China Food

Swire Coca Cola, coffee “refreshing”

Today, as one of the two largest bottlers of Coca Cola in China, Swire Coca Cola released its latest semi annual report.

According to the latest report card, in the first half of 2022, in the Chinese mainland market, although the revenue and sales volume of Swire Coca Cola declined as a whole due to the impact of the epidemic, many categories still achieved growth. At the performance meeting held this evening, Su Wei, President of Swire Coca Cola, pointed out that the business in mainland China has recovered significantly since June, and it is expected that there will be “great improvement” in the second half of the year.

Swire Coca Cola is the fifth largest Bottling Group by sales volume of Coca Cola’s global bottling system. It operates beverage business in mainland China, Hong Kong and Taiwan and the US market. As one of the two largest bottlers of Coca Cola in China, Swire Coca Cola provides services to 700 million mainland Chinese consumers. Therefore, its financial report is also an important “window” to see Coca Cola’s business in China.

Su Wei, President of Swire Coca Cola, was at the performance meeting today

Next, the snack generation will take you to understand.

inland

First, let’s focus on the mainland market.

According to the financial report read by snack generation, in the first half of 2022, Swire Coca Cola earned HK $14.021 billion (about RMB 11.747 billion) in the Chinese mainland market. Revenue in local currency (including revenue from a joint venture and excluding sales to other bottling companies) decreased by 6%. The profit attributable was HK $586 million (approximately rmb503 million), a year-on-year decrease of 41%.

Raw material costs, operating expenses and depreciation expenses increased. EBITDA and EBIT in local currency (including EBITDA and EBIT of a joint venture and excluding central and other costs) decreased by 27% and 42% respectively. The EBITDA margin decreased from 14.1% in the same period of last year to 11.1% in the first half of 2022, and the EBIT margin decreased from 10.1% to 6.3%.  

“Mainland China (the largest market for Swire Coca Cola) contributed 53% of our total revenue, followed by the United States, which contributed 40%.” Su Wei said at the meeting today that in the first half of the year, the income of the Chinese mainland market was affected by the travel and social restrictions related to the epidemic. “At the same time, our investment (cost) also increased, resulting in a 41% drop in profits.”

In addition, the financial report pointed out that in the first half of 2022, the total sales volume in the mainland market of China fell by 10%. “In early March 2022, many cities took restrictive measures to deal with the epidemic, which adversely affected sales.” Su Wei explained.  

The Coca Cola bottler expects its business to improve in the second half of the year.

“Despite the challenging environment, our team will continue to focus on implementing our long-term strategy, with a particular focus on revenue growth plans.” Su Wei said at the meeting that this has played a great role after the mitigation of the epidemic control measures.

“In mainland China, since June, we have observed a significant recovery of business and a rapid recovery of market vitality. Therefore, we are confident that with the improvement of the external environment, our business will continue to grow in

The company pointed out that in mainland China and Hong Kong, both revenue and sales volume declined; In Taiwan, revenue increased but sales decreased. “Due to the epidemic raging in mainland China, Hong Kong and Taiwan, and the rising cost, the business has been adversely affected.” Guy Bradley, chairman of Swire Pacific, explained.

The financial report shows that in the first half of this year, due to the impact of the epidemic, the profit attributable to Swire Coca Cola’s Hong Kong business was HK $62 million, a year-on-year decrease of 13%; Revenue (excluding sales to other bottling companies) fell by 8%. By category, the revenue of soft drinks decreased by 8%, that of non-alcoholic beverages decreased by 8%, while the revenue of coffee, tea drinks, fruit juice drinks and drinking water decreased by 7%, 1%, 24% and 6% respectively. Total sales fell by 10%.  

As for Taikoo Coca Cola’s Taiwan business, affected by the epidemic in early May, the profit attributable to Taikoo Coca Cola in the first half of this year was HK $53 million, a year-on-year decrease of 12%. Revenue in local currency increased by 1%. The revenue of soft drinks increased by 8%, the revenue of non-alcoholic beverages decreased by 5%, the revenue of tea drinks decreased by 10%, and the revenue of energy drinks increased by 26%.  

Look again

The financial report shows that in the first half of 2022,

Looking forward to the second half of 2022, Martin Murray, financial director of Swire cola, said today that for Swire Coca Cola, the adverse impact of the epidemic on the beverage markets in mainland China, Hong Kong and Taiwan “is expected to be alleviated in the second half of the year”. In addition, it is expected that the increase in raw material costs and operating expenses will continue to put pressure on profit.

“Expansion”

Although the “first half” encountered challenges, from the perspective of Swire Coca Cola, 2022 is also full of “exciting development opportunities”.

Su Wei described at the meeting today that for Swire Coca Cola, 2022 is an “exciting expansion year”. She mentioned that in July this year, Swire Coca Cola and Coca Cola reached an agreement to merge (part of) the non gas beverage business of the original Coca Cola bottler production Holding Co., Ltd. in the Chinese mainland market through equity transfer. The completion of the equity transfer is subject to a number of conditions (including applicable anti-monopoly approvals) and is expected to be completed on or before March 31, 2023.  

