Coca-Cola HBC AG (LON:CCH), a growth-focused Consumer Packaged Goods business and strategic bottling partner of The Coca-Cola Company, has reported its financial results for the twelve months ended 31 December 2024.
Full-year highlights
· Focused execution of strategic priorities drives strong organic revenue growth of 13.8%1
o Organic volume grew 2.8%, with all our strategic priority categories driving growth, Sparkling +1.5%, Energy +30.2% and Coffee +23.9%
o Organic revenue per case growth of 10.7%, driven by targeted revenue growth management (RGM) initiatives
o Reported revenue growth of 5.6%, with strong organic growth partly offset by FX headwinds in the Emerging segment
o Further value share gains, with our share in Non-Alcoholic Ready-To-Drink (NARTD) up 150bps and Sparkling up 20bps in 2024
· Strong organic EBIT growth of 12.2%
o Comparable EBIT of €1,192.1 million; Comparable EBIT margins improved 40 basis points on a reported basis to 11.1%, down 20 basis points on an organic basis
o Comparable gross profit margin up 110 basis points to 36.1%, reflecting RGM initiatives and easing input cost inflation, with comparable COGS per unit case up 1.0%
o Higher operating expenses in the first half related to currency headwinds, as well as ongoing investment in the business through the year, resulted in comparable opex as a percentage of revenue up 70 basis points
o ROIC up 190 basis points to 18.3%
· Organic revenue and volume growth across all segments, in a range of macro conditions
o Established: Organic revenue up 3.3%, led by revenue per case expansion and positive volume; organic EBIT broadly flat
o Developing: Organic revenue up 12.7%, with strong revenue per case expansion and good volume progress; organic EBIT grew 39.6%
o Emerging: Organic revenue up 23.3%, as we utilised RGM initiatives to navigate FX headwinds while still driving solid volume growth; organic EBIT grew 13.0%
· Robust EPS and FCF performance, and improved shareholder returns
o Comparable EPS grew by 9.5% to €2.28, supported by strong EBIT delivery
o Free cash flow slightly increased year-on-year, at €712.6 million
o Net debt to comparable adjusted EBITDA of 1.0x, reflecting the strength of our balance sheet
o Returned €226 million to shareholders since the start of our ongoing share buyback programme
o Board of Directors to propose an ordinary dividend of €1.03 per share, up 11% year on year and representing a 45% payout
· Further investment across our strategic priorities
o Continued close partnership with The Coca-Cola Company to drive growth in Sparkling, capitalising on key consumer moments, including the Olympic Games, Euro 2024, music festivals and other events tailored to local markets
o Monster Energy Green Zero Sugar launched in 16 markets in 2024 and saw ongoing strong performance of the category, notably with affordable brands in Africa
o Coffee growth driven by increasing share of revenue in the out-of-home channel, in line with our plans
o We continue to focus on driving mixability and premiumisation, with our 24/7 portfolio, notably through Adult Sparkling and Premium Spirits, including expansion of Finlandia Vodka to 19 new markets
o We continue to lead in Sustainability and were recognised as the world’s most sustainable beverage company by the 2024 Dow Jones Best-in-Class Indices2 for the eighth time
Zoran Bogdanovic, Chief Executive Officer of Coca-Cola HBC AG, commented:
“I am proud that we have delivered yet another year of double-digit growth, with a 13.8% increase in organic revenues and volume growth in each of our segments. 2024 demonstrated that we can achieve a consistently strong financial performance even in a range of market conditions. I would like to thank our team for their commitment to our vision and our consistent focused execution. I would also like to thank our customers, The Coca-Cola Company and all our valued partners for their ongoing support.
“We continued to invest in our bespoke capabilities, driven by data, insights and analytics, to enable segmented and focused execution. We also made choices to further strengthen our 24/7 portfolio to drive growth and always with our customers at the heart of our decision making. We achieved share gains, and volume growth across all three of our priority categories, Sparkling, Energy and Coffee.
“In 2024, we made significant progress towards our Mission 2025 and NetZeroby40 goals. We saw encouraging results for our countries with newly launched Deposit Return Schemes in 2024, and we collaborated with governments and NGOs to assist communities impacted by floods across Europe and Nigeria.
“While we expect the macroeconomic and geopolitical environment to remain challenging, in the year ahead, we are confident that our portfolio, capabilities and people will enable us to make progress against our medium-term growth targets.”
