Coca-Cola HBC AG achieve record levels of revenue, comparable EBIT and free cash flow

Coca Cola

Coca-Cola HBC AG (LON:CCH), a growth-focused Consumer Packaged Goods business and strategic bottling partner of The Coca-Cola Company, has reported its financial results for the twelve months ended 31 December 2022.

Full-year highlights

·     Focus on strategic priorities and excellence in execution delivered another year of strong organic growth1, driven by price, mix and volume

o  Organic revenue up 14.2%. Reported revenue up 28.3%

o  Excluding Russia and Ukraine organic revenue up 22.7%

o  Organic revenue per case up 15.9%, benefitted from pricing and targeted actions to improve mix throughout the year

o  Broad-based volume growth outside of Russia and Ukraine, led by our priority categories: Sparkling, Energy and Coffee

o  Execution excellence driven by focused channel activations and customer segmentation

o  Gaining volume and value share

·     Comparable EBIT up 11.9% to €929.7 million with organic EBIT up 1.3% as pricing, mix and cost discipline drive profits despite the challenging inflationary backdrop

o  Operating leverage and cost savings enabled operating expenses as a percent of revenue to improve by 50bps

o  Continued investment in marketing, increased by 11.5% excluding Russia and Ukraine

o  2021 comparative included €23 million benefit to EBIT from one-off Cyprus property sale

·     Continued investment behind strategic priorities to drive profitable, sustainable growth

o  Investment behind Sparkling and Energy capacity and capability driving consistent performance

o  Increased investment in capabilities to support prioritised opportunities in data, digital commerce, Egypt and Coffee

o  Accelerating our sustainability agenda with the opening of €30 million recycled PET (rPET) facility in Italy

·     Another year delivering record free cash flow and an increased dividend

o  Comparable EPS up 7.7%, impacted by a higher tax rate and finance charges, as expected

o  Free cash flow increased by €43.8 million to €645.1 million, due to improved profit generation and effective working capital management

o  Issue of first green bond for €500 million

o  Board of Directors to propose an ordinary dividend of €0.78 per share, up 9.9% year on year representing a 46% pay-out

Segment highlights

Established and Developing show strong momentum, Emerging impacted by declines in Russia and Ukraine

·     Established: Organic revenue increased by 18.6% with well-balanced volume and  revenue-per-case expansion. Organic EBIT expanded 1.3%

·     Developing: Organic revenue up 29.0%, led by double-digit volume growth across the main markets. Organic EBIT up 12.7%

·     Emerging: Organic revenue up 5.5%, with 23.5% growth excluding Russia and Ukraine. Organic EBIT declined 1.1%

Zoran Bogdanovic, Chief Executive Officer of Coca-Cola HBC AG, commented:

“We delivered a strong performance in 2022 against a challenging backdrop, achieving record levels of revenue, comparable EBIT and free cash flow.

The benefits of portfolio prioritisation were clear, with growth led by Sparkling, Energy and Coffee. Consumer demand for our products and in our categories remained good. The power of our portfolio and consistent investment in our capabilities allowed us to balance pricing and mix enhancements, while also achieving another year of strong share gains.

We are making tangible progress towards our Mission 2025 and NetZeroby40 goals, with key milestones including the opening of a new rPET facility in Italy and the issuance of our first green bond.

Our strong performance is testament to the passion and dedication of our people and I would like to thank all our customers, partners and employees for their ongoing commitment and support.

Looking to 2023, our track record, portfolio, capabilities, the diversity of our markets and, above all, our talented people make us confident of achieving another year of strategic and financial progress, accelerating our journey to becoming The Leading 24/7 Beverage Partner.”

 Full Year
Full Year
% Change Reported%Change Organic1
Volume (m unit cases)2,711.82,412.712.4%-1.5%
Net sales revenue (€ m)9,198.47,168.428.3%14.2%
Net sales revenue per unit case (€)3.392.9714.2%15.9%
Operating profit (EBIT)2 (€ m)703.8799.3-11.9% 
Comparable EBIT1 (€ m)929.7831.011.9%1.3%
EBIT margin (%)7.711.2-350bps 
Comparable EBIT margin1 (%)10.111.6-150bps-130bps
Net profit3 (€ m)415.4547.2-24.1% 
Comparable net profit1,3 (€ m)624.9578.18.1% 
Basic earnings per share (EPS) (€)1.1341.499-24.3% 
Comparable EPS1 (€)1.7061.5847.7% 
Free cash flow1 (€ m)645.1601.37.3% 

1For details on APMs refer to ‘Alternative Performance Measures’ and ‘Definitions and reconciliations of APMs’ sections.

