KO - Earnings call 3 2023 | The Coca-Cola Company

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 2023 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. Media participants should contact Coca-Cola's Media Relations department if they have any questions.

to like now would introduce Ms. I Vice Halpern, President and Relations. Investor of Head Robin Ms. now you begin. Halpern, may

Robin Halpern

and results you section Executive morning, Officer. non-GAAP our may the Quincey, our Murphy, Good Investors thank President We've our with I'm which to by our financial reported financial Chairman James posted here schedules senior discussion and information Chief company Chief and during Officer; under John as be for at morning's and These Financial joining in coca-colacompany.com. accepted website our generally measures, of schedules certain this executives accounting reconcile under referred to principles. us.

You analysis can of an of section our same growth margins. schedules also in and the provide our website that operating find

including should contained the objectives, call long-term In addition, James. Instructions] Now statements and earnings reports. this concerning [Operator be cautionary turn statements in I'll call which conjunction in with our periodic SEC in release the statements, earnings company's may to considered forward-looking over contain

James Quincey

good morning, third operating earnings growth. share Robin, line quarter, per margin expansion Thanks, comparable top strong everyone. growth, and delivered and we the In

These working. we our results are line both our line of consistent track is delivery. year-to-date And raising strategy Our top bottom and performance, record given guidance. our continue

discussing financial considerations XXXX the investing consumer been our capture a to update provide year discuss across for John for to performance I'll my morning, This time business we've I'll end longer-term on landscape. the details brief capabilities strengthen by our focus global Then opportunities. on XXXX. of further and much the how segments early for revised growth quarter, some and full guidance will

was is environment always quarter no exception. operating global dynamic, and The this

conditions, and with while others a transitory ranging of geopolitical conflicts. tensions markets pressures, from inflationary variety Some sequentially, ongoing factors dealt improved weather

with month from September volume, X% quarter actions month. strongest each into and sequentially base some We quarter improved delivered the by carryover and coming organic this in the in year. pricing pricing Volume last marketplace revenue positive being driven the our growth XX% grew

industry year-to-date and compared with expanding, capture we remains our and underlying vibrant remains volume overall, to And growth is performance growth. executing Our consistent that to XXXX. are

quarter, less the spending During in and U.S., seen was switching channels. around has developed share gained both markets, world. vary previous activity and Europe Consumer We've volume the well, at-home [ away-from-home pressured. brands In continues to Australia to held sentiment value agro the ] a to label however, across was consumer to the same consumers and channels largely quite in Japan. up some in some discount in goods feel few The and we private shift compared intensity pronounced of the categories. markets but quarter and this

Southeast broadly developing the India picture In and strength emerging across We're parts America, Asia. mixed. of consumer in Central the is more and markets, seeing and Latin

other confidence yet the On in fully recover hand, Africa to has in and China. spending consumer

they are. revenue in Our we right advantage, the meet we package consumers distinct points at a growth the product right have channel us and where the right right price and ensure in management capabilities these are the give to execution to capabilities leveraging

to region. each continue in world, the and through more the levers share to dynamics Notwithstanding have details play conditions. many market around we from varying deliver some I'll pull

primarily additional participate in as Asia costs to opportunities income with delivered growth, Pacific. curve investing the incurring rationalization. operating revenue ahead portfolio We from Starting but result strategic organic declined of a longer-term of and

launched and consumers In which to Coke we Thailand, and line ASEAN South Coca-Cola. with who recipes influencers with we connected brands coupled top linking In profit strong shared grew Kitchen, our occasions Pacific, to drinking their by execution. favorite

aggregators. consumers, attracted our and rate X increased beverages meals service through to million aggregators combo Campaign nearly partnered drive ordered of with the food also We service significantly with we food meals. attachment

In Japan, we're year-to-date. gaining volume and value share

from our and and momentum strong and I stepped LOHAS e-commerce execution continue Coca-Cola, see community have in channels. We campaigns Georgia vending, up Coffee to

category to soft volume sparkling as is taking the longer declined recover. China, in However, drink

Our also lower results were impacted by profit conditions to strategic some deprioritize categories.

to on opportunities. sparkling the revenue soft category restore focus and Our execution capitalize management and drink growth to is momentum

and In India, point gain the top line which affordable transactions the the we share X growth, delivered We're in over generating value X.X winning billion in double-digit at highest volume resulted past by across years. price packaging Without regions. our help Waste of and and Pacific, Asia driving Indonesia rural for system World drive XXX% in circular India, recycled launched Thailand. strategy PET materials, as part to availability our Across packaging economy marketplace

In by strong natural growth. Despite date. XX,XXX Africa, organic expansion, operating macro PET Morocco disasters revenue XXX,XXX on refillable accelerated business coolers and challenging, EMEA. nearly adding was drove delivered transaction this remain digitizing our we and outlets growth in to environment, Moving and conditions income and through We to impacted further used Libya.

