Despite the devastating flood, the Kofola Group increased its sales in the third quarter. EBITDA also grew
The Kofola CzechoSlovakia beverage family managed the main season with a good result. Revenues in Q3 grew by 33% compared to last year, all companies in the group, including the newly integrated breweries, did well. Group EBITDA reached CZK 1.6 billion for the first 9 months of the year. Management promises the outlook for the rest of the year to be at the upper end of the announced range.
In September, Kofola struggled with the consequences of the devastating flood in the Czech Republic, which mostly affected the Krnov production plant and the warehouse and logistics area of its subsidiary company Santa Trans. "Thanks to the enormous engagement of our employees from all corners of CzechoSlovakia, we have put the factory into operation very quickly. All of our lines are already running. We would like to apologize once again to our customers, primarily from the gastronomy sector, for the limited supplies during this difficult period for us," says Daniel Buryš, CEO of the Kofola CzechoSlovakia.
Despite these complications, Kofola managed to increase sales by 10% compared to the third quarter of 2023. "The record months of July and August contributed the most. In these months we exceeded CZK 800 million range in the Czech Republic and Slovakia and thus we achieved the highest sales in history. Both sales channels, i.e. Retail and HoReCa, maintained growth of 10%. Kofola, the traditional czechoslovakian coke brand, also grew by the same percentage, benefiting fully from a new strategic set-up, a successful redesign and the strongest festival season so far," adds Buryš.
The Targa Florio, Kláštorná Kalcia, Korunní and Rajec brands and last but not least Royal Crown Cola were also successful. SEMTEX and SEMTEX EXTREM with a completely new product architecture brought market share growth in the on the go drinks segment. "Higher sales in the Czech Republic and Slovakia were matched by rising EBITDA supported by stable energy, raw material and material prices," confirms Daniel Buryš.
Kofola's second strongest part of the business, the Adriatic region, recorded strong sales in all markets in the latest reporting period, with Slovenia growing 9%, Croatia posting impressive growth of 18% and export markets strengthening by 14%. The success was driven by significantly better execution of activities in the market, supported by effective logistics, as well as a longer tourist season, which extended into September thanks to warm and sunny weather.
"In the Adriatic, we successfully continued to plant trees. This year, we invited business partners and other companies to join us and take part in "greenbuildings" instead of teambuildings. This year's novelty was planting trees in hard-to-reach areas using drones," describes the key activities Marián Šefčovič, CEO of Radenska Adriatic.
The newly integrated breweries, which make up the third largest entity of the Kofola Group and also dealt with the consequences of the floods, recorded an increase in EBITDA mainly due to improved sales. "Both domestic sales and exports, which account for about a third of sales, did well. The better result was mainly due to higher sales volume, which covered rising costs, especially of energy. On the other hand, we realized savings particularly in the marketing cost structure in connection with the preparation of a new brand development strategy," said René Musila, CEO of Pivovary CZ Group.
The Fresh&Herbs segment of Kofola did not slack off either. UGO recorded double-digit year-on-year revenue growth in the third quarter. Gross sales are 17% higher than in 2023. The fastest growing division is Freshbars and Salaterias (i.e., the QSR segment) with 20% year-over-year growth. "In the centre of Prague we opened Salateria in the Quadrio shopping centre, in České Budějovice we opened Freshbar in cooperation with a new franchisee. It is performing well beyond expectations, so we are looking for a potential location for Salateria in the region," reveals Marek Farník, CEO of UGO Trade.
In the Retail division, UGO was slowed down as a result of the Krnov flood. "The production line for packaged fresh juices, the material and finished products warehouses were damaged. For several weeks we were unable to deliver our bottles to customers. However, everything was put back into operation in a very short time. We were pleased with our salad division in Jažlovice near Prague – it did better than we expected," adds Marek Farník.
In the third quarter, LEROS focused on preparing for the peak, autumn and winter season. This was rewarded with high sales in September and October, aiming to set a new monthly record with invoiced revenue around CZK 60 million. Premium Rosa managed the last quarter of the year very well and achieved a result above the budgeted EBITDA. Like LEROS, it is very well prepared for the mail season.
At Christmas time, Kofola will enrich the Czechoslovakian market with a new limited edition Kofola with the flavour Marlenka, which it has created in cooperation with a local company of the same name.
"The fact that we had a successful season despite the flood complications helped us to make decision at the end of October to pay an advance on dividend of CZK 7.50 per share before tax. The EBITDA outlook for the entire Kofola Group has stabilized at the upper end of the announced range, so we expect it to be CZK 1.8 billion," concludes Martin Pisklák, CFO of Kofola Group.
Kofola Group results for 3Q 2024:
