RESULTS FOR THE SIX MONTHS ENDED 28 JUNE 2013

RESULTS FOR THE SIX MONTHS ENDED 28 JUNE 2013

SECOND QUARTER AND HALF YEAR HIGHLIGHTS

	Q2	Q2	%
	2013	2012(1)	Change
Volume (m unit cases)	578	587	-2%
Net Sales Revenue (€ m)	1,949	1,986	-2%
Net Sales Revenue per Unit Case (€)	3.37	3.39	-1%
Currency Neutral Net Sales Revenue per Unit Case (€)	3.43	3.39	1%
Comparable Cost of Goods Sold	1,234	1,247	-1%
Comparable EBIT (€ m)	179	188	-5%
Comparable Net Profit (€ m)	127	126	-
Comparable EPS (€)	0.34	0.35	-3%
	Half year	Half year	%
	2013	2012(1)	Change
Volume (m unit cases)	1,004	1,014	-1%
Net Sales Revenue (€ m)	3,381	3,419	-1%
Net Sales Revenue per Unit Case (€)	3.37	3.37	-
Currency Neutral Net Sales Revenue per Unit Case (€)	3.41	3.37	1%
Comparable Cost of Goods Sold	2,183	2,187	-
Comparable EBIT (€ m)	178	187	-5%
Comparable Net Profit (€ m)	111	107	3%
Comparable EPS (€)	0.31	0.29	7%

Notes

¹ Comparative amounts 2012 have been adjusted to reflect the impact of new accounting standards adopted in 2012, as detailed in note 1 to the condensed consolidated interim financial statements.

² Comparable Net Profit refers to comparable net profit after tax attributable to owners of the parent.      

 

§ Volume: Volume declined by 2% in the second quarter of 2013. A 2% volume increase in emerging markets was more than offset by a 6% volume decline in established markets and a 3% decline in developing markets. Overall, volume declined by 1% in the first half of 2013. § Sales: Net sales revenue declined by 2% in the quarter and by 1% in the first half, with currency neutral net sales revenue per case growing by 1% for both periods. § Comparable operating profit (EBIT): Our revenue growth initiatives more than offset total input cost increases in absolute terms, still they were not sufficient to prevent a gross margin decline. Lower volume and unfavourable foreign currency movements resulted in a 5% decline in comparable operating profit both in the second quarter and the first half despite operating expense savings. § Half Year 2013 market shares: We continued to win in the marketplace. We gained or maintained volume share in sparkling beverages in the majority of our markets including Austria, Ireland, Italy, the Czech Republic, Romania, Russia and Ukraine. § Half Year 2013 free cash flow: We generated free cash flow of €98 million in the first half of the year, delivering a year-on-year increase of 15%. § Dividend: The Board has decided on a new progressive dividend policy effective from 2014 onwards with a targeted payout ratio on comparable net profit in the range of 35-45% over time.

Dimitris Lois, Chief Executive Officer of Coca-Cola HBC AG, commented:

"We continued to focus on our top line, with currency neutral net sales revenue per case increasing for the eighth consecutive quarter. Our emerging markets were the drivers in terms of volume growth, albeit at a slower pace. The volume decline in our established and developing markets reflects the ongoing difficult macroeconomic environment in most of our European markets. Against this challenging backdrop, trademark Coca-Cola products grew by over 2% in the second quarter.

For the remainder of 2013, we anticipate that the current trading conditions will remain unchanged.  We are confident in our ability to drive operational performance and deliver on our strategic commitments: winning in the marketplace, increasing currency neutral net sales revenue per case and focusing on cost leadership through tight operating expense control and disciplined working capital management.

The primary listing in London, a key milestone in the history of our Company, was successfully completed with the settlement of the statutory buy-out of the minority holdings in Coca-Cola Hellenic Bottling Company S.A. in June. The refinancing of our upcoming bond maturities at very competitive rates soon after the completion of the share exchange offer is a clear testament of our ability to capture the benefits of our relisting and redomiciliation."

 

SPECIAL NOTE REGARDING THE INFORMATION SET OUT HEREIN

Unless otherwise indicated, the condensed consolidated interim financial statements and the financial and operating data or other information included herein relate to Coca-Cola HBC AG and its subsidiaries ("Coca-Cola HBC" or the "Company" or "we" or the "Group").

 

This document contains forward-looking statements that involve risks and uncertainties. These statements may generally, but not always, be identified by the use of words such as "believe", "outlook", "guidance", "intend", "expect", "anticipate", "plan", "target" and similar expressions to identify forward-looking statements. All statements other than statements of historical facts, including, among others, statements regarding our future financial position and results, our outlook for 2013 and future years, business strategy and the effects of the global economic slowdown, the impact of the sovereign debt crisis, currency volatility, our recent acquisitions, and restructuring initiatives on our business and financial condition, our future dealings with The Coca-Cola Company, budgets, projected levels of consumption and production, projected raw material and other costs, estimates of capital expenditure, free cash flow, effective tax rates and plans and objectives of management for future operations, are forward-looking statements. You should not place undue reliance on such forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect our current expectations and assumptions as to future events and circumstances that may not prove accurate. Our actual results and events could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in the annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (File No 1-31466) for Coca-Cola Hellenic Bottling Company S.A. and its subsidiaries for the year ended 31 December 2012.

Although we believe that, as of the date of this document, the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we, nor our directors, employees, advisors nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. After the date of the condensed consolidated interim financial statements included in this document, unless we are required by law or the rules of the UK Financial Conduct Authority to update these forward-looking statements, we will not necessarily update any of these forward-looking statements to conform them either to actual results or to changes in our expectations.

 

 

 

 

 

Reconciliation of Reported to Comparable Financial Indicators (numbers in € million except per share data)

Group Financial Results			Second quarter 2013
	COGS1	Gross  Profit2		Operating Expenses3	EBIT4	Adjusted EBITDA5	Finance Costs6	Net Profit7	EPS8 (€)
Reported	(1,235.8)	713.4		(551.9)	145.3	244.6	(29.7)	90.0	0.25
Restructuring costs	-	-		-	16.2	10.8	-	11.9	0.03
Commodity hedging9	1.8	1.8		-	1.8	1.8	-	1.3	-
Non-recurring items10	-	-		15.9	15.9	15.9	9.2	23.4	0.06
Comparable	(1,234.0)	715.2		(536.0)	179.2	273.1	(20.5)	126.6	0.34
Group Financial Results			Second quarter 201211
	COGS1	Gross  Profit2		Operating Expenses3	EBIT4	Adjusted EBITDA5	Finance Costs6	Net Profit7	EPS8 (€)
Reported	(1,253.4)	732.3		(550.9)	176.7	277.5	(22.0)	117.5	0.32
Restructuring costs	-	-		-	4.7	3.3	-	4.2	0.01
Commodity hedging9	6.4	6.4		-	6.4	6.4	-	4.5	0.02
Comparable	(1,247.0)	738.7		(550.9)	187.8	287.2	(22.0)	126.2	0.35
Group Financial Results			Half year 2013
	COGS1	Gross  Profit2		Operating Expenses3	EBIT4	Adjusted EBITDA5	Finance Costs6	Net Profit7	EPS8 (€)
Reported	(2,187.3)	1,193.8		(1,037.4)	134.0	327.9	(49.4)	65.6	0.18
Restructuring costs	-	-		-	22.4	17.0	-	17.3	0.05
Commodity hedging9	4.1	4.1		-	4.1	4.1	-	2.8	0.01
Non-recurring items10	-	-		17.7	17.7	17.7	9.2	25.0	0.07
Comparable	(2,183.2)	1,197.9		(1,019.7)	178.2	366.7	(40.2)	110.7	0.31
Group Financial Results			Half year 201211
	COGS1	Gross  Profit2		Operating Expenses3	EBIT4	Adjusted EBITDA5	Finance Costs6	Net Profit7	EPS8 (€)
Reported	(2,191.4)	1,227.7		(1,045.2)	164.4	359.2	(43.8)	88.6	0.24
Restructuring costs	-	-		-	18.1	16.1	-	15.5	0.04
Commodity hedging9	4.2	4.2		-	4.2	4.2	-	2.9	0.01
Comparable	(2,187.2)	1,231.9		(1,045.2)	186.7	379.5	(43.8)	107.0	0.29

¹   Reported COGS refers to cost of goods sold.

²   Reported Gross Profit refers to gross profit.

³   Reported Operating Expenses refers to operating expenses.

⁴   Reported EBIT refers to operating profit.

⁵   Adjusted EBITDA refers to operating profit before deductions for depreciation and impairment of property, plant and equipment (included both in cost of goods sold and in operating expenses), amortisation and impairment of intangible assets, employee share options and other non-cash items, if any (refer to 'Supplementary information' section).

⁶   Reported Finance Costs refers to total net finance costs.

⁷   Reported Net Profit refers to profit after tax attributable to owners of the parent.

⁸   Reported EPS refers to basic earnings per share.

⁹   The Group has entered into certain commodity derivative transactions in order to mitigate its exposure to commodity price risk. Although these transactions are economic hedging activities that aim to manage our exposure to sugar and aluminium price volatility, they do not qualify for hedge accounting. The fair value gains and losses on the derivatives are immediately recognised in the income statement in the cost of goods sold line item. The Group's comparable results exclude the unrealised gains or losses resulting from the mark-to-market valuation of this hedging activity. These gains or losses will be reflected in the comparable results in the period when the underlying transactions will occur, to match the profit or loss impact of the underlying transactions.

¹⁰ Non-recurring items refer mainly to the transactions costs related to the re-domiciliation and the admission of the Group to listing on the premium segment of the London Stock Exchange. Further to that, non-recurring finance costs also relate to the tender offer for the €500 million bond maturing in January 2014.

¹¹  Comparative amounts have been adjusted to reflect the impact of new accounting standards adopted in 2012, as detailed in note 1 to the condensed consolidated interim financial statements.

 

 

Group Operational Review

Coca-Cola HBC AG's ("Coca-Cola HBC" or "we" or the "Company" or the "Group") unit case volume declined by 2% in the second quarter and by 1% in the first half of 2013. Macroeconomic and trading conditions continue to be as challenging as in the previous quarters across most of our territories, particularly in our established markets. Disposable income continued to be under pressure and the level of unemployment continued to rise. In addition, unseasonably wet weather in Central and Eastern Europe during May and June, had an adverse impact on our business in the second quarter, particularly in developing markets and in certain of our established and emerging markets.