strong We tea. was performances our drinks and key In systems soft value in business sparkling dynamics, with are for weather. our Europe, these and consumers impacted to by did partnering facing [ unfavorably our and we gained customers still pressure, consumers. ] by through value Despite share this drive poor

to early in Jack see for promising continue results Europe. We Coca-Cola Daniel's and

in are announcement including our recent We expanding Sprite. alcoholic of Vodka & drinks, and our learning Absolut

occasions events snacking focused Eurasia launched this recycled artists. local East, through last, and concerts like we package And on XXX% prominent Fanta summer. in recruited which innovative, Middle Fest with marketing PET also by consumers They occasion-based Turkey,

expansion generated we America, strong portfolio. executing total North organic our revenue growth beverage and In by across delivered margin

up to outperform sparkling continue drive we soft at-home Fanta. Coca-Cola, are away-from-home drink, Sprite channels. holding to Within quality continue leadership with elasticities see channel well, and We and

and Sprite with drove up stepped For of higher at penetration which sale, and repeat example, Legacy household Lymonade our purchases. on displays increased point systems activation in-store

trends year-to-date and water Core Peak X a critical latest and share Halloween Fanta Department with restore U.S., nearly including we of grasslands. of Powerade in improve partnership of the we our What renewed system to forests And is the for stabilizing. graphics, Agriculture that drove communities and BODYARMOR gains. Outside and decade-long and water resources, Water are national the And through generated priority the and smartwater value the new points innovation in to protect Fanta serve. a fairlife, gain Power, vale iteration Gold sparkling, the share platform. sheds

In Latin few top our improving by top in we profit which in markets. our share of trends the strategy, share fifth the value on growth X America, resulted of In and double-digit Mexico, gains seeing X line facets all last value generated we're market, over months. executing

reached connections. build influencers, artists which partnered we We're of points to XX million consumers. the hosted we increasingly generated deeper passion Studio, where linking and hours our billion X Coke Brazil, through consumers' Music and engaged brands with Festival, Town with XX to and concert In nearly impressions

affordability price to strong an packaging campaigns markets, availability, supported offer generated and U.K. the while key global At of by larger strengthened refillable overall personalized in visible up important and Last, our of as such systems summer stepped packages. ventures strong management activation pre-drop growth innovation areas. Global PET growth. eliminate XXX,XXX of developing increased year-to-date, at of inventory lower our our and equation share continue through to growth. This marketing drive category emerging in the reflecting revenue loyalty refreshment ice, we of over Costa, products our introduction our was driving points. and transaction expansion We tool which waste In refillables are coolers

value U.K. gained both in innocent share the and France. Additionally,

trade the XXXX. strengthening expanding Group more immediate time, affordable Finally, At route using and the in progressing Bottling and end plans India for we're optimizing market Investments income consumption before organic add decarbonizing entry of operating towards electric vehicles collections. working to grew through with revenue our packs same through operations and XXX to

have to system to continuing continue we confidence drive long key decision-making We and better quarter, opportunity. galvanized ever execution. data the capture our this is than more term. see to is momentum Leveraging Beyond in industry, improving our the to across

initiatives collectively strategy. facets invested digital in drive to on all of has system Our our

marketing with first innovation. Starting and

Our per spend relevant our marketing is transformation Zs day screen. Gen X Today, brands X consumers. making on hours to increasingly to more

traditional is We've time very shifting towards digital. media been However, our little spend TV. watching spent

on Happens, In Fusion seen was population year-to-date than through XX% We've disproportionately with over others. XXXX, for our digital campaigns engagement total Made of Heat and earn meals, Fuze campaigns, higher return XX%, is where through investments. of segment among digital consumers which spend Tea's tremendous media reaching Coke Sprite the we that's less digital-first and

of the We're consumer taking be at bold AI. and generative both nonconsumer-facing forefront steps to

digital launched Magic, For turns Real we which Create into creators. consumers example,

letting We into our GenAI fans this of also the and process piece to a brought of the chance creative take the film NFTs. for sale award-winning Coca-Cola through Masterpiece the work

in first futuristic we Recently, Coke initial with which platform. AI. has YXXXX, demonstrated flavor, launched our Coke world's strong Creations the co-created The eighth is Coca-Cola launch results. YXXXX, iteration the

implementing side, to nonconsumer-facing we're market the insight, research trends. On to data, improve access AI and generative

to on revenue growth Moving and integrated management execution.

