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Eastern European Coke bottler Coca-Cola HBC posted first half organic growth of 19.4% as double-digit price rises and volume growth mitigated the loss of business in Russia and Ukraine.

Organic volumes were up 4.7% in the first half, albeit excluding the impact of declines in Russia and Ukraine organic volume growth was up 12.1% with increased momentum on the second quarter.

Organic revenue per case increased 14% benefitting from pricing and targeted actions to improve mix, further supported by the recovery of the out-of-home channel, with an accelerating of price in Q2 to mitigate inflationary pressures.

Overall organic revenue increased by 19.4% and reported net sales revenue increased by 29.6% to €4.2bn, helped by Egypt adding 7 percentage points to reported net sales revenue growth and positive currency impacts from the Russian Rouble and Nigerian Naira.

Within Sparkling, Low/ no sugar variants were up 28.6% and adult sparkling brands up 7.4%. Trademark Coca-Cola volumes grew by 4.0%, led by ongoing strong performance from Coke Zero. Overall, Sparkling volumes grew by 3.6%.

Energy volumes grew by 18.6%, with consistently high growth in all three segments.

Coffee “performed well”, rising 55.8%, led by growth in Costa Coffee and out-of-home customer recruitment.

Still volumes grew by 7%, with growth led by the established and developing segment, while performance in the emerging segment was weaker, impacted by Russia and Ukraine.

Premium Spirits volumes increased by 4.9%, cycling growth of nearly 50% in the prior year period.

Overall, established market organic revenue increased by 19.1%, developing markets up 33.6% and emerging up 14.2% excluding Russia and Ukraine.

Comparable operating costs increased also jumped by 17.1% on the back of higher volume and Egypt, but operating costs as a percent of revenue decreased by 250 basis points to 23.7%.

CCH said it benefited from good operational leverage by controlling costs as revenue growth accelerated. To seize opportunities in markets outside of Russia and Ukraine, it increased marketing spend, partially offset by cuts in Russia from March onwards.

Comparable EBIT increased by 23.0% and 32.0% on an organic and reported basis respectively, to €462.5m, while comparable net profit was up 34.5% to €316.9m.

During the period it incurred non-cash charges of €188m, predominantly related to the scaling back of its business in Russia.

CEO Zoran Bogdanovic commented: “We delivered strong performance in the first half as we continued to execute our growth strategy with focus and discipline, including making progress on our sustainability commitments.

“The quality of our 24/7 brand portfolio, revenue growth management capabilities and execution excellence allowed us to take full advantage of post-pandemic recovery across our markets and to continue to gain significant share. I am pleased we achieved strong organic growth, balanced between volume and revenue per case. Pricing, mix and cost efficiencies helped to mitigate input cost increases, underpinning successful conversion of revenue growth into profits and cashflow.

“Consistent investment in high-potential opportunities, prioritised capabilities and capacity over years is delivering growth today. And we stay the course, with targeted investments for growth.

“We have high confidence that our close customer partnerships, strong portfolio and the capabilities of our people will allow us to continue to create value even as we face a period of macro-economic and geo-political uncertainty.”

The group restated its guidance for 2022 and expect to generate comparable EBIT in the range of €740m-820m.

CCH shares are up 3.1% on the news to 2,042p.

Morning update

Palm oil producer MP Evans has responded to the announcement by the Indonesian government regarding changes to its palm-oil export tax bands, which are effective immediately.

Previously, export tax became payable in increasing amounts based on US$50 price bands starting at CPO reference prices above US$750 per tonne.

The export tax continues to be payable based on US$50 price bands, but this now starts at CPO reference prices above US$680 per tonne.

The effect is to increase the export tax by up to US$74 per tonne depending on the CPO reference price.

The CPO export levy, which has been temporarily cancelled until the start of September, remains unchanged from that announced by the company on 19 July 2022, at which point it had decreased by up to US$90 per tonne from the previous arrangement, depending on the CPO reference price.

It said it will continue to monitor the situation closely as the new arrangements come into force.

On the markets this morning, the FTSE 100 has opened flat at 7,507.1pts.

Early risers, along with Coca-Cola HBC, include McBride, up 4.1% to 18p, Nichols, up 3.5% to 1,170p and Naked Wines, up 1.4% to 151.7p.

Fallers include Haleon, down 5.5% to 264.1p, Science in Sport, down 4.8% to 30p and Deliveroo, down 1.6% to 96.4p.

Yesterday in the City

The FTSE 100 closed yesterday up 0.25% at 7,507.1pts.

Deliveroo jumped 7.4% to 98p despite revealing widening losses, slowing growth and the loss of Next boss Simon Wolfson from its board.

Risers included THG, up 6.4% to 66.9p, Hilton Food Group, up 3.7% to 1,054p, Glanbia, up 3.5% to €11.90, Bakkavor, up 3.4% to 99.8p, Cranswick, up 2.1% to 3,270, and B&M European Value Retail, up 1.8% to 859.5p.

Fallers included Finsbury Food Group, down 2.1% to 69p, Nichols, down 1.3% to 1,130p, AG Barr, down 2.1% to 69p and PZ Cussons, down 0.7% to 211.5p.