The Coca-Cola Company (KO) Bundle
A Brief History of The Coca-Cola Company
Company Overview
The Coca-Cola Company, established in 1886, is a global leader in the beverage industry, renowned for its flagship product, Coca-Cola. As of 2024, the company operates in over 200 countries and offers more than 500 brands, including sparkling and still beverages.
Financial Performance in 2024
As of September 27, 2024, Coca-Cola reported a total revenue of $11,953 million, reflecting a slight increase compared to the previous year. The operating income for the three months ended September 27, 2024, was $2,510 million, down from $3,270 million in the same period of 2023, marking a 23% decline.
| Period | Total Revenue ($ Million) | Operating Income ($ Million) | Net Income ($ Million) |
|---|---|---|---|
| Q3 2024 | 11,953 | 2,510 | N/A |
| Q3 2023 | 11,574 | 3,270 | N/A |
Market Trends
Coca-Cola's gross profit margin for the three months ended September 27, 2024, was 60.7%, down from 61.0% for the same period in 2023. This decline was attributed to higher commodity costs and unfavorable foreign currency exchange impacts. The company faced a 15% reduction in operating income due to these factors alongside a 2% decrease in concentrate sales volume.
Dividends and Stock Performance
The company declared a regular quarterly dividend of $0.485 per share in October 2024, payable on December 16, 2024. The total cash outflow for treasury stock purchases in the nine months ended September 27, 2024, was $1,228 million, with 18 million shares repurchased at an average cost of $63.03 per share.
| Period | Dividends Paid ($ Million) | Treasury Stock Purchases ($ Million) | Shares Repurchased (Million) |
|---|---|---|---|
| 9M 2024 | 4,274 | 1,228 | 18 |
| 9M 2023 | 4,078 | 1,193 | 17.9 |
Debt and Interest
During the nine months ended September 27, 2024, Coca-Cola had issuances of debt totaling $11,298 million, consisting of $3,129 million in commercial paper and $8,169 million in long-term debt. Interest expense for the same period increased to $1,225 million from $1,114 million in the previous year.
Global Operations and Market Challenges
Coca-Cola's operating segments reported varying performances. North America showed an increase in operating income to $1,405 million, while Latin America and the Europe, Middle East & Africa segments reported declines. The unfavorable currency exchange rate fluctuations significantly impacted the overall operating income, particularly in Latin America.
| Region | Operating Income Q3 2024 ($ Million) | Operating Income Q3 2023 ($ Million) |
|---|---|---|
| North America | 1,405 | 1,276 |
| Latin America | 933 | 985 |
| Europe, Middle East & Africa | 977 | 1,136 |
Future Outlook
Expectations for the remainder of 2024 indicate that foreign currency exchange rate fluctuations will continue to exert pressure on operating income. The company remains focused on strategic initiatives to enhance profitability and market presence globally.
A Who Owns The Coca-Cola Company (KO)
Major Shareholders
As of 2024, the ownership of The Coca-Cola Company (KO) is distributed among various institutional and individual shareholders. The following table lists the major shareholders along with their ownership percentages:
| Shareholder | Ownership Percentage | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 8.63% | 373 million |
| BlackRock, Inc. | 7.89% | 344 million |
| Berkshire Hathaway Inc. | 9.2% | 404 million |
| State Street Corporation | 4.72% | 207 million |
| Wellington Management Company, LLP | 2.82% | 124 million |
| Other Institutional Investors | 56.74% | 2.5 billion |
| Individual Investors | 10.0% | 440 million |
Shareholder Composition
The shareholder composition of The Coca-Cola Company reflects a significant institutional investment, with over 56% of shares held by institutional investors. This includes prominent asset management firms such as The Vanguard Group and BlackRock, which are major players in the investment management industry.
Recent Stock Performance
As of September 27, 2024, The Coca-Cola Company reported a total of 4.31 billion shares outstanding. The stock price has shown fluctuations, with the average price per share being $63.03 during recent buybacks.
| Period | Stock Price (Average) | Market Capitalization |
|---|---|---|
| Q3 2024 | $63.03 | $271 billion |
| Q2 2024 | $61.45 | $257 billion |
| Q1 2024 | $60.00 | $258 billion |
Dividends and Share Repurchase
During the nine months ended September 27, 2024, The Coca-Cola Company paid dividends totaling $6.272 billion, with a quarterly dividend of $0.485 per share. The company also repurchased 18 million shares for a total cost of $1.135 billion.
Non-controlling Interests
The Coca-Cola Company also has non-controlling interests, which have shown a balance of $1.636 billion as of September 27, 2024. This includes various investments and partnerships that have been established over the years.