customers stocks of for better price Year-to-date, we're X.X physical reducing we've system, eBXB product, a out of and architecture, eBXB accelerating As and platforms. tailoring to optimizing that connected million allow inventory. packaging of placement platforms

coverage We digital Initial expand of road. continue but push now notifications what's the purchase suggest we're scratching investing incremental that surface recommended to likely have sales. SKUs, just and capabilities to more expand who pilots possible, the scale. customers in at our resulting offer customers retail receive personalization And we're been in AI-written potential to down

in results To this sum is encouraged XXXX year-to-date, guidance. by up, and our our we're reflected it all updated

have We around can types levers many that world. and have proven to in we the markets of many pull deliver

system long reinvest on to term. level local the win a and level, maintain on to continue flexibility We a our global build for

I'll With the to John. over turn that, call

John Murphy

comment our I'll updated third deliver the to Today, on early on on everyone. our morning, highlight and guidance. continue XXXX good we and quarter commentary our also XXXX James, you, and I'll are provide taking some Thank to objectives. performance actions

Starting As Unit revenues James quarter was line. results. We case growth strong delivered top organic X%. mentioned, with the we third grew XX%.

Russia, of positive suspending the since If our each of delivered you impact volume the we have growth quarter start in in business XXXX. exclude

a markets, were with base Price/mix across X% line the including from growth year. coming pricing into hyperinflationary last the sales pricing was carryover the for by in Concentrate impact unit quarter. few driven operating of actions cases segments, with along

from strong approximately for EPS year-over-year was by Comparable impact together, margin impact headwinds. points quarter. This year bottling driven expansion partially partially headwinds. the Putting headwinds. of gross benefit offset was Comparable expanded it basis currency and by up underlying comparable despite as operations, XX the basis points as all top X% driven increase a investments primarily currency of slight line offset X% versus for up growth the was well prior refranchising, approximately margin quarter and XXX currency quarter refranchising the the operating $X.XX of higher-than-expected third bottler an by in marketing by

approximately to operational benefits, payments. offset $XXX million $XXX flow capital by attributable $X.X M&A-related year-to-date. million in and cash largely working was This payment performance Free transition tax and partially was billion strong underlying

our to target range our strong, below EBITDA balance and X debt Our is net of is of X.Xx sheet leverage X.Xx.

Recently, we letter to refranchise a intent of Philippines bottler. into our entered

to aspire Group of improve return we than As return X-point invested profile was Bottling journey, than our on capital makes XX%, less more revenue. the on we was our progress when return XXXX, In on nearly revenue, Group our Today, net approximately XX% And net Investments of invested Investments of a Bottling our refranchising business. capital XX%. is over XX% increase. our up

After Bottling in this assets primarily operations transaction in and closes, locations, include our India, Asia the smaller will Group Investments remaining Pacific. several in Africa,

sure approach will long-term best making We by deliver remain sustainable to our refranchising position growth. system disciplined in our we

moderate XX%, from on growth. Our developed as positive be guidance. performance XX% price/mix expect that confidence the by includes led the initiatives volume us pricing to organic to of gives in will This revenue We year. we cycle pricing of is growth we markets do our business fourth comprised raised quarter deliver prior can and in XXXX year-to-date which

expect There in be And per day based headwind now to share currency additional on of currency-neutral approximate share hedge fourth price/mix. XX% that comparable X-point an earnings year comparable XX%. to will our markets growth expect quarter. the hyperinflationary will earnings There drive to net are to to a current also an now X revenues few We be per rates comparable positions, currency for headwind full approximate and we and XXXX. X-point continue

of positions, effective rate commodity goods growth impact X% sold underlying for per we in to in and price tax We range we be in XXXX. are expect mid-single-digit rates share XXXX. comparable of versus to expect in, our per-case to a X% of cost now inflation XXXX on on $X.XX XX%. updating comparable the All Based hedge continue current earnings

guidance in $X.X flow capital free That's expect does approximately to $XX.X approximately in This $X.X continue which our of income the payments to billion in to XXXX operations. billion include billion any U.S. approximately We cash related through cash are XXXX. from in tax with unlikely dispute occur not to investments. IRS, generate

our proceeds some capital business, we in both continue we to from shareowners. that strength and our sheet bottler return balance have of to our flexibility Given momentum reinvest the of the expect and increased business to refranchising, to receive

early where share today. too the it by what currency items is top on will we hyperinflationary do our on it with XXXX, markets While market inflation, across There pressures considerations specific or know momentum to handful is is follow want possible price it manage of hedge continue to costly based to either some a we local line demonstrated these and so. markets, markets. majority to approach. encouraged of not can provide In that taking we we our we've We're are by this to

while some our impacted flexibility. With and also by bias tensions be we to reinvest our to that to brands While could normalizing, have is continue commodities are costs spend, advertising input maintaining conflicts. respect behind

single-digit hedge currency revenues an positions, headwind would approximate comparable earnings be to low headwind if Regarding approximate full our there year for XXXX. current comparable to we and net an mid-single-digit per share currency, currency rates assume and

