Coca-Cola was able to increase sales, profits and market share for the company in 2023. According to the accounts published this Tuesday of the Atlanta-based soft drinks giant, the group's annual turnover amounted to 45,754 million dollars, with a growth of 6%, slightly weighed down by the impact of foreign exchange rates, while profits improved by 12% to 10,714 million dollars.
So far, the company has been able to combine the increase in sales volumes with the increase in prices in an inflationary environment, in which the prices of raw materials and other costs have also increased. The group is already seeing a decline in input and freight costs since the peak of the pandemic.
The company has told the U.S. Securities and Exchange Commission (SEC) that it expects organic sales growth of 6% to 7%, a figure above market expectations. However, according to forecasts, actual sales will be burdened by a negative currency effect of 2 to 3% as well as a negative effect of 4 to 5% from acquisitions, divestments and structural changes. So real income growth is questionable. Against this backdrop, Coca-Cola expects to increase comparable earnings per share by 4 to 5%, weighed down by a currency effect of 4 to 5 points.
The group's CEO, James Quincey, will comment on the results at a conference with analysts this Tuesday.
The Company expects to generate free cash flow of approximately $9.2 billion from operating cash flow of approximately $11.4 billion, net of capital expenditures of approximately $2.2 billion. The figure does not include possible payments related to ongoing tax disputes with the U.S. Treasury Department. The company recently lost in court in a major case with a potential impact exceeding $14 billion.
Quarterly profit falls
In the fourth quarter, net income rose 7% to $10,849 million. Organic sales increased 12%, driven by 9% price/blend growth and 3% growth in concentrate sales. The quarter included an additional day that increased sales growth by one point. For the full year, organic sales increased 12%, driven by 10% growth in price/blend and 2% growth in concentrate sales. Sometimes the numbers that Coca-Cola considers organic are less representative of the company's performance. For example, they are distorted in countries with high inflation such as Argentina. When prices rise sharply, “organic” sales skyrocket, but the currency depreciates and then that growth is subtracted by exchange rate effects.
The company improved its profitability thanks to full-year sales growth. In the fourth quarter, profit fell 3% to $1,973 million due to one-time results and currency effects. What the company describes as comparable earnings per share came in at $0.49, as the market expected.
The company was able to gain value share in total non-alcoholic ready-to-drink beverages both in the quarter and for the year as a whole. Coca-Cola, whose brands also include Fanta, Powerade and Minute Maid, is preparing to launch its first new permanent flavor in several years, a raspberry-flavored drink called Coca-Cola Spiced.
PepsiCo, maker of Gatorade, Mountain Dew and Frito-Lay snacks, last week reported declines in sales and volume at its North American food and beverage units. Category growth is normalizing as consumer behavior returns to pre-pandemic normality, explained Spanish Ramón Laguarta, CEO of the company.
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