(Reuters) - Coca-Cola HBC AG reported higher first-quarter sales on Thursday, underpinned by strong demand in emerging markets, and the bottling company said it was looking for deals to expand its business.
The results eased some concerns around the company’s prospects after it warned earlier this year that an expected economic slowdown in a number of its more established markets would curb consumer spending.
The company, which sells Coca-Cola drinks in 28 countries mostly in Europe, said net sales revenue rose 4.4 percent to 1.41 billion euros ($1.58 billion) in the quarter.
Its emerging markets segment saw net sales revenue rising 6.4 percent to 612.9 million euros, boosted by growth in Nigeria and expansion in Russia, Romania and Ukraine.
The company’s established markets segment, which includes Greece, Italy and Ireland, saw volumes grow 0.2 percent, held back by the later timing of Easter and a delay caused by the introduction of new packaging and prices in Switzerland.
The general business model of U.S. soft drinks giant Coca-Cola is to sell syrup to a network of franchise partners who do the heavy lifting of bottling and delivering the drinks. It owns a 23.26 percent stake in Coca-Cola HBC, according to Refinitiv Eikon data.
It also has a stake of around 18.6 percent in Coca-Cola European Partners, a rival bottling company.
Coca-Cola HBC’s shares were almost 3 percent higher at 2,805 pence at 0900 GMT, making the stock the second biggest gainer on London’s bluechip index.
The company also proposed a special dividend of 2 euros per share.
Jefferies analysts said investors could view the payout as an argument against major transformational moves such as one involving Coca-Cola.
The U.S. beverage giant has been looking to refranchise its Africa bottling unit, and Coca-Cola HBC and rival Coca-Cola European Partners have been seen as potential buyers.
“(We) remain very open, alert for the right opportunities for Coca Cola HBC ... we are looking for bolt on opportunities primarily in water and juices,” Chief Executive Zoran Bogdanovic told reporters on a call.
“Proposed special dividend ... does not preclude our ability to think of also bigger and broader deals if they would come our way,” he added.
Reporting by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier/Keith Weir