Coca-Cola's Demand Recovery, Higher prices Drive Surprise Revenue Jump
Wednesday, February 12th, 2025
The Coca-Cola Company today reported fourth quarter and full year 2024 results. "Our all-weather strategy is working, and we continue to demonstrate our ability to lead through dynamic external environments," said James Quincey, Chairman and CEO of The Coca-Cola Company. "Our global scale, coupled with local-market expertise and the unwavering dedication of our people and our system, uniquely position us to capture the vast opportunities ahead."
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Highlights |
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Quarterly/Full Year Performance |
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Revenues: For the quarter, net revenues increased 6% to $11.5 billion, and organic revenues (non-GAAP) grew 14%, driven by 9% growth in price/mix and a 5% increase in concentrate sales. Concentrate sales were 3 points ahead of unit case volume, primarily driven by two additional days and the timing of concentrate shipments. For the full year, net revenues grew 3% to $47.1 billion, and organic revenues (non-GAAP) grew 12%, driven by 11% growth in price/mix and 2% growth in concentrate sales. Concentrate sales were 1 point ahead of unit case volume, primarily due to the timing of concentrate shipments.
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Operating margin: For the quarter, operating margin was 23.5% versus 21.0% in the prior year, while comparable operating margin (non-GAAP) was 24.0% versus 23.1% in the prior year. For the full year, operating margin was 21.2% versus 24.7% in the prior year, while comparable operating margin (non-GAAP) was 30.0% versus 29.1% in the prior year. For both the quarter and the full year, operating margin performance included items impacting comparability, as well as currency headwinds. Full year operating margin included a charge of $3.1 billion related to the remeasurement of the contingent consideration liability to fair value in conjunction with the acquisition of fairlife, LLC ("fairlife") in 2020. For both the quarter and the full year, comparable operating margin (non-GAAP) expansion was primarily driven by strong organic revenue (non-GAAP) growth and the impact of refranchising bottling operations, partially offset by higher input costs, higher operating expenses and currency headwinds.
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Earnings per share: For the quarter, EPS grew 12% to $0.51, while comparable EPS (non-GAAP) grew 12% to $0.55. EPS performance included the impact of a 1-point currency headwind, while comparable EPS (non-GAAP) performance included the impact of an 11-point currency headwind. For the full year, EPS declined slightly to $2.46, while comparable EPS (non-GAAP) grew 7% to $2.88. EPS and comparable EPS (non-GAAP) performance both included the impact of a 9-point currency headwind.
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Market share: For both the quarter and the full year, the company gained value share in total nonalcoholic ready-to-drink ("NARTD") beverages.
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Cash flow: For the full year, cash flow from operations and free cash flow (non-GAAP) were $6.8 billion and $4.7 billion, respectively. Both decreased versus the prior year, primarily due to a $6.0 billion deposit made to the U.S. Internal Revenue Service ("IRS") related to ongoing tax litigation ("IRS tax litigation deposit"). Free cash flow excluding the IRS tax litigation deposit (non-GAAP) was $10.8 billion, an increase of $1.0 billion versus the prior year, largely due to strong business performance and working capital benefits, partially offset by higher other tax payments and higher capital expenditures.
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Company Updates |
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Offering a brand portfolio across compelling package offerings: The company, in close alignment with its bottling partners, continues to exemplify leadership in revenue growth management ("RGM") by offering relevant global and local brands in a variety of packages at the right price points to meet consumer needs. Returnable glass bottles offer a unique competitive advantage, having an expansive footprint for the company across more than 110 countries and, in 2024, added 1.6 billion unit cases to total company volume performance, with a growth rate that outpaced total company volume growth. Returnable glass bottles are important to the company’s RGM capabilities, serving as both an affordable and premium package that can be tailored to local market needs. In developed markets across Western Europe, the bottle is a key premium package in away-from-home channels. In certain developing and emerging markets, returnable glass bottles are an affordable offering that enables the company to recruit consumers and develop the commercial beverage industry. In 2018, the company launched a universal returnable glass bottle in Latin America, aimed at further reducing input costs, increasing collectability and expanding beverage offerings. The universal bottle has quickly expanded to markets around the world, including Germany, South Africa and Vietnam, with more opportunities ahead.
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Stepping up key execution levers to drive recruitment: The company’s global franchise system is increasing outlet coverage and accelerating the placement of cold-drink equipment across local markets to drive consumer recruitment and long-term balanced revenue growth. In 2024, the Coca-Cola system increased availability by adding more than 250,000 net new outlets and nearly 600,000 new coolers. Increasing cold-drink equipment is critical to drive transactions and expand the consumer base, as coolers are one of the strongest enablers for transaction growth, especially in traditional trade channels where approximately 90% of NARTD beverages are served cold. These actions contributed to the company growing volume and gaining value share for both the quarter and the full year.