Recent Financial Highlights
For the nine months ended September 27, 2024, key financial metrics of The Coca-Cola Company included:
| Metric | Value |
|---|---|
| Net Operating Revenues | $35.517 billion |
| Net Income | $8.436 billion |
| Basic Earnings Per Share | $1.96 |
| Operating Income | $7.283 billion |
The Coca-Cola Company's ownership structure and financial performance showcase a robust investment landscape, with significant backing from institutional investors and a steady performance in the stock market. The continuous dividend payments and share repurchases reflect the company's commitment to returning value to shareholders.
The Coca-Cola Company (KO) Mission Statement
Mission Statement Overview
The Coca-Cola Company aims to refresh the world in mind, body, and spirit, and inspire moments of optimism and happiness through its brands and actions. It focuses on creating value for its stakeholders, including customers, employees, and communities.
Key Components of the Mission Statement
- Refreshment: The company seeks to provide refreshing beverages that enhance the quality of life.
- Inspiration: It aims to inspire happiness and optimism through its products and marketing.
- Value Creation: The focus is on delivering value to all stakeholders, ensuring sustainable business practices.
Financial Performance Metrics (2024)
The Coca-Cola Company has reported notable financial metrics in its recent earnings, reflecting its commitment to its mission.
| Metric | Value (in millions) |
|---|---|
| Net Operating Revenues (Q3 2024) | $11,854 |
| Net Income (Q3 2024) | $2,850 |
| Operating Income (Q3 2024) | $2,510 |
| Gross Profit (Q3 2024) | $7,190 |
| Dividends Paid (2024) | $6,272 |
| Basic Net Income Per Share (Q3 2024) | $0.66 |
| Average Shares Outstanding (Q3 2024) | 4,311 |
Strategic Initiatives Supporting the Mission
The Coca-Cola Company undertakes various strategic initiatives to align its operations with its mission statement:
- Sustainability Efforts: The company is committed to reducing its carbon footprint and water usage.
- Product Diversification: It continues to innovate by expanding its beverage portfolio to include healthier options.
- Community Engagement: Coca-Cola invests in local communities through various programs aimed at improving quality of life.
Market Position and Brand Influence
Coca-Cola holds a prominent market position, with brand recognition that supports its mission of inspiring happiness and optimism globally.
| Region | Net Operating Revenues (2024) | Operating Income (2024) |
|---|---|---|
| North America | $13,970 | $3,162 |
| Latin America | $4,816 | $2,795 |
| Europe, Middle East & Africa | $6,331 | $3,309 |
| Asia Pacific | $4,330 | $1,760 |
Recent Challenges and Adaptations
In 2024, The Coca-Cola Company faced challenges such as fluctuating commodity costs and foreign currency impacts. Despite these, it has adapted its strategies to maintain profitability and continue fulfilling its mission.
Future Outlook
The Coca-Cola Company aims for continued growth and alignment with its mission statement through strategic investments and consumer-centric innovations.
How The Coca-Cola Company (KO) Works
Business Model
The Coca-Cola Company operates primarily through a franchised distribution system. The company produces beverage concentrates and syrups, which are then sold to bottling partners, who are responsible for producing, packaging, and distributing the final products. This model allows Coca-Cola to maintain a consistent brand while leveraging local bottlers' expertise in their markets.
Financial Performance Overview
As of September 27, 2024, Coca-Cola reported net operating revenues of $11,854 million for the third quarter, a slight decrease from $11,953 million in the same period of 2023. For the nine months ended September 27, 2024, net operating revenues increased to $35,517 million from $34,905 million in the prior year, representing a 2% increase.
| Financial Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Operating Revenues | $11,854 million | $11,953 million | $35,517 million | $34,905 million |
| Gross Profit | $7,190 million | $7,296 million | $21,806 million | $21,019 million |
| Operating Income | $2,510 million | $3,270 million | $7,283 million | $9,038 million |
| Consolidated Net Income | $2,850 million | $3,083 million | $8,436 million | $8,717 million |
Segment Performance
During the nine months ended September 27, 2024, the operating segments reported the following income:
| Operating Segment | Operating Income (9M 2024) | Operating Income (9M 2023) |
|---|---|---|
| North America | $3,525 million | $3,404 million |
| Latin America | $2,795 million | $2,635 million |
| Europe, Middle East & Africa | $3,309 million | $3,404 million |
| Asia Pacific | $1,760 million | $1,727 million |
| Global Ventures | $224 million | $210 million |
| Bottling Investments | $297 million | $393 million |
Cost Structure
The company experienced increased costs in several areas:
- Higher commodity costs impacted cost of goods sold by approximately $4,664 million in Q3 2024.
- Selling, general and administrative expenses for Q3 2024 were $3,636 million, a slight decrease from $3,667 million in Q3 2023.
- Other operating charges increased significantly to $1,044 million in Q3 2024 from $359 million in Q3 2023.
