Shares in Coca-Cola bottling partner Coca-Cola HBC (CCH) fell as much as 6.5% to a new 12-month low of £21.63 even though the company delivered forecast-beating earnings for 2021 and raised its dividend payout ratio.
The firm, one of Coca-Cola’s many bottling partners worldwide, served up a 20.6% improvement in like-for-like revenues to €7.17 billion for the year to December, driven by a 13% increase in unit volumes together with price rises.
Full year earnings before interest and tax rose 23.6% to €831 million compared with €672 million the previous year and a company compiled consensus of €797 million.
‘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 earnings before interest and tax margin and free cash flow while continuing to gain share,’ said chief executive Zoran Bogdanovic.
As well as bottling Coca-Cola and other fizzy drink brands owned by the US consumer goods giant, the company has what it calls a ‘24/7 portfolio’ of products which it packages including Costa Coffee, energy drinks, alcoholic beverages, fruit juices, spring water, teas and biscuits.
Demand in developed markets increased by nearly 14% due to a 10% rise in volumes and roughly a 4% price hike, while sales in developing markets climbed 18% and emerging market sales jumped 27% driven by ‘strong momentum’ in Nigeria, Russia and Ukraine.
‘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,’ said Bogdanovic.
The firm said that, given the positive long-term outlook for the business, it would raise its targeted dividend payout from a range of 35% and 45% to between 40% and 50%.
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