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Kofola ČeskoSlovensko, a prominent player in the beverage industry with a market capitalization of $529.1 million, held its Q2 2025 earnings call, revealing a challenging quarter marked by declining sales and profitability. The company revised its full-year EBITDA guidance to CZK 1.9 billion and adjusted its revenue growth expectation from 3% to 1.5%. Despite these hurdles, Kofola’s stock showed a modest increase of 0.77%, closing at CZK 524. According to InvestingPro analysis, the stock has demonstrated remarkable strength with a 77.76% return over the past year. The stock remains within its 52-week range, between CZK 298 and CZK 552.
Key Takeaways
- Full-year EBITDA guidance revised to CZK 1.9 billion.
- Revenue growth expectation reduced from 3% to 1.5%.
- Stock price increased by 0.77% post-earnings.
- New product launches aimed at countering market challenges.
- Slovak market faced significant sales declines.
Company Performance
Kofola’s performance in Q2 2025 was characterized by a decrease in sales and profitability, primarily due to adverse conditions in the Slovak and Czech markets. While the company is grappling with a net debt/EBITDA ratio expected to slightly exceed 2.5x, InvestingPro data shows a strong financial health score of 3.24 (GREAT), with last twelve months EBITDA of $77.16 million. Despite these challenges, Kofola remains the second most trusted FMCG brand on the Velikon Top 25 list, with 14 beverages receiving international accolades.
Financial Highlights
- Revenue growth expectation: Reduced to 1.5% from 3%.
- EBITDA guidance: Revised to CZK 1.9 billion.
- Net debt/EBITDA ratio: Expected to be slightly above 2.5x.
Market Reaction
Following the earnings announcement, Kofola’s stock experienced a 0.77% increase, closing at CZK 524. This movement keeps the stock within its 52-week range, reflecting cautious optimism among investors despite the revised guidance and market challenges.
Outlook & Guidance
Looking ahead, Kofola anticipates a slight increase in sweetener prices, up to 10%, and expects improved performance in the second half of 2025. The company aims to enhance EBITDA through cost-saving measures, normalized sales in September and October, and contributions from its General Plastic investment.
Executive Commentary
- "We decided to face the negative market trends by innovations and huge marketing support." - Daniel Buryš, CEO
- "The slower start to the summer season impacted overall consumption in the Czech beer market." - Martin Rosipal, Finance Director
- "At the moment, we expect like a slight increase up to 10% [in sweetener prices]." - Martin Pisklak, Group CFO
Risks and Challenges
- Cold weather and negative consumer sentiment impacting sales.
- Slovak sugar tax and the end of Rauch cooperation affecting market dynamics.
- Potential increase in sweetener prices up to 10%.
- Export challenges due to the Russian "enemy tax."
Kofola ČeskoSlovensko is navigating a turbulent market with strategic product innovations and increased marketing efforts. While the company faces significant hurdles, its commitment to sustainability and new product launches may bolster its position in the coming quarters. With a P/E ratio of 20.48 and a dividend yield of 2.6%, InvestingPro subscribers can access additional insights, including 8 more ProTips and comprehensive valuation analysis, to make informed investment decisions about this beverage industry player.
Full transcript - Kofola CeskoSlovensko as (KOFOL) Q2 2025:
Conference Moderator, Kofola ČeskoSlovensko: Ladies and gentlemen, welcome to Kofola ČeskoSlovensko’s second quarter of 2025 results conference call. Martin Pisklak, the Group CFO, will present a summary of the results. This will be followed by a recording with business insights from Czech Republic, Adriatic region, and Beer segment. Present are CEOs Daniel Buryš, Marian Šefčovič, and CFO Martin Rosipal.
Martin Pisklak, Group CFO, Kofola ČeskoSlovensko: Martin Pisklak speaking. Today we are reporting the second quarter of 2025. From the results, I think it’s visible that the trend of the negative results was continuing in the second quarter, and also the outlook of the revenues in July and August is not very positive. However, we still believe that we are able to reach the lower range of the EBITDA interval, which we presented, and at the moment, we predict the full-year EBITDA of Kofola ČeskoSlovensko Group on the level of CZK 1.9 billion. Also, I have to apologize for the mistake which we published yesterday in the report. In the slide for the goals, the revenue growth should not be 3%. We expect only 1.5% of revenue growth, and also net debt/EBITDA ratio should be not 2.1, as it was in the previous quarter, but at the moment, we expect slightly above 2.5 times EBITDA.
After this conference call, we will publish a correction of the report on our webpage so you can download the proper report. Once again, I apologize for this. Now my colleagues will continue and comment on the performance of the individual business segments.
