Coca-Cola European Partners (CCEP), the Coke bottler for the UK, saw its second-quarter revenue slide 26% to €2.36bn after seeing a 50% drop in away from home (AFH) volumes during lockdowns in its key markets.
Total comparable volumes across the period were down 22% with the Home channel also experiencing a decline (-3.5%) due to its exposure to immediate consumption packs.
However, CCEP highlighted that it has seen a sequential improvement in volumes across the quarter as the coronavirus restrictions were gradually lifted. After April volumes plummeted 36%, the decline was 26% May and a more modest 9% in June and July.
Revenue per unit case also declined by 5% due to negative geographic, channel and pack mix, driven by the closure of venues in the AFH channel.
All its markets suffered heavy drops in revenue with the Iberia (Spain, Portugal & Andorra) region the worst affected (-48%). This was followed by France (-25%), Germany (-22.5%), and Northern Europe (-17.5%).
Great Britain held up slightly better with revenues down 13.5% after weak AFH volumes were partially offset by strong growth in the Home channel. Coca-Cola Zero Sugar, Dr Pepper, Lilt, Monster & Schweppes mixers all grew volumes during the quarter.
For the whole first half, CCEP’s comparable operating profit fell 48% to €398m, reflecting a 16% decline in revenues and higher cost of sales.
Damian Gammell, the group’s Chief Executive Officer, said: “We entered the year with good momentum, and I am proud of the resilience of our business and the speed at which we were able to respond to the challenges we faced as we entered the second quarter. We saw lower demand for immediate consumption and widespread outlet closures in the away from home channel but we quickly adapted, placing greater emphasis on the home channel, including the growth in online and future consumption, and I am particularly pleased that continued to gain overall market share.
“We are supporting our away from home customers as they start to re-open, and encouragingly, trading improved throughout the quarter as restrictions were lifted. However, many of our customers continue to operate at significantly reduced capacity and on-the-go consumption remains under pressure.
“We are focused on leveraging our solid capabilities to drive a robust second half recovery and we are confident about the future of our business, led by an even stronger sustainability and digital agenda.”
NAM Implications:
- Following lockdown, logic suggests that any company with any on-trade exposure…
- …will endeavour to optimise off-trade presence…
- …on the assumption that hospitality will settle at 50% original capacity.
