US: FY sales lift fails to halt profit slip for Coca-Cola Co
The Coca-Cola Co has posted a slight dip in full-year net profit, despite a healthy rise in sales.
The soft drinks giant today (12 February) posted a 3% year-on-year fall in net profit for 2008, coming in at US$5.81bn. Total sales for the year were up, however, by 11% on 2007 at $31.94bn.
Operating profit recorded a 16% leap on the year before, hitting $8.45bn.
A 1% slip in unit case volumes in North America for the year was offset by price increases, resulting in a 6% lift in sales by value in the region. Operating profit from the continent dropped by 7%, while Eurasia & Africa delivered a 25% leap in operating profit for the full-year.
In Europe, volumes rose by 3% with sales by value climbing by 10%, and operating profit up by 14%. Latin America saw sales up by 8% and 18% in volume and value respectively. Operating profit increased by 20% in the region.
Finally, the Pacific region posted an 8% rise in volumes and a 7% increase in sales by value, with operating profit up by 9%.
Coca-Cola's sparkling beverages portfolio saw full-year volumes climb by 2%, with still beverage unit case volume leaping by 13% for 2008, led by strong growth across the portfolio, including juice and juice drinks, teas, active lifestyle and water brands.
For the final quarter of last year, meanwhile, net profit plunged by 18% to $995m, with sales falling less markedly, by 3% to $7.13bn. Operating profit was up by 12% at $1.71bn. Of the company's regions, most notable was Eurasia & Africa, where a 7% climb in volumes failed to offset a 12% drop in sales by value. Operating profit from the region in the quarter subsequently dropped by 16%.
Russia's unit case volume declined 8% in the quarter and was even for the year, reflecting the impact of a more challenging economic environment and adverse weather conditions in the summer, the company said.
"We delivered consistent, quality results for the quarter and for the full-year," said Muhtar Kent, Coca-Cola's president and CEO. "For the year, we again exceeded our long-term growth targets despite a very challenging economic environment. And importantly, we gained volume and value share in most of our leading markets through solid execution of our strategies.
"While certainly not crisis proof, as no company is, I do believe our global business model is relatively resilient," Kent continued. "We recognise that 2009 will bring many unique challenges to us and our consumers, customers, and bottling partners. Yet, I believe that our solid brand and business fundamentals ... provide a sound foundation for our management team to continue driving long-term sustainable growth."
Coca-Cola also noted that it is still on track to deliver $500m in annualised savings from productivity initiatives by the end of 2011.
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