We continue to win in the market place. In the first quarter of 2013, we gained or maintained volume share in sparkling beverages and value share in the non-alcoholic ready-to-drink beverages ("NARTD") category in the majority of our markets. Markets in which we gained or maintained volume share in sparkling beverages include Austria, Ireland, Italy, the Czech Republic, Romania, Russia and Ukraine. In the NARTD category, we gained or maintained value share in Austria, Italy, Switzerland, the Czech Republic, Russia and Romania, among others.

Our premium sparkling beverages registered its fourth consecutive quarter of volume growth. Volume in premium sparkling beverages grew by 1% in the quarter, reflecting a 4% increase in our emerging and 1% increase in our developing markets, more than offsetting a 3% decline in our established markets. Volume in the premium sparkling beverages category increased by 2% in the first half as a result of a 7% increase in emerging, a 1% increase in developing and a 4% decline in established markets. Volume of trademark Coca-Cola products increased by 2% in both periods. Coca-Cola Zero continued to perform strongly, growing by 18% in the second quarter and 15% in the first half of the year, registering growth in all three reporting segments.

In the ready-to drink tea category our volume declined by 1% in the quarter, whereas year-to-date volume was up by 1%, driven by strong performance in our emerging markets, particularly in Russia. Our volume in the energy category grew by 4% year-on-year, marking the thirteenth consecutive quarter of growth, with 9% growth in developing and 7% growth in emerging markets. For the first half of 2013, our volume in the energy category grew by 6%. Our volume in the juice category declined by 4% in the second quarter and 3% in the first half of 2013, as growth in our emerging markets was more than offset by the decline in our established and developing markets. Our volume in the water category declined by 8% in the second quarter and 9% in the first half the year with negative trends across all three reporting segments.

Package mix improved marginally in both periods, despite the continuous shift in demand towards at-home consumption and organised trade, as the volume of single-serve packages declined less than the volume of multi-serve packages. The positive package mix is supported by our occasion-based brand, package, price and channel strategy ("OBPPC") and more specifically in the second quarter by the launch of our "Share a Coke" marketing campaign in 24 out of 28 markets.

Our OBPPC strategy enabled us to increase currency neutral net sales revenue per unit case for the eighth consecutive quarter. On a currency neutral basis, net sales revenue per unit case increased by 1% in both the second quarter and the first half of 2013.

Currency neutral input costs per case posted a 1% increase in both the second quarter and the first half of the year. Overall, the input costs environment has evolved in line with our expectations. Our revenue growth initiatives more than offset the increase of total input costs in absolute terms.

Comparable operating expenses as a percentage of net sales revenue declined by 24 bps in the quarter, reflecting improved operational efficiency across our business. The improvement in the quarter was primarily due to reduced warehousing and sales expenses. On a segmental basis the main drivers of the improvement in operating expenses as a percentage of net sales revenue were the developing and established markets, despite the negative operating leverage due to lower volumes. In the first half of 2013, comparable operating expenses as a percentage of net sales revenue declined by 41bps driven by improvements in all three operating segments.

Our comparable operating profit (EBIT) declined by 5% in both the second quarter and the first half of 2013. Benefits from our revenue growth initiatives and lower operating expenses fully offset higher input costs and the negative impact from currency movements, however, it was not enough to compensate for the decline in volume as well.

 

Group Operational Review (continued)

During the first half of the year, we incurred €22 million in pre-tax restructuring charges, €16 million of which was incurred in the second quarter. We continue to execute our restructuring plans for 2013, which are expected to improve productivity and create a more agile and efficient organisation.

Comparable earnings per share were €0.34 in the second quarter and €0.31 in the first half of the year, posting a €0.02 increase year-on-year in the first half.

We continue to be strongly cash generative. In the second quarter, we generated €137 million of free cash flow, a €21 million year-on-year improvement, mainly driven by a reduction in working capital. The improvement in working capital primarily resulted from a significant reduction in accounts receivable and to a lesser extent inventories. Therefore, we were able to reduce our cash conversion cycle by 8 days year-on-year. Overall, in the first half of the year, free cash flow was €98 million.

We continuously seek to integrate sustainability into all areas of our business. The next natural step for us was to reflect this in our reporting and we published our first Integrated Report in early June. We followed the guidance of the International Integrated Reporting Council. In preparing the report, we applied  the most stringent criteria and international standards. Our report has been externally audited for the third consecutive year, reaching an 'A+' rating in accordance with the Global Reporting Initiative standard.

Statutory Buy-Out & Delisting

On 17 June 2013, Coca-Cola HBC completed its statutory buy-out of the remaining shares of Coca-Cola Hellenic Bottling Company S.A ("CCHBC SA") that it did not acquire upon completion of its voluntary share exchange offer. The cash consideration paid during the statutory buy-out was €1 million. Consequently, CCHBC SA is now a 100% owned subsidiary of Coca-Cola HBC.

On 23 July 2013, the delisting of CCHBC SA from the Athens Exchange was approved by the Hellenic Capital Market Commission and effected as of the same date. Coca-Cola HBC will continue to maintain a parallel listing of its shares on the Athens Exchange.

Refinancing

In the second quarter, we successfully issued €800 million principal amount of 7-year fixed-rate notes with a coupon of 2.375%, and completed a fixed price tender offer for our outstanding €500 million  notes due in January 2014 with a 7.875% coupon, (the "2014 Notes"). €183 million of the 2014 Notes were tendered and cancelled. The net proceeds of the new issue, after financing the repurchase of €183 million of the 2014 Notes, will be used towards the refinancing of certain upcoming bond maturities, namely the $500 million notes due in September 2013 and the remaining €317 million notes due in January 2014. Following the completion of the new issue and the fixed price tender offer in June 2013, we cancelled our €500 million bond bridge facility. In addition, following the successful outcome of the statutory buy-out of the remaining shareholders in CCHBC SA, we also cancelled our €550 million statutory buy-out facility.

Dividends

In the Extraordinary General Meeting of Coca-Cola HBC held on 19 June 2013, our shareholders approved the distribution of a €0.34 dividend per share. The dividend was paid on 23 July 2013 and amounted to €124.7 million.

The Board of Directors of the Company has approved a new medium-term dividend policy which will be effective for dividend payments from 2014 onwards. This is a progressive dividend policy with a targeted payout ratio on comparable net profit after tax in the range of 35-45% over time. Subject to the availability of distributable reserves and shareholder approval, dividends are expected to be paid   annually after our annual general meeting in line with past practice.

Half-yearly financial report

Our half-yearly financial report for the six months ended 28 June 2013 will be released on Monday 12 August 2013 and will be available from our website www.coca-colahellenic.com  with effect from such date.

 

 

Operational Review by Reporting Segment
Established markets
	Q2	Q2	%	Half year	Half year	%
	2013	2012	Change	2013	2012	Change
Volume (m unit cases)	177.5	188.2	-6%	319.4	341.4	-6%
Net sales revenue (€ m)	697.2	743.9	-6%	1,267.7	1,364.1	-7%
Net Sales Revenue per Unit Case (€)	3.93	3.95	-1%	3.97	4.00	-1%
Currency Neutral Net Sales Revenue per Unit Case (€)	3.96	3.95	-	3.99	4.00	-
Operating profit  (EBIT in € m)	30.5	56.3	-46%	33.9	65.0	-48%
Comparable operating profit (Comparable EBIT in € m)	50.5	57.6	-12%	61.6	75.3	-18%

Note: Comparative amounts have been adjusted to reflect the impact of new accounting standards adopted in 2012, as detailed in note 1 to the condensed consolidated interim financial statements. 

 

§ Unit case volume in our established markets segment decreased by 6% in both the second quarter and the first half of 2013, following an 8% and 5% decline respectively in the comparable prior year periods. The main driver of the volume decline in the segment during the quarter was the weakness in all key categories in Greece, Italy and Austria.

§ Net sales revenue declined by 6% in the second quarter and by 7% in the first half of 2013. Lower volume, unfavourable price mix and negative currency translation impact more than offset the benefits of improved category mix on net sales revenue in both periods. Currency neutral net sales revenue per case was flat in both periods.

§ Volume in Italy declined by mid single-digits in the second quarter of 2013, while the decline was in the high single-digit for the first half of the year. Austerity measures impacted disposable income, and unemployment continued to rise. In the second quarter, volume pressure was evident across all categories. A 14% volume increase in Coca-Cola Zero partially supported volume in the sparkling beverages category in the second quarter. Package mix improved in the sparkling category as well as in total volume. We expect volatility to continue as a result of the ongoing fiscal and economic developments in the country.

§ Volume in Greece declined by the low-teens in the second quarter of 2013. Volume for the first half of the year declined by mid teens. Disposable income is expected to decline further in 2013 while unemployment remains at the historically high level of 27%. Sparkling beverages were more resilient and declined by mid single-digits in the quarter.

§ Volume in Switzerland declined by low single digits in both the second quarter and the first half of the year. Unseasonably cold weather and heavy rainfalls during May and June had an adverse impact on demand. Our "Share a Coke" campaign supported a marginal volume increase in Trademark Coke while Coca-Cola Zero continued its positive trend, with volume increasing by mid single-digits in the second quarter of the year.

§ Volume in Ireland was marginally positive in the second quarter following seven consecutive quarters of decline. Volume in the first six months of 2013 decreased by low single-digits. The volume growth was driven by our sparkling category, which increased by low single digits in the second quarter, supported by the "Share a Coke" campaign. Package mix continued to improve, driven by single-serve packages.

§ Comparable operating profit in the established markets segment declined to €51 million in the second quarter of 2013 from €58 million in the comparable period last year. Comparable operating profit declined to €62 million in the first half of 2013 from €75 million in the comparable period last year. Benefits from tighter operating expense management and our restructuring initiatives were more than offset by lower volume and negative price mix in the second quarter.

 

 

 

Operational Review by Reporting Segment (continued)
Developing markets
	Q2	Q2	%	Half year	Half year	%
	2013	2012	Change	2013	2012	Change
Volume (m unit cases)	105.5	108.7	-3%	182.3	188.1	-3%
Net sales revenue (€ m)	308.5	319.7	-4%	525.7	548.9	-4%
Net Sales Revenue per Unit Case (€)	2.92	2.94	-1%	2.88	2.92	-1%
Currency Neutral Net Sales Revenue per Unit Case (€)	2.93	2.94	-	2.89	2.92	-1%
Operating profit (EBIT in € m)	15.4	14.6	5%	0.5	1.0	-50%
Comparable operating profit (Comparable EBIT in € m)	18.6	15.6	19%	3.9	5.6	-30%

Note: Comparative amounts have been adjusted to reflect the impact of new accounting standards adopted in 2012, as detailed in note 1 to the condensed consolidated interim financial statements. 

