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European Coca-Cola bottler Coca-Cola HBC (CCH) beat earnings expectations last year as a return to growth in established markets helped improve profitability.

Full year volumes were 2.6% for the year ended 31 December 2015 after continued volume growth in the fourth quarter. The company saw strong performance in established markets including Italy and Greece, growing volumes in developing markets, including Poland and Hungary, and double-digit growth in emerging markets despite a single-digit decline in Russia.

Comparable EBIT was up 11.4% to €473.2m as EBIT margin improved by 100 basis points, driving by pricing action, favourable input costs and volume leverage.

On a reported basis, EBIT increased by 15.8% to €418.2m, while net profit was down 4.9% to €280.m.

Dimitris Lois, CEO of Coca-Cola HBC AG, commented: “I am pleased with our progress in 2015; volumes grew in all segments for the first time in five years and margins have improved significantly. Our commercial initiatives supported volume expansion and we made further efficiency gains to ensure continued profitable growth.”

“Conditions in Europe are slowly improving while countries with large oil exposure face ongoing difficult trading conditions. Overall [in 2016] we think the business is well placed to build further on both the volume growth and margin expansion achieved in 2015.”

CCH share leapt 4.1% to 1,431p in morning trading in London on the consensus beat.

Morning update 

Coca-Cola HBC apart it’s a typically quiet Friday on the markets this morning after the brief flurry of activity yesterday with full year results from Wal-Mart (and Asda) and Nestle.

The Grocer has the story that Kraft Heinz is in pole position to snap up Mondelez-owned Philadelphia. We also have the story that snack company Propercorn is receiving offers from private equity firms for a minority stake in the business.

The FTSE 100 is creeping up again this morning, rising 0.3% to 5,992pts so far this morning.

CCH is the major market mover in the sector (as above, up 4.1% to 1,431p), but there are also share price rises from Applegreen (APGN), up 2.1% to 363p, and Premier Foods (PFD), up 1.6% to 32p. 

The morning is looking less rosy for AG Barr (BAG), down 2.1% to 495.1p, and Majestic Wine (MJW), down 1.3% to 390p.

The ONS’ official retail sales figures from January are out later this morning.

Yesterday in the City

Asda fourth quarter sales plunge of 5.8% (leading to a full-year sales collapse of 4.7%) has made the headlines in the UK, but parent Wal-Mart had wider problems last year.

Wal-Mart’s shares fell 3.1% in the US yesterday as investors were spooked by it’s first group-wide sales fall since 1980, with revenues down 0.7% to $482.1bn for the year to 31 January (though without currency impact sales would have been up 2.8%).

In the UK it was a slightly downbeat day in the City as once again falls in the mining sector weighed heavily on the rest of the market.

The FTSE 100 ended the day 1% down to fall back through the 6,000 point barrier to 5,971.9pts.

There was little notable movement in the FTSE 100 grocery and fmcg sectors, but former FTSE constituent Morrisons (MRW) was up 2.9% to 186.7p as knowledge spread of the (at first glance, unlikely) rumour that Tesco is preparing a bid.

Sainsbury’s (SBRY) ended the day up 0.6% to 263.1p, while British American Tobacco (BATS) fell 1% to 3,849.5p and Associated British Foods (ABF), was down 0.9% to 3,229p.

Along with Morrisons a number of other mid-cap retailers had good days, including Conviviality (CVR), up 3.8% to 219.8p, McColl’s (MCLS), up 2.2% to 134.9p, and Greggs (GRG) up 1.6% to 1,039p. SSP Group (SSPG) fell 1.6% to 278.4p and Ocado (OCDO) was down 1.3% to 260p.

Notable supplier movers including Hilton Food Group (HFG), up 3.5% to 529p, and Tate & Lyle up 3.1% to 564p. Purecircle (PURE) fell 3.7% to 312p and Kerry Foods was down 2.1% to €72.49.

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