Coca-Cola HBC
Aligeorgas Bill
Gatsidas John
Date 23/12/2013
Ticker: ● EEE GA / CCH LN
Price (15/11): ● € 20.86
Recommendation: ● HOLD
Price Target: ● € 23.20
CCH: Post-London listing interest and medium term
growth sets the company in a position to outpace peers
Weak Outlook: Although CCH is the second largest Coca-Cola distributor with well established
channels and a wide area diversification, the 3Q 2013 results showed the company’s weak reaction
reflects. We saw notable consumer slowdowns in all three business regions, which in combination
with the higher input costs dropped the EBIT significantly (-7.2%) compared to the first nine
months of 2012.
Market Profile
Market Capitalization
€ mln 7.584
Shares Outstanding
mln 363.60
Main Shareholders
The Coca-Cola Co.
23%
Kar-Tess Holding S.A.
23%
Free Float
54%
52w Price Range
16.79-23.80
30 day Avg. Volume
67,000
Beta
0.675
Source: CCH data & Bloomberg
CCH will grow revenues and improve margins: Our estimates show that in 2013 there will be a
slight decline in revenues as well as in EBIT margin (Appendix No.1). Commodities prices are
forecasted to marginally increase in 2014, but the upcoming macro-economic recovery in Europe
will stand in favor of net income grow provisions. If CCH delivers higher margins, there is an
upside risk to our forecasts. Only if the company succeeds to improve significantly its market share
(in volume) in key markets and have significant turnover of its investment in Russia, there is a
possibility of growth rates greater than our estimations.
Greece’s uncertainty not yet a major issue: We aknowledge that Coca-Cola Hellenic operates in
28 countries which is very helpful in order to keep the revenues balanced. Following the primary
listing at the London Stock Exchange the appetite for the stock became greater. It seems that finally
the company is disconnected from the institutional environment in Greece. Indicatively, CCH
shares have outperformed market and peers since the London listing.
Neutral: Although the environment in the European beverage sector currently remains weak and
we expect flat EPS as well as lower than expected free cash flows, the company is characterized by
strong fundamentals. The economic recovery in Europe, CCH’s major market, will increase
consumer spending. As a result, we do not endorse the management’s current optimism, but we
estimate a stronger increase in revenues from 2014 and on. Our target price of €23.20 is 11.20%
higher than the current share price.
Highlights (€m)
2011A
2012A
2013E
2014E
2015E
2016E
2017E
Revenues
6824.30
7044.70
7023.57
7142.97
7292.97
7475.29
7662.18
EBIT
450.30
337.70
314.63
331.47
408.91
501.74
608.80
Net Income
265.70
193.40
184.97
197.34
258.08
330.86
415.04
EPS
0.730
0.532
0.509
0.543
0.710
0.910
1.141
Source : Author’s estimates, CCH data.
Important disclosures appear at the back of this report
www.indeepanalysis.gr
23/12/2013
25,00
450
Coca-Cola HBC (EEE)
24,00
FTSEAthens Large Cap
23,00
400
22,00
21,00
350
20,00
19,00
300
18,00
250
17,00
16,00
200
15,00
Apr-29-2013
May-29-2013
Jun-29-2013
Jul-29-2013
Aug-29-2013
Sep-29-2013
Oct-29-2013
Source : Bloomberg
Business Description
Tea;
Juice; 5%
6%
Other;
1%
Water;
20%
Lowcalorie
sparklin
g
beverag
es; 6%
Sparkli
ng
beverag
es; 62%
Source : CCH Data.
