Top story

GB Coke bottler Coca-Cola Europacific Partners has raised its sales and profits outlook after strong volume-driven first half growth on the back of a strong rebound of out-of-home consumption.

First half revenues were up 40% year-on-year to €8.3bn, boosted by the acquisition of Coca-Cola Amatil and organic revenue growth of 17%.

Overall growth was driven by both volumes and pricing, with volumes up 32% in the first half and 13% on an organic basis.

In the second quarter revenues were up 26%, with pro forma growth of 16%.

Second quarter volumes were up 10.5% year-on-year and up by 5% on pre-Covid 2019, driven by the continued recovery of the away from home (AFH) channel, further supported by the return of tourism in Europe, alongside favourable weather.

AHF volumes were up 20% and were above pre-Covid levels by 1.5%, reflecting increased mobility and the recovery of immediate consumption packs.

Home performance remained “resilient”, with volumes up 4.5% in the quarter and by 7.5% to on pre-Cpvid levels, led by the recovering of immediate consumption packs and sustained growth in multipacks.

Pro forma revenue per unit case was up 5%, driven by favourable underlying price & promotional optimisation, alongside positive pack and channel mix led by the recovery of AFH.

On a geographical basis, all key regions were in double-digit growth in the second quarter, with GB up 14.5% on an organic basis, France up 14%, Germany 18%, Iberia 27.5%, Northern Europe 13.5% and Asia Pacific up 10%.

In Great Britain CCEP said growth was driven by favourable weather and a strong recovery in away from home consumption, with Coca-Cola Original Taste & Zero Sugar, Fanta & Monster all outperforming.

Overall strong growth led to an 86% jump in operating profits to €967m in the first half, reflecting comparable growth of 29%.

Cost of sales per unit case were up 5.5% in the first half, reflecting increased revenue per unit case driving higher concentrate costs, commodity inflation and adverse mix, partially offset by the favourable recovery of fixed manufacturing costs as a result of higher volumes

The bottom-line boost also reflected the benefit of on-going efficiency programmes and continuous efforts on discretionary spend optimisation.

Due to this strong first half performance, CCEP hiked guidance for pro forma growth to 11%-13% from previously guided 8%-10%.

Growth, it said, will be weighted towards volume growth over price/mix reflecting continued recovery of the AFH channel and the return of tourism

Cost of sales per unit case will be 7% over the full year amid high single-digit commodity inflation and as higher concentrate costs.

Overall growth together with increased revenue per case and hedge coverage will see pro forma operating profit growth of 9%-11% - up from previously guided 6%-9%.

CEO Damian Gammell commented: “We are pleased to have delivered a great first-half. We achieved strong top and bottom-line growth, gained value share and generated solid free cash flow. Key to this was the continued recovery of restaurants, pubs, cafes and bars, a return to travel and tourism for many consumers and a resilient home channel. All underpinned by robust categories and the strength of our customer relationships.

“Our focus on core brands, leading in-market execution and headline price and mix delivered volume and revenue ahead of 2019. We shared in this success with our retail customers, having delivered more revenue growth for them than any of our peers. And we continued to make progress against our sustainability commitments - using more recycled plastic in our bottles and reducing carbon emissions from our supply chain.

“We remain confident in the resilience of our categories, despite a more uncertain outlook, given macroeconomic and geopolitical volatility and higher inflation. We continue to actively manage key levers of pricing and promotional spend across our broad pack offering, alongside our focus on efficiency. However, given our strong first-half, we are raising revenue, operating profit and free cash flow guidance for FY22. This demonstrates the strength of our business and ability to deliver continued shareholder value.”

Morning update

German consumer group Beiersdorf has reported continued strong growth in the first half of the financial year 2022 despite a “challenging” market environment.

Group sales rose to €4.5bn in the first six months of the year and were up 10.5% year-on-year in organic terms.

The Consumer Business Segment achieved sales of €3.6 billion and organic year-on-year growth of 11.7% in the first half of 2022. Significant growth was achieved particularly in the Americas, where the high level seen in previous quarters was maintained.

Sales of core brand Nivea rose by 11.2% in organic terms in the first six months of the year as it achieved “excellent” results worldwide and across its product portfolio in the first and second quarters, in both skin care and personal care.

Overall EBIT margin, excluding special factors, stood at 15.9%, boosted by significant sales growth across all regions, but partially offset by higher commodity and transport costs.

Beiersdorf confirmed its expects sales growth at the upper end of the mid-single-digit range and a consolidated EBIT margin from operations to be at prior-year level.

Vincent Warnery, CEO of Beiersdorf, commented:“2022 has been a successful year for us so far. In an increasingly challenging environment, Beiersdorf carried the strong growth momentum from the start of the year into the second quarter and posted double-digit sales growth at Group level.

“We were also able to significantly improve our profitability. In the second half of 2022 we expect additional headwinds from economic and political tensions, and are confirming our full-year guidance,” said

On the markets this morning the FTSE 100 has opened flat at 7,443.2pts.

Early risers include Naked Wines, up 7.6% to 158.1p, Virgin Wines, up 7.6% to 78p and Devro, up 3.7% to 189.8p.

Fallers include Bakkavor, down 5.5% to 89.8p, Reckitt Benckiser, down 1.3% to 6,720p and Unilever, down 1.3% to 3,964.5p.

Yesterday in the City

The FTSE 100 closed up yesterday 0.5% to 7,445.6pts.

Just Eat was one of the day’s major risers, climbing 6.7% to 1,662p yesterday after stating it was making “significant progress” towards profitability despite a £2.9bn loss in the first half of its financial year.

Other online consumer players were all on the up, with Virgin Wines up 8.2% to 72.5p, Deliveroo, up 5.8% to 100.5p, Ocado, up 4.9% to 912.2p, THG, up 3.6% to 68.3p and Domino’s Pizza Group, up 2.5% to 280p.

Other risers included Hotel Chocolat, up 2.2% to 138p, WH Smith, up 1.9% to 1,446p, PZ Cussons, up 1.7% to 212.5p, Greencore, up 1.6% to 101.4p, Pets at Home, up 1.5% to 101.4p and Greggs, up 1.4% to 2,162p.

The day’s fallers included Nichols, down 5.6% to 1,105p, Hilton Food Gorup, down 4.9% to 1,052p, Sainsbury’s, down 1.3% to 217.9p, Haleon, down 1.1% to 307p, Naked Wines, down 1.1% to 146.9p and Bakkavor, down 1% to 95p.