Market Leader informed
The Coca-Cola Company (NYSE:KO) is an American food company, the world’s largest producer and supplier of concentrated products, syrups and nonalcoholic beverages.Coca-Cola is its most famous product.
The company’s headquarters are in Atlanta, the capital of Georgia. Muhtar Kent has been the President and CEO of the company since July 2008.
Coca-Cola’s history began on 8 May 1886 in Atlanta, US, in the house of pharmacist Pemberton. Then John Pemberton cooked somewhat unusual syrup in his copper basin, called his bookkeeper Frank Robinson and shared his invention with him:
- Frank, my friend, try what I came up here with!
- There’s something in it, John!Put down the recipe lest you should forget it!
Today Coca-Cola is a large company that has a market cap of $136.54 bn and employs 92,800 staff. The company maintains a dividend policy and its stocks are held by many large investors.
The company’s mission:- To refresh the world, body, mind and spirit;
- To inspire moments of optimism with our drinks and actions;
- To create value and make a difference.
Vision of the 2020 tasks:
- People: Be a great place to work where people are inspired to be the best they can be;
- Planet: Be a responsible citizen that makes a tangible contribution and change the world for the better;
- Products: Produce drinks that meet and, moreover, exceed desires and needs of people;
- Partners: Nurture a winning partnership network, together we create mutual, enduring value;
- Profit: Maximize return to shareowners while being mindful of our overall responsibilities.
General values:
- Leadership: The courage to shape a better future;
- Passion: Committed in heart and mind;
- Integrity: Be real;
- Accountability: If it is to be, it’s up to me;
- Collaboration: Leverage collective genius;
- Innovation: Seek, dream, create and enjoy creativity;
- Quality: What we do, we do well.
The company’s strategy
The strategy rests on sustainable growth.Coca-Cola’s strengths include marketing and innovations.They helped the company to become the most successful producer of soft drinks in the world today and its brands are recognizable everywhere.One of Coca-Cola’s major principles is to seek opportunities everywhere in everything. These opportunities open up increasingly wider horizons:
- The company’s portfolio includes over 2,800 products in more than 200 countries of the world. These are juices and nectars, drinking water, sports and energy drinks, iced tea, child food, kvass. Coca-Cola’s research centers work every day to invent new energizing tastes that quench your thirst and improve your mood.
- Having the largest distribution system, Coca-Cola quickly delivers its products to different countries of the world and, in this way, meets the needs of its consumers.
- Coca-Cola releases a variety of new drinks each year. Over 150 low-calorie and calorie-free soft drinks were launched in 2007 alone.
- In 2008 Coca-Cola invested $40 mln in construction of the world’s largest facility in the US that recovers PET from plastic bottles (the Bottle to Bottle technology).
- The company has improved water utilization during production by over 20% saving more than 160 billion liters of water in this way.
- The company announced purchase of 100,000 devices of ‘environmentally friendly’ refrigerating equipment that operates on H2O and, as a result, doesn’t destroy the atmosphere’s ozone layer.
Production
The company has operations on five continents:Eurasia and Africa, South and North Americas, the Pacific Region.
The company sells concentrated products and syrups to be bottled; preservatives, sparkling ingredients and aromatizers. Coca-Cola’s business partners sell bottled products, mix syrups with water or concentrated products with sweeteners (depending on the product) with usual water and/or soda to make the final product.
Final products are transported in containers marked with Coca-Cola trademarks or trademarks licensed for such purposes, refillable cans, throw-away glass and plastic bottles. The products are directly sold to retailers or, in some cases, through wholesalers or bottling companies.
In the US Coca-Cola produces and sells syrups for its firm products to retailers or authorized wholesale companies or partners that later resell the products to retailers. Outside the US syrups are usually made by authorized soft drinks plants from concentrated products sold by the company. Coca-Cola also produces a whole variety of other drinks sold both to retailers and wholesalers in the US and other countries and directly through a network of business partners, including certain partners for bottled storage.
The company’s products include: Coca-Cola, caffeine-free Coca-Cola, Cherry Coke, Diet Coke (sold as Coca-Cola Light in many countries other than the US), caffeine-free Diet Coke, Diet Coke sweetened Splenda, Diet Coke with lime, diet Cherry Coke, Coca-Cola Zero (Coke Zero is sold in some countries), Fanta, Sprite, Diet Sprite/Sprite Zero (sold as Sprite Light in many countries, besides the US), Pibb Xtra, Меllо Yello, Tab, Fresca и Barq's, Powerade, Sokenbicha, Ciel, Bonaqa/Bonaqua, Dasani, aromatized Dasani, Georgia ready-to-drink coffees (sold primarily in Japan), Lift, Thums Up, Kinley, Eight O’Clock, Qoo, Mother, Vault, NOS, Full Throttle and other products specifically developed for certain countries.
