Wednesday 18 September 2019

Coca-Cola sales growth boosted by Brexit stockpiling

The soft drinks giant reported a 5% jump in first-quarter net revenues to eight billion US dollars (£6.2 billion).

Coca-Cola reported a 24% rise in earnings per share (Nick Ansell/PA)
Coca-Cola reported a 24% rise in earnings per share (Nick Ansell/PA)

By Henry Saker-Clark, Press Association City Reporter

Stockpiling in preparation for a no-deal Brexit has boosted Coca-Cola’s sales and earnings in the first quarter.

The soft drinks giant said sales growth was primarily driven by stockpiling by bottlers, who significantly increased the size of their orders before the original Brexit deadline.

Coca-Cola reported a 5% jump in net revenues year-on-year to eight billion US dollars (£6.2 billion) for the quarter to March 2019.

It said around two percentage points of sales growth was “primarily related to bottler inventory build to manage uncertainty related to Brexit”.

Earlier this year, the largest independent Coke bottler, Coca-Cola European Partners (CCEP), revealed it had begun stockpiling ingredients in the UK to minimise disruption from a disorderly exit from the EU.

In 2018, the UK represented around one fifth of CCEP’s overall sales, which totalled more than 1.5 billion euros (£1.3 billion) for the year.

We’re encouraged by our first-quarter results as our disciplined growth strategies continue to deliver strong underlying performance James Quincey, Coca-Cola Company

Coca-Cola reported a 24% rise in earnings per share, with Brexit stockpiling contributing to around 2% of earnings growth, it said.

Wall Street-listed Coca-Cola saw shares jump 4% in pre-market trading, after posting figures ahead of forecasts.

It reported net income of 1.7 billion US dollars (£1.3 billion), up 29%, on the back of revenue growth across all of its global regions.

Operating income rose 7% across its European region, as it was buoyed by strong sparkling soft drink sales.

Revenues also benefited from the completion of Coca-Cola’s £3.9 billion acquisition of Costa Coffee during the quarter, as well as a strong performance by its Innocent smoothie business.

The company has “completed a smooth transition” with Costa, it said, and is working quickly to continue growth in the coffee business.

James Quincey, chief executive of the Coca-Cola Company, said: “We’re encouraged by our first-quarter results as our disciplined growth strategies continue to deliver strong underlying performance.

“We remain confident in our full-year guidance as we continue to make progress on our transformation as a consumer-centric total beverage company.”

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