KO - Earnings call transcript Q2 2024

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Operator

At this time, I'd like to welcome everyone to the Coca-Cola Company's Second Quarter 2024 Earnings Results Conference Call. Today's call is being recorded. [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. I would now like to introduce Ms. Robin Halpern, Vice President and Head of Investor Relations. Ms. begin. now may you Halpern,

Robin Halpern

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

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prepared Instructions] Now [Operator James. your remarks, over I will take we to Following the call questions. will turn

James Quincey

After foster our quarter. the good is to scale a continuing working. all-weather Thanks, start morning, strategy world a mindset. We're market In in Robin, momentum spectrum dynamics, with a our to in leveraging marketplace everyone. our and growth by of good and the wide continued a the winning we year, second

growth. our second top our year-to-date contribute quarter are strong environment innovations discussing earnings performance. to to by to and results, including tech-enabled today. This I'll more Given capabilities our leveraging morning, start drive efficient reviewing operation. ultimately our raising Then line how both we bottom our and I'll guidance effective operating enhancing digital we're line the our and and explain current

strong while revenue we [indiscernible] invest XXXX our continuing grew business. growth results and John Finally, volume, the guidance. In and margins financial second our to in expanded will quarter, organic generated discuss

most we'll remains a value share. industry and currency world, headwinds refranchising. and despite good off the Across ASEAN grew share across we strong digits headwinds XX% many South value market This opportunities had by ASEAN comparable increasing In is We of packages, the and our Philippines, continue growth Pacific dynamics offerings. available including varying points footprint. a portfolio. Overall, to deliver volume was well refillable is to the gains locally driven Growth We refranchising also from and Pacific, of across Philippines start. sparkling by performance we focus culminated our the bottler attractive Pacific, South strong our expanding. price we're drove end-to-end vast positioned to strong affordable Asia and capture on by per X% In X% double to share to earnings believe across in and us. our the navigate gained execution accessible objectives. In global

to little India Strong as in nicely [indiscernible]. double-digit led a year such volume to growth. In as driven execution end-to-end well by Fanta brands slower the and recovered and consumer Sprite as subdued. business from strong confidence our remains Up Thums across Our start flywheel China, growth

We continue and long-term core invest profitable our growth. business focus behind to on

coilemon XXXX investing traffic including pressure reduced due we Euro much-loved music quarter during external Korea, local execution won while sparkling from Powerade relaunched tension weather East, Sprite. In some such geopolitical and also Olympics. on remains benefiting headwinds innovations Paris focus We're highly share. channels. saw Middle with our on Tea tea as course, value Lastly, markets. successfully to capture our and environment and business. despite and across across and momentum Europe. To we strong led navigate brands several to of a continue investing for performance portfolio, In activations multiple generated Japan increasing robust including in our currency Football in the South term. uncertainty closely execution strong working in We're Fuze our value, devaluations EMEA, we're to festivals, Europe, away-from-home partners we're We the longer with integrated impact Ayataka, our Western In Eurasia e-commerce growth beverage the in Championship and the promising and In brand economic our mixed. these local foot in reformulated Africa, business to Japan, the adverse volume total in and and and stronger anticipated

value volume For and in inflationary accessible value refillable on example, won and and focusing America, the and increasing share. In digits quickly win packages line responded intense outlet and top by similarly and growth value generated share. bottom volume affordable including in Across coverage Africa, North Nigeria, offerings mid-single points line we to both we our system price environment share. to grew on and both volume robust

we're Our food was this, volume decline offset to market drink customers drive in and foodservice beverage partnering To away-from-home to softness incidents. channels. and traffic combo with driven meals by

during mainstream the #X Excluding finished quarter. #X retail Coke packaged volumes up Fairlife held industry and the at sales for the water well. Trademark and growth leaders home as at-home

innovations, demand. in our also recent Our Sprite Brazil. Growth Chico Latin level Zero Sabores standout beverage to cold drink business quarter solid win we're to entire by and off continued, share increasing including total momentum driven inventory and had over and with Mexico a visible Topo Sugar XX% by continuing consumer growth, and additional strong quarter take integrated led and was a strength Coca-Cola had volume to the are juice equipment starts. In to investments Chill create execution America, across portfolio. volume of next behind

