KO - Earnings call transcript Q3 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

At this time, I'd like to welcome everyone to The Coca-Cola Company's Third Quarter Earnings Results Conference Call. Today's call is being recorded.

If you have any objections, please disconnect at this time. [Operator Instructions].

I would like to remind everyone that the purpose of this conference is to talk with investors and, therefore, questions from the media will not be addressed. Coca-Cola's Department contact any they should questions. participants Media if Relations have Media

like Tim now introduce and would to I now Mr. Officer. Leveridge, Investor Mr. Leveridge, you may begin. Relations President Vice

Timothy Leveridge

you for our our Quincey, Chief Chief Good morning, Officer. and and joining today. with Chairman John I'm and Officer; us Executive Financial James here Murphy, thank

at tab to Before our generally accepted www.coca-colacompany.com. under may our the Financial under we posted we schedules of certain reconcile I'd principles. begin, schedules senior discussion reported be accounting section and These like during in Information non-GAAP that company which to Investor to morning's as this website by inform you measures, executives the Reports results financial our referred

find of of Investor additional materials like also structure. We'd in our an analysis website can section that our provide margin to note you company's the that

may earnings conference objectives with statements, In our in and call in SEC recent report. be periodic statements earnings cautionary considered should addition, contain in conjunction the company's release concerning contained long-term most forward-looking this and statements including

this prepared the your for over will [Operator we Instructions]. Following call questions. turn morning, remarks

let the me to over Now call James. turn

James Quincey

Good Thanks, morning, Tim. everyone.

seen deliver release continue earnings from strong have earlier we results. today, you'll As our to

potential. a with great We are part of solid long-term industry growth

greater revenue across of management driving and across innovation, ,all is We our and For growth our company, improving the business. power building, top growth by solid us segments. supported that aligned brand helping see line engaged sustain system all operating execution are our momentum

cultural across Our associates we are changes the are the responding system driving. the and organization within to

momentum business which and value up will as in cash we're track helped as top also about, from share increased of sustaining the quarters contribution currency EPS we've encouraging. And with talk emerging is is with strongly developed to across deliver line growth have year-to-date, John the performance markets, headwinds. offset balanced the a solid all on operating free commitments, and we're the global gained that both through our X segments flow So year,

Looking around world. the

segments seen of organic operating our all we've delivered said, revenue In growth I EMEA, growth. solid As X% year-to-date. sustained

much our the Importantly, to emerging to to pretty in management we're seeing developed efforts revenue due markets. growth come continue markets few the revenue of world. the growth is encouraging, initiatives, This from years. And markets partly management to over growth out as we last as roll developed other areas it's these contributions as

revenue to India new while emerging X% In and Asia strong gaining leading recruiting have in year-to-date. horizontal organic growth. and consumers effectiveness. system quarterly and China, In capacity, to fast-changing consumer volume Pacific, work Asia, Southeast efficiencies like both we've distribution to operating still Japan, grown and We're markets, and do, models environment seeing our manufacturing to we're revenue. volume drive we're The adapting continues in we evolving sequential the improvement and rebuild

driven drink by Turning America. economic little has more up a momentum, sustained they're behind strong and has improved even macro to Latin Again, quarter. X% equipments. in challenging despite This slowed has growth third environment, we're Brazil organic positive been the the a investment performance year-to-date. as driving cold consistent execution and

Our the the consumer enabled quarter. grow of spending the in to approach twice has rate third business

impacting consumer moved to environment, improvement returnable packaging. Mexico we've -- a on In has push to has spending, trends year. actively affordability in has to more portfolio worsening a situation business through and as economic in business higher adjusted affected towards Argentina, industry. Our a though, the the challenging our our the and inflation with This economic shifting led

year-to-date. have our value However, by share gained consumer base, playbook also following while focusing increases, maintaining our price balancing of we carefully on

a North improving performance our in innovation portfolio sparkling performance strong to marketplace in We turning by stills. Finally, America. and saw driven

share. gain to continue also We

X% was drink versions year-to-date. as best of up so And sparkling largely strong demand growth No by soft packages continued driven far, our serving. growth per less This known revenue of brands consumer Sugar revenue as growth some well is -- sugar for with smaller organic for

we Of get always to the better. have opportunity course,

performance as We're strong been the our near in this we'd further category water has to the on example, marketplace working in For not like. future. in plans the address as

Taking a across and step looking markets. back all our

disciplined further challenger stakeholders. performance quality driving leadership for explorer are an positions sustained Within framework and with focused our in to and more our markets. platform aligned operationalizing and approach, We portfolio, a more collaboration our a through leader, portfolio system engaged we build in brands growth on

consumers find continue new While to with is leader evolving, behavior brands. connect ways our to rapidly through consumer we

