10-KPeriod: FY2021

COCA COLA CO Annual Report, Year Ended Dec 31, 2021

Filed February 22, 2022For Securities:KO

Summary

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% 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.

Financial Highlights

55 data points
Beta

Revenue

$38.66B

60.3% Gross Margin

Net Income

$9.77B

25.3% Net Margin

EPS (Diluted)

$2.25

Total Assets

$94.35B

Cash & Equivalents

$9.68B

Free Cash Flow

$11.26B

Financial Statements
Beta
Revenue$38.66B
Cost of Revenue$15.36B
Gross Profit$23.30B
SG&A Expenses$12.14B
Operating Income$10.31B
Interest Expense$1.60B
Net Income$9.77B
EPS (Basic)$2.26
EPS (Diluted)$2.25
Shares Outstanding (Basic)4.32B
Shares Outstanding (Diluted)4.34B

Key Highlights

  • 1Net 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.
  • 2Operating income grew by 15% to $10.3 billion, reflecting improved gross profit margins and effective cost management.
  • 3The company returned $7.3 billion to shareholders through dividends in 2021, maintaining its track record of consistent dividend growth.
  • 4Acquisitions, notably the full acquisition of BodyArmor, and strategic investments contributed to portfolio diversification and revenue growth.
  • 5The company actively managed its debt, issuing new notes while also repaying outstanding debt, maintaining a strong liquidity position.
  • 6Geographic diversification was a strength, with strong performance noted across Europe, Middle East & Africa, Latin America, and Asia Pacific, alongside North America.
  • 7The company emphasized its ESG goals and strategies, aiming for sustainability and positive social impact as core business priorities.

Frequently Asked Questions

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.

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.

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.

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.