] Tree despite like organic United pressures generated remains Inercom business capabilities our Global unique our Europe. Putting Kingdom loyalty such The targeted China, expanded resilient. markets [ drop [indiscernible] amplified portfolio, by clear despite and our a key together, system's Ventures, margins. very as we environment, external in ] driving growth advantage. power the gained an it all and Cost is of revenue ever-changing promotions is in and in [ Finally, share value through

innovation organization. Starting integrates with our we Studio our marketing efficient which on speed to able and ecosystem delivering we're deliver bets organizational the that removing flywheel and and barriers process connects bolder approach, refining building know and year, our prioritize far also global a odds measure of up capabilities years. that X X, in more and to and in scale innovating greater real innovation. agile, the consistently the we're tailored impact we're more to and marketing much multiyear deliver [ in improved second Last each its structure. on are also to greater and to success a to second year grow launch capabilities is network investment producing impact success commitments, our and improve rates We're effective have While sustaining become and near-term holistic performance past a and focused ] bigger them be and stood to time. year rate. We a across digital for [indiscernible] We're content innovations that time set at our with have

innovation Sugar Continued others. Zero in among successes and Sprinter [indiscernible] America, include reformulations, Tea in North many Fuze Europe

Disney to and collaborated XX over graphics these consumers successes with closely activations [ of with quarter. and limited connect Walt Company and produce greatest into our greatly with augmented a We markets. activation packaging improved XX and nearly tapped best-in-class and drive to impact. One we timely to the to different ability innovation result edition experiences. the As featured example unique with initiatives, reality on quickly rapidly QR Marvel marketing scale content, scale partnership animation Marvel, our Coca-Cola's from combined second have Studios ] which codes the integrate collectible and deliver the to

volume As this result a volume grew share growth during other Trademark quarter. initiatives, and of and Coca-Cola and value on the

We the XX Year won Brand awards of innovation contributed at Trademark Coke to and for Cannes transformation journey time Creative first winning marketing Cannes Our in the ever June. Lions. at Lions the different

we're capabilities, Even markets better. there's Beyond marketing to potential flexing very well-developed in our and revenue execution growth to innovation, be integrated competitive sustain with muscle advantage. in management even

Mexico the density revenue management example, the of markets the in the For at equipment forefront one highest world. has cold is and growth of drink

with we and quarter, premiumization with transactions. During single-serve the refillables affordability drove

us Our of enjoy XX,XXX initiatives, our past during into volume servings system digits these added to continuing and consumers by we similar II, value the XXX create us translating potential including quarters. Each consumers. about those insights Technologies, annually. consumer, of Emerging year-to-date. the billion scale better mid-single retailers quarter, day, offerings. also which from gives approximately coolers the have momentum X.X few products enhanced the to grew This unique the for billion helps servings kind into over Through tailor and

both AI-based an piloting solutions our to the helps we're tool that across and to that offerings evaluates and pack market. tool example, channel show markets several speed improve better to price volume revenue. Early results For optimization drive tailor opportunities incremental

the recommended SKUs, system. just all, messages and we messages for scratching improve how what's down system efforts initiative be on we're possible, and recognize Initial aspect who the AI-driven results receive also data. our road. To year-to-date incremental is results to more the in retailers opportunities are orders to of suggested encouraged and market to XX% piloting the Our our surface capture and pilots vast retailers We're the sum much push purchase do done seize based to steps an retailers items opportunities to over work likely still it while there's we're available; to indicate by taking every of that previous personalized sales business. we which with to

developed the forward signs the uncertain, markets. in various second of look half including remains we to pressure backdrop some across year, segments As the of external consumer

confident unwavering we dedication portfolio of call However, deliver to on will XXXX thanks longer-term our to are our the system over guidance I'll our commitments. With power we the updated employees, John. turn the of that, and

John Murphy

the strong case in of concentrate grew by and next global unit XX%. that X morning, points, Thank primarily of good you, driven by James, timing everyone. revenues chain and Concentrate partly delivered to sales disruptions supply organic we reverse quarter. we results. some shipments of quarter, were We This ahead X% expect the consisted volume growth. second In

significant in pricing a price/mix devaluation two, of pricing an primarily of one, the points to was array and intense by X items: growth across of markets inflationary of and approximately handful Our X% two mix our actions currency offset driven markets. quarter across

basis from margin than pricing XX% the was XXX concentrate XXX quarter growth by from million from expenditures. expanded higher Organic less working expansion refranchising bottler headwinds partially was up approximately comparable algorithm. capital operating year Excluding cycling tax margin second X% the to due X% $XXX bottler basis growth year-over-year EPS year. versus driven less despite capital Comparable refranchising was payments, benefit prior operating and currency was and margin points, flow cash during benefits prior points. long-term down all from it approximately headwind gross bottler the approximately $X.X and revenue $X.XX to refranchising. up billion, approximately expansion shipment the high of benefit and of due by expansion margin. Putting comparable at currency comparable underlying end the headwinds. Comparable intense offset gross and impacts from the our with inflation, margin markets Comparable timing was Free greater operating headwinds together, to currency quarter from higher

