Coca-Cola HBC net sales grow 5.7% despite ‘softness’ in Russia and Nigeria

During a half-yearly financial report and webcast for the six months ended 30, June 2017, with Michalis Imellos, CFO, Coca-Cola HBC, Lois said the company had low single-digit volume growth in Nigeria with mixed performance in the categories as well as a successful launch of Monster in February.

Strong plans for Russia

In Russia he said the market remains challenging with good growth in trademark Coke and Energy and a decline driven by water and RTD tea .

“With Nigeria we see this year as a slow year in volume, and that is taking into consideration the high single digit price increase we did in 2016,​” said Lois.

“We have started the year with a mid teens price increase and we are very closely monitoring the external environment which will be the key driver for the second potential price increase​.

“So obviously we do have some pricing that would negatively affect the year, that's why at this point in time we are saying that Nigeria will be slow for 2017​.

“Going to Russia we have seen the overall external environment improving. At this point in time also the GDP is going to be positive, which is good news. So the combination of the overall macros and the forecast for 2017 drives us to believe this eventually will filter through to consumption​.

“We have very strong plans in Russia, so obviously the turnaround from the current minus 8%, to stabilisation is something that will contribute greatly to the overall emerging (markets)​.

The CEO went on to tell investors the firm’s strategy in Nigeria is focused on affordability and a proliferation on overall pack size where it launched, not nationwide, but selectively a 60cl PET, and expanded further distribution of its 35cl glass.

Sparkling & Juice

“As we move forward we have very strong plans including additional SKUs to address price points and that would be covering both Sparkling and Juice​,” he added.

“We have strong plans behind Fanta with the new campaign coming up. And we are focusing on a few of our occasions that are global for Hellenic and in Nigeria it's the meals occasion which would be again one of the big focus areas​.

“The developing segment has grown over the past years and recovered and now it's more smooth. ​

"The big opportunity is coming from Emerging because with the Russia crisis and the impact on the margins and with Nigeria having been challenged it will be potentially a softer year as we said in 2017. ​

"This is the area which in the future we expect that we give better, or more substantial margin expansion​.”

Talking about Fanta, Lois said it had seen in 2016 a 5% increase for Hellenic which was the pioneer in introducing a new bottle, the slider bottle across a few select markets.

The company has a lot of launches including a new Coke Zero formula, first introduced to the UK and now expanded to all other markets and a Sprite formula and ‘under the overall umbrella of reformulation’, there will also be news regarding juices.

Occasions

Lois said the firm is now focusing on four occasions; meals at home; away from home; overall socialising; and me time at home.

“In Energy (drinks), we have launched in seven new markets in 2016. Nigeria is ahead of us, the Ukraine is ahead of us, Belarus is ahead of us, and obviously expanding further the distribution in those seven markets and obviously Italy, Romania, are two key markets where we're looking forward to​,” said Lois.

“We are very excited with a lot of initiatives for 2017 and that's why also we are giving this outlook with regards to volume on Established, covering the 2.3% negative to flattish and then continuing with our momentum in both Emerging and Developing​.”