Greece’s economy may have been through the wringer over the past six months, as the cash-strapped country hammered out the terms of a new €85bn rescue with its creditors, but it seems as though consumers are still willing to spend on small luxuries, like a bottle of Coca-Cola.
Coca-Cola Hellenic (Coca-Cola HBC), one of the world’s largest Coca-Cola bottlers, which was once Greece’s biggest quoted company but in 2012 decided to quit the cash-strapped country and pursue a stock market listing in London, said its sales in Greece maintained “positive momentum” and increased “marginally” in the first half of its financial year, to July 3, despite a tough economic back drop.
However, the company is more cautious about the outlook, after Greece introduced capital controls at the end of June, limiting how much people could withdraw from their bank accounts on a daily basis.
From Coca-Cola Hellenic’s statement on Greece:
“looking ahead, we remain cautious as the macroeconomic environment is uncertain.”
The company continued to experience tough conditions in its key Russian market during the first half, with sales by volume in the country decreasing by “low single digits” as sliding oil prices and western sanctions over the Ukraine crisis have continued to take their toll on the Russian economy.
However, Coca-Cola Hellenic saw more success in other countries that have experienced political upheaval over the past six months, notably Ukraine and Nigeria. Unit case volume at its emerging markets division, which groups together countries such as Russia, Nigeria, Romania and the Ukraine, rose by 5.4 per cent overall in the first half.
But unfavourable foreign exchange movements had a negative effect on total group revenues, pushing them down 1 per cent to €3.2bn although net profit rose almost 32 per cent to €125.2m.
The company said it has benefited from favourable input costs while it has also been driving down other costs through an efficiency programme.
Dimitris Lois, chief executive, said:
We are pleased to have achieved strong results, with good volume growth and a significant improvement in margins. Our strategic initiatives are delivering, both through our commercial strategy designed to drive growth and ongoing efficiency improvements.
Difficult conditions remain in many of our markets, particularly in Russia, although we have proven to be adaptable and resilient in such markets. Conditions are more favourable in Eastern Europe and Nigeria, where we are confident of further growth. We have become more optimistic as the year has progressed and remain confident that 2015 will be a year of volume growth and progress on margins.