Bottler Coca-Cola HBC AG forecast a better second half as it steps up marketing following a decline in first-half sales.
The shares rose to the highest since January 2014 as Chief Executive Officer Dimitris Lois said July’s results were “strong,” adding to optimism for a rebound.
“We do forecast an improvement in the second half,” Lois said on a call following the release of results showing a 3.4 percent drop in six-month revenue. “We have several strong marketing initiatives which we are launching in the third quarter.”
The company is seeking to bounce back after demand in Europe was affected by cool early summer weather, causing volume to show almost no growth. It will have to overcome weakness in currencies such as the Nigerian naira, and estimates that adverse foreign-exchange shifts will reduce full-year profit by about 115 million euros ($128 million). The bottler buys concentrate from Atlanta-based Coca-Cola Co. and sells the products in Europe, Russia and Nigeria.
The shares were up 7.3 percent at 1,686 pence at 11:25 a.m. in London, valuing the company at 6.1 billion pounds ($7.9 billion).
Improving margins and price changes mean the soda bottler is on track to achieve its full-year outlook, UBS AG analysts said in a note. The operating margin widened by 0.9 percentage point to 7.2 percent in the first half, while net income gained 12 percent to 140 million euros.
An extra selling day will provide a benefit in the fourth quarter, Lois said, promising “moderate volume growth” for the year.
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