Coca-Cola HBC AG: history, ownership, mission, how it works & makes money

A Brief History of Coca-Cola HBC AG

Coca-Cola HBC AG, a leading bottler of The Coca-Cola Company, has its roots tracing back to 2013, when it was established as a result of the merger between the bottling operations of Coca-Cola HBC and the acquisition of a variety of other bottling businesses. The company operates in 28 countries across Europe, including Switzerland, Greece, and Nigeria, with a significant presence in the Central and Eastern European markets.

As of June 2023, Coca-Cola HBC AG has over 30,000 employees and operates 22 bottling plants across its territories. The company has seen a remarkable transformation over the years, focusing not only on beverage production but also on sustainability and innovation.

In 2022, Coca-Cola HBC reported a revenue of approximately €8.3 billion, reflecting a year-on-year increase of 19% compared to 2021. The company attributed this growth to the increasing demand for sparkling beverages and the expansion of its low and no-sugar offerings.

Coca-Cola HBC’s earnings before interest and taxes (EBIT) reached €1.4 billion in 2022, which represents a rise of 15% from the previous year. The company also demonstrated strong cash flow, with an operating cash flow of €1 billion.

The company has also prioritized sustainability. In 2022, Coca-Cola HBC announced its commitment to a net-zero emissions target by 2040, with interim goals to reduce absolute greenhouse gas emissions across its value chain by 25% by 2030. This initiative aligns with global shifts towards sustainability and responsible corporate practices.

The stock performance of Coca-Cola HBC has been noteworthy. As of October 2023, the stock price was approximately €23.50, reflecting a year-to-date increase of 10%. The company's market capitalization is around €9 billion, making it one of the key players in the European beverage market.

Dividends have also been a focal point for investors; Coca-Cola HBC declared a dividend of €0.62 per share in 2022, with plans to increase this amount steadily in the future, considering its robust cash flows and profitability.

In summary, Coca-Cola HBC AG has evolved substantially since its inception, demonstrating strong financial growth, a commitment to sustainability, and a focused strategy on expanding its market presence throughout Europe and beyond.

A Who Owns Coca-Cola HBC AG

Coca-Cola HBC AG is a leading bottler for The Coca-Cola Company, operating in 29 countries across Europe and Africa. As of their latest reports, the ownership structure is quite significant in terms of both institutional and private shareholders.

As of the end of Q3 2023, the ownership distribution of Coca-Cola HBC AG is as follows:

As per the latest financial disclosures, Coca-Cola HBC reported the following key financial metrics for the fiscal year 2022:

Coca-Cola HBC AG’s shares are traded on the London Stock Exchange and are included in the FTSE 100 Index. The company has shown a strong performance in stock price, reaching approximately €31.45 per share by the end of September 2023, marking an increase of around 7.5% year-to-date.

Moreover, the dividend yield for Coca-Cola HBC AG as of Q3 2023 stands at 2.12%, with an annual dividend payout of approximately €0.67 per share, reflecting its commitment to returning value to shareholders.

Coca-Cola HBC AG Mission Statement

Coca-Cola HBC AG, one of the largest bottlers of The Coca-Cola Company, operates with a clear mission to build sustainable businesses that create value for customers, consumers, and the communities in which they operate. Their mission statement emphasizes a commitment to quality, innovation, and responsible business practices.

In 2022, Coca-Cola HBC AG generated a total revenue of €9.12 billion, reflecting a growth of approximately 13.4% compared to the previous year. The company's focus is on delivering sustainable growth through a balanced portfolio of products that meet the evolving tastes and preferences of consumers.

The mission statement is encapsulated in four key pillars:

• Customer Satisfaction: Striving to meet the needs of their customers with high-quality products and services.
• Sustainability: Committing to reduce environmental impact through initiatives such as reducing carbon emissions and improving packaging sustainability.
• Innovation: Continuously innovating to meet market demands and consumer preferences.
• Community Engagement: Contributing positively to local communities and ensuring responsible business practices.

Coca-Cola HBC AG's dedication to sustainability is evident in its goal to achieve a 50% reduction in carbon emissions across its value chain by 2030. Additionally, the company aims to ensure that 100% of its packaging is recyclable or reusable by 2025, aligning with global sustainability goals.

The company is focused on popularizing its new beverage options, which saw a growth of 20% in the non-carbonated beverages segment in 2022. This aligns with consumer trends towards healthier options and has proven to be a successful part of their innovation strategy.

Through its detailed focus on these mission pillars, Coca-Cola HBC AG demonstrates a robust approach to conducting business that not only meets the demands of the market but also addresses the broader social and environmental challenges of today.

How Coca-Cola HBC AG Works

Coca-Cola HBC AG operates as a bottler and distributor of Coca-Cola products across various regions, including Europe, Africa, and Asia. The company is a leading bottler of the Coca-Cola Company, making it a pivotal part of the beverage market.

