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The Coca-Cola Company Reports Second Quarter and Year-to-Date 2011 Results


Second quarter performance ahead of Company long-term growth targets

Global volume and value share gains realized in total nonalcoholic ready-to-drink (NARTD) beverages and across both sparkling and still beverages

• Strong worldwide volume growth of 6% in both the quarter and year-to-date, with growth across all five geographic operating groups. Excluding new cross-licensed brands, primarily Dr Pepper brands, worldwide volume was up 5% in both the quarter and year-to-date. International volume was up 6% in the quarter and year-to-date.
• North America volume was up 4% in the quarter and grew 5% year-to-date. Excluding new cross-licensed brands, North America volume was even in the quarter and grew 1% year-to-date.
• Worldwide volume growth was led by brand Coca-Cola, up 4% in the quarter and up 3% year-to-date.
• Second quarter reported EPS was $1.20, up 18%, with comparable EPS at $1.17, up 10% and ahead of our long-term growth target. Year-to-date reported EPS was $2.02, up 18%, with comparable EPS also at $2.02, up 9%.
• Second quarter reported net revenue and comparable net revenue were both $12.7 billion, up 47%, reflecting solid growth in concentrate sales, a 6% currency benefit, positive price/mix and the acquisition of Coca-Cola Enterprises’ (CCE) North American operations in the fourth quarter of 2010. Year-to-date reported net revenue and comparable net revenue were both $23.3 billion, up 44%.
• Second quarter reported operating income was $3.2 billion, up 15%, with comparable operating income of $3.4 billion, up 18%, reflecting strong top-line performance, a 6% currency benefit and the acquisition of CCE’s North American operations, partially offset by increased commodity costs. Year-to-date reported operating income was $5.5 billion, up 10%, with comparable operating income of $5.9 billion, up 14%, including a 4% benefit from currency.
• Coca-Cola Refreshments (CCR) integration efforts are on plan, with expected 2011 net cost synergies of $140 to $150 million.
• Company-wide productivity initiatives are well on track to slightly exceed the upper end of our original targeted range of $400-$500 million in annualized savings by year-end 2011, the final year of the four-year program.

ATLANTA, July 19, 2011 - The Coca-Cola Company reports strong second quarter and year-to-date 2011 operating results, meeting or exceeding our long-term growth targets and gaining volume and value share in total NARTD beverages. Reported worldwide volume grew 6% in both the quarter and year-to-date. Excluding new cross-licensed brands in North America, primarily Dr Pepper brands, worldwide volume grew 5% in the quarter and year-to-date. We achieved broad-based volume growth in the quarter across each of our five geographic operating groups, with growth of 7% in Eurasia and Africa, 7% in Pacific, 6% in Latin America, 5% in Europe, and 4% in North America. Excluding new cross-licensed brands, North America volume was even in the quarter and grew 1% year-to-date.

In the quarter and year-to-date, we grew global volume and value share in NARTD beverages, with share gains across most beverage categories. We continued to see growth in sparkling beverages, with worldwide brand Coca-Cola volume growth of 4% in the quarter driven by a number of global markets, including 24% in China, 17% in Russia, 7% in Mexico, 7% in France, 6% in Germany and 2% in Japan. Worldwide sparkling beverage volume grew 5% in the quarter (4% excluding new cross-licensed brands in North America), with international sparkling beverage volume growing 5%.

Worldwide still beverage volume grew 7% in the quarter, led by growth across the portfolio, including juices and juice drinks, sports drinks, ready-to-drink teas, energy drinks and water brands. Still beverage volume in the quarter grew 10% internationally and 1% in North America. Minute Maid Pulpy continues to expand globally and achieved 35% growth in the quarter. Water grew 10% in the quarter with a focus on innovative and sustainable immediate consumption packaging like our PlantBottle™ in the U.S. and our Eco Crush bottle for the I LOHAS brand in Japan.

Muhtar Kent, Chairman and CEO of The Coca-Cola Company, said, "We are pleased with our second quarter performance results. We completed the second quarter of 2011, and the sixth quarter of our 2020 Vision, by delivering results ahead of our long-term growth targets . Importantly, we are delivering these strong results at a time when global macroeconomic conditions are at best mixed. This serves to underscore how, together with our global bottling partners, we are decisively investing in the future and executing our 2020 Vision from a position of real strength.

"Even as consumers around the world continue to feel the impact of a slow economic recovery, they increasingly choose our brands to refresh themselves at a rate of over 1.7 billion servings each and every day. Our strong revenue and profit results, combined with our worldwide share gains and positive price/mix, attest to the strength of our global system. With our 2020 Vision as our roadmap, we continue to sharpen our focus on execution by getting very clear on those priority actions we need to take to deliver in the near term while also preparing for 2020 today.

“During this past quarter, we officially celebrated Coca-Cola’s 125 th anniversary. And while it is wonderfully rewarding to celebrate our past, we remain constructively discontent and resolutely focused on our future. Our proven track record of creating value over time is a testament to this dynamic commercial enterprise and business that has just begun to reach its potential. That is why, as we look ahead to 2020 and beyond, we remain confident in our ability to achieve our long-term targets and to deliver sustainable profitable growth and value for our shareowners.”


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 NARTD 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 2011 financial results were impacted by one fewer selling day, which will be offset by the impact of one additional selling day in fourth quarter 2011 results. Unit case volume results are not impacted by the variance in selling days due to the average daily sales computation referenced above.
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial information does not represent a comprehensive basis of accounting.
Our long-term revenue and operating income growth targets are on a comparable currency neutral basis and exclude structural changes. Our long-term volume growth target is on a comparable basis, excluding the effect of structural changes. Our long-term EPS growth target is on a comparable basis.

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