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The Kofola Group has had a successful second quarter of the year. The reopening of the market and the adroit timing of activities contributed to a significant increase in sales and EBITDA.

2. 9. 2021

Kofola Group has published its results for the second quarter of the year, in which it managed to increase sales by 23% and EBITDA operating profit by 65%. The main reason for this was the significant growth in demand in June following the reopening of the market, including the important gastronomy segment. Sales were also boosted by the weather and freer movement of people in all markets. As a result, sales in June were at an all-time high. And given the subsequent positive developments of the summer season, Kofola’s management has refined its estimate for this year’s EBITDA operating profit to a range of between CZK 1.08 – 1.15 billion.

The pubs and restaurants were closed for almost the entire first five months of this year. In addition, the movement of people between districts was restricted in the Czech Republic in the spring, all of which significantly reduced sales in the gastronomy segment, and also affected the important impulse purchases of beverages. “While in the first quarter of this year we sold almost exclusively in the retail segment, demand has grown significantly since the beginning of June, mainly due to the reopening of the gastronomy business. The market was finally complete. We also enjoyed good weather, which made people want to go out for trips and holidays. Combined with well-prepared marketing activities and new product launches of key brands, we achieved very good results,” comments Jannis Samaras, CEO of Kofola Group, on the development of the second quarter of the year.

Among the new products on the Czech and Slovak market were the new line of premium citrus lemonades Targa Florio, the energy drink Semtex Focus, and Rajec Bio. The mineral water Kláštorná Kalcia, the Jupí range of syrups received significant support in the form of new campaigns, as did the company’s flagship Kofola, which also introduced two new variants with reduced sugar content.

With the summer opening of pub gardens and tourist attractions, a draught portfolio could also be reintroduced. “After the pubs and restaurants opened, the return of their customers was initially rather hesitant and took some time. However, from the second half of June onwards, businesses started to perform much better, and this caused a jump in demand for our drinks, led by Kofola on tap. The interest in the entire portfolio was so great that our final June figures for the Czech and Slovak markets are the best in the company’s history,” says Martin Pisklák, CFO of Kofola Group, commenting on the results.

Kofola Group’s good results were also driven by the growth in demand in the Adriatic region. “This region also saw an easing of pandemic measures before the summer, and at the same time tourists from all over Europe started to return to the region. After last year’s break, they wanted to spend their holidays again in the attractive tourist areas of Croatia and Slovenia. This, of course, had a positive effect on the sales of our brands, led by Radenska and Studenac mineral waters,” adds Martin Pisklák.

Important innovations in the region include the launch of a strategic cooperation with Fructal, the largest juice producer in the region, and the bottling of the Croatian spring water brand Studena in bottles made of the 100% recycled PET material rPET. “The question that the whole beverage industry is trying to find the answer to is how to find a balance between the sustainability of our business and its impact on the environment. That is, how to produce products that consumers love, with packaging that is as eco-friendly as possible, while maintaining product quality and consumer convenience. For us, rPET is a good example of how waste can be transformed into a valuable material, thus closing the circle. Thanks to rPET, we not only save primary raw materials, but we also get a 90% reduction in CO2. Thus every new bottle we produce has a lower environmental impact,” says Jannis Samaras, CEO of the Kofola Group. Since 2019, this material has been used by the Slovak mineral water Kláštorná Kalcia. This was followed in 2020 by the Slovenian mineral water Radenska Naturelle.

The positive development of the year allows us to refine the overall EBITDA result

The good results of the second quarter thus offset the year-on-year decline in the first quarter, which was caused by the closure of the gastronomy segment, and also by the reduction in travel. Revenues for the first six months of the year are thus more than 7% higher than in 2020, and EBITDA is up by almost 35%. In addition, the summer period followed a very strong June in terms of sales. “This July and August will also rank among our most successful months. We took advantage of the presence of domestic tourists in the Czech Republic and Slovakia as well as tourists from all over Europe who returned to Croatia and Slovenia for their holidays,” says Martin Pisklák.

“The development of sales to date, and our financial discipline since the beginning of the year allow us to refine our estimates for the final EBITDA result for 2021 to a range of between CZK 1.08 to 1.15 billion,” adds Martin Pisklák, CFO of Kofola Group. The previous estimate was in the range of between CZK 1.03 billion to CZK 1.15 billion.

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