our achieve take balance a purpose We will continue support to that sheet best agenda. to growth for actions fit

tax we During We're expect the we to to able the to This IRS approximately our case making billion quarter, raised continue respect cash forward upcoming progress With and pre-funding contingent move IRS defend. our debt case, we issuing year. by for related long-term fairlife vigorously may appeal general end to consideration. the include of to we will corporate payments by purposes. tax the and the be which an in next steps, $X

continued billion during quarter. fairlife, recorded we charge a of $X.X Given of the the outperformance

XXXX. which billion, in final this $X.X estimated is related Our will be made payment to acquisition

We are our encouraged it fairlife's company. the for has performance by and value created

So $X growth invested capital points table. prioritize ago. businesses and is in streamlining billion the to X year, our refranchising investments. off X gross proceeds take Return XX%, approximately realized and from up years we've passive bottler continue We'll on nearly higher far this equity from capital

range Our below demonstrated strong, X.Xx net well X X.Xx. EBITDA balance of debt which targeted to our by of sheet leverage is is as our

capacity drive opportunistic. have ample agenda, allocation to investing support continuing dividend and our to We further staying which dynamic, our agile to growth, pursue capital prioritizes and

deliver mentioned, commitments. we're on portfolio to proactively managing As James our our

in Based XX% X- the year. updated half in headwind expect and to guidance now earnings comparable to XXXX a now to of by growth per headwind during our full share our X-point confidence XX% comparable first momentum positions, increase expect an share XXXX. a we in small markets, and revenue our neutral organic XX%. And comparable our treasury approximate versus of share year. the our we the be to comparable share. headwind of revenues hedge an We currency on of and in, earnings X% now headwind approximate now X-point in Bottler XXXX. and currency X-point revenues. the plans is reflects currency currency number we earnings X% driven comparable X- ability the This this to execute to are is year mind. our rest to business for anticipate net expect still of Our to to of growth relatively X-point rates half to intensive second is to X- to keep of results. All current to while currency-neutral to considerations basket expected X% There $X.XX per in X- a the per to comparable per growth net earnings refranchising on of headwind some

XXXX. weighted two the cases We the in growth relatively earnings track shipments our and extra record full business. quarter. To concentrate unit and expect mind remainder in fourth the other fourth the everything underlying our keep of line there be days the towards by encouraged expect for into XXXX each will quarter. are year momentum be we to with Taking Please of consideration, we're summarize, during in

of incredibly motivated business. continuing remains questions. drive on return share improve earnings guidance growth. we and longer-term confident system objectives. With per focused We're profile are we we're the And our that, to and to our and to comparable ready quality deliver will take margins line expand Our growth, operator, grow top drive

Operator

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

Dara Mohsenian

channel more transition get just normalized environment, more update business, North discuss variance how cost Can questions seeing your be to an forward? going around going rate a price perspective us you're on give forward America? then and demand you a that we And any can impact what's you also helpful consumer any mix as to North sustained America, view any informs It'd given in on spending. run on performance your in

James Quincey

Yes, sure. No problem, Dara.

spots, strong, for there say the I in some traffic combo pretty has in that, think, with Firstly, seeking are consumer particularly, resilient. softness Within actually away-from-home in there fair aggregate already softer lower increase been that a little relatively be overall, it'd meals. is sentiment to some out which channels. pretty some and value put

consumers meals. in definitely, So somewhere through lower are out there on of consumers, they slightly more for at-home But there's value those a experiences. premium said consumers value on slightly as just channels, there's or income combo getting and a premium points focus And of greater more deals. Having looking are do either greater which less. then, when course, kind piece that, or the deals much by promo the spending go categories going price of

average So that's the strong itself in all consumer. done we've in and quarter. aggregate, the I in strong share Topo growth Chico aggregating We've juices out won value at across Trademark seen well. a We we sort a of Within fairlife, in resilience growth very saw in Coke for overall the think and that, portfolio.

to particular, America, North concentrate terms the first is world, consolidate parts of of of vertically and as set the we is other marketplace. independent growth pricing such typically franchise set the the in of broad-based worth down, business So Remember the in hotspots our resilience the some demand business that for out, growth, American a overall kind category the price in produce in a underlining that I look or North mix. a demand of businesses channel is can of of a effect think as thing up but mix you integrated that consumer. And a of the nature compared

the at it's second understand important As quarter of price. only in half of XX you actually look is that price/mix to America, the points that in North