 

§ Unit case volume in our developing markets segment decreased by 3% in both the second quarter and the first half of 2013, following 7% and 4% declines respectively, in the comparable prior year periods. Challenging economic conditions impacted volume performance across the segment, particularly in Hungary.

§ Net sales revenue declined by 4%, in both the second quarter and the first half of the year. Lower volume and negative price mix, unfavourable category mix and a marginal negative currency translation impact drove the performance in the second quarter. Currency neutral net sales revenue per case was flat in the second quarter and declined by 1% in the first half of 2013 compared to the respective prior year periods.

§ Volume in Poland declined by low single-digits in the second quarter and by mid single-digits in the first half of the year. The low single-digit volume increase in sparkling beverages was not enough to offset the decline in still beverages, especially ready-to-drink tea in the second quarter. Among sparkling beverages, Trademark Coca-Cola was the biggest contributor increasing by mid single-digits in the quarter. Juice posted strong double-digit growth in the quarter mainly as a result of the continuous successful execution in 1L PET, supported by marketing activities.

§ Volume in Hungary declined by low teens in the second quarter of the year driven primarily by a decline in sparkling and water categories. Volume dropped by high single digits in the first half of the year. The economic environment remained volatile with consumer confidence among the lowest in Europe and double-digit unemployment. Coca-Cola Zero was the only outperformer among sparkling beverages, posting double-digit growth for another quarter. Volume in the energy category almost doubled, mainly reflecting the strong performance of recently launched Burn Blue and Monster Rehab. Package mix improved, as our "Share a Coke" campaign supported the performance of single serve packages.

§ Volume in the Czech Republic declined by low single-digits in the second quarter, while for the first half of the year volume recorded a low single-digit increase. Overall economic and political conditions remain volatile. Volume of Trademark Coca-Cola products grew by mid teens, driven by a 16% increase in brand Coca-Cola and a strong double-digit increase in Coca-Cola Zero, supported by increased promotional activities.

§ Developing markets posted a comparable operating profit of €19 million in the second quarter, compared to a comparable operating profit of €16 million in the second quarter of 2012. In the first half of the year, developing markets posted a comparable operating profit of €4 million, compared to a comparable operating profit of €6 million in the first half of 2012. Lower operating expenses and favourable currency movements more than offset lower volume and negative price mix in the second quarter.

 

 

Operational Review by Reporting Segment (continued)
Emerging markets
	Q2	Q2	%	Half year	Half year	%
	2013	2012	Change	2013	2012	Change
Volume (m unit cases)	294.7	289.7	2%	502.7	484.1	4%
Net sales revenue (€ m)	943.5	922.1	2%	1,587.7	1,506.1	5%
Net Sales Revenue per Unit Case (€)	3.20	3.18	1%	3.16	3.11	2%
Currency Neutral Net Sales Revenue per Unit Case (€)	3.29	3.18	3%	3.22	3.11	4%
Operating profit (EBIT in € m)	99.4	105.8	-6%	99.6	98.4	1%
Comparable operating profit (Comparable EBIT in € m)	110.0	114.6	-4%	112.7	105.8	7%

Note: Comparative amounts have been adjusted to reflect the impact of new accounting standards adopted in 2012, as detailed in note 1 to the condensed consolidated interim financial statements. 

 

§ Unit case volume in our emerging markets segment grew by 2% in the second quarter of the year, following a 2% increase in the comparable prior year period. Strong performance in Nigeria and Russia more than offset volume declines in Romania and Ukraine. Unit case volume grew by 4% in the first half of the year.

§ Net sales revenue grew by 2% in the second quarter and 5% in the first half of 2013. Higher volumes, as well as positive price and category mix more than offset the negative impact from currency translation in both periods. Currency neutral net sales revenue per case increased by 3% in the second quarter and by 4% in the first half of 2013.

§ Volume in Russia grew by mid single-digits in both the second quarter and the first half of the year, following a low-teens increase in the second quarter of 2012. This was the seventh consecutive quarter of volume increase in Russia. Growth was broad-based with all major categories posting higher volume, except water. The positive impact of our OBPPC initiatives and strong execution of the Sochi Winter Olympic Games sponsorship with focus on the Olympic Torch Relay campaign supported an 11% growth in brand Coca-Cola, marking the eleventh consecutive quarter of volume and share expansion. Our RTD-Tea volume registered mid teens growth, reflecting the increased distribution of 1L PET as well as the continuous solid performance of 1.75L PET. Volume in our juice category grew by low teens, with growth coming from both our mainstream brand Dobry, which posted mid-teens growth, as well as our premium brand Rich, which was up by strong double-digits in the quarter.

§ Volume in Nigeria grew by almost double digits in the second quarter of the year, following a mid single-digit decline in the corresponding period last year. In the first six months of 2013, volume increased by mid-teens. In addition to the favourable base effect from last year's decline, increased marketing activities and improved availability supported volume growth. Brand Coca-Cola posted 15% growth, while Sprite grew in the low-teens and Fanta in high single-digits.

§ Volume in Romania declined by high single-digits in both the second quarter and the first half of the year, following a low single digit decline in the comparable prior year period. Performance was negatively impacted by both poor weather and competitive promotional pressures, mainly in multi-serve packages. Volume declined in all key categories, except for our energy category which posted mid single-digits growth. Coca-Cola Zero outperformed, recording double-digit volume growth supported by promotional activity.

§ Volume in Ukraine declined by mid teens in the second quarter of the year driven by declines in the juice and water categories, following a high single-digit decline in the comparable prior year quarter. Volume in the first half of 2013 decreased by high single-digits. Overall, the economic environment in the country remains fragile, impacting consumer demand. Volume declined with low single digits in sparkling beverages, as Trademark Coca-Cola products posted mid single-digits growth, supported by promotional activities. Our ready to drink tea volume recorded mid-teens growth in the quarter mainly due to pre seasonal availability.

 

Operational Review by Reporting Segment (continued)

 

§ Comparable operating profit in the emerging markets segment reached €110 million in the second quarter of 2013, compared to €115 million of operating profit in the same period last year. Improved category and price mix and higher volume was more than offset by increased raw material costs, higher operating expenses and adverse currency movements in the second quarter. Comparable operating profit reached €113 million in the first half of the year, compared to €106 million in the same period last year due to better volume and price mix performance in the first quarter.

 

 

Business Outlook

 

For the remainder of the year, we expect the challenging macroeconomic and trading conditions to persist across most of our territories. Economic uncertainty and austerity measures are expected to continue to lead to lower disposable income and high unemployment across the Eurozone. We do not anticipate the current trading conditions to change materially in the second half of the year.

Our strategic priorities remain unchanged. We are focusing on growing currency neutral net sales revenue per case, through our OBPPC-driven initiatives, while continuing to reinforce our position in the marketplace. Addressing affordability remains a key element of our strategy in order to stay relevant to our consumers.

We have clear category priorities in pursuing our strategy in the marketplace. We are focused on growing volume and value shares in the sparkling beverages, ready-to-drink tea and energy categories. In the juice category, we maintain a selective approach focusing on immediate consumption and the most profitable future consumption packages on a country-by-country basis. In the water category, our goal is to grow value ahead of volume by focusing on single-serve packages, as well as the most profitable multi-serve packages.

We continue to expect currency neutral net sales revenue per unit case in 2013 to grow year-on-year, albeit at a slower pace than that registered in 2012, and for currency neutral input costs per case to increase by low single-digits.

We also continue to execute our 2013 restructuring plans and we remain confident that we can achieve our targeted benefits. We expect the initiatives already taken in 2012 and those that we are taking in 2013 to yield approximately €65 million in total benefits in 2013. We continue to expect costs of approximately €50 million from restructuring initiatives in 2013 that are expected to yield €30 million in annualised benefits from 2014 onwards.

Based on current spot rates, we now expect a negative impact from currency movements in 2013 in line with the levels in 2012 as a result of increased volatility in our emerging markets' currencies.

We reiterate our expectations for a comparable effective tax rate for the mid-term in the range of 23-25%.

During the three year period ending 31 December 2015, we aim to generate free cash flow of approximately €1.3 billion. Net capital expenditure over the medium-term is expected to range between 5.5% and 6.5% of net sales revenue, reflecting our commitment to investing in the long-term development of our business. We are committed to maintaining strong discipline in working capital management, with the aim to drive solid free cash flow generation in the full year.

We manage our business for the long-term. We are confident that we have the right strategy to grow in a sustainable and profitable way, leveraging some of the world's best known and loved brands in an attractive diversified geographic footprint, characterized by low per capita consumption and market share growth opportunities.

