Coca-Cola Reports Third Quarter 2023 Results and Raises Full-Year Guidance
Global Unit Case Volume Grew 2%
Net Revenues Grew 8%;
Organic Revenues (Non-GAAP) Grew 11%
Operating Income Grew 6%;
Comparable Currency Neutral Operating Income (Non-GAAP) Grew 13%
Operating Margin Was 27.4% Versus 27.9% in the Prior Year;
Comparable Operating Margin (Non-GAAP) Was 29.7% Versus 29.5% in the Prior Year
EPS Grew 9% to $0.71; Comparable EPS (Non-GAAP) Grew 7% to $0.74
Coca-Cola Reports Third Quarter 2023 Results and Raises Full-Year Guidance
ATLANTA--(BUSINESS WIRE)--October 24, 2023--
The Coca-Cola Company today reported third quarter 2023 results, reflecting continued momentum from the first half of the year. “We delivered an overall solid quarter and are raising our full-year topline and bottom-line guidance in light of our year-to-date performance,” said James Quincey, Chairman and CEO of The Coca-Cola Company. “Our leading portfolio of brands, coupled with an aligned and motivated system, positions us to win in the marketplace today while also laying the groundwork for the long term.”
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Highlights
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Quarterly Performance
---------------------
-- Revenues: Net revenues grew 8% to $12.0 billion, and organic revenues
(non-GAAP) grew 11%. Revenue performance included 9% growth in price/mix
and 2% growth in concentrate sales. Concentrate sales were in line with
unit case volume.
-- Operating margin: Operating margin was 27.4% versus 27.9% in the prior
year, while comparable operating margin (non-GAAP) was 29.7% versus 29.5%
in the prior year. Operating margin decline was primarily driven by items
impacting comparability and currency headwinds. Comparable operating
margin (non-GAAP) expansion was primarily driven by strong topline growth
and the impact of refranchising bottling operations, partially offset by
an increase in marketing investments versus the prior year, as well as
currency headwinds.
-- Earnings per share: EPS grew 9% to $0.71, and comparable EPS (non-GAAP)
grew 7% to $0.74. Comparable EPS (non-GAAP) performance included the
impact of a 4-point currency headwind.
-- Market share: The company gained value share in total nonalcoholic
ready-to-drink (NARTD) beverages.
-- Cash flow: Cash flow from operations was $8.9 billion year-to-date, an
increase of $861 million versus the prior year, driven by strong business
performance and working capital initiatives, partially offset by the
transition tax payment made during the second quarter. Free cash flow
(non-GAAP) was $7.9 billion year-to-date, an increase of $636 million
versus the prior year.
Company Updates
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-- Leveraging consumer passion points on a global stage: Around the world,
the company continues to link consumption occasions with consumer passion
points to build deeper brand connections. For the FIFA Women's World Cup
2023(TM), the biggest female sporting event in history, the company
activated a system-wide campaign in Australia and New Zealand that
focused equally on the business, society and people. The company used the
reach and relevance of its brands, including Trademark Coca-Cola(R) and
Powerade(R), to connect to the global soccer phenomenon by engaging with
fans and players through digital storytelling and on-the-ground brand
experiences. The campaign contributed to Asia Pacific gaining both value
and volume share for the quarter. The campaign was also activated on a
global scale in markets where soccer is a loved sport, such as in Latin
America, where fans received real-time messages while watching matches.
During the quarter, the company announced a long-term partnership with
the U.S. Soccer Federation, showing the company's commitment to continue
using its brands to support the sport.
-- Scaling packaging innovations to continue progress toward a circular
economy: The company, in close alignment with its global partners,
continues to pursue its World Without Waste packaging goals by designing
and increasing availability of packages that include a combination of
recycled materials or reusable containers. During the quarter, Coca-Cola
HBC AG unveiled a new, state-of-the-art line for refillable glass bottles
in Austria, boosting refillable packaging capacity. In the United States,
the system expanded the availability of Trademark Coca-Cola 20-ounce
bottles made from 100% recycled PET plastic material (rPET), excluding
cap and label. With this expansion, these bottles are now available in 11
major U.S. markets. Following authorization for the use of rPET in
several markets over the past year, including India in February, at least
one of the company's beverages is now available in 100% rPET, excluding
cap and label, in India, Indonesia, Thailand and Türkiye.
-- Building a stronger system while strengthening the balance sheet: The
company continues to evaluate its fit-for-purpose balance sheet and the
needs required to support its growth agenda. Recently, the company
entered into a letter of intent to refranchise company-owned bottling
operations in the Philippines to Coca-Cola Europacific Partners (CCEP)
and Aboitiz Equity Ventures (AEV). The combination of CCEP, a strong and
experienced bottler, and AEV, a leading Philippines conglomerate with
more than 100 years of experience in the market, provides a great
opportunity to unlock long-term system growth. The remaining assets in
the Bottling Investments segment include operations in India, Africa and
several smaller locations primarily in Asia Pacific. The company remains
committed to successfully listing Coca-Cola Beverages Africa as a public
company via an initial public offering once market conditions become more
favorable.
Operating Review -- Three Months Ended September 29, 2023
---------------------------------------------------------
Revenues and Volume
Acquisitions,
Divestitures
and Reported
Percent Concentrate Currency Structural Net Organic Unit Case
Change Sales(1) Price/Mix Impact Changes, Net Revenues Revenues(2) Volume(3)
------------- ----------- --------- -------- ------------- -------- ----------- ---------
Consolidated 2 9 (2) (1) 8 11 2
------------- ----------- --------- -------- ------------- -------- ----------- ---------
Europe,
Middle East
& Africa 2 19 (12) 0 10 21 (1)
Latin America 5 15 4 0 24 20 7
North America 1 5 0 0 6 6 0
Asia Pacific 1 1 (4) 0 (2) 2 0
Global
Ventures(4) 3 6 6 0 15 9 5
Bottling
Investments 10 9 (5) (9) 4 18 2
------------- ----------- --------- -------- ------------- -------- ----------- ---------
Operating Income and EPS
Comparable
Currency
Reported Items Neutral
Operating Impacting Currency Operating
Percent Change Income Comparability Impact Income(2)
--------------- -------------- -------------- -------------- -------------
Consolidated 6 (3) (5) 13
--------------- -------------- -------------- -------------- -------------
Europe, Middle
East & Africa 9 1 (15) 22
Latin America 38 3 5 31
North America 18 8 0 10
Asia Pacific (17) 7 (4) (19)
Global Ventures 21 (2) 5 18
Bottling
Investments 185 85 (9) 109
--------------- -------------- -------------- -------------- -------------
Comparable
Items Currency
Impacting Currency Neutral
Percent Change Reported EPS Comparability Impact EPS(2)
--------------- -------------- -------------- -------------- -------------
Consolidated 9 3 (4) 11
--------------- -------------- -------------- -------------- -------------
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.