| Full Year | |||||
| 2024 | 2023 | %Change Reported | %Change Organic1 | ||
| Volume (m unit cases) | 2,914.5 | 2,835.5 | 2.8% | 2.8% | |
| Net sales revenue (€ m) | 10,754.4 | 10,184.0 | 5.6% | 13.8% | |
| Net sales revenue per unit case (€) | 3.69 | 3.59 | 2.7% | 10.7% | |
| Operating profit (EBIT)3(€ m) | 1,185.4 | 953.6 | 24.3% | ||
| Comparable EBIT1(€ m) | 1,192.1 | 1,083.8 | 10.0% | 12.2% | |
| EBIT margin (%) | 11.0 | 9.4 | 170bps | ||
| Comparable EBIT margin1(%) | 11.1 | 10.6 | 40bps | -20bps | |
| Net profit4(€ m) | 820.6 | 636.5 | 28.9% | ||
| Comparable net profit1,4(€ m) | 828.8 | 764.2 | 8.5% | ||
| Basic earnings per share (EPS) (€) | 2.253 | 1.730 | 30.2% | ||
| Comparable EPS1(€) | 2.275 | 2.078 | 9.5% | ||
| Free cash flow1(€ m) | 712.6 | 711.8 | 0.1% | ||
1For details on APMs refer to ‘Alternative Performance Measures’ and ‘Definitions and reconciliations of APMs’ sections
2These indices were formerly known as the Dow Jones Sustainability Indices (DJSI).
3Refer to the condensed consolidated income statement.
4Net Profit and comparable net profit refer to net profit and comparable net profit respectively after tax attributable to owners of the parent.
Business Outlook
We have delivered a strong performance in 2024, in mixed market conditions. We expect the macroeconomic and geopolitical backdrop to remain challenging, but we have high confidence in our 24/7 portfolio, bespoke capabilities, our people, and the opportunities for growth in our diverse markets. In 2025 we expect to make continued progress against our medium-term growth targets.
Our guidance for 2025 is:
· Organic revenue growth of 6% to 8%
· Organic EBIT growth of 7% to 11%
Technical 2025 guidance
FX: We expect the impact of translational FX on our Group comparable EBIT to be a €15 to 35 million headwind.
Restructuring: We do not expect significant restructuring costs to occur.
Tax: We expect our comparable effective tax rate to be within a range of 26% to 28%.
Finance costs: We expect net finance costs to be between €40 to 60 million.
Group Operational Review
Leveraging our unique 24/7 portfolio
Full year organic revenue grew by 13.8%, driven by growth in volumes, price and mix. Reported net sales revenue increased by 5.6%, with adverse FX translation effects in the Emerging segment partially offsetting strong organic growth across the Group.
Volumes increased by 2.8% on an organic basis, led by our strategic priority categories of Sparkling, Energy and Coffee.
· Sparkling volumes grew by 1.5%. Trademark Coke grew by low-single digits and Coke Zero grew mid-single digits, benefitting from our strong partnership with The Coca-Cola Company to capitalise on key moments across the year, executing programmes tailored to local markets. We delivered high-single digit growth in Adult Sparkling, supported by new flavours and package formats of Schweppes and Kinley, as well as the launch of Three Cents in a further eleven markets. Fanta and Sprite volumes declined low-single digit in the year.
· Energy volumes grew by 30.2%, making 2024 the ninth year of consecutive double-digit growth. We made good progress in all segments despite new regulation in Poland and Romania. In Established and Developing markets, we achieved high-single digit growth, driven by Monster. In Emerging we saw strong double-digit growth, supported by Predator in Africa. Monster Energy Green Zero Sugar was launched in 16 markets, with encouraging signs in the first year of launch.
· Coffee volumes grew 23.9%, with growth across all segments. Our primary focus was on the out-of-home channel, and we made good progress in terms of customer recruitment, adding another 4,300 outlets in the year. We see greater long-term potential in the out-of-home channel and have taken steps to re-focus our attentions here.
· Stills volumes grew by 3.3%. In Sports Drinks we grew mid-teens, supported by the growth of Powerade, where we launched the brand in three new markets, leveraged the Olympic Games, and placed dedicated Powerade coolers in key markets. We also launched Vitamin Water in two new markets. Water grew mid-single digits on soft comparatives. Ready-to-Drink Tea increased mid-single digits and Juices declined low-single digits in challenging market dynamics.
· Premium Spirits volumes grew by 31.8%, led by the Developing segment. We expanded Finlandia Vodka into 19 markets where we did not have distribution rights prior to acquisition. Finlandia Vodka is enhancing our premium spirits credentials and opening incremental mixability opportunities for our NARTD portfolio. We also launched Jack Daniel’s & Coca-Cola in a further 15 markets in the year.
Winning in the marketplace
Organic net sales revenue per case grew by 10.7% in the full year. Our revenue growth management (RGM) capabilities enabled us to navigate varying levels of inflation, currency devaluation, regulation and taxation across our markets during the year. In our European markets, inflationary pressures generally eased, but in Africa, we took pricing actions to mitigate currency devaluation and cost inflation.
One of the benefits of our RGM framework is that it allows us to meet demand for both affordability and premiumisation. We benefit from the breadth of our portfolio, with categories and brands at different price points, as well as our ability to adapt package formats for different occasions and affordability needs.
Affordability was more relevant in 2024, and we have continued to tailor initiatives to each market’s local reality. We focused on entry and smaller packs, that offer a lower price point, and rolled out the 300ml PET affordable entry pack to Hungary, Croatia and Romania. Affordability is also addressed by targeted promotional activities, leveraging our advanced analytics tools to determine the most effective promotion mechanism, maximise value for customers, as well as improve return on investment. In Nigeria and Egypt, we delivered a strong performance from our affordably priced, returnable glass bottles (RGB), with volume growth of 19% and 22% respectively.
