Coca-Colas Central and Southern Europe volumes dropped by 2% in Q3

Coca-Cola's Central and Southern Europe volumes dropped by 2% in Q3

The Coca-Cola Co has said that it remains upbeat on its performance across Europe, despite recording volume declines in Central and Southern Europe in the third quarter of 2011.

Today (18 October), The Coca-Cola reported an increase in third-quarter profits, driven by international volume sales growth of 5%. In Europe, group volumes growth was broadly flat, despite a 2% volume decline in Central and Southern Europe.

The company cited an "ongoing volatile economic environment" as the reason for the decline.

However, on the firm's results call today, Coca-Cola's chairman & CEO, Muhtar Kent, told analysts that Europe's performance in the quarter was positive, despite a "very unseasonable cold and rainy summer season and moderating consumer confidence".

Kent said: "We realised non-alcoholic volumes and value share gains across the whole of Europe ... that was a performance we are pleased with given the conditions.

"The East and Central European area was challenging, and also Italy and Greece, but I believe, overall, the portfolio worked for us ... and that is what is going to continue to work for us as we move into the fourth quarter of this year as well as into next year."

Kent added that innovations in packaging and in Coca-Cola's still beverages portfolio will help to drive growth and market share gains in Europe.

Separately, giving a commodity and currency outlook for the remainder of the year, Coca-Cola's CFO, Gary Fayard, told analysts that the company expects group costs for 2011 to be up by $800m, rather than $700m previously.

"We have effectively leveraged retail price increases and the acceleration of cost saving initiatives to offset the rise in commodity costs," Fayard said. "The $100m was not a big surprise to us, over last couple of months we saw it coming."

Fayard declined to give a commodity outlook for 2012, but said the company is seeing is "a lot of correlation between currencies and commodities.

"Every time you see a big spike in the strength of the dollar you see commodities come off strongly," he said. The group is seeking to jointly hedge itself against both commodities and currency swings, he added.

Fayard said that Coca-Cola update on expected commodity costs for 2012 during the company's full-year earnings call, scheduled for February. Coca-Cola's share price was up 0.31% to $66.79 at 1604 BST today.