Global Unit Case Volume Grew 2% for the Quarter
and 2% for the Full Year
Net Revenues Grew 7% for the Quarter and 6% for
the Full Year; Organic Revenues (Non-GAAP) Grew 12% for the Quarter
and 12% for the Full Year
Operating Income Grew 10% for the Quarter and
4% for the Full Year; Comparable Currency Neutral Operating Income
(Non-GAAP) Grew 20% for the Quarter and 16% for the Full Year
Fourth Quarter EPS Declined 2% to $0.46;
Comparable EPS (Non-GAAP) Grew 10% to $0.49; Full Year EPS Grew 13%
to $2.47; Comparable EPS (Non-GAAP) Grew 8% to $2.69
Cash Flow from Operations Was $11.6 Billion for
the Full Year, Up 5%; Full-Year Free Cash Flow (Non-GAAP) Was $9.7
Billion for the Full Year, Up 2%
Company Provides 2024 Financial Outlook
The Coca-Cola Company today reported fourth quarter and
full-year 2023 results. “During the year, our people and partners
rose to meet new challenges, allowing us to excel globally and
deliver in a dynamic world,” said James Quincey, Chairman and CEO
of The Coca-Cola Company. “As we begin a new year, we’re confident
that our all-weather strategy, powerful portfolio and harmonized
system will continue to create value for our stakeholders in 2024
and for the long term.”
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240213191250/en/
Highlights
Quarterly / Full-Year
Performance
- Revenues: For the quarter, net revenues grew 7% to $10.8
billion, and organic revenues (non-GAAP) grew 12%, driven by 9%
growth in price/mix and 3% growth in concentrate sales. The quarter
included one additional day, which resulted in a 1-point tailwind
to revenue growth. For the full year, net revenues grew 6% to $45.8
billion, and organic revenues (non-GAAP) grew 12%, driven by 10%
growth in price/mix and 2% growth in concentrate sales. For both
the quarter and the full year, organic revenue (non-GAAP)
performance was strong across all operating segments.
- Operating margin: For the quarter, operating margin was
21.0% versus 20.5% in the prior year, while comparable operating
margin (non-GAAP) was 23.1% versus 22.7% in the prior year. For the
full year, operating margin was 24.7% versus 25.4% in the prior
year, while comparable operating margin (non-GAAP) was 29.1% versus
28.7% in the prior year. Operating margin performance included
items impacting comparability and currency headwinds. For both the
quarter and full year, comparable operating margin (non-GAAP)
expansion was primarily driven by strong topline growth, partially
offset by an increase in marketing investments versus the prior
year, as well as currency headwinds.
- Earnings per share: For the quarter, EPS declined 2% to
$0.46, while comparable EPS (non-GAAP) grew 10% to $0.49. EPS
performance included the impact of a 14-point currency headwind,
while comparable EPS (non-GAAP) performance included the impact of
a 13-point currency headwind. For the full year, EPS grew 13% to
$2.47, and comparable EPS (non-GAAP) grew 8% to $2.69. EPS
performance included the impact of an 8-point currency headwind,
while comparable EPS (non-GAAP) performance included the impact of
a 7-point currency headwind.
- Market share: For both the quarter and the full year,
the company gained value share in total nonalcoholic ready-to-drink
(NARTD) beverages.
- Cash flow: Cash flow from operations was $11.6 billion
for the full year, an increase of $581 million versus the prior
year, driven by strong business performance and working capital
initiatives, partially offset by a transition tax payment and
currency headwinds. Free cash flow (non-GAAP) was $9.7 billion for
the full year, an increase of $213 million versus the prior
year.
Company Updates
- Connecting with consumers through experiences and digital
engagement: The company continues to leverage its marketing
transformation to build globally scaled marketing platforms
tailored to local consumers. In the fourth quarter, “The World
Needs More Santas” campaign was executed in over 80 markets,
continuing the company’s rich history of celebrating the holidays.
