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Lockdown impacts on Kofola’s results for the first quarter of the year are lower than expected
1. 6. 2021
Kofola Group published its financial results for the first quarter of this year after experiencing the biggest market limitation of the pandemic period. For the entire quarter, not only the key gastronomy segment was locked down, but impulse purchases were also limited for part of this period due to free movement between districts being prohibited in the Czech Republic. In comparison with the previous year, revenue fell by only 10.4%, with EBITDA lower by 23.4%, which, in the circumstances, was more than acceptable. For the time being, Kofola’s management affirms its original annual EBITDA guidance at 1.03 to 1.15 billion Czech crowns.
“The Coronavirus surprised everybody last year and we had to gradually learn to live with the virus and manage it. But we are more experienced this year. We have set up our plans, innovations, marketing and business activities to succeed despite the ongoing restrictions. The main season and gastronomy opening will be of key importance,” says Jannis Samaras, Kofola Group’s CEO, and adds: “Also this year, we will continue with sustainability projects in the vicinity of our plants, and, for example, in the field of packaging.”
As expected, the sales in the first three months of this year were significantly affected by the coronavirus restrictions. The continuing closure of the important gastronomy segment in this period was followed by restrictions on the movement of people, which also impacted the segment of impulse purchases at gas stations or, for example, in tourist centres. The revenue in the first quarter dropped by 10.4% in comparison with the previous year, and the operating profit indicator dropped by 23.4% in comparison with the same period last year. In the context of this year, EBITDA is in line with the company’s plans thanks to cost-saving measures.
“We managed the beginning of 2021 slightly better than we expected. We were successful in the timing of our activities and costs and are benefitting from the synergies resulting from the integration of Ondrášovka and Korunní. But we must remain prudent until the end of the year,” says Martin Pisklák, financial director of Kofola Group, regarding this year’s strategy.
Since almost the entire market was open last year for the first three months whereas this year, gastronomy, a key sector, was closed for the same period, obviously, the year-to-year comparison was affected. “From the viewpoint of sales, the first quarter is always the least important for us in terms of volume, and we prepare ourselves for the main season during this period. We have made important arrangements that should help us during the main season, for example, we have concluded a strategic cooperation agreement in Slovenia with Fructal, the largest juice producer in the region. Given all this, we are convinced that we will achieve our financial objective – i.e., EBITDA in the range set at 1.03 to 1.15 billion Czech crowns,” adds Martin Pisklák.
Kofola’s sales plans in the Czech Republic and Slovakia include a number of innovations, which will supplement the existing portfolio. The biggest of them is a brand new premium citrus lemonade Targa Florio, which Kofola put on the market in March. Further novelties include two new Kofola variants with reduced sugar content, the energy drink Semtex Focus, and two flavours in the new Rajec Bio family, which contain our own herbs grown and harvested in the Rajecká Valley, which has BIO locality certification for free herb harvesting, obtained by Kofola in cooperation with local bodies.
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