Business

Based on released third quarter results, Kofola Group managed to cope with a drop-in sales volume

23.11. 2023

The domestic beverage company has published its results for the first nine months of this year. It has successfully managed to strike an economic balance between falling consumption, rising costs and necessary profitability. The good weather and especially the popularity of Kofola on draught with its original herbal recipe contributed to the sales in the key summer season. The very positive development trend of the UGO division, which focuses on selling fresh juices and healthy meals, also continued.

Based on released third quarter results, Kofola Group managed to cope with a drop-in sales volume

The domestic beverage company has published its results for the first nine months of this year. It has successfully managed to strike an economic balance between falling consumption, rising costs and necessary profitability. The good weather and especially the popularity of Kofola on draught with its original herbal recipe contributed to the sales in the key summer season. The very positive development trend of the UGO division, which focuses on selling fresh juices and healthy meals, also continued.

"Revenues for the third quarter grew by approximately 9%, despite a decline in volumes sold, particularly for beverages that are in larger packages and intended for consumption at home. Cost discipline, readiness for the summer season, as well as very good weather contributed to the overall good result. The biggest achievement this year is the growing sales volume of Kofola on draught - and this is in a situation where the entire gastronomy industry is reporting declining sales of draught beverages," comments Jannis Samaras, CEO of the Kofola Group, on the results. "At the EBITDA level, our result translated into a 20% growth. The profit margin is finally approaching 2019," he adds.

In the Adriatic, where Kofola also operates, it was mainly Slovenia and its water segment that contributed to the great results. "We managed to reverse the decline in consumption of our core brand Radenska Classic. Strong marketing campaigns and a new category of
functional waters supported sales growth, with sales in Slovenia in Q3 approximately 16% higher than in 2022," says Marian Šefčovič, CEO of Radenska Adriatic. In Croatia, Kofola faced challenges related to the decline in consumer demand and focused on cost optimization, which improved gross profit even with a loss in volume compared to last year. The overall search for cost savings helped Kofola across markets and divisions.

From a business perspective, the Kofola´s Fresh&Herbs segment also had a successful quarter. "UGO continues to grow revenue and profitability. UGO Salad and Fresh bars’ and Packaged products’ gross sales are growing at double-digit rates and EBITDA margin has
already exceeded 21%," comments Marek Farnik, CEO of UGO, on the results. "A new Freshbar has opened in Prague, Florenc. In collaboration with our sister company F.H. Prager, we have launched a new product, UGO Kombucha with probiotic cultures, and made changes to the restaurant portfolio that are helping to increase the number of transactions and average order value. The year-on-year growth of packaged pascalised juices, smoothies and lemonades, exceeds 150%" Marek Farník lists the successes.

After a weak July, which is the most off-season month for LEROS, came a sales strong August for the herb-scented segment. "We recorded an all-time August sales high. This was followed by a successful September. We were well-prepared for the start of the tea season and fully exploited the potential of our e-commerce channel with gift goods," summarizes Martin Mateáš, CEO of the LEROS division, on the results.

The overall outlook for the beverage Group Kofola this year is positive. Already the figures for October indicate that the tenth month of 2023 will make its sales history. Shareholders can also rejoice - since 1 November, the dividend has been paid to them via the modern Česká spořitelna app. "We will end the full-year outlook for 2023 at the upper end of the announced range of EBITDA, i.e. at around CZK 1,250 million," concludes Martin Pisklák, CFO of the Kofola Group.