Latest financial update

STRONG REVENUE GROWTH DRIVES MARGIN EXPANSION

Coca‑Cola HBC AG, a leading bottler of The Coca‑Cola Company, reports its financial results for the full year ended 31 December 2018.

Full-year highlights

  • Second year of FX-neutral revenue growth above our 4-5% target range, with continued good progress towards 2020 margin targets
  • Net sales revenue up 6.0% on an FX-neutral basis; reported net sales revenue increased by 2.1%
  • FX-neutral revenue per case up 1.7% benefiting from our revenue growth management initiatives including product innovation, price increases and better package mix
    - Established and Developing segment countries improved price/mix at a higher rate than in 2017
    - Emerging segment price/mix growth, up 2.4%, was a moderation from prior years due to the cycling of 2016/17 price increases in Nigeria and lower Premium Spirits sales in Russia
  • Volume growth accelerated to 4.2%, with growth in all segments, driven by Sparkling beverages
    - broad-based growth, with continued momentum in the Emerging and Developing segment countries
    Nigeria volume decline in a very competitive environment 
    growth in all categories including RTD Tea, which returned to growth after the launch of FUZE Tea
  • Comparable EBIT up 9.6% to €680.7 million; comparable EBIT margin up 70 basis points to 10.2%; reported margin up 60 basis points to 9.6%; key drivers included:
    - operating leverage from benefits of revenue growth management and strong volume growth
    - 20 basis-point reduction in comparable operating expenses as a percentage of revenue, a good performance in a year of continued investment in innovation and marketing
    - slightly favourable input costs offset by the impact of adverse foreign exchange movements
  • Comparable EPS up 5.9%; higher operating profitability, lower interest income and higher effective tax rate
  • Free cash flow was €370.0 million; strong operating cash flow was offset by a €49 million increase in net capital expenditure as we accelerated investment in revenue-generating assets as planned
  • The Board of Directors proposes a €0.57 dividend per share, a 5.6% increase on the 2017 dividend
  Full Year Change
  2018 2017  
Volume (m unit cases) 2,192.3 2,104.1 4.2%
Net sales revenue (€ m) 6,657.1 6,522.0 2.1% 
Net sales revenue per unit case (€) 3.04 3.10 -2.0%
FX-neutral net sales revenue1 (€ m) 6,657.1 6,283.1 6.0% 
FX-neutral net sales revenue per unit case1 (€) 3.04 2.99 1.7% 
Operating expenses / Net sales revenue (%) 28.2 28.4 -20bps 
Comparable operating expenses / Net sales revenue (%) 27.7  27.9 -20bps 
Operating profit (EBIT)2 (€ m) 639.4  589.8 8.4% 
Comparable EBIT1 (€ m) 680.7  621.0 9.6% 
EBIT margin (%) 9.6  9.0 60bps 
Comparable EBIT margin1 (%) 10.2  9.5 70bps 
Net profit3 (€ m) 447.4 426.0 5.0%
Comparable net profit1,3 (€ m) 480.4 449.7 6.8%
Basic earnings per share (EPS) (€) 1.216 1.168 4.1%
Comparable EPS1 (€) 1.306 1.233 5.9%
Free cash flow1 (€) 370.0 425.9 -13.1% 

1For details on APMs refer to ‘Alternative Performance Measures’ and ‘Definitions and reconciliations of APMs’ sections.
2Refer to the condensed consolidated income statement.
3Net Profit and comparable net profit refer to net profit and comparable net profit respectively after tax attributable to owners of the parent.

A full body shot of Zoran Bogdanovic - CEO
In 2018 we delivered another very good performance with revenue growth above our target range and another step up in margins. Strong volume growth in all our segments was helped by a record number of new product launches, whilst price/mix improved for the eighth consecutive year. This growth supported margin progress, which we delivered while increasing our investment in marketing. Our sharp focus on cost efficiencies continues while we invest in the business for growth. The shape of the business, capabilities and commitment of our people and our overall commercial proposition give us confidence in our ability to continue to grow revenues and margins. Zoran Bogdanovic, Chief Executive Officer of Coca‑Cola HBC AG