Coke bottler hit by exposures in foreign markets

 
Caitlin Morrison
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The firm is the second biggest bottler for Coca-Cola brands
BEVERAGE bottler Coca-Cola HBC faces tough challenges in 2015, analysts have warned, after the firm reported a 5.3 per cent drop in sales revenue for 2014, from €1.57bn (£1.16bn) to €1.51bn.

Volumes of unit cases sold also fell, by 2.8 per cent from 2.06bn in 2013 to 2bn, while net profit plunged by 11.4 per cent, from €34.3m to €30.4m.

Coca-Cola HBC, the second largest bottler for the Coca-Cola brand, reported that the fourth quarter saw sharp depreciation of currencies in some of its biggest markets. It also blamed the “worsening macroeconomic outlook due to the decline in the oil price” for adding to the challenges the firm faced.

Dimitris Lois, the company’s chief executive, said the business had “delivered in a difficult year”. He continued: “In 2015, we will continue to pursue our strategy with a wide range of planned actions. 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.”

However, analysts warned the firm’s exposures in volatile markets would make recovery a lengthy process. JP Morgan Cazenove pointed out that Russia and Nigeria account for over one third of group profit, and stated: “Both these economies are oil dependent, which we believe will have a detrimental second derivative effect on the consumer.”

Meanwhile, Lewis Sturdy at London Capital Group, commented: “Its exposure to troubled markets such as Russia, as well as the fact it is essentially a Greek firm listed in London, is not making it particularly attractive to investors.”

Shares in the firm closed down by 3.03 per cent yesterday to 1,143p.