 

 

 

 

Group Financial Review
Selected income statement and other items	Second Quarter
	2013 € million	20123  € million	%      Change
Volume (m unit cases)	577.7	586.6	-2%
Net sales revenue	1,949.2	1,985.7	-2%
Net Sales Revenue per Unit Case (€)	3.37	3.39	-1%
Currency Neutral Net Sales Revenue per Unit Case (€)	3.43	3.39	1%
Cost of goods sold	(1,235.8)	(1,253.4)	-1%
Comparable cost of goods sold1	(1,234.0)	(1,247.0)	-1%
Gross profit	713.4	732.3	-3%
Comparable gross profit1	715.2	738.7	-3%
Operating expenses	(551.9)	(550.9)	-
Comparable operating expenses1	(536.0)	(550.9)	-3%
Operating profit (EBIT)	145.3	176.7	-18%
Comparable operating profit (EBIT)1	179.2	187.8	-5%
Adjusted EBITDA2	244.6	277.5	-12%
Comparable adjusted EBITDA1	273.1	287.2	-5%
Total net finance costs	(29.7)	(22.0)	35%
Comparable total net finance costs1	(20.5)	(22.0)	-7%
Tax	(30.1)	(40.6)	-26%
Profit after tax attributable to owners of the parent	90.0	117.5	-23%
Comparable profit after tax attributable to owners of the parent1	126.6	126.2	-
Basic earnings per share (€)	0.25	0.32	-22%
Comparable basic earnings per share (€)1	0.34	0.35	-3%
Net cash from operating activities2	237.4	217.9	9%
Capital expenditure2	(100.2)	(101.3)	-1%
Free cash flow2	137.2	116.6	18%

 

Selected income statement and other items	Half Year
	2013 € million	20123  € million	%      Change
Volume (m unit cases)	1,004.4	1,013.6	-1%
Net sales revenue	3,381.1	3,419.1	-1%
Net Sales Revenue per Unit Case (€)	3.37	3.37	-
Currency Neutral Net Sales Revenue per Unit Case (€)	3.41	3.37	1%
Cost of goods sold	(2,187.3)	(2,191.4)	-
Comparable cost of goods sold1	(2,183.2)	(2,187.2)	-
Gross profit	1,193.8	1,227.7	-3%
Comparable gross profit1	1,197.9	1,231.9	-3%
Operating expenses	(1,037.4)	(1,045.2)	-1%
Comparable operating expenses1	(1,019.7)	(1,045.2)	-2%
Operating profit (EBIT)	134.0	164.4	-18%
Comparable operating profit (EBIT)1	178.2	186.7	-5%
Adjusted EBITDA2	327.9	359.2	-9%
Comparable adjusted EBITDA1	366.7	379.5	-3%
Total net finance costs	(49.4)	(43.8)	13%
Comparable total net finance costs1	(40.2)	(43.8)	-8%
Tax	(23.5)	(35.3)	-33%
Profit after tax attributable to owners of the parent	65.6	88.6	-26%
Comparable profit after tax attributable to owners of the parent1	110.7	107.0	3%
Basic earnings per share (€)	0.18	0.24	-25%
Comparable basic earnings per share (€)1	0.31	0.29	7%
Net cash from operating activities2	249.8	256.1	-2%
Capital expenditure2	(152.2)	(171.2)	-11%
Free cash flow2	97.6	84.9	15%

 

¹   Refer to the 'Reconciliation of Reported to Comparable Financial Indicators' section.

²    Refer to 'Supplementary Information' section.

³    Note: Comparative amounts have been adjusted to reflect the impact of new accounting standards adopted in 2012, as detailed in note 1 to the condensed consolidated interim financial statements.

 

 

Group Financial Review (continued)

 

Net sales revenue

Net sales revenue per unit case decreased by 1% during the second quarter of 2013 compared to the respective prior year period, on a reported basis. On a currency neutral basis, net sales revenue per unit case increased by 1% in the second quarter of 2013 compared to the respective prior year period. For the first half of 2013, net sales revenue per unit case was flat compared to the respective prior year period, on a reported basis and increased by 1% on a currency neutral basis.

 

Cost of goods sold

Comparable cost of goods sold decreased by 1% during the second quarter and was flat for the first half of 2013, compared to the respective prior year periods. Overall, the input cost environment has evolved in line with our expectations.

 

Gross profit

Comparable gross profit margin decreased from 37.2% in the second quarter of 2012 to 36.7% in the second quarter of 2013 and from 36.0% in the first half of 2012 to 35.4% in the first half of 2013.

 

Operating expenses

Comparable operating expenses decreased by 3% during the second quarter and by 2% during the first half of 2013 versus the respective prior year periods, mainly reflecting the benefits of our restructuring initiatives as well as lower period over period warehouse and sales expenses.

 

Operating profit

Comparable operating profit decreased by 5% in both the second quarter and the first half of 2013, compared to the respective prior year periods, as lower volume, higher input costs and the negative impact from currency movements more than offset the benefits from our revenue growth initiatives and the lower operating expenses.

 

Total net finance costs

Comparable total net finance costs decreased by €1.5 million during the second quarter and by €3.6 million during the first half of 2013, compared to the respective prior year periods.

 

 

Tax

On a comparable basis, Coca-Cola HBC's effective tax rate for the first half of 2013 was approximately 23% compared to 27% in the first half of 2012. The Group's effective tax rate varies quarterly depending on the mix of taxable profits by territory, the non-deductibility of certain expenses, non-taxable income and other one-off tax items across its territories.

 

Profit after tax attributable to owners of the parent

On a comparable basis, profit after tax attributable to owners of the parent decreased by 2% in the second quarter compared to the respective prior year period mainly driven by the reduced operating profitability. Comparable profit after tax attributable to owners of the parent increased by 1% in the first half of 2013 compared to the respective prior year period as the reduced taxes more than offset the operating profitability shortfall.

 

Net cash from operating activities

Net cash from operating activities increased by 9% in the second quarter of 2013 compared to the respective prior year period, reflecting the improvement in working capital and the reduced taxes paid, that more than offset the negative impact of the reduced profitability. For the first half of 2013, net cash flow from operating activities decreased by 2% compared to the respective prior year period, mainly on the back of the reduced profit during the period that more than offset the positive effect of the reduced payments for taxes and the improved working capital.

 

 

Group Financial Review (continued)

 

Cash flow from operating activities net of capital expenditure increased by 18% during the second quarter versus the respective prior year period, reflecting mainly the increased cash from operating activities. For the first half of 2013, cash flow from operating activities net of capital expenditure increased by 15% versus the respective prior year period, mainly on the back of positive phasing of the capital expenditure outflows.

 

Capital expenditure

Capital expenditure, net of receipts from the disposal of assets and including principal repayments of finance lease obligations, reduced by 1% in the second quarter and by 11% in the first half of 2013, compared to the respective prior year periods, mainly due to positive phasing of the cash outflows in the first half of 2013. This trend is expected to be reversed in the second half of the year. In the first half of 2013, capital expenditure amounted to €152.2 million of which 42% was related to investment in production equipment and facilities and 23% to the acquisition of marketing equipment. In the first half of 2012, capital expenditure amounted to €171.2 million of which 39% was related to investment in production equipment and facilities and 35% to the acquisition of marketing equipment.

 

 

Supplementary Information
The financial measures Adjusted EBITDA, Capital Expenditure and Free Cash Flow consist of the following reported amounts in the condensed consolidated interim financial statements:
	Second quarter
	2013 € million	20121 € million
Profit after tax	89.9	118.2
Tax charged to the income statement	30.1	40.6
Total finance costs, net	29.7	22.0
Share of results of equity method investments	(4.4)	(4.1)
Operating profit (EBIT)	145.3	176.7
Depreciation of property, plant and equipment	97.5	98.5
Amortisation of intangible assets	0.3	0.7
Employee share options	1.5	1.6
Adjusted EBITDA2	244.6	277.5
(Gains) / losses on disposal of non-current assets	(1.4)	2.1
Decrease/(increase) in working capital	1.3	(46.2)
Tax paid	(7.1)	(15.5)
Net cash from operating activities	237.4	217.9
Payments for purchases of property, plant and equipment	(97.4)	(97.0)
Principal repayments of finance lease obligations	(4.1)	(5.4)
Proceeds from sale of property, plant and equipment	1.3	1.1
Capital expenditure	(100.2)	(101.3)
Net cash from operating activities	237.4	217.9
Capital expenditure	(100.2)	(101.3)
Free cash flow	137.2	116.6
	Half year
	2013 € million	20121 € million
Profit after tax	65.5	89.4
Tax charged to the income statement	23.5	35.3
Total finance costs, net	49.4	43.8
Share of results of equity method investments	(4.4)	(4.1)
Operating profit (EBIT)	134.0	164.4
Depreciation of property, plant and equipment	191.2	190.2
Amortisation of intangible assets	0.6	1.4
Employee share options	2.1	3.2
Adjusted EBITDA2	327.9	359.2
(Gains) / losses on disposal of non-current assets	(2.7)	2.5
Increase in working capital	(55.9)	(68.7)
Tax paid	(19.5)	(36.9)
Net cash from operating activities	249.8	256.1
Payments for purchases of property, plant and equipment	(146.9)	(160.0)
Principal repayments of finance lease obligations	(8.0)	(12.7)
Proceeds from sale of property, plant and equipment	2.7	1.5
Capital expenditure	(152.2)	(171.2)
Net cash from operating activities	249.8	256.1
Capital expenditure	(152.2)	(171.2)
Free cash flow	97.6	84.9

 

¹ Note: Comparative amounts have been adjusted to reflect the impact of new accounting standards adopted in 2012, as detailed in note 1 to the condensed consolidated interim financial statements.

² Adjusted EBITDA refers to operating profit before deductions for depreciation and impairment of property, plant and equipment (included both in cost of goods sold and in operating expenses), amortisation and impairment of intangible assets, employee share options and other non-cash items, if any.

 

Coca-Cola HBC Group

 

Coca-Cola HBC is the second-largest bottler of products of The Coca-Cola Company in terms of volume with sales of more than 2 billion unit cases. It has a broad geographic footprint with operations in 28 countries serving a population of approximately 581 million people. Coca-Cola HBC offers a diverse range of NARTD beverages in the sparkling, juice, water, sport, energy, tea and coffee categories. Coca-Cola HBC is committed to promoting sustainable development in order to create value for its business and for society. This includes providing products that meet the beverage needs of consumers, fostering an open and inclusive work environment, conducting its business in ways that protect and preserve the environment and contribute to the socio-economic development of the local communities.

 

Coca-Cola HBC has a premium listing on the London Stock Exchange (LSE: CCH) and its shares are listed on the Athens Exchange (ATHEX: EEE). Coca-Cola HBC's American depositary shares (ADSs) are listed on the New York Stock Exchange (NYSE: CCH). Coca-Cola HBC is included in the Dow Jones Sustainability and FTSE4Good Indexes. For more information, please visit http://www.coca-colahellenic.com/.

 

 

 

 

Conference call

 

Coca-Cola HBC will host a conference call with financial analysts to discuss the second quarter and half year 2013 financial results on 8 August 2013 at 10:00 am, Swiss time (9:00 am London, 11:00am Athens, and 4:00 am New York time). Interested parties can access the live, audio webcast of the call through Coca-Cola HBC's website (www.coca-colahellenic.com/investorrelations/webcasts).

