The Coca‑Cola Company Reports 2010 Second Quarter And Year-To-Date Results
Today, our Company reports strong performance in the second quarter, delivering volume, profit and earnings growth ahead of our long-term targets. We are winning in the marketplace with global volume and value share gains in total nonalcoholic ready-to-drink beverages as well as across the sparkling and still beverage categories.
To access this story via The Coca-Cola Company website please click here
- Strong worldwide volume growth of 5% in the quarter, ahead of our long-term target, with balanced growth around the world, including 2% growth in North America and 6% international growth. Year-to-date worldwide volume grew 4%. Volume growth led by brand Coca-Cola, up 5% in the quarter and 4% year-to-date.
- Second quarter reported EPS was $1.02, up 16%, with comparable EPS up 15% to $1.06, ahead of our long-term target.
- Reported operating income increased 13% in the quarter and 15% year-to-date. Comparable currency neutral operating income grew 11% in Q2, ahead of our long-term target.
- Reported net revenues grew 5% in the quarter and year-to-date, with comparable currency neutral net revenue growth of 5% in Q2, in line with our long-term target.
- Extensive global nonalcoholic ready-to-drink beverage volume and value share gains, driven by both sparkling and still beverages. International volume and value share gains continued, with widespread share gains in North America as well.
- Strong cash flow continued, with year-to-date cash from operations up 18% to $4.3 billion.
- Integration planning for the pending acquisition of Coca-Cola Enterprises' North American business remains on track with an expected fourth quarter close.
ATLANTA - The Coca-Cola Company reports strong second quarter 2010 operating results, with volume increasing 5%, ahead of our long-term target and cycling 4% growth in the prior year. We achieved 2% volume growth in North America, demonstrating the momentum we are building for our system in this important market.
International volume increased 6%. Eurasia and Africa volume grew 10% in the quarter, cycling 7% in the prior year, with a return to growth in Russia, which was up 6%. India demonstrated continued strong growth of 22% in the quarter, cycling prior year growth of 33%. Latin America volume grew 7%, cycling 6% growth in the prior year quarter, with 13% growth in Brazil and 5% growth in Mexico.
Pacific volume grew 6%, cycling 6% in the prior year quarter, with 6% growth in China and double-digit growth in the Philippines and Thailand. Although Europe volume was down 1% in the quarter due to continued challenging economic conditions, Germany and Iberia both grew volume 1% and France was up high single digits.
Strong growth continued in countries with per capita consumption of Company brands less than 150 eight-ounce servings per year, with volume up 10% in the quarter and year-to-date in those countries.
We gained global volume and value share in total nonalcoholic ready-to-drink (NARTD) beverages as well as sparkling and still beverages, driven by gains in both North America and many international markets. We also realized volume and value share gains across core sparkling beverages, juices and juice drinks, sports drinks and packaged water.
Brand Coca-Cola, which was up 5% in the second quarter and 4% year-to-date, continues to energize the Company's growth through our investment in global properties like the FIFA World CupTM sponsorship and the "Open Happiness" global integrated marketing campaign, resulting in continued volume and value share gains. The strong brand Coca-Cola growth came from a diversity of markets, including Brazil, Mexico, the Philippines, Turkey, Thailand, Russia, India and the United States. Total sparkling beverage volume increased 3% in the quarter, with international sparkling beverage volume increasing 4%. Total still beverage volume increased 10% in the quarter, led by continued growth in juices and juice drinks, sports drinks, teas and water brands. Still beverage volume increased 11% internationally.
Muhtar Kent, Chairman and Chief Executive Officer, The Coca-Cola Company said, "I am pleased with the performance of our Company, where we once again delivered a solid quarter of growth with consistent profitable results inspired by our 2020 Vision and fueled by our strategic marketing, innovation and focused execution. We continue executing around the globe in close alignment with our bottling partners, leveraging our scale and unique global platforms - such as our FIFA World CupTM campaign - to build the equity and global share of our brands."
Mr. Kent continued, "It is clear, however, that the state of the global economy remains uncertain in many regions, affected by ongoing deficit concerns in Europe, recent downward revisions to China's economy and weakened consumer confidence. While this uncertainty weighs on us all, we remain resolute in our commitment to invest in our global operations and our brands for the long-term. Even during these challenging times, our brand equity is growing stronger around the world, as consumers continue to choose our brands, with 4% global growth for brand Coca-Cola year-to-date. Additionally, we continue to make tangible progress with our planning related to the efficient and effective integration of Coca-Cola Enterprises' (CCE) North American bottling business and we remain on track to complete the transaction in the fourth quarter of 2010.
"Looking forward to the balance of the year, we remain cautious, yet confident in our ability to deliver our 2010 plan while continuing our efforts to achieve our 2020 Vision through consistent long-term profitable growth."
- Second quarter and year-to-date 2010 reported net revenues increased 5%. Second quarter reported net revenues included a positive currency impact of 2% offset by a 2% impact due to the deconsolidation of certain entities required by a change in accounting guidance. Comparable currency neutral net revenues increased 5% in the quarter, reflecting a 5% increase in concentrate sales. Price/mix for the quarter was even, with our positive revenue growth management strategies being offset by geographic mix. Year-to-date comparable currency neutral net revenues increased 3%.
- Reported operating income increased 13% in the quarter and 15% year-to-date. Second quarter 2010 comparable currency neutral operating income increased 11%. This was driven by strong top-line performance as well as a continued strong focus on cost management and the leveraging of productivity initiatives as well as favorable timing of marketing expenses versus the prior year. Year-to-date comparable currency neutral operating income increased 10%.
- Year-to-date cash from operations increased 18%. There were no share repurchases during the first half of 2010 (except for minimal treasury share activity related to employee benefit plans) due to the proposed acquisition of Coca-Cola Enterprises' North American bottling business.
- Productivity initiatives are well on track to achieve our target of $500 million in annualized savings by year-end 2011.
- All references to growth rate percentages, share and cycling of growth rates compare the results of the period to those of the prior year comparable period.
- "Concentrate sales" represents the amount of concentrates, syrups, beverage bases and powders sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers.
- "Sparkling beverages" means nonalcoholic ready-to-drink beverages with carbonation, including energy drinks and carbonated waters and flavored waters.
- "Still beverages" means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and enhanced waters, juices and juice drinks, teas, coffees and sports drinks.
- All references to volume and volume percentage changes indicate unit case volume. All volume percentage changes are computed based on average daily sales. "Unit case" means a unit of measurement equal to 24 eight-ounce servings of finished beverage. "Unit case volume" means the number of unit cases (or unit case equivalents) of Company beverages directly or indirectly sold by the Company and its bottling partners to customers.
- Year-to-date 2010 results were impacted by one fewer selling day in the first quarter, which will be offset by the impact of one additional selling day in fourth quarter 2010 results.
- Comparable results for the second quarter and year-to-date 2010 reflect the impact of the deconsolidation of certain entities required by a change in accounting guidance.
- Our long-term growth targets referenced in this release are on a comparable currency neutral basis and exclude structural changes.