The half is mix. other

up, it grows, and So marketplace. like Topo makes weaker, effect business a the but get it's in really mechanical Chico is gone Dasani price that and juice and mix the fairlife hasn't mix when the look the drinks grows business you juice

business into North of general, and central overall logical inflation general, in such think the is pricing it on of another -- more markets around yes, out as mentioned world, going I you is we to which high point in the think that's the in half So marketplace to landing largely that to gets [ the the in think of end, we're half But so. But it or price/mix. commodity-based intense marketplace that there'll in it John inflation remains mix costs up, coming -- match would Yes, any our the squeeze comments, reflected going the much We like the of with input excluding zone, and the and going we'll inflation is typically, level the the banks there, see real in as metal out generally, in to strategy the America on actually the yes, through. ] But said getting and earn it and our or that's than work the ones the ones. still be to I is, we're agricultural we're I have zone. inflation, cost are Yes, it going execution. take, that pricing look rather we'll innovation in But normalization approaching have put to going productivity. marketing to a earlier,

Operator

from comes question from next Lauren Lieberman Our Barclays.

Lauren Lieberman

a a love away Europe similar also of was it. certainly of But I'd mentioned in on June summer to home. kind slowness conversation about part from James, the -- sports Western has have kicked off, already you Great. because some bit

maybe the a volume EMEA. weather in challenging been in the case to the And little unit see softness surprising so has but

North Western Europe. -- So just through particularly some a run I'd some dynamics, in love America of as the similar just you on did in

James Quincey

Yes, sure.

Europe obviously the growth. building good really the and -- share, and first volume In from swings price through winning had let -- quarter, actually managing first Africa going and value volume inflation macroeconomically on growth which a but includes a good separate growth, and second growth. price/mix. volume on had growth So Africa quarter, business in good a strong roundabouts the East quarter. Africa, of Africa. Middle good lot Volume the net-net, me there's EMEA, volume just Obviously, and good on

The the that continuing is of conflict Obviously, affect in flip side the world. to Middle business is East. part the

but complete then headwinds to coming come some And you Europe And out see We'd of imminently been within the was there. the away but sporting the if have West, more away start. The as home, offset East. have it's the the more overall some lower was in it on whether there. a Olympics, like from to EMEA, there's like said, mix the there's European growth already some programs the and So which the programs, the from been be. so home Europe. help, away going has from trips. than countries seeking it to not where the slower is to consumption growing income Europe we'd strong of business. the really, same the not West little or pressure enough the on in value as countries pressure Yes, in and of certainly in a helped, packs sporting doing general and effect home consumers U.S. to weather the of happened There's across I less yet in immediate that's UEFA some the terms a But

from So dissimilar U.S., similar. big and weather a a in sense, sporting very an too worse little the events, Europe, aggregate perhaps not picture, but more little

Operator

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

Bryan Spillane

maybe don't just guess about points that just a we is, of concentrate underneath the bit volatility just the term around up just for And us little to near How differences. bit the just year. now. because how simply expect to you But versus kind John, benefited the margin expecting bit can the little shipments. it what's related you talked can timing question much shipments get I you, by around know, units this second, I much just the more quarter? world's unsettled in this? And a right on the end a perspective the excess line I maybe more gross two should Red margin they'll little the think the from is, what's a a give in and about of driving you've if regular shipments One guess, difficult of stuff it's talk versus don't Sea is I

John Murphy

Brian. Thanks, Okay.

relationship had we quarter of on during first question, yes, the the between concentrate. unit affected events and that number cases So that

couple Singapore We Sea Brazil floods demand. of and wake in we in the and of LatAm, to our a the in up in India them, mentioned Red had the operations. some future You the anticipate some ingestion and -- stocking some had restocking

threat So them -- a common them. factors, to range of none threat of a a with

slight normal a the to not highlighted, were the of haul, rightly guidance to second as And something have we'd and is cases is year. the related more Our impact, line. and it's half that margin ago both that gross have to the with to But longer continue operating basis certainly if regards there we goal and our be leveling But year us advise. of tens to stocking, in on certainly expect. you is gallons in And we gross with again, ahead we benefit a happen, assumes in likely over guidance the of that a reflected our that there's the to margins but anticipated. points. out

