Coca-Cola Hellenic shrugs off Boko Haram terrorist trouble to maintain Nigeria growth


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Coca-Cola Hellenic shrugs off Boko Haram terrorist trouble to maintain Nigeria growth

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Coca-Cola Hellenic boss Dmitris Lois said today that Nigeria remains a ‘key growth driver’ for the group despite the negative effects of terrorist group Boko Haram on its operations in the country’s northeast.

Discussing CCH’s results for the year ending December 31 2014, Lois claims Coke’s second-biggest bottler delivered across a difficult year, with volume sales flat (+0.8%) at 485.1m unit cases in the last quarter and net sales revenue down 4.1% to €1.51bn.

Volumes fell 2.8% to 2.002bn unit cases in the full year, while net sales revenue fell 5.3% to €6.51bn, with comparable net profit down 5.4% at €277.4m.

Established and developing markets weigh on FY 2014

Although group volumes improved over the quarter, CCH blamed both ‘established markets’ (where volumes fell 5.4% in the full year) and ‘developing markets’ (-6% for the full year) for the declines.

In developed markets CCE said Italy showed weakness in the first nine months and, as did Switzerland to some extent; volumes in Greece and Ireland improved due to growth in bottled water.

Although volumes in developing markets (these include Hungary and Poland) grew 1.4% in the last quarter CCE is cycling nearly two years of declines.

That said, volumes were up 2.8% in Q4 2014 in so-called emerging markets – due to strong performance in Nigeria and Russia.

In Nigeria CCH maintained the volume growth it saw in Q3 2014, with high single-digit growth cycling, well, high single-digit growth in the country. Full-year volume sales rose 4%.

Sparkling drinks and Coke climb in Nigeria

CCH said strong execution helped its sparkling drinks portfolio and the Coke trademark grow by 9% and 8% respectively in the quarter, while the juice category also continued to grow.

“Nigeria remains a key growth driver for the company, although the recent significant decline in oil prices and the consequent currency depreciation, coupled with the elections in March and April, may impact macroeconomic trends as the year progresses,”​ Lois said.

Asked by one analyst about the effect that hardline Islamic terrorist organization Boko Haram has had on CCH’s business, Lois said:  “Obviously Boko Haram has been negatively affecting the whole nation – and us for more than a year and a half now. We’re very strong in the north, it’s approximately a quarter of our sales …we have a very, very strong position.

“Parts, particularly the Northeast [where Boko Haram is based] have been affected the most. The No. 1 priority is safety of people, then the availability of our products. The North has been an element of growth, and we continue to believe it will continue to be an element of growth,”​ Lois added.

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