For portfolio growth, so example, value and sparkling Coca-Cola, far we growth retail trademark by X% see continued our year. led X% strong with this performance volume in

has and make work relevant formula of brand and around more continually for Our years, we Coke than been new XXX recruit consumers. to to generations

packaging, calorie campaigns, innovation more great over This In a smaller marketing factor, has been the at XX% no such It variants in consumer-centric growing are cans, mini lower rate the that moderate addition help as consumers intake. years. includes to which sugar includes a year-to-date last few of and than key especially U.S. their

launched which XX consumers is are example, And looking than XX% for adjusting as in is little we're volume designed year-to-date. and For extra Sugar such learn markets, as launchers growing Energy most Energy more Coke Coke included new Coke to upliftment. and globally Plus we a for responding. Zero recently, We've Coke it's Coffee, consumers how

drink XXXX. bring we're Energy flagship our the As Overall, U.S. plans to globally. Coke you trademark we more to know, consumers seeing have products from in

performance In China and we launched well is across challenger and brand Authentic the of beginning the our year, sustained in last explorer Tea investment House Tea of plan Within Europe. innovation in geographies. ahead helping across and At Southeast Asia. brands, Fuze Asia, are levels key drive

the and entering showing importance Europe, seen Chi, points and momentum investment Fuze share of has marketing taking Consumers sustained results. Now the Tea continues well region. in brands. have brand, approach and continue revenue our value-added innovation momentum. sustained the its responded, perform More build to investments, added into of as Africa's and we've yielding growth brands across dairy driven behind gained second positive juice in West we leaders. gains year, by broadly, to footprint share by is our both shown expanded marketplace invest distribution. we value will to across X The Western disciplined challenger leading are

the for consumption committed year India, more coolers and grow action only XX market. us are Of consumption collectively fueled space digit grown is during year-to-date. to partners drink with of and our the helped component. allowing include course, of by price of marketing pack Globally, example, than and the strategy scale equipment immediate to volume a and driving working expanding more customer our energized. These to outlets the equation. one year-to-date, growing growth adding building expenditure. of additional more in future. than in initiatives lead marketplace placing packages investing at growth are raise Key architectures, critical execution and double are for this part We're customer Daily consumption bottling rate base. kind the packages, in transactions aligned have levers XXX,XXX chilled They're immediate the cold on new the the with In double availability of new immediate to execution. consumption of has them Globally, consistent bar increasing also personal X%

world. X removing and equivalent from to billion let initiatives around makes plans ability operate the package-free over virgin the difference In a also at least is chain critical of We to issue, we're technology. the like from highlight updates which number aluminum And course, time. years. by of leverage shared world, the a example in World working packaging X I'd see water on expansion time across our recyclable, including that PET the goals which plastic our Fundamentally, sustainable our of Freestyle enterprise and is DASANI, dispensers, to more reusable a with our stakeholders. package for the supply introduce of Coca-Cola and all one of me U.S., DASANI PureFill But including Waste lineup recent we, of options, the XXXX, share waste. first a Without next packages driven bottles we business will provided a

Great in Britain new make recycle plastic plastic In bottles our double recycled our the has clear system to to to XX%. least And will easier to of into Sprite at in Great Britain, we bottles all green from XXXX, in bottles. switched it

bottles In Australia, by be made year, PET XXX% the from will recycled end plastic. single-serve all of the

recycled, Finally, packaging drinks. future we for and shows just be our and recovered made ocean unveiled partners and the sample with first foods This recycled plastics. to debris for potential bottle marine the

and Of course, This our what's confidence and system this throughout be is a the imagining system take approach will people building none of expansive possible. me our company possible future. to that shared company better is an gives without what this

with disciplined through performance and sustained for aligned platform a engaged working growth, driving we're stakeholders. and are system summary, in So portfolio an our

the This of underlying year, months target achieve delivered growth guidance. ahead confidence our value. our ability gives X us to shareholder first and in we of EPS full strong year drive the our For initial

