Reasons for the growth: According to a report, the US carbonated soft drink experienced impressive demand across the emerging markets in Africa and Europe.
This factor including strong demand in Nigeria resulted in a surge in the net sales revenue which hit 3.35 billion euros ($3.76 billion) for the six months ended June 28. Meanwhile, in the first quarter of the year, Coca-Cola HBC’s net sales revenue rose by 4.4% to 1.41 billion euros ($1.58 billion).
The report also added that the increased demand in Nigeria and expansion in Russia, Romania, Ukraine, coupled with growth in other emerging markets made Coca Cola HBC’s net sales revenue rise by 6.4% to 612.9 million euros within the period.
Result dispels fear: There had been an initial projection that economic slowdown in a number of Coca Cola HBC’s more established markets would negatively impact consumer spending, however, consumer demand in Nigeria, as well as other emerging markets, rallied to drive growth for the company.
Although volumes grew by 0.2% in established markets like Greece, Italy and Ireland, the timing of Easter and the delay in the introduction of new packaging and prices in Switzerland held back the growth.
Expansion plan: Coca Cola doesn’t do the heavy lifting of bottling and delivering the drinks. It mostly sells its syrup brand to a network of franchise partners. Now, it is planning to refranchise its Africa bottling unit, with Coca-Cola HBC and rival Coca-Cola European Partners competing for the right opportunities.
The Chief Executive of Coca Cola HBC, Zoran Bogdanovic, said, “We remain very open, alert for the right opportunities for Coca Cola HBC… we are looking for a bolt on opportunities primarily in water and juices.
“Proposed special dividend does not preclude our ability to think of also bigger and broader deals if they would come our way.”
The company proposed a special dividend of two euros per share.
Note: Coca Cola has 23.26% stake in Coca-Cola HBC and 18.6% stake in Coca-Cola European Partners.