Coca-Cola profit up from international gains
February 9, 2010
Today, The Coca-Cola Co., Atlanta, reported continued worldwide volume growth in 2009, which drove share gains in sparkling and still beverages for the year, and full year profit growth in line with its long-term target.
The company reported solid fourth quarter 2009 operating results, with net operating revenue rising 5 percent to $7.51 billion. North America net operating revenue declined 4 percent to $1.89 billion. For the full year, volume increased 3 percent, in line with its long-term volume target, it said. Internationally, Coca-Cola achieved case volume growth of 6 percent in the fourth quarter, cycling 6 percent growth in the prior year quarter.
In the quarter, volume increased strongly in emerging markets such as 29 percent in China and 20 percent in India. In developing markets, volume grew 8 percent in Brazil and 4 percent in Mexico, and in the developed markets of France and Germany, volume gained 12 and 3 percent, respectively.
Total sparkling beverage unit case volume increased 3 percent in the quarter, with international sparkling beverage unit case volume increasing 5 percent. Total still beverage volume increased 9 percent in the quarter, led by growth across the portfolio, including juices and fruit stills, teas and water brands. Still beverage unit case volume increased 14 percent internationally.
Coca-Cola’s North America unit case volume declined one percent in the quarter primarily due to the recession impacting consumer spending and foodservice traffic, it says. Full year unit case volume decreased two percent. Net revenues for the quarter decreased four percent.
In North America, unit case volume for sparkling beverages declined 2 percent in the quarter. Coca-Cola Zero delivered double-digit unit case volume growth in the quarter, achieving 15 consecutive quarters of double-digit growth, the company said.
Still beverage unit case volume was even in the quarter in North America. Still beverage volume in foodservice and hospitality business continued to grow, driven by innovation and new segmented customer offerings in its tea portfolio, Coca-Cola says.
In the quarter, North America gained value share in sparkling beverages for the fifth consecutive quarter, with both volume and value share gains for the full year. Still beverages also gained value share for the fifth consecutive quarter, led by strong performance in its foodservice and hospitality business for its Simply and Fuze brands. Simply and Minute Maid continued to perform strongly with new flavor innovations and expanded availability, contributing to volume and value share gains in the juice and juice drinks category for both the quarter and the full year, Coca-Cola said. In 2009, Simply became its 14th billion dollar brand.
"We ended this year on a high note, delivering global volume and value share gains, comparable currency neutral revenue growth, improved productivity and increased cash flows," said Muhtar Kent, The Coca-Cola Co.’s chairman and chief executive officer.
"In a year marked by unprecedented economic uncertainty, our foundation â€” leading brands, unmatched global footprint, great bottling partners and a solid financial position â€” proved that we have the right ingredients for growth even under challenging economic conditions. Early last year we committed to align our company and our system to emerge from this global crisis stronger. Our performance results for the year underscore that we are doing just that. Now, with our 2020 Vision as our roadmap, we look forward to entering our next decade of growth as we work closely together with our bottling partners to usher in a new era of winning for the Coca-Cola system."