“After the completion of the acquisition, our bottling system will add 6 factories and a total of 21 non aerated beverage production lines. This will help to speed up production deployment, launch new products, provide consumers with a richer non aerated beverage category and packaging portfolio, save a lot of logistics and office expenses, and create synergy with our existing manufacturing facilities.” Su Wei said at the meeting today.

According to the snack representative, in the next five years, Swire Coca Cola’s investment in China is expected to reach 5.5 billion yuan, including 20 production lines. Among them, this year, Swire Coca Cola invested five production lines in Hefei, Huizhou, Jiangxi, Hainan and Hangzhou, and two bottle embryo lines in Hefei and Yunnan, with a total investment of about 450 million yuan. At the beginning of this year, Swire Coca Cola announced that it would invest 1.25 billion yuan to expand its new production base in Guangdong, setting a new record

Swire Coca Cola, coffee “refreshing”

下半年

我们不妨再来看下中国香港和中国台湾地区的表现。

该公司指出,中国内地和香港地区方面,收益和销量均有所下跌;台湾方面,收益增加但销量则有所下跌。“由于疫情在中国内地、香港和台湾肆虐,加上成本上升,令业务受到不利影响。”太古公司董事长白德利(Guy Bradley)解释称。

财报显示,今年上半年,受疫情影响,太古可口可乐的香港业务的应占溢利为6200万港元,同比减少13%;收益(撇除对其他装瓶公司的销量)下跌8%。分品类看,汽水的收益下跌8%,不含汽饮料的收益下跌8%,而咖啡、 茶饮料、果汁类饮料及饮用水的收益分别下跌7%、1%、24%及6%。总销量下跌10%。 

至于太古可口可乐的台湾业务,受到5月初的疫情影响,今年上半年的应占溢利为5300万港元,同比下跌12%。以当地货币计算的收益增加1%。汽水的收益增加8%,不含汽饮料的收益下跌5%,茶饮料的收益下跌10%,能量饮料收益增加26%。 


再来看下太古可口可乐的整体业绩。

财报显示,2022年上半年,太古可口可乐收益总额(包括一家合资公司的收益总额及撇除对其他装瓶公司的销量)为265.92亿港元(约合222.79亿元人民币),同比上涨0.5%。应占溢利为11.52亿港元,同比减少22%。销量为8.96亿标箱,下跌8%。

展望2022年下半年,太古公司财务董事马天伟(Martin Murray)今天表示,对太古可口可乐而言,疫情对中国内地、 香港及台湾饮料市场的不利影响,“预计将于下半年减轻”。另外,预计原料成本及营业开支增加,将继续令溢利受压。

“扩张”

尽管“上半场”遭遇挑战,但在太古可口可乐来看,2022年也充满“令人振奋的拓展机遇”。

苏薇今天在会上形容说,对太古可口可乐而言,2022年是“令人兴奋的扩张之年”。她提到,今年7月,太古可口可乐与可口可乐公司达成协议,将通过股权转让的方式,在中国内地市场并入原可口可乐装瓶商生产控股有限公司的(部分)不含气饮料业务。股权转让的完成受限于若干条件(包括适用的反垄断批准)的达成,预期于2023年3月31日或之前完成。 

“在收购完成后,我们的装瓶系统将增加6家工厂,一共21条不含气饮料的生产线。这将有助于加快生产调配、新产品上市,为消费者提供更丰富的不含气饮料品类及包装组合,同时节省大量物流和办公费用,并与我们现有的制造设施产生协同作用。”苏薇今天在会上表示。

小食代介绍过,未来五年,太古可口可乐在华投资额预计达到55亿元人民币,包括20条生产线。其中,今年,太古可口可乐在合肥、惠州、江西、海南、杭州投资了五条生产线,在合肥、云南投资了两条瓶胚线,合计投资约4.5亿元人民币。今年年初,太古可口可乐宣布投资12.5亿元在广东扩容新生产基地,刷新了单笔投资金额的纪录,据悉该项目目前正在顺利推进。

在中国市场之外,太古可口可乐也正在积极扩大业务版图。

今年7月,太古可口可乐宣布,有条件同意收购可口可乐在越南和柬埔寨的装瓶业务,交易的总代价为10.15亿美元,预期于2022年第四季度完成。这是太古可口可乐首次拓展业务到东南亚市场。收购完成后,太古可口可乐的的特许经营区域人口将增加15%至8.76亿。

“这是我们在东南亚的第一笔投资,这项交易将让太古可口可乐进军两个增长快速的饮料市场。当地市场人口结构年轻,GDP增速高,这给我们带来了巨大的增长机会。同时,这也能够在业务能力、供应链、采购和数字化等方面与我们的传统市场产生协同效应。”苏薇在会上表示。

“今年上半年,面临新冠肺炎疫情等因素的影响,我们仍在各个市场稳步前行。”她说,“放眼长远,我们对于未来的信心不会改变。今年以来,我们不断加大投入,拓展业务布局,将以卓越的执行力、数字化创新和更佳的产品组合,推动公司的长远发展。” 


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