Of could outlook course, broader currency between our several outlook both factors and and impact business February. now

so. Over growth, and few have the delivered to to do EPS dollar years, many we U.S. past levers continue we've

the we we to capturing on heading by on sustainable clear the to our to focused summary, execute world, are there. available on to us. around our growth. to well our the long-term commitments over direction us the to equipped system on get invest and the incredible opportunities our employees and remain are encouraged to So term. confident drive we results in We the in strategies long of very we're deliver commitment business ability continue Thanks And

we operator, that, to questions. are ready take With

Operator

Dara first [Operator from comes Instructions] question Stanley. Morgan Our Mohsenian from

Dara Mohsenian

for give a increase to know the perspective want the full the I for next of the QX year around year XXXX. pricing numbers outlook, sort raise. and clearly, in you just of put confidence how price hoping So won't in the was more that and the next another results about get set bit mix hyperinflationary and of increased into strong year, year versus pricing versus can with love think to sense QX I'd obviously, but you on specific sort down of on front. it pieces a environment strength portends us competitive for outlook perhaps market the break given what the for you

James Quincey

few thoughts, just Dara. offer me a Let up

and about of end think as just you that's out into QX breaking year. I next Firstly, because instructive think down the the year

then drop in there African and difference very Turkey got that's QX regular points QX And of markets carryover a inflationary into is a inflation as Argentina, given a the coming couple from are XXXX. making of the levels level. inflation, that, we And these of overall Firstly, year. of more points pricing. obviously the from a from couple you've and And pricing environment markets, out got you've obviously, that the at company high the number of next then get will the that's

we're of guidance, from in one markets uncertain thing ends But we inflation those thing year. positivity some are is certain degree next price/mix year. about high sense the assuming markets mentioned degree in next John one in that's -- The FX about some the as assuming that's negativity it unpredictably. that And of

update it's early going And very look on what we'll have So full to to a XXXX. get to we February. like pitch in when obviously, that's

towards the heading landing economies. the have developed moderation you're net-net, going to So continued zone in

are the in inflation, to got markets what got bag importance You've couple these is of particular a which And be emerging emerging then high-inflation subnormal a overall markets, mixed of a journey you've and is marketplaces. China. aka going

about and lands parameters QX in some into which provides to year. that it hopefully how next think with So

Operator

from Barclays. question comes next from Lieberman Our Lauren

Lauren Lieberman

things was out release, you case expectations, was thought me I the of in struck regions also regions specific when all, is of versus the there greater thing -- pricing least was as one interesting better-than-expected that where But inflationary called one my were is really there inflationary at unit pricing. specifically So contribution interesting first the the where the volume. that it helpful you from was

that and I you're think case come say the pricing, the So through. volume. volume here, getting right, historically, less logic more unit But would elasticity to

maybe And kind I So of speak wonder growth to if to pacing differently that's a bit able talk you're what then to cases. if combination. little about that how you that's also, those in if -- transaction could doing markets just you're enabling that's relative pacing also unit

James Quincey

Sure.

protect I be and for firstly, very want year specifically to also in into underline what see or have to the good other want no and growth want words, the So degree environment. it our is, we to we but In positive year that transaction franchise of just number grow. inflation of next will pursuing pursuing years, been consumer the volume the of in scale this environment, matter see a we

RGM, around the value been And environments there's of share strategy it. has marketing, growth making so not the much the gaining embedded that innovation, our very the but much execution in very volume sure in these just

we much So approach. that take very

very innovation, we And to operate ballpark, an inflation there environment of has the rest mean, And are inflation, regions the very of of it's against in pricing in driven extended marketing the is clearly and that it an predominant been the sort I puzzle know the masters two executing inflationary same And relates of America The in. those much the much by they is there, where there very the business of Latin the speaking, a content, great are there's generally for we time. EMEA. pieces taking was order, have to RGM. America, the period Argentina. Latin execution, volume, as And where biggest the how and

levels. XXXX and devaluation they given was I had the that rollercoaster, its from country personal say its inflation in XXXX a big their manager I a default economic is when on as there can debt. and Argentina then And experience and levels

And America, markets is operate, of Latin so where so are kind of to certain part we and something we what know in it's able this how execute. and in happens to

and into to Europe U.S., As divided the parts. moderating is it the more more the terms perhaps poor two relatively like and dynamic a a they moderating degree than and of One in in consumer where of the a relates weather fact the under is was much European U.S. EMEA, little around inflation, that environment pressure the down much the is summer had inflation

there, EMEA the Zimbabwe high And number of to The as are other extent, Turkey, marketplaces like inflation of Egypt and there Africa. happens, is Eurasia that a to half it group context, very some occasionally in Nigeria some when through And volume. on But impacts overall, extent. it so to a able does the we've see carried you do that inflation total basis, segment spike, through. manage it we've to been

look I any markets more inflation and spiky given in those maintain certainly although some to volume of we the quarter, much system. franchise, said, to, the be And than consumer the negative in may as as be tends grow

