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Coca-Cola Reports Fourth Quarter and Full-Year 2021 Results :: The Coca-Cola Company (KO)

Global unit case volume grew 9% in the quarter and 8% in the full year

net income grew 10% in the quarter and 17% in the full year; organic revenue (non-gaap) grew 9% in the quarter and 16% in the full year

Reading: Coca-cola 2021

Operating income decreased 28% for the quarter and increased 15% for the full year; Currency-neutral (non-GAAP) comparable operating income decreased 12% in the quarter and increased 12% for the full year

Fourth quarter earnings per share increased 65% to $0.56, and comparable earnings per share (non-gaap) decreased 5% to $0.45; full-year earnings per share increased 26% to $2.25, and comparable earnings per share (non-gaap) grew 19% to $2.32

cash flow from operations was $12.6 billion for the full year, up 28%; Full-year free cash flow (non-GAAP) was $11.3 billion, up 30%

the company provides financial perspectives for 2022

atlanta-(business wire)- the coca-cola company today reported fourth quarter and full year 2021 results, including another quarter of sequential improvement in volume trends compared to 2019. “in 2021, our system demonstrated resilience and flexibility by successfully navigating through another year of uncertainty,” said james quincey, president and chief executive officer of the coca-cola company. “we focused on our key strategies and came out stronger. we are confident that progress in Our strategic transformation has made us a more agile total beverage company, and while the environment remains dynamic, we will build on the momentum of 2021 to drive top-line growth and maximize returns.”

highlights

full quarter/year performance

  • Revenue: For the quarter, net revenue increased 10% to $9.5 billion, resulting in net revenue before 2019, and organic revenue (non-GAAP) increased by 9%. revenue performance included a 10% growth in price/mix and a 1% decline in concentrate sales. the quarter included six fewer days, resulting in a roughly 6 point drag on revenue growth. The quarter was also affected by the timing of concentrate shipments. For the full year, net income grew 17% to $38.7 billion, and organic (non-GAAP) revenue grew 16%. this performance was driven by 9% growth in concentrate sales and 6% growth in price/mix.
  • Margin: For the quarter, operating margin, which includes items that affect comparability, was 17.7% versus 27.2% a year ago, while the Comparable operating margin (non-GAAP) was 22.1% versus 27.3% a year ago. for the full year, operating margin, which includes items that affect comparability, was 26.7% vs. 27.3% a year ago, while comparable (non-gaap) operating margin was 28.7% vs. to 29.6% from the previous year. For both the quarter and the full year, the operating margin compression was primarily due to a significant increase in marketing investments compared to the prior year. in addition, fourth quarter operating margin was affected by gross revenue pressure from six days down in the quarter along with the timing of concentrate shipments.
  • earnings per share: for the quarter, earnings per share grew 65% to $0.56, and comparable earnings per share (non-gaap) decreased 5% to $0 ,Four. Five. For the full year, EPS grew 26% to $2.25, and comparable EPS (non-GAAP) grew 19% to $2.32. both 4th quarter and full year comparable eps (non-gaap) performance included the impact of a 2-point currency tailwind.
  • Market Share: For both the quarter and the full year, the company gained value share in total non-alcoholic ready-to-drink beverages (nartd), which includes earnings of participation both in -home channels and away from home. the company’s value share of total nartd beverages, and both at-home and away-from-home channels, remains ahead of 2019.
  • Cash Flow: Cash flow from operations for the year was $12.6 billion, an increase of $2.8 billion from the prior year, driven by strong business performance and working capital initiatives. Full-year free cash flow (non-GAAP) was $11.3 billion, an increase of $2.6 billion from the prior year, driven by strong cash flow from operations.