 

Enquiries

Coca‑Cola HBC AG Oya Gur Investor Relations Director	Tel: +30 210 618 3255 email: [email protected]
Eri Tziveli Investor Relations Manager	Tel: +30 210 618 3133 email: [email protected]
Dimitris Bakas Investor Relations Manager	Tel: +30 210 618 3124 email: dimitris.bakas@cchellenic.com

 

International media contact:   RLM Finsbury Guy Lamming Charles Chichester Philip Walters Charles O' Brien		Tel: +44 20 7251 3801   email: [email protected] email: [email protected] email: [email protected] email: charles.o'[email protected]
Greek media contact:   V+O Communications Mary Andreadi	Tel: +30 211 7501223 email: [email protected]

 

 

Condensed consolidated interim balance sheet (unaudited)
	Note	As at 28 June 2013 € million	As at 31 December 2012 € million
Assets
Intangible assets	4	1,924.8	1,944.6
Property, plant and equipment	4	2,968.8	3,041.4
Other non-current assets		308.0	293.3
Total non-current assets		5,201.6	5,279.3
Inventories		585.6	458.0
Trade and other receivables		1,195.0	1,073.7
Cash and cash equivalents	5	1,063.5	439.1
Total current assets		2,844.1	1,970.8
Total assets		8,045.7	7,250.1
Liabilities
Short-term borrowings	5	911.7	555.0
Other current liabilities		2,001.8	1,667.3
Total current liabilities		2,913.5	2,222.3
Long-term borrowings	5	1,876.0	1,604.7
Other non-current liabilities		391.7	416.6
Total non-current liabilities		2,267.7	2,021.3
Total liabilities		5,181.2	4,243.6
Equity
Owners of the parent		2,859.5	2,988.7
Non-controlling interests		5.0	17.8
Total equity		2,864.5	3,006.5
Total equity and liabilities		8,045.7	7,250.1

 

 

 

 

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements

 

 

Condensed consolidated interim income statement (unaudited)
	Note	Three months to 28 June 2013 € million		Three months to 29 June 20121 € million
Net sales revenue	3	1,949.2		1,985.7
Cost of goods sold		(1,235.8)		(1,253.4)
Gross profit		713.4		732.3
Operating expenses		(551.9)		(550.9)
Restructuring costs	7	(16.2)		(4.7)
Operating profit	3	145.3		176.7
Total finance costs, net	8	(29.7)		(22.0)
Share of results of equity method investments		4.4		4.1
Profit before tax		120.0		158.8
Tax	9	(30.1)		(40.6)
Profit after tax		89.9		118.2
Attributable to:
Owners of the parent		90.0		117.5
Non-controlling interests		(0.1)		0.7
		89.9		118.2
Basic and diluted earnings per share (€)	10	0.25		0.32

 

 

 

 

 

 

¹ Comparative amounts have been adjusted where necessary to reflect the adoption of accounting standards as detailed in note 1.

 

 

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements

 

 

 

 

 

Condensed consolidated interim statement of comprehensive income (unaudited)
	Three months to 28 June 2013 € million		Three months to 29 June 20121 € million
Profit after tax for the period	89.9		118.2
Other comprehensive income:
Items that may be subsequently reclassified to income statement:
Available-for-sale financial assets:
Valuation gains during the period	0.4		-
Cash flow hedges:
Amounts of gains during the period	3.1		6.5
Amounts of losses reclassified to profit and loss for the period	2.6		4.3
Foreign currency translation	(76.6)		(29.5)
Share of other comprehensive income of equity method investments	(0.7)		0.9
Income tax relating to items that may be subsequently reclassified to income statement	(1.0)		(2.3)
	(72.2)		(20.1)
Items that will not be subsequently reclassified to income statement:
Actuarial gains/(losses)	17.6		(9.1)
Income tax relating to components of other comprehensive income	(3.3)		2.3
	14.3		(6.8)
Other comprehensive income for the period, net of tax	(57.9)		(26.9)
Total comprehensive income for the period	32.0		91.3
Total comprehensive income attributable to:
Owners of the parent	32.1		90.6
Non-controlling interests	(0.1)		0.7
	32.0		91.3

 

 

 

 

 

¹ Comparative amounts have been adjusted where necessary to reflect the adoption of accounting standards as detailed in note 1.

 

 

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements

 

 

 

 

 

Condensed consolidated interim income statement (unaudited)
	Note	Six months to 28 June 2013 € million		Six months to 29 June 20121 € million
Net sales revenue	3	3,381.1		3,419.1
Cost of goods sold		(2,187.3)		(2,191.4)
Gross profit		1,193.8		1,227.7
Operating expenses		(1,037.4)		(1,045.2)
Restructuring costs	7	(22.4)		(18.1)
Operating profit	3	134.0		164.4
Total finance costs, net	8	(49.4)		(43.8)
Share of results of equity method investments		4.4		4.1
Profit before tax		89.0		124.7
Tax	9	(23.5)		(35.3)
Profit after tax		65.5		89.4
Attributable to:
Owners of the parent		65.6		88.6
Non-controlling interests		(0.1)		0.8
		65.5		89.4
Basic and diluted earnings per share (€)	10	0.18		0.24

 

 

 

 

 

¹ Comparative amounts have been adjusted where necessary to reflect the adoption of accounting standards as detailed in note 1.

 

 

 

 

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements

 

 

Condensed consolidated interim statement of comprehensive income (unaudited)
	Six months to 28 June 2013 € million		Six months to 29 June 20121 € million
Profit after tax for the period	65.5		89.4
Other comprehensive income :
Items that may be subsequently reclassified to income statement:
Available-for-sale financial assets:
Valuation gains during the period	0.3		-
Cash flow hedges:
Amounts of gains / (losses) during the period	6.6		(8.9)
Amounts of losses reclassified to profit and loss for the period	6.6		5.3
Foreign currency translation	(68.7)		35.7
Share of other comprehensive income of equity method investments	(0.2)		(0.1)
Income tax relating to items that may be subsequently reclassified to income statement	(2.0)		1.3
	(57.4)		33.3
Items that will not be subsequently reclassified to income statement:
Actuarial gains / (losses)	19.7		(23.2)
Income tax relating to items that will not be subsequently reclassified to income statement	(3.4)		4.8
	16.3		(18.4)
Other comprehensive income for the period, net of tax	(41.1)		14.9
Total comprehensive income for the period	24.4		104.3
Total comprehensive income attributable to:
Owners of the parent	24.5		103.5
Non-controlling interests	(0.1)		0.8
	24.4		104.3

 

 

 

¹ Comparative amounts have been adjusted where necessary to reflect the adoption of accounting standards as detailed in note 1.

 

 

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements

 

 

 

 

 

 

Condensed consolidated interim statement of changes in equity (unaudited)
	Attributable to owners of the parent
	Share capital(3) € million	Reserve for share capital return   € million	Share Premium(3) € million	Treasury shares(3) € million	Exchange equalisation reserve € million	Other reserves € million	Retained earnings € million	Total € million	Non- controlling interests € million	Total equity € million
Balance as at 1 January 2012	549.8	-	569.2	(55.5)	(199.7)	380.0	1,660.6	2,904.4	15.8	2,920.2
Share-based compensation:
Options	-	-	-	-	-	3.2	-	3.2	-	3.2
Movement in treasury shares	-	-	-	-	-	0.3	-	0.3	-	0.3
Return of capital to shareholders	-	(124.6)	-	1.2	-	-	-	(123.4)	-	(123.4)
Extinguishment of accumulated losses	-	(55.0)	-	-	-	-	55.0	-	-	-
Hyperinflation impact	-	-	-	-	-	-	3.5	3.5	-	3.5
Appropriation of reserves	-	-	-	-	-	0.4	(0.4)	-	-	-
Share of other changes in equity   of equity method investments	-	-	-	-	-	-	(2.1)	(2.1)	-	(2.1)
	549.8	(179.6)	569.2	(54.3)	(199.7)	383.9	1,716.6	2,785.9	15.8	2,801.7
Profit for the period net of tax	-	-	-	-	-	-	88.6	88.6	0.8	89.4
Other comprehensive income for the period, net of tax	-	-	-	-	35.6	(2.3)	(18.4)	14.9	-	14.9
Total comprehensive income for the period, net of tax(1)	-	-	-	-	35.6	(2.3)	70.2	103.5	0.8	104.3
Balance as at 29 June 2012 (adjusted) (2)	549.8	(179.6)	569.2	(54.3)	(164.1)	381.6	1,786.8	2,889.4	16.6	2,906.0
Shares issued to employees exercising stock options	-	-	0.1	-	-	-	-	0.1	-	0.1
Share-based compensation:
Options	-	-	-	-	-	3.1	-	3.1	-	3.1
Movement in treasury shares	-	-	-	-	-	(0.2)	-	(0.2)	-	(0.2)
Hyperinflation impact	-		-	-	-	-	0.7	0.7	-	0.7
Return of capital to shareholders	(124.6)	124.6	-	-	-	-	-	-	-	-
Extinguishment of accumulated losses	(55.0)	55.0	-	-	-	-	-	-	-	-
Appropriation of reserves	-	-	-	-	-	0.1	(0.1)	-	-	-
Dividends	-	-	-	-	-	-	-	-	(1.0)	(1.0)
	370.2	-	569.3	(54.3)	(164.1)	384.6	1,787.4	2,893.1	15.6	2,908.7
Profit for the period net of tax	-	-	-	-	-	-	101.8	101.8	2.2	104.0
Other comprehensive income for the period, net of tax	-	-	-	-	(4.0)	(8.0)	5.8	(6.2)	-	(6.2)
Total comprehensive income for the period, net of tax	-	-	-	-	(4.0)	(8.0)	107.6	95.6	2.2	97.8
Balance as at 31 December 2012	370.2	-	569.3	(54.3)	(168.1)	376.6	1,895.0	2,988.7	17.8	3,006.5

 

 

 

⁽¹⁾The amount included in the exchange equalisation reserve of €35.6 million gain for the first half of 2012 represents the exchange gains attributed to the owners of the parent of €35.7 million plus the share of equity method investments of €0.1 million loss.

    The amount included in other reserves of €2.3 million loss for the first half of  2012 consists of cash flow hedges loss of €3.6 million (of which €8.9 million represents revaluation losses for the period and €5.3 million represents revaluation losses reclassified to profit and loss for the period) and the deferred income tax credit of €1.3 million.

    The amount of €70.2 million gain comprises a gain for the first half of 2012 of €88.6 million, the actuarial losses of €23.2 million plus deferred income tax credit of €4.8 million.

    The amount of €0.8 million gain included in non-controlling interests for the first half of 2012 represents the share of non-controlling interests in the retained earnings.

⁽²⁾Comparative amounts have been adjusted where necessary to reflect the adoption of accounting standards as detailed in note 1.