The company leveraged the success of its first AI-based platform,
“Create Real Magic”, by inviting consumers to create sharable,
digital greeting cards featuring iconic brand assets such as
cherished depictions of Santa Claus and the Coca-Cola polar bear.
Local initiatives generated buzz and excitement, such as the
Coca-Cola Caravan Truck Tour, which travelled throughout nearly 60
countries around the world making over a thousand stops and meeting
over 16 million consumers to share in the magic. In total, the
holiday campaign experiences garnered approximately 9 billion
impressions on social media. By combining the company’s global
scale with local relevancy, the holiday activation contributed to
Trademark Coca-Cola® volume and value share gains as well as unit
case volume and transactions growth for both the quarter and for
the full year.
- Building a system that is increasingly positioned for
sustainable long-term growth: Since the start of 2023, the
company completed the refranchising of company-owned bottling
operations in Vietnam to a subsidiary of Swire Pacific Limited
(Swire), completed the sale of its stake in the bottler in Pakistan
to Coca-Cola İçecek and completed the sale of its stake in the
bottler in Indonesia to Coca-Cola Europacific Partners (CCEP). More
recently, the company completed the refranchising of a portion of
its company-owned bottling operations in India to existing
franchise bottlers and received regulatory approval to sell its
bottling operations in the Philippines to CCEP and Aboitiz Equity
Ventures, which is expected to close towards the end of February
2024. Additionally, the company recently completed the sale of its
stake in the largest bottler in Thailand to Swire and existing
shareholders of the bottler. Our franchise business model has
enabled the company to develop a strong global footprint with a
local touch in markets around the world. The company continuously
works to optimize the system with trusted, capable and motivated
bottling partners allowing it to focus on building and growing
consumer-loved brands.
- Delivering on our purpose by empowering people to drive
growth: The company’s strategy is centered around people,
starting with the employees who are critical in bringing this
strategy to life. In November, the company was ranked #1 on the
2023 American Opportunity Index, which assessed how effectively
companies enable employees to progress in their careers in the
United States. Around the world, the company provides thousands of
jobs and is invested in the long-term success of its employees.
Over the year, the company enhanced its learning and related
technologies, making strides towards nurturing a more innovative
and informed workforce. The company’s 2023 Culture & Engagement
Survey results underscore the strong levels of employee pride and
growth opportunities with a strong number of respondents saying
they are proud to work at The Coca-Cola Company and see good
opportunities to learn and grow in their roles.
Operating Review – Three
Months Ended December 31, 2023
Revenues
and Volume
Percent Change
Concentrate Sales1
Price/Mix
Currency Impact
Acquisitions, Divestitures and
Structural Changes, Net
Reported Net Revenues
Organic Revenues2
Unit Case Volume3
Consolidated
3
9
(4)
(1)
7
12
2
Europe, Middle East & Africa
2
24
(14)
0
11
25
1
Latin America
10
14
(8)
0
16
23
4
North America
(3)
8
0
0
5
5
(1)
Asia Pacific
3
10
(5)
(1)
7
13
2
Global Ventures4
3
3
4
0
10
5
(1)
Bottling Investments
7
7
(4)
(8)
2
14
(1)
Operating Income and EPS
Percent Change
Reported Operating Income
Items Impacting Comparability
Currency Impact
Comparable Currency Neutral
Operating Income2
Consolidated
10
0
(11)
20
Europe, Middle East & Africa
30
1
(22)
50
Latin America
10
(1)
(13)
24
North America
19
14
0
5
Asia Pacific
6
(9)
(4)
18
Global Ventures
426
194
11
221
Bottling Investments
38
(19)
(9)
66
Percent Change
Reported EPS
Items Impacting Comparability
Currency Impact
Comparable Currency Neutral
EPS2
Consolidated
(2)
(13)
(13)
23
Note: Certain rows may not add due to
rounding.
1
For Bottling Investments, this represents
the percent change in net revenues attributable to the increase
(decrease) in unit case volume computed based on total sales
(rather than average daily sales) in each of the corresponding
periods after considering the impact of structural changes, if
any.
