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first_imgCoca-Cola maintains volume as revenue beats despite 16% dropPosted By: News Deskon: July 26, 2017In: Beverage, Business, Financial, Industries, Manufacturing, Soft drinksPrintEmailCoca-Cola has held on to volume in its second quarter results, despite overall revenue falling 16% on the same quarter last year to $9.7 billion.Total unit case volume was even, with positive performance in four of the five category clusters, Coca-Cola said. Its mainstay business of sparkling soft drinks saw nill growth, while juices, dairy and plant-based beverages saw the highest combined growth of 3%.But gross profit was 14.5% lower at $6.04 billion, and operating income fell 27% on the same period last year to reach $2.08 billion.Unit case volume performance continued to be impacted by macroeconomic challenges in certain Latin American markets, with Brazil and Venezuela in particular stunting volume growth.But Coca-Cola’s volume growth continued in its established markets, with ‘outperformance’ driven by Mexico and Spain, where it launched a new range of premium mixers for the horeca sector in February.It blamed the drop in revenue on “a 17% headwind from the ongoing refranchising of bottling territories, and a foreign currency exchange headwind of 2%”. Revenue fell year-on-year but was $580 million higher than the first three months of the year. It’s the first sign of quarter-on-quarter revenue growth since the company’s sales dipped below $10 billion in the fourth quarter of last year, and the results beat on analysts’ pre-release predictions.For comparison, the company’s revenue jumped more than $1.2 billion between the first and second quarters of 2016.Coca-Cola president and chief executive officer James Quincey said: “Our second-quarter results demonstrate continued progress against the strategic priorities we have laid out to accelerate the transformation of our business into a total beverage company with balanced growth across a consumer-centric portfolio.“Not only did we see strong performance during the quarter in rapidly expanding areas of our company, such as our Innocent juice and smoothie business in Europe, our organic revenue growth in sparkling soft drinks was led by innovation in and marketing support for our low- and no-sugar options like Coca-Cola Zero Sugar, which continues to roll out around the world.”Coke continues to invest in its reduced-sugar and zero-sugar portfolio, including a bold revamp for Coke Zero in Australia just 14 months after the global rollout of its reformulated Coca-Cola Zero Sugar product. By focusing on its zero-sugar offering, the company is falling in line with an industry-wide trend that will see no-sugar sodas become the new normal.Coca-Cola has already quietly pulled its full-sugar 7Up in the Netherlands, replacing it with a sugar-free version previously known as 7Up Free.The results are mixed though, with the company’s refranchising efforts leading to a 3.6% drop in profit margin. It has stepped up its efforts in the past year and a half to sell all company-owned bottling territories, which it expects to be achieved by the end of the year.But it has incurred costs of $653 million in the second quarter alone – primarily because of the refranchising programme – while net income fell by more than 60% to $1.37 billion.Quincey continued: “Our performance gives us confidence that we will achieve our full-year financial objectives even in the face of challenging conditions, and also demonstrates further success in evolving our portfolio to meet changing consumer tastes and preferences. While we are in a period of substantial transformation and change that is never easy, I am encouraged by the spirit of our people and partners as we reinvent the company for the future.”Share with your network: Tags: Coca-ColarefranchisingUSlast_img read more

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