company updates

  • Business Environment: Compared to 2019, global unit case volume improved sequentially each quarter in 2021, resulting in higher full-year unit case volume than 2019. This performance was driven by , the asynchronous recovery in many markets, and the company’s ability to better adapt to successive waves of the pandemic. Q4 marked the first quarter in which out-of-home volume surpassed 2019, while strength in in-home channels also continued. Although reopenings continue to vary around the world, the company is combining the power of scale with the depth of knowledge required to win locally and continues to invest specifically in advance of the recovery.
  • strengthening a consumer-focused portfolio through strategic acquisitions: during the fourth quarter, the company acquired the remaining 85% equity stake in bodyarmor, a line of beverages of hydration and athletic performance that has significant long-term growth potential. Since gaining access to the company’s bottling system three years ago, BodyArmor has driven continuous innovation in hydration products. For the full year of 2021, BodyArmor was the #2 sports drink in the category across measured retail channels in the US, with retail value growth of approximately 50%. bodyarmor will continue to be distributed in the us. uu. of the company. bottling system and will be managed as a separate business within the company’s north america operating unit.
  • transforming and modernizing marketing through a global marketing network partner: after a comprehensive review in 2021, the company named wpp as its global marketing network partner. overall marketing. wpp will play a key role in executing a new marketing model to drive the long-term growth of the company’s global portfolio of brands. the new integrated agency model is consumer-centric and harnesses the power of big, bold ideas and creativity within experiences. the company intends to create end-to-end experiences that are based on data-rich consumer insights, optimized in real time and deployed at scale. Backed by a common data and technology platform that connects marketing teams across the company, wpp will work with a strategic list of approved agencies to provide access to the best creative minds and ideas.
  • further embed sustainability into the business, including a new packaging goal: the company’s environmental, social and governance (esg) goals are embedded in operations and serve as key drivers of growth. To complement and support its goals for a world without waste, the company announced a new global target to achieve 25% reusable packaging by 2030. reusable packaging, including refillable dispenser/fountain containers along with refillable plastic and glass bottles or returnable, support the company’s strategy. collection targets and helps reduce the company’s carbon footprint, while aligning with consumer preferences for sustainable packaging options. The increase in reusable packaging and dispensing options responds to both consumer affordability and sustainability preferences, making it one of several important business levers to help achieve the company’s waste-free world and contribute to the circular economy.

    operational review three months ended December 31, 2021

    revenue and volume

    percentage change

    concentrated sales1

    price/mix

    currency impact

    acquisitions, divestments and structural changes, net

    reported net income

    organic income2

    box volume unit3

    consolidated

    (1)

    10

    (1)

    1

    10

    9

    9

    europe, middle east & Africa

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    4

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    13

    (2)

    0

    15

    17

    11

    latin america

    (10)

    11

    1

    0

    2

    2

    5

    north america

    See also: What Does /s/ Mean in a Signature and Why is It Used?

    4

    9

    0

    3

    17

    14

    8

    asia pacific

    See also: What Does /s/ Mean in a Signature and Why is It Used?

    4

    (8)

    (3)

    0

    (6)

    (3)

    11

    global companies4

    10

    15

    2

    0

    27

    25

    19

    investments in bottling

    6

    (3)

    (1)

    0

    2

    3

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    13

    operating income and eps

    percentage change

    reported operating income

    elements that affect comparability

    currency impact

    neutral comparable currency2

    consolidated

    (28)

    (17)

    1

    (12)

    europe, middle east & Africa

    1

    (7)

    0

    8

    latin america

    0

    (1)

    See also: What Does /s/ Mean in a Signature and Why is It Used?

    4

    (3)

    north america

    (17)

    (16)

    0

    (1)

    asia pacific

    (31)

    0

    (3)

    (29)

    global companies

    —5

    investments in bottling

    (11)

    (4)

    5

    (12)

    percentage change

    eps reported

    elements that affect comparability

    currency impact

    neutral comparable currency2

    consolidated eps

    65

    70

    2

    (6)

    note: certain rows may not be added due to rounding.

    1

    For bottling investments, this represents the percentage change in net income attributable to increase (decrease) in unit case volume calculated based on total sales (rather than average daily sales) at each of the the corresponding periods after considering the impact of the structure changes, if any.

    2

    Organic revenue, comparable currency-neutral operating income and comparable currency-neutral earnings per share are non-GAAP financial measures. See Reconciliation of GAAP and Non-GAAP Financial Measures section.

    3

    unit case volume is calculated based on average daily sales.

    See also: What Does /s/ Mean in a Signature and Why is It Used?