In 2022, Coca-Cola HBC reported a revenue of €9.8 billion, reflecting a growth of 17.5% compared to the previous year. This growth was driven by increased demand across its diverse product portfolio, including sparkling soft drinks, water, juices, and other non-alcoholic beverages.

The operational model of Coca-Cola HBC involves producing and distributing its products through a well-established network. The company operates 28 bottling plants and serves over 600,000 customers, ensuring a broad reach across its markets. In addition to manufacturing, the company places significant emphasis on logistics and supply chain management to ensure timely delivery and product availability.

Coca-Cola HBC’s production capacity stands at approximately 3 billion liters annually. The company focuses on efficiency and sustainability in its operations, aiming to reduce its carbon footprint by 30% by 2030. Action plans include investment in energy-efficient technologies and utilizing renewable energy sources.

Financial Performance

The financial metrics for Coca-Cola HBC indicate strong operational efficiency and market competitiveness. The company’s EBITDA margin was reported at 11.4% for 2022, while its net profit reached €1.1 billion, demonstrating a 14.3% increase year-over-year.

Coca-Cola HBC also maintains a strong balance sheet, with total assets valued at approximately €6.6 billion as of December 2022. The current ratio stands at 1.1, indicating sufficient short-term liquidity and financial stability.

The company actively engages in capital expenditure to enhance production capabilities and expand its market reach. In 2022, Coca-Cola HBC invested around €300 million in upgrading its bottling facilities and expanding distribution networks.

Market Strategy and Innovations

Coca-Cola HBC’s market strategy includes a focus on product diversification and innovation. The company has expanded its beverage portfolio with low and no-sugar options, responding to changing consumer preferences. This segment of the market saw a growth of 25% in 2022, contributing significantly to overall sales.

Additionally, Coca-Cola HBC is committed to sustainability and has set ambitious goals for reducing plastic waste. In 2022, the company announced that over 25% of its packaging was made from recycled materials, with a goal to reach 50% by 2030.

The company’s ability to adapt to market trends and consumer demands has positioned it favorably amongst competitors, enabling it to capture a larger market share across its operating regions.

Coca-Cola HBC's stock is listed on the London Stock Exchange under the ticker symbol CCH, with a market capitalization of approximately €23 billion as of Q3 2023. The company's share price has demonstrated resilience, with a year-to-date increase of 12%.

In 2022, Coca-Cola HBC also announced a dividend payout of €0.75 per share, marking a 5% increase from the previous year, reflecting its commitment to returning value to shareholders.

How Coca-Cola HBC AG Makes Money

Coca-Cola HBC AG is one of the largest bottlers of The Coca-Cola Company, operating across 28 countries primarily in Europe, including nations such as Greece, Italy, and Austria. The company generates revenue through a range of activities centered around the production and distribution of soft drinks, water, and other non-alcoholic beverages.

In 2022, Coca-Cola HBC reported a revenue of €8.2 billion, representing a year-over-year growth of 17.2%. This growth was driven by higher sales volume, pricing adjustments, and an expansion of its product portfolio.

The company’s revenue streams can be categorized as follows:

• Product Sales: Coca-Cola HBC sells a variety of beverages, including sparkling soft drinks, water, juices, and energy drinks.
• Brand Licensing: The company benefits from its association with The Coca-Cola Company's well-established brands.

The distribution model is essential for Coca-Cola HBC’s profitability. The company operates over 25 bottling plants and distributes its products through more than 90,000 outlets. This extensive distribution network allows the company to maintain a strong presence in the market.

Moreover, Coca-Cola HBC has diversified its portfolio to include healthier options such as low and zero sugar beverages, which accounted for approximately 45% of total sales volume in 2022. The emphasis on health-conscious products reflects the changing consumer preferences, contributing to the overall revenue growth.

In terms of operating performance, the company reported an operating margin of 10.2% in 2022, showing resilience in managing costs despite inflationary pressures. Net profit for the year stood at €543 million, compared to €483 million in 2021, reflecting an increase of 12.5%.

Coca-Cola HBC also invests in sustainability initiatives, which has led to a significant reduction in carbon footprint, promoting efficiency and enhancing its brand image, thereby indirectly contributing to revenue through increased consumer loyalty.

The company's stock performance on the London Stock Exchange has been robust, with share prices reaching around €31 in October 2023, marking a year-to-date increase of approximately 25%. This uptrend is indicative of investor confidence, driven by consistent financial performance and strategic growth initiatives.

In summary, Coca-Cola HBC AG's multifaceted approach to revenue generation—through diverse product offerings, an extensive distribution network, and alignment with consumer trends—positions the company favorably in the competitive beverage industry.