue growth [11] Strategic Initiatives - Sustainability Investments: Continued focus on sustainability, including a new returnable glass line in Austria and a commitment to a $15 million venture capital fund for carbon footprint reduction [7][14] - Acquisition of Finlandia Vodka: Expected to enhance offerings in key markets, particularly in the HORECA sector [22][23] Market Conditions - Mixed Economic Environment: Challenges in markets with high inflation (Czech Republic, Hungary, Romania) affecting consumer behavior [17] - Resilience in Key Markets: Positive performance noted in Greece, Ireland, Serbia, and Bulgaria, with cautious optimism for Nigeria following recent improvements [52][57] Future Outlook - Guidance for 2023: Mid-teens organic revenue growth expected for the full year, with EBIT growth of 9% to 12% [41] - COGS Expectations: Anticipated high single-digit increase in COGS per unit case for 2023, with a focus on managing inflationary pressures [41][72] - Long-term Growth Strategy: Updated mid-term guidance of organic revenue growth of 6% to 7% on average per year from 2024 [25] Additional Insights - Revenue Growth Management: Emphasis on data-driven insights to optimize pricing and promotional strategies, enhancing profitability [20][70] - Operational Efficiency: Strong operating leverage and effective hedging strategies contributed to improved margins despite inflationary pressures [29] - Market Adaptability: Local management teams demonstrated flexibility in navigating economic challenges, particularly in Nigeria [15][57] Conclusion Coca-Cola HBC AG reported a strong performance in the first half of 2023, with significant organic revenue and EBIT growth. The company remains focused on strategic priorities, sustainability, and adapting to market conditions, positioning itself for continued growth in the future.