Alongside the focus on affordability, premiumisation remains important for specific shoppers. In 2024, we expanded our premium RGB portfolio in the at-home channel in Austria, drove mini-can and single-serve multi-pack activation, and continued to make good progress with premium small glass bottles in the hotels, restaurants and cafes (HoReCa) channel.
Our leading Data, Insights and Analytics capability is enhancing our RGM framework, and we continued to make progress through the year. We now have the ability to micro-segment our customers in all of our markets, which helps us to address specific consumer needs and personalise execution. We are further enhancing segmentation of the HoReCa channel with our bespoke tools to segment outlets.
Package mix saw further improvements, with total single-serve mix up 100 basis points in the year. All segments saw improvements in single-serve mix. Category mix also saw further improvements, driven by good growth in Adult Sparkling, Energy and Finlandia, partially offset by higher contribution of Water.
Our focused execution in the marketplace and joint value creation with customers enabled us to gain further value share. We gained 150 basis points of value share in NARTD in 2024. In Sparkling we gained 20 basis points of value share at the Group level. This was negatively impacted by country mix, due to stronger growth in Africa, where our share is lower. We were again the number one contributor to retail customers’ absolute revenue growth within fast moving consumer goods (FMCG) in Europe, according to Nielsen.
Operating profit, margins and cost control
Comparable gross profit grew by 8.9%, with gross profit margins up 110 basis points to 36.1%. Comparable COGS per case increased 1.0%, reflecting easing input cost inflation and the benefit from translational FX on the COGS line.
Comparable operating expenses as a percentage of revenue increased by 70 basis points to 25.1% in the full year. In the first half, we faced headwinds in operating costs, including a non-cash foreign currency remeasurement of balance sheet items in Emerging markets, as well as continued investment across the business. In the second half, we saw a good improvement in the trend of operating costs as a percentage of revenue, due to better operating leverage while we continued investing in the market.
Comparable EBIT increased by 10.0% on a reported basis to €1,192.1 million, principally driven by organic growth across our markets, only partially offset by negative foreign currency movements. The comparable EBIT margin was 11.1%, up 40 basis points on a reported basis, benefitting from operational leverage. On an organic basis, comparable EBIT increased by 12.2%, and margins contracted 20 basis points, mainly due to negative foreign currency movements.
We saw a negative translational and transactional currency impact in 2024, driven mainly by the depreciation of the Nigerian Naira, Russian Rouble and Egyptian Pound.
Net profit and free cash flow
Comparable net profit of €828.8 million and comparable basic earnings per share of €2.275 were 8.5% and 9.5% higher respectively. Reported net profit and reported basic earnings per share of €820.6 million and €2.253 were 28.9% and 30.2% higher respectively compared to 2023.
Comparable taxes amounted to €306.8 million, representing a comparable effective tax rate of 27.0%.
ROIC expanded by 190 basis points to 18.3%, driven by higher profit and lower capital employed.
Net finance costs were €12.2 million higher than the prior year at €60.5 million, as the increase in interest expenses along with negative foreign currency movements more than offset the increase in finance income.
Capital expenditure increased by €4.4 million to €679.3 million as we continued to invest in growth initiatives such as production capacity, ongoing automation in supply chain, digital and data solutions, and energy-efficient coolers. Capex as a percentage of revenue was 6.3%, slightly below our target range of 6.5% to 7.5%, impacted by low levels of investment in Russia.
Free cash flow was €712.6 million, slightly increased compared to the prior year, largely reflecting higher operating profit, partially offset by higher taxes paid.
ESG leadership
Sustainability remains a key priority, and we were pleased to be recognised in 2024, as the world’s most sustainable beverage company by the 2024 Dow Jones Best-in-Class Indices5, for the eighth time, and achieved a double-A rating from CDP on climate and water. We remained focused on delivering our Mission 2025 and NetZeroby40 goals, and in December, the SBTi gave formal approval of our net zero targets based on their new guidelines.
We continue to support packaging circularity including the launch of deposit return schemes (DRS). In 2024, schemes went live in the Republic of Ireland and Hungary, and in Austria in January 2025. Poland and Greece are expected to launch in 2025. DRS help to consistently deliver high packaging collection rates. For example, in Romania (launched December 2023), results are encouraging with an average return rate of 77% of containers sold in the market in the last three months of 2024.
Also in the year, we collaborated with governments and NGOs to assist communities severely impacted by floods across Europe and Nigeria, delivering over 270,000 litres of beverages through a network of local charities and municipalities, supported by The Coca-Cola HBC Foundation.
On 31 January 2025 in Nigeria, the first-ever Coca-Cola System-owned and operated packaging collection facility was opened. The facility, in which we have co-invested with The Coca-Cola Company, has the capacity to process up to 13,000 metric tonnes of plastic bottles annually and we are operating the facility on behalf of the System.
5These indices were formerly known as the Dow Jones Sustainability Indices (DJSI).