Operator

Sachs. Our from Bonnie next from Herzog Goldman question comes

Bonnie Herzog

in channel have to on want to the in James, which moving decelerated in we and forward. growth touch the I about is about a think your did touch your the year? was accelerate what do your how the And maybe margins? growth business, assuming more for just I implemented top did you've And on. any this further, remainder guess QX initiatives how moderates this outlook hoping you then your much QX channel and business on hear to away-from-home I channel versus this may little bit line ask of impact in

I helpful. would be think that

James Quincey

Yes, deceleration the don't saying be the a first sure. as I it worth going Thanks, quarter come would we big Bonnie. on second from as quarter. into think

last at look end back some in were of away home, year. calling from happened, and out in bit a and I softness back we already what think stand just you If the

second of as I would a more been half quarter. build last slow it the and back year the through first so there's from And characterize the

than to how bring just focused really, have of sure softening in back make can accelerating a major away-from-home quarter some channel. kind make that little like not of and in sure year. negative working But that architecture pricing it's been with the First a we more and the last It's the our anything it's and the and bear a softening rather of off stay to it's partners cliff. softness second a slow than question, of kind the we key a price may abrupt a away half be across the of from we we've combos provide, in that's at a which on whatever is we're home terms to of done U.S. And laddering and format can is being historically more or different in so the and about channels meal running people there's to mom-and-pop on we all line home thinking the channels thinking got pack offerings whether then in the a that within that doing sense, affordability category channels of at really about the of allow it, slow what obviously kind level when

are so And we those rolling as speak. out

an see them impact years to in expect the We making to go.

Operator

next Powers comes Bank. Steve Our from Deutsche from question

Stephen Robert Powers

Maybe, timing, both and John, year-to-date, mix the strong. the driver the the guess, in underlying has cetera. impact put maybe and around margin of just wrap margin performance, I conversation a and Year-to-date, quarter et to been concentrate

underlying material confirm expecting in half it back difference outright, doesn't I of feel the as the penciling and help I'm back are could the that just there As you're performance you a sales in us And play the and differences, to what business -- if despite to drivers? like the are going drivers slower other margin concentrate don't macro material any maybe that? the of some

John Murphy

Steve, Sure, thanks.

to margin, most then highlight which quarter, nowadays have structural we the gross a had refranchising any big performance So maybe and activity just on changes to drivers of the our relates in as impact. typically underlying currency our

maybe reflecting And margin structural year-to-date, is in the step with half half on the half down will XXX to the -- underlying line, slightly in the first profile we're the say second of of operating down primarily margin similar half. the year dissimilar. second would on in and than we've it driven that's trends of the points seen the But to for year one to half. And I some basis almost the of first overall the what lower So And year, the second not currency. offset increase. typically, be just by

on had the the expect margin And in We then of half prior calls, the more sort benefit flexible even. have to structural. more discussed I the year that yet, linked travel the of many strengthening our year, profile be right than underlying our line make and the investment with be the world. much as the that it on the second in and of half we had to line what's of this to But in direction in around to of to markets gross stay be on overall happening we've both And decisions conversations we operating in previous is first some the event we've margin pretty on reserve topic.

Operator

Citi. Falorni question next Filippo Our from comes from

Filippo Falorni

well? of is And have very to in markets, Brazil. unit years. Mexico very with also what temporary a, flooding a some business. I of your is I some countries. significantly just strong of relationship with improved last the just very how was wanted strong growth your other Still couple America baller curious case know driver total There behaving of key working in the your Brazil, to obviously It the the the general impact and company over sense price/mix. strong Latin about a consumer continues ask But be volume.

James Quincey

and in important innovation, affordability really just as volume including clearly of sure now putting mentioned, in the from the the not Yes. ways or capability Cock their the our but really by transformation, execution talk like relationships particularly a people sure the of is marketplace, both strategy marketing it together all the price long-term with and Coke packaging a Sure, have sustained driven have and in we at of approach components traditional franchise this that that which but doubled Brazil. but packaging, has coal whether executed result America regular Latin XX% we of trademark, with Obviously, on we Latin America, and options, digitization another also the being bottlers strong bringing be volume Zero America, all in and be on about, momentum, Mexico markets not really growth. with returnable success just packaging down, focus execution the system part Yes. premiumization critically more quarter, of keeping retailers. making had pretty bottling of out the Latin making you there, story, It's in Filippo. broad-based the momentum category the doors opportunities. But the whether building

really, the what elements possible the are is the marketplace. representation of strategy of all the So when in executed system of

I think the X%. in X/X price/mix do worth of take is performance price/mix yes, actually high noting strong Argentina. affected that, the heavily to and it's due is the Argentinian Please by that volume obviously, of inflation mind

