Coca-Cola Hbc Ag Debt jumped on 107% and EBITDA jumped on 16.5%

13 Feb 2020 • About Coca-Cola Hbc Ag ($CCH) • By InTwits

Coca-Cola Hbc Ag reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is expanding: 15.7% in FY2019 vs. 14.2% in FY2018 vs. 11.5% in FY2015
Coca-Cola Hbc Ag has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.1%. At the same time it's a lot of higher than industry average of 4.0%.
CAPEX is quite volatile: $5,429m in FY2019, $3,749m in FY2018, $2,944m in FY2017, $3,062m in FY2016, $2,294m in FY2015
The company has highly profitable business model: ROIC is 13.0%
It operates with high leverage: Net Debt/EBITDA is 2.3x while industry average is 1.9x

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Coca-Cola Hbc Ag's Revenue increased on 5.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.8 pp from 27.5% to 30.3% in FY2019. EBITDA Margin followed a growing trend at 0.96 pp per annum in the last 5 years.

Gross Margin showed almost no change in FY2019. Gross Margin stuck to a growing trend at 0.28 pp per annum in FY2015-FY2019.

Net Income margin showed almost no change in FY2019. Net Income margin stuck to a growing trend at 0.62 pp per annum in FY2015-FY2019.

Investments (CAPEX, working capital and M&A)

Coca-Cola Hbc Ag's CAPEX/Revenue was 6.7% in FY2019. The company showed small growth in CAPEX/Revenue of 1.1 pp from 5.6% in FY2016 to 6.7% in FY2019. It's average CAPEX/Revenue for the last three years was 6.5%. CAPEX as a % of Revenue stuck to a growing trend at 0.40 pp per annum in FY2015-FY2019.

Return on investment

The company operates at good ROIC (13.0%) and ROE (16.8%). ROIC showed almost no change in FY2019. ROE increased on 2.2 pp from 14.6% to 16.8% in FY2019. ROIC grew at 1.1 pp per annum in FY2015-FY2019. ROE grew at 1.6 pp per annum in the last 5 years.

Leverage (Debt)

Debt level is 2.3x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA jumped on 1.3x from 0.9x to 2.3x in FY2019. Debt jumped on 107% while cash jumped on 15.5%. During FY2015-FY2019 Net Debt/EBITDA bottomed in FY2018 at 0.9x.

Coca-Cola Hbc Ag has no short term refinancing risk: cash is higher than short term debt (108.0%).

Valuation and dividends

Coca-Cola Hbc Ag's trades at EV/EBITDA 11.8x and P/E 21.5x.

Management team

The company's CEO Zoran Bogdanovic is a founder and has spent 2 years with the company. Coca-Cola Hbc Ag's CFO Michalis Imellos has spent 2 years with the company.

Financial and operational results

FY ended 30 Nov -0001

Coca-Cola Hbc Ag ($CCH) key annual financial indicators

mln. €	2015	2016	2017	2018	2019	2019/2018
P&L
Revenue	6,346	6,219	6,522	6,657	7,026	5.5%
Gross Profit	2,327	2,299	2,439	2,515	2,646	5.2%
SG&A	1,846	1,755	1,820	1,843
EBITDA	727	812	891	945	1,101	16.5%
Net Income	280	344	426	447	488	9.0%
Balance Sheet
Cash	487	573	724	712	823	15.5%
Short Term Debt	782	157	166	136	762	458.5%
Long Term Debt	923	1,468	1,460	1,468	2,563	74.6%
Cash flow
Capex	332	348	410	437	473	8.2%
Ratios
Revenue growth	-2.5%	-2.0%	4.9%	2.1%	5.5%
EBITDA growth	4.1%	11.8%	9.7%	6.1%	16.5%

Gross Margin	36.7%	37.0%	37.4%	37.8%	37.7%	-0.1%
EBITDA Margin	11.5%	13.1%	13.7%	14.2%	15.7%	1.5%
SG&A, % of revenue	29.1%	28.2%	27.9%	27.7%
Net Income Margin	4.4%	5.5%	6.5%	6.7%	6.9%	0.2%
CAPEX, % of revenue	5.2%	5.6%	6.3%	6.6%	6.7%	0.2%

ROIC	8.6%	10.8%	12.5%	13.0%	13.0%	-0.1%
ROE	10.0%	12.1%	14.5%	14.6%	16.8%	2.2%
Net Debt/EBITDA	1.7x	1.3x	1.0x	0.9x	2.3x	1.3x