I'm And to over to now turn the John. going call

John Murphy

joining and the cash quick previously on I'd like for Thank you, critical sustainable business mentioned improving segments line you with company, are to across that top us focus areas driving update all our key start expanding today. of few to flow. a James, to thanks a of growth, margins I've and

execution, drive has a being the at our the and innovation, continues all reached supported long-term building across actions both growth to is to, respond As of and top we've just comprehensive improved to XXXX, consecutive line range up and quarter world. ninth within our progress Organic James I look by X% in initiatives target. brand year-to-date, to revenue of the management revenue our spoken

improving And management X the healthy margin into underlying we're Investments. across cost our in solid segments, achieving Bottling line geographic performance, working business: is on solid made and Our top to doing We're brands. in tapering off year-to-date. Ventures invest all operating of to cash this expansion restructuring our Global our this and and acting effective flow We've translating continuing in areas while are through addition up capital initiatives, position, steady our productivity costs. progress XX% free which underlying

an has line headwind, our up expectations, to setting our grow meet us to enabled us in point Our currency for per with guidance the share progress earnings despite year. X

We that the is always, to aim actions better. to the as do taking. business responding been pleased we are we've But

right make business will sustain the to investments future. the momentum in We into continue to the this

growth revenue performance segments. organic solid with to quarter. delivered contributions for our financial X% operating Turning all across We the

revenue with expected, driven growth due the from some growth are in management the we year. As cycling marketplace, revenue prior items initiatives to strong by our was price/mix along

average. put biggest was price/mix cycling partially benefit The and X of offset is the as in sales This driver Bottler's Brazilian quarter, inventory this points the concentrate increased items case last than our year. corresponding on lower per revenue than more Brazilian of company a our pressure from these was by levels in business

of quarter timing the the cycling certain deductions also benefit price/mix third to are year, slight which in last was We a the of in quarter.

However, no on the performance. year-to-date impact

as X% these adjusting I at growth apples-to-apples this volume would So X% for organic quarter's being and X% basis, an price/mix. on items, look revenue

the than Underlying currency basis growth the Operating concentrate shipments in in quarter timing stronger-than-anticipated segments, X% impacted was declined point offset margin was in income, with X% XXX current cycling across Global the in X% by and of to margin more negatively the EPS marketing. on Ventures addition certain points during by headwind. and comparable quarter, geographic Bottling This the basis, including a roughly currency year, currency impacted expenses year, Comparably, in a Investments. X in underlying neutral growth to items even expanded our investments operating translated the by headwind. an about of contribution timing which prior

to remainder the of year. our for outlook Turning the

we underlying the stronger translating we're in is see revenue the increase to guidance growth organic This in guiding profit free With least at business, of $X.X cash X%. growth flow to an at and into billion. least now momentum our

comparable the allows EPS compared expectations. our in of currency headwinds face Our to maintain underlying increasing performance year full to previous even us guidance,

on Staying a currency for moment.

an outlook those that movements, quarter -- which outlook. the on call, time, provided recent we on for has XXXX, at of benign review there expected our dollar then, for will On a year. Based based the strengthened, the an view far. mix, next X -- we entirely is rates second initial has Since be headwind operating as that impacted currency movement approximate losses X XXXX of are business point year headwind the so almost X rates at natural our XXXX. a to to and for to point full And in revenue. income given from in gains multiplier X This market hedging due minimal namely effect

factors goes February. hedging currencies. our outlook when program, several on can It in GXX our hedges to respect have we hedged without XXXX our XXXX, nearly for full non-GXX our now are provide we With we guidance but today an in for have currency that currencies XXX% geopolitical saying minimal between and the impact

there to are Coming quarter X, should couple of XXXX. things In consider. back a you

quarter, have First, adds we additional growth. which X day revenue the fourth about an in point of

Second, the we expect European top bottlers. to reduction line growth, levels inventory X biggest in estimated factor headwind an point our by being

X, recall in shipments but, concentrate fully that Brexit. reverse increasing course, The advance for these in may point benefited the to You quarter, from to quarter. potentially growth Brexit quarter their safety the subject in of X line a disruptive headwind will expect this of bottlers the it's outcome. in net a currently of and those to result pending first price/mix stocks top X We

momentum the So in we are pleased have the in business. summary, we with

us. everywhere we the to focused bar to remain continue invest sustainable raising to performance growth We capture and the future, available the on opportunity very for in

Operator, questions. we for ready now are

Operator

[Operator Instructions].

