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Troubled Eastern European Coke bottler Coca-Cola HBC has withdrawn its guidance for its current financial year due to the conflict between two of its key territories of Ukraine and Russia.

Releasing its annual results on 22 February, the group set guidance for the year “in a wide range that considered geopolitical risks, as well as headwinds from commodities and currencies”.

However, it has withdrawn this guidance as “the last week the situation involving Ukraine and Russia has clearly developed further and faster than anticipated”.

“It is still too early to quantify the impact that the evolving geopolitical crisis and many governments’ developing reactions to it will have on our business or on our full year 2022 results,” it said.

“Given that we generated c. 20% of 2021 volumes and EBIT from both regions, combined with the uncertainty of the duration and economic impact, we no longer believe that it is prudent to provide guidance for our group’s current financial year.”

The group said the safety of employees remains its “highest priority” and it remains in constant contact with staff in Ukraine and Russia and “are doing everything we can to support them”.

The group temporarily stopped production at its plant in Kyiv on the 24 of February and evacuated our employees.

“We will update accordingly when we have greater visibility on the impact of the events in the Ukraine and Russia on our business.”

The FTSE 100 group has lost a third of its value since 21 Feb as the crisis has escalated.

Morning update

Irish nutrition and ingredients group Glanbia has reported a strong rebound in sales and profits as global demand returned.

The group’s wholly-owned revenue was up 13.1% at constant currency (9.8% reported) to €4.2bn, driven by growth in volume of 16.1% offset by a decline in price of 4% and acquisitions adding 1%.

Both its Performance Nutrition and GPN and Nutritional Solutions businesses delivered double-digit volume growth and strong price improvement versus prior year. However, US Cheese price declines reflected market price reductions compared with 2020.

GPN revenue increased by 17.1%, driven by volume growth of 11.4% and price increase of 4.5% with the LevlUp acquisition, completed in May 2021, delivering 1.2% growth.

Volumes grew in all markets as robust and effective in-market execution was aligned with strong demand. Demand was driven by both a post Covid-19 market inventory rebuild in the early part of the year and strong underlying consumption trends throughout the year.

Its NS business saw revenues increase by 20.8% versus prior year (reported 17.5 %), due to a 13.6% increase in volume, a 3.7% increase in price and the Foodarom and PacMoore acquisitions delivering 3.5% growth.

Volume growth was broadly based across the portfolio with strong growth in premix micro-nutrients and protein-based healthy snacking reflecting good end-market demand across a broad sectoral reach. Price increase was primarily related to increased dairy ingredient market pricing year-on-year which were successfully passed on to customers.

US Cheese revenue increased by 7.7% (reported 4.0%), driven by a 19.8% increase in volume offset by a 12.1% decrease in price.

Wholly-owned EBITA pre-exceptional was €270.6 million, up 34.0% constant currency (up 29.1% reported), driven by strong volume growth and margin improvement in GPN.

Wholly-owned EBITA margins were 6.4%, up 100 basis points constant currency and 90 basis points reported due to margin improvements in GPN.

Profit after tax for the year was €167.4m compared to €143.8m in 2020. Profit after tax from continuing operations comprises pre-exceptional profit of €183.8 million compared to €151.4m in the previous year million, while exceptional charges rose to €42.8m from €30.6m.

The €32.4 million increase in pre-exceptional profit after tax is driven by the increased profitability of the wholly-owned business net of reduced profitability from joint ventures.

During 2022, Glanbia anticipates the effects of Covid-19 will further abate, however the ongoing impact of cost inflation, especially dairy-related, will need to continue to be actively managed as it was in 2021.

Given this context, Glanbia has started 2022 with good revenue growth in both GPN and GN NS and expects both businesses to deliver high single-digit percentage revenue growth for 2022, largely driven by pricing.

Based on the current market environment, Glanbia expects to deliver growth in 2022 adjusted EPS for continuing operations in a range of 2% to 8% on a constant currency basis. The reported growth rate is expected to be higher than the constant currency result by approximately 5% based on current foreign exchange rates.

Siobhán Talbot, group MD, said: “I am pleased to announce that Glanbia delivered a strong performance in 2021 compared to the prior year as good revenue growth delivered an increase of 23.9% in adjusted EPS, constant currency, for continuing operations. This was well ahead of our expectations at the beginning of 2021 and was driven by strong global consumer demand in Glanbia’s areas of nutrition expertise across ingredient solutions and our portfolio of nutrition brands. Our robust and effective operational execution delivered an excellent cash performance with 100.2% cash conversion in the year.

“Our clear strategic focus for 2022 and beyond is to drive growth across both GPN and GN NS as the nutrition partner of choice to our customers and consumers. During 2022, we anticipate the effects of Covid-19 will further abate, however the ongoing impact of cost inflation, especially dairy-related, will need to continue to be actively managed as it was in 2021.”

Elsewhere, Footfall strengthened slightly in February over the month as a whole, despite stormy weather as consumer behaviour rebounds from Covid.

Springboard found that footfall in the month was 20.7% below 2019 compared to 20.8% below in January 2022.

Footfall declined from 2019 by -26.2% in high streets, -24.1% in shopping centres and -5.3% in retail parks.

However, footfall increased by 9.1% from January 2022; the largest single monthly uplift since June 2021 and nearly three times as great as the rise from September to October, before the Omicron variant hit.

In the absence of the extreme weather in the third week of the month it is likely that the overall result for the month would have been circa -18% below 2019.

The uplift in February 2022 is a reverse of the result in six of the nine years up to and including 2019, when the annual change in footfall in February worsened from January despite the occurrence of the school half term.

Springboard said February “appeared to be a sweet spot in terms of returning footfall”, with consumers’ confidence riding high on the back of the removal of Covid restrictions, although impending rises in energy and fuel costs remain a concern.

On the markets this morning, the FTSE 100 is down 0.2% to 7,418.3pts.

Fallers so far include THG, down 5.6% to 93.2p, Bakkavor, down 4.8% to 116.6p and McBride, down 4.2% to 43.1p.

Risers include Paypoint, up 0.4% to 587.6p, SSP Group, up 0.3% to 266.5p and Associated British Foods, up 0.2% to 1,750p.

Yesterday in the City

The FTSE gained 1.4% yesterday to close at 7,429.5pts.

Nichols ended the day down 1.6% to 1,412.5p as it fell to a loss as the damage caused to its out-of-home business by the pandemic continued to weigh heavily on the group.

Just Eat gained 0.8% to 2,907.5p after its adjusted EBITDA margin improved substantially in the fourth quarter, while Hotel Chocolat fell back 4.4% despite bumper first half and Christmas as it batted aside inflationary pressures with profits outpacing sales growth.

Other fallers included McColl’s, which dropped back 23.5% to 1.5p as concerns persist over its future, Coca-Cola HBC fell another 5.8% to 1,670.5p on the Russia/Ukraine situation, Virgin Wines was down 4.4% to 130p, FeverTree down 4.4% to 1,750p, Coca-Cola Europacific Partners, down 3.9% to €45.50, Parsley Box, down 3.4% to 28.5p and Finsbury Food Group, down 3.4% to 86p.

The day’s risers included Glanbia, up 5.3% to €12.39, Compass Group, up 3.9% to 1,683p, Bakkavor, up 3.7% to 122.4p, Naked Wines, up 3.2% to 415p, Devro, up 2% to 206p, Hilton Food Group, up 1.9% to 1,060p, British American Tobacco, up 1.2% to 3,276.5p and Imperial Brands, up 1% to 1,657.5p.

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