Coca-Cola HBC revenue plummets 37% in April with most markets in lockdown

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Coca‑Cola HBC AG, a leading consumer products business and strategic partner of The Coca‑Cola Company, today announces its 2020 Q1 trading update.

First-quarter highlights

– All employees safe, customers that are open for business supplied, production and logistics operating

– Strong trading in January and February; weaker results in March as government lockdowns severely impacted the out-of-home channel

– Q1 FX-neutral revenue declined by -1.2%, or -0.5% adjusted for trading days and Bambi1

  • Q1 Volumes increased by 3.1% as good growth YTD February was partly offset by a decline in March. Fewer selling days is estimated to have cost 2.1pp of growth in the quarter (ex Bambi)2
  • FX-neutral revenue per case declined by 4.1% driven by a negative country mix from strong growth in Nigeria following prior-year pricing actions (-2.2pp impact), the discontinuation of Lavazza Coffee (-0.8pp impact) as well as a shift in the channel and pack mix caused by significantly reduced volumes in the out-of-home channel, growth in discounters and supermarkets, and a shift into large-format packs in March
  • Gained or maintained share in the majority of our markets

– FX-neutral revenue growth by segment heavily influenced by the timing and severity of lockdowns

  • Established: -7.2%; volume -5.5% as countries in this segment entered lockdown first and derive a larger proportion of revenues from the out-of-home channel
  • Developing: -2.9%; volume growth of 1.8% was offset by negative pack mix due to lockdown measures and strong growth from organised trade
  • Emerging: +4.8%; volume growth of 8.1% with continued growth in most markets and
    double-digit volume growth in Nigeria which entered lockdown after the quarter-end

– In April, with every market in lockdown, FX-neutral revenue fell -37.2% and volumes -27.3% (ex.Bambi)

– The anticipated combined net impact of FX and raw materials for 2020 unchanged; benefits from lower commodity costs offset weaker FX

– Decisive actions are taken to reduce costs and re-prioritise investments: 2020 discretionary expenditure cut by over €100m vs plan, cash CAPEX cut by over €100m or just under 20% vs plan

– Strong balance sheet and sufficient liquidity to meet all financial commitments as well as to operate and invest in the business

The challenges presented by the Covid-19 pandemic are unprecedented for our business and the communities where we operate. On behalf of all of us at Coca‑Cola HBC, I would like to sincerely thank those working tirelessly to keep us all safe. After a strong start to 2020, March and especially April have been more difficult. I am very proud of how our teams are responding to this crisis, particularly the adaptability, resilience and community spirit our people have demonstrated. The strong performance in January and February ensured that we entered this crisis from a position of real strength with sound business fundamentals and a solid balance sheet. When the pandemic struck we took decisive actions, fully focused on keeping our people safe, our customers served and our communities supported. We are also effectively managing the business for the conditions which will support our performance and ensure we are well-placed to move into the recovery phase when it comes.

Zoran Bogdanovic, Chief Executive Officer of Coca‑Cola HBC AG