⁽³⁾As these condensed consolidated interim financial statements are a continuation of the consolidated financial statements of Coca-Cola Hellenic Bottling Company S.A., for the period 1 January 2012 to 25 April 2013 these components of equity reflect the capital structure of Coca-Cola Hellenic Bottling Company S.A. and following the reorganisation reflect the capital structure of Coca-Cola HBC AG.

 

The accompanying notes form an integral part of these condensed consolidated financial statements

	Condensed consolidated interim statement of changes in equity (unaudited)

 

	Share capital(5) € million		Share premium(5) € million		Group Reorganization reserve(5) € million	Treasury shares € million		Exchange equalisation reserve € million		Other reserves € million		Retained earnings € million		Total € million		Non- controlling interests € million		Total equity € million
Balance as at 1 January 2013	370.2		569.3		-	(54.3)		(168.1)		376.6		1,895.0		2,988.7		17.8		3,006.5
Shares issued to employees exercising stock options	1.6		2.8		-	-		-		-		-		4.4		-		4.4
Share-based compensation:
Options	-		-		-	-		-		2.1		-		2.1		-		2.1
Hyperinflation impact	-		-		-	-		-		-		2.1		2.1		-		2.1
Appropriation of reserves	-		-		-	-		-		0.3		(0.3)		-		-		-
Purchase of shares held by non-controlling interest	-		-		-	-		-		-		(5.1)		(5.1)		(8.2)		(13.3)
Change of parent company to Coca-Cola HBC AG	1,620.7		4,832.6		(6,472.1)	(16.4)		-		1.5		-		(33.7)		-		(33.7)
Dividends (note 13)	-		(124.7)		-	-		-		-		1.2		(123.5)		(4.5)		(128.0)
	1,992.5		5,280.0		(6,472.1)	(70.7)		(168.1)		380.5		1,892.9		2,835.0		5.1		2,840.1
Profit for the period net of tax	-		-		-	-		-		-		65.6		65.6		(0.1)		65.5
Other comprehensive income for the period, net of tax(4)	-		-		-	-		(68.9)		11.5		16.3		(41.1)		-		(41.1)
Total comprehensive income for the period net of tax	-		-		-	-		(68.9)		11.5		81.9		24.5		(0.1)		24.4
Balance as at 28 June 2013	1,992.5		5,280.0		(6,472.1)	(70.7)		(237.0)		392.0		1,974.8		2,859.5		5.0		2,864.5

 

 

 

 

 

 

 

 

 

⁽⁴⁾ The amount included in the exchange equalisation reserve of €68.9 million loss for the first half of 2013 represents the exchange loss attributed to the owners of the parent of €68.7 million plus the share of equity method investments of €0.2 million loss.

    The amount included in other reserves of €11.5 million gain for the first half of 2013 consists of gains on valuation of available-for-sale financial assets of €0.3 million, cash flow hedges gain of €13.2 million (of which €6.6 million represents revaluation gains for the period and €6.6 million represents revaluation losses reclassified to profit and loss for the period) and the deferred income tax loss of €2.0 million.

    The amount of €81.9 million gain comprises a gain for the period of €65.6 million plus actuarial gains of €19.7 million less deferred income tax charge of €3.4 million.

    The amount of €0.1 million loss included in non-controlling interests for the first half of 2013 represents the share of non-controlling interests in the retained earnings.

⁽⁵⁾As these condensed consolidated interim financial statements are a continuation of the consolidated financial statements of Coca-Cola Hellenic Bottling Company S.A., for the period 1 January 2012 to 25 April 2013 these components of equity reflect the capital structure of Coca-Cola Hellenic Bottling Company S.A. and following the reorganisation reflect the capital structure of Coca-Cola HBC AG.

 

 

 

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements

 

 

Condensed consolidated interim cash flow statement (unaudited)
	Note	Six months to 28 June 2013 € million		Six months to 29 June 20121 € million
Operating activities
Profit after tax for the period		65.5		89.4
Total finance costs, net	8	49.4		43.8
Share of results of equity method investments		(4.4)		(4.1)
Tax charged to the income statement		23.5		35.3
Depreciation of property, plant and equipment	4	191.2		190.2
Employee share options		2.1		3.2
Amortisation of intangible assets	4	0.6		1.4
		327.9		359.2
(Gains) / losses on disposal of non-current assets		(2.7)		2.5
Increase in inventories		(138.6)		(161.8)
Increase in trade and other receivables		(139.8)		(167.1)
Increase in trade and other payables		222.5		260.2
Tax paid		(19.5)		(36.9)
Net cash from operating activities		249.8		256.1
Investing activities
Payments for purchases of property, plant and equipment		(146.9)		(160.0)
Proceeds from sales of property, plant and equipment		2.7		1.5
Net payments for investments		(6.1)		(25.0)
Interest received		2.7		4.1
Net cash used in investing activities		(147.6)		(179.4)
Financing activities
Payments for buy-out minorities of Coca-Cola Hellenic Bottling Company SA		(1.0)		-
Proceeds from shares issued to employees exercising stock options		4.4		-
Purchase of shares held by non-controlling interests	12	(15.3)		(8.3)
Dividends paid		(4.5)		-
Proceeds from external borrowings		1,226.8		795.1
Repayments of external borrowings		(609.3)		(812.5)
Principal repayments of finance lease obligations		(8.0)		(12.7)
Interest paid		(73.0)		(55.9)
Net cash from / (used in) financing activities		520.1		(94.3)
Increase / (decrease) in cash and cash equivalents		622.3		(17.6)
Movement in cash and cash equivalents
Cash and cash equivalents at 1 January		439.1		447.4
Increase / (decrease) in cash and cash equivalents		622.3		(17.6)
Effect of changes in exchange rates		-		1.4
Effect of consolidation of Coca-Cola HBC AG		1.8		-
Hyperinflation impact on cash		0.3		(0.7)
Cash and cash equivalents at the end of the period		1,063.5		430.5

 

 

 

 

 

¹ Comparative amounts have been adjusted where necessary to reflect the adoption of accounting standards as detailed in note 1.

 

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements

 

 

 

Selected explanatory notes to the condensed consolidated interim financial statements (unaudited)

 

1.      General information and accounting policies

 

General information

On 11 October 2012, Coca-Cola HBC AG ('Coca-Cola HBC', the 'Company' or the 'Group') a Swiss company incorporated by Kar-Tess Holding, announced a voluntary share exchange offer to acquire all outstanding ordinary registered shares and all American depositary shares of Coca-Cola Hellenic Bottling Company S.A., ('CCHBC SA'). As a result of the successful completion of this offer, on 25 April 2013 Coca-Cola HBC acquired 96.85% of the issued CCHBC SA shares, including shares represented by American depositary shares, and became the new parent company of the Group.  On 17 June 2013, Coca-Cola HBC completed its statutory buy-out of the remaining shares of CCHBC SA that it did not acquire upon completion of its voluntary share exchange offer. Consequently, CCHBC SA is now a 100% owned subsidiary of Coca-Cola HBC.

 

These transactions were treated as a reorganisation of an existing entity that has not changed the substance of the reporting entity. The consolidated financial statements of Coca-Cola HBC are presented using the values from the consolidated financial statements of CCHBC SA. On the date that the Coca-Cola HBC became the new parent of the Group, April 25 2013, the statutory amounts of share capital, share premium and treasury shares of the Company have been recognized through an adjustment in the Statement of Changes in Equity under heading 'Change of parent company to  Coca-Cola HBC AG'. The resulting difference has been recognised as a component of equity under the heading "Group Reorganization reserve". The shares of Coca-Cola HBC started trading in the premium segment of the London Stock Exchange on April 29 (Ticker symbol: CCH) and on the Athens Exchange (Ticker symbol: EEE) and regular way trading in Coca-Cola HBC ADSs commenced on the NYSE (Ticker symbol: CCH). On the date that CCHBC SA became subsidiary of Coca-Cola HBC, the existing stock options were replaced with new ones with identical terms but with underlying shares of Coca-Cola HBC instead of CCHBC SA and the exercise price in GBP instead of Euros using the original exercise price translated at the spot rate at the date of the modification.  The incremental fair value of the new options over the fair value of the old options at the date of the modification was immaterial.

 

Accounting policies

The accounting policies used in the preparation of the condensed consolidated interim financial statements of Coca-Cola HBC are consistent with those used in the annual financial statements of CCHBC SA Group for the year ended 31 December 2012, except for the adoption, as of 1 January 2013, of the International Financial Reporting Standard ("IFRS") 13Fair Value Measurement; the amendment to IFRS 7 Financial Instruments: Disclosures-Offsetting Financial Assets and Financial Liabilities and the annual improvements to IFRSs 2009-2011 cycle which included amendments to IAS 1 Financial Statement Presentation; IAS 16 Property, plant and equipment; IAS 32 Financial Statement Presentation and IAS 34 Interim Financial Reporting.  The adoption of the new and amended standard did not have a significant impact on the current or prior periods, apart from additional disclosures resulting from the adoption of IFRS 13, see note 6.

During the second quarter of 2013, the IASB issued IFRIC Interpretation 21 Levies; Amendments to IAS 36: Recoverable Amount Disclosures for Non Financial Assets and Amendments to IAS 39: Novation of Derivatives and Continuation of Hedge Accounting.  The effective date for the amendments and new IFRIC Interpretation is 1 January 2014 and the Group is current assessing what impact, if any, they will have on the consolidated financial statements.