    4

    Due to the combination of multiple business models in the operating segment of global companies, concentrate sales composition and price/mix may fluctuate significantly from time to time. therefore, the company focuses more on revenue growth as the best indicator of the underlying performance of the global companies operating segment.

    5

    Reported operating income for global companies for the three months ended December 31, 2021 was $78 million. The reported operating loss for global companies for the three months ended December 31, 2020 was $9 million. therefore, the percentage change is not significant.

    operational review year ended December 31, 2021

    revenue and volume

    percentage change

    concentrated sales1

    price/mix

    currency impact

    acquisitions, divestments and structural changes, net

    reported net income

    organic income2

    volume per unit box

    consolidated

    9

    6

    1

    0

    17

    16

    8

    europe, middle east & Africa

    12

    6

    1

    0

    19

    18

    9

    latin america

    6

    12

    0

    0

    18

    19

    6

    north america

    7

    7

    0

    0

    15

    14

    5

    asia pacific

    11

    (2)

    3

    0

    12

    9

    10

    global companies3

    20

    See also: Should You Buy The Dip? – Forbes Advisor

    13

    7

    0

    41

    34

    17

    investments in bottling

    11

    2

    2

    0

    15

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    13

    11

    operating income and eps

    percentage change

    reported operating income

    elements that affect comparability

    currency impact

    neutral comparable currency2

    consolidated

    15

    1

    2

    12

    europe, middle east & Africa

    See also: Should You Buy The Dip? – Forbes Advisor

    13

    (2)

    1

    See also: Should You Buy The Dip? – Forbes Advisor

    13

    latin america

    20

    1

    1

    18

    north america

    35

    16

    0

    19

    asia pacific

    9

    1

    See also: What Does /s/ Mean in a Signature and Why is It Used?

    4

    See also: What Does /s/ Mean in a Signature and Why is It Used?

    4

    global companies

    —4

    investments in bottling

    53

    11

    (2)

    43

    percentage change

    eps reported

    elements that affect comparability

    currency impact

    neutral comparable currency2

    consolidated eps

    26

    7

    2

    17

    note: certain rows may not be added due to rounding.

    1

    For bottling investments, this represents the percentage change in net income attributable to the increase (decrease) in unit case volume after accounting for the impact of structural changes, if any.

    2

    Organic revenue, comparable currency-neutral operating income and comparable currency-neutral earnings per share are non-GAAP financial measures. See Reconciliation of GAAP and Non-GAAP Financial Measures section.

    3

    Due to the combination of multiple business models in the operating segment of global companies, concentrate sales composition and price/mix may fluctuate significantly from time to time. therefore, the company focuses more on revenue growth as the best indicator of the underlying performance of the global companies operating segment.

    See also: What Does /s/ Mean in a Signature and Why is It Used?

    4

    Reported operating income for global companies for the year ended December 31, 2021 was $293 million. The reported operating loss for global companies for the year ended December 31, 2020 was $123 million. therefore, the percentage change is not significant.

    In addition to the data in the tables above, operating results included the following:

    consolidated

    • unit case volume grew 9% for the quarter and 8% for the year, resulting in volume ahead of 2019. volume growth was strong in most markets. Volume performance was driven by market inversions, the ongoing recovery in markets where coronavirus-related uncertainty was easing, and the cycle benefit from the impact of the pandemic in the prior year. For both the quarter and the year, growth in emerging and developing markets was led by China, India, and Russia, while growth in developed markets was led by the United States, Mexico, and the United Kingdom.

    category performance was as follows:

