According to the third quarter financial report of Coca Cola, during the reporting period, Coca Colas revenue decreased by 9% to 8.7 billion US dollars, compared with 9.5 billion US dollars in the same period of last year, and the net profit was 1.737 billion US dollars, which was 2.593 billion US dollars in the same period of last year.
At the same time, affected by the epidemic, the suspension of some restaurants and large-scale sports activities in Europe reduced the outdoor sales of Coca Cola. The market expected that the revenue of Coca Cola in the third quarter was only 8.36 billion US dollars and the net profit was 2.035 billion US dollars. Therefore, although Coca Colas revenue and net profit in the third quarter decreased compared with the same period last year, they still exceeded the market expectations.
Affected by the news, Coca Colas share price rose instead of falling. As of press release, Coca Cola rose 1.65% to $50.81.
4000 job cuts
Compared with the same period last year, the revenue of North America market changed little, only a small decrease of 2%, but the revenue of Latin America decreased by 23% year-on-year, with the largest decline, followed by the Asia Pacific market, with a year-on-year decrease of 9%.
In response to the new outbreak crisis, Coca Cola launched a business restructuring strategy in early October, planning to cut its existing 500 brands by more than half.
The first confirmed product to be discontinued is Zico coconut water, while Coca Cola plans to stop selling Huberts lemonade in retail stores and close its business of odwala juice and smoothies.
In the U.S. market, Coca Colas other withdrawn brands include juice oddwalla, coconut water Zico and dietcoke feisty cherry, as well as regional products such as Northern Neck ginger beer and Delaware punch. Vegitabeta (Japanese market) and Kuat (Brazil market) are one of the products that Coca Cola withdrew from its international product portfolio.
In addition to cutting back on products, Coca Colas business restructuring strategy also includes restructuring the companys internal structure and streamlining personnel.
Coca Cola said on August 28 that it would lay off staff globally as part of its restructuring.
As of December 31, 2019, Coca Cola has 86200 employees, including about 10100 U.S. employees.
Continue to increase the Chinese market
Coca Colas market performance in China is still brilliant.
After the outbreak of Xinguan epidemic in the world, China was the first country in the world to resume production. In addition, the data from Kantar worldpanel in China showed that the sales of carbonated drinks in China had not been greatly affected during the epidemic period, and maintained a relatively stable growth in the second quarter. Coca Colas third quarter report also showed that the downward trend of single box sales in the Asia Pacific market continued to improve, from 18% in the previous quarter to 4%.
Coca Cola not only promotes the all category strategy in the Chinese market, but also increases its investment in the local supply chain and personnel training in China.
In June, Coca Cola China extended its tentacles into social e-commerce. Innocent (innocent) invested by Coca Cola Co., Ltd. launched fresh fruit products in the Chinese market, opened up new sub categories, and promoted the exploration and layout of Coca Cola in the juice market. At the same time, it was sold nationwide for the first time through social e-commerce online channels.
In terms of supply chain, COFCO Coca Cola launched the worlds fastest fully automated pop-up beverage production line in Sichuan in May this year. The production line can produce 120000 cans of pop-up drinks per hour, with an annual output of 260000 tons and an output value of 1.3 billion yuan.
In the third quarter, Coca Cola continued to increase its weight in China.
In July, the new production line of Hubei Swire Coca Cola has completed the bidding, and is expected to be put into production by the end of April next year.
In July, COFCO Coca Cola started construction of its first plant in Guizhou, with an estimated total investment of 270 million yuan in the first phase, which is planned to be completed and put into operation by the end of 2021.
As for the current situation of Coca Cola, CEO Zhan kunjie said that Coca Cola is accelerating the transformation already in progress, so that the overall economic recovery of Coca Cola is faster.
Buffett sticks to Coca Cola for 32 years
The third largest position
As we all know, Mr. Buffett loves Coca Cola most in his life. Up to now, he has held Coca Cola for 32 years.
According to the data, Mr. Buffett holds 400 million shares of Coca Cola, with a market value of more than $20 billion, second only to apple and Bank of America in his portfolio.
According to overseas media reports, the cost price of Mr. Buffetts holding Coca Cola is about $3.25. According to the current price of $51, Coca Cola brings him more than 1500% return on capital.
As a result, even if Coca Colas revenue fell the most in 25 years in the second quarter of this year, Mr. Buffett still hasnt cut back on Coca Cola.
Source: China Fund News Editor in charge: Yang Bin_ NF4368