Coca-Cola’s European bottler said it expected an end to the consumer downturn in Greece and Ireland this year, but warned of a bigger hit to reported profits from weakening foreign currencies than in 2013.
Coca-Cola Hellenic Bottling Company had been Greece’s largest company by market value until last year, when it decided to remove a “Greek discount” on its valuation by moving its primary listing from Athens to London.
Dimitris Lois, chief executive of the FTSE 100 company, said he had been “very encouraged” by an increase in sales volumes in the final three months of last year – the first pick-up in 12 months.
“We do expect that after the middle of this year we will be able to look back and say the worst is behind us in Greece and Ireland,” he said.
But he foresaw no improvement in Italy, or in central Europe. However, the group’s emerging markets of eastern Europe, Russia and Nigeria would be “major growth drivers”, he said.
Emerging markets, which account for 47 per cent of total net sales revenues, were the fastest growing of the 28 countries in which Coca-Cola’s second-largest bottler operates. Their sales rose 4 per cent in the three months to the end of December and by 2 per cent for the full year.
Coca-Cola HBC, which is domiciled in Switzerland, reported a 14 per cent rise in pre-tax profits to €294.1m, driven by a smaller restructuring charge compared with 2012. Net sales fell 2 per cent to €6.9bn.
Cost-cutting boosted operating profit margins by 0.2 percentage points to 6.6 per cent – the first improvement in three years.
Mr Lois expected input costs to be stable this year, but said that the hit from the weakening of currencies such as the Russian rouble would be “significantly higher” than last year’s €32m.
“Looking into 2014 the prospects are for somewhat better volumes as some of the worst market performances cycle out, but any uptick is likely to be very modest with the group expecting a ‘challenging’ trading environment,” said analysts at Credit Suisse, who cut 2014 forecasts by 13 per cent.
The shares closed 3 per cent lower at £15.48.
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