Operator

next Our Goldman from question Sachs. comes from Herzog Bonnie

Bonnie Herzog

up operating quarter. question had in guess, investments. All the right. margins marketing a I I your drag a on They on and, were

for hoping just some reinvestments. on these more So color

James, invest to to ahead continue of the curve. And you then, your plans mentioned

next you're to with driving thinking going more flexible trying whether context And could these And the how year, dollar especially provide the in little understand balance top of a greater marketing to thinking of FX be plan about reinvest EPS you strength you to this? So in how the headwinds. this how more about it's growth. much this color to year? on then ultimately, reinvestments I how then importantly, line guess you're you're

James Quincey

Okay.

Just try that and kind bit. unpack of let a little me

expected as to growth and last rather post-COVID of we there as and come we going rebound. for is in characterize in seeing. top a to over growth I And that we long than and operandi, we're pull are trying have as modus not years the lean to a as the sure back line that So something. said anticipation the of And on couple I'm bottom drag extra in more a motor results, marketing would driving invest line

the the obviously, we working, guidance. line is in leaning bottom feel raised top that fact both the and typified So by the line we've

push to certainly into be to of next as think we year, through so. I continue would year and extent do that the a we happy can that end model the this to

down region extent that, spend surprises, hit, quarter unexpected we Having of XXXX a some said will or to environment. in with the a we pivot the whether and XXXX marketing globally, in it's when will speed second COVID that brings that as did we country, we pivot, ramped

feel degree in starting lean should we've much move, greater flexibility part we're growth. So a of we to a at going moving whatever to world. the be of as for developed needed But point,

And all see the a take little if -- all about of thing take growth X the in say income component the think been increasing obviously, implied know, operating if with perspective over different a which think if you is or broadly kind point zoom look take last you in is leverage a just operating a of I income the it's X.X these balance margin, and items, long-term broader the the, margin at of you years the model. I pieces, don't last I of bit that a out you'll is year would margin you about if because marketing a so, operating at line

so strategy. way very we is And ours. been part the it of It's see because quarter going quarters to happen not our lumpy, are has of but objective an every that

Operator

comes from question Ottenstein ISI. next Robert Our Evercore from

Robert Ottenstein

the is you improve options. just value more consumer and affordability that looking talked the the room value-added I'd journey, that, focus in you've for about and a the Great. incident mix, higher environment we you where a packs, also has and I this from weaker packs consumer get packs past, them something that to -- more think is talked Company or that economic the James, moving in on the are is U.S. love maybe more can commodity there to to how where in Coca-Cola do call much sense you of

James Quincey

pack tremendous diversity. are Thanks, there's absolutely a to We're opportunity the I there. Sure. not that all leverage Robert. think in the Look, greater opportunities U.S. capturing marketplace

are options. at actually either segments income as disposable for diversity or terms where, And disposed the of under in of in going there the certain for they're where consumers are U.S. helps feel plenty in pack you would of greater options. moment the income have and an channels And segments of more look who of their and pressure more affordable in spending premium the yet, environment in terms leveraging

the segmentation offers and of marketplace of opportunity greater the diversity packaging. So

We that do PET have nature marketplace it the more we can can bottles. sizes shapes the in the the the and on and of be in or whether range the U.S.,

there's So satisfy U.S. of plenty continue needs in RGM I in consumer the to have runway opportunity the equations that think U.S. to the and we leverage to the packaging diversity on deliver for to

that could the you do that developed parts ultimately, And are consumers want have. use look cold deliver or the other which America see Latin business to at more there packages Europe, successfully the to markets of and relatively world, we

Operator

from Our next JPMorgan. Andrea question comes Teixeira from

Andrea Teixeira

what encouraging John, about But and appreciate line said your recently is So XXXX. is growth, in obviously changed the EPS see one, in in call. I earnings which that developed with given to you in the the the weaker thoughts your and sequentially? moving consumer would growth volume like number pieces commentary said And markets, anything last you James, you there many

what and be dismissive you course, it just I the the terms the you to Can similar given but the impact have of moving XX% volumes, think content investor to and GLP tools be the over years it's being would the many, have two, that, at disposal. obviously, of to abroad thinking portion control, Obviously, ask, talk drugs, done granted how sugar concerns. about this of curious how approaching investors potential you the And of your many should proactively in risk? is not you're related of

John Murphy

Thanks, Andrea.

