Bottler Coca-Cola HBC lifts profit forecast as demand outshines macro concerns
Strong Performance and Upgraded Outlook Amid Global Events
By Simone Lobo
Aug 5 (Reuters) - Bottler Coca-Cola HBC narrowed its annual profit growth forecast towards the higher end of its forecast range on Wednesday, as sales related to the soccer World Cup accelerated demand that it says has stayed resilient despite uncertainties.
Impact of the World Cup and Strategic Partnerships
The Switzerland-based bottling partner for Coca-Cola in Central and Eastern Europe and Africa has benefited from the U.S. beverage giant's tie-up for the World Cup, a global event which helped lift spending morale against a backdrop of rising geopolitical tensions and macroeconomic headwinds.
Share Performance and Profit Guidance
Shares of Coca-Cola HBC rose as much as 4.3% to £50.35 after it said it expects an organic operating profit growth of 8% to 10% for fiscal 2026, versus its previous forecast of 7% to 10%.
Analysts are expecting growth of 9.1%, according to a company-provided consensus.
Revenue Growth and Analyst Expectations
The company, which also sells energy drinks, coffee and sparkling drinks, also expects annual organic revenue growth around the top end of its guidance range of 6% to 7%, compared to company-provided analyst expectations of 6.2%.
Brand Equity and Consumer Sentiment
Partnerships such as the one for the World Cup which offered special-edition Coca-Cola and Powerade packs tend to have a lasting impact beyond the event as it enhances brand equity, CEO Zoran Bogdanovic told Reuters.
Bogdanovic also said the company had seen resilience in consumer sentiment overall, even as some markets showed signs of sensitivity and most other consumer goods companies flagged softer consumer trends.
Macroeconomic Challenges and Hedging Strategies
Rising inflation, commodity and energy costs stemming from the Iran war have also prompted businesses to hedge against swings.
Coca-Cola HBC is 85% hedged on key commodities which include sugar, aluminium, aluminium premium, gas oil, corn and plastics, CFO Anastasis Stamoulis told Reuters. However, he noted a "certain level of pressure" with fuel utilities, but did not provide details.
Financial Results and Future Plans
Comparable operating profit of €760.1 million ($876.70 million) for the six months ended July 3, surpassed expectations of €731.1 million.
Coca-Cola HBC also said it was on track to complete the acquisition of its African counterpart in the second half.
Additional Information
($1 = 0.8670 euros)
(Reporting by Simone Lobo in Bengaluru; Editing by Rashmi Aich and Shailesh Kuber)