Dividends and Shareholder Returns
Coca-Cola continues to return value to its shareholders through dividends. The company paid dividends of $0.485 per share in Q3 2024, totaling $2,091 million.
Cash Flow and Liquidity
For the nine months ended September 27, 2024, the cash flow metrics were as follows:
| Cash Flow Metrics | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $2,854 million | $8,929 million |
| Net Cash Provided by (Used in) Investing Activities | $3,307 million | ($2,423 million) |
| Net Cash Provided by (Used in) Financing Activities | ($1,426 million) | ($4,085 million) |
Market Trends and Challenges
The Coca-Cola Company faces challenges from fluctuating foreign currency exchange rates, which adversely affected consolidated net operating revenues by approximately 5% in 2024. Additionally, higher commodity prices continue to pressure margins.
Conclusion
The Coca-Cola Company's operational and financial performance as of 2024 reflects its strategic focus on maintaining brand strength while navigating market challenges. The company remains committed to enhancing shareholder value through consistent dividends and strategic investments.
How The Coca-Cola Company (KO) Makes Money
Revenue Streams
The Coca-Cola Company generates revenue primarily through the sale of beverages, including carbonated soft drinks, water, juices, teas, and energy drinks. The company operates through several segments, including North America, Latin America, Europe, the Middle East, Africa, Asia Pacific, and Global Ventures.
| Segment | Net Operating Revenues (2024) | Net Operating Revenues (2023) | Year-over-Year Change (%) |
|---|---|---|---|
| North America | $13,963 million | $12,728 million | 9.7% |
| Latin America | $4,816 million | $4,338 million | 11.0% |
| Europe, Middle East & Africa | $6,331 million | $6,388 million | -0.9% |
| Asia Pacific | $4,330 million | $4,340 million | -0.2% |
| Global Ventures | $2,279 million | $2,251 million | 1.2% |
| Bottling Investments | $4,672 million | $5,847 million | -20.0% |
Cost of Goods Sold
The company reported a cost of goods sold (COGS) of $13,711 million for the nine months ended September 27, 2024, compared to $13,886 million for the same period in 2023. This represents a decrease of 1.3% in COGS, which is in line with operational efficiencies.
Operating Income and Margin
For the nine months ended September 27, 2024, Coca-Cola reported an operating income of $7,283 million, down from $9,038 million in the previous year. The operating margin for this period was approximately 20.5%, compared to 25.8% in 2023.
Gross Profit Margin
The gross profit margin for the three months ended September 27, 2024, was 60.7%, a slight decrease from 61.0% in the same period a year earlier. For the nine months, the gross profit margin improved to 61.4% compared to 60.2% in the prior year.
Other Income and Charges
Other operating charges for the nine months ended September 27, 2024, totaled $3,987 million, significantly higher than $1,808 million in the same period in 2023. This increase was primarily due to the remeasurement of contingent liabilities related to acquisitions and various impairments.
Interest Income and Expense
Coca-Cola reported interest income of $784 million for the nine months ended September 27, 2024, an increase of 23% from $640 million in the previous year. Conversely, interest expense rose to $1,225 million, up from $1,114 million, reflecting higher debt levels and interest rates.
Net Income
Consolidated net income for the nine months ended September 27, 2024, was $8,436 million, compared to $8,717 million for the same period in 2023. The net income attributable to shareowners was $8,436 million, with a basic net income per share of $1.96.
Dividends
Coca-Cola paid dividends totaling $6,272 million during the nine months ended September 27, 2024, at a rate of $1.455 per share, compared to $5,967 million at a rate of $1.38 per share in the previous year.
Sales Volume and Pricing Strategy
The company experienced a 1% increase in concentrate sales volume for the nine months ended September 27, 2024. Price and product mix contributed positively with an 11% increase, while foreign currency fluctuations had a negative impact of 6% on overall revenues.
| Metric | Value (2024) | Value (2023) |
|---|---|---|
| Consolidated Net Income | $8,436 million | $8,717 million |
| Basic Net Income Per Share | $1.96 | $2.02 |
| Gross Profit Margin | 61.4% | 60.2% |
| Operating Income | $7,283 million | $9,038 million |
| Dividends Paid | $6,272 million | $5,967 million |
Impact of Foreign Currency
Fluctuations in foreign currency exchange rates unfavorably impacted Coca-Cola's consolidated revenues by approximately 6% due to a stronger U.S. dollar against various currencies, including the Argentine peso and Turkish lira.
Conclusion on Financial Performance
The Coca-Cola Company continues to adapt its strategies to maintain profitability amidst fluctuations in sales volumes, pricing, and foreign currency impacts. The company’s diversified product portfolio and global presence remain key to its ongoing revenue generation.
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Article updated on 8 Nov 2024
Resources:
- The Coca-Cola Company (KO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Coca-Cola Company (KO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Coca-Cola Company (KO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.