Coca-Cola Hellenic was formed in 2000 as a result of the merger of the Athens-based Hellenic Bottling
Company and the London-based Coca-Cola Beverages. Since then, its territory has expanded and currently
extends from Ireland, to the easternmost point of Russia. Coca-Cola Hellenic is headquartered in Zug,
Switzerland and currently is listed on the Athens, New York and London stock exchanges. For the sixth
consecutive year the company has been included in Dow Jones Sustainability Index. The shareholder’s
structure is consisted of the Kar-Tess Holding S.A, which possesses the 23% of total shares, The Coca-Cola
Company with another 23%, while the remaining 54% of shares are in free float. The company operates in 28
countries, employs more than 38,000 people, and offers a broad portfolio of 136 brands . Moreover is one of
the largest anchor of The Coca-Cola Company’s products in the world, and the biggest in Europe. The group
is active in 27 European countries and in Nigeria. The company focuses on emerging and developing
European markets while it has significant presence in established countries such as Italy. In the first 9 months
of 2013 Coca-Cola Hellenic had a further EBIT decrease of 3% compared to the same period of 2012. In
addition, EPS shrunk by 1%. The decrease in these figures is mainly due to the continuing adverse impact of
commodity costs and the persisting economic challenges across to the company’s territories.
Product Portfolio.:
The group offers a vast range of products that currently enumerates more than 600 different products and still
expands. The main focus is the sparkling beverages of the parent Coca Cola Company while a large number
of leading national brands, is marketed in each country. The group’s categories of products are: Sparkling
beverages, still beverages, waters and milks. Sparkling beverages account for the 62% of the product
segmentation, water for 20%, while still beverages such as juices, hydration-energy drinks and tea account
for 18% of the product portfolio.
Operational Review by Segment:
Coca-Cola Hellenic operates in a broad range of territories as the company serves 28 countries and over 600
milllion customers. Operational structure is grouped into three segments: established markets, developing
markets and emerging markets.
•
Established markets are consisted of Austria, Cyprus, Greece, Italy, Northern Ireland, Republic of
Ireland and Switzerland. These markets are characterised by: high net sales revenue per unit case,
proportionally with the other segments, though, recession, government austerity measures and
increased taxes resulted in 5% decrease in volume compared to 2011. FY2012 showed further
weakness in volume, with a 5% decline due to additional austerity measures in Italy and Greece
maintain consumer confidence at low levels as there is a significant decline in disposable income.
The overall VAT rate was increased by one percent in Italy effective from 19 September 2011
while in Greece from September 2011 VAT for all commercial beverages except still water was
increased by 10% from 13% to 23 percent. For FY 2012, established markets accounted for 39% of
the total net sales revenue and for the 33% of the total volume of the unit cases.
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23/12/2013
•
39%
45%
16%
Established
Developing
Emerging
Revenues Split per Region.
Source : CCH Data.
33%
48%
•
Developing markets are consisted of Croatia, Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Poland, Slovakia and Slovenia. Developing countries have the lowest net sales revenue
per unit case compared to the other two segments. In the first nine months of FY2013 there’s been a
3% decrease in volume along with an equal in sales. However, there was a 49% increase in
operating profit in the first nine months compared to prior year’s same period. Volume and net
sales, on the third quarter declined by 2% , as volume in Hungary declined in the third quarter due
to the volatile economic environment and the relative low consumer confidence and double-digit
unemployment rate. In addition, volume in Czech Republic decreased by low-single digits in the
third quarter. For FY2012 developing markets amounted for the 16% and 19% share of net sales
revenue and total volume respectively.
Emerging markets, mostly influenced by Russia, Nigeria, Romania and Ukraine, have much
growth opportunities mainly due to their population size, their favorable demographic
characteristics and their relatively low consumption rates. During 2012 emerging markets saw
declining unemployment and increase in disposable incomes, at the time, though, when austerity
measures and falling consumer sentiment had taken place. This resulted to stability as far as volume
and net sales revenues are concerned but also to a 6% drop in adjusted EBITDA for the nine
months in 2013. Volume in Russia increased by middle single-digits in the three quarters of 2013,
while in Ukraine there was a decline of mid-single digits. Volume in Nigeria also increased by mid
single-digits in 2013 indicating that Nigeria is not majorly affected by the global economic
downturn. For FY2012 emerging markets represented the 45% of sales and the 48% of the total
volume indicating the share of contribution of this particular segment of market.
