Coca-Cola HBC reports robust organic growth in third quarter
Coca-Cola HBC reported a robust third quarter of organic growth on Tuesday, which it attributed to the continued implementation of its ‘24/7’ strategy.
The FTSE 100 beverage bottler said organic revenue increased 15.3% for the quarter, with year-to-date organic revenue growth at 17%.
That was bolstered by a 2.2% increase in organic volume, particularly in strategic priority categories, including a 1.5% rise in sparkling beverages, a substantial 24.8% surge in energy drinks, and an impressive 33.5% growth in coffee products.
Moreover, organic revenue per case showed growth of 12.9%, reflecting the cumulative advantages of revenue growth management initiatives across all categories and segments over the past year.
Reported revenue also displayed a positive trajectory, rising 3.8%, partially offset by foreign exchange headwinds in emerging markets.
Coca-Cola HBC said it continued to make substantial gains in value share, registering a 110 basis point increase in non-alcoholic ready-to-drink (NARTD) and a 60-basis point gain in sparkling beverages year-to-date.
In terms of segments, the company said it saw broad-based organic revenue growth with a particularly robust performance in emerging markets.
Within the established segment, organic revenue increased 7.7%, primarily driven by revenue-per-case expansion.
That growth occurred despite mixed volume performance due to challenging comparatives and varying weather conditions.
The developing segment recorded strong growth of 15.9% in organic revenue, supported by strong volume performance in energy and coffee products.
Those gains helped offset weaker volumes in sparkling beverages, water, and juices.
In the emerging segment, Coca-Cola HBC said it achieved an outstanding organic revenue increase of 21.8%, underpinned by a significant improvement in volume growth, notably in Egypt.
“We’re pleased to have delivered another solid performance, and a second consecutive quarter of organic volume growth,” said chief executive officer Zoran Bogdanovic.
“This was driven by our strong execution, underpinned by a continued focus on our strategic priority categories of sparkling, energy and coffee, and our focus on bespoke capability development to drive personalised execution for every outlet.
“Our sophisticated revenue growth management, powered by data, insights and analytics, is helping us to adapt our initiatives and execution to different consumer environments and successfully balance affordability and premiumisation.”
As a result, Bogdanovic said the company had enhanced revenue per case and driven higher levels of market share.
“We continue to invest in our future with a clear focus on delivering against our sustainability agenda.
“In Austria, we have introduced an industry-leading alternative to plastic shrink film for multipacks of multi-serve bottles, and in Romania, we have invested in recycled PET capabilities to drive packaging circularity.
“We reiterate our guidance for strong growth in 2023 and, despite continued macro uncertainties, we are well placed to deliver on our medium-term targets.”
Reporting by Josh White for Sharecast.com.