2
Organic revenues, comparable currency
neutral operating income and comparable currency neutral EPS are
non-GAAP financial measures. Refer to the Reconciliation of GAAP
and Non-GAAP Financial Measures section.
3
Unit case volume is computed based on
average daily sales.
4
Due to the combination of multiple
business models in the Global Ventures operating segment, the
composition of concentrate sales and price/mix may fluctuate
materially from period to period. Therefore, the company places
greater focus on revenue growth as the best indicator of underlying
performance of the Global Ventures operating segment.
Operating Review – Year Ended
December 31, 2023
Revenues
and Volume
Percent Change
Concentrate Sales1
Price/Mix
Currency Impact
Acquisitions, Divestitures and
Structural Changes, Net
Reported Net Revenues
Organic Revenues2
Unit Case Volume
Consolidated
2
10
(4)
(1)
6
12
2
Europe, Middle East & Africa
0
19
(12)
0
7
19
(2)
Latin America
6
16
(3)
0
19
22
5
North America
(1)
8
0
0
7
7
(1)
Asia Pacific
0
5
(5)
1
0
5
3
Global Ventures3
5
2
0
0
8
7
4
Bottling Investments
6
8
(7)
(8)
0
14
(1)
Operating Income and EPS
Percent Change
Reported Operating Income
Items Impacting Comparability
Currency Impact
Comparable Currency Neutral
Operating Income2
Consolidated
4
(4)
(7)
16
Europe, Middle East & Africa
6
1
(15)
21
Latin America
20
0
(5)
24
North America
18
4
0
15
Asia Pacific
(11)
0
(6)
(5)
Global Ventures
78
2
3
74
Bottling Investments
19
4
(6)
21
Percent Change
Reported EPS
Items Impacting Comparability
Currency Impact
Comparable Currency Neutral
EPS2
Consolidated
13
4
(7)
15
Note: Certain rows may not add due to
rounding.
1
For Bottling Investments, this represents
the percent change in net revenues attributable to the increase
(decrease) in unit case volume after considering the impact of
structural changes, if any.
2
Organic revenues, comparable currency
neutral operating income and comparable currency neutral EPS are
non-GAAP financial measures. Refer to the Reconciliation of GAAP
and Non-GAAP Financial Measures section.
3
Due to the combination of multiple
business models in the Global Ventures operating segment, the
composition of concentrate sales and price/mix may fluctuate
materially from period to period. Therefore, the company places
greater focus on revenue growth as the best indicator of underlying
performance of the Global Ventures operating segment.
In addition to the data in the preceding tables, operating
results included the following:
Consolidated
- Unit case volume grew 2% for the quarter. Developed markets
were even as growth in Mexico and Germany was offset by declines in
the United States and Chile. Developing and emerging markets grew
4%, driven by growth in Brazil and India. For the full year, unit
case volume grew 2%. Developed markets grew 1%, driven by growth in
Mexico and Germany. Developing and emerging markets grew 2%, driven
by growth in India and Brazil, partially offset by the suspension
of business in Russia in 2022.
Unit case volume performance included the following:
- Sparkling soft drinks grew 2% for both the quarter and the full
year, primarily driven by growth in Latin America and Asia Pacific.
Trademark Coca-Cola® grew 2% for both the quarter and the full
year, primarily driven by growth in Latin America and Asia Pacific.
Coca-Cola Zero Sugar grew 4% for the quarter and 5% for the full
year, driven by growth in Latin America and North America.
Sparkling flavors grew 1% for both the quarter and the full year,
primarily driven by growth in Asia Pacific.
- Juice, value-added dairy and plant-based beverages grew 6% for
the quarter and 2% for the full year. This performance benefited
from growth in Minute Maid® Pulpy in China, Mazoe® in Africa and
fairlife® in the United States.
