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COCA-COLA H.B.C. S.A.
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Announcement
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October 2, 2008 Coca-Cola Hellenic Bottling Company S.A. (Coca-Cola Hellenic) provides an update on current year guidance to reflect the impact from further cyclical economic weakness and continued poor weather in certain key markets. In the third quarter, Coca-Cola Hellenic achieved continued volume growth of approximately 4.5%, a solid achievement building on strong volume growth of 12% achieved in the comparable prior-year period. However, this performance in the third quarter was below our expected 7% volume growth, resulting from adverse weather in key countries and lower consumer confidence stemming from slowing economic growth and increasing inflationary pressures. Nevertheless, we continue to maintain or grow our volume and value shares in most of our territories. In Russia, our largest market in terms of volume, continued exceptional poor weather contributed to a volume decline of approximately 4.5% in the third quarter. In addition, there are signs that sustained high inflation and recent volatility in the financial markets are weighing on consumer confidence which causes us to adopt a more cautious outlook for the balance of year. Despite this challenging operating environment, we continue to grow both our volume and value share in Russia across the total alcohol free beverage market. Our year-to-date operating profit (EBIT) performance is being affected both by the slowdown in volume growth and by adverse product/ channel mix that results from a decrease of discretionary consumer spending in our higher-margin products and channels. However, as the third quarter progressed, we achieved a sequential monthly improvement in operating profit from implementing planned pricing and cost-saving initiatives. As a result, we expect our EBIT growth for the third quarter to be broadly flat. As we enter the seasonally smaller fourth quarter, we expect to realise continued improvement in operating profit through our planned cost saving and revenue growth initiatives. While we remain cautious of the current economic environment and continued financial market volatility, our updated full year 2008 guidance is as follows: - Volume growth of approximately 4% (6% previously). - EBIT broadly stable compared with last year (5% to 7% previously). - EPS broadly stable compared with last year (5% to 8% previously). Doros Constantinou, Managing Director of Coca-Cola Hellenic, commented: "Following further economic deterioration and continued adverse weather in some key markets during the course of the third quarter, we are today revising our full-year guidance. While we remain vigilant with respect to economic developments, we are maintaining our focus on continuing to execute effectively in the marketplace, so as to grow both market share and profitability. In addition, as we enter our 2009 business planning cycle, we are identifying further opportunities to reduce our costs and align our infrastructure to expected volume. The fundamentals of our business remain solid, as proven by the expansion of our market share across most of our territories. We continue to believe that our diverse country and product portfolio place us in an ideal position to maximise positive long-term industry trends and build shareholder value". Coca-Cola Hellenic management will host a conference call with financial analysts today to discuss the business update at 4pm Athens time (2pm London time, 9am New York time).
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