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Coca-Cola reports second quarter 2024 results & raises full-year guidance
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Saturday, 27 July, 2024, 08 : 00 AM [IST]
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Atlanta, USA
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The Coca-Cola Company reported second quarter 2024 results that demonstrate continued momentum in an industry with many growth opportunities. James Quincey, chairman and CEO of The Coca-Cola Company, said, “We are encouraged with our second quarter results, which delivered solid topline and operating income growth in an ever-changing landscape. Together with our bottling partners, we continue to execute our highly effective all-weather strategy, and we are confident in our ability to deliver on our raised 2024 guidance and longer-term objectives.”
Quarterly Performance
Revenues: Net revenues grew 3% to $12.4 billion, and organic revenues (non-GAAP) grew 15%. Revenue performance included 9% growth in price/mix and 6% growth in concentrate sales. Concentrate sales were 4 points ahead of unit case volume, primarily due to the timing of concentrate shipments.
Operating margin: Operating margin, which includes items impacting comparability, was 21.3% versus 20.1% in the prior year, while comparable operating margin (non-GAAP) was 32.8% versus 31.6% in the prior year. Operating margin expansion was primarily driven by strong business performance and the impact of refranchising bottling operations, partially offset by currency headwinds and an increase in marketing investments.
Earnings per share: EPS declined 5% to $0.56, while comparable EPS (non-GAAP) grew 7% to $0.84. EPS performance included the impact of an 11-point currency headwind, while comparable EPS (non-GAAP) performance included the impact of a 10-point currency headwind.
Market share: The company gained value share in total non-alcoholic ready-to-drink (NARTD) beverages.
Cash flow: Cash flow from operations was $4.1 billion, a decrease of $516 million versus the prior year, largely due to higher tax payments and cycling working capital benefits from the prior year. Free cash flow (non-GAAP) was $3.3 billion, a decrease of $693 million versus the prior year.
Utilising enhanced marketing capabilities to ‘Celebrate Everyday Greatness’: The company has a 96-year relationship with the Olympic Movement and is using its transformed marketing approach to connect with fans around the world in advance of the Olympic and Paralympic Games. The ‘Celebrate Everyday Greatness’ campaign focuses on five key brands and leverages a global toolkit to tailor marketing locally. In France, the Olympic flame has been celebrated through digital and live experiences during the Olympic Torch Relay. Consumers engaged with AI-powered digital artwork, creating personalized avatars to virtually accompany torchbearers.
The company connected with consumers through music, offering in-person concerts in six cities along the relay route and so far, more than 750,000 beverage samples have been distributed via recyclable mini cans and reusable cups. Millions of fans have also tuned in to the concerts via live streaming, all powered by Coke Studio. To share the magic of Paris 2024 with other regions, the company collaborated with local artists to introduce new Trademark Coca-Cola ‘hug cans’ to celebrate the unity of fans and athletes. By combining two hug cans, consumers unlock prizes and experiences and can connect with others through social media. In the latest evolution of the ‘Pause is Power’ campaign, Powerade launched a globally integrated campaign in 30 markets that aspires to support mental and physical well-being including social and experiential activations featuring Team Powerade athletes. The company also introduced a new flavour specially designed for the Olympic and Paralympic Games, Powerade Gold, in 20 markets. The campaigns contributed to Powerade growing volume 6% during the quarter.
Delivering value through elevated revenue growth management (RGM) capabilities: The company has made significant progress in optimising its price-pack architecture, leveraging its RGM advantage to create value for customers and consumers. In some developed markets where consumers are seeking more affordable offerings, the company is partnering with customers through affordability activations to drive basket incidence and increase retail sales. In India, the company is leveraging packaging innovation by utilising an ultra-lightweight affordable bottle with an extended shelf life, allowing beverages to be transported farther to reach more consumers and reducing costs. The package is now available in over half of India’s commercial beverage outlets and has added more than 400 million transactions in the first half of the year. In Latin America, the company is piloting and scaling its use of AI to quickly react to market changes, optimize pricing decisions and adjust strategies to meet local business objectives, driving revenue and volume growth across the system.
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