Beverage giant, Coca-Cola’s sales rebounded strongly in the second quarter of 2021 as the pandemic retreated and economies reopened around the world.
In terms of revenues, Brand Spur observed the company’s net revenues grew 42% to $10.1 billion, and organic revenues (non-GAAP) grew 37%. Revenue performance included 26% growth in concentrate sales and 11% growth in price/mix.
Revenue growth was driven by the ongoing recovery in markets where coronavirus-related uncertainty is abating, along with the benefit from cycling revenue declines from the impact of the coronavirus pandemic last year.
Brand Spur noted that the global unit case volume benefited from the ongoing recovery in many markets, partially offset by the impact of a resurgence of the coronavirus in several markets. As a result, when compared to 2019 volume levels, second-quarter volume growth was in line with the first quarter of 2021.
The company saw away-from-home channels rebound as restrictions eased in certain markets, driving value across the enterprise and leading to second-quarter revenues ahead of the 2019 level. While coronavirus-related uncertainty continues, the company remains agile in order to execute on its strategic priorities and build on the work that has been done in the past year to navigate an asynchronous recovery.
“Our results in the second quarter show how our business is rebounding faster than the overall economic recovery, led by our accelerated transformation. As a result, we are encouraged and, despite the asynchronous nature of the recovery, we are raising our full-year guidance. We are executing against our growth plans and our system is aligned. We are better equipped than ever to win in this growing, vibrant industry and to accelerate value creation for our stakeholders.”
- Margin: Operating margin, which included items impacting comparability, was 29.8% versus 27.7% in the prior year, while comparable operating margin (non-GAAP) was 31.7% versus 30.0% in the prior year. Operating margin expansion was primarily driven by favourable channel and package mix where coronavirus-related uncertainty is abating, partially offset by a significant increase in marketing expenses versus the prior year.
- Earnings per share: EPS grew 48% to $0.61, and comparable EPS (non-GAAP) grew 61% to $0.68. Comparable EPS (non-GAAP) growth included the impact of a 5-point currency tailwind.
- Market share: The company gained value share in total nonalcoholic ready-to-drink (NARTD) beverages driven by a share gain in both at-home and away-from-home channels. The company’s value share in total NARTD beverages is now ahead of the 2019 level.
- Cash flow: Year-to-date cash flow from operations was $5.5 billion, up $2.7 billion versus the prior year, driven by strong business performance, five additional days in the first quarter and working capital initiatives. Year-to-date free cash flow (non-GAAP) was $5.1 billion, up $2.8 billion versus the prior year, driven by cash flow from operations along with lower capital expenditures versus the prior year.
Europe, Middle East & Africa
- Unit case volume grew 21% in the quarter, driven by the ongoing recovery in markets where coronavirus-related uncertainty is abating, along with the benefit from cycling the impact of the coronavirus pandemic last year. Growth was led by Russia, Spain and Germany in Europe, Nigeria in Africa, and Turkey and Pakistan in Eurasia and the Middle East.
- Price/mix grew 20% for the quarter, driven by favourable channel and package mix due to cycling the impact of the coronavirus pandemic last year, along with the timing of deductions. For the quarter, concentrate sales were 20 points ahead of unit case volume due to cycling the rationalization of stock levels in the prior year, along with the timing of shipments in the current year. Year-to-date concentrate sales were 9 points ahead of unit case volume primarily due to five additional days in the first quarter, along with cycling the timing of shipments in the prior year.
- Operating income grew 60%, which included items impacting comparability and a currency tailwind. Comparable currency neutral operating income (non-GAAP) grew 56%, primarily driven by strong organic revenue (non-GAAP) growth across all operating units, partially offset by a significant increase in marketing expenses versus the prior year.
- The company gained value share in total NARTD beverages along with gaining or maintaining share across all categories.