ECONOMY

Coca-Cola HBC profit grows with acquisitions

An acquisition in Russia and increased consumption in emerging markets boosted Greek Coca-Cola bottler CCHBC’s net profits in 2005, while more takeovers are expected to strengthen results this year. Coca-Cola Hellenic Bottling Co (CCHBC), the world’s second-largest bottler of Coca-Cola products by sales, said yesterday net profits rose 22 percent last year, in line with market expectations. CCHBC, 24 percent-owned by The Coca-Cola Co, posted net profits of 308 million euros, versus 253 million euros in 2004, adjusted to IFRS standards. «Results were basically in line with market expectations. Emerging markets outperformed, increasing their contribution in the group’s sales mix,» said HSBC securities analyst Paris Mantzavras. Seventeen analysts polled by Reuters had forecast on average full-year net profit of 305.8 million euros. In April, CCHBC acquired Russian juice company Multon jointly with Coca-Cola, as part of its strategy to strengthen its non-carbonated soft drinks portfolio. Multon is Russia’s second-largest juice producer, with a 25 percent market share. CCHBC also bought two bottled water companies in Serbia and Bulgaria last year. CCHBC 2005 earnings per share (EPS) came in at 1.29 euros. Including acquisitions, earnings per share were 1.34 euros, above its guidance of 1.28 to 1.30 euros, the company said. CCHBC expects EPS to grow to 1.50 to 1.53 euros this year on the back of the recent acquisition of Cyprus Coke bottler Lanitis and Serbian juice maker Fresh & Co. It said it will raise its 2005 dividend per share by 5 percent. The bottler paid a 0.28 dividend per share in 2004. New products CCHBC’s results were also boosted by a series of new products as more consumers shift to healthier beverages like orange juice and bottled water. Its non-carbonated soft drinks segment accounted for 28 percent of the group’s total sales last year versus a 23 percent share in 2004. CCHBC said it would rise further to around 35 percent this year after recent acquisitions. «In 2005, we took a number of initiatives that were the drivers behind this growth with a key focus on marketplace execution, expansion of our product offering and an ongoing emphasis on supply chain improvement,» CCHBC Managing Director Doros Constantinou said. This helped offset significantly higher raw material costs, he said. Sales volume rose 12 percent last year to 1.578 billion unit cases, with sales up 13 percent to 4.78 billion euros. (Reuters)