ATLANTA — Macroeconomic conditions pressured profit and sales for The Coca-Cola Co. during the first quarter of 2016, but the Atlanta-based beverage company said it is making progress toward its goal of becoming a stronger, more efficient and more focused organization. Net income attributable to shareowners of Coca-Cola for the three months ended April 1 was $1,483 million, equal to 34c per share, down 5% from $1,557 million, or 35c per share, in the comparable period. Net operating revenues were $10,282 million, down 4% from $10,711 million, but organic revenue increased 2% over the year-ago quarter.
|Muhtar Kent, chairman and c.e.o. of Coca-Cola|
“During the first quarter, our continued focus on our five strategic initiatives enabled us to gain value share and deliver positive top-line growth with underlying margin expansion,” said Muhtar Kent, chairman and chief executive officer of Coca-Cola, during an April 20 earnings call with financial analysts. “With the first quarter behind us, we see the challenging global environment continuing, but we remain committed to our full-year targets we laid out in February in both the top- and bottom-line performance.”
For the full year, the company continues to expect organic revenue growth in a range of 4% to 5% and comparable currency neutral earnings per share growth in a range of 4% to 6%, inclusive of structural headwinds from refranchising. Additionally, the company said it remains on track to deliver more than $600 million in productivity savings this year to support brand and growth investments while covering cost inflation and driving margin expansion.
During the quarter, Coca-Cola continued to execute its strategic initiatives, which included the roll-out of its new global One Brand marketing strategy for trademark Coca-Cola products under the Taste the Feeling campaign in 195 markets.
“Additionally, we added to our portfolio of fast-growing still beverages,” Mr. Kent said. “We closed our Chinese plant-based protein acquisition of Culiangwang in March. We also invested in Chi, the leading juice and value-added dairy company in Nigeria, Africa’s largest economy. Both transactions are further proof points of how we are strengthening our leading stills position, effectively responding to evolving consumer preferences.”
Also during the quarter, Coca-Cola accelerated its global refranchising efforts, with a long-term goal to refranchise all of its bottling operations in North America by the end of 2017. The company has transferred or signed agreements on almost two-thirds of the U.S. territories originally acquired from Coca-Cola Enterprises, Mr. Kent said.
“Looking outside of North America to Western Europe, our Coca-Cola European Partners transaction remains on track to close by the end of the second quarter,” he added. “In Africa, the regulatory approval process continues. The South Africa competition commission has recommended for the competition tribunal to approve the Coca-Cola Beverages Africa merger with certain conditions. The tribunal is set to meet in May to review the pending transaction.“In summary, we recognize that we still have much work to do, but we have defined a clear path to transform the company, and we are making consistent progress to create long-term value for our shareowners. The Coca-Cola Co. is becoming stronger, more efficient and more focused on our core strengths of marketing and brand building, customer value creation and leading our franchise bottling system.”