Coca-Cola HBC AG (LON:CCH) has said it expects to deliver good full-year profitability despite coronavirus (COVID-19) pandemic disruption thanks to growth in the at-home channel combined with its cost-savings programme.
However, the fourth quarter to end December 2020 is facing renewed lockdowns across its markets and a very strong volume comparator, the FTSE 100 group added.
In the third quarter, the company said trading improved as coronavirus restrictions were lifted in most markets during the summer, prompting a recovery of the out-of-home channel.
In the three months to end-September, revenue slipped by 7% to €1.8bn while volume was down 1% 613mln unit cases.
Developing markets delivered the best performance, with sales only down 3% to €375mln, boosted by growth in Nigeria and Russia, while established and emerging markets slipped 5% to €667mln and 10% to €786mln respectively.
The out-of-home channel, which typically accounts for 40% of the firm’s total revenues, was open and trading during the quarter, albeit at lower capacity compared to the prior year.
Out-of-home outlets carry more single-serve package formats which sell at a higher revenue per case compared to the multi-serve formats which are mainly sold in the at-home channel.
The Coca Cola bottler said it continues to see improved trends in the at-home channel as consumers shift their patterns of consumption, while in this segment there is more chance to drive premium products.
Following the €100mln of discretionary cost savings planned, the manufacturer expects to deliver a further €20mln of savings in the year, while capital expenditure cash outflow will be €100mln lower than estimated.