Coca-Cola reports strong growth in NARTD sector

Net Revenues Grew 16% for the Quarter and 9% for the Full Year

The Coca-Cola Company has reported another quarter of strong growth, along with achieving or exceeding all guidance for the full year 2019. The company continued to execute its growth strategy, allowing it to deliver strong revenue and profit growth for the quarter and full year while gaining value share globally.

James Quincey, chairman and CEO of The Coca-Cola Company said, “We made good progress in 2019 by delivering on our financial commitments and growing in a more sustainable way. We continue to transform the organization to act with a growth mindset, which gives us confidence in our 2020 targets and our ability to create a better shared future for all of our stakeholders.”

Quarterly / Full Year Performance

Revenues: Net revenues grew 16% to $9.1 billion for the quarter and 9% to $37.3 billion for the year. Organic revenues (non-GAAP) grew 7% for the quarter and 6% for the year. Revenue growth for the quarter was driven by concentrate sales growth of 2% and price/mix growth of 5%. The quarter included one additional day, which resulted in an approximate 1-point benefit to revenue growth. Revenue growth for the year was driven by concentrate sales growth of 1% and price/mix growth of 5%.

Margin: For the quarter, operating margin, which included items impacting comparability, was 23.9% versus 23.4% in the prior year, while comparable operating margin (non-GAAP) was 24.8% in both the current and prior year. For the year, operating margin, which included items impacting comparability, was 27.1% versus 26.7% in the prior year. Comparable operating margin (non-GAAP) was 27.9% versus 28.8% in the prior year. For both the quarter and full year, strong underlying margin expansion was more than offset by headwinds from currency and net acquisitions.

Earnings per share: For the quarter, EPS grew 134% to $0.47, and comparable EPS (non-GAAP) grew 1% to $0.44. For the year, EPS grew 38% to $2.07, and comparable EPS (non-GAAP) grew 1% to $2.11. Both fourth quarter and full year comparable EPS (non-GAAP) performance included the impact of an 8-point currency headwind.

Market share: The company continued to gain value share in total nonalcoholic ready-to-drink (NARTD) beverages.

Cash flow: Cash from operations was $10.5 billion for the year, up 37% largely due to strong underlying growth, accelerated timing of working capital initiatives and the reduction of productivity and restructuring costs. Full year free cash flow (non-GAAP) was $8.4 billion, up 38%.

Asia Pacific

• Price/mix grew 5% in the quarter, as positive performance across the majority of markets was further benefited by geographic mix, due to growth in developed markets outpacing certain emerging and developing markets.
• Unit case volume grew 2% in the quarter due to broad-based growth across the majority of key markets, partially offset by soft performance in China. In China, strong growth in sparkling soft drinks was offset by the impact of strategic deprioritization of low-margin water and downsizing of key packages in the juice portfolio.
• Operating income grew 6% in the quarter, which included items impacting comparability. Comparable currency neutral operating income (non-GAAP) grew 5%. Operating income was negatively impacted by geographic mix.
• For the full year, the company gained value share in total NARTD beverages in addition to sparkling soft drinks.