Kofola: The results were unsurprising, the higher dividend unexpected

Kofola has published its annual report, including a complete set of results that more or less confirmed the preliminary figures (revenue and EBITDA) announced on February 17, 2025. EBITDA for the fourth quarter of 2024 reached CZK262m, representing a yoy increase of 125% on revenues of CZK2.6bn (+26% yoy). Net profit for the fourth quarter of 2024 was CZK-65m (CZK-61m a year ago). Kofola announced an 8% yoy decline in revenues in the first quarter of 2025. This is likely due to lower revenues in Slovakia following the introduction of a sugar tax. The Board of Directors is proposing a dividend of CZK21 per share. This is a positive development, as the market had expected a significantly lower amount. It even exceeded our optimistic expectation of CZK19.1.

Revenues for the fourth quarter of 2024 amounted to CZK2.6bn (+25.9% yoy), and EBITDA was CZK262m (+125.1% yoy). The slight discrepancy between these figures and the preliminary estimates (CZK2.7bn and CZK265m) is due to a change in the consolidation method for the acquired company. As a reminder, the results were primarily driven by the acquisition of the brewery group and lower costs. The net loss for 4Q24 was CZK64.7m (4Q23: CZK-60.9m).

In 2024, Kofola generated revenues of CZK11.1bn (+27.5% yoy) and EBITDA of CZK1.85bn (+47.7% y/y). While Kofola met its full-year EBITDA target of CZK1.8bn, it fell slightly short of its projected +30% revenue growth. Last year's net profit was CZK601m, which is a 76.8% increase year over year.

The net debt/EBITDA ratio, leverage is 2.14x (compared to 2.28x at the end of 2023).

Outlook for 1Q25: Kofola's sales fell 8% yoy in 1Q25, with volumes down 9% yoy. This decline is likely due to the sugar tax in Slovakia and the impact of pre-stocking. Please note that the first months of the year are traditionally the weakest for Kofola. The second quarter and especially the third quarter are decisive for the full-year figures.

2025 Guidance: EBITDA should be in the range of CZK1.9-2.0bn (+4.6% yoy) with revenue growth of +3% yoy. Leverage is expected to remain unchanged at 2.1x.

Dividend: Kofola proposes paying its shareholders a dividend of CZK21. This is a positive surprise compared to the projection of at least CZK13.5. Our optimistic estimates were based on a dividend of CZK19.1. The dividend of CZK21 will be reduced by the advance dividend of CZK7.5 that has already been paid (to be paid CZK13.5). The last date of trading with the right to receive this dividend will be Wednesday, July 2, 2025 (subject to approval).

Author: Bohumil Trampota