Coca-Cola products also include water called glaceau vitaminwater and smartwater, fortified Fuze, tea, aromatized drinks and fruit drinks sold in the US, Matte Leao sold in Brazil. The company’s drinks also include Schweppes, Canada Dry, Dr Pepper and Crush.
The company produces and distributes juice-based products including Minute Maid; juices and juice-based beverages: Cappy juices, Odwalla – vitamin medical drinks, five live drinks Alive, Bacardi mixes (produced and sold under a license agreement with Bacardi & Company Limited).
Coca-Cola has licenses for production and sale of concentrated products for Seagram’s mixes, a line of sparkling drinks. Besides, the company cooperates with Nestea and Enviga in the US and makes products under a sublicense agreement with a subsidiary of Nestle SA (Nestle).
Multon, the Russian juice business (Multon) is managed by Coca-Cola as a joint venture of Coca-Cola Hellenic Bottling Company S.A. They make and sell the company’s products under different trademarks, including Dobryi, Rich and Nico BioTime in Russia, Ukraine and Belarus.
Beverage Partners Worldwide (BPW), the company’s joint venture with Nestle, shares the market under different trademarks, including Nestea, Enviga, Yang Guang, Nagomi, Frestea, Ten Ren, Yuan Ye, Tian Yu Di (Heaven & Earth), Nestea Vitao and Nestea Cool, in different markets worldwide, other than the US and Japan.
Ilko Coffee International, S.r.l., a joint venture with illycaffe S.p.A., and Ilko Hellenic Partners GmbH, a joint venture between Ilko Coffee International, S.r.l. and Coca-Cola’s Greek branch, make and sell ready beverages branded illy issimo.
The company competes with PepsiCo, Inc., Nestle, Dr Pepper Snapple Group, Inc., Groupe Danone, Kraft Foods Inc. and Unilever.
The company's performance
The company’s performance indicators in Q2 2010 and in the entire 2009 show that Coca-Cola worked well during the reporting period and increased production volumes, profits and earnings per share which justifies investors’ long-term goals.
- Coca-Cola demonstrated a strong international growth of product volumes by 5% in Q2 which justifies long-term goals together with a balanced growth worldwide, including a 2% growth in North America and 6% internationally. The international volume grew this year by 4%. Coca-Cola branded volumes grew 5% in Q2 and 4% over the current year.
Significant growth in product output was also reached in other key markets of the world such as Japan, Brazil, Mexico, Argentina, Thailand, Korea, Western Europe.
- By end of Q2 EPS grew by 16% to $1.06, or 15% more than the previous $1.02, which meets long-term targets.
Profits reported for Q2 2009 as per share were $ 0.88 or 44% more than in Q2 2008.
- Operating income added 13% in Q2 and 15% in 2010, which is in line with long-term targets.
- Net income grew by 5% in Q2 and a net profit also grew by 5% in Q2, which is in line with long-term targets.
- The vast global demand for beverages increases the company’s capitalization boosting the volume and earnings per share.
- Cash flow operations increased by 18% in 2010 and reached $4.3 bn.
Muhtar Kent, President and CEO of Coca-Cola, told the media: “I am happy with the operation of our company when we showed growth in Q2 again with consistent and good results that justify our plans and business vision until 2020 supported by our strategic marketing and innovations".
Mr. Kent went on to say: “It is clear, however, that growth of the global economy remains doubtful in many regions affected by the persisting problems of deficits in Europe, recent downward revisions in Chinese economy and weakened consumer confidence. And while this uncertainty looms over all of us, we remain determined in our commitment to invest in our global action and our brands towards long-term development. Even during this period the value of our brand is becoming stronger worldwide and consumers continue choosing our products. Looking forward to the annual balance sheet, we are still confident in our ability to meet the 2010 plan and continue making every effort to reach targets by 2020”.
Technical analysis of the company’s stocks
The company’s stocks are listed in Dow Jones and S&P500. Options are traded with a minimum spread.
The stock is within a wide range of 88.94-37.01 (March 2002) in the long-term chart. When broken upwards, the sloping channel opens the way for a move up with the major resistance area at 61.97 (Pivot 2) and 83.25 (Fibo 161.8%).
The Team of Analysts of the Land Association of US and Canada Traders maintains a positive outlook for Coca-Cola stocks and recommends buying them for a medium to long term.
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