just On Call - Germany a "turnaround story" for The Coca-Cola Co
Coca-Cola has seen is market share eroded in Germany over the last few years, primarily due to strong competition from discount retailers
The CEO of The Coca-Cola Co has said that another quarter of healthy growth and share gain in Germany means that the country is beginning to look like "a very positive story".
The soft drinks giant recorded a strong increase in first quarter profits this morning (26 April), boosted by the acquisition of Coca-Cola Enterprise's North American bottling operations and global volume growth. Worldwide volume growth of 6% in the quarter was led by the Coca-Cola brand.
In Europe, the company's 1% rise in volume sales was driven by 4% volume growth in Germany.
Speaking on the firm's results conference call today, Coca-Cola's chairman and CEO, Muhtar Kent, told analysts that Germany is "beginning to look like a turnaround story". Coca-Cola has seen its market share eroded in Germany over the last few years, primarily due to strong competition from discount retailers.
"We are winning again in all channels in Germany," Kent said today. "All the restructuring that we have been involved in for the past 36 months in Germany is beginning to pay out. The infrastructure that we have, in terms of production, distribution, as well as warehousing, and then with our strong brands. When you look at brand Coke in Germany, which was actually up 4% supported by very strong marketing, and then some other brands, Sprite, which had very healthy growth, up almost 7%, we have very good brand portfolio metrics in Germany."
Kent said the firm is pleased with the improvements it is seeing in margins across Germany as the "benefits of the restructuring are beginning to come alive" and volumes begin to pick up in multiple channels across the country.
The upturn in Germany is also likely to be of interest to Coca-Cola Enterprises (CCE). As part of Coca-Cola's deal to acquire CCE's North American operations, CCE gained the option to acquire Coca-Cola's 83% equity stake in its German bottling operations over a set time period.
Click here to view a full transcript of the Coca-Cola earnings conference call from Seeking Alpha.
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