WOOD Flash – Coca-Cola HBC: 3Q20 trading update – better price/mix in Established, further EUR 20m cut in costs
Coca-Cola HBC released its 3Q20 trading update today (11 November), with a better-than-anticipated price/mix in the Established segment. The Emerging segment remains the best-performing region in the CCH group, as volumes in Russia and Nigeria grew by low-teens to low-twenties (on a lfl basis). Management remains cautious on the 4Q outlook in Europe, due to the lockdown measures, but it announced a further EUR 20m in cost savings for 2020E (EUR 120m in total). This, in our view, continues to be a key element of our BUY rating, as revenue generation depends on the virus, to a large extent. In our view, the company’s tight cost control and the further EUR 20m in savings further support our view. Our price target (PT) of GBp 2,383/share still offers c.12% upside to yesterday’s close. On our 2021E EV/EBITDA of 8.7x, the company is trading at a c.20% discount vs. its historical average.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.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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