Today, our Company reports solid performance, with quarterly results exceeding all long-term growth targets. Our momentum advances from a position of strength as we continue to gain global volume and value share in both core sparkling and still beverages. The acquisition of Coca-Cola Enterprises' North American business closed early in Q4 in line with our commitment, and integration efforts are well on track.
Strong worldwide volume growth of 5% in the quarter, ahead of our long-term target, with balanced quality growth around the world, including 2% North America growth and 6% international growth. Year-to-date worldwide volume grew 5%. Volume growth was led by brand
Coca-Cola, up 4% in the quarter and year-to-date.
Third quarter reported EPS was $0.88, up 9%, with comparable EPS up 12% to $0.92, 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 8% in Q3, ahead of our long-term target.
Reported operating income increased 9% in the quarter and 13% year-to-date. Comparable currency neutral operating income grew 14% in Q3, ahead of our long-term target.
Global volume and value share gains continued in both core sparkling and still beverages. Grew total nonalcoholic ready-to-drink (NARTD) beverage value share globally while maintaining volume share.
Strong cash flow continued, with year-to-date cash from operations up 15% to $7.2 billion.
Integration efforts of
Coca-ColaEnterprises' (CCE) North American business remain well on track, with expected synergies of at least $350 million per year, phased in over the next 4 years.
ATLANTA, October 19, 2010 -- The
International volume increased 6% in the quarter. Eurasia and Africa volume grew 12% in the quarter, with broad-based growth across all business units and beverage categories, including 30% volume growth in Russia and double-digit growth in Turkey, Southern Eurasia and East and Central Africa. India achieved its 17th consecutive quarter of volume growth despite record rainfall in the quarter and cycling very strong 37% growth in the prior year quarter. Pacific volume grew 11% in the quarter, cycling 6% growth in the prior year quarter. These results were supported by 12% growth in China, as well as growth of 11% in Japan, 19% in the Philippines and 13% in Korea. Latin America volume grew 4% in the quarter, cycling 7% growth in the prior year quarter, with Brazil volume up 13%. Mexico posted even volume results despite adverse weather and cycling 9% growth in the prior year quarter. Europe volume was slightly positive in the quarter, rounding to even, a sequential improvement supported by mid single-digit volume growth in France and the Nordic Region as well as volume growth in Great Britain, Germany and Northern Central Europe. These positive results were partially offset by continuing macro-economic pressures in South and Eastern Europe and the Adriatic Region.
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 value share and maintained volume share in total NARTD beverages driven by volume and value share gains across core sparkling beverages, still beverages, juices and juice drinks, sports drinks and packaged water. We also gained volume share in energy drinks. Internationally, we gained volume and value share in total NARTD beverages.
Incremental volume was evenly balanced between sparkling and still beverages. Total sparkling beverage volume increased 3% in the quarter with international sparkling volume increasing 4%. Brand Coca-Cola grew 4% in the quarter and year-to-date, with growth across many markets in the quarter, including Russia (+34%), Brazil (+14%), the Philippines (+12%), Japan (+9%), South Africa (+5%), France (+3%) and Germany (+2%). Total still beverage volume increased 11% in the quarter, led by continued growth in sports drinks, juices and juice drinks, teas and water brands. Still beverage volume increased 13% internationally.
Muhtar Kent, Chairman and Chief Executive Officer of The
"We are now intensely focused on driving a fast and seamless integration effort in our North America operations. This evolution of our franchise system is an important milestone in realizing our 2020 Vision, strengthening our commitment to best serve our customers and consumers and facilitating our ability to achieve sustainable and profitable growth in this, our flagship market.
"We see a world where today's consumers are valuing companies and brands as much on the quality of their ideals as the quality of the products and services they provide. Ideals like community, fun, happiness and the hope for a better tomorrow. This is what inspires our Company and our system and the long-term value we can create for our consumers and shareowners."
- Third quarter and year-to-date 2010 reported net revenues increased 5%. Third quarter reported net revenue growth includes a negative 3% impact due to the deconsolidation of certain entities required by a change in accounting guidance. Comparable currency neutral net revenues increased 8% for the quarter, reflecting a 7% increase in concentrate sales. Price/mix for the quarter was up 1%, with our positive revenue management strategies offsetting the expected impact of geographic mix. Year-to-date comparable currency neutral net revenues increased 5%, in line with our long-term growth target.
- Reported operating income increased 9% in the quarter and 13% year-to-date. Third quarter 2010 comparable currency neutral operating income increased 14%. This was driven by strong top-line performance as well as a continued focus on cost management and the leveraging of productivity initiatives. Currency had minimal impact on operating income in the quarter. Year-to-date comparable currency neutral operating income increased 11%.
- Year-to-date cash from operations increased 15%.
- There were no share repurchases during the first three quarters of 2010 due to the CCE transaction, which was finalized after the close of the third quarter. However, we expect to repurchase approximately $2 billion in shares by the end of 2010.
- Productivity initiatives are well on plan and we remain 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 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 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 third 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.
- All references to operating expense leverage indicate currency neutral operating expense leverage. This is calculated by subtracting comparable currency neutral gross profit growth from comparable currency neutral operating income growth.
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