- Water, sports, coffee and tea was even for the quarter and grew
1% for the full year. Water grew 1% for the quarter and 2% for the
full year, primarily driven by growth in Latin America. Sports
drinks declined 1% for the quarter and were even for the year. Full
year performance was benefited by growth in Powerade® in Latin
America, offset by a decline in BODYARMOR®. Coffee declined 7% for
the quarter and grew 3% for the year. Full year performance was
benefited by strong performance of Costa® coffee in the United
Kingdom and China. Tea was even for the quarter and declined 1% for
the full year, as growth in Latin America and Europe, Middle East
and Africa was more than offset by declines in North America and
doğadan® in Türkiye.
- Price/mix grew 9% for the quarter and 10% for the full year,
primarily driven by pricing actions in the marketplace, including
the continued impact of hyperinflationary markets, and favorable
mix. For the quarter, concentrate sales were 1 point ahead of unit
case volume, primarily due to one additional day.
- Operating income grew 10% for the quarter and 4% for the full
year, which included items impacting comparability and currency
headwinds. Comparable currency neutral operating income (non-GAAP)
grew 20% for the quarter and 16% for the year. For both the quarter
and the full year, performance was driven by organic revenue
(non-GAAP) growth across all operating segments, partially offset
by an increase in marketing investments.
Europe, Middle East &
Africa
- Unit case volume grew 1% for the quarter, driven by growth in
water, sports, coffee and tea as well as juice, value-added dairy
and plant-based beverages. Growth was led by Germany and
Nigeria.
- Price/mix grew 24% for the quarter, approximately one-third of
which was driven by the continued impact of pricing in
hyperinflationary markets and the remaining driven primarily by
pricing actions across operating units. For the quarter,
concentrate sales were 1 point ahead of unit case volume, primarily
due to one additional day.
- Operating income grew 30% for the quarter, which included a
22-point currency headwind. Comparable currency neutral operating
income (non-GAAP) grew 50% for the quarter, primarily driven by
organic revenue (non-GAAP) growth across all operating units.
- For the year, the company gained value share in total NARTD
beverages, led by share gains in Türkiye, Nigeria and Germany.
Latin America
- Unit case volume grew 4% for the quarter, driven by growth in
Trademark Coca-Cola and water, sports, coffee and tea. Growth was
led by Brazil and Mexico.
- Price/mix grew 14% for the quarter, primarily driven by the
continued impact of inflationary pricing in Argentina and pricing
actions, partially offset by incremental investments in the
marketplace. For the quarter, concentrate sales were 6 points ahead
of unit case volume, primarily due to one additional day and the
timing of concentrate shipments.
- Operating income grew 10% for the quarter, which included a
15-point currency headwind and items impacting comparability.
Comparable currency neutral operating income (non-GAAP) grew 24%
for the quarter, primarily driven by strong organic revenue
(non-GAAP) growth, partially offset by an increase in marketing
investments.
- For the year, the company gained value share in total NARTD
beverages, led by share gains in Brazil, Colombia and Mexico.
North America
- Unit case volume declined 1% for the quarter, as growth in
juice, value-added dairy and plant-based beverages and Trademark
Coca-Cola was more than offset by a decline in water, sports,
coffee and tea.
- Price/mix grew 8% for the quarter, primarily driven by pricing
actions already in the marketplace, timing related adjustments and
favorable category mix. For the quarter, concentrate sales were 2
points behind unit case volume, primarily due to the timing of
concentrate shipments, partially offset by one additional day.
- Operating income grew 19% for the quarter, which included items
impacting comparability. Comparable currency neutral operating
income (non-GAAP) grew 5% for the quarter, primarily driven by
organic revenue (non-GAAP) growth.
- For the year, the company gained value share in total NARTD
beverages, driven by sparkling soft drinks and value-added dairy
beverages.
Asia Pacific
- Unit case volume grew 2% for the quarter, primarily driven by
growth in juice, value-added dairy and plant-based beverages and
sparkling flavors. Growth was led by India and China.
- Price/mix grew 10% for the quarter, primarily driven by pricing
actions in the marketplace and favorable category mix. For the
quarter, concentrate sales were 1 point ahead of unit case volume,
primarily due to one additional day.