    • carbonated soft drinks grew 8% in the quarter and 7% in the year, resulting in volume before 2019, driven by strong performance in all geographic operating segments. Coca-Cola trademark grew 7% in both the quarter and the year, resulting in volume before 2019, led by Europe, the Middle East & Africa and Asia Pacific. coca-cola® zero sugar grew double digits both in the quarter and in the year. sparkling flavors grew 9% for both the quarter and the year, led by europe, middle east & Africa and Asia Pacific.
    • nutrition, juice, dairy and plant-based beverages grew 11% in the quarter and 12% in the year, resulting in higher volume than 2019 for both the quarter and the year , there was strong growth in all geographic operating segments.
    • hydration, sports, coffee and tea grew 12% in the quarter and 7% in the year. hydration grew 11% in the quarter and 5% in the year, with growth in all geographic operating segments. Sports drinks grew 18% in the quarter and 13% in the year, resulting in volume ahead of 2019, primarily driven by strong growth in bulletproof vests in the US. tea grew 10% in the quarter and 6% in the year, led by growth in japan and the united states. coffee grew 17% in the quarter and 15% in the year, mainly driven by the ongoing reopening of costa® retail stores in the uk.
    • price/mix grew 10% in the quarter and 6% in the year, driven by market pricing actions coupled with a favorable mix of channels and packages due to the cyclical impact of the pandemic in the previous year. price/mix for the quarter further benefited from positive segment mix. for the quarter, concentrate sales were 10 points below unit case volume. this was primarily due to six fewer days in the quarter, resulting in an approximately 6 point impact on concentrate sales, along with the timing of concentrate shipments. for the full year, concentrate sales were 1 point above unit case volume, primarily due to bottlers building inventory to manage short-term supply disruption.
    • Operating income decreased 28% in the quarter and increased 15% in the year, which included items that impacted comparability and currency tailwinds. Currency-neutral (non-gaap) comparable operating income decreased 12% in the quarter, driven by a significant increase in marketing investments compared to the prior year. In addition, fourth quarter operating income was affected by the pressure of gross receipts from six days less in the quarter. Currency-neutral (non-GAAP) comparable operating income increased 12% for the full year, driven by strong organic (non-GAAP) revenue growth in all operating segments, partially offset by a significant increase in revenues. marketing investments compared to the previous year.

    europe, middle east & Africa

    • unit case volume grew 11% in the quarter, a low-single-digit increase compared to 2019, driven by the ongoing recovery in markets where coronavirus-related uncertainty was easing, along with the benefit of recycling the impact of the pandemic. in the previous year. Growth was led by Russia and Spain in Europe, Nigeria in Africa, and Turkey in Eurasia and the Middle East.
    • price/mix grew 13% in the quarter, driven by a favorable mix of channels and packages due to the cyclical impact of the pandemic in the prior year, coupled with a positive geographic mix. for the quarter, concentrate sales were 7 points below unit case volume, primarily due to six fewer days in the quarter.
    • Operating income increased 1% in the quarter, including items that affected comparability. Currency-neutral (non-GAAP) comparable operating income increased 8% in the quarter, primarily driven by strong organic (non-GAAP) revenue growth across all operating units, partially offset by a significant increase in revenues. marketing investments compared to the previous year.
    • During the year, the company gained value share in total nartd beverages, which included share gains in most categories.

    latin america

    • unit case volume grew 5% in the quarter, a mid-single-digit increase compared to 2019. growth was led by mexico, argentina and chile, driven by growth in most of the categories.
    • price/mix grew 11% in the quarter, driven by market pricing actions, a favorable channel and package mix, along with deduction timing. for the quarter, concentrate sales were 15 points below unit case volume, primarily due to six fewer days in the quarter and the timing of concentrate shipments.
    • Operating income was flat for the quarter, which included items that impacted comparability and a 3-point currency tailwind. Comparable currency-neutral (non-GAAP) operating income decreased 3% in the quarter, driven by an increase in marketing investments compared to the prior year.
    • During the year, the company gained value share in total NARTD beverages, led by share gains in Mexico, Argentina, Brazil and Colombia.

    north america

    • unit case volume grew 8% in the quarter, resulting in a flat performance compared to 2019. growth was driven by recovery in the sources business as uncertainty eased related to the coronavirus. soft drinks and sports drinks led growth during the quarter.
    • price/mix grew 9% in the quarter, driven primarily by market pricing actions, recovery in out-of-home source and channel business, and strong growth in premium offerings. for the quarter, concentrate sales were 4 points below unit case volume, primarily due to six fewer days in the quarter.
    • Operating income decreased 17% in the quarter, including items that affected comparability. Comparable currency-neutral (non-GAAP) operating income decreased 1% in the quarter, driven by a significant increase in marketing investments compared to the prior year.
    • The company gained value share in total nartd beverages during the year, driven by recovery in out-of-home channels coupled with strong performance in in-home channels for sparkling flavors, sports drinks and dairy.

