21st Oct 2025 09:20
(Alliance News) - Coca-Cola HBC AG on Tuesday announced a deal to boost its presence in Africa, and reiterated full-year guidance despite third-quarter sales falling short of expectations.
In response, shares in the Zug, Switzerland-based soft drinks bottler fell 0.7% to 3,513.00 pence each in London on Tuesday morning.
Coca Cola HBC said it will buy a 75% shareholding in Coca-Cola Beverages Africa Pty Ltd from the Coca-Cola Co and Gutsche Family Investments Pty Ltd for USD2.6 billion.
The acquisition is being funded through a new USD2.5 billion bridge financing facility and the issue of Coca-Cola HBC shares issued to GFI representing around 5.5% of Coca-Cola HBC share capital.
In addition, Coca-Cola HBC has an option to buy the remaining 25% equity interest in CCBA owned by Coca Cola following completion.
The deal creates the second largest Coca-Cola bottling partner by volume globally, with leading market positions across Africa and Europe.
Coca-Cola Beverages Africa operates in 14 markets across Africa, representing around 40% of Coca-Cola system volumes sold across the continent.
Coca Cola HBC, which already operates in Nigeria and Egypt, said the enlarged business will, on completion, cover over 50% of the continent's population.
Coca-Cola HBC added that the agreement unlocks opportunities for growth and is expected to be low-single digit accretive to earnings per share from the first full year following completion.
Leverage post completion is expected to be towards the top end of Coca-Cola HBC's medium-term target range of 1.5 times to 2.0x for net debt to earnings before interest, tax, depreciation and amortisation, with no expected impact to credit rating.
As a result of the deal, Coca-Cola HBC said it will cancel its share buyback programme with immediate effect.
Completion is targeted by the end of 2026, subject to approvals.
Coca-Cola HBC said it intends to pursue a secondary listing on the Johannesburg Stock Exchange to "underpin its commitment" to both South Africa and Africa.
In addition, Coca-Cola HBC reported organic revenue growth of 5.0% in the third quarter, below Visible Alpha consensus of 6.7%, bringing year-to-date organic revenue growth to 8.1%.
Organic volume growth was 1.1%, with growth led by Sparkling and Energy with organic revenue per case up 3.8%.
Organic revenue growth was seen across all three segments, Established, Developing and Emerging,
despite a mixed market environment and less favourable weather.
Emerging organic revenue growth of 7.9% was particularly healthy, led by strength in Nigeria and Egypt.
"This performance highlights the strength of our portfolio," said Chief Executive Officer Zoran Bogdanovic.
Overall, revenue rose 4.9% to EUR3.20 billion in the quarter from EUR3.05 billion the year prior, with revenue per unit up 3.7% to EUR3.87 from EUR3.73.
Coca Cola HBC said it expects the broader macroeconomic and geopolitical backdrop to remain "challenging and unpredictable", but reiterated 2025 guidance.
It expects organic revenue growth at the top end of its 6% to 8% range and organic earnings before interest and tax growth at the top end of its 7% to 11% range.
In 2024, the company reported revenue of EUR10.75 billion, including organic sales growth of 14%, and Ebit of EUR1.19 billion, which included organic growth of 13%.
Coca Cola HBC said it now expects a EUR5 million to EUR15 million foreign exchange tailwind to Ebit compared to a EUR0 million to EUR10 million headwind before. It also expects lower finance costs of between EUR10 million to EUR20 million, lowered from EUR15 million to EUR25 million previously.
By Jeremy Cutler, Alliance News reporter
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