The Coca-Cola Co. reported strong first quarter 2011 operating results, with comparable EPS growth in line with itslong-term target and with reported worldwide volume growth of 6 percent, cycling 3 percent growth in the prior year quarter. Excluding new cross-licensed brands in North America, primarily Dr Pepper brands, worldwide volume grew 5 percent in the quarter, ahead of long-term target. The company achieved broad-based volume growth in the quarter across each of five geographic operating groups, with growth of 8 percent in Eurasia and Africa, 7 percent in Latin America, 6 percent in North America (2 percent excluding new cross-licensed brands), 5 percent in Pacific and 1 percent in Europe. North America achieved its fourth consecutive quarter of organic volume growth.
In the quarter, the company grew global volume and value share in NARTD beverages, with share gains across most beverage categories. The company continued to see growth in sparkling beverages, with worldwide brand Coca-Cola volume growth of 3 percent in the quarter driven by a wide array of global markets.
Worldwide still beverage volume grew 11 percent in the quarter, led by growth across the portfolio, including juices and juice drinks, ready-to-drink teas, sports drinks and water brands. Still beverage volume in the quarter grew 12 percent internationally and 8 percent in North America. Juice brand Del Valle recently became our 15 the billion dollar brand, and is the first billion dollar company brand with roots in Latin America. Minute Maid Pulpy, a billion dollar brand with roots in China, continues to expand globally and achieved 25 percent growth in the quarter. And vitaminwater grew in the quarter, with solid double-digit growth internationally and 8 percent growth in North America.
Muhtar Kent, chairman and chief executive officer of The Coca-Cola Co. said in a prepared statement, "I am pleased with our first quarter results. Despite ongoing global geopolitical challenges, we once again delivered consistent, quality growth across all five of our geographic operating groups, with broad worldwide share gains across beverage categories. The growing value of our brands, our consistent quality operating results and our solid financial performance underscore how our system is steadily and strategically advancing its momentum around the world.
"This year on May 8 we celebrate the 125th anniversary of one of the world’s greatest consumer product innovations—Coca-Cola. As we mark this milestone, we see a company and a system shaped by its youth and not its age.
"And as we look forward, the opportunities before us are clearly abundant. We see one unified system, guided by 700,000 of the world’s greatest people and aligned behind one compelling and achievable 2020 Vision. Collectively, we own, inspire and drive our 2020 Vision each and every day. Our strong alignment has not only helped us weather recent storms, it has put us in a position of real strength. That is why, as we look ahead to 2020 and beyond, I am confident that our system has only just begun to achieve its potential in ushering in a new era of winning for all of our shareowners."
First quarter reported net revenue was up 40 percent. Comparable net revenue also increased 40 percent, reflecting a 4 percent increase in concentrate sales, a 2 percent currency benefit, positive price/mix and the acquisition of CCE’s North American operations, partially offset by the effect of structural changes. International and bottling investments group (BIG) price/mix was 2 percent positive and focus in North America on driving revenue growth management strategies led to positive price realization in the quarter.
First quarter reported operating income was up 4 percent. Comparable operating income was up 10 percent, reflecting strong top-line performance, a 3 percent currency benefit and the acquisition of CCE’s North American operations.
Reported first quarter cash from operations was $458 million. Net cash provided by financing activities was $986 million.
The company is actively engaged in hedging activities principally related to commodity exposures associated with the North American business acquired from CCE. During the first quarter, this hedging activity resulted in net unrealized gains of $36 million, which would have added $0.01 to comparable EPS. These net unrealized gains were excluded from first quarter comparable earnings and are reflected in the reconciliation of GAAP and non-GAAP financial measures schedule. These gains will be reflected in comparable earnings in the period that the related underlying transactions occur.
CCR integration efforts are on schedule, with expected 2011 net cost synergies of $140 to $150 million. This is in addition to the $150 million in annual synergies previously identified in North America as part of Coca-Cola Supply.
Productivity initiatives are on plan and on track to achieve a target of $500 million in annualized savings by year-end 2011.