2 Refer to the condensed consolidated income statement.

3Net Profit and comparable net profit refer to net profit and comparable net profit respectively after tax attributable to owners of the parent.

Business Outlook

We have benefitted from a better-than-expected financial performance in 2022, despite the significant headwinds to our business. While we remain attentive to macroeconomic and geopolitical risks, we have high confidence in our broad portfolio and the opportunities in our diverse markets, amplified by our prioritised capabilities, customer-centric commercial strategy and above all, the talent of our people. We are actively prioritising investments across our categories and geographies to drive sustainable growth.

·     In 2023 we expect to generate organic revenue growth at a Group level above our 5-6% average target range.

·     We continue to face ongoing inflation and assume COGS/case increases by low teens percent in 2023.

·     We expect the impact of translational FX on our Group comparable EBIT to be a €25 – 35 million headwind.

·    We expect organic EBIT growth in the range of +3% to -3% in 2023.

Technical guidance

Restructuring: We do not expect significant restructuring initiatives to take place in 2023.

Tax: Considering the dynamics of the evolving mix of profitability in our country portfolio, we continue to

expect our comparable effective tax rate to be in the range between 25% and 27%.

Finance costs: We expect net finance costs for 2023 to be similar to 2022.

Scope: We will benefit from the consolidation of Multon from 11 August 2022 and the acquisition of Three Cents from 21 October 2022.

Group Operational Review

Leveraging our unique 24/7 portfolio

Organic revenue increased by 14.2% driven by price and mix, while reported net sales revenue increased by 28.3%, driven by the acquisition of Egypt, consolidation of Multon as well as favourable currency impact.

Full year organic volume fell by 1.5%, adversely impacted by declines in Russia and Ukraine. Excluding these markets, organic volume growth was up 8.1%, with broad-based increases across segments.

Our focus on the most profitable growth opportunities across our 24/7 portfolio is driving high quality revenue growth. 

·     Outside of Russia and Ukraine, Sparkling volumes grew by 7.7% overall. Low/ no sugar variants and Adult Sparkling maintained strong momentum with Low/no sugar up 14.3% and Adult Sparkling up 9.5%. Trademark Coca-Cola volumes grew 9.1%, led by ongoing strong performance from Coke Zero, while Fanta grew 3.8% and Sprite 4.7%. Including Russia and Ukraine, overall Sparkling volumes declined by 2.7% with Low/no sugar up 10.3%, a decline in Adult Sparkling and a 4.0% decline in trademark Coca-Cola volumes.

·     Energy volumes grew by 16.3%, with strong momentum in most markets, which more than offset declines in Russia and Ukraine.

·     Still volumes grew by 0.5%, with growth led by the Established and Developing segments.

·     Coffee performed well, up 28.2%, with encouraging share gains driven by both rate of sales and distribution increases. We are making good progress on out-of-home customer recruitment having doubled outlet penetration to 8,000 in a year.

Winning in the marketplace

Organic revenue per case expanded by 15.9%, as pricing and revenue growth management actions in all markets drove improvements throughout the year.

Pricing and mix

Pricing remained a critical lever of growth in 2022. We took a proactive and agile approach, enhanced by a consistent focus on improving mix. We have well-developed plans and scenarios in our markets to guide our pricing decisions in 2023. We continue to benefit from our revenue growth management capabilities, the strength and breadth of our portfolio, as well as data, insights and analytics, to support affordability in a profit-accretive way, while also premiumising to enhance revenue per case.

·     Single-serve mix gained 3.5 percentage points, driven by strong growth in the out-of-home channel as well as targeted activation of single-serve package formats across our markets.

·     Category mix continued to improve driven by contributions from Sparkling and Energy.

·     Channel mix improved due to strong out-of-home channel performance, which benefitted from targeted channel activation plans to capitalise on recovery after the COVID-19 pandemic.

