01—Abstract
Summary
Summary of the 10-K filed February 22, 2022. Cited figures are marked; the original filing is the authoritative source.
Coca-Cola Company (KO) reported strong results for the fiscal year ending December 31, 2021.
The company saw a significant increase in net operating revenues, driven by an 8%a rise in unit case volume and a 9% increase in concentrate sales volume compared to 2020. This growth was attributed to the gradual recovery of away-from-home consumption channels and effective pricing and product mix strategies. The company's diversified portfolio, spanning sparkling flavors, hydration, coffee, tea, and nutrition, contributed to this performance across its operating segments.
Financially, Coca-Cola demonstrated robust operating income growth, bolstered by improved gross profit margins and strategic cost management. The company also continued its commitment to returning capital to shareholders through dividends and share repurchases. Despite facing challenges such as increased commodity and transportation costs, and ongoing COVID-19 pandemic impacts, Coca-Cola's strategic initiatives, including organizational transformation and portfolio optimization, position it for continued growth and value creation.
02—Key points
Key Highlights
- Net operating revenues increased by 17% to $38.7 billion in 2021, driven by an 8% increase in unit case volume and a 17% increase in concentrate sales volume.
- Operating income grew by 15% to $10.3 billion, reflecting improved gross profit margins and effective cost management.
- The company returned $7.3 billion to shareholders through dividends in 2021, maintaining its track record of consistent dividend growth.
- Acquisitions, notably the full acquisition of BodyArmor, and strategic investments contributed to portfolio diversification and revenue growth.
- The company actively managed its debt, issuing new notes while also repaying outstanding debt, maintaining a strong liquidity position.
- Geographic diversification was a strength, with strong performance noted across Europe, Middle East & Africa, Latin America, and Asia Pacific, alongside North America.
- The company emphasized its ESG goals and strategies, aiming for sustainability and positive social impact as core business priorities.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Coca Cola Co kept $0.25.
- Revenue$38.66B100.0%
- Cost of revenue−$15.36B39.7%
- Gross profit$23.30B60.3%
- Operating costs−$12.99B33.6%
- Operating income$10.31B26.7%
- Interest, other & tax−$537.0M1.4%
- Net income$9.77B25.3%
Where FY2021 revenue went
$38.66B- Cost of revenue: $15.36B, 40% of revenue
- SG&A: $12.14B, 31% of revenue
- Net income: $9.77B, 25% of revenue
- Other operating costs: $846.0M, 2.2% of revenue
- Interest, other & tax: $537.0M, 1.4% of revenue
Kept 25% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 22, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $38.66B$33.01B | +17.1% |
| Cost of Revenue | $15.36B$13.43B | +14.3% |
| Gross Profit | $23.30B$19.58B | +19.0% |
| SG&A Expenses | $12.14B$9.73B | +24.8% |
| Operating Income | $10.31B$9.00B | +14.6% |
| Interest Expense | $1.60B$1.44B | +11.1% |
| Net Income | $9.77B$7.75B | +26.1% |
| EPS (Basic) | $2.26$1.80 | +25.6% |
| EPS (Diluted) | $2.25$1.79 | +25.7% |
| Shares Outstanding (Basic) | 4.32B4.29B | +0.5% |
| Shares Outstanding (Diluted) | 4.34B4.32B | +0.4% |
05—Questions
Frequently Asked Questions
What was Coca-Cola's revenue performance in 2021?
Coca-Cola reported net operating revenues of $38.7 billion in 2021, a 17% increase compared to $33.0 billion in 2020. This growth was driven by a combination of volume increases, favorable price, product, and geographic mix, and a positive impact from foreign currency fluctuations.
How did Coca-Cola's profitability fare in 2021?
The company's operating income increased by 15% to $10.3 billion in 2021, up from $9.0 billion in 2020. This improvement was supported by a higher gross profit margin, which increased to 60.3% from 59.3%, and effective cost management, despite facing increased commodity and transportation costs.
What major strategic moves did Coca-Cola make in 2021?
Key strategic moves in 2021 included the full acquisition of BodyArmor, which significantly expanded its sports drink portfolio, and continued focus on its organizational transformation initiatives to enhance agility and local market responsiveness. The company also continued to invest in its innovation pipeline and digital capabilities.
What is the company's stance on the IRS tax dispute?
The Coca-Cola Company is engaged in a significant tax dispute with the IRS concerning transfer pricing for the tax years 2007-2009. While the Tax Court predominantly sided with the IRS on November 18, 2020, Coca-Cola disagrees with the decision and intends to vigorously defend its position on appeal. The company has estimated a potential aggregate incremental tax and interest liability of approximately $13 billion as of December 31, 2021, if the IRS's methodology is applied to subsequent years.
06—Continue