In the fourth quarter of 2012 the Group early adopted IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interest in Other Entities and the revised IAS 19 Employee Benefits and details of the early adoption can be found in the annual financial statements for the year ended 31 December 2012. The impact from the adoption of IFRS 11 and IAS 19 revised on the first six months of 2012 is outlined in the tables below:

 

 

Selected explanatory notes to the condensed consolidated interim financial statements (unaudited)

1.      General information and accounting policies (continued)

Impact of change in accounting policies on condensed consolidated interim income statement (unaudited)

	Three months to 29 June 2012 (before adjustments)	Change in accounting policy   IFRS 11      IAS 19		Three months to 29 June 2012 (as presented)
Gross profit	740.6	(8.2)	(0.1)	732.3
Operating profit	182.7	(5.3)	(0.7)	176.7
Profit before tax	161.2	(1.7)	(0.7)	158.8
Profit after tax	120.4	(1.7)	(0.5)	118.2
Basic earnings per share (€)	0.33	(0.01)	-	0.32
Other comprehensive income for the period, net of tax	(27.5)	0.1	0.5	(26.9)
Total comprehensive income for the period	92.9	(1.6)	-	91.3

 

	Six months to 29 June 2012 (before adjustments)	Change in accounting policy   IFRS 11        IAS 19		Six months to 29 June 2012 (as presented)
Gross profit	1,237.0	(9.1)	(0.2)	1,227.7
Operating profit	169.9	(4.2)	(1.3)	164.4
Profit before tax	126.8	(0.8)	(1.3)	124.7
Profit after tax	92.1	(1.7)	(1.0)	89.4
Basic earnings per share (€)	0.25	(0.01)	-	0.24
Other comprehensive income for the period, net of tax	13.9	-	1.0	14.9
Total comprehensive income for the period	106.0	(1.7)	-	104.3

 

Impact of change in accounting policies on condensed consolidated interim statement of changes in equity (unaudited)

	As at 29 June 2012 (before adjustments)	Change in accounting policy IFRS 11        IAS 19		As at 29 June 2012 (as presented)
Total equity	2,900.5	5.9	(0.4)	2,906.0

 

Impact of change in accounting policies on condensed consolidated interim cash flow statement (unaudited)

	Six months to 29 June 2012 (before adjustments)	Change in accounting policy    IFRS 11       IAS 19		Six months to 29 June 2012 (as presented)
Net cash from operating activities	269.4	(13.3)	-	256.1
Net cash used in investing activities	(162.1)	(17.3)	-	(179.4)
Net cash used in financing activities	(118.0)	23.7		(94.3)
Decrease in cash and cash equivalents	(10.7)	(6.9)	-	(17.6)

 

 

Selected explanatory notes to the condensed consolidated interim financial statements (unaudited)

1.      General information and accounting policies (continued)

Basis of preparation

Operating results for the second quarter of 2013 are not indicative of the results that may be expected for the year ending 31 December 2013 because of business seasonality. Business seasonality results from higher unit sales of the Group's products in the warmer months of the year. The Group's methods of accounting for fixed costs such as depreciation and interest expense are not significantly affected by business seasonality. Costs that are incurred unevenly during the financial year are anticipated or deferred in the interim report only if it would also be appropriate to anticipate or defer such costs at the end of the financial year. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss. These condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to Interim Financial Reporting ("IAS 34"). These condensed consolidated interim financial statements should be read in conjunction with the 2012 annual financial statements of CCHBC SA Group, which include a full description of the Group's accounting policies.

 

2.      Exchange rates

The Group's reporting currency is the euro (€). Coca-Cola HBC translates the income statements of subsidiary operations to the euro at average exchange rates and the balance sheet at the closing exchange rate for the period, except for subsidiaries operating in a hyperinflationary environment as explained in Note 8.

The principal exchange rates used for transaction and translation purposes in respect of one euro were:

	Average for the six months period ended		Closing as at
	28 June 2013	29 June 2012	28 June 2013	31 December 2012
US dollar	1.31	1.30	1.31	1.33
UK sterling	0.85	0.82	0.85	0.82
Polish zloty	4.19	4.23	4.32	4.09
Nigerian naira	203.87	202.76	203.50	206.72
Hungarian forint	295.90	292.63	297.28	291.50
Swiss franc	1.23	1.20	1.23	1.21
Russian Rouble	40.68	39.54	42.80	40.42
Romanian leu	4.38	4.39	4.43	4.43
Serbian dinar	111.94	111.13	114.49	113.46
Czech koruna	25.75	25.17	25.83	25.08
Ukrainian hryvnia	10.46	10.38	10.50	10.57

 

3.      Segmental analysis

The Group has one business, being the production, distribution and sale of non-alcoholic,
ready-to-drink beverages. The Group operates in 28 countries and its financial results are reported in the following three reportable segments:

Established:	Austria, Cyprus, Greece, Italy, Northern Ireland, Republic of Ireland and Switzerland.
Developing:	Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia.
Emerging:	Armenia, Belarus, Bosnia and Herzegovina, Bulgaria, FYROM, Moldova, Montenegro, Nigeria, Romania, Russia, Serbia and Ukraine.

 

 

Selected explanatory notes to the condensed consolidated interim financial statements (unaudited)
3.      Segmental analysis (continued)

Information on the Group's segments is as follows:

	Three months ended		Six months ended
	28 June 2013	29 June 2012	28 June 2013			29 June 2012
Volume in unit cases(1) (million)
Established countries	177.5	188.2	319.4			341.4
Developing countries	105.5	108.7	182.3			188.1
Emerging countries	294.7	289.7	502.7			484.1
Total volume	577.7	586.6	1,004.4			1,013.6
(1) One unit case corresponds to approximately 5.678 litres or 24 servings, being a typically used measure of volume. Volume data is derived from unaudited operational data.
	Three months ended		Six months ended
	28 June 2013	29 June 2012	28 June 2013			29 June 2012
Net sales revenue (€ million)
Established countries	697.2	743.9	1,267.7			1,364.1
Developing countries	308.5	319.7	525.7			548.9
Emerging countries	943.5	922.1	1,587.7			1,506.1
Total net sales revenue	1,949,2	1,985.7	3,381.1			3,419.1
Operating profit (€ million)
Established countries	30.5	56.3	33.9			65.0
Developing countries	15.4	14.6	0.5			1.0
Emerging countries	99.4	105.8	99.6			98.4
Total operating profit	145.3	176.7	134.0			164.4
Reconciling items (€ million)
Finance costs, net	(29.7)	(22.0)	(49.4)			(43.8)
Tax	(30.1)	(40.6)	(23.5)			(35.3)
Share of results of equity method investments	4.4	4.1	4.4			4.1
Non-controlling interests	0.1	(0.7)	0.1			(0.8)
Profit after tax attributable to owners of the parent	90.0	117.5	65.6			88.6

 

 

4.      Tangible and intangible assets

		Property, plant and equipment € million			Intangible assets € million
Opening net book value as at 1 January 2013		3,041.4			1,944.6
Additions		169.4			-
Effect from the consolidation of Coca-Cola HBC AG		0.2			-
Reclassified from assets held for sale		4.7			-
Disposals		(4.3)			-
Depreciation and amortisation		(191.2)			(0.6)
Foreign exchange differences		(51.9)			(19.2)
Effect of hyperinflation		0.5			-
Closing net book value as at 28 June 2013		2,968.8			1,924.8

 

 

 

Selected explanatory notes to the condensed consolidated interim financial statements (unaudited)

 

5.      Net debt

		As at
		28 June 2013 € million		31 December 2012 € million
Long-term borrowings		1,876.0			1,604.7
Short-term borrowings		911.7			555.0
Cash and cash equivalents		(1,063.5)			(439.1)
Net debt		1,724.2			1,720.6

 

In the second quarter, the Group successfully issued €800 million principal amount of 7-year fixed-rate notes with a coupon of 2.375%, and completed a fixed price tender offer for the outstanding €500 million with a 7.875%  notes due January 2014, (the "2014 Notes"), with €183 million of the 2014 Notes having been tendered and cancelled. The net proceeds of the new issue, after financing the repurchase of €183 million of the 2014 Notes, will be used towards the refinancing of certain upcoming bond maturities, namely the $500 million notes due September 2013 and the remaining €317 million notes due January 2014.

During the first quarter of 2013, the €500 million bond maturing in January 2014 was reclassified from long term borrowings to short term.

In order to affect the exchange offer described in Note 1, Coca-Cola HBC had available a €500 million Bond Bridge facility (all undrawn), and a Statutory Buy-Out Facility for up to €550 million. On 18th June 2013 the €500 million Bond Bridge facility was cancelled, and the Statutory Buy-Out Facility limit was reduced to €55 million. The amount drawn under the Statutory Buy-Out Facility of €45.5 million was repaid on 26 July 2013 and the facility was cancelled.

 

6.      Fair value

The Group's activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk, commodity price risk), credit risk, liquidity risk and capital risk. There have been no changes in the risk management policies since the year end.

The Group's financial instruments recorded at fair value are included in Level 2 within the fair value hierarchy and comprise derivatives. There have been no changes in valuation techniques and inputs used to determine their fair value since 31 December 2012 (as described in the 2012 Annual Report available on the CCHBC SA's web site: www.coca-colahellenic.com). As at 28 June 2013 the total financial assets included in Level 2 was €43.8 million and the total financial liabilities €140.6 million. There were no transfers between level 1,2 or 3 during the first half of 2013. The fair value of bonds and notes payable as at 28 June 2013, including the current portion, is €2,533.6 million, compared to their book value, including the current portion of €2,470.3 million.

 

7.      Restructuring costs

Restructuring costs amounted to €16.2 million before tax in the second quarter of 2013. The Group recorded €14.9 million, €0.3 million and €1.0 million of restructuring charges in its established, developing and emerging countries respectively. For the second quarter of 2012, restructuring costs amounted to €4.7 million, of which €1.3 million, €1.0 million and €2.4 million related to the Group's established, developing and emerging countries, respectively. The restructuring costs mainly concern redundancy costs.

Restructuring costs amounted to €22.4 million before tax in the first half of 2013. The Group recorded €21.0 million, €0.3 million and €1.1 million of restructuring charges in its established, developing and emerging countries respectively. For the first half of 2012, restructuring costs amounted to €18.1 million, of which €10.3 million, €4.6 million and €3.2 million related to the Group's established, developing and emerging countries, respectively. The restructuring costs mainly concern redundancy costs.

 

 

 

Selected explanatory notes to the condensed consolidated interim financial statements (unaudited)

 

8.      Total finance costs, net

		Three months ended
		28 June 2013 € million			29 June 2012 € million
Interest income		(2.6)			(3.1)
Finance costs		31.8			24.1
Net foreign exchange losses/(gains)		0.5			(0.1)
Loss on net monetary position		-			1.1
Total finance costs, net		29.7			22.0

 

		Six months ended
		28 June 2013 € million			29 June 2012 € million
Interest income		(4.1)			(5.3)
Finance costs		52.8			47.6
Net foreign exchange gains		(0.3)			(0.2)
Loss on net monetary position		1.0			1.7
Total finance costs, net		49.4			43.8

 

 

Total net finance costs for the second quarter and half of 2013 were higher by €7.7 million and by €5.6 million respectively, compared to the same periods last year, mainly due to the higher interest expense reflecting the tender offer for the €500 million bond that matures in January 2014.

