Focus - The Coca-Cola Co's Q1 Performance by Region
Coca-Cola released its Q1 results yesterday
Volumes in North America climbed by 1% in the quarter, cycling 2% growth in the prior-year quarter. Net sales declined by 1%, which includes the impact of two fewer selling days in the quarter as well as a 1% unfavourable impact from structural changes, Coca-Cola said. Taking these out of the equation leaves the region broadly in line with "as reported" volumes. First quarter operating profits declined by 24%, although Coca-Cola said that, excluding currency exchange rates and the two fewer days, operating profits would have grown. The company said it gained volume and value share in both sparkling and still beverages, but sparkling beverage volumes fell by 1% in the quarter. Brand Coca-Cola grew slightly in the quarter. Coca-Cola Zero volumes grew by 3% and still beverage volumes increased by 6%. In sports drinks, Coca-Cola said Powerade maintained value share with a decline in volumes share “in the face of aggressive competitive pricing in the category”.
Eurasia & Africa
Eurasia & Africa volumes grew by 15% in the quarter, cycling 7% volume growth in the prior year. Excluding the Aujan partnership, it was up by 11%. The Middle East & North Africa region was up by 30%. Net sales for the quarter increased by 9% and operating profits increased by 6%. Sparkling beverage volumes were up by 12% in the quarter, led by brand Coca-Cola, which also grew 12%. Sprite volumes climbed by 15% and Fanta volumes were up by 10%. Still beverage volume increased by 26% in the quarter. Volumes growth in Russia continued to be led by the sparkling beverage portfolio, including brand Coca-Cola, up 15%, Fanta, up 15% and Sprite, up 7%.
Europe volumes were even in the quarter, cycling 1% growth in the prior-year quarter. Coca-Cola blamed poor weather, especially in March, as well as ongoing weakness in consumer confidence, for the flat performance. Net sales were down by 2%, reflecting a 2% decline in concentrate sales. Operating profits also slipped by 2%. The UK returned to volume growth, led by sparkling beverages and brand Coca-Cola in particular, Coca-Cola said. Germany volumes increased by 3%, cycling 3% growth in the prior-year. Volumes in the Central and Southern Europe and Iberia regions declined low single digits, with both cycling volumes growth in the prior-year.
Latin America volumes increased by 4%, cycling 5% growth in the prior-year quarter. There was 11% volumes growth in the Latin Centre region and 3% growth each in Mexico, Brazil and the South Latin region. Net sales increased by 4%. Operating profits increased by 3%, primarily reflecting solid volumes growth and favourable pricing, Coca-Cola said. Sparkling beverage volumes were up by 2%. Brand Coca-Cola volumes climbed by 2% while both Fanta and Sprite were up by 5%. Still beverage volumes grew by 11%, driven by ready-to-drink tea, up double digits as a result of the continued expansion of Fuze Tea.
Pacific volumes increased by 3%, cycling 9% growth in the prior-year quarter. Net sales slipped by 4%, reflecting concentrate sales growth of 4%. Coca-Cola said concentrate sales growth was impacted by the later timing of the Chinese New Year this year. Operating profits were flat. Volumes in both China and Japan increased by 1%, cycling strong 9% and 3% growth in the prior-year quarter, respectively. Volumes growth in India was up by high single-digits, and South Korea and Thailand volumes and share growth momentum continued in the quarter. India sparkling beverage volumes growth was led by brand Coca-Cola, up 30%. Japan volumes growth was led by sparkling beverages, up 4%, with Coca-Cola Zero up by 11%. Sparkling beverage volumes in China climbed by 8% and juices and juice drinks volumes grew by 14% supported by the launches of new Minute Maid Pulpy products, Coca-Cola said. The company added that, while it continued to expect China's economic slowdown to have a short-term effect on the industry and its business, it predicted gradual improvement in consumer disposable income as the year progresses.
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