Expansion the key to CCHBC recovery
black as a result of volume improvements and acquisitions.
Coca-Cola HBC, the Greek Coca-Cola bottler, has reported a strong increase in profits for 2002 to €35 million, compared to losses of €20 million in 2001. The strong return to the black was helped by a 17 per cent hike in volume sales to 1,268 million cases.
While there was an increase in the territories covered by the bottler, most of the increase in volumes came in fact from higher sales of non-carbonated beverages, which accounted for 15 per cent of total volumes. These products include water, juices and sports drinks.
Irial Finan, managing director of CCHBC, said: "Our excellent full year performance in 2002 builds upon the strong foundations laid in 2001. Commercial innovation and product diversification have continued to enable us to grow the business rapidly and sustainably."
Finan said that while carbonated soft drink brands (CSDs) accounted for 85 per cent of the business, the non-carbonated business was playing an increasingly important role in the company's results. The water segment in particular shows great potential, and non-carbonated beverages are expected to represent 20 per cent of CCHBC's total volume in 2004.
This is supported by our recent acquisitions of the Swiss mineral water business, Valser and the Romanian mineral water business, Dorna, as well as investment in our greenfield water plant in Hungary, which commenced operations in the fourth quarter. Each of these transactions was pursued jointly with The Coca-Cola Company," said Finan.
Value sales were up 6.6 per cent for the year, despite stronger sales of water, a product line which makes a lower contribution to revenue per unit case than carbonated soft drinks, the company said. Sales revenue in European markets increased by 7.1%, on a constant territory basis.
In CCHBC's established markets, the company reported volume growth of 3 per cent for the full year to 518.0 million unit cases, despite challenging conditions, helped by growth of more than 5 per cent in Ireland and Northern Ireland driven by the more profitable 500ml packs in the immediate consumption channel and the launch of Powerade and Oasis. Greek sales were boosted by strong growth in non-carbonated beverages (Avra and Amita brands), while there was also volume growth of 1 per cent in Italy, where the company continued to focus on investment for future growth.
In developing markets, volumes rose 5 per cent to 261.6 million unit cases, driven by 8 per cent growth in Poland, due to an improved pricing strategy, intensive cold drink placements and successful promotional activities. Growth of more than 9 per cent in the Czech Republic for the year was due to a strong performance from the Lift and Bonaqua water brands.
As for emerging markets, volume growth reached 13 per cent 488.7 million unitCases, with Nigeria rising 2 per cent and Russia surging 17 per cent, driven by economic stabilisation, increased brand awareness and the successful launch of new products. In Ukraine, volume growth for the year was 24 per cent following new product launches, significant in-trade investments and improved market presence, while volume growth in Romania of 19 per cent was led by new Fanta flavours (Madness, Shokata) and Schweppes Bitter Lemon as well as an overall improvement in economic conditions.
This impressive volume growth is expected to continue in 2003, with estimates put at around 7-9 per cent, including the additional water businesses in Switzerland and Romania.
