- Coca-Cola’s revenues grew 11 percent. The increase was based almost entirely on higher prices for most of its products.
- This is the best revenue performance in Coca-Cola’s last seven years.
- The fear is that now, with a recession looming and people buying less because they need to spend on essential services, higher prices will undermine sales.
The US multinational beverage corporation Coca-Cola managed to rescue a year marked by the suspension of its operations in Russian territory and cost increases with a turnover of more than 43 billion dollars, an increase of more than 10 percent over the previous year.
This is the best revenue figure achieved in the last seven years, due to the price increases that the company, like the other major food and beverage companies, carried out during the year to balance the cost increases and maintain its margins, which also registered an 11 percent increase.
This decision did not affect sales volume, which grew about 5 percent year-over-year, despite posting a 1 percent decline in the last quarter.
“Sales volume increased in all operating sectors, especially in out-of-home channels,” Coca-Cola explained in its earnings report last week.
By markets, it also recorded significant growth in Brazil and India, in addition to the hard hit by the suspension of operations in Russia. In Spain, the beverage company highlights a gain in market share.
Coca-Cola reduces operating margin
The best-performing divisions were water, coffee, tea and isotonic beverages, which recorded an annual increase of more than 5 percent.
This performance enabled the company to achieve its annual objective: to maintain its margins at maximum, which is essential for the industry.
Its operating profit grew by 5.9 percent to US$10.9 billion. However, as revenues increased rapidly, the operating margin was 25.5 percent, down 1.3 percentage points from the previous year.
Net income was $9.5 billion, down about 2 percent. “Last year was a solid year for the company. We adopted important policies and achieved growth in a challenging macroeconomic environment,” explained The Coca-Cola Company’s chairman and chief executive officer, James Quincey.
> Coca-Cola 2022 Financial Results.
Targets for 2023
For this year, Coca-Cola estimates organic sales growth in excess of 7 percent, and earnings per share growth in excess of 6 percent. “We expect prices to moderate during 2023. Although the inflationary context is balancing, we still foresee a high increase in our operating costs, but we will continue to increase investments to sustain growth,” said CFO John Murphy in a conference with analysts, who also anticipated that, with the current situation of rising interest rates, they estimate higher financial expenses.
Coca-Cola changes the CEO of Costa Coffee
On the other hand, Costa Coffee announced this week that Philippe Schaillee will become CEO of the company as of April 10, 2023. Schaillee comes to Costa from Groupe SEB, where he served as executive vice president in charge of Products and Innovation since April 2021.
“Philippe is an outstanding leader who comes to Costa with deep business experience and a passion for building great brands,” said Evguenia “Jeny” Stoichkova, president, Global Ventures, The Coca-Cola Company.
“We look forward to working with Philippe to expand the plans we have developed to grow Costa, both in its home country of England and beyond.”
Schaillee began his career at Sara Lee Group in Belgium in 1994, where he held various marketing positions. In 2000, he moved to the United States, where he was executive vice president of marketing for the coffee and tea businesses. He later became executive vice president of the beverage division.
In 2006, he was appointed executive vice president of the Breakfast, Snacks and Beverages division. In 2008, he was named senior vice president, chief marketing officer and member of the executive committee for all categories of Sara Lee Group in the United States.
In 2012, Schaillee returned to Europe, where he joined Jacob Douwe Egberts Group (JDE). He was appointed president of the Professional Coffee Division and served as a member of its executive committee.
Most recently, he was a member of the executive committee of France-based Groupe SEB, which is a world leader in the cookware, small appliances and professional coffee equipment market, with brands that include WMF, Schaerer, All-Clad, Krups, Tefal and Rowenta.
“I have long admired Costa and appreciate the company’s deep history and heritage,” said Schaillee. “I am excited to join the great team at Costa and look forward to learning and growing the business with them.”
Schaillee graduated from the Catholic University of Leuven and holds an MBA from the Vlerick Leuven Ghent Management School, both in Belgium. Schaillee succeeds former Costa CEO Jill McDonald. She will report to Stoichkova and will be based in London.
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