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Measuring Coca-Cola HBC AG’s (LON:CCH) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess CCH’s recent performance announced on 29 June 2018 and weigh these figures against its long-term trend and industry movements.
View our latest analysis for Coca-Cola HBC
How Did CCH’s Recent Performance Stack Up Against Its Past?
CCH’s trailing twelve-month earnings (from 29 June 2018) of €451m has jumped 14% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 16%, indicating the rate at which CCH is growing has slowed down. Why could this be happening? Well, let’s examine what’s transpiring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Coca-Cola HBC has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. Furthermore, its return on assets (ROA) of 6.8% is below the GB Beverage industry of 9.3%, indicating Coca-Cola HBC’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Coca-Cola HBC’s debt level, has increased over the past 3 years from 9.6% to 13%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 97% to 52% over the past 5 years.
What does this mean?
Coca-Cola HBC’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Coca-Cola HBC has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Coca-Cola HBC to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for CCH’s future growth? Take a look at our free research report of analyst consensus for CCH’s outlook.
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Financial Health: Are CCH’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 29 June 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.