Coca-Cola HBG volumes fizz but earnings dented by forex

Coca-Cola HBC, the Greece-based drinks bottler, enjoyed improved volumes and lower sugar and oil costs in the final few months of the year but earnings were hit by worsening currency movements.With an improved performance in Russia, among other regions, volumes rose 0.8% to 485m cases in the fourth quarter of the year, after falling in the preceding three quarters, meaning the full year saw a dip of 2.8%.With adverse movements in currencies since late November exceeding management expectations by €15m, and only partly offset by more friendly input costs, a 4.1% fall in net sales revenue in the quarter to €1.5bn was better than previous nine months, though the 11.7% decline in earnings per share to €0.083 was rather worse.This meant full-year earnings were dragged lower, down 5.6% to €0.76, compared to market expectations of €0.801, on full-year net revenues down 5.3% to €6.5bn.Analysts noted that the trading performance excluding currency impact looks "more resilient" than might have been anticipated.Directors proposed a slightly improved dividend payout of €0.36 per share, from €0.354 a year before.Chief executive Dimitris Lois searched for the positives: "Our business, with its strategy focused on execution in the markets, has delivered in a difficult year. We have won share, protected our margin and generated solid free cash flow."Indeed, volume and value share continued to grow in the fourth quarter in the majority of countries, ending the full year with higher or stable share in 16 markets in sparkling beverages and in 10 markets in non-alcoholic ready-to-drink (NARTD) products.For 2015, management has pledged a wide range of actions, from improving volumes through marketing initiatives and focusing on affordability to self-help efficiency measures.This year is expected to produce a "high single-digit" percentage decrease in input costs per case, before the impact of currency changes, which Lois predicts will be alleviated by the operational leverage from a predicted recovery in volumes and positive country mix."These efforts, along with materially reduced input costs, will help to mitigate the negative impacts of currency volatility, and related uncertainty in some key markets. We anticipate a challenging year and are optimistic that our business will prove its strengths in adversity."Shore Capital analyst Phil Carrol said that while there were "some encouraging signs" in the furth quarter performance, he expected short-sentiment to remain negative on the stock."The results from a profit perspective are below market expectations as FX depreciation in Q4 has materially impacted the profit performance of its emerging markets division. That said, the trading performance ex currency impact looks more resilient than might have been anticipated."