about So same months of rest for XX had first of think ago year, I XXXX to headwinds environment an and has expect into the to if volatility we on in or so. ForEx continue and much kinds that point, this that would what guiding the months where the next the were XX the we're from you of it's

few in to such effectively a XXXX of period and levers a year. expect both uncertainty. we the the volatility through and be script the I we've those developed that manage as both of in demonstrated we've to number with -- last And have a highlighted over type similar And forums, years

would the marketplace. growth many system overall execution levers I and So abilities and getting the are I management stronger these marketing of year-on-year revenue of are our improved you think point to in innovation, that the

industry continues that equation XXXX also. be to feature be and to our a the for of strong, expect we So underlying

Regarding the we offer is if focused -- point still There's you second of would will raised, are impact, as it lot that an any, there have. I a what on. out it area views to very if lock choice to and the well strategy us are above -- few we step our you motivations respective us people's of that for thrust provide positioned years, and provide the needs. total last beverage over options to and

have today. invest strategy to choice and the continue deal we'll of in And comes innovation so that calories no And total to whatever we're continue -- products or to XX% monitor of... low out but confident our the space, with beverage we

Operator

Fargo next from Carey Securities. Chris Our from Wells question comes

Christopher Carey

Growth pretty year. you growth ask a against year the to through wanted unit last a Zero. I has Coca-Cola question bit exceptional case about decelerated

just we're if the was where with perhaps reframe you I any we are reaching expansion the it and with you opportunities So for could the franchise, of thresholds if just the wondering offering. see

James Quincey

I reaching quite Coke potential think in going a the Sure, I opposite, Actually, for vast Zero a terms of I there's don't Zero. Yes. forward. Coke the threshold think expansion of Chris. we're think

and Zero aka Europe. months look of of QX. the had the and you very it is like also couple poor Coke there, in markets makes in think that They it's big very term impact a of short down I see run the what summer dipped some for a

runway will it and of plenty has are on long-term Zero potential. Coke think I continue But to behind forward, we invest bullish its going and

Operator

from next Securities. Truist Bill question Chappell Our comes from

William Chappell

on obviously extent, consumer of there Can to bit little to is this and you the in getting maybe waiting do anything that can bounce a of quarter market? the as see with Africa. a just not any or Coca-Cola accelerate China the maybe first it go more you little But consumer guess, And we've heard Just progressed, the are as that slow pricing is on that to some into really terms things where back. I we a promotion? -- the better the changes being quarter bit real in green shoots ended Or did you is little fourth?

James Quincey

helps I environment, happen the going Obviously, to wait we're the from macro hate of it a but Bill. that. not just Sure, there's economically. to something general tailwind for idea for waiting Yes. Certainly, when

on there's need the investing on to opportunities restore Chinese and business, and the part focused very a for cranked sparkling the early really of Also, will get to and which and lot to in Year, XXXX. be capitalize tackle a have China. in strong of opportunities us up try execution We're and we go on particularly RGM and New momentum,

business. we investing hoping took focus be of some control we drive get the but business to the from QX, set controlling a we which created kind what decisions of of wait segment and really and to drive to Chinese on the for impact focused prioritization really bit And and plus of the that. macroeconomics, in an We on decisions a that make there'll can't can APAC a the tailwinds invest that forward, ahead margin need we can so

Operator

next comes Charlie Atlantic. Redburn question from from Higgs Our

Charlie Higgs

and talk CCEP? And and guess, now BIG just on how a high And country the question from the you transaction, maybe a got level, I Philippines. has why James, performed? I've the why Philippines can about

-- could sales can go outlook what proceeds go for a 'XX thoughts us said from ahead, as John, maybe does buybacks, activities comment that BIG it just may is on you if just should give mean margin, towards read of FY you then, the transaction disposals? the that we And then when nonoperating EPS? And maybe portion some

James Quincey

Sure.

there, me Let Charlie. start

smallest to refranchising a we want been clear We be stated objective have over that and the time so operations. world's bottler have the

We currently terms. a in part hold X/X and small a countries, number the X of rough large-stage CCBA, the Philippines, a India basically pieces: a number other -- of each system of about in then significant in

refranchises are own. And so we we long-term, operations the bottling of

availability given ups back last I good some run the the of terms recent had critical of in as we've years. good lack downs, a a actually, some a Philippines, But or actually of had very commodities In overall, the years good of bounce the of Philippines, marketplace. number set availability we've said, notwithstanding in and in

for looking and right to to. been right time we've so the And the refranchise partners

investing combination strong, is system Aboitiz a together family, Group coming expertise local, from importantly, of most with think some long-term a the I this CCEP.