Peers in Beverages

Below we provide Coca-Cola Hbc Ag benchmarking against other companies in Beverages industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %


Top	FY2015	FY2016	FY2017	FY2018	FY2019
Stock Spirits Group ($STCK)		-0.6%	5.2%	2.8%	10.6%
C&C Group ($CCR)	10.3%	-3.1%	-10.0%	-8.1%
Median (2 companies)	10.3%	-1.9%	-2.4%	-2.6%	10.6%
Coca-Cola Hbc Ag ($CCH)		-2.0%	4.9%	2.1%	5.5%

Top companies by Gross margin, %


Top	FY2015	FY2016	FY2017	FY2018	FY2019
Stock Spirits Group ($STCK)	53.5%	50.7%	50.0%	48.9%	47.3%
Median (1 company)	53.5%	50.7%	50.0%	48.9%	47.3%
Coca-Cola Hbc Ag ($CCH)	36.7%	37.0%	37.4%	37.8%	37.7%

Top companies by EBITDA margin, %


Top	FY2015	FY2016	FY2017	FY2018	FY2019
Stock Spirits Group ($STCK)	20.1%	19.7%	20.5%	21.0%	16.5%
C&C Group ($CCR)	-4.9%	12.7%	-6.7%	17.0%
Median (2 companies)	7.6%	16.2%	6.9%	19.0%	16.5%
Coca-Cola Hbc Ag ($CCH)	11.5%	13.1%	13.7%	14.2%	15.7%

Top companies by CAPEX/Revenue, %


Top	FY2015	FY2016	FY2017	FY2018	FY2019
Stock Spirits Group ($STCK)	2.8%	2.6%	1.4%		2.7%
Median (1 company)	3.0%	2.0%	2.6%	2.6%	2.7%
Coca-Cola Hbc Ag ($CCH)	5.2%	5.6%	6.3%	6.6%	6.7%

Top companies by ROIC, %


Top	FY2015	FY2016	FY2017	FY2018	FY2019
Stock Spirits Group ($STCK)	7.9%	7.6%	8.7%	9.9%	8.0%
C&C Group ($CCR)	-5.1%	6.0%	-5.7%	8.7%
Median (2 companies)	1.4%	6.8%	1.5%	9.3%	8.0%
Coca-Cola Hbc Ag ($CCH)	8.6%	10.8%	12.5%	13.0%	13.0%

Top companies by Net Debt / EBITDA


Top	FY2015	FY2016	FY2017	FY2018	FY2019
C&C Group ($CCR)		1.9x		2.5x
Stock Spirits Group ($STCK)	1.1x	1.2x	1.0x	0.5x	0.8x
Median (2 companies)	1.1x	1.6x	1.0x	1.5x	0.8x
Coca-Cola Hbc Ag ($CCH)	1.7x	1.3x	1.0x	0.9x	2.3x

Coca-Cola Hbc Ag stock price chart

Coca-Cola Hbc Ag financials

mln.	FY2013	FY2014	FY2015

Revenue	6,874	6,510	6,346
EBITDA	730.5	697.9	726.7
Net income	221.2	294.8	280.3
CAPEX	380.2	362.6	331.5
Debt	2,200	2,105	1,705
Cash	737.5	636.3	487.4

About Coca-Cola Hbc Ag

Coca-Cola HBC AG produces, sells, and distributes non-alcoholic ready-to-drink beverages under bottlers' arrangements, franchise arrangements with third parties, and under its own brand names. The company offers sparkling, still, and water beverages, including juices and juice drinks, waters and flavored waters, sports and energy drinks, teas, and coffees. It markets and sells non-alcoholic carbonated beverages under the Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, and Sprite brand names; water and juices under the Amita, Avra, Deep RiverRock, and Fruice brand names; and iced tea, and sports and energy drinks under the Nestea and Monster brand names. The company sells its products primarily through hypermarkets, supermarkets, discounters, kiosks, petrol stations, cinemas, leisure parks, hotels, restaurants, and caf?s. It operates in 28 countries, including Austria, Cyprus, Greece, Italy, Northern Ireland, the Republic of Ireland, Switzerland, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Armenia, Belarus, Bosnia and Herzegovina, Bulgaria, FYROM, Moldova, Montenegro, Nigeria, Romania, the Russian Federation, Serbia, and Ukraine. The company was founded in 1969 and is headquartered in Zug, Switzerland.