Coca-Cola Hellenic | Still fizzing
In our new detailed note on Coca-Cola Hellenic, we argue that CCHBC in on track to deliver c10% growth in adj. EBIT in FY18e and to meet/exceed mgt’s target for an EBIT margin of 11% by FY2020e. Solid operational momentum and balance sheet optionality are likely to continue driving the shares, but we caution that a potential ratcheting up of FX volatility may dent growth in 2019-20.In our view, a potential transformational M&A deal could justify higher valuation but an alternative scenario of a special dividend that would lead leverage to c1.5x net debt/EBITDA – so that CCHBC retains some headroom for bolt-on acquisitions – is fully reflected in the share price. We thus keep our Hold rating.
Coca-Cola Hellenic Bottling Co. produces, sells and distributes an extensive portfolio of non-alcoholic ready-to-drink beverages. Co.'s business is engaged in producing, selling and distributing non-alcoholic ready-to-drink beverages under bottlers' agreements with The Coca-Cola Company. In some Territories, Co. also produces, sells, distributes and markets its own brands of juice and Water beverages. In addition, Co. bottles and distributes beer in Bulgaria and Former Yugoslav Republic of Macedonia and Co. distributes a selected number of third party premium spirit brands in certain central and eastern European operations.
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