Market share gains

We delivered share gains across the portfolio in 2022 driven by holistic marketing plans and targeted execution across our markets. In NARTD, value share increased by 120 basis points, while Sparkling value share increased by 170 basis points. We remained the number one contributor to retail customers’ revenue growth within fast moving consumer goods (FMCG) across our territories.

Cost control, operating profit and margins

Comparable gross profit grew by 21.3%, leading to gross profit margins of 34.2%, a decline of 200 basis points. Inflation headwinds from input costs, energy and production overheads pushed comparable COGS per case higher by 17.7%.

Comparable operating costs as a percent of revenue improved by 50 basis points to 24.6%. We benefitted from good operational leverage by controlling costs as revenue growth accelerated. While maintaining tight control of non-essential costs, we increased marketing spend above pre-pandemic levels, seizing opportunities across our markets.

Comparable EBIT increased by 11.9% on a reported basis to €929.7 million, benefitting from growth across our markets, cost control, currency, the consolidation of the Egypt acquisition from mid-January as well as the consolidation of Multon.

On an organic basis, comparable EBIT increased by 1.3%, while the comparable EBIT margin was 10.1%, down 130 basis points on an organic basis, as the inflationary pressures in costs, together with the cycling of last year’s asset sale, more than offset our pricing and mix actions.

We saw slightly positive translational and transactional currency impact in 2022, as the appreciation of the Russian Rouble during the year was offset by depreciation of the Nigerian Naira.

Net profit and free cash flow

Comparable net profit of €624.9 million and comparable basic earnings per share of €1.706 were 8.1% and 7.7% higher than in the prior year, respectively. Reported net profit and reported basic earnings per share of €415.4 million and €1.134 were 24.1% and 24.3% lower than in the prior year respectively, mainly due to impairment charges relating to our operations in Russia.

Comparable taxes amounted to €224.4 million, representing a comparable tax rate of 26%, at the mid-point of our guided range of 25% to 27%.

Financing costs were €15.1 million higher than the prior year at €82.7 million, driven by the consolidation of Egypt.

Capital expenditure increased by €48.6 million to €589.5 million as we invested behind production capacity in growth products, packages and markets, energy efficient cooler expansion to drive single-serve mix, and our sustainability agenda with the opening of an rPET facility in Italy. Capex as a percentage of revenue was 6.4%, slightly below our targeted range of 6.5% to 7.5%, given discontinued investment in Russia.

Free cash flow was €645.1 million, an increase of €43.8 million compared to the prior year and a record for the business, driven by higher profitability.

Earning our licence to operate

Throughout the year we remained focused on delivering towards our Mission 2025 and NetZeroby40 goals and were pleased to be recognised, for a sixth time, as the world’s most sustainable beverage company by the 2022 Dow Jones Sustainability Index.

We continued to prioritise a circular approach to packaging. For example, in Switzerland, we successfully moved our entire, locally produced portfolio to rPET and rolled out label-free bottles for our
carbon-neutral water brand, Valser. In December we began the transition to a 100% rPET portfolio in Austria and Italy for all categories outside of Water.

Also in Italy, this year we repurposed an existing site, building a new plant that can convert up to 30,000 tonnes per annum of plastic into 100% rPET preform bottles, developing our in-house recycling technology capability. These rPET preforms have a carbon footprint up to 70% lower than their virgin plastic equivalents. This investment guarantees a good supply of rPET meeting our total beverage needs in the market. We also established in-house rPET production capability in our facility in Poland, and have further plans for rPET production in Romania for 2023, bringing our total investment in recycling technologies to date to more than €45 million.

In September we issued our first green bond, raising €500 million in support of ambitious sustainability projects that will further accelerate our progress into 2023 and beyond.

Operational Review by Reporting Segment

Established markets

Full Year
Full Year
% Change Reported% Change Organic
Volume (m unit cases)643.9589.99.2%9.1%
Net sales revenue (€ m)2,974.12,479.020.0%18.6%
Net sales revenue per unit case (€)4.624.209.9%8.6%
Operating profit (EBIT) (€ m)310.4285.68.7%
Comparable EBIT (€ m)307.1300.82.1%1.3%
EBIT margin (%)10.411.5-110bps
Comparable EBIT margin (%)10.312.1-180bps-180bps

Net sales revenue grew by 18.6% and 20.0% on an organic and reported basis respectively, as we faced positive foreign currency movements from the Swiss Franc.

