28th Apr 2020 11:10
(Alliance News) - Coca-Cola European Partners PLC on Tuesday deferred its dividend for the first half of 2020 after reporting a drop in in quarterly revenue and volumes.
The bottler of Coca-Cola soft drinks said the Covid-19 crisis is having a fundamental impact on the way people consume its products and, as result, it is focusing more on the home channel including growth in online.
"We are confident about the post-crisis future of our business. While we take action to respond to the immediate crisis and provide relief to communities, we are also preparing for how we enable recovery and then sustained growth," said Chief Executive Damian Gammell.
"Before the crisis took hold in our markets, we saw good momentum in the first quarter, including progress on our sustainability agenda. Despite the uncertainty that surrounds us today, our confidence in the future of our business is driving us to take the right actions to protect our performance, conserve cash and lay the foundations for recovery, all underpinned by a strong balance sheet," Gammell added.
For the three months to March 27, Coca-Cola European Partners posted a 4.0% year-on-year drop in revenue to EUR2.48 billion.
By region, Britain and France saw a 6.5% drop in revenue, while Germany saw a 2.0% dip. Iberia - Spain, Portugal & Andorra - posted 1.5% revenue drop and Northern Europe - Belgium, Luxembourg, Netherlands, Norway, Sweden & Iceland - suffered a 4.0% fall.
Comparable volumes also slipped by 4.0% to 521 million cases. Volumes for Covid-19 impacted weeks - five weeks to April 17 - fell in a range of 20% to 40%
First quarter revenue per unit case increased 1.5%, however, due to favourable pricing and promotions, offset by negative channel and pack mix, particularly in March due to emerging lockdowns.
Coca-Cola European Partners, which has been approved to access the UK government's Covid loan scheme, said it is reducing its discretionary spend by EUR200 million, which will result in a capital expenditure of EUR350 million.
Earlier in March, the company suspended its EUR1 billion share buyback programme due to the health crisis, with EUR130 million repurchased to-date. It also had withdrew its annual guidance and had said it was its reviewing capital expenditure plans.
Shares in Coca-Cola European Partners were down 2.6% at EUR36.75 each.
By Tapan Panchal; [email protected]
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