    Asia Pacific

    • unit case volume grew 11% in the quarter, resulting in a low single-digit increase compared to 2019. growth was driven by china, india and the philippines, partially offset by the pressure in australia due to the impact of the pandemic. Growth was led by Coca-Cola trademark and sparkling flavors.
    • price/mix decreased 8% during the quarter due to negative channel mix in key markets along with 4 points of negative geographic mix due to growth in emerging and developing markets outpacing developed markets . for the quarter, concentrate sales were 7 points below unit case volume, primarily due to six fewer days in the quarter.
    • Operating income was down 31% for the quarter, including a 2 point currency headwind. Comparable currency-neutral (non-GAAP) operating income decreased 29% during the quarter, driven by top-line pressure coupled with a significant increase in marketing investments compared to the prior year.
    • The company’s value share of total nartd beverages was flat over the year as strong underlying share gains in most markets were offset by the impact of negative geographic mix in the operating segment.

    global companies

    • Net income grew 27% in the quarter, including a 2-point currency tailwind. Organic revenue (non-GAAP) grew 25%. Revenue growth was primarily due to the ongoing reopening of Costa Retail stores in the UK.
    • Operating income growth and currency-neutral (non-gaap) comparable operating income growth for the quarter were driven by strong organic (non-gaap) revenue growth.

    investments in bottling

    • Unit case volume grew 13% during the quarter, driven by strong growth in the key markets of India and the Philippines.
    • price/mix decreased 3% in the quarter, primarily due to weather-related disruptions and negative package mix in South Africa.
    • Operating income decreased 11% for the quarter, including items affecting comparability and a 5 currency point tailwind. Comparable currency-neutral (non-GAAP) operating income decreased 12% in the quarter, driven by an increase in operating expenses compared to the prior year.

    capital allocation update

    • reinvesting in the business: the company continued to invest in its various lines of business, spending $1.4 billion in capital expenditures in 2021, an increase of 16% compared to the prior year .
    • dividend continues to increase: the company paid dividends totaling $7.3 billion during 2021. the company has increased its dividend in each of the last 59 years.
    • consumer-focused m&a: the company acquired the remaining 85% ownership of bodyarmor, a line of sports performance and hydration drinks, in November 2021 for 5,600 million dollars.
    • Share Repurchase: In 2021, the Company did not repurchase any shares under the existing share repurchase authorization. the company’s remaining share repurchase authorization is approximately $10 billion.

    perspective

    The 2022 outlook information provided below includes ungapped forward-looking financial measures, which management uses to measure performance. the company is unable to reconcile projected full-year 2022 organic revenue (non-gaap) to projected full-year 2022 reported net revenue, comparable projected full-year 2022 net revenue (non-gaap) to projected reported net revenue full-year 2022 revenue, full-year 2022 projected comparable cost of goods sold (non-GAAP) to full-year 2022 projected reported cost of goods sold, full-year 2022 projected underlying effective tax rate (non-GAAP) ) for full-year 2022 reported effective tax rate, comparable currency-neutral EPS projected for full-year 2022 (non-gaap) to reported EPS projected for full-year 2022 or comparable EPS projected for full-year 2022 (non-gaap) to reported eps projected for the full year 2022 without unreasonable efforts because it is not possible to predict with a reasonable degree of certainty the actual impact of changes in interest rates foreign currency exchange throughout 2022; the exact timing and number of acquisitions, divestitures and/or structural changes throughout 2022; the exact timing and number of items affecting comparability throughout 2022; and the actual impact of commodity cost changes through 2022. Unavailable information could have a material impact on the Company’s reported full-year 2022 financial results.

    full year 2022

    The company expects to generate organic (non-GAAP) revenue growth of 7% to 8%.

    for comparable net income (non-gaap), the company expects a currency headwind of 2% to 3% based on current rates and including the impact of hedged positions, plus a tailwind 3% of acquisitions.

    The company expects commodity price inflation to be a mid-single-digit percentage headline in comparable cost of goods sold (non-GAAP), based on current rates and including the impact of hedged positions. .