Organic growth in net sales revenue per case was 8.6%. We benefitted from price increases in all markets throughout the year, as well as positive package and category mix. A focus on single-serve activation, both in at-home and out-of-home channels, saw a 4.5 percentage point improvement in single-serve mix.

Established markets volume grew 9.1%, with good momentum across markets, driven by our priority categories. Sparkling volumes grew high-single digits benefitting from over 20% volume growth in Adult Sparkling and low-double digit growth in Coke Zero. Stills grew by high-single digits, benefitting from strong execution and improvement in the out-of-home channel. Energy volumes expanded in the mid-twenties despite very tough comparatives.

·     In Italy, volumes grew by 9.0%. Growth was driven by strategic priorities in Sparkling: Coke Zero up high-teens and Adult Sparkling up strong double-digits. Energy grew in the thirties, despite tough comparatives. We are seeing positive results from investments in Stills with strong performance from Powerade and FuzeTea.

·     Volumes in Greece were up by 9.1%. We saw low-double digit volume growth in Stills, driven by Water, which performed well, as the out-of-home channel recovered. Sparkling grew by high-single digits driven by Coke Zero, Fanta and Adult Sparkling, while Energy grew above 20%.

·     In Ireland, volumes grew by 10.0%. Stills delivered mid-teens volume growth driven by successful new premium launches in Hydration. Sparkling volumes grew by high-single digits, driven by Coke Zero, Sprite and Fanta, while Energy grew in the mid-twenties.

·     In Switzerland, volumes grew by 8.7%, benefitting from out-of-home recovery and good execution. Still volume was up low-double digits. Sparkling volumes grew high-single digits with a strong performance from Trademark Coke and Fanta.

Comparable EBIT in the Established segment increased by 1.3% and 2.1% on an organic and reported basis respectively, to €307.1 million. Comparable EBIT margin was 10.3%, down 180 basis points on an organic basis, impacted by higher COGS as well as the cycling of last year’s property sale in Cyprus.

Developing markets

Full Year
Full Year
% Change Reported% Change Organic
Volume (m unit cases)478.8415.515.2%15.2%
Net sales revenue (€ m)1,719.71,365.625.9%29.0%
Net sales revenue per unit case (€)3.593.299.3%11.9%
Operating profit (EBIT) (€ m)113.1104.78.0%
Comparable EBIT (€ m)115.1106.58.1%12.7%
EBIT margin (%)6.67.7-110bps
Comparable EBIT margin (%)6.77.8-110bps-100bps

Net sales revenue grew by 29.0% and 25.9% on an organic and reported basis respectively, driven by adverse foreign currency movement through the year from the Polish Zloty and Hungarian Forint.

Organic net sales revenue per case increased by 11.9%. The segment benefitted from double-digit volume growth across the main markets as well as from pricing initiatives, and positive package and channel mix.

Developing markets volume grew by 15.2%, with a good performance across all countries and categories. We saw mid-teens volume growth in Sparkling and high-teens growth from Energy and we delivered good results also in Adult Sparkling and Stills.

·     Poland volumes increased by 18.5%, with very strong performance in Sparkling, thanks to Trademark Coke and Sprite. The category benefitted from cycling the implementation of the sugar tax and our execution with customers, while we drove significant share gains in Sparkling. Energy grew by high-teens and Stills by low double digits.

·     In Hungary, volumes increased by 11.8%, with a strong performance from Sparkling where we saw mid-teens growth, driven by Trademark Coke, Fanta, and Adult Sparkling. Energy continued its strong momentum. Additional pricing was taken to pass on the sugar tax effective July 2022.

·     Volume in the Czech Republic grew by 17.8%. We saw mid-teens growth in Sparkling driven by Trademark Coke, Fanta and Adult Sparkling. Water volumes increased significantly due to stronger execution in the out-of-home channel.

Comparable EBIT in the Developing segment increased by 8.1% to €115.1 million, an organic growth rate of 12.7%. Comparable EBIT margin was 6.7%, down 100 basis points on an organic basis, impacted by higher COGS.