 

 

Hyperinflation

Belarus has been considered to be a hyperinflationary economy since the fourth quarter of 2011. The three year cumulative inflation exceeded 100% and therefore Belarus is consolidated in terms of the measuring unit at the balance sheet date and translated at the closing exchange rate. The restatement was based on conversion factors derived from the Belarus Consumer Price Index (CPI) as compiled by the National Statistical Committee of the Republic of Belarus. The conversion factor used for June 2013 was 1.069 which resulted in a net monetary loss for the first half of 2013 of €1.0 million.

 

 

9.      Tax

The Group's effective tax rate for 2013 may differ from the parent company statutory tax rate as a consequence of a number of factors, the most significant of which are: the statutory tax rates of the countries in which the Group operates, the non-deductibility of certain expenses, non-taxable income and one off tax items.

 

 

10.    Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to the owners of the parent by the weighted average number of shares outstanding during the period (second quarter of 2013: 363,203,865, first half of 2013: 363,164,293, second quarter of 2012: 363,117,207, first half of 2012: 363,114,849). Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive ordinary shares arising from exercising employee stock options.

 

 

 

Selected explanatory notes to the condensed consolidated interim financial statements (unaudited)

11.    Share capital

During 2012, the Board of Directors resolved to increase the CCHBC SA's share capital by issuing 5,334 new ordinary shares on 21 March 2012 and 6,165 new ordinary shares on 27 September 2012, following the exercise of stock options pursuant to the CCHBC SA's employees' stock option plan. Total proceeds from the issuance of the shares under the stock option plan amounted to €0.1 million.

On 25 June 2012, the Annual General Meeting of shareholders of CCHBC SA resolved to decrease the share capital of Coca-Cola Hellenic Bottling Company S.A. by the amount of €124.6 million by decreasing the nominal value of CCHBC SA's share by €0.34 per share, from €1.50 to €1.16 per share, and the return of the amount of the decrease to CCHBC SA's shareholders in cash, i.e. a return of €0.34 per share. Furthermore, on the same date, it was resolved to decrease the share capital of CCHBC SA's by the amount of €55.0 million by decreasing the nominal value of the CCHBC SA's shares by €0.15 per share, from €1.16 to €1.01 per share, in order to extinguish accumulated losses of the parent company CCHBC SA by an equal amount.

On 25 April 2013, Coca-Cola HBC acquired 96.85% (355,009,014 shares)of the issued CCHBC SA shares, including shares represented by American depositary shares, following the successful completion of its voluntary share exchange offer and became the new parent company of the Group.

On 17 June 2013, Coca-Cola HBC completed its statutory buy-out of the remaining shares of CCHBC SA that it did not acquire upon completion of its voluntary share exchange offer. Consequently, CCHBC SA is now a 100% owned subsidiary of Coca-Cola HBC. Out of the remaining 3.15% interest acquired in CCHBC SA, representing 11,544,593 shares, 11,467,306 shares were exchanged for equal number of Coca-Cola HBC shares and 77,287 shares were acquired for a cash consideration of €1.0 million.

In the second quarter of 2013, the Board of Directors resolved to increase the Coca-Cola HBC's share capital by issuing 273,855 new ordinary shares following the exercise of stock options pursuant to the Coca-Cola HBC AG's employees' stock option plan. Total proceeds from the issuance of the shares under the stock option plan amounted to €4.4 million.

Following the above changes, and including the initial 14,925 ordinary shares of Coca-Cola HBC, that are held by the Company as treasury shares, on June 2013 the share capital of the Group amounted to €1,992.5 million and comprised 366,765,000 shares with a nominal value of CHF 6.70 each.

 

12.    Non-controlling interests

On 8 June 2011, the Board of Directors of the Coca-Cola HBC's subsidiary Nigerian Bottling Company plc ("NBC") resolved to propose a scheme of arrangement between NBC and its minority shareholders, involving the cancellation of part of the share capital of NBC. The transaction was approved by the Board of Directors and General Assembly of NBC on 8 June 2011 and 22 July 2011 respectively and resulted in the acquisition of the remaining 33.6% of the voting shares of NBC bringing the Group's interest in the subsidiary to 100%. The transaction was completed in September 2011 and NBC was de-listed from the Nigerian Stock Exchange. The consideration for the acquisition of non controlling interests was €100.2 million, including transaction costs of €1.8 million, out of which €72.4 million was paid as of 28 June 2013 (as of 31 December 2012: €70.4 million). The difference between the consideration and the carrying value of the interest acquired (€60.1million) has been recognised in retained earnings while the accumulated components recognised in other comprehensive income have been reallocated within the equity of the Group.

On 14 January 2013, the Group acquired 14% of Coca-Cola Hellenic Bottling Company Bulgaria AD, bringing the Group's interest in the subsidiary to 99.39%. The consideration paid for the acquisition of non controlling interests acquired was €13.3 million and the carrying value of the additional interest acquired was €8.2 million. The difference between the consideration and the carrying value of the interest acquired has been recognised in retained earnings.

 

 

 

Selected explanatory notes to the condensed consolidated interim financial statements (unaudited)

13.     Dividends

On 19 June 2013, the extraordinary general meeting of Coca-Cola HBC AG approved the distribution of a €0.34 dividend per share. The total dividend amounted to €124.7 million and was paid on 23 July 2013.

 

14.     Contingencies

There have been no significant changes in contingencies since 31 December 2012 (as described in the 2012 Annual Report of CCHBC SA available on the Company's web site: www.coca-colahellenic.com).

 

15.     Commitments

As of 28 June 2013 the Group has capital commitments of €97.1 million (31 December 2012: €90.3 million), which mainly relate to plant and machinery equipment.

 

16.     Number of employees

The average number of full-time equivalent employees in the first half of 2013 was 38,167 (40,293 for the first half of 2012).

 

17.     Related party transactions

a) The Coca-Cola Company

As at 28 June 2013, The Coca-Cola Company and its subsidiaries (collectively, 'TCCC") indirectly owned 23.2% (2012: 23.2%) of the issued share capital of Coca-Cola HBC.

 

Total purchases of concentrate, finished products and other materials from TCCC and its subsidiaries during the first half and the second quarter of 2013 amounted to €715.8 million and €394.2 million (€702.3 million and €400.2 million in the respective prior year period). Total net contributions received from TCCC for marketing and promotional incentives during the same period amounted to €42.1 million and €26.4 million (€27.2 million and €16.2 million in the respective prior year period).

 

During the first half and the second quarter of 2013, the Group sold €13.8 million and €7.7million of finished goods and raw materials respectively to TCCC (€12.2 million and €4.4 million in the respective prior year period) while other income from TCCC was €9.2 million and €7.5 million respectively (€9.0 million and €5.9 million in the prior year period). Other expenses from TCCC amounted to €2.6 million and €1.3 million for the first half and second quarter of 2013 (€2.4 million for both periods under review).

 

As at 28 June 2013, the Group had a total amount of €79.6 million (€49.6 million as at 31 December 2012) due from TCCC, and had a total amount of €219.3 million (€154.0 million as at 31 December 2012) due to TCCC.

 

b) Kar-Tess Holding

Kar-Tess Holding

As at 28 June 2013 Coca-Cola HBC owed €1.6 million to Kar-Tess Holding relating to the acquisition of the initial Coca-Cola HBC shares.

 

 

 

Selected explanatory notes to the condensed consolidated interim financial statements (unaudited)

 

17.     Related party transactions (continued)

 

Frigoglass S.A. ('Frigoglass')

Frigoglass, a company listed on the Athens Exchange, is a manufacturer of coolers, glass bottles and crowns. Frigoglass is related to Coca-Cola HBC by way of a 44.1% (2012: 44.1%) ownership by the parent of Kar-Tess Holding, which as at 28 June 2013 owned 23.3% (2012: 23.3%) of the issued share capital of Coca-Cola HBC. Frigoglass has a controlling interest in Frigoglass Industries Limited, a company in which Coca-Cola HBC has a 23.9% effective interest, through its investment in NBC.

 

During the first half and the second quarter of 2013, the Group made purchases of €63.9 million and €40.4 million respectively (€94.9 million and €15.6 million in the prior-year periods) of coolers, raw materials and containers from Frigoglass and its subsidiaries and incurred maintenance and other expenses of €5.1 million and €2.5 million respectively (€4.3 million and €3.0 million in the prior-year periods). Other income from Frigoglass both during the first half and the second quarter of 2013 was €0.1 million (€0.6 million and €0.5 million respectively in the prior-year periods). As at 28 June 2013, Coca‑Cola HBC owed €25.0 million (€21.4 million as at 31 December 2012) to, and was owed €0.2 million (€1.2 million as at 31 December 2012) by Frigoglass.

 

c) Other related parties

During the first half and the second quarter of 2013, the Group purchased €66.8 million and €42.3 million of raw materials and finished goods respectively (€70.3 million and €49.2 million in the prior year period). In addition, the Group received reimbursement for direct marketing expenses incurred of €0.4 million for both of the first half and the second quarter of 2013 (€0.1 million and €0.1 million in the prior year period). Furthermore during the first half and the second quarter of 2013, the Group incurred other expenses of €18.6 million and €9.9 million (€3.1 million and €0.5 million in the prior year period) and recorded income of €3.4 million and €0.3 million respectively (€0.2 million and €0.2 million in the prior year period). As at 28 June 2013, the Group owed €19.8 million (€8.1 million as at 31 December 2012) to, and was owed €2.9 million (€0.4 million as at 31 December 2012) by other related parties.

 

 

d) Joint Ventures

During the first half and the second quarter of 2013, the Group purchased €13.1 million and €7.8 million of finished goods (€14.7 million and €9.0 million in the prior-year periods) from joint ventures. In addition, during the first half and the second quarter of 2013, the Group incurred expenses of €0.2 million and € 0.1 million (€0.1 million and nil respectively in the prior-year periods) and recorded other income for the first half and the second quarter of €0.2 million and nil from joint ventures (€0.2 million and nil in the prior-year periods). As at 28 June 2013, the Group owed €65.2 million (€67.5 million as at 31 December 2012) to, and was owed €5.9 million (€19.5 million as at 31 December 2012) by joint ventures.

There were no transactions between Coca-Cola HBC and the directors and senior management except for remuneration for the period ended 28 June 2013, as well as the prior year period.

There were no other significant transactions with related parties for the period ended 28 June 2013.

 

 

18.    Subsequent events

On 23 July 2013 the delisting of CCHBC SA from the Athens Exchange was approved by the HCMC and effected as of the same date. Coca-Cola HBC will continue to have a secondary listing on the Athens Exchange.