Coca-Cola Company reiterates plans to list African bottling unit CCBA as a publicly traded company | Food Business Africa Magazine
USA – The Coca-Cola Company (TCCC) is planning to list Coca-Cola Beverages Africa as a publicly traded company via an initial public offering (IPO) in 2023, the Atlanta-based company said in its full year financial report for 2022.
CCBA, which employs more than 17000 people in Africa, began operations as a legal entity in 2016 and is the largest Coca-Cola bottling partner in Africa by revenue.
It is responsible for up to 40% of the volume of sodas sold in Africa. The Coca-Cola Company owns 66.5% of CCBA, and the other 33.5% is owned by Gutsche Family Investments (GFI), and the former will be selling part of its shares through the planned initial public offering (IPO).
According to TCCC, the listing of CCBA as a publicly traded company has yet to materialize because of unfavorable market conditions in the past.
Instability of the market, especially due to the covid19 pandemic, created uncertainties that caused TCCC to put their plans of an IPO on hold.
According to TCCC, listing CCBA is currently the one of the most effective uses of capital to drive growth and continue focusing on consumer-loved brands.
Divesting and Refranchising
To support sustainable value creation, in 2022, TCCC re-franchised its bottling operations in Cambodia to Swire Coca-Cola Limited. The company also completed the sale of its stake in the bottler in Egypt to Coca-Cola HBC AG.
As of January 2023, TCCC has also re-franchised its company-owned bottling operations in Vietnam, and is planning to sell its stake in the bottler in Pakistan.
TCCC made no significant acquisitions in 2022, and instead chose to focus its investments on their existing product lines; investing US$1.5 billion on capital expenditures. This investment is up 9% from the previous year.
The company also had US$0.6 billion net shares repurchases in 2022, having purchased US$1.4 billion worth of shares and sold US$0.8 billion of shares.
James Quincey, CEO of The Coca-Cola Company explains that “As we begin 2023, we continue to invest in our capabilities and strengthen alignment with our bottling partners to maintain flexibility.”
Full year revenues grow to US$43B
According to James Quincey, “While 2022 brought many challenges, the company is proud of our overall results in a dynamic operating environment.”
TCCC saw a 5% growth in Global Unit Case Volume, and an 11% Net Revenues growth to US$43.0 billion in 2022.
The unit case volume for sparkling soft drinks grew 4% for the year, despite unfavorable business environment causing suspension of operations in Russia.
The Coca-Cola® Zero Sugar grew 11% in 2022 as well, with this growth evident in both developed and developing markets.
For juice, value-added dairy and plant-based beverages, and water, sports, coffee and tea, the unit case volume grew by 3% and 6% respectively.
The company also experienced growth in market share for non-alcoholic ready-to-drink beverages (NARTD) globally, maintaining its position as an industry leader.
James Quincey, the CEO acknowledges that growth in 2023 could be complicated by inflation, supply chain issues and geopolitics, but expects the company to register organic revenue growth of 7% to 8%.
According to John Murphy, the President and Chief Financial Officer, TCCC, the company has “… the right portfolio, a very focused strategy, a flexible and adaptable structure and a system with the ability to reinvest in the business”.
With these, the company is confident that they will register significant growth in 2023. The company expects to deliver comparable currency neutral EPS (non-GAAP) growth of 7% to 9% and comparable EPS (non-GAAP) growth of 4% to 5%, versus US$2.48 in 2022.
It further forecasts a free cash flow (non-GAAP) of approximately US$9.5 billion through cash flow from operations of approximately US$11.4 billion, less capital expenditures of approximately US$1.9 billion.
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