The growth in organic revenue for Coca-Cola surpasses forecasts.
Following a fiscal year 2019 when organic revenue growth across the board exceeded projections, Atlanta-based Coca-Cola Co. has released an outlook for 2020 that falls within the parameters of its long-term growth plan.
According to James Robert B. Quincey, chairman and chief executive officer, organic revenue increased by 6% in 2019—two percentage points higher than the initial estimate and at the top end of the long-term growth model—during a Jan. 30 earnings call. North America saw a 3% increase in organic revenue, Latin America saw a 13% increase, while Europe, Middle East, and Africa (EMEA) and Asia saw 5% growth.
“Despite greater-than-anticipated currency headwinds, we met our financial obligations for the year,” Mr. Quincey stated. “We’re just getting started, but we see the right strategies taking hold, supported by the right partners, underpinned by a growing and vibrant industry.”
In the fiscal year that concluded on December 31, 2019, Coca-Cola’s net income attributable to shareholders was $8,920 million, or $2.09 per share. This was a 39% increase from $6,434 million, or $1.51 per share, the year before. Net operating sales increased from $34,300 million to $37,266 million, a 9% increase. On January 30, Coca-Cola’s stock price on the New York Stock Exchange closed at $58.86 per share, down from $57.01 per share on January 29.
Coca-Cola’s financial2020 expects about 5% growth in organic revenues and e.p.s. of $2.25, a 7% increase from 2019.Based on the progress we’ve been making and the plans we have in place, we expect to achieve results well within our long-term growth targets for revenue, profit and earnings per share for 2020,” said John Murphy, executive vice-president and chief financial officer. “Importantly, we expect to deliver meaningful U.S. dollar e.p.s. growth.”
According to Mr. Quincey, the operating income and revenue guidance is in the middle of the long-term growth range.He stated, “At this time, we’re still projecting a mild currency headwind, which then gives us the 7% (increase) on e.p.s.”
Based in New York According to global investment bank and financial services giant Morgan Stanley, Coca-Cola Co. has a “clearly superior” long-term growth prognosis compared to its counterparts in the consumer product goods industry because of the company’s strong category growth, competitive pricing strength, and advantageous strategy adjustments. As it did in 2019, Morgan Stanley predicts that the initial fiscal-year 2020 organic top-line guidance would ultimately prove cautious due to the sustained momentum in sparkling drinks, robust pricing power, and accelerated innovation. Coca-Cola received a price objective of $65 per share from Morgan Stanley for January 2021.
Comparable currency-neutral operating income in 2019 grew 13%, ahead of the initial goal of 10% to 11%. Unit case volume grew 2% for the year, which included 2% growth for sparkling soft drinks, 3% for water, enhanced water and sports drinks, and 1% for tea and coffee. Unit case volume was even for juice, dairy and plant-based beverages.
Net operating revenues increased by 2% to $11,915 million from $11,630 million in North America, while operating income improved by 12% to $2,594 million from $2,318 million. Coke Energy just made its US debut after launching in a few overseas regions in 2019. Coca-Cola stated that it will support that launch with its “full marketing muscle.”
“We’re definitely putting a lot of effort into Coke Energy in North America—kind of a version 2.0—having completed a 1.0 in several international markets,” Mr. Quincey stated. One of the things we discovered while entering the North American market was that we needed to make the product’s flavor profile more akin to Coke—less tart and more like Coke. We believe that will function nicely.
for the North American market, and certain round-one markets will see the implementation of that formula.Mr. Quincey discussed Sweden’s recycling initiatives and the coronavirus, which started in China, on a global scale.
On January 30, the World Health Organization announced that 170 deaths were attributed to the coronavirus, which was initially identified in Wuhan, China. The coronavirus, according to Mr. Quincey, might behave differently from SARS (severe acute respiratory syndrome), which was discovered in 2003 and initially afflicted people in China.
He stated, “It’s important to remember that the Chinese economy is significantly larger now than it was in 2003 and that it may grow even more interconnected.” “China makes up around 10% of our total volume worldwide, however less on a profit and revenue basis.”
He claimed that many factories and offices are shuttered in China. Coca-Cola, according to him, will concentrate on three things: business continuity and recovery, staff safety, and aiding the Chinese government in resolving the crisis.Therefore, Mr. Quincey stated, “it’s way too early to tell what the impact will be in the short term, and I think ultimately, in the long run, it will rebalance.”Coca-Cola Sweden anticipates entering the market first.worldwide to switch all plastic bottles produced there to 100% recyclable polyethylene terephthalate (rPET) plastic.
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“With today’s technology, those recycled PET bottles have a lower carbon footprint than glass or cans, in addition to having a lower carbon footprint than just one-way bottle capitals,” Mr. Quincey stated. “So in fact, the best way to achieve your goal of zero waste and lower carbon footprint—which is where I think the conversation is going to go—is to actually create a circular economy on PET.”
Net income attributable to Coca-Cola shareholders in the fourth quarter of the firm was $2,042 million, or 48c per share on the common stock, increasing 135% from $870 million, or 20c, in the same period the previous year.per share, during the fourth quarter of the prior year. The fourth quarter saw a 16% increase in net operating revenues, from $7,806 million to $9,068 million.