CCEP rides sugar tax and drop in volume as revenue holds strong

Coca-Cola European Partners (CCEP) has recorded flat revenue growth, despite a quarter in which volumes declined by 2.5%.

In an earnings report that barely mentioned the words ‘sugar tax’, the bottler announced first-quarter revenue of €2.38 billion – just €4 million less than the first quarter of 2017.

Operating profit was 14.5% lower at €187 million, while profit after tax amounted to €124 million.

The dip in volume was offset by strong revenue per unit case growth, the company said.

There were positive signs in Great Britain, the Netherlands and Sweden, which all recorded revenue growth; as well as sales of Coca-Cola Zero Sugar, which were 8.5% stronger than the same period last year.

This quarter, the company has reduced the size of its classic Coca-Cola bottles in order to fall in line with the UK’s soft drinks industry levy. In recent years, it has been placing more importance on its diet and zero-sugar portfolio.

CCEP chief executive officer Damian Gammell said: “Our first-quarter results reflect our continued focus on improving our in-market execution and driving profitable revenue
growth through strong price and mix realisation.”

Gammell still expects full-year performance to be within the range previously stated, including growth in earnings per share.

“While pleased with our overall performance, volume growth was impacted during the quarter by unfavourable weather, customer challenges, and the effect of some of our brand realignment decisions,” Gammell continued.

“We remain confident that we are making the right strategic decisions for the long term and this is reflected in our 2018 outlook, which we have affirmed today. To achieve this outlook, we are focused on executing our plans over the key summer selling season while navigating through a dynamic trading environment.”

Earlier this week, Coca-Cola saw its net revenues decline 16% in the first quarter of the year to $7.63 billion, as it was impacted by a 26% headwind from the refranchising of its bottling territories.