    The firm’s underlying effective tax rate (non-gaap) is estimated to be 20%. This does not include the impact of ongoing tax disputes with the US. uu. internal revenue service, if the company did not prevail.

    Given the above considerations, the company expects to deliver 8% to 10% comparable currency-neutral EPS (non-GAAP) growth and 5% to 6% comparable non-GAAP EPS growth, compared to $2.32 in 2021.

    eps comparable percentage growth (non-gaap) is expected to include a currency headwind of 3% to 4% based on current rates and includes the impact of hedged positions, plus a minimal tailwind of acquisitions.

    The company expects to generate free cash flow (non-GAAP) of approximately $10.5 billion through cash flow from operations of approximately $12.0 billion, less capital expenditures of approximately $1.5 billion. This does not include any potential payments related to ongoing tax disputes with the US. uu. internal revenue service.

    considerations for the first quarter of 2022

    Comparable net income (non-GAAP) is expected to include a currency headwind of approximately 3% based on current rates and including the impact of hedged positions, plus a 3% tailwind of acquisitions.

    Comparable EPS percentage growth (non-GAAP) is expected to include a currency headwind of approximately 5% based on current rates and including the impact of hedged positions.

    the first quarter has one less day compared to the first quarter of 2021.

    notes

    • All references to growth rate and share percentages compare period results to the comparable period of the prior year, unless otherwise noted.
    • All references to volume change and volume percentage indicate unit case volume, unless otherwise noted. all volume percentage changes are calculated based on fourth quarter average daily sales, unless otherwise noted, and are calculated on a full year reported basis. “unit box” means a unit of measure equal to 192 u.s. fluid ounces of finished beverage (24 eight-ounce servings), with the exception of unit case equivalents for non-ready-to-drink coastal beverage products which are measured primarily in number of transactions. “unit case volume” means the number of unit cases (or unit case equivalents) of the company’s beverages sold directly or indirectly by the company and its bottling partners to customers or consumers.
    • “concentrate sales” represents the amount of concentrates, syrups, beverage bases, water sources and powders/minerals (in all cases expressed in equivalent unit cases) sold or used in finished beverages sold by the company. to its bottling partners or other customers. For non-ready-to-drink Costa beverage products, “concentrate sales” represent the amount of coffee (in all cases expressed in equivalent unit cases) sold by the company to customers or consumers. In the reconciliation of reported net income, “concentrate sales” represents the percentage change in net income attributable to the increase (decrease) in concentrate sales volume for the geographic operating segments and the global companies operating segment after accounting for the impact of structural changes, if any. for the Bottling Investments operating segment for the fourth quarter, this represents the percentage change in net income attributable to the increase (decrease) in unit case volume calculated based on total sales (rather than average daily sales) in each of the corresponding periods after considering the impact of structural changes, if any. for the bottling capex operating segment for the full year, this represents the percentage change in net income attributable to the increase (decrease) in unit cash volume after accounting for the impact of structural changes, if any. Bottling Investments operating segment reflects unit case volume growth for consolidated bottlers only.
    • “price/mix” represents the change in net operating income caused by factors such as price changes, the mix of products and packages sold, and the mix of channels and geographic territories where the sales occurred.
    • First quarter 2021 financial results were affected by an additional five days compared to the first quarter of 2020, and fourth quarter 2021 financial results were affected by an additional six days compared to the fourth quarter of 2020. unit cash volume results for the quarters are not affected by variations in days due to the above average daily sales calculation.

    conference call

    The company is hosting a conference call with investors and analysts to discuss fourth quarter and full year 2021 operating results today, February 2. 10, 2022, at 8:30 a.m. The Company invites participants to listen to a live webcast of the conference call on the Company’s website, http://www.coca-colacompany.com, in the “Investors” section. a downloadable digital audio playback and transcript of the call will be available on the website within 24 hours of the call. In addition, the “Investors” section of the website includes certain supplemental information and a reconciliation of non-GAAP financial measures to the company’s results as reported under GAAP, which can be used during the call when discussing financial results. .

    investors and analysts: tim leveridge, koinvestorrelations@coca-cola.com media: scott leith, sleith@coca-cola.com

    source: the coca-cola company

    released February 10, 2022

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