Soft drinks bottler Coca Cola HBC AG has topped estimates for third-quarter revenue, as relaxed COVID-19 restrictions during the summer helped demand rebound at restaurants, theatres and other public places.
Declines in the out-of-home channel improved to high-single digits from peak lockdown lows of 70% to 90%, with the total number of bottled units sold slipping to 1.4% in the reported quarter.
The company said the at-home channel returned to growth in July and grew by mid-single digits in the third quarter, helped by special offers for lunches and dinners, get-togethers and TV viewing.
Soft drink bottlers have been saddled with too much product meant for restaurants, as shoppers in lockdowns preferred to buy cases of fizzy drinks from grocery stores, which are stocked with bigger and less-profitable packages.
Chief executive Zoran Bogdanovic said growth in the at-home channel, which contributes to nearly 60% of HBC's revenue, was encouraging and will be important for the current quarter as Europe heads into another round of lockdowns.
“We are encouraged by the strong improvement in trading in Q3, supported by a rapid recovery in the out-of-home channel as markets reopened," he said. "This performance demonstrates our ability to adapt to the fast-changing market environment. Looking into Q4, as we cycle a very strong volume comparator and see the renewal of lockdown restrictions in some markets, we are encouraged by the consistent growth we have seen in the at-home channel, which will be especially important for this final quarter.
"Combined with the increasing impact of our cost savings programmes this should allow us to continue to deliver good profitability in a severely disrupted year.“
The company, which bottles and sells Coca-Cola drinks in 28 countries, said net sales revenue for the three months ended Sept. 25 stood at €1.83 billion, above a company-provided consensus of €1.79 billion.
Coca-Cola Co owns a 23.2% stake in Coca-Cola HBC, making the U.S.-based company its second-biggest shareholder, Refinitiv data showed.