- Operating income grew 6% for the quarter, which included items
impacting comparability and a 13-point currency headwind.
Comparable currency neutral operating income (non-GAAP) grew 18%
for the quarter, driven by organic revenue (non-GAAP) growth across
all operating units and lower operating costs, partially offset by
an increase in marketing investments.
- For the year, the company gained value share in total NARTD
beverages, led by share gains in India, the Philippines, South
Korea and Japan.
Global Ventures
- Net revenues grew 10%, and organic revenues (non-GAAP) grew 5%
for the quarter, primarily driven by the strong performance of
Costa® coffee in the United Kingdom and China.
- Operating income and comparable currency neutral operating
income (non-GAAP) both had robust growth for the quarter, driven by
organic revenue (non-GAAP) growth and lower costs.
Bottling Investments
- Unit case volume declined 1% for the quarter, as growth in
India and the Philippines was more than offset by the impact of
refranchising bottling operations.
- Price/mix grew 7% for the quarter, driven by pricing actions
across most markets.
- Operating income grew 38% for the quarter, which included items
impacting comparability and an 8-point currency headwind.
Comparable currency neutral operating income (non-GAAP) grew 66%
for the quarter, driven by organic revenue (non-GAAP) growth,
partially offset by higher operating costs.
Capital Allocation
Update
- Reinvesting in the business: The company continued to
invest in its various lines of business and spent $1.9 billion on
capital expenditures in 2023, an increase of 25% versus the prior
year.
- Continuing to grow the dividend: The company paid
dividends totaling $8.0 billion during 2023. The company has
increased its dividend in each of the last 61 years.
- M&A initiatives: In 2023, the company did not make
any significant acquisitions. The company continues to evaluate
inorganic growth opportunities through brands and capabilities. In
2023, with respect to divestitures, the company made progress
towards refranchising company-owned bottling operations.
- Share repurchases: In 2023, the company issued $0.5
billion of shares in connection with the exercise of stock options
by employees and purchased $2.3 billion of shares. Consequently,
net share repurchases (non-GAAP) were $1.7 billion. The company’s
remaining share repurchase authorization is approximately $6
billion.
Outlook
The 2024 outlook information provided below includes
forward-looking non-GAAP financial measures, which management uses
in measuring performance. The company is not able to reconcile
full-year 2024 projected organic revenues (non-GAAP) to full-year
2024 projected reported net revenues, full-year 2024 projected
comparable net revenues (non-GAAP) to full-year 2024 projected
reported net revenues, full-year 2024 projected underlying
effective tax rate (non-GAAP) to full-year 2024 projected reported
effective tax rate, full-year 2024 projected comparable currency
neutral EPS (non-GAAP) to full-year 2024 projected reported EPS, or
full-year 2024 projected comparable EPS (non-GAAP) to full-year
2024 projected reported EPS without unreasonable efforts because it
is not possible to predict with a reasonable degree of certainty
the exact timing and exact impact of acquisitions, divestitures and
structural changes throughout 2024; the exact timing and exact
amount of items impacting comparability throughout 2024; and the
exact impact of fluctuations in foreign currency exchange rates
throughout 2024. The unavailable information could have a
significant impact on the company’s full-year 2024 reported
financial results.
Full Year 2024
The company expects to deliver organic revenue (non-GAAP) growth
of 6% to 7%.
For comparable net revenues (non-GAAP), the company expects a 2%
to 3% currency headwind based on the current rates and including
the impact of hedged positions, in addition to a 4% to 5% headwind
from acquisitions, divestitures and structural changes.
The company’s underlying effective tax rate (non-GAAP) is
estimated to be 19.2%. This does not include the impact of ongoing
tax litigation with the IRS, if the company were not to
prevail.
Given the above considerations, the company expects to deliver
comparable currency neutral EPS (non-GAAP) growth of 8% to 10% and
comparable EPS (non-GAAP) growth of 4% to 5%, versus $2.69 in
2023.
