The Coca-Cola HBC (LSE: CCH) share price was on the transfer at this time (13 February), surging 9.3% to an all-time excessive of three,246p. This made it the highest riser within the FTSE 100 by a ways.

I’m relieved that I lastly added this inventory to my portfolio late final yr. For months beforehand, I meant to speculate however by no means bought spherical to it.

Why is the inventory up at this time?

For these unfamiliar, the corporate is likely one of the main bottlers for The Coca-Cola Firm.

Based mostly in Switzerland, it produces, sells and distributes drinks like Coca-Cola, Fanta, Schweppes, Sprite, and Monster throughout 28 markets in Europe, Africa, and Eurasia. Coca-Cola nonetheless owns greater than 20% of the FTSE 100 agency.

As we speak, it launched a robust annual earnings report for 2024, which is why the inventory is up. Natural internet gross sales rose 13.8% yr on yr to €10.7bn, which barely beat the consensus estimate for 13% progress.

Nonetheless, reported income progress was 5.6%, as this sturdy natural efficiency was partially offset by foreign money headwinds in rising markets. 

Volumes elevated by 2.8% on an natural foundation, led by power and occasional classes. Certainly, power drink volumes grew by 30.2%, marking the ninth yr of consecutive double-digit progress. Monster led the way in which, whereas Predator is rising strongly in Africa. Costa Espresso drinks are additionally doing very well.

In the meantime, natural working revenue was up 12.2% to €1.2bn, whereas adjusted earnings per share elevated 9.5% to €2.28. The dividend was hiked 11% to €1.03 per share, giving a ahead yield of about 2.9%. 

Looking forward to this yr, Coca-Cola HBC forecasts natural income progress of 6%-8%, in comparison with market expectations of seven.3%. And it sees working revenue rising 7%-11%, versus analysts’ prior anticipation for a ten.7% rise.

Whereas the corporate is forecasting slower progress, many consumer-facing corporations would snap your hand off in case you provided them this stage of anticipated progress in 2025.

combine

One factor to remember right here is that overseas foreign money modifications can hit reported earnings. In 2024, the enterprise noticed a unfavourable foreign money influence from the depreciation of the Nigerian Naira, Russian Rouble and Egyptian Pound.

So it is a threat, whereas there may be an ongoing pushback in opposition to some Western manufacturers in Egypt (thought of a progress market, with a youthful inhabitants above 110m).

Alternatively, this numerous geographical footprint could be a power, as weak point in a single market (developed Europe, for instance) may be offset by power in one other (most of Japanese Europe is rising strongly).

This is applicable to drinks too. For instance, Coke Zero grew mid-single digits final yr whereas Monster is rising a lot sooner.

General, I actually just like the sturdy mixture of markets and types right here.

What about valuation?

The inventory is buying and selling at round 15.5 occasions forecast earnings for 2025. I don’t assume that’s notably demanding for a high-quality firm like this.

Additionally, an finish to the Russia/Ukraine battle can be a constructive for Coca-Cola HBC. It nonetheless sells merchandise in Ukraine whereas additionally working in Russia, the place it focuses on native manufacturers. An finish to the conflict may also increase shopper sentiment in neighbouring international locations like Poland and Romania.

Regardless of the rise at this time, I nonetheless assume the inventory is value contemplating for a diversified portfolio.