Steve Deutsche question first comes Our from Bank. Powers with

Stephen Powers

currency to last hate much dominated months, that's about but on because almost is talk it especially. there's a few so conversation start I topic elsewhere, the

I to John, think to So I what you thinking for about ahead, that that extent have but levers the we should you this realized the just more terms the operating such managing now a is the right? think headwinds, hope to how love But But to all continues question offset more to looking case, in lot bit worse. color it how and, your financial is less My of feared. if can the on bit try and hedging EPS little whereas than get do investors severe you leaned in and flow. productivity and, think guess, isn't more I you're especially it if is FX little work flexibility, like XXXX is I lean importantly, to possible a outlook levers impacts about as volatility price/mix. dollar-based feel you currency a of that and FX cash through to more FX on the read company past, levers,

John Murphy

Steve. Thanks,

few a Just comments.

the First in I of paint as all, easier what in to go picture just outlook, that into correct described you're we the an it's call. XXXX, given

do think sustained to to win growth appropriate start on all a that to our continues be able I an to emphasize important markets and overall in algorithm with of it's the locally world actions to around Secondly, our the objective to that take basis.

are integrated a also our an that we more headwinds we particularly with tailwinds job local to moment, also in have the and at the think, ongoing operating think, degree determining and we I currency. respect leverage, doing, various leaders I to much on basis which can the with manage the

on mind it, go in get think the guidance world that that think, as year, deliver talked where the more levers we puts advantage the provide to the possible is just this on connected I detailed around make we of of about, in of next and allow some doing algorithm and nonoperating I more managing that overall think there's a takes primary but line, keep fashion focus to a important with But -- mitigate and about much we it's we're headwinds. taking we'll when our of which the those us some the to in to forward, is As equation both space to lot I'd respect I February. point still obviously operating it's

Operator

Lieberman Our question next comes Barclays. with from Lauren

Lauren Lieberman

cash just to little a I about want flow. ask bit

on CapEx particular, quarter, is my in raised took actually down last So you quarter. you CapEx, recollection it the this but budget think I

the a in a you wondering about you're know obviously going you've talk thinking could overall talked then forward. and effort little that if sheet balance about bit conscious change I reassess kind CapEx how flow, cash of John, to So of so and sort

John Murphy

Thanks, onetime emphasize line lower. taxes Sure. let our bit -- little just in the by we fourth benefit some lowering paid me just Yes, to Lauren. is the in we finish to -- flow getting a the underlying actually guidance, the year. prior working previous the driven capital start growth. with expenditures and our from see year-to-date, We're the our from strong capital payments. a cycling cash the from In -- the of expect that restructuring quarter, year We're

billion. quarter. think we We're of timing the the $X.X down I to is $X.X for of we billion. have And number actually scheduled started projects at a the fourth

in our as outlined the flow change So initiatives some no for in forward. for top go continue work going next priority to remains I've major there's that on conversations, CapEx. year to expect a to overall expectation to cash respect But with really improvement this I've as the in previous we just and we and us, year free discussed

Operator

our Mohsenian Stanley. And next Morgan from Dara comes question with

Dara Mohsenian

wanted guidance year for the the cash flow also on I quarter. full moved this flow keep John, cash to topic. also Operating up

So about driving you've row free of flow cash structural what's the now raised outlook, ex the flow improved underlying a couple cash think you And that? free as items. in a quarters

that getting this your into that that the around means is more timing-related discovering look more is actually confidence area? this moving put place traction flow you the you're year? and initiatives as on So efficiencies you and Or on conversion some focus given free of that improving focus you're is with it beyond up cash greater

John Murphy

Thanks, Yes. Dara.

all, driver the year of underlying business. I this of performance think the First for is primary the

we arena, working capital. an And uptick new -- see are don't don't the just I plug away delivering the -- working capital that to news seeing in -- at but so plan about not is Yes, we're have opportunities out know we I talk underway, overall to which any We're overall from delivery continue have the we a operations. there. on

my in see, of account $X.X $X.X range question, to billion back the the -- in as XX to South or next months. in to in we respect Philippines in taking into that Africa I be this year taken the with and the billion, fact mentioned -- we last have XX that for full into the the just year, And CapEx, previous the

we going as program last further plan, So And as I've of the the onetime will we of advance health forward, capital incurred cost and the go continued into previously I working productivity on years. primary the see will restructuring to part also the continue that of productivity to three next we've over expect driver. we discussed. tapering business off in see as the a And the year,

Operator

from Bryan And comes of our question with next Spillane America. Bank

Bryan Spillane

to pretty and good, was volume in the ask about also in So of on been which the but if unit release you give just -- placements, volumes year-to-date just wanted remarks, see right, in this about we focus transactions so color relative right? case a you the of a consumption, trending cooler on has to prepared lift is some quarter just unit to also pack -- types, sense it's smaller kind I perspective even bit just better what press and talked cases? you a just unit whether us than better or are -- and and could bigger just where that immediate get

James Quincey

running of smaller volume. on compared average packages. consumption I strategic a focus by pun focus cans and It's unit Example, XX%, packages on about smaller the different sizes, particular. no shapes driven strategic driving about U.S., running intended. to consumption clear immediate X% at Sure. of X% some and on Lots there. being and a quarters absolutely, so number growing the mean it's ahead mini of in packages, have cases for Transactions immediate been