Comparable EPS (non-GAAP) percentage growth is expected to
include a 4% to 5% currency headwind based on the current rates and
including the impact of hedged positions, in addition to an
approximate 2% headwind from acquisitions, divestitures and
structural changes.
The company expects to generate free cash flow (non-GAAP) of
approximately $9.2 billion through cash flow from operations of
approximately $11.4 billion, less capital expenditures of
approximately $2.2 billion. This does not include any potential
payments related to ongoing tax litigation with the IRS.
First Quarter 2024
Considerations
Comparable net revenues (non-GAAP) are expected to include an
approximate 4% currency headwind based on the current rates and
including the impact of hedged positions, in addition to an
approximate 2% headwind from acquisitions, divestitures and
structural changes.
Comparable EPS (non-GAAP) percentage growth is expected to
include an approximate 8% currency headwind based on the current
rates and including the impact of hedged positions, in addition to
an approximate 1% headwind from acquisitions, divestitures and
structural changes.
The first quarter has one less day compared to the first quarter
of 2023.
Notes
- All references to growth rate percentages and share compare the
results of the period to those of the prior year comparable period,
unless otherwise noted.
- All references to volume and volume percentage changes indicate
unit case volume, unless otherwise noted. All volume percentage
changes are computed based on average daily sales in the fourth
quarter, unless otherwise noted, and are computed on a reported
basis for the full year. “Unit case” means a unit of measurement
equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce
servings), with the exception of unit case equivalents for Costa
non-ready-to-drink beverage products which are primarily measured
in number of transactions. “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 or consumers.
- “Concentrate sales” represents the amount of concentrates,
syrups, beverage bases, source waters and powders/minerals (in all
instances expressed in unit case equivalents) sold by, or used in
finished beverages sold by, the company to its bottling partners or
other customers. For Costa non-ready-to-drink beverage products,
“concentrate sales” represents the amount of beverages, primarily
measured in number of transactions (in all instances expressed in
unit case equivalents) sold by the company to customers or
consumers. In the reconciliation of reported net revenues,
“concentrate sales” represents the percent change in net revenues
attributable to the increase (decrease) in concentrate sales volume
for the geographic operating segments and the Global Ventures
operating segment after considering the impact of structural
changes, if any. For the Bottling Investments operating segment for
the fourth quarter, this represents the percent change in net
revenues attributable to the increase (decrease) in unit case
volume computed based on total sales (rather than average daily
sales) in each of the corresponding periods after considering the
impact of structural changes, if any. For the Bottling Investments
operating segment for the full year, this represents the percent
change in net revenues attributable to the increase (decrease) in
unit case volume after considering the impact of structural
changes, if any. The Bottling Investments operating segment
reflects unit case volume growth for consolidated bottlers
only.
- “Price/mix” represents the change in net operating revenues
caused by factors such as price changes, the mix of products and
packages sold, and the mix of channels and geographic territories
where the sales occurred.
- First quarter 2023 financial results were impacted by one less
day as compared to first quarter 2022, and fourth quarter 2023
financial results were impacted by one additional day as compared
to fourth quarter 2022. Unit case volume results for the quarters
are not impacted by the variances in days due to the average daily
sales computation referenced above.
Conference Call
The company is hosting a conference call with investors and
analysts to discuss fourth quarter and full-year 2023 operating
results today, Feb. 13, 2024, at 8:30 a.m. ET. The company invites
participants to listen to a live webcast of the conference call on
the company’s website, http://www.coca-colacompany.com, in the
“Investors” section. An audio replay in downloadable digital format
and a transcript of the call will be available on the website
within 24 hours following the call. Further, the “Investors”
section of the website includes certain supplemental information
and a reconciliation of non-GAAP financial measures to the
company’s results as reported under GAAP, which may be used during
the call when discussing financial results.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240213191250/en/
Investors and Analysts: Robin
Halpern, koinvestorrelations@coca-cola.com Media: Scott Leith, sleith@coca-cola.com
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