So the John, to I Philippine the combination market right the want market been of of knowledge what's track bring -- think it's together the of to expertise continue do Philippines that pieces? achieved. do partners bottling can other record you and

John Murphy

Yes.

more have February, deal the the in give we'll So on headwind will from margin Charlie, specifics, great And progress -- It's revenue that that assuming as we're February. at and And and guide on it closes. know you we'll in a giving the details moment. making transaction tailwind. stuff, history, specifics, without a

flexibility, balance bottler with few stronger years do following. And the fact the the have, -- refranchising position the last and the a think, say is business, regard a to given the momentum we i.e., part of would nonoperating back, we in sheet from and the question, your One that created last long have coming I have proceeds strong versus I we the primarily. in have sources, we today developed

We returning continue objective have business and their look reinvesting we as these very current repurchases focused the we cover on will use, to share be including at proceeds we capital. of in beyond the coming some dilution. in, to evaluate And best

So more come February. that in to on

Operator

from Our Bank next of from question America. comes Bryan Spillane

Bryan Spillane

you then had us level? at question. hyperinflationary price/mix give pricing clarification company total much affected did I how just the is, and a clarification total just one The the

James Quincey

give but It you line. want to didn't points of But cut think about in we a it's where add X.X to which countries X.X QX. points. in it you about as precise the depends want and No, number,

Bryan Spillane

And right. America. question my North All then is about just

I that think you had in the volumes press called you unit were case out share. gained flat, release, and

about And think prepared your growing faster you away-from-home at-home. then, James, than remarks, in I talked

consumers? the get a with in can on us Just quarter. So kind what's relative happening value-seeking may better the we you with of of just terms business of sort through how in trying got category you give North kind happening terms seeing anything of of America understanding and the little both performance, just as performed in a in behavior of more channel bit of to what's your kind be perspective

James Quincey

Sure.

the saying Nielsen just by start me under let in Firstly, represents the universe U.S. our business half of

of just are measured the business. total the under half So channels

the and in for is simplifying happening buying at-home. those it what's most pressure, most kind And down, under landscape are consumer in under occasion that's when the consumers of lower-income the shopping they're pressure is

is And most by Nielsen. the captured business so that

is more bit the away from there's home. growth And consumers when the marketplace are of where

rebound a still -- just the amusements, very away-from-home hospitality, strong travel, channels, still but and there's those restaurants, in some things. growth So leisure, of not the

growth which is So of in you're part unmeasured. that more the seeing marketplace,

so the strength driving And the the overall side. of business what's revenue that's and really U.S.

total divergence Obviously, away measures between home. And is kind disposable channels the And clear. versus that you under from and then the feeds observed who's income at overall marketplace. behavior of of the see a a of through from kind pressure consumer so home into

Operator

Our next from Grom UBS. Peter comes question from

Peter Grom

question follow to in up channels I Australia mentioned like pronounced label in the relative trade you the was less think XQ, markets that actually and So to Europe the discount impact mentioned I your U.S., there. and prepared you I similar on kind Japan. of Bryan's to wanted also down but mean, remarks. private in James, But

get on love dynamic then would pronounced out just perspective evolving? kind those you it you I as trade-down this to less see how So in 'XX, you And why do to think look was and markets? your of XQ

James Quincey

Okay.

of consumer the point the under point. European -- than view. That's think disposable from pressure more is U.S. look, I the So a slightly consumer income starting

size U.S. or I So trading that's the in tightness generally And think versus I basket on why a you that's think overall more true. Europe little down see

that pressured of prioritization brand occasions the then are And by question strength most consumer. by is categories and about really of the which

got So preserve you averagely choices down certain money, categories. your other don't to make trade and if save choice on in you a you've across you categories, everything,

product, our to going much a obviously make occasion. reduction be happens very private the they in innovation. to And and marketing brands for to they in choices is ones. they our preserve shopping If the that in that in objective there the sure we value when so label the So make trade is spend, in in total deliver brand because some other our we the categories down them value strengths those

difference the we that's as Europe. it. that's overall the between the dynamic so And U.S. see and And

Operator

comes Falorni from Filippo Our from next question Citi.

Filippo Falorni

question weak. James, the mentioned Pacific the solid, that you on business. China was A Asia India very business but was

First, next going big year? a maybe give on in expectations you of a drag are China what can forward and was quarter, into how the your comment

was in one from pricing in of a some But probably environment segment across lowest Pacific? can about as well impact. Asia then price/mix standpoint, I your of one mix price/mix you the segments. the And know there's other geographic the talk

James Quincey

Most margin volumetric from Yes. from given numbers mean, a of sales, view, the any China segment. a supply clearly the back quarter, importantly, to on not of important I in steps lumpiness to really it's concentrate Sure. terms in is drag was this the the in several given consumer. point -- the over-rotate chain

So I quarters. X always an of average think important take to it's

markets fast prioritization of or in and decisions number as be whether number we In Asia made Pacific, XXXX to the third in earlier, quarter, as a portfolio a of for in it to on that China. a start I a Japan little China related investing commented