19%
Established
Emerging
Developing
Volumes Split per Region.
Source : CCH Data.
Industry Overview and Competitive Positioning
Coca-Cola Hellenic presents defensive characteristics, significant for the Food & Beverages sector with a
good growth potential coming from the group’s expansion to the developing and emerging markets. The
degree of segmentation in the non-alcoholic beverage industry varies depending on different regions. There is
a wide range of competitors of non-alcoholic beverages especially in a local level including big supermarket
chains through private labels. CCH faces intense price competition, from local brand producers and
distributors that produce and sell diversified-quality brands at lower prices, a competition for which
management of CCH is not interested or willing to match as Coca-Cola brand products are considered
premium high quality brands. In addition, the company aims to gain share markets focused on volume
expansion and not so on price competition. Taking a closer look into the beverage industry worldwide, the
presence of major Coca-Cola bottlers is dominant. Especially in the U.S. market, Coca-Cola Company and
Coca-Cola Enterprises present the highest market capitalization while other U.S. competitors like Dr.Pepper
Snapple Group & Monster Beverage Corporation accumulatively reach a market capitalization of $ 17 billion.
Relatively close to Coca-Cola Company’s market capitalization seems to be PepsiCo Inc. with a significant
difference though. Competition in other countries like in the UK, Chile and Canada remains at low levels,
while in the U.K. the market capitalization for the British Britvic PLC does not exceed the 1,5 billion pounds.
The segments of emerging and developing countries show a great growth potential since consumption per
capita is still low. Trademark Coca-Cola products grew by low-double digits resulting in a share gain in the
sparkling beverages in the first nine months of 2013 in Russia, a market for which CCH is highly interested
in the long term, yet a challenging segment as the disposable income for consumption remains at low levels.
There is significant competition from local players since the market in these countries is fragmented with
intensive presence of local brands. CCH does not control a dominant market share in any of these countries
with the exception of Croatia and Hungary where other major international brands are also highly involved.
The segment of established markets remains a challenging field for implementing any market strategy since
the austerity measures that have already been implemented in Greece and Italy had a significant impact and
are expected to continue to deteriorate consumption levels for the next year, affecting, not only the already
deteriorating consumer sentiment, but the declining disposable income level as well. We highlight the
implementation of OBPPC approach in market execution as an effective market strategy affecting the volume
margins of the company for the 2013. Regarding the Greek market, although it represents only 5% of the
Group’s sales, competition with private label brands, is significant not only in the beverages segment but in
the water market too with various other value brands, pushing Coca-Cola Hellenic into promoting a mixed
product portfolio of snacks, competing with major brand Chipita and Tasty Chips, launching at the same time
various different energy drinks.
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It’s worth mentioning that RedBull, one of the biggest competitors in the energy drink market, lost its leading
market position to Coca-Cola’s Monster in the USA in terms of volume while in the Western Europe segment
still remains as a dominant energy drink but with declining consuming rates. Future developments in the
energy drinks markets of Western Europe will be lead by players with the strongest branding and positioning.
As countries of Western Europe are considered to be a mature market and since buyers have no switching
costs to another energy drink product, switching strategies might prove to be a promising growth potential for
CCH’s energy drink brands in these markets.
15,00%
13,00%
11,00%
9,00%
Investment Summary
7,00%
5,00%
We initiate coverage of Coca-Cola Hellenic with a hold rating and a target price of € 23.20, higher than the
current price of € 20.86 (as of 15/11/2013) by 11.20%. The stock in Athens Exchange is up by 2.5% the last
six months compared to a 16% decrease of ASE Lsrge Cap Index during the same period.
3,00%
EBIT Margin %
EBITDA Margin %
Source: Author’s estimates.
8%
26%
39%
27%
Fleet, IT, other
Coolers, Vending
Production/ Equipment
Land & Building
Capex Split 2012.
Source :CCH Data.
