Solid 4% global volume growth
Worldwide share gains advance in both sparkling and still beverages
First Quarter 2013 Highlights
- Solid 4% first quarter global volume growth. Volume growth of 3% for
Coca-ColaAmericas and 5% for Coca-ColaInternational.
- Global sparkling beverage volume grew 3%, led by brand
Coca-Cola, up 3%, and global still beverage volume grew 6% in the first quarter.
- First quarter reported net revenues declined 1%. Excluding the impact of currency and structural changes, net revenues grew 2% despite two fewer selling days in the quarter.
- First quarter reported operating income declined 4% and comparable currency neutral operating income grew 5%, in line with our expectations and reflecting the impact of two fewer selling days in the quarter.
- First quarter reported EPS was $0.39, down 13%, and comparable EPS was $0.46, up 5%, including a currency headwind of approximately 4%.
- The Company announces implementation of a new partnership model in the United States.
ATLANTA, April 16, 2013 – The
"Together, we are working to unlock value, to execute with excellence and to keep winning volume and value share. We proudly serve more than 500 brands through 23 million retail customer outlets each week, providing consumers a wide array of choices in package sizes, sweeteners and beverages – including more than 800 low- and no-calorie options. Our focus each and every day is to refresh the world, inspire moments of optimism and happiness, create value and make a meaningful difference. I am proud of all we are achieving alongside our customers, bottlers and other partners. Even so, we remain constructively discontent as we seek to make the most of the vast growth opportunities we continue to see around the world."
We grew value share in nonalcoholic ready-to-drink (NARTD) beverages for the 23rd consecutive quarter and we maintained global volume share in the quarter. Importantly, value share growth once again outperformed volume share. Further, our immediate consumption (IC) volume grew 3% globally in the first quarter, with sparkling IC volume up 2% and still IC volume up 3%, driven by focused in-store activation efforts and continued cold-drink equipment expansion, building on the 1.3 million units placed in 2012.
Worldwide sparkling beverage volume grew 3% for the quarter. We grew volume and value share in global core sparkling beverages in the quarter, led once again by brand
Worldwide still beverage volume grew 6% in the quarter, with volume growth across most beverage categories, including ready-to-drink tea, juices and juice drinks, packaged water, energy drinks and sports drinks. Excluding the impact of acquired volume, primarily from the Aujan partnership in the Eurasia and Africa Group, still beverage volume grew 4% in the quarter. We grew global volume and value share in still beverages and realized volume and value share gains in juices and juice drinks, ready-to-drink tea, and packaged water.
Ready-to-drink tea volume grew double digits in the quarter, with continued strong performance of key brands such as Gold Peak and Honest Tea in North America, Ayataka green tea in Japan and Fuze Tea, which we expanded across multiple markets worldwide during the quarter. Juices and juice drinks volume grew 9% in the quarter, with growth across all of our geographic operating groups as we continue to introduce a common visual identity across our portfolio of juice brands around the world. Energy drinks volume also grew 9% in the quarter. Packaged water volume grew 1% in the quarter, as we strengthened our focus on innovative and sustainable immediate consumption packaging to grow value in the category.
Our two newest billion-dollar brands, I LOHAS single-serve water and Ayataka premium green tea, both in Japan, grew 22% and 13%, respectively, in the quarter, as we build on our strong history of brand innovation to capture growth opportunities across beverage categories and occasions in this important market. The Company now has 16 billion-dollar brands.
- 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, sports drinks and noncarbonated energy drinks.
- All references to volume and volume percentage changes indicate unit case volume, except for the reference to volume included in the explanation of net revenue growth for North America. All volume percentage changes, unless otherwise noted, 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.
- For both North America and Bottling Investments Group, net revenue growth attributable to volume reflects the increase in "as reported" volume, which is based on as reported sales rather than average daily sales and may include the impact of structural changes. For North America, this volume represents
Coca-ColaRefreshments' unit case sales (which are equivalent to concentrate sales) plus concentrate sales to non-Company-owned bottling operations.
- First quarter 2013 financial results were impacted by two fewer selling days, and fourth quarter 2013 financial results will be impacted by one additional selling day. Unit case volume results for the quarters are not impacted by the variance in selling days due to the average daily sales computation referenced above.
- In January 2012, the Company announced that Beverage Partners Worldwide (BPW), our joint venture with Nestlé in the ready-to-drink tea category, will focus its geographic scope primarily in Europe and Canada. The joint venture was phased out in all other territories by the end of 2012, and the Company's agreement to distribute products in the United States terminated at the end of 2012. We have eliminated the BPW and Nestlé licensed volume and associated concentrate sales for the year ended December 31, 2012 in those countries impacted by these structural changes.
- As previously announced, effective January 1, 2013, the Company transferred our India and South West Asia business unit from the Eurasia and Africa operating segment to the Pacific operating segment. The countries included in our India and South West Asia business unit include Bangladesh, Bhutan, India, the Maldives, Nepal and Sri Lanka. This change in organizational structure did not impact the other geographic operating segments, Bottling Investments or Corporate. The reclassified historical operating segment data reflecting the change in organizational structure was disclosed in a Form 8-K filed on March 21, 2013.
- 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.
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