Coca-Cola European Partners (CCEP) has reported flat revenues in its second-quarter results, as overall sales volumes declined in several of its major markets and the popularity of Coca-Cola Classic declined as consumers moved towards low sugar beverages.
Overall sales volume across Europe declined 3.5%, which the company attributed to customer disruption in France, unfavourable weather in Iberia and the introduction of sugar taxes in countries such as the UK.
CCEP’s quarterly revenue of €3.06 billion represented the same total as the company’s second-quarter revenue in 2017, partially affected by falling sales of Coca-Cola trademark brands, which experienced a volume decline of 5.5%.
These factors also led to an operating income decline, as the €418 million figure represented a 9.1% drop when compared to the €460 million figure recorded in the same period last year.
Despite the overall drop in sales volume, the company’s revenue grew in its Northern European markets of Belgium, Luxembourg, the Netherlands, Norway, Sweden, and Iceland by 6.5%, while revenue also rose 4.5% in Germany.
While consumer preference for low-sugar beverages affected the company’s core soft drinks, it benefitted other drinks in the company’s portfolio such as Coca-Cola Zero Sugar, which experienced growth of 7% in the quarter.
CCEP claimed that its Fuze Tea, Vio and Smartwater all experienced strong quarters, though portfolio decisions in the ready-to-drink tea and water categories led to an 8% fall in its ‘water’ category and a decline of 10.5% in its ‘juices, isotonics and other’ unit.
Damian Gammell, CCEP CEO said: “We are pleased with our execution and performance in the first half as we continued to make bold portfolio and pricing decisions.
“We are confident that these are the right strategic initiatives for our business in the long-term, while acknowledging the near-term negative impact on volume.
“This strategy is reflected in another quarter of solid growth, including strong revenue per unit case gains as we focus on improving our pack and pricing architecture.
“Overall, we are encouraged by our first-half performance given business disruption in France owing to customer negotiations; unfavourable weather in Iberia; and new industry taxes, notably in Great Britain.
“Given our solid progress in the first half, we have affirmed our 2018 profit outlook. We are committed to implementing our Beverages For Life strategy; investing in our business; better serving our customers; and improving our in-market execution.
“Importantly, we are confident that we have the right strategy and the right team in place to deliver strong cash generation and ultimately generate long-term value for our shareholders.”
© FoodBev Media Ltd 2019