Athens, Greece – 13 June 2008 - Coca‑Cola Hellenic Bottling Company S.A. (Coca‑Cola Hellenic) provides an update on the current trading to reflect the impact of several external factors that have led to weakness in the performance for the first half of the year.
While we are adjusting our near-term outlook, longer-term we continue to believe that the structural characteristics of our geographic portfolio and our strong market place capabilities will help us to create ongoing value for our shareholders.
In our quarterly results announcement on the 8th May 2008, we stated that whilst we still expected to deliver on our full year guidance, we remained watchful and realistic about the possible risk of an economic slowdown in some of our key markets, as well as further commodity cost pressures, notably PET. Though trading during most of April was satisfactory, some signs of weakening market conditions and unfavourable mix emerged at the end of that month. This was compounded in May, the start of our high selling season, with volume growth in the low-single digits being well below our initial plans. The factors contributing to this performance included:
• Weather conditions across most of our Central European markets, Russia and Ukraine were significantly worse in May compared with the prior year, impacting both volume and mix.
• The economic environment in some of our markets, particularly Italy, Ukraine and Romania, has become increasingly challenging with early signs of rising food and fuel prices adversely impacting consumer sentiment and restricting discretionary spending.
• The continued rise in global oil prices to unprecedented levels negatively impacted our cost base, primarily relating to our PET contracts and distribution expenses.
• In Greece, one of our key markets, a twelve-day general transportation strike in May limited our ability to fulfill customer orders for at least 3 to 4 weeks ahead of our high selling season, particularly in the higher margin immediate consumption channels.
Based on preliminary data, the factors outlined above are expected to impact adversely our operating profit result, particularly in the first half of the year which we expect to be down in the mid-to-high single-digits versus prior year. While we remain cautious of the current market conditions our updated 2008 full year guidance is as follows:
• Volume growth of approximately 6% (7% previously)
• EBIT growth of approximately 5%-7%, (11%-13% previously)
• EPS of approximately €1.37-€1.40, an increase of 5%-8%, (€1.46-€1.49, an increase of 12%-15% previously)
Doros Constantinou, Managing Director of Coca‑Cola Hellenic, commented:
‘In light of softer than expected trading performance that we have witnessed in some of our markets, particularly in May, we are updating our 2008 full year guidance. We are already initiating specific action plans to meet these challenges and I believe that the steps we are taking will enable us to deliver on our updated full year guidance. Over the long-term, the unique strengths of Coca‑Cola Hellenic’s proven business model and our clear set of value-focused strategic priorities give me confidence in our ability to achieve our previously communicated long-term growth targets.’
Coca‑Cola Hellenic management will host a conference call with financial analysts today to discuss the business update at 3pm Athens time (1pm London time, 8am New York time).
Investor Relations Director
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Coca‑Cola Hellenic’s website is located at www.coca-colahellenic.com.
Coca‑Cola Hellenic is one of the world's largest bottlers of products of The Coca‑Cola Company and has operations in 28 countries serving a population of 550 million people. Coca‑Cola Hellenic‘s shares are listed on the Athens Exchange (ATHEX: EEEK), with secondary listings on the London (LSE: CCB) and Australian (ASX: CHB) Stock Exchanges. Coca‑Cola Hellenic’s American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE: CCH).
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This document contains forward-looking statements that involve risks and uncertainties. These statements may generally, but not always, be identified by the use of words such as ‘believe’, ‘outlook’, ‘guidance’, ‘intend’, ‘expect’, ‘anticipate’, ‘plan’, ‘target’ and similar expressions to identify forward-looking statements. All statements other than statements of historical facts, including, among others, statements regarding our future financial position and results, our outlook for 2008 and future years, business strategy and the effects of the macro-economic environment and global oil prices on our business and financial condition, budgets, projected levels of consumption and production, projected raw material and other costs, estimates of capital expenditure and plans and objectives of management for future operations, are forward-looking statements. You should not place undue reliance on these forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect our current expectations and assumptions as to future events and circumstances that may not prove accurate. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in our annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (File No 1-31466).
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Unless we are required by law to update these statements, we will not necessarily update any of these statements after the date of the consolidated financial statements included here, either to conform them to actual results or to changes in our expectations.