Volume grew 3% in developing and emerging markets, with China (+12%) and Brazil (+4%) both accelerating sequentially due to strong marketing campaigns centered around holiday programming and the FIFA World Cup™ as well as a systemwide focus on execution. Volume in developed markets was down 1%, impacted by the shift in the Easter holiday from the first quarter last year to the second quarter this year. However, volume increased in certain key developed markets, including Japan (+3%) and Australia (+1%), while volume in North America was even.
Chairman and CEO Muhtar Kent said, “While we are making meaningful progress across our five strategic priorities to restore our momentum, we are firmly committed to further advancing our growth trajectory through 2014 as we are accelerating marketing investments in our brands and focusing relentlessly on marketplace execution in partnership with our bottling partners around the world.”
The full press release, including more facts and figures about first quarter results, can be found by clicking here.
Check back later today for more updates from our quarterly call with investors. In the meantime, you can listen live beginning at 9:30 a.m. ET here.
Following the release of our earnings this morning, our Chairman and CEO Muhtar Kent and CFO Gary Fayard conducted a call with financial analysts. Below are some highlights of what was said. If you missed listening to the webcast discussing our first quarter 2014 earnings, you can listen to a replay at the link below. We’ll also have a transcript of the call available at the same link shortly.
Muhtar Kent on overall results:
“As you know, we started 2014 with a clear objective of restoring the momentum of our global business. Today, I am pleased to report that our growth momentum is improving in line with our expectations.
In the midst of continued headwinds, we achieved:
- Sequentially stronger 2% volume, cycling 4% volume growth in the prior year quarter, despite the shift of the Easter holiday into the second quarter this year;
- Comparable currency neutral net revenue growth of 2% after excluding the impact of structural items;
- Growth of an incremental 100 million unit cases or the equivalent of 27 million incremental servings per day; and,
- Both volume and value share gains in nonalcoholic ready-to-drink beverages, with value share gains ahead of volume share gains.
These topline results underscore our system’s ability to leverage our occasion, brand, price, pack, channel architecture strategy across our portfolio of leading brands. They are also a reflection of our ability to drive performance, improve incidence, and simultaneously enhance price/mix, which increased 2% globally in the quarter. And we increased our marketing investments while decreasing other SG&A costs, consistent with our commitment to identify savings opportunities and to increase support for our brands.”
Gary Fayard, Chief Financial Officer on creating shareowner value:
“As it relates to overall cash management, as we have discussed in the past, we follow disciplined guidelines for how we use our cash to create sustainable shareowner value.
First, we are reinvesting in the business to further strengthen the equity of our brands and to accelerate growth. This includes capital investments in new cooler placements, route-to-market enhancements, brand and packaging innovation, and marketing investments that include not only more marketing but better quality marketing. Importantly, along with our increased investments, our bottling partners are also stepping up their investments, thus further enhancing growth for the overall system.
Second, we continue to reward shareowners by paying a healthy dividend, which is $1.22 per share this year, a 9% increase over last year. It is worth noting that we have increased our dividend every year for more than a half century.
Third, we evaluate opportunities to grow through bolt on acquisitions, strategic partnerships, and value added joint ventures when appropriate. Recent examples include:
- The Keurig Green Mountain partnership which opens up an exciting new packaging format for our brands;
- Investments to further enhance our leading juice portfolio like innocent and Rani; and,
- Investments that allow us to broaden our reach like Zico or Core Power.
And finally, we conduct meaningful regular share repurchases.”
Muhtar Kent on key growth trajectory:
“We are firmly committed to advancing our growth trajectory in 2014. Our strategic priorities are yielding tangible and measurable results, and they are consistent with our long-term goals and our overarching business strategy.
Increased marketing investments and a relentless focus on execution underscore our confidence and our system’s alignment as we seek to execute these strategies, while further strengthening the foundation for profitable and sustainable long-term growth.
Our 2020 Vision calls for well balanced growth. That is, growth in sparkling beverages and in still beverages, across more than 200 markets and in revenues and in margins. And thanks to this balanced growth we see a path that leads to global volume, revenue, and profit growth in line with our long-term targets.
Our focus is unwavering and our execution of our five strategic priorities will enable us to restore momentum for growth to our business.”
Click here to find the MP3 file of the webcast.