So is something and clearly, that we're after. encouraging this

And see transactions coming so unit cases. perhaps that in simply of point all to ahead a put to it's the heartening

Operator

Ali from with our question And comes Bernstein. Dibadj next

Ali Dibadj

can margin. the just than we to clarification me So just the dilution on you think have little to it's operating more X flow of next a points you back Can talk questions, that the because about so about bit prepared while The more but between little improvement you're again but given operating more in buy should that And Coke improvement one half this establishing remarks, then obviously you underlying doing basis you about just gap basis perhaps question, an secondly, let used questions. that leg story, talked points cash question. ago? there being bit when a -- as a a stock XXX perspective? One, the curtailed free margin versus investment are elaborate the underlying cash I margin on from gross about only the try both you're what have

James Quincey

where dividend be set of Maybe with been coverage, be. half we've we expanding made the We would point it two clear not is wanted flow, Free around, our first that, intent grow. dividend a we that questions. I'll ourselves is start we've to pretty target which continue a a gone the cash of look, clear but see clearly to also the as which to have

So the some to growth periods see obviously multiple comfortable that and we track where From than get the grow faster point. we cash would like are runway dividend have we of EPS flow now, to need more -- earnings. for ahead a the to

we So of guidance we'll think have are I next for XXXX flexibility. a doing, our to on come until we what substantially increase don't we're course, likely be year, there's more programmatic when clear but to

Operator

Our with Nik RBC. next Modi comes question from

Sunil Modi

James, you've particular just to with talk trying and this, in, an kind business. one update is balance the understand the maybe on past you of another and of slip longer-term can in of realign kind I and and to And then but question. part apologies give about the really vision the sheet cost that us doing for prior what about could talked if the

that cash about and the in of kind the potentially are sheet, to of situation? cash terms fix you just have balance process in realign the you So we equity flow of can where some some investments so thinking having

James Quincey

business Brexit the the That's driven The call. the the business affected the from will of by in the in -- up. bought which we've over also be Yes. to the it the Coke think, The has the the It term, We business over. platforms. system in Whitbread separation I gone Sure. been that schedule. the associates sentiment impacted or has ahead in encouraged integration has bit and actually outlook cost, by But the little various entire opportunities well a long I short the in we're about everyone, say accomplished consumer to integration is last mean been more term, about U.K. talked U.K. fair U.K., the drive successfully.

the But certainly it with with this and whether we to the support package go extra growth, -- on doing launched days, a strategy. and of early which see lot bring expectations. year. the context and not bottlers lot but And the coffee exist interest, partnerships working It's the Serve through a we customers Costa to brand placements future, the to be ready of before machines up are in a of to Proud providing some machine, be Express or coming we setting to We'd how and, the of that sales we platforms a ready-to-drink. continues and at see customers very is it to ahead well we're to of point. And beans can a the entry first is into we have then likely see the lot all more as coffee like drink, U.K. as which point, doing service going in

see some with using idea our customers for coffee world. of solution the platforms to a drive different as validation system So the around strategic the of we good

Operator

JPMorgan. our from And Andrea next comes with Teixeira question

Andrea Teixeira

a be in can And appreciate positioned shelf plans your the I the to U.S. of to how but the of terms ACV shelf? it see I you. squeeze can for if defer broadly Latin in I'll terms American in and Energy are was energy you would it, Coke what question, would I trying for think just

James Quincey

Thanks, Andrea.

some got launched in be to some far resonated learnings. got out a some It's I things that learnings We've We've it the And the of we've U.S. of sort version Coke countries places. in sort obviously, on So in around been in able XXXX. Energy, world rolling excellent we've need improve. so X.X have to -- think that resonated XX-plus things we'll some into we build -- the

the consumers moving whistles and that profile a a of Coke. in to the of strategy in brings the into product flavor drive additional closer approach the in bells I marketplace, some towards U.S. the category save think growth new for clear date, the a energy -- we're energy for Plans that U.S. opportunity then category, markets, some play the we we'll to really role closer order in very we'll energy on the drive rest later the taking see so by have consumers the plans within bring to Energy to the an it And relevance trademark. be to learnings Classic. And next some flavor and for year. the to date we the to Coke a franchise new and launched Coca-Cola building of those category in to Coke evolving where of in new the and some world

