Bottler Coca-Cola HBC has surpassed half-year profit expectations and revised its annual revenue goal upwards, citing robust sales and elevated drink prices as key contributors to its success. The company, based in Switzerland and 20% owned by U.S. beverage giant Coca-Cola (KO.N), reported strong performance despite the ongoing cost-of-living crisis. Companies have managed to maintain demand for packaged food and beverages despite raising prices to offset higher energy and input costs.
Coca-Cola HBC, which was founded in Nigeria in 1951, anticipates organic revenue growth in the mid-teens percentage range for the full year, a significant increase from its earlier projection of 5-6%. CEO Zoran Bogdanovic highlighted the improvement in revenue per case through strategic price and mix management, aided by data-driven insights and analytics. The company’s organic net sales revenue per case grew by 19.0%, surpassing the 17.4% forecast from analysts.
Although the company saw slight volume declines in Nigeria due to temporary currency availability issues, it anticipates a negative impact from foreign currency exchange on comparable operating profit to range between 50 million and 60 million euros ($55 million and $66 million) for the year.
TUI Reports First Post-Pandemic Profit Amidst Travel Boom
Tour group TUI (TUI1n.DE) announced its first post-pandemic profit with robust bookings and strong travel demand driving the positive Q3 figures. As tourists continue to flock to European hotspots in a travel boom post-pandemic, airlines are reaping the benefits and reporting favourable results.
TUI’s underlying earnings before interest and tax reached 169 million euros ($185.46 million) for the quarter, alongside a revenue of 5.3 billion euros. Chief Executive Sebastian Ebel noted that despite extreme weather conditions, the Mediterranean region remains a top destination for the tour group. The reduction of net debt by 1.1 billion euros to 2.2 billion euros also signals a positive trend for the company.
Ebel emphasised TUI’s ongoing investments aimed at profitable growth, highlighting the group’s strategic vision for the future.
China’s Economy Faces Deflation as Consumer Prices Decline
China’s economy has entered a phase of deflation, marked by a decline in consumer prices in July – the first such occurrence in over two years. The official consumer price index, a measure of inflation, dropped by 0.3% compared to the previous year. This situation has heightened pressure on the Chinese government to boost demand in the world’s second-largest economy.
In conjunction with weak import and export data, concerns regarding China’s post-pandemic recovery are emerging. The country grapples with challenges like burgeoning local government debt, housing market issues, and high youth unemployment. The falling prices further complicate China’s efforts to manage its debt, potentially resulting in slower growth.
Analysts suggest a combination of increased government spending, lower taxes, and more accommodating monetary policies could help address the situation and stimulate inflation. Daniel Murray from investment firm EFG Asset Management emphasises the need for a multifaceted approach to lift inflation amidst these economic challenges.
