Coca-Cola HBC AG on Tuesday raised its annual payout following a double digit rise in profit and revenue as a result of higher volumes and pricing following ‘effective execution’ in a volatile environment.

Shares in the Zug, Switzerland-based soft drinks bottler were down 4.8% at 2,202.00 pence on Tuesday morning in London - the second worst performer in the FTSE 100.

The company said its geographical expansion into Egypt adds exciting growth opportunity with the integration of Coca-Cola Bottling Co of Egypt SAE on track.

For 2021, Coca-Cola HBC posted a pretax profit of €734.9 million, up 23% from €593.9 million the year before. Net profit meanwhile rose 32% to €547.2 million from €414.9 million.

According to market consensus cited by Vuma, pretax profit was on track to reach €717.9 million, and net profit €528.7 million.

Comparable earnings before interest and tax rose 24% to €831.0 million in 2021 from €672.3 million in 2020.

This was on net sales revenue which grew 17% year-on-year to €7.17 billion from €6.13 billion, and coming above consensus expectations of €7.07 billion. Annual like-for-like currency neutral revenue grew 21%.

Revenue growth was partly driven by a rise in volumes, with unit cases rising 13% to 2.41 billion, mostly from a 19% rise in the Emerging Markets segment, from growth mainly in Nigeria, Russia and Ukraine on Energy products including Monster and Predator.

On a like-for-like basis, annual volumes rose 14%.

Coca-Cola HBC declared a dividend of €0.71 per share, up 11% from €0.64 the year before. In addition, the group had raised its payout ratio target to 40% to 50%, from the prior ratio of 35% to 45%.

Looking ahead, the group expects volume growth to continue in all segments in 2022, allowing currency neutral revenue growth to come above the 5% to 6% target range. In addition, comparable earnings before tax is set to rise by mid to high-single digits for the year.

However, Coca-Cola HBC said it expects net finance costs for 2022 to be around €15 million to €20 million higher than 2021, mainly due to its high-profile investment in Egypt.

It also outlined a net zero commitment backed by €250 million investment by 2025, as it seeks to become a net-zero company by 2040.

‘The business has delivered a very strong recovery in 2021, with all key metrics above pre-pandemic levels, the result of consistent and disciplined focus on our strategic priorities over the last few years. We finished the year with strong revenue growth, our highest ever Ebit margin and free cash flow while continuing to gain share,’ said Chief Executive Officer Zoran Bogdanovic.

‘We are encouraged by the momentum we see in the business. We expect 2022 to be a year of strong sales supported by ongoing volume momentum, pricing actions and beneficial category mix. While mindful of inflationary headwinds and other risks, our track record and continuous focus on efficiencies give me confidence in delivering another year of Ebit growth,’ Bogdanovic added.

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