Daniel Buryš, CEO, Kofola ČeskoSlovensko (Czech and Slovak Markets): Dear investors, here is Daniel speaking. Let me comment on key moments in the Czech and Slovak sojourning markets. The first half of 2025 was a not successful period, and we have to report declining sales and profitability. Key factors are known. First, Slovak sugar tax and retailers front-loading CZK 75 million in 2024. Slovak sales dropped in Q1 more than 10%, and in Q2, 8%. Second, the end of cooperation with Rauch represents roughly CZK 200 million lower sales, partly replaced by innovations. There is not an EBITDA impact. Three, I don’t like value complaints, but it is a fact. We decided to face the negative market trends by innovations and huge marketing support. Marketing spends increased 26%. Extraordinarily successful was the launch of Targa Florio retail formats, Curiosa Juices, and Dilmah Iced Tea. We overslept in the functional water category, which exploded, and we are not present enough.
Cost of material and services are under control. After a successful June, including the Slovak market recovery, the sojourning market had the worst season in this decade. It was not only cold weather, but negative consumer sentiment through all markets and categories. We reacted by a cost-savings program, but compensating huge sales drops in season is difficult. Thank you for your attention, and better information next time.
Marian Šefčovič, CEO, Kofola ČeskoSlovensko (Adriatic Region): Hello everyone, this is Marian Šefčovič, CEO of Adriatic speaking. In the first half of 2025, the Adriatic region recorded a solid 5% year-over-year increase in revenues. This growth was mainly supported by higher sales in Slovenia, plus 4%, and a 5% increase in export markets. In the second quarter, we observed a noticeable rise in demand and consumption, especially in June, when the region experienced a prolonged heatwave. However, this revenue growth did not proportionately reflect in EBITDA, mainly due to higher operations costs from increased brand investments and rising personnel expenses following minimum wage adjustments. We successfully launched new flavors under the Ora and Radenska brands: Ora Tangerine and Radenska Blackberry Lime, and also a new flavor of Oraketa Elderflower Lime. Our Studena campaign won eight awards at the Day of Communication Festival, including a fee. Oraketa won second place for rebranding at the Balkanes competition.
At the international evaluation, 14 of our beverages received medals, including a Grand Gold medal. We ranked second on the Velikon Top 25 list of the most trusted FMCG brands in the region. Sustainability efforts continue with the organization of the Three Hours Marathon, the biggest sport event in the country with zero-waste principles. We supported BioBlitz Slovenia, where over 70 experts, biologists from four countries, recorded 500-plus species around our wells, which is a strong indicator of a clean and healthy environment. Thank you, Marian.
Daniel Buryš, CEO, Kofola ČeskoSlovensko (Czech and Slovak Markets): Dear investors, this is Martin Rosipal speaking, Finance Director of the Beer segment. I am pleased to provide you with a brief update on our performance for the second quarter of 2025. The slower start to the summer season impacted overall consumption in the Czech beer market. Despite this, our domestic revenues held steady compared to 2024, supported by the new pricing policy we introduced in Q1. We continued to invest in our brands, with a particular focus in Q2 on rejuvenating Zubr. This year, Zubr became the official beer partner of Octagon MMA in the Czech Republic, and we unveiled its refreshed design and marketing campaign at Octagon’s flagship event in Prague’s Eden Arena. Additionally, we expanded our portfolio with four new products in the fast-growing non-alcoholic flavored beer segment. On the export side, revenues declined as we prioritized margin improvement and scaled back lower-value private label business.
Taking Czech and export markets together, these dynamics led to an overall 7% beer revenue decrease in Q2. The combination of softer domestic demand due to cooler weather and the ongoing restructuring of our export business continued to impact the rest of the season. Although the short-term results are not satisfying, we remain committed to our transformation strategy. Our focus is on building a stronger, more profitable brand-driven business that will deliver sustainable growth in the long run. Thank you for the continued support and attention. Wishing you a successful day ahead.
Conference Moderator, Kofola ČeskoSlovensko: Ladies and gentlemen, now it’s time for your questions. If you wish to ask a question, please click on the raise hand icon on your participant panel. When prompted by the organizer, click on the unmute me icon. If you have no further questions, click on the lower hand icon. We have the first question from Mr. Batek. Please go ahead. Mr. Batek, you can go ahead. Ladies and gentlemen, if you wish to ask a question, please click on the raise hand icon on your participant panel. Mr. Batek, you should be able to click on the unmute me icon. We have a question from Mr. Rashka. Please go ahead.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): Good morning. Do you hear me?
Conference Moderator, Kofola ČeskoSlovensko: Yes, we can.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): Thank you. I would like to ask what is the main reason of the drop in exports in the beer segment?
Martin Pisklak, Group CFO, Kofola ČeskoSlovensko: Thank you for this question. Basically, there is the same reason as the last quarter. From January 1, 2025, Russia introduced the enemy tax on the beer, which is produced in the European Union. From that time, we see the significant drop in our sales number. We realized that part of the distributors, which we have, for example, in Poland or other European countries, were re-exporting our beer to Russia. Because of this enemy tax, this re-export basically disappeared. Our distributors in these countries started to purchase lower amounts, and that’s very visible in our number. We are not exporting, and we were not exporting our beer to Russia directly. We were aware that there are some re-exports because our beer was visible on the shelves in Russia. At least we identified who are the re-exporters to Russia.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): Okay, thank you.
