Coca-Cola profits from still and carbonated boost

By Neil Merrett

- Last updated on GMT

Related tags: Cent, Generally accepted accounting principles, Coca-cola

Coca-Cola posted a 20 per cent improvement in operating revenues,
amounting to $28.8bn during the full fiscal year as the company
harnessed its international presence to drive growth in both its
carbonated and non-carbonated brands.

Operating profit rose by 15 per cent to $7.2bn over the same period the previous year as a result, the company said. However, operating margins fell by a single percentage point to 25.1 per cent for the twelve-month period ending 31 December 2007. Coca-Cola chairman Neville Isdell said that sales growth was not specific to a specific product area, or market, with improvements achieved throughout all its operations. "On a worldwide basis, sparkling beverage volume increased a solid 4 per cent, and still beverages increased 12 per cent,"​ he stated. Isdell added that the company expected this focus to continue to drive growth into the upcoming financial year. "With our strategies in place, our expanded brand portfolio and our geographic balance, we are well prepared to respond to opportunities and challenges ahead and anticipate another good year in 2008,"​ he said.​ The company's optimistic outlook was matched by the performance of its operations internationally. EU ​In the European Union, the company posted a 14 per cent improvement in full year sales over the same period last year. Operating profit increased by 16 per cent. Case volumes of the company's brands within the bloc were up three per cent over the year, due to the affects of favourable weather conditions over the second half of the year, the group claimed. The company said the performance was particularly encouraging due to difficult comparatives such as the 2006 football world cup in Germany. The launch of the Coca-Cola Zero brand as part of a company-wide "three Colas" initiative, along with the rugby world cup in France, were seen as major drivers for profitability over the period, according to Coca-Cola. North America ​In North America, the company's net sales rose 11 per cent over the full year, with operating margins increasing marginally by one per cent. Acquisitions within the national market and changes to brand pricing were attributed by the company to the improved sales, which in turn helped to offset higher input costs. Latin America ​In the group's Latin America arm, revenues improved by 24 per cent over the year, with operating profit up by 22 per cent. Coca-Cola said that case volume growth of its brands was again behind the increases, aided by the completion of the joint acquisition of Jugos del Valle, with bottling arm Coca-Cola FEMSA. Jugos del Valle, which manufactures juice and juice-based nectar drinks, further added to case volume improvements in the region, Coca-Cola said. Pacific ​In terms of the group's Pacific division, revenues increased by seven per cent over the year, while operating profit was up by three per cent. In the region's key markets like China, case volume of Coca-Cola's brands rose by 13 per cent over the quarter, driven by sales of carbonated brands like Sprite, and the Minute Maid juice range. In the Philippines, unit case volume was up five per cent over the full year, with volumes of the group's carbonated volumes rising by 14 per cent. Africa​ In Africa, the company said that full year sales were up by 16 per cent on the back of an 11 per cent rise in the company's concentrate sales and new brand launches and price strategies. The company claimed that strong sales of its flagship Coca-Cola beverage had also allowed the group to improve its market share in the continent-wide beverage market. Eurasia​ Through Coca-Cola's Eurasian operations, revenues were up by 24 per cent over the whole year, with operating profit rising by 38 per cent. Double-digit growth in the case volumes of the group's brands being shipped to markets in Russia, India, Turkey, Middle East, Eastern Europe and Southern Eurasia were attributed to the improved sales and profits. Within India in particular, the company said that improved case volumes of its brands had allowed it to post continued share gains in both the sparkling and still beverages categories.

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