Global value share gains in nonalcoholic ready-to-drink beverages with volume and value share gains in core sparkling and still beverages for the full year
Full-Year and Fourth Quarter 2013 Highlights
Global volume grew 2% for the full year and 1% for the fourth quarter.
Reported net revenues declined 2% for the full year and 4% for the fourth quarter. Excluding the impact of structural changes, comparable currency neutral net revenues grew 3% for the full year and 4% for the fourth quarter.
Reported operating income declined 5% for the full year and 4% for the fourth quarter. Excluding the impact of structural changes, comparable currency neutral operating income grew 6% for the full year, in line with our long-term growth target, and 6% for the fourth quarter.
Currency was a 2% headwind on comparable net revenues and a 4% headwind on comparable operating income for the full year.
Full-year reported EPS was $1.90, down 3%, and comparable EPS was $2.08, up 3%. Comparable currency neutral EPS was up 8% for the full year. Fourth quarter reported EPS was $0.38, down 7%, and comparable EPS was $0.46, up 2%. Comparable currency neutral EPS was up 7% for the fourth quarter.
We are expanding our previously announced productivity and reinvestment program to generate an incremental $1 billion in productivity by 2016 to drive increased media investments in our brands.
As announced on Feb. 5, 2014, we signed an agreement together with Green Mountain Coffee Roasters to collaborate on the development and introduction of our global brand portfolio for use in the forthcoming Keurig Cold™ at-home beverage system.
All references to growth rate percentages and share compare the results of the period to those of the prior year comparable period.
“Concentrate sales” represents the amount of concentrates, syrups, beverage bases and powders sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers.
“Sparkling beverages” means NARTD beverages with carbonation, including energy drinks and carbonated waters and flavored waters.
“Still beverages” means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and enhanced waters, juices and juice drinks, teas, coffees, sports drinks and noncarbonated energy drinks.
All references to volume and volume percentage changes indicate unit case volume, unless otherwise noted. All volume percentage changes are computed based on average daily sales for the fourth quarter, unless otherwise noted, and are computed on a reported basis for the full year. “Unit case” means a unit of measurement equal to 24 eight-ounce servings of finished beverage. “Unit case volume” means the number of unit cases (or unit case equivalents) of Company beverages directly or indirectly sold by the Company and its bottling partners to customers.
Fourth quarter 2013 financial results were impacted by one additional selling day, which partially offset the impact of two fewer selling days in first quarter 2013 results. Unit case volume results for the quarters are not impacted by the variance in selling days due to the average daily sales computation referenced above.
In January 2012, the Company announced that Beverage Partners Worldwide (BPW), our joint venture with Nestlé in the ready-to-drink tea category, will focus its geographic scope primarily in Europe and Canada. The joint venture was phased out in all other territories by the end of 2012, and the Company's agreement to distribute products in the United States terminated at the end of 2012. We have eliminated the BPW and Nestlé licensed volume and associated concentrate sales for the year ended Dec. 31, 2012 in those countries impacted by these structural changes.
As previously announced, effective Jan. 1, 2013, the Company transferred our India and South West Asia business unit from the Eurasia and Africa operating segment to the Pacific operating segment. The countries included in our India and South West Asia business unit are Bangladesh, Bhutan, India, the Maldives, Nepal and Sri Lanka. This change in organizational structure did not impact the other geographic operating segments, Bottling Investments or Corporate. The reclassified historical operating segment data reflecting the change in organizational structure was disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission on March 21, 2013.
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. Our non-GAAP financial information does not represent a comprehensive basis of accounting.