And there. so investments are going there some

inflation then minimal. of XX of ASEAN years. the clear. China The the the relatively kind the very pricing and CPI taking overall which rest And Australia. kind been relatively relatively the of is given in obvious the of rest is pricing is Japan, Japan, is to around last recently, inflation environment inflation In we've different

that's really it. what's driving so And

see think of an than in rather more quarter Pacific the third terms Asia price/mix I anomaly a trend. as in

Operator

from HSBC. comes Our next Laboy from question Carlos

Carlos Alberto Laboy

with? or sort speak in efficiency of sum, digital cost bottlers more chain-centric? helping that these guess trying to U.S. supply what investments are is digital bottlers you're I'm changing and understand you them revenue-driven Is doing their the perhaps U.S. Can that the how to I and are capabilities? it investments more

James Quincey

the the was bit of last What question, Carlos?

Carlos Alberto Laboy

changing digital these investments bottlers capabilities? and are these How their

James Quincey

Sure. undergoing of of is bottlers is it's digital like I answer are much it's the mean both. the both. international The not set the either, rest bottler investments. And actually, U.S. a

logistics to through the manufacturing, investments in We be kind the a AIs old-school period through have a are the feature. different for technology drive been through time it chain, AI of supply long generative technology whether making now and investments, efficiencies of

that's and most there's to So internally get them going -- CONA. referred among lot enterprise bottlers connected use basically on on, as the all done there's of lot platform or they're because all side connectivity they're through software a of a the a shared to use things

of is done. sure chain a ecosystem support on it making So get supply the as there's partners as lot it be and efficient can lot from a investment of to

to that forecasting supply of then with digitized. trade. customers, the the digitize -- point chain, the largely but marketplace already And trying focus and that largely in talking view, interaction connectivity the investing nonmodern from And the Obviously, there of the the is they're a of really modern in is the you're exists. terms rest already connection, retail visibility on relationship the to intensify I when inventory big effectiveness mean,

customers, order, digitize opportunities you more to a a be can platform helping on really deeper component, so productive. it's terms, once that relationship, kind -- And simple working is to it's nonchain which can of BXB bottlers And then then the been can AI-supported then XX/X tends coordination, knowing from platform then about the them exists, internationally that And the them to an in business. if in you number that get on that provide also an and drive purchase BXB on layering of suggested relationship that a have AI the over to orders. it

bottlers on similar bottlers. U.S. the much a international journey very sense are So the to in that

Operator

come from Cooper will Consumer Edge. from question Brett last Our

Brett Cooper

years, and and hold just in differential implementation Coke's in looking year-to-date the whereas there category seem results, Not or necessarily looking you the given many but market over to nonsparkling different, the growth at be sparkling share nonsparkling of meaningfully growth opportunity third hasn't a management. been in quarter that higher would cluster

speak likely in I'm can growth to impediment what So higher any missing? nonsparkling to or you

can you And then hot your within about the to like that talk just company B guess newer is part coffee categories ability I the to develop or umbrella, alcohol?

James Quincey

those have something from argument And else. is opportunity for But categories to have brands portfolio. take you course, someone an objective our to shares of that need do share. you that a where certainly, is can make justice we lower natural in -- We gain the the to Sure.

from global are it, The to CAGNY vast all the on white the little a that other say page the referenced other in created. perspective people to beverage the space. the seen is not industry actually is beverage industry seeing is the way of of world words, yet majority back the page with In

that to continues representation most our to idea And is of the from and so sparkling create spaces strength a operating brands. white position industry strongest successful the grow us a the with actually, of in

a path going so And sparkling our feature of of forward. should be continued growth

nonsparkling the historically quality to experimental is to playing in talked are build We share. has get to that out. challengers looking a gain about categories, trying to we from And leader that then course, long-term of And I think been leadership. to

couple has long-term look business brands, perspective has the If consistently the it that slowly, is over of and it the increased the take decades. nonsparkling of total of last you percent made but at increased up

industry But that of it build built leadership over a view years position. last the is the to from decades. from into challenger number in has Nothing a from we're the we into going overnight. and happen the opportunity being future. consumer-centric further up capital move confident So of of and to into radical allocation industry the right to the start to experimenters point steadily earning And the is and the dynamic resource rebuild the or

last Okay. operator. That the question, was

Okay.

our term. We've everyone. we to we can we're see, I So long executing to volume, much, over continue strategy. value per incremental dollar can very create And all-weather in growth by earnings that line that conclude, thanks share proven, deliver against confident the hope you top U.S. QX and

and us for you company in the this morning. investment for joining your your and thank So interest

Operator

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

You disconnect. may now

The Coca-Cola Company (KO) 24 Oct 232023 Q3 Earnings call transcript