Emerging markets

Full Year
Full Year
% Change Reported% Change Organic
Volume (m unit cases)1,589.11,407.312.9%-10.9%
Net sales revenue (€ m)4,504.63,323.835.5%5.5%
Net sales revenue per unit case (€)2.832.3620.0%18.4%
Operating profit (EBIT) (€ m)280.3409.0-31.5%
Comparable EBIT (€ m)507.5423.719.8%-1.1%
EBIT margin (%)6.212.3-610bps
Comparable EBIT margin (%)11.312.7-150bps-80bps

Net sales revenue grew by 5.5% on an organic basis, or by 35.5% on a reported basis, due to the consolidation of Egypt from mid-January and Multon from 11 August, as well as the stronger Russian Rouble. Organic net sales revenue grew by 23.5% when excluding Russia and Ukraine.

Net sales revenue per case grew 18.4% organically, benefitting from pricing actions taken throughout the year, including proactively managing the impact of currency devaluation in Egypt and Nigeria.

Emerging markets’ volume fell by 10.9% organically and grew 12.9% on a reported basis, which includes the consolidation of Egypt from mid-January and Multon from 11 August. Sparkling volumes declined by low-double digits and Still volumes were down high-single digits, both negatively impacted by Russia and Ukraine. Excluding Russia and Ukraine, organic volumes grew by mid-single digits and Sparkling volumes grew mid-single digits. 

·     Volume in Nigeria increased by 2.0% on tough comparatives. We consciously drove strong price mix to manage cost inflation and currency devaluation while gaining both value and volume share. Sparkling volumes increased low-single digits, with high-single digit growth in Adult Sparkling. We also benefitted from very strong growth in Energy and share gains in Juice.

·     Russia volumes declined by 41.4%. We depleted inventories of The Coca-Cola Company’s branded products from 8 March to the end of July. We now sell solely local brands in Russia.

·     Ukraine volume fell by 26.3%. After restarting the plant in May, we continued to increase production through the rest of the year, in response to improving demand from customers and consumers. The team continues to manage complex challenges in the operating environment.

·     Volume in Romania increased by 0.6%. Sparkling volumes fell slightly, with mid-single digit growth in Adult Sparkling and low-double digit growth in Energy. We saw low-single digit growth in Stills, driven by Water and RTD tea.

·     Volumes declined by 7.3% in Egypt, on a tough comparative and a challenging consumer and macroeconomic environment. Integration continues to progress well, with ongoing deployment of our key capabilities in the market, which drove market share gains in Sparkling.

Comparable EBIT in the Emerging segment fell by 1.1% on an organic basis and grew 19.8% on a reported basis, to €507.5 million. Operating profit declined 31.5%, mainly due to impairment charges relating to our operations in Russia. Comparable EBIT margin was 11.3%, down 80 basis points on an organic basis, impacted by higher COGS.

Coca-Cola HBC Group

Coca-Cola HBC is a growth-focused consumer packaged goods business and strategic bottling partner of The Coca-Cola Company. We create value for all our stakeholders by supporting the socio-economic development of the communities in which we operate, and we believe building a more positive environmental impact is integral to our future growth. Together, we and our customers serve 715 million consumers across a broad geographic footprint of 29 countries on three continents. Our portfolio is one of the strongest, broadest and most flexible in the beverage industry, offering consumer-leading beverage brands in the sparkling, juice, water, sport, energy, plant-based, ready-to-drink tea, coffee, adult sparkling and premium spirits categories. These beverages include Coca-Cola, Coca-Cola Zero, Schweppes, Kinley, Costa Coffee, Valser, Römerquelle, Fanta, Sprite, Powerade, FuzeTea, Dobry, Cappy, Monster and Adez. We foster an open and inclusive work environment amongst our 33,000 employees and we are ranked among the top sustainability performers in ESG benchmarks such as the Dow Jones Sustainability Indices, CDP, MSCI ESG and FTSE4Good.

Coca-Cola HBC has a premium listing on the London Stock Exchange (LSE: CCH) and is listed on the Athens Exchange (ATHEX: EEE). For more information, please visit

Financial information in this announcement is presented on the basis of International Financial Reporting Standards (‘IFRS’)

Conference call

Coca-Cola HBC’s management will host a conference call for investors and analysts on Tuesday, 14 February 2023 at 9:00 am GMT. To join the call, in listen-only mode please join via webcast. If you anticipate asking a question, please click here to register and find dial-in details.

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