[ pricing result. you continue strong ] e-commerce very invert about leaves future. that So very roughly and for of the [ ] the seeing In X% a Nevertheless, to that rest America, forward into looking the for countries. normal pleasing Latin

Operator

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

Christopher Carey

perhaps perspective from months? continue how of do do impact I development it's XX John, a sheet XX raising fairlife cash what can escrow to the ask you an negative maybe specifically expense these cover interest limit on so flow, you on cash flow And to specifically from a that a income liability just as wanted can balance continues around positive versus to next perhaps you net to cover the just additional just question does, well. however, you payment. The see ahead. some And on major payments comment trending overall Clearly, the capital in grow. view to fairlife. to have fairlife to

John Murphy

you. the of broader overall relative some end to firstly the And there's of fairlife, the Thank we're size is the from sources have the regard cash and the term, performance short to that operations. in With Well, pleased the come businesses is Sure, refranchise from that. as with very are Chris. the have free to our [indiscernible] say place in we flow of to the continue there. construct in we in from sources proceeds conversation, we cash

the market, debt issued into and quarter, second some the debt. we During went long-term also we

with many of sight managing of the we And taken we needs so into that line strong. it's on to really file clear yes, the that sheet our the of. those business and capital We as a we the of in fairlife the care overall year case. this continue payment the very that into IRS strategy, relative acquisition dividend on invest to what go we tax closely occasions the deal on care remains XXXX XXXX end of are we have support take a To to and as And tax with as be horizon see. Balance will three discussed the relative appropriate. to outflows to combination to is allocation

be an the to confident through, today done we XX in well it's through months So we've interesting work that going all prepares as work to all, manage it. very feel but to

Operator

comes question Next from Teixeira Andrea from JPMorgan.

Andrea Teixeira

pricing, and other, there amazing all in innovation. but around North RGM marketing the the not of on and have. well of about James, and my Of that is and done even America, pretty in as course, thinking, that marketing gains how half quite you talk America what team -- we as there you've also be and and But expect of only should there Can in you to to broadly, in pay still of of ahead, ahead? packaging North in ] and Mexico, going the EMEA. much I mix point additional by think the you guess, looking price/mix any mentioned about but Brazil in moving cadence well So additional you campaigns expect you book gains [ driven due terms XX the the how

James Quincey

the the we reasonable level Clearly, of become effects likely more year. inflationary execution. the subdued with as we're half with with into of price earn marker mean, to some mix with the the the take to ahead press to going we to marketing, innovation, are continue effects of absolutely, the do Sure. pricing. back some the That's I the and of a provide way go

is So trend because expecting, mix from America, and North of it over of itself. in I'm does it part, not it think half the will I example, it core is piece start starts cycling pricing, for time. And down half in mix so to

of the it an do as on. its effects, top volume, to big through inflation X% we've me of you are in piece the if spot so I there, look core and I'm think a said, the of take X-ish out at and again for and the the there been second And look company key algorithm the about of quarter the overall pricing, you're right in as it's that end mix was that inflation, core sweet to deliver you looking it kind I the level you is in at percent offer thinking pricing. And totality, the

for that of like assumption of zone starting think the the and more price to being these kind effects see of inflation I and actions core mix the So across the strategy is business. flywheels the the a central landing mix kind driving

Operator

from comes Our next from Jefferies. question Kaumil Gajrawala

Kaumil Gajrawala

a we slowdown of delivered You look Staples, in case rest the seeing across growth. of volume of sort bit X% when quite And we're volumes.

term with you a I Can the your your at should North talk medium provided innovation, sports, AI What of in maybe exception of volume looking also growth? new think but maybe terms we just operating sporting you're bit views, it of these you more positive everywhere over environment things. the -- America. types be events, as

James Quincey

Yes.

ours at but architecture to price use try strategy keep times we have taken not longer, possible objective affordability the over as recruit to number to the that. sure and So see to last of stage. even but franchise than particularly pack not from trying a them innovation do many we volumes to years, on -- some make critically Clearly, And tougher side. re when the in later within an get all important approach our it's keep and as and in consumers rather just do is perspective, of the as in they're negative the elements people focus, marketing not say

volume had true -- we're of quarter. and in ] got rate X% past, ambition the it mix. staying there. We've X% to And to X%, with you balance talked set in the in the and algorithm a of we've remains revenue X% long-term a [ we price range run for growth -- X% the a so looking as we We've got say, of today ourselves that central the

and [ if essentially on price, volume in -- the X% X% a in that X% X% ] that's way split we So [ you're with saying you to were X% that, range volume. ] quarter to the in kind of

