Yahoo Finance Was Coca-Cola HBC AG's (LON:CCH) Earnings Growth Better Than The Industry's?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Today I will take a look at Coca-Cola HBC AG's (LON:CCH) most recent earnings update (31 December 2018) and compare these latest figures against its performance over the past few years, as well as how the rest of the beverage industry performed. As an investor, I find it beneficial to assess CCH’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
Check out our latest analysis for Coca-Cola HBC
How CCH fared against its long-term earnings performance and its industry
CCH's trailing twelve-month earnings (from 31 December 2018) of €447m has increased by 5.0% 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 14%, indicating the rate at which CCH is growing has slowed down. What could be happening here? Well, let's look at what's occurring with margins and whether the entire 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 14% instead. Furthermore, its return on assets (ROA) of 7.1% is below the GB Beverage industry of 9.1%, 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 12% to 14%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 80% to 51% over the past 5 years.
What does this mean?
Though Coca-Cola HBC's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Coca-Cola HBC gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Coca-Cola HBC to get a more holistic view of the stock by looking at:
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.
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.
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 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
