Kofola's annual report confirms the very good result of last year with an operating EBITDA of CZK 1.128 billion.
In its annual report this year, the Kofola Group confirmed the very good preliminary results published in February. The Group also successfully coped with a second year significantly impacted by the Covid-19 pandemic, with an operating EBITDA of CZK 1.128 billion, which means a year-on-year increase of almost CZK 100 million, exceeding the estimate, which was in the range of CZK 1.080-1.120 billion. This is the first time in history that operating profit has reached this level. Despite significant market constraints, especially in the first half of the year, the Group's sales grew by 7.5% year-on-year to CZK 6.636 billion.
"When the pubs and restaurants previously closed due to Covid first opened at the end of May last year, we knew we had to manage the summer season exceptionally well to achieve our goals. We were well prepared for it in the Czech Republic and Slovakia, as well as in the Adriatic region. A record high season in our home markets and the return of tourists from all over Europe to holiday in Croatia and Slovenia helped us to achieve very good figures. Our boldness in launching new products that exceeded our expectations, and our year-round cost discipline also paid off. All this led us to our highest ever EBITDA operating profit," says Jannis Samaras, CEO of the Kofola Group, in his evaluation of the successful year.
The domestic market was about traditional brands, novelties, and Kofola Incubator
"Last year we managed to succeed in our domestic markets both with our traditional portfolio, headed by Kofola, and with novelties or new projects. This helped us to compensate for the slightly declining soft drinks market," says Daniel Buryš, CEO of Kofola ČeskoSlovensko. The new premium lemonade, Targa Florio, was a pleasant surprise, but Kláštorná Kalcia and the traditionally strong Rajec, which added a new BIO range to its portfolio, also did well. We also finished the integration of new mineral waters to the portfolio - Korunní and Ondrášovka, which are now beginning a new era under Kofola.
"An important step for us in the future is the opening of a new platform in the form of the Kofola Incubator. It supports projects with a start-up character. Now it includes F.H. Prager with its craft ciders, or, for example, the Brute e-sport team, which has become a promotional tool for SEMTEX REPUBLIC, and brings a new style of brand marketing. We are looking for other projects that have the potential to develop our business in new directions in the future," says Daniel Buryš.
Fresh and Herbs increased sales
The Kofola Group does not just consist of beverages. A significant pillar is the "Fresh and Herbs” segment, i.e., LEROS, UGO, and Premium Rosa. The UGO fresh bars and salaterias were affected by Covid restrictions and shopping centre closures. Despite this, its business managed to achieve figures in the black at EBITDA level thanks to the slimming down of the company and the successful restart of the outlets after the market opening in the second half of the year. Higher demand for teas and other herbal products during the pandemic helped LEROS. Overall, these companies, together with the Polish syrup and fruit juice brand, Premium Rosa, increased sales by 6.7% year-on-year.
Key growth in the Adriatic region
The further year-on-year sales growth of the Kofola Group was mainly driven by the growth in demand in the Adriatic region. This was reflected by the 12.6% growth in sales and operating profit EBITDA of 34.8%. "Our region also saw a relaxation of the pandemic measures before the summer, and at the same time, holidaymakers, who wanted to spend their holidays in the attractive tourist areas of Croatia and Slovenia again, started to return to the region after last year´s break. In combination with well-prepared marketing and sales activities, this had a positive effect on sales growth, especially in Croatia, which grew at a double-digit rate," explains Marián Šefčovič, CEO of Radenska Adriatic, and adds: " Exports, the main brand of which is Radenska, also strengthened."
Further advances in sustainability: protection of water sources, and deposit system of packaging
Activities that strengthen sustainability in the Group's business played an increasingly important role in the corporate strategy last year, with a major shift, especially in these two directions: the protection of the soil and water resources around the production plants, and activities directed towards a deposit returnable system of packaging and its recycling.
Near the Ondrášovka production plant, our experience of the protection of water sources from Rajecká Lesná was put to use. "In cooperation with local farmers and local government, we have managed to certify other BIO localities for the collection of herbs close to Ondrášov and Moravský Beroun. Together with the Slovak territory, we have already certified 224 km2. We then opened a LEROS herb buying shop on the grounds of the plant. Then we added another in Velké Karlovice," says Jannis Samaras, describing developments in this area.
A significant step was made in the area of deposit returnable packaging, which is related to Kofola's long-term goal in the area of sustainable business. It involves the achievement of circularity of both PET bottles and cans, in addition to glass bottles. Used packaging is recycled to create new packaging. “Packaging circularity is not only a fundamental principle of our strategy, but also of the European Union's environmental strategy. It minimises the impact of production on nature and saves non-renewable and now scarce raw material resources," explains Jannis Samaras. In Slovakia, a new deposit system for PET bottles and cans has been in place since January. In the Czech Republic, Kofola is a founding and active member of the initiative for a deposit system for such packaging and is preparing to start selling Cirkulka returnable glass bottles.
The plan for this year assumed double-digit growth in sales and EBITDA
"In 2021, we predicted a full-year revenue growth of 5% and a net debt ratio to EBITDA below 3.5. We are pleased to have exceeded all of our targets. Revenue grew by 7.5% and the achieved EBITDA operating profit of CZK 1.128 billion is above the upper limit of the last estimate. We also met the net debt ratio without difficulty - the final result is 3.1. For 2022, we are planning for an operating EBITDA profit in the range of CZK 1.080 - 1.200 billion and double-digit sales growth," adds Martin Pisklák, CFO of the Kofola Group.