this So to price I it's term, was exactly what long more quarter. in earlier that in to Talked slightly slightly shorter in and volume, which the kind likely continue be less happened we'll that. think pursue the the year run, of second

and rest in the But that's that, net-net, we is balanced better. kind can the Japan not for Africa, we the America, a that is we're and slightly think growth it likely confident to So year. prices and true rest algorithm of of to -- little of of future. the strong the inflation gets volume from strategy algorithm be would this drive as see of pricing out the America disruptions less extent, Asia But economies, and to see North and India, of and income kind zone. And as rest Latin through is that of we me kind less developing of true rest that's bit think specific Europe some from landing of year surprise that slightly playing a than weighing parts terms The the a to get through the go guidance the weather winning, I remains we that Southeast summer. that on more year coming some repetition the probably the the go price our and tends slightly East. positive as tends and we've towards volume through of and more into Hopefully, slightly likely and largely being standard a towards Middle the we the that the we're of of channel that where the volume, got

Operator

Our Evercore Robert next Ottenstein comes from ISI. from question

Robert Ottenstein

that emphasis than go a energy And basis, at for get like to love one, year look a Number but America, looks I'd it of as on think the like it on things. of the I thoughts I'd first your thoughts I more time a the the maybe maybe first for back half the second of category is what can doing quarter. get your are with to drivers sector. couple there. better to sparkling on more North on

team? any then Second, category side on combining the sports And seeing third, you're strategy noting? how your particular BODYARMOR things are worth and strengths, working, new is other management Powerade that one under that

James Quincey

Yes, sure, Robert.

the actually and of quarter. provided second in North what's trademarks the life if at good is So terms had definitely, X you in And growth actually dollar -- clearly retail universe which look America at standouts and a is The QX. fair look most interesting Nielsen Coca-Cola. growth, answer you

a for see the could as you working. way, either so And a microcosm sort that strategy of overall

ends marketplace growth. really in broad of substantial executed and got portfolio and You've the it's driving being the working

getting So to performance being sports to we're see of growth the not those starting the growth, the better. with Zero. In of Coca-Cola won and work innovation starting good all by kind Coca-Cola and and good in going price Zero some with and BODYARMOR we've with the the fairlife, and turn overall positive South. again, innovations but share some And gaining by We're marketing Powerade. category, I.V. and by corner pack yet performance obviously We we volume on stabilized led there. Flash had on really stabilization some Powerade the

kind So long clearly the of do a that good not last. better. to turning and and more great I'm looking corner there's forward say to step much and sure quarter

Operator

from Grom question comes UBS. from next Our Peter

Peter Grom

of right? notable up wanted Robert's the we've to change mean, on seen it's just I pretty a question, where energy here. few just one follow drinks, specifically I categories on guess I

pressure you look lived? would the suggest weakness perspective, is do persist So and any may the short 'XX? be as be balance [ you're then ] this through some you to weaker would anticipate that what this James, seeing on something into maybe of the you And ahead, have year of performance? Or driving could maybe there

James Quincey

start us, for mean, Monster bottling Well, a the and think created Monster it to been a of in create in start Coca-Cola U.S., to bring for firstly, and up spaces with bit. that's look partners. the had you people happening Clearly, the and two for tremendous when category value category we've category. great new and is brands Sure. I what's one every news people particularly of break the I in need there's or partnership in look, energy, kind innovate happens a case there's the And to the for U.S. what to white think I

will the that And we the evolution so way looking consumer with category. at think respond Monster to or I is working the the

of the for also think I state important it's to their overall to an responds lives. that energy the categories of category fueled needs one understand being that consumer is

a I on one Energy bring do so forms. then and across there's internationally, that that portfolio we're that. with its in the need ways that. it. in category of we And the kind where bear world different their and delivering done in state. and brand different has be do in And play But something I as think part progress multiple company more to energy brands there's them each Monster work we robust to including around against own the category each making to of board, the think from see And in view, working point each growth to on to needs And

of growth, and So energy overall, done parts in of I world. category geographically of got be jobs different think has one some see it kind good that at it's still there's different to kind pull apart to to the look and

Andrea Teixeira

question from next Our comes Charlie from Redburn. Higgs

Charlie Higgs

from in Japan? that there then is the and in down purely mix QX, a question And Philippines price/mix where there within in India more up specifically, Can China Or what just performance you're as was the X%, that? up how the negative got in X% on a a X% ground I've down bit QX. X%. on and the volumes well talk geographic and negative you performed seeing pricing maybe Asia just volumes price/mix was about Pacific, were please, China and