Conference Moderator, Kofola ČeskoSlovensko: Mr. Batek, you can click on the unmute me icon and go ahead.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): Good morning. Can you hear me now?
Martin Pisklak, Group CFO, Kofola ČeskoSlovensko: Yes, we can.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): Finally, good. Thank you for taking my questions. I have two, first related to the guidance. If I calculate correctly, the guidance still implies, soon after the reduction, around 9% or 10% increase in revenues in the second half of the year and a well over 20% increase in EBITDA. How should we perceive that? Is there any one-off effect or how do you want to achieve such an increase? Second, maybe more towards 2026, I guess you are at the beginning of contracting the sweeteners for the next year. If you can elaborate on what you see in the market, what would you expect for the raw material prices for the next year? Thank you.
Martin Pisklak, Group CFO, Kofola ČeskoSlovensko: Thank you for your questions. Let’s start with the sweeteners. At the moment, we are at the very beginning of the negotiations. What we see at the moment is that there will be most probably a slight increase of the sweetener prices, but nothing significant. There should be no such a significant fluctuation as we were used to in the past, let’s say, four or five years. We expect like a slight increase up to 10% at the moment. As I said, we are at the very beginning of the negotiations. Regarding the second half of the year, it seems that the second half of the year projection is very, very optimistic in the light of the current results. Basically, we see some three major reasons for such an optimistic second half. First one is basically our, like as also Daniel Buryš described, cost-saving program.
We are reducing significantly now the investment to the market in terms of marketing and commercial promotions because we invested really a lot in the first two quarters. Some kind of cost savings is the first part of the way how we should do it. The second fact is that we do not expect floods in September and October this year. Hopefully, the sales in September and October will be more normal compared to the prior year. I just would like to highlight that a lot of the regions, especially Northern Moravia, where we are extraordinarily strong in terms of sales, were heavily impacted by the floods. This year, it should be much more normalized.
The third reason for the better result in the second quarter is the fact that we will consolidate almost five months of the assuring result, which can be approximately, let’s say, €1 million, a positive impact to our financial results. Also, there is a very strong result, which also should contribute more than €1 million of General Plastic compared to prior years, which is an investment where we have 33%, and we are consolidating this investment using the equity method. Altogether, new acquisitions and improved profitability of General Plastic together should bring us some like CZK 15 million. Openly speaking, this should replace the, let’s say, one-off effect of the pre-sales related to sugar tax, which were especially in the last month of 2024. The full second half quarter will be much more about reducing the costs and better sales in September and October compared to the prior year.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): Thank you. Maybe one more question. In your presentation, you have a dividend policy to pay out CZK 300 million or CZK 14.5 per share, which is lower than the CZK 21 paid from last year profit. Should we take it as a kind of a flaw, or you are just considering a return to the previous dividend policy?
Martin Pisklak, Group CFO, Kofola ČeskoSlovensko: At the moment, you should take it basically as a floor. As it indicated, it should be equal or higher than CZK 13.5 per share. We will consider the dividend payout after the full-year result. At the moment, I do not expect that we will pay some advance payment for the dividends in 2025, and we will do the full decision in 2026 based on the full 2025 results.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): Okay, thank you.
Conference Moderator, Kofola ČeskoSlovensko: Ladies and gentlemen, as a reminder, if you wish to ask a question, please click the raise hand icon on your participant panel. We have another question from Mr. Batek. Please go ahead.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): Sorry. One more follow-up question to the General Plastic contribution. You say it’s an equity and consolidation method. Will it appear in EBITDA or not?
Martin Pisklak, Group CFO, Kofola ČeskoSlovensko: Yeah, it will appear in EBITDA. It’s basically that 33% of General Plastic EBITDA is appearing in other operating income, basically. So it’s included in the EBITDA. Yeah.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): The operation, it has started in the beginning of this year, and it’s ramping up, or how should I see that?
Martin Pisklak, Group CFO, Kofola ČeskoSlovensko: Yeah. Basically, we are active in General Plastic, I think, like more than three years already. All the time, the General Plastic results were very flat. This year, they are increasing significantly because of the improved production process. We have invested a lot. We have a line for the rPET, and we are like using rPET. We have a special line for cleaning the PET bottles which were returned from the Slovak markets. This is now showing the real effectiveness of the plant, and the profitability is increasing. Approximately, let’s say, €1 million should be the jump in profitability, which is equal to our share in the company.
Martin Rosipal, Finance Director, Kofola ČeskoSlovensko (Beer Segment): Thank you.
Conference Moderator, Kofola ČeskoSlovensko: Ladies and gentlemen, as a reminder, if you wish to ask a question, click on the raise hand icon on your participant panel. There are no more questions. This concludes today’s conference call. Thank you for your participation. A recording of today’s call will be available on our webpage. You may now disconnect. Thank you and goodbye.
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