James Wilmore

Focus - The Coca-Cola Co's Q2 & H1 performance by region

By | 16 July 2013

Coca-Cola has seen a drop in H1 profits and sales

Coca-Cola has seen a drop in H1 profits and sales

Earlier today, the Coca-Cola Co reported a drop in first-half profits and sales, blaming the weather in many of its key regions for its performance. Here, just-drinks takes a look at the company's performance by global region: 

North America 

Volumes in North America fell by 1% in the second quarter and were flat in H1. The group said its volumes were dragged down by “unseasonably cold and wet weather”, the timing of Easter and the 4 July holidays, and “weakened consumer spending”. Second-quarter reported operating profits fell by 3%. 

The group said it grew market share in volume and value in sparkling and still beverages. However, Q2 sparkling beverage volumes fell by 4% in the region, while still beverage volumes rose by 5%, led by ready-to-drink tea and packaged water. 

Europe 

Coca-Cola's volumes fell by 4% in Q2 and by 2% in the six months in the region. Net sales were down by 1% in the second quarter. Reported operating profits dropped by 7% in Q2. The company flagged "poor weather across many countries, including severe flooding in parts of Germany and Central Europe, as well as ongoing weakness in consumer confidence and spending across the region".  

Latin America 

The group's volumes in the region rose by 2% in Q2  and by 3% in the second-half. Reported net sales for Q2 were up by 6%. Growth was led by Central Latin America, where volumes were up by 7%, South Latin America, up 5%, and Mexico with a 1% rise. Coca-Cola's Q2 volumes in Brazil were flat, cycling 3% growth on 2012.

Pacific

The region's volumes grew 2% in both Q2 and the second-half as a whole, cycling 10% growth on the prior year. Reported net sales fell by 5%. Q2 reported operating profits in the region were down by 3%. Vietnam saw a 28% rise in volumes, Indonesia 22%, Thailand 17% and a 1% rise in Japan and India

The group noted that the performance in India was cycling 20% growth in the prior-year quarter and “reflects the impact of an earlier and heavier than normal monsoon season in 2013 and cycling a later-than-normal monsoon season in the prior year”. 

In China, Q2 volumes were flat due to the “economic slowdown, poor weather and competitive activity such as package upsizing”. However, still beverages grew 4% in Q2, driven by juices and packaged water. The company added: “We are evolving our strategies in China and we anticipate a return to growth in our business in the second half of the year.” 

Eurasia & Africa 

Volumes rose by 9% in Q2 and 11% in the first half.  Second quarter net sales for the unit rose by 5%, while operating profits were up by 12%. Growth was led by Middle East and North Africa, with volumes up by 17%, the company said. Central, East and West Africa volumes rose by 10%. Russia was up by 3%.

For a full round-up of just-drinks' coverage of Coca-Cola Co's H1 results,click here.

Expert analysis

The Coca-Cola Company (KO) - Financial and Strategic SWOT Analysis Review

The Coca-Cola Company (Coca-Cola) is one of the leading non-alcoholic beverage manufacturers in the world. The company undertakes the production, distribution and marketing of non-alcoholic beverages. It offers beverage concentrates, syrups, and finished sparkling and still beverages. The company’s non-alcoholic beverage portfolio includes juices and juice drinks, soft drinks, energy and sports drinks, ready-to-drink teas and coffees, waters and enhanced waters. It owns and markets the world’s leading non-alcoholic sparkling beverage brands, namely, Coca-Cola, Fanta, Diet Coke and Sprite.

Sectors: Company results, Soft drinks, Water

Companies: Coca-Cola Co

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