Coca-Cola Posts Higher Quarterly Revenue -- 2nd Update

By Jennifer Maloney and Dave Sebastian 

Coca-Cola Co. said its sales volume in March returned to pre-pandemic levels as the rollout of Covid-19 vaccines allows more people to eat out again.

The beverage giant's sales plummeted a year ago as restaurants, stadiums, cinemas and other venues closed around the world. The company said demand steadily improved in the first quarter of this year, and in March sales volume reached the same level it stood in March 2019.

Coke Chief Executive James Quincey said he expects that positive trajectory to continue, despite new pandemic-related lockdowns in some parts of the world.

"The rollout of the vaccines is ultimately starting to work," particularly in the U.S. and the U.K., he said in an interview. But he noted that it would take time to distribute the vaccine in countries such as India, which is battling a new surge in coronavirus cases.

"Parts of the world will get vaccinated and will start to come out and particularly some of the developing markets are going to take longer -- not just more months but, you know, into next year and potentially beyond -- to really get it under control," Mr. Quincey said. He added that the possibility of new variants presents a bit of the unknown.

This year, Coke expects high-single-digit percentage growth in organic revenue, which excludes currency swings and acquisitions or divestitures. On that basis, Coke's revenue grew 6% in the quarter ended April 2.

The company's unit-case volume, or the number of 24 8-ounce servings of finished beverages sold, was flat for the quarter compared with the same period a year earlier. Its volume fell by 6% in the U.S. and by 2% in Europe, the Middle East and Africa but grew by 9% in Asia. Even as the U.S. reopens, fountain-drink sales there are still weak, Mr. Quincey said, noting that "it's not an on-off switch."

The company said its profit for the quarter fell 19% to $2.25 billion.

Separately on Monday, Coca-Cola said it plans to list Coca-Cola Beverages Africa as a separate, publicly traded company. The Atlanta-based company said it would sell a portion of its stake in the Africa bottling business through the initial public offering, which it expects within the next 18 months. Shares will be listed in Amsterdam and Johannesburg, with Amsterdam being the primary exchange, the company said.

The stand-alone listing would let the unit access capital independently to meet investment needs, said Jacques Vermeulen, CEO of Coca-Cola Beverages Africa. Coca-Cola said that the move is in line with its goal of selling off its bottling operations and that it sees Africa as a growth market.

Layoffs and other cost-cutting measures have helped Coke mitigate its revenue declines and improve operating profit margins. The company, which employed 80,300 people as of the end of last year, in December said it would cut 2,200 jobs. It has also narrowed its focus on core brands, dropping smaller ones such as Tab, a diet soda popular in the 1970s, and Zico coconut water.

Write to Jennifer Maloney at [e-mail] and Dave Sebastian at [e-mail]

(END) Dow Jones Newswires

April 19, 2021 10:05 ET (14:05 GMT)

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