Coca-Cola Hellenic | Healthy outlook intact but largely priced in
Despite the slower operating momentum in Q2 – mainly due to the adverse weather – CCH remains on track to deliver double-digit adj. EBIT growth in FY19 and >40bps EBIT margin expansion, broadly in sync with consensus estimates. Looking ahead, the medium-term outlook is healthy with mgt targeting 5-6% organic revenue growth through to 2025 (underpinned by innovation and the migration towards a holistic 24/7 beverage model) and 20-40bps annual margin expansion. We estimate this translates to high single-digit annual EBIT CAGR over 2019-2025e, which is however already embedded in both our and market estimates. By implication, we see relatively limited upside risk to medium-term forecasts unless the macro/FX backdrop proves more constructive and conducive for CCH’s fundamentals.In this note, we incorporate in our valuation the sustained low interest rate environment in the light of further central bank easing (thereby lowering our WACC) while also incorporating the special dividend paid recently. Following minor changes to our operating estimates, we edge up our PT to €30.1, effectively valuing CCH at a 1-year forward PE of c20x, just small discount vs. EU beverages. We retain our Hold recommendation.
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.
Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.
Eurobank Equities S.A. offers a comprehensive suite of investment products—including equities, derivatives, bonds, and mutual funds—serving over 15,000 private, corporate, and institutional clients in Greece and internationally.
The firm maintains a dominant position in the Greek capital markets, consistently ranking among the top brokers in terms of market share and is repeatedly recognised in major institutional investor surveys as one of the leading brokers and top Equity Research Providers for Greece.
Its multi-awarded Research Division delivers timely insights and fundamental coverage on almost 40 listed companies—representing over 90% of the ATHEX’s market capitalisation and traded value.
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