The Coca-Cola Company Reports First Quarter 2017 Results
Source The Coca-Cola Company
ATLANTA--(BUSINESS WIRE)--The Coca-Cola Company today reported first quarter 2017 operating results. Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company, said, "The first quarter performance was in line with our plan, and we remain on track to deliver our underlying revenue and profit targets for the full year. As anticipated, revenues in the quarter were adversely impacted by two fewer days and the shift of the Easter holiday. Most importantly, we continue to execute against the long-term strategic transformation plan for the Company – a plan that I am confident will deliver even greater shareowner and stakeholder value in the years to come."
"Next week I will proudly hand over the CEO reins to James Quincey with full confidence that he will complete the Company's transformation and lead our aggressive growth agenda. His vision of accelerating The Coca-Cola Company's evolution into a total beverage business with a focus on driving sustainable growth across a broad portfolio is exciting for all stakeholders, and he has my full support," Kent continued.
President and Chief Operating Officer James Quincey said, "We are rapidly evolving our growth model to make changes that will result in an even more consumer-centric portfolio that meets people's changing tastes and preferences. Importantly, these portfolio changes will help our consumers moderate the amount of added sugar they consume. In addition, as we approach the end of our refranchising and implement our new, more agile operating model, we are expanding our productivity program. Our revamped portfolio, a stronger global bottling system, and a leaner enterprise structure will allow us to capture an increasing share of the vibrant value growth available in the beverage industry and to deliver value for our shareowners. It will be an honor and a privilege to lead the organization as CEO, and I look forward to working with our people around the world to accelerate our growth."
Highlights
Quarterly Performance
- Net revenues declined 11% to $9.1 billion, impacted by a headwind from acquisitions, divestitures, and structural items of 10% related to the ongoing refranchising of bottling territories and a foreign currency exchange headwind of 1%. Organic revenues (non-GAAP) were even – the result of 3% price/mix growth and a 3% decline in concentrate sales. The two fewer days in the quarter accounted for an approximate 2 point drag on organic revenue (non-GAAP) growth. The timing of concentrate shipments and the shift of the Easter holiday into the second quarter also put negative pressure on the results. Core business organic revenues (non-GAAP) were even, and core business price/mix growth was 3%.
- Our value share growth outpaced our volume share in total nonalcoholic ready-to-drink ("NARTD") beverages, reflecting our shifted focus from driving volume growth to driving revenue growth. We also gained value share in sparkling soft drinks and juice, dairy, and plant-based beverages.
- Total unit case volume was even, which included less than a half point of growth from acquired brands. Unit case volume performance was significantly impacted by the macroeconomic conditions in select Latin American markets along with the shift of the Easter holiday into the second quarter. Brazil and Venezuela accounted for over a 1 point drag on consolidated unit case volume growth. From a market segmentation perspective, our developed markets continued to outperform the consolidated results with 1% unit case volume growth.
- Our operating margin expanded by more than 90 basis points and our comparable currency neutral operating margin (non-GAAP) expanded over 220 basis points. The reported operating margin includes items impacting comparability and the impact of changes in foreign currency exchange rates. Improvements in operating margin were driven by structural impacts, our ongoing pricing initiatives, savings generated through our productivity program, and geographic mix.
- Cash from operations was $788 million, up 30% from the prior year. This increase was driven by the cycling of a pension plan contribution in the prior year, partially offset by the impact of two fewer days in the quarter and our ongoing refranchising of North American bottling territories.
