10-KPeriod: FY2019

COCA COLA CO Annual Report, Year Ended Dec 31, 2019

Filed February 24, 2020For Securities:KO

Summary

Coca-Cola Company's (KO) 2019 10-K filing highlights a robust global presence with over 500 nonalcoholic beverage brands across five key categories: sparkling soft drinks, water/enhanced water/sports drinks, juice/dairy/plant-based beverages, tea/coffee, and energy drinks. The company emphasizes its extensive distribution network, reaching consumers in over 200 countries through independent bottling partners. A significant portion of net operating revenues comes from concentrate operations, with finished product operations contributing the remainder. The filing also details the company's strategic focus on disciplined portfolio growth, an aligned bottling system, and stakeholder engagement, supported by digital transformation and sustainability initiatives. Key financial highlights for 2019 include net operating revenues of $37.266 billion, a consolidated net income of $8.985 billion, and diluted earnings per share of $2.07. Coca-Cola continued its shareholder return strategy by paying significant dividends and repurchasing shares. The company faced challenges such as evolving consumer preferences, health concerns (particularly obesity), and increased competition, but expressed confidence in its ability to adapt and innovate. The report also addresses potential risks including foreign currency fluctuations, increased indirect taxes, and ongoing tax disputes with the IRS, while noting the early stages of impact from COVID-19 in China.

Financial Highlights

56 data points
Beta

Revenue

$37.27B

60.8% Gross Margin

Net Income

$8.92B

23.9% Net Margin

EPS (Diluted)

$2.07

Total Assets

$86.38B

Cash & Equivalents

$6.48B

Free Cash Flow

$8.42B

Financial Statements
Beta
Revenue$37.27B
Cost of Revenue$14.62B
Gross Profit$22.65B
SG&A Expenses$12.10B
Operating Income$10.09B
Interest Expense$946.00M
Net Income$8.92B
EPS (Basic)$2.09
EPS (Diluted)$2.07
Shares Outstanding (Basic)4.28B
Shares Outstanding (Diluted)4.31B

Key Highlights

  • 1Coca-Cola operates as the world's largest nonalcoholic beverage company with over 500 brands across five major categories.
  • 2Net operating revenues for 2019 reached $37.266 billion, with consolidated net income at $8.985 billion.
  • 3The company reported diluted earnings per share of $2.07 for the year ended December 31, 2019.
  • 4Coca-Cola's global reach extends to over 200 countries through a vast network of independent bottling partners.
  • 5Sparkling soft drinks, particularly the 'Trademark Coca-Cola' brand, remain the largest volume drivers, accounting for 69% and 45% of worldwide unit case volume, respectively.
  • 6The company returned significant value to shareholders through dividends totaling $6.845 billion and share repurchases.
  • 7Key risks identified include evolving consumer preferences, health concerns related to sugar-sweetened beverages, increased competition, and foreign currency exchange rate fluctuations.

Frequently Asked Questions

In 2019, Coca-Cola's net operating revenues were primarily derived from concentrate operations (55%) and finished product operations (45%). The company sells concentrates and syrups to bottling partners globally, which then manufacture and distribute finished beverages.

Coca-Cola's growth strategy is centered around disciplined portfolio growth through continuous innovation and acquisitions, an aligned and engaged bottling system focused on value growth, and winning with stakeholders. Key enablers for this strategy include digitizing the enterprise, fostering a growth culture, and growing sustainably.

Key risks identified include evolving consumer preferences (health, wellness, sustainability), increased competition, product safety and quality concerns, ingredient quality and quantity (especially water scarcity), and fluctuations in foreign currency exchange rates. The company also highlighted potential impacts from global events like the COVID-19 outbreak, which began affecting operations in China in early 2020.

Coca-Cola manages its relationships with approximately 200 independent bottling partners through bottler's agreements. These agreements authorize bottlers to manufacture and sell Company Trademark Beverages within specific territories. The company also works closely with these partners on pricing models, marketing, and innovation to ensure alignment and mutual growth.