Operator

Kaumil question next with Crédit our And Gajrawala Suisse. comes from

Kaumil Gajrawala

normally affordability other high-end you permanent of some in more you're economic -- something on rather these perhaps You there Is in leads talking is affordable including that about to which an we're think that you that mentioned and packaging more a seeing Diageo, than of spirits. bunch CPG what secular companies, Mexico cycle? aligns with focus markets hearing just from

James Quincey

that generated XX there's top. And Latin of difference the society years, income -- I doubt the XX in where, a been it's over the at mean I at the economic largely in while of world to income felt -- than no the in last previous prior been ground. that there's cycle, financial crisis, there years the years was XX middle the especially think America. more case have And the in more pressure, all has been under the generated of end. there's wealth a around been has the top lower last the section creation

in luxury in industries a the bifurcation across growth end of the general, end XX So many last the you've in top end. value seen, the years, in and both growth

we I America and the yes, piece on this Mexico a in in a think, talked of categories is that spreading general, case pricing that spectrum very there Latin trend. the And about, out But in of of kind we've here, of so have based the up some the is much those And that doubling a serve reason an very been lately set we've out because infrastructure under less with the down needs on to much of income. these have be able a that's been the pressure of to is economies affordability. and there

Operator

comes And question our Robert Evercore. next Ottenstein from with

Robert Ottenstein

XX James, is a on interested competitors? about what you share primarily talk to new under little trademark the say, with it wondering what consumers. nicely. the your able particularly brand if are and gains U.S. in with let's from the continue the I'm to bit to was what's extent quite take in customers doing the business, is in with of you the of could the vibrant or is going brand? I recruiting interested keep It's And to younger how Coke you age very learning to doing brand Or want number in XX, terms consumers, you're I'm whatever

James Quincey

I on think a consumers, whether see drinks the what Coke. that Coke think, a the clearly, or firstly, business. with that clear the sparkling on I category. demonstration be of the growth it for in mean is strategy are is of can soft in innovation, of be the target It's marketing, that And of with of of Zero and getting you to revitalization relevant going the making part I Sure. more this formats that part Sugar brand with as getting packages sparkling smaller is

true So way, is around formula that's it's and been true mean in world. I a always the a

And You age people, yes, they some what see Has you you let's to bring I take the will to see flip-flopped you to you're want occasion right to, you for you need millennials relevantly whatever you need it sparkling innovation that category engage. think to down by need is, category. overnight? relevance, to the innovation, loosely, of hasn't, call execution No, starting it of and packaging, reconsideration be think it engage. you're then need the starting able you to marketed I need it marketing, but if the need

Operator

Our from SunTrust. question next Chappell comes with Bill

William Chappell

we Just doesn't, move through, want into expect it to understand, Brexit it if expected term the if a expect, in follow happen? is environment longer better Didn't destock you you'll destock fourth do to Or then quarter, through, Brexit is term. back mean do automatically, fully you up for goes it sales? goes if of again, XXXX? as you kind and Brexit a have to is near -- on I for And and won't? pickup

James Quincey

mercifully all sentiment mean, will but I overnight, XXXX. improve, going yes, not then Well, maybe I end, over if our into and, comes to time think an it do hopefully,

normalize. the stock of pass like out what vote. I tomorrow. as seeing with if Monday. happens on the We'll I don't tomorrow the inventories stock call happens and the if to mechanistic pass think vote, mean the out. vote, But see clearly We'll they what to it's super they see drops we would err us need drop to not doesn't

Clearly, would So take our inventory inventory, see extra our you end -- need no it the normalization coming us guarantee or as need to that in But take should to it's it. the but be what of of the from we that does the doesn't preferred the there's year. manage form of agreement by path no outcome days. preferred unwinding is we to because through see

Operator

Guggenheim. from comes Grandet question next Laurent Our with

Laurent Grandet

announced a the Red where it's more Bull you the with just and U.S. Coke at actually January price X Energy. off in in and the total, more from X than put mean launch Bull. between point aligned middle I not in in Coke Red Monster any Energy SKUs X to Europe of and with Just

So from I'd in the mean, year do did for launch what are I triggered expect, Energy you to the understand changes. learnings And you that U.S.? like get this you Coke already the what those

James Quincey

two based rather to Coke of I current I'll to category in mentioned energy clearly to repeat, U.S. markets. formula which the believe And the other with closer we more I consumers competing for is many therefore, ones. formula we The And is our to doing and much obvious will Sure. be markets in the trying bring of in approach than the I a category of Coke into new that than the mean an on learnings, research Coke so think effective. taking the most our launch Energy U.S. the one that are more just closer bring experiences developed that the Classic.

