Refresco Group has published third quarter 2016 results. It has reported increased volumes and net profit in Q3 2016.
Q3 2016 highlights:
Total volume increased 8.0% to 1,803.8 million liters.Co-Packing volumes grew by 61.1% to 486.3 million liters. Private Label volumes decreased 3.7% to 1,317.5 million liters.Gross profit margin per liter was 13.8 euro cents (Q3 2015: 13.9 euro cents).Adjusted EBITDA increased 6.8% to €67.9 million.Adjusted net profit increased 15.3% to €31.6 million.Adjusted EPS increased 15.0% to 39.0 euro cents.
Volume and revenue by location of sales
Total volume in Q3 2016 increased 8.0% to 1,803.8 million liters. After a very soft start in July, volumes improved in August and September as a result of enhanced weather conditions. On a like-for-like basis total volume in the quarter decreased 1.8% compared to the same quarter in 2015, slightly outperforming the soft drinks market in Europe. In the Benelux volume growth was mainly driven by the DIS acquisition.
In the UK the new carbonated soft drinks production line, which started production this year, continued to drive volume growth. In Germany and Poland the effects of the discontinued low margin-large volume private label contracts resulted in a volume decline compared to Q3 2015.
Revenue in the quarter increased 6.0% to €571.7 million compared to €539.2 million in Q3 2015. Revenue per liter in Q3 2016 is lower because of the growth in Co-Packing. The revenue of the acquired companies DIS and Whitlock Packaging consists mainly of filling fees as their business consists primarily of Co-Packing.
Gross margin per liter
Gross profit margin per liter for the quarter was 13.8 euro cents (Q3 2015: 13.9 euro cents). Like-for-like, excluding the impact of the British pound and the DIS and Whitlock Packaging acquisitions, gross margin per liter amounted to 14.4 euro cents, reflecting an improvement of the product mix following our decision earlier in the year to discontinue low margin private label contracts.
Operating profit
Operating profit in Q3 2016 amounted to €43.8 million compared with €43.4 million in Q3 2015. Operating costs increased to €204.6 million in the quarter, €16.3 million higher compared to €188.3 million in the same quarter last year. The year on year increase is fully related to the acquisitions and was reflected in an increase in other operating expenses and employee benefits expenses.
Reconciliation of operating profit to adjusted EBITDA
Adjusted EBITDA in Q3 2016 increased by 6.8% to €67.9 million compared to €63.6 million in Q3 2015.The one-off costs in Q3 2016 related to the acquisition of Whitlock Packaging which was finalized in September 2016