Management targets to grow revenues ahead of volume. We estimate a CAGR of 2.20% for the period 20132017. The impact of increased commodity prices primarly for PET resin, EU sugar and juice concentrate and
fuel seems to be significant for reduced profitability margins. Regarding 2014 our assumption for input costs
is to increase in the low single digits.The normalization of EU sugar, PET resin, and aluminium will drive
the EBIT margins from 4.5% in 2013 to 4.8% in 2014 and 6% in 2015. We believe there will be a slight
increase in revenues the next two years after 2013, in the merits of a change to the current economic
contraction status in key markets and the deteriorating consumer sentiment. We estimate a 0.3% decline in
revenues in 2013 and a 2.25% growth in 2014 on the basis of GDP growth forecasts for the countries where
CCH operates (Appendix No.1).
Our target price of €23.20 is based on a DCF analysis and a Multiples analysis. As the company operates in
regions with different levels of growth, margins and risks, our DCF is based on a separate approach for each
geographic region as market segment (Established, Developing, Emerging) of CCH. Contrary to the
management’s optimistic expectations of €1.35 billion accumulated free cash flow for the period of 2013-15,
our approach results to circa €1 billion for the same period.
The company’s focus on operating expenses, working capital management along with restructuring initiatives
are yet to be evaluated as adequate to offset the impact of recession in key markets, as the joint investment in
Russia and a further capital expansion will require an even more efficient inventory management.
Valuation
We evaluate Coca-Cola Hellenic by applying Discounted Cash Flow (DCF) Analysis and a Multiples
analysis. The DCF analysis is based on growth rates and profitability margins that have been weighted
accordingly for the three business regions. We think this approach is appropriate as the company operates in
areas with different level of growth, margin and risk. We weighted our target price merely on our DCF
estimation (70%), compared to the Multiples analysis (30%), as we consider it as a more proper approach due
to the difficulty of conducting a clear peer group analysis in the beverage sector and due to the fact that
Multiples analysis does not take into consideration future performance.
Our DCF values CCH at €23.20 per share for the first quarter of 2014. While we appreciate CCH’s long term
potential, we believe there is uncertainty on the financial year 2013 due to the challenging consumer
environment in Europe and the pricing power. With per capita consumption closely tied to GDP, CCH had
benefited from strength in the underlying economies. However, 3Q13 results showed worsening margins
which stated clearly the CCH’s vulnerability. We expect similar results for the 4Q13.
The basic assumptions for our price target are a WACC of 7.8%, with a beta of 0.67, a cost of debt of 5.5%,
a risk premium of 6.00% and a terminal growth rate of 2.20%, which is in line with peers. A high risk free
rate is based on the assumption that a significant portion of CCH’s profits is generated in Eastern European
emerging markets as well as in Greece which can carry macroeconomic risks. The forecasts for modest
growth potential at the most of the 28 countries that Coca-Cola Hellenic operates lead us to assume a
softening demand for soft drinks. We estimate a 2.2% revenues growth for 2014 and a 2.70% for 2015. We
think that there is growth potential in markets with low penetration of soft drinks per capita but not before
the 2015 when we expect to see strong net income figures again. The forecasted stock return of 11.20%
gives a neutral recommendation. (Revenues Appendix No.1)
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As mentioned, we conducted also a Multiples analysis, in order to estimate the CCH’s equity value relative to
its peers. In the following table the CCH’s peer group from beverage industry worldwide is presented:
Country
Revenue
Growth
(5yr.
CAGR)
EBITDA
Growth
(5yr.
CAGR)
EV/EBIT
(5yr.)
Price/Revenue
(5yr.)
Price/Net
Income
(5yr.)
U.S.
5.2%
5.3%
15.7x
1.5x
17.1x
U.S.
1.0%
2.4%
11.1x
1.6x
22.7x
U.S.
17.9%
18.5%
22.0x
6.0x
37.9x
Mexico
24.8%
20.1%
26.8x
3.8x
37.7x
Britvic Plc
U.K.
11.9%
4.3%
17.3x
1.3x
48.0x
Pepsico, Inc.