of we're competitors to -- point to more of if category balanced the world that direction markets pricing, starting some offering, visibility is more But the a been Coke shelf enough of bit I a categories, packages that. focus more or revitalization the launched to driving the is in the competitive And having part weights SKUs need lot you this need And to learn learning if we'll of looking different and what, no in by the Energy, in many from Trademark, you we'll X of a to Obviously, us. Trademark for to in I go that's true And we'll you around course, presence. and And that's And that's part already. of in an SKUs. it of structure we've a U.S. especially part evolve the at broader what's energy developed pleasing full the chosen X variants. other X or but relative think of price Coke SKUs the in go driving kind where of points in there's actually has a slightly if standout which is driving some U.S. that have mean shelf of then the very underdeveloped, and slightly portfolio and On on the has we and world is launch with of continue a the the impact. the for you're make the doubt, clearly, all as Coke and of more the different of therefore, pricing Europe.

Operator

Instructions]. [Operator

Sharma Our BMO next Markets. question comes from Capital Amit with

Amit Sharma

connection you've bit can elaborate bit Coke view, GDP? point still the in a bit? talked bit for least in the But at playbook looks upbeat changing message, of historical even recessions? view a profitability L.A. fairly Is little from a the between Or that like point that it a is tougher. James, and And been has different consumption little on is continue consumption the little you about it past than that a the as get little to of macros

James Quincey

I GDP our with growth. business firstly, long-term is on Sure. correlated a mean, basis, yes,

that long matters. run, in the So

of the commented as last problem in in overinvest we can has revitalized not think focus the that been that our in line or in in recognize our isn't global raining a here. we've few our not we And we up XX Secondly, world, -- lot is -- I have emerging clouds a recession, not do as and but has bottom time work to actions approach find is a the out total any do what top a of taken. look can news we taking looking quarter, the It the And as line. on where there really whilst a it's are there's sky. we storm places, are not some I whether of the all XX but to well, certainly to on initiatives world. things the strategic the places to around we're over And

a So on on marketing we on consumption over our portfolio growth revenue in the and and investment on do can management, lot more and we media have innovation, management, execution. calls

need. we way drive And look looking and look, it the time your our stick growth to the that the waste is, we so strategy, you we forecast, needing execute if actually, can at could we at but against

Operator

next comes Levy question Our with from Caroline Macquarie.

Caroline Levy

on growth brand great Coke. a on congratulations And

James Quincey

Thank you.

Caroline Levy

top And Ventures running like X%. I and around Ventures and faster XX% businesses the the are just than line the business, Bottling think. that I of touch see bottling looks Global around margin should growth Investments, which Global XX% rest to to want on

like low divisions, other? longer is one margin change of see term? So size businesses. and the the those creation all levels beginning us can are of normalized out maybe sort those these And just of Or more you trending help upwards the recent And because look the you unusually in changes that might do both on what in a XXXX? in

James Quincey

me one. with Yes. start So that let

idea is firstly, slightly in Global of better Clearly, be that part invested Ventures we the Global Yes. much to average? categories treating should order So we've faster differently BIG the in Ventures are and drive than going of growth. the

yes, So growing be they should faster. one,

at when get Two, business the got be we might of or the Ventures, we to Monster explain or different looking whether of tea businesses, kind the Costa. a and Global very or it's partnership Dogadan some mix Innocent when that try February and more guidance,

we about you Ventures talk the think Global see businesses. different encompasses line. is So bottom certainly because margin But it I what normalized a should on don't can faster and a set top the of growth for

they like think that structures mean We are but be we growth and not aspiring bottlers should the is And making be and that you don't want BIG, in the But forward. returns the rates have, of how markets. on that's margin what using historically, to in I be same, or the group. in going for the our expression like, that heading at look a clearly, margin equivalent in that developed some for underperforming. average And that towards ones they're I market. -- we markets lot think performance the we of and case bottlers, our I of perhaps and that do we ward should outs of emerging certainly are philosophically, ins should like-for-like idea going if to best think a be invited they had hospital to above

Operator

Our next question comes from Sean King with UBS.

Sean King

-- recent first but to a when considering did mark market year the this you a outlook favorable giving and that that the maybe next is preliminary time whiz, your a given outlook? for Just bit little you're in very FX currencies move,

John Murphy

very answer. that's that. precise the Let me take Monday,

Operator

And our next with Grundy question Kevin comes Jefferies. from

Kevin Grundy

strong on congratulations the And result.

