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(Correcting that Coca-Cola HBC saw growth in developing and emerging markets, and a weaker performance in established markets.)
LONDON (Alliance News) - Soft drinks bottler Coca-Cola HBC AG on Friday said reported volumes were broadly stable in the first quarter, with good growth in developing and emerging markets offsetting a weaker performance in established markets, but its shares were sold as net sales revenue declined.
Coca-Cola HBC shares were down 4.4% to 1,335.00 pence on Friday, one of the worst performers in the FTSE 100.
The company said total volumes grew 0.1% in the quarter to the end of March, with developing markets volumes up 1.9% and emerging markets growing 1.3% year-on-year, offsetting a 2.7% decline in established markets volumes.
Net sales revenue, however, declined 2.7% in the quarter, primarily driven by currency weakness. In constant currencies, net sales revenue increased 2.0%, the company said, with the reported revenue fall driven by weakness in the Swiss franc, the Polish zloty and Hungarian forint.
Dimitris Lois, Coca-Cola HBC's chief executive, said the group had a "good start" to 2016, adding the group was encouraged by ongoing volume growth in emerging and developing markets and improving underlying trends in established markets.
"We are confident we have the right initiatives in place to continue our progress in the remainder of the year," Lois added.
Coca-Cola HBC conceded established markets had experienced a slow start to the year, but said underlying trends were improving.
Volumes in Italy were broadly flat, with market initiatives and new products such as Coke Life and energy drink Monster helping to offset a decline for bottled water. Greek volumes declined, the company said. Given the austerity measures imposed in the country as it attempts to return to economic health, Coca-Cola HBC said it was cautious on the outlook for the Greek market.
Volumes declined in Switzerland in the quarter, with all key categories weaker with the exception of energy drinks, while trading conditions remain difficult in Ireland.
Within developing markets, Coca-Cola HBC said it saw good growth in the majority of countries in the segment, with underlying trading conditions improving and nearly all product categories performing well.
In central Europe, Polish volumes increased thanks to good growth in sparkling drinks and a strong quarter for water, while volumes in Hungary also grew thanks to volume growth from trademark Coca-Cola drinks. Czech Republic volumes declined against tough year-prior comparatives and a weak quarter for sparking products, Coca-Cola HBC said.
In emerging markets, most countries in the segment performed well, in particular Nigeria, which helped offset declines in Russia, which continues to be a challenging market, the company said.
Coca-Cola HBC said Nigeria volumes once more grew strongly, driven by marketing initiatives, new product launches and a good juice performance. Volumes in Romania were pushed higher by sparking, water and juice trading, and Ukraine delivered better volumes, driven by sparking products.
Russia, however, saw volumes decline as all categories weakened, with the exception of Coke Zero and energy drinks.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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