Issuance activity: Tomorrow, MinFin is scheduled to auction CZK2.0bn of 2032 bonds and CZK2.0bn of 2038 floaters. The updated April’s calendar indicates a total supply of CZK17.0bn of CZGBs, while the total issuance for 2Q remaining at CZK50.0bn. Overall, MinFin has sold CZK83.7bn of CZGBs in primary auctions, with an additional CZK50.6bn of taps and CZK38.1bn of switches on the secondary market year to date. The secondary market is therefore becoming increasingly significant this year, probably due to its higher flexibility amid heightened market volatility.

Issuance activity: Tomorrow, MinFin is scheduled to auction CZK2.0bn of 2032 bonds and CZK2.0bn of 2038 floaters. The updated April’s calendar indicates a total supply of CZK17.0bn of CZGBs, while the total issuance for 2Q remaining at CZK50.0bn. Overall, MinFin has sold CZK83.7bn of CZGBs in primary auctions, with an additional CZK50.6bn of taps and CZK38.1bn of switches on the secondary market year to date. The secondary market is therefore becoming increasingly significant this year, probably due to its higher flexibility amid heightened market volatility.

Market situation: Czech rates continue to follow trends in core markets, which are primarily driven by swings in sentiment caused by headlines about the conflict in the Middle East. As expected, Czech PPI rose by 1.5% mom in March due to higher energy prices. Although food industry prices rose slightly by 0.1% mom in March after seven months of decline, this, together with other indicators, does not imply significant upward pressure on final consumer food prices in the near term. However, the acceleration of construction material price growth and continued growth in construction work prices are likely to put upward pressure on imputed rent, contributing to the acceleration of core inflation in March (more information can be found here: https://bit.ly/CPI_Mar26_EN). CNB Board member Jan Kubíček and Deputy Governor Eva Zamrazilová both expressed no need to rush with monetary tightening.  Although they both admitted that a hike is the more likely next move, the central bank should not react to the primary effects of higher fuel prices, but rather closely monitor potential spill-overs to other segments of the consumer basket, as well as inflation expectations and wage demands. Moreover, they noted that some tightening has already been delivered by the recent rise in CZK IRS.

Rates outlook: Given that the CNB is relatively well positioned to navigate the oil price shock, we expect it to wait for more clarity rather than act pre-emptively at this stage. Rate hikes may only be on the table if there are significant second-round effects on other components of inflation. For now, we are keeping our call for CNB policy unchanged and therefore continue to expect interest rates to remain on hold until the end of the year.

Yesterday, Kofola announced its results in its annual report after the markets closed. The results show better EBITDA than the preliminary figures announced on February 18, 2026. Kofola also reported strong revenue figures for 1Q26. This information in the report is the most relevant. A dividend of CZK21 is expected. Forecasts for this year have been confirmed.

Quarterly Results: The reported EBITDA for 4Q25 is nearly +7% higher than the preliminary figure. It reached CZK415m, which represents a substantial yoy increase of +58%. The margin increased by +6pps points to 16.1%. This outcome was driven by cost management, including strict cost control and reduced personnel expenses. Net profit reached CZK89m (loss CZK55m in 4Q24).

Yesterday, Kofola announced its results in its annual report after the markets closed. The results show better EBITDA than the preliminary figures announced on February 18, 2026. Kofola also reported strong revenue figures for 1Q26. This information in the report is the most relevant. A dividend of CZK21 is expected. Forecasts for this year have been confirmed.

Quarterly Results: The reported EBITDA for 4Q25 is nearly +7% higher than the preliminary figure. It reached CZK415m, which represents a substantial yoy increase of +58%. The margin increased by +6pps points to 16.1%. This outcome was driven by cost management, including strict cost control and reduced personnel expenses. Net profit reached CZK89m (loss CZK55m in 4Q24).

Full-Year Results: As with the quarterly results, EBITDA exceeded preliminary estimates. Full-year 2025 EBITDA reached CZK1.816bn, which is a 1.9% yoy decrease. This figure is nearly +4% higher than Kofola’s target of CZK1.75bn. Full-year revenue fell by 3% yoy, reaching CZK10.75bn. The business was negatively impacted by the sugar tax introduced in Slovakia in 2025. Unfavourable weather conditions did not help either. Breweries experienced a decline due to weather conditions and a drop in exports. In the Adriatic region, results were only slightly lower yoy. The decline in the beverage business was partially offset by record results from the UGO and Leros (Fresh & Herbs). Coffee and herb operations helped mitigate the decline. This business is immune to weather fluctuations. Net profit for 2025 reached CZK586m (+8.6% yoy).

Kofola's outlook for 1Q26 is very strong. Revenue is expected to grow by +14% yoy. This would bring revenue to approximately CZK2.39bn. This is significantly better than our expectations of a +7% yoy to CZK2.25bn. In our view, this is the most important information from the published report, as it indicates a recovery in demand. Lastly, favourable weather also boosted sales.

Dividend: The expected dividend from last year’s profit is CZK21. This indicates a gross yield of +4.4%. The Annual General Meeting, at which shareholders will vote on the dividend, will be held in mid-June.

Leverage: At the end of last year, leverage (ND/EBITDA) ratio was 3.02x. This is a slight decline from 3.08x in 3Q25 (2.14x at the end of 2024). The yoy increase is driven by lower EBITDA and higher debt.

2026 Outlook: Kofola expects EBITDA to be between CZK1.8 and 1.9bn, which is a +1.8% yoy, and revenue growth of +10% yoy. These targets include recent acquisitions. The leverage is expected to be 3.0x. The targets may seem overly conservative given the expected strong performance in 1Q26. However, we would like to point out that, from a full-year perspective, the summer months and quarters are critical to meeting the forecast. We anticipate a potential update later in the year.