Coca-Cola

Coca-Cola highlights Euro 2012 and London Olympics to maintain brand relevance as it announces 2011 results

Author

By Stephen Lepitak, -

February 15, 2012 | 3 min read

Soft drink company Coca-Cola has highlighted its sponsorship of the European Championships and London Olympic Games as two events that will help maintain the relevance of the brand as it reveals a 1% sales revenue increase for 2011.

The brand has revealed that in 2011, the company made €6,854m, an increase of 1% of 2010, with a decline in net profit of 27%, falling from €453m to €330m.

There was mixed growth experienced across its differing categories, with Sparkling beverages and energy drinks volume increasing by 2% and 29% respectively, last year, while water and juice categories declined by 7% and 8%, respectively.

Premium brands grew ahead of total volume however, with Coca-Cola growing by 5%, Coca-Cola Zero growing by 7% and Fanta and Sprite each experiencing 1% growth.

The rising cost of materials however was blamed for the 21% decline in comparable pre-tax earnings.

Dimitris Lois, Chief Executive Officer of Coca-Cola Hellenic, commented:

"We grew revenue ahead of volume both in the fourth quarter and for the full year 2011. Despite extremely challenging economic conditions in most of our markets, net sales revenue per case grew by 4% on a currency neutral basis in the full year. This result was achieved whilst growing or maintaining our volume share in sparkling beverages in twenty five out of twenty eight markets in 2011.

“We expect the economic environment and consumer sentiment to remain weak in 2012. We also anticipate another year of significant input cost pressures. In this environment, we will continue to optimise our operations to reduce our ongoing costs. We remain committed to our revenue growth strategy, and we expect to further improve currency neutral net sales revenue per case while we continue building sustainable leadership in the marketplace.

“We will sustain a strong free cash flow generation trend in 2012 through our focus on working capital management and set a competitive cost base through our operating efficiency initiatives."

The company stated in its business outlook for 2012 that following an ‘exceptionally challenging year’ in 2011 across many territories where consumer confidence continued to deteriorate, Coca-Cola was able to grow its market leadership. This year, it anticipates further cost pressures and slowdown of growth within the Eurozone, with an increase in total costs expected to be in ‘the high single-digitals’ due to EU sugar and juice prices, although its overall revenue growth strategy will focus on recovering the increase.

Coca-Cola also highlighted both the Euro 2012 and the Olympic Sponsorships as its aimed to ‘stay relevant’ to customers and partner with customers to drive cost leadership and grow the company’s market position.

‘Additional restructuring opportunities’ have also been identified to improve efficiencies within the company and reduce costs, expected to cost €50 million this year, but is forecast to yield €35 million from 2013 onwards. Meanwhile, initiatives undertaken in 2011 are forces to yield around €40 million in benefits this year alone.

Coca-Cola

More from Coca-Cola

View all

Trending

Industry insights

View all
Add your own content +