U.S.
10.7%
6.5%
15.9x
2.2x
20.4x
Company name
Coca-Cola
Enterprises Inc.
Dr Pepper Snapple
Group, Inc.
Monster Beverage
Corporation
Arca Continental,
S. A. B. de C. V.
Source : Bloomberg
Multiples analysis targets CCH equity value at € 9.6 bn, equal to € 26.40 per share, a price 26.6% higher than
its current price. The major factor for this estimate was the comparable Net Income 5 years average multiples
as well as the Revenues comparable 5 years average multiples.
Risks to Our Price Target
Main upside risks to our price target are: (1) an improvement in the macroeconomic outlook in Italy, Greece,
Ireland and Eastern Europe, (2) a great decrease in commodity prices, (3) a stronger Russian Rouble or
Nigerian Naira, (4) higher than expected returns from the capital expenditure programme.
Main downside risks to our price target are: (1) a severe economic recession in key countries, (2) higher
commodity prices, (3) weaker Russian Rouble or Nigerian Naira, (4) poor weather.
WACC
PERPETUITY FCFF GROWTH
0,0125
0,0175
0,0225
0,0275
0,0325
0,072
23,71514
24,90907
26,34421
28,10184
30,30444
0,075
22,97678
24,04511
25,31693
26,8565
28,75832
0,0781
22,28502
23,24249
24,37216
25,72509
27,37471
0,089
20,29961
20,9748
21,75152
22,65454
23,71739
0,084
21,13483
21,92235
22,83793
23,91555
25,20242
WACC
AVERAGE ANNUAL GROWTH RATE
0,017
0,0202
0,0232
0,026
0,029
0,072
24,90907
25,97856
26,97124
27,931
28,96147
0,075
24,04511
25,05392
25,98991
26,89477
27,86658
0,0781
23,24249
24,19495
25,07832
25,93219
26,84955
0,089
20,9748
21,76825
22,50312
23,21315
23,97683
21,92235
0,084
Source: Author’s estimates.
22,78221
23,57909
24,34919
25,17704
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Financial Analysis
In this section, the basic assumptions of our valuation are presented.
We estimate CAGR in sales, for the period 2013-2017, at 2.20%.
Sales : CCH presents an effective diversification in sales among emerging,developing, and established
markets which provides the company with the advantage to keep a sustainable sales growth for the period
2013-2017. We assume that CCH’s growth rate in sales will be in line with the GDP forecasts for the regions
where it operates. For this reason we used a weighted average of GDP growth among the three regions to
forecast the revenues for the period concerned. We believe that in the short term the global recession that still
affects the established and some of the developing markets will hold back growth in revenues, allowing
figures to climb up to prior to the crisis levels after 2015, although from 2015 to 2017 we forecast a faster
growth of 3.5% level which will be driven mostly from an increase in volume sold in emerging markets,
since we do not foresee a faster growth for the disposable income available for consumption for these
markets.
Margins : In addition to the above stated assumptions we consider that input cost pressures will slightly
decline in accordance with World Bank’s estimates, that justifies an improvement of EBIT margin by 130bps
from 7.85% in 2011 to 9.15% in 2015, far from the management’s assumptions to reach 2007’s level of EBIT
margin. Capital Expenditure and market share expansion lead to improvements in profitability on the longterm. We forecast EBITDA margin improvement of 130bps from 13.2% in 2011 to 14.5% in 2015, as
gradual adjustment back to the prior to recession levels.
6,0%
4,0%
2,0%
0,0%
2012
2013
2014
2015
2016
2017
-2,0%
-4,0%
-6,0%
-8,0%
Sugar EU
Aluminum
Spot Crude
Source: IMF forecasts.
Earnings
Regarding net income we forecast that up to 2016 there will be an increasing adjustment back to 2008-2009
levels mostly driven by a raise in volume due to the expansion planned in emerging and developing markets.