James Quincey

you. Thank

Kevin Grundy

on price/mix. Question

You growth higher these The contribution spend time modeled revenue certainly discussing the going what unit of And had a price/mix case expect management. X%, are on we the materially quite should lot forward. while various is calls results Street initiatives around than and good,

thinking quarter? should into the Two, much did So how to expectations And had quarter then one, related a three, James. own your few I the in quarter? in in fourth relative how next contributed that, year? to in we come about Argentina this be questions mean, and the price/mix

James Quincey

Sure.

bit But year. cycling of of So last about that. in clearly, Argentina the price/mix is a little -- actually, bit inventory from Brazil there's atypically in It that a a higher. some is quite was there's

number we as it's a for and more than Obviously, been And you come of Still was a quarter. over to a think expected look back the excellent in. you're number thought X%. I what's So sensibly happening rather a I X%. of a in it more if 'XX seeing 'XX, much think X%

think take And be put to of the innovation, the brand revenue right good building management been some is out rolled can we along initiatives, marketplace, ahead them, us with which think still the and into us makes to right that earns the able so growth and I pricing have forward. what which runway have the

Operator

question with next Fargo. from Our Bonnie Wells Herzog comes

Bonnie Herzog

wanted ask to I actually on margins.

as FX year. how You've really you're of could start years to give the to hoping M&A over done But that some subside. pressures us once good this to facing a we from of the margins next a effects the and of trend sense perspective telegraphing said, just margin a job expect you should

think underlying you to to hear some the margins and really levers the ultimately key can can would basis. you on be on confidence have that I an you drive helpful touch pull business the of that expansion it margin what grow gives just

John Murphy

Thanks, Bonnie.

Let me that. take

the have Global take example the and the within bucket there's see for if our to line, across of $X more top that core we Bottling we effectively. we -- been First I the and of have, continuing different margins large groups, the the the Ventures in we our more arena, and as each clear works at gross around certainty I we ongoing Starting $X we base. -- and got there's of expanding -- across a efficiently its starting the our line. X premiumizing advantage opportunity the ways the look in at that's that's on specifically we line said, in looking in we've the three top world each when that -- disposal. to business, Cost And our can billion, in sight drive on operate -- focus agenda, we at that have a growth examples at increasing innovation iteration core with company, levers all, revenue these business management segments take of Within margin Investments are pretty current which ongoing marketing billion of cost -- line innovation on management each of businesses, -- Group. really of and at total we're the businesses, those geographic that

to continue mind output We base. greater investment from that new ways of driving

long-term our -- manageable. we confident margin expansion, overall, is So model, is implicit we're growth as that in

be year-to-date gives we'll work year-to-date in performance of Our XX as on to the a the call February texture talk XXXX, a performance months. would areas underlying continue. that, position confidence towards in can that specific we little about -- coming give And some more opportunity the me more -- you and of

Operator

Azer our Company. question from Vivien comes And next with and Cowen

Vivien Azer

which I was is on the mini hoping clearly to U.S., can little business bit dig in exceptionally in a the more doing well.

X it X, cans X, a continuing of targets to percentage of more that. drive format around small of sales future years there -- just of in two, have CapEx So continued broadly? mix on Number any as over kind couple terms of for what remind mini questions represents growth a you you any that can Number And considerations do shift? the the or one, next are three, Coca-Cola number franchise?

James Quincey

the break consumption the being on it of grew immediate emblematic Along cans mini smaller business driving are the mean with think quarter. out format certainly, mini we most and a I we XX% I the packages, that other of representing. that. one, this focused packages is total percentage series But cans don't Sure.

up you to pleased you to We want rather you're will sell. to I a want percent going with consumer-centric, than very what with don't target as we're consumers buy percentage it So this the if this pursue, the should of to opportunity. sales be said, kind well, that of, be because, ultimately, end

up. have go to right go it back if do is haven't, will drawing it to got CapEx. mini And require worth noting board. that that's whatever And relevancy we consumer. on for think, focus if bundle brands the so drive or the or making packages most And if our our we're we've selling I it, the we we some cans It -- philosophically, on

manufacturing to And so, more we'll but that's to they have good yes, some have. the the to are, adjust it, a problem of the do more footprint successful

Operator

call would now to concludes closing over and Ladies remarks. this James back Quincey session. question-and-answer the any turn I to gentlemen, for like our

James Quincey

across and strategies our near-term delivering very long-term on everyone. hold To So remain within organization confidence And summarize, that us the and our our focused conclude taking thanks much, and we are performance, the again, gives goals. system.

thank our interest, us your joining investment Thank company and for As we for your always, you today. in you.

Operator

Ladies concludes for and Thank gentlemen, this conference participating. call. today's you

disconnect. now may You

The Coca-Cola Company (KO) 18 Oct 192019 Q3 Earnings call transcript