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Operating Review – Three Months Ended December 31, 2024 |
Revenues and Volume
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Percent Change |
Concentrate |
Price/Mix |
Currency |
Acquisitions, |
Reported Net |
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Organic |
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Unit Case |
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Consolidated |
5 |
9 |
(3) |
(5) |
6 |
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14 |
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2 |
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Europe, Middle East & Africa |
6 |
11 |
(11) |
0 |
6 |
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17 |
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0 |
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Latin America |
3 |
23 |
(15) |
0 |
10 |
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25 |
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2 |
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North America |
4 |
12 |
0 |
0 |
16 |
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15 |
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1 |
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Asia Pacific |
6 |
(5) |
8 |
0 |
9 |
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1 |
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6 |
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Global Ventures4 |
10 |
(7) |
2 |
0 |
5 |
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3 |
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3 |
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Bottling Investments |
4 |
2 |
0 |
(30) |
(23) |
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7 |
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(26) |
Operating Income and EPS
|
Percent Change |
Reported |
Items Impacting |
Currency Impact |
Comparable |
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Consolidated |
19 |
11 |
(14) |
22 |
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Europe, Middle East & Africa |
2 |
7 |
(20) |
14 |
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Latin America |
24 |
1 |
(24) |
46 |
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North America |
29 |
3 |
0 |
26 |
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Asia Pacific |
24 |
35 |
(5) |
(6) |
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Global Ventures |
14 |
4 |
1 |
9 |
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Bottling Investments |
8 |
7 |
4 |
(3) |
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Percent Change |
Reported EPS |
Items Impacting |
Currency Impact |
Comparable |
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Consolidated |
12 |
(1) |
(11) |
23 |
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Note: Certain rows may not add due to rounding. |
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1 For Bottling Investments, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume computed based on total sales (rather than average daily sales) in each of the corresponding periods after considering the impact of structural changes, if any. |
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2 Organic revenues, comparable currency neutral operating income and comparable currency neutral EPS are non-GAAP financial measures. Refer to the Reconciliation of GAAP and Non-GAAP Financial Measures section. |
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3 Unit case volume is computed based on average daily sales. |
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4 Due to the combination of multiple business models in the Global Ventures operating segment, the composition of concentrate sales and price/mix may fluctuate materially from period to period. Therefore, the company places greater focus on revenue growth as the best indicator of underlying performance of the Global Ventures operating segment. |
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Operating Review – Year Ended December 31, 2024 |
Revenues and Volume
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Percent Change |
Concentrate |
Price/Mix |
Currency |
Acquisitions, |
Reported Net |
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Organic |
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Unit Case |
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Consolidated |
2 |
11 |
(5) |
(4) |
3 |
|
12 |
|
1 |
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Europe, Middle East & Africa |
(1) |
17 |
(16) |
0 |
1 |
|
16 |
|
0 |
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Latin America |
3 |
21 |
(14) |
0 |
11 |
|
25 |
|
3 |
|
North America |
1 |
10 |
0 |
0 |
11 |
|
11 |
|
0 |
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Asia Pacific |
2 |
2 |
(3) |
0 |
2 |
|
4 |
|
1 |
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Global Ventures3 |
4 |
(3) |
2 |
0 |
2 |
|
1 |
|
2 |
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Bottling Investments |
5 |
5 |
(2) |
(28) |
(21) |
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9 |
|
(23) |
Operating Income and EPS
|
Percent Change |
Reported |
Items Impacting |
Currency Impact |
Comparable |
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Consolidated |
(12) |
(17) |
(11) |
16 |
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Europe, Middle East & Africa |
(2) |
1 |
(16) |
14 |
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Latin America |
10 |
(2) |
(18) |
31 |
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North America |
(2) |
(16) |
0 |
14 |
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Asia Pacific |
5 |
6 |
(6) |
5 |
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Global Ventures |
9 |
1 |
1 |
8 |
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Bottling Investments |
(14) |
1 |
(1) |
(15) |
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|
|
|
|
|
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Percent Change |
Reported EPS |
Items Impacting |
Currency Impact |
Comparable |
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Consolidated |
0 |
(8) |
(9) |
17 |
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Note: Certain rows may not add due to rounding. |
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1 For Bottling Investments, this represents the percent change in net revenues attributable to the increase (decrease) in unit case volume after considering the impact of structural changes, if any. |
|
2 Organic revenues, comparable currency neutral operating income and comparable currency neutral EPS are non-GAAP financial measures. Refer to the Reconciliation of GAAP and Non-GAAP Financial Measures section. |
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3 Due to the combination of multiple business models in the Global Ventures operating segment, the composition of concentrate sales and price/mix may fluctuate materially from period to period. Therefore, the company places greater focus on revenue growth as the best indicator of underlying performance of the Global Ventures operating segment |