The low figures of 2013 and 2014 will gradually increase from circa €185 mln. in 2013 and € 197 mln. in
2014 to € 415 mln. in 2017 as the global recession gradually smoothes out and CCH will ensure its position
in Russia along with the other developing and emerging markets. Therefore, earnings per share also present
an increase from €0.51 in 2013 to €1.14 in 2017 which sensibly will raise the appetite for the stock in the
long-term, contrary to the unattractive low figures of 2012.
Cash Flow
We project a sustainable growth of free cash flows to the firm, however our estimates measure the 2013-2015
period to circa to € 1bn, instead of € 1.35 bn that the Management expects. As far as dividends are concerned
we estimate an average 25% payout ratio for the years 2013-2017 accordingly to the company’s policy to
provide dividends at a rate between 20%-30% of net profits with dividend per share rising to € 0.285 in 2017.
(Appendix No.2 )
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Investment Risks
SWOT ANALYSIS
Strengths
•
•
•
•
•
•
Weaknesses
Balanced geographic exposure.
Presence in 28 countries
Second largest Coca-Cola bottler
Subsidiary of The Coca-Cola Co
Small exposure to Greece (5%)
Large portfolio of products
Efficient management record
Opportunities
•
•
•
•
•
•
Seasonality in sales
Dependence on weather conditions and
consumer-related factors
Vulnerable to cost input increases
Threats
Introduction of new products and
packaging innovations
Quick recovery in some markets where
the beverages market is far from mature
Great potential in most emerging
markets
•
•
•
•
Increased competition with PepsiCo and
private label products may affect
negatively the margins
Political and macroeconomic instability in
some countries. Recovery at least in
Greece, Italy, Ireland and Hungary is
expected slow
Increased commodity costs
Currency volatility risk
Strategic Risks:
Low investment return. CCH’s strategy is investing in emerging markets and especially in Russia and
Nigeria, expecting that its market share will grow substantially the next years. However, the company’s
sales may be lower than expected which could have negative effect to profits and free cash flow.
GDP growth rates. CCH is operating in 28 countries and the last results showed that its geographical
exposure is well-balanced. However, we expect zero growth in Europe, which will negatively affect sales
in major markets like Italy, Greece, Hungary, Ireland. IMF forecasts show that Europe’s debt crisis is
evolving into a more than just a temporary matter, even for corporations with large capitalization. Intense
competition with PepsiCo and other private label companies in all the areas could affect revenues and
market shares, especially if we consider CCH’s strategy not to reduce prices.
Financial Risks:
Fluctuations of exchange rates. CCH is exposed to exchange rate risk because of its operations to noneurozone countries, which could affect the profits. However, its well-serving of its long term borrowings is
certainly an advantage for future growth and prosperity.
Operative Risk:
Increase in energy, raw materials and components costs. The company’s financial results show that CCH is
highly dependent of input costs and especially sugar, oil, PET, aluminium. An increase at the price of those
commodities could severely affect the operating margin and hence earnings.
Corporate Governance/ Social Responsibility
The company gives much attention to its corporate governance. There are six governing bodies: The Board
of Directors, The Audit Committee, The Human Resources Committee, The Social Responsibility
Committee, The Disclosure Committee and The Operating Committee. The Board of Directors is consisted
of twelve members from which only one is an executive of the company. All are very experienced
professionals. Four directors are designated by Kar-Tess Holding S.A. and two by The Coca-Cola
Company. The Audit committee is consisted of three non-executive and independent members. The Board
and its committees meet at regular intervals.
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The following table provides the overall and specific corporate ratings and helps us to compare.
(Scale 1 to 100)
Basic corporate social
responsibility ratings
Overall
Community
Employees
Environment
Governance
69
69
72
68
67
49
49
46
50
49
All company average
47
47
47
46
51
Greece / company
average
45
44
45
46
44
COCA-COLA
HELLENIC
Beverage
Manufacturing
Source: CSRHUB.