James Quincey

sure. order, effect. than the the more Yes, mix it in driven reverse take by Yes, Charlie. is I'll pricing negative

X%. And But the down I operating of swing central Clearly, back Asia in you pricing to more go operating thing the just of Pacific works. it's geography of But mix, went the is equities answer driven price/mix is the if big unit. the it's taking positive is to than Asia pricing mix, minus different consuming way the India. core unit mathematics units. the by geography bounce So operating overall the of core it and back by performance if is there

You'll quarter. remember India a that had in first we soft the first quarter,

strong. second was The quarter very

And results. so produces swing obviously, big a that in the

Still So India very the certainly the second but second future, a be quarter. line the had realistic a India. Still it of very volume into good double-digit terms bullish quarter. they growth had a on in in won't good straight of in quarter

across good volume also including were this Volumes and growth story. also Southeast growth to saw parts Japan We across Asia, South negative two the volume operating Korea. There's in China unit.

case as where general yes, control, and cetera, estate, some the there's teas, invest juice works across water, category more in focusing and prioritizing issues drinks China. and money been is where the restructuring macro real cetera. and deprioritizing and we on make pack things the we portfolio around essentially we pricing, et sparkling don't structural et is, through what essentially the we first overall economy that have of softness But a The within

was in the So deprioritization that's actually, negative China, slightly sparkling entirely And for quarter. water. volume the overall were positive I in volumes the but think driven by China for

Operator

comes Grundy question Paribas. from Kevin next BNP Our from

Kevin Grundy

please. John, for Questions

cash flow. questions refranchising. the potential please, of some Can on on update, of we building timing of get an kind bottler Just earlier on

currently CCBA value probably much into potentially moving thinking you understanding all, you're with And hear from that think that on if EPS a largely question you're We conditions thinking solutions about can that? about creation how there? then potential it's help timing how as thinking come you're shareholders, does at that. forward shareholders for sometimes, market as and I about dictate. may us But

John Murphy

outstanding. the in finish, that staying timing, to disciplined when in out still regarding we new refranchising areas the So to are expect very we're dates thoughtful, partners recruiting the process we're as not giving

message value with there's impact the But as of us with year, recipe we partnership mechanical that change a support staying us. With Coca-Cola the regard overall around couple to haul we'll is on the the longer to clear Coca-Cola John, having imminent we've The right term, long-term to that the for a balance we fruition. system. the we -- it's decisions work what the back do focused to the expect And seen be dilution, that we is do again that and the broader Company to over the broader benefits over the step time and comes so when longer you've that a is -- underway, very great change, believe the EPS designed impact that model. decisions refranchising of there's think and a the strategic but advise good ease demonstrating that's started best, effect on And [indiscernible] what our Company exceed in EPS performance. in to have and mechanical internally line. there best that years And this in very mid-teens on bear But posters on the we'll benefit Coca-Cola we sheet I system no the all proposition not time and is step think for growth overall are work from if forward. then working that of the path over work as continue world the is for refranchising, overall we

Operator

TD will Moscow Cowen. today Our Robert last question from come from

Unknown Analyst

of marketing make you did but for on it, changed any year year. anything intentions since commentary the the the missed your I has whether Maybe start investment about

be you maybe improve categories. that signal volume. investment no here to But certain I assume I needs markets there's can surgical that efforts in incremental about think in talked some certain to

James Quincey

attack different me Let a [indiscernible]. the answer in

we of pull all one warrant the softness we you a back. Having nothing look in radically said investment, changing particularly there's level and then extent invest continue tell invest. And more to will to that is doesn't And also the to bias the more. we to to certain we opportunities. trying we invest see direction And in lean continue is we'll Our that If if contrary see guidance opportunity, the that, the see is other. in that's to see opportunities, we true. where

and marching to see see together. fixed continue that not there's the It's for is to very guidance not drive different. trying we radically that's and the two need the much But marketing to the inflation. sum line, nothing top to you invest subject It's continue We pressure. in tell we something a

question. Okay. Thanks, Robert. last That was the

So emphasizes every summarize, we we're culture how to do improving that a building business. of aspect

we're successfully opportunities we The We front us. our We of strategy will that in have we're confident to opportunities, capture positioned and execute for well lots you stakeholders, value think these of your for and create thank interest. [indiscernible].

you. company in us this morning. for investment and Your Thank joining

Operator

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

You disconnect. may now

The Coca-Cola Company (KO) 23 Jul 242024 Q2 Earnings call transcript