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Annual Profits Plunge at Coca-Cola Hellenic

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Annual Profits Plunge at Coca-Cola Hellenic

Annual Profits Plunge at Coca-Cola Hellenic
February 15
12:19 2012

Coca-Cola Hellenic has reported a 1% growth in net sales revenue to Eur8.85 billion for 2011 but volumes fell by 1%. Despite overall volume and net sales revenue remaining similar to the previous year, the continuing adverse impact of commodity costs and persisting economic challenges across most of the group’s territories, combined with unfavourable country mix and foreign currency impact resulted in a 21% decline in comparable EBIT to Eur541 million and net profit plunged 27% to Eur330 million.

A volume increase of 2% in developing markets was more than offset by a 3% decline in established markets and a 1% decline in emerging markets. Coca-Cola Hellenic’s sparkling beverages and energy drinks volume increased by 2% and 29% respectively, in 2011. Volume in the water and juice categories declined by 7% and 8%, respectively. Premium sparkling brands grew ahead of total volume, with Coca-Cola growing 5%, Coca-Cola Zero growing 7%, and Fanta and Sprite growing 1%, each.

Coca-Cola Hellenic continued to focus on improving operating efficiencies and productivity in its business through further restructuring initiatives in 2011, incurring pre-tax restructuring costs of Eur72 million which are expected to yield annualised benefits of Eur50 million from 2012 onwards. The restructuring initiatives of 2010 and 2011 resulted in total benefits of Eur44 million in 2011.

”Despite extremely challenging economic conditions in most of our markets, net sales revenue per case grew by 4% on a currency neutral basis in the full year. This result was achieved whilst growing or maintaining our volume share in sparkling beverages in twenty five out of twenty eight markets in 2011,” comments Dimitris Lois, chief executive of Coca-Cola Hellenic.

He continues: “We expect the economic environment and consumer sentiment to remain weak in 2012. We also anticipate another year of significant input cost pressures. In this environment, we will continue to optimise our operations to reduce our ongoing costs. We remain committed to our revenue growth strategy, and we expect to further improve currency neutral net sales revenue per case while we continue building sustainable leadership in the marketplace.”

The soft drinks group has identified additional restructuring opportunities to further improve efficiencies and reduce costs. It expects to incur costs of approximately Eur50 million in restructuring initiatives for 2012, which are expected to yield Eur35 million annualised benefits from 2013 onwards. Initiatives already taken in 2011 and initiatives to be made in 2012 are expected to yield approximately Eur40 million in total benefits in 2012.

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