Additionally, since 2008, CCH is listed in the Dow Jones Sustainability Indexes (DJSI), both the Dow Jones
Sustainability World Index and the Dow Jones Stoxx Sustainability Index. In 2012 CCH was among the top
120 companies across Europe included in the Vigeo Europe 120 list. A list measuring performance on the
grounds of sustainable development and social responsibility.
Furthermore, internal controls are tested on an annual basis, against ISO 14001 and the CCH Quality
System (TCCQS), at every plant.
According to CCH, using eco-indicator 99 method, its ecological footprint in value chain is as follows:
Enviromental Footprint
Raw Materials
36%
Bottling Plant
12%
Distribution
7%
Post-Consumer packaging
waste
2%
Cold-Drink Equipment
43%
Source: CCH Data.
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Appendix No. 1: Key Income Statement Data
Key Income Statement Data
2011A
2012A
2013E
2014E
2015E
2016E
2017E
Net Sales Revenues (in €mil)
6824.30
7044.70
7023.57
7142.97
7292.97
7475.29
7662.18
Sales Growth
0.93%
3.23%
-0.30%
1.70%
2.10%
2.50%
2.50%
COGS + SGA
6374.00
6707.00
6708.93
6811.50
6884.05
6973.55
7053.37
COGS
4254.70
4522.20
4558.93
4661.50
4734.05
4823.55
4903.37
Gross profit Margin
37.65%
35.81%
35.09%
34.74%
35.09%
35.47%
36.01%
NOPM
6.60%
4.79%
4.48%
4.64%
5.61%
6.71%
7.95%
EBIT
450.30
337.70
314.63
331.47
408.91
501.74
608.80
Depreciation
371.50
378.30
375.76
382.15
390.17
399.93
409.93
EBITDA
821.80
716.00
690.39
713.62
799.09
901.67
1018.73
Net Interest
85.80
79.10
84.28
85.72
87.52
89.70
91.95
Abnormal items (pre-tax)
42.00
20.00
0.00
0.00
0.00
0.00
0.00
EBT
364.50
258.60
230.35
245.75
321.40
412.03
516.86
Tax
98.80
65.20
45.38
48.41
63.32
81.17
101.82
Net Income
265.70
193.40
184.97
197.34
258.08
330.86
415.04
Shares
363.80
363.50
363.60
363.60
363.60
363.60
363.60
EPS
0.730
0.532
0.509
0.543
0.710
0.910
1.141
Change in Working Capital
-68.00
-84.00
-30.00
-30.00
-30.00
0.00
0.00
Invest ment
363.90
395.50
386.30
392.86
401.11
411.14
421.42
Net Investment
-7.60
17.20
10.54
10.71
10.94
11.21
11.49
DPS
0.183
Source: CCH Data & Author’s estimates.
0.133
0.127
0.136
0.177
0.227
0.285
Appendix No. 2: Sales Split by Country (2012)
Ireland 3,9%
Other
6,6%
Bulgaria 2,5%
Serbia 4,0%
Russia 18,0%
Ukraine 4,0%
Greece 5,0%
Romania 8,0%
Nigeria 9,0%
Czech Rep 2,5%
Hungary 4,0%
Poland
8,0%
Italy 15,0%
Austria 5,5%
Source: CCH Data.
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Switzerland 4,0%
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Appendix No. 3: Revenues/EPS
7800,00
1,400
7600,00
1,200
7400,00
1,000
7200,00
0,800
7000,00
0,600
6800,00
0,400
6600,00
6400,00
0,200
6200,00
0,000
2010A
2011A
2012A
2013E
2014E
Revenues 2015E
EPS
Source: CCH Data & Author’s estimates.
Appendix No. 4: FCFF
2,50
2,00
2,00
1,50
1,00
0,95
1,00
2012‐2014
2013‐2015
0,50
0,00
2013‐2017
Source: Author’s estimates.
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2016E
2017E
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Appendix No. 5: Stock Price Chart & Acquisition Dates
Price
30
25
07/05/07 Acquisition of
new production facility
in Russia
20
03/31/05 Acquisition of
Russian juice company
Multon
15
07/05/06 Acquisition of
Italian Traficante Group
06/01/07 Acquisition of
Italian vending operator
Eurmatik
08/06/08 Acquisition of
Italian Socib S.p.A.
