You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Coca-Cola tops sales expectations

Amid vaccine-led reopening.
Image: George Frey/Bloomberg

Coca-Cola Co.’s sales beat expectations in the first quarter as the soda maker said it saw early — though uneven — signs of recovery in demand, particularly in areas with stronger rates of vaccination against Covid-19.

The company also said it plans to sell a portion of the Coca-Cola Beverages Africa bottling business via an initial public offering.

Moneyweb Insider INSIDERGOLD

Subscribe for full access to all our share and unit trust data tools, our award-winning articles, and support quality journalism in the process.

Choose an option:

R63 per month
R630 per year SAVE R126

You will be redirected to a checkout page.
To view all features and options, click here.

A monthly subscription is charged pro rata, based on the day of purchase. This is non-refundable and includes a R5 once-off sign-up fee.
A yearly subscription is refundable within 14 days of purchase and includes a 365-day membership.

Click here for more information.

Coke’s organic revenue, which excludes the impact of currency or acquisitions, climbed 6% in the quarter ended April 2, according to a statement Monday. That topped the estimated 0.5% growth analysts had been expecting, according to forecasts compiled by Bloomberg.

The results hint at a potential rebound as consumers worldwide emerge from more than a year of isolation, a process that is happening at different rates in different countries. The company is “encouraged by improvements in our business, especially in markets where vaccine availability is increasing and economies are opening up,” Chief Executive Officer James Quincey said in the statement.

The soda business is unlikely to see full recovery until people are back at restaurants and amusement parks worldwide, buying overpriced hot dogs and giant-sized soft drinks. The uneven reopening pace is showing up in the results: Recovery remains “asynchronous” around the world, the company said. Unit case volume was down 6% in North America, but up 9% in Asia Pacific. Globally, case unit volume was flat.

Coke shares rose 1% to $54.20 at 9:52 a.m. in New York. The stock declined 2.1% this year through Friday.

Bottling IPO

The company also announced plans to list Coca-Cola Beverages Africa as a publicly traded company within the next 18 months. “A standalone listing for CCBA will enable the bottler to build on its growth trajectory and access capital independently to meet the investment needs of the business, which is great for stakeholders across Africa,” said Jacques Vermeulen, CEO of CCBA.

An IPO of Coke’s stake could value the African business at about $6 billion, Bloomberg News reported last month. The soft-drink giant, which owns 66.5% of the bottling company, didn’t specify how much of its stake it intends to sell.

Coke is grappling with the commodity inflation pressures that are affecting other manufacturers, Chief Financial Officer John Murphy said in an interview.

While consumer prices may start to rise this quarter, the company is “well-hedged” to withstand much of the cost pressure in the near term, he said. “We think it’s manageable this year; it’s really a 2022 challenge.”

Aluminum costs

Most relevant to the soda maker will be higher costs in plastic and aluminum, including can-supply challenges in the US, he said. That should abate in 2022, though, with more supply becoming available.

Coke is also seeing increases in high-fructose corn syrup and coffee. The company plans to manage those higher costs with supply-chain productivity and pricing, Murphy said.

“Pricing decisions and hedging decisions are actually local decisions,” he said. “We will be working closely with our bottling partners all around the world to come up with the optimal solutions that could happen starting in the second quarter.”

Coke reaffirmed its forecast for organic sales percentage growth of high single digits in 2021 and comparable earnings-per-share expansion of high single digits to low double digits. The company slightly trimmed its expectations for the impact of currency benefits on net revenue and comparable earnings.

© 2021 Bloomberg


Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.


Hahaha. Coca Cola can shove their drink.

Here is proof that the article on “sugar taxes” is having an effect is a lot of bunk. Blogged on that one that these guys are NOT suffering due to the Taxes on them.

End of comments.





Follow us:

Search Articles: Advanced Search
Click a Company: