To deliver our vision we focus on four strategic priorities.
Building trust within our communities
We believe that our business can only be as healthy and strong as the communities in which we operate. In the long run, healthy, sustainable businesses require thriving communities.
Trust is the foundation of our relationships with shareholders, customers, consumers, employees, institutions and business partners, and we build trust through responsible, sustainable management of our business.
For more than a decade, we have worked to embed corporate responsibility and sustainability into all of our business processes and decisions. We identified the environmental and social issues that are most material to our business, consulted with key stakeholders and developed ambitious strategies and commitments to create value for all stakeholders and minimise negative impacts. We have also consistently set ambitious long-term targets and reported against them, holding ourselves accountable to delivering on our commitments.
Offering our consumers the right products for all occasions
For Coca‑Cola HBC, consumer relevance means meeting and exceeding consumer expectations by offering the right products, in the right packs, through the right channels for the right occasion. These products must be consistently fresh, in premium condition, and presented cold when that is appropriate.
Delivering the products and services our customers expect
Building successful relationships with our customers is fundamental to our success. We work hard to ensure our people are constantly focused on customer needs and satisfaction. We aim to exceed expectations in terms of delivery and execution to be the best supplier, and work as partners in creating value to achieve the best relationship.
Focusing on a cost efficiency mindset
In 2019, currency neutral input cost per case grew marginally by 60 basis points, in line with our low-single digit guidance for the year. The main driver for this small increase in input cost growth was resin, while sugar and aluminium improved. Comparable operating expenses as a percentage of revenue improved by 80 basis points in the full year to 26.9%. Lower marketing expenses as we are cycling the investments behind the FIFA world cup in 2018 and operational leverage on logistics and administration costs were the major factors behind this improvement.
Depreciation of currencies, mainly the weakening of the Russian Rouble and the Nigerian Naira against the US Dollar resulted in a 7 million Euro currency headwind for the year, better than we had initially anticipated.
As a result, Comparable EBIT increased by 11.5% year-on-year, and comparable EBIT margin expanded by 60 basis points to 10.8%. 10 basis points of this margin improvement is attributable to the Bambi consolidation in the second half of 2019.
In addition to managing the cost structure of the business, we continued to improve our ability to use natural resources efficiently. We have taken additional steps to ensure that we achieve our long-term targets to reduce water and energy consumption, and contribute to the achievement of global goals regarding climate and clean water.
All our operations work towards the same objectives. These initiatives are adjusted to respond to local demographics, economies and market characteristics in order to manage risk while driving growth.
- Expand and deepen route to market
- Execute in-store with excellence
- Create joint value with customers
- Drive the water category, focusing on value
Volume is measured in million cases sold, where one unit case represents 5,678 litres.
- Capitalise on meals and socialising occasions for sparkling drinks
- Increase share of single-serve packs, driving transactions
- Improve performance in hotels, restaurants and cafes (HoReCal)
- Grow in the energy category
- Drive pricing strategies
Net sales revenue (NSR) comprises revenues from Coca‑Cola HBC's primary activities. We report this on an FX-neutral basis.
Net sales revenue generated per case sold is calculated on an FX-neutral basis.
- Continue production infrastructure and logistics optimisation
- Capitalise on contiguous territory and Emerging markets opportunities
- Use shared services to gain process efficiency
- Drive packaging harmonisation and innovation (light-weighting)
OpEx (operating expenses) as a percentage of net sales revenue is calculated by dividing comparable operating expenses by total net sales revenue.
Comparable EBIT margin refers to profit before tax excluding finance income or cost and share of results of equity method investments adjusted for certain non-recurring items divided by net sales revenue.
- Invest in revenue-generating assets and innovative technology
- Acquire water and juice brands in existing territory
- Maintain negative working capital balance sheet position
Working capital is operating current assets minus operating current liabilities, excluding financing and investment activities.
Capital expenditure (CapEx) as a percentage of net sales revenue.
Return on invested capital (ROIC) is net operating profit after tax divided by capital employed in the business.