07/09/02 Leading Swiss mineral
water brands join CCH
10/02/03 Multivita
acquisition in Poland
11/26/01 CCH purchases
Russian operations
01/02/06 Merger of Kar-Tess S.A.
with Socomex S.A.
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01/03/02 CCH purchases
Baltic operations
05/26/09 Agreement with
Russian Cambell Soup
12/30/03 Acquisition
of Tsakiris
07/31/02 CCH adds
Romanian mineral water
Dorna in the portofolio
5
0
3/1/2001
3/1/2002
3/1/2003
3/1/2004
3/1/2005
3/1/2006
3/1/2007
Source: CCH Data.
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3/1/2008
3/1/2009
3/1/2010
3/1/2011
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History of Acquisitions
-26 November 2001Coca-Cola HBC purchases Russian operations from The Coca-Cola Company
-3 January 2002Coca-Cola HBC purchases Baltic operations from The Coca-Cola Company
-9 July 2002Leading Swiss mineral water brands join Coca-Cola portfolio
-31 July 2002The Coca-Cola Company and Coca-Cola HBC add Romania’s Dorna natural mineral water to their product range
-25 November 2002Cretan Bottling Absorption
-02 May 2003
Coca-Cola HBC announces joint acquisition of Polish Water Brand
21 July 2003
Coca-Cola HBC announces acquisition of Austrian mineral water company
02 October 2003Coca-Cola HBC announces completion of Multivita acquisition in Poland
-05 December 2003Coca-Cola HBC announces completion of the Römerquelle acquisition in Austria
-30 December 2003Coca-Cola HBC announces completion of the acquisition of Greek potato chip company Tsakiris
-28 January 2004Coca-Cola HBC announces completion of Gotalka acquisition in Croatia
-21 February 2005Coca-Cola HBC announces acquisition of Vlasinka mineral water company in Serbia
-31 March 2005Coca-Cola HBC announces acquisition of Multon, a leading Russian fruit juice company
-04 April 2005Coca-Cola HBC announces acquisition of Bulgarian natural mineral water company Bankia
-15 April 2005Coca-Cola HBC announces completion of Vlasinka acquisition in Serbia
-20 April 2005Coca-Cola HBC announces completion of Multon acquisition in Russia
-02 January 2006Coca-Cola HBC announces merger of Kar-Tess Holding S.A. with Socomex S.A.
-20 January 2006Coca-Cola HBC announces acquisition of Serbian fruit juice company Fresh & Co
-14 February 2006Coca-Cola HBC announces acquisition of Italian mineral water company, Traficante Group
-13 March 2006Coca-Cola HBC announces completion of Fresh & Co acquisition
-05 July 2006Coca-Cola HBC announces completion of Traficante Group acquisition in Italy
-23 April 2007Coca-Cola HBC announces the acquisition of Italian vending operator Eurmatik
-01 June 2007Coca-Cola HBC announces completion of the acquisition of Italian vending operator Eurmatik
-5 July 2007Coca-Cola HBC announces the acquisition of a new production facility in Russia
-04 September 2007Coca-Cola HBC announces completion of the acquisition of a new production facility in Russia
-06 August 2008Coca-Cola HBC announces the acquisition of Socib S.p.A., the second largest Coca-Cola franchise bottler in Italy
-11 December 2008Coca-Cola HBC announces completion of the acquisition of Socib S.p.A. - the second largest Coca-Cola franchise
bottler in Italy
-26 May 2009Coca-Cola HBC announces agreement to distribute Campbell Soup products in Russia
-16 December 2011Coca-Cola HBC announces that it has completed, in conjunction with Heineken N.V., the acquisition of minority
shares in their joint venture company Pivara Skopje
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over the next twelve month period, and recommends that investors take a position above the security’s weight in the S&P 500, or any other relevant index.
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