KO - Earnings call transcript Q4 2024

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Operator

At this time, I'd like to welcome everyone to the Coca-Cola Company's Fourth Quarter and Full Year 2024 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 Mr. I Vice Halpern, President and Relations. Investor of Head Robin Ms. now you begin. Halpern, may

Robin Halpern

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

same conjunction You analysis can also earnings in in periodic James. section statements objectives operating contain find of will the growth concerning Now company's our including website schedules margins. to be with an release reports. in the which our in long-term provide [Operator statements, call Instructions] turn may SEC I considered the contained forward-looking that and This and our over cautionary of statements earnings call should

James Quincey

good and morning, Robin, Thanks, everyone.

are margin currency growth growth and on despite commitment continue to results grow These the per double-digit impact bottler comes and robust us have what of growth gross which and at and demonstrated to comparable with organic the refranchising. operating include volume share agility our comparable We This X% comparable revenue through strategy, we led continuation nearly our of we've a reflect earnings XXXX all-weather headwinds expansion. results, delivering long-term our to pleased navigate [indiscernible]

executing end overview discussing and I'll what Then an strategy providing detail and will financial next fine-tuning of fourth explain amplifying our we're guidance. in our across industry With that segments our the performance confident provide where our can I'll on objectives. guidance by results quarter. about our more XXXX John and we're this, the context, our needed. in business longer-term and perspective by on how momentum is we working strong Given our review XXXX as deliver

how our it with of consumer, that have by customer, is ahead in by great you we us. of slice fundamental operate a category, industry we matter by geography beverage opportunities vast strengths One no growth, steady by

tea, quarter, progress the across as local to leveraged categories. soft We in scale well tailored growth categories portfolio momentum reaching system gains had beverage our remaining need. global other on beverage broad-based ongoing in franchise of capitalize and delivering to drinks overall our which the portfolio total expertise while across opportunities. our our and as these like share value-added sparkling we the are consumer of We're During local dairy and power share making global

franchise across is And long-term balanced we're and which believe an continuing growth. to locally strengthen our we advantage global to model, system, alignment drive our operates

industry well our During the quarter, operating while remains dynamic, held environment consumer demand remained strong. and up our

Starting and Pacific, integrated during in and which Asia campaigns like volume South marketing Asian we were from growth. quarter successful marks, outlets Coca-Cola in over the grew activated In volume to trademark led X,XXX Pacific. and benefited food

and headwinds, seeing our continues we're and early, Made across quarter business. improved we during Sprite, trends performance. gain to Trademark approximately In by in system offerings South continued of Refillable attractive growth contributed macro X/X on points. increasing Our focusing refillable XXXX. price affordability offerings and volume volumes grew improved to the [indiscernible] despite Coca-Cola also Minute share while volume each Pacific and drove Fanta China,

accelerating in of activating placement system and drink stepping channels. integrated equipment in marketing campaigns up XXXX Our by cold is execution integrated key

volume. marketing from execution from quarter, our In to a up nicely South strong Coca-Cola grew Japan quarter. the by rebounded India, continuing channels. contributor Innovation Trademark and in grew of the number In stepped brands. was steady Korea, during and during We're a integrated research benefit our innovative offerings. now led Coca-Cola added business growth, billion [indiscernible] to we price other performance Thums our with and In with volume music, key we which $ provides XXth to approximately customer Up XXXX, Maza And consumers and X campaigns is brand. product, travel tailor opportunities system recruited better our more [indiscernible] our with that India, in link XXX,XXX movies. and We to platforms digital outlets packaging

XXXX. needs traction Jack to rates and for by volume in with both meals. EMEA. brands and linking with Moving Tea, innovation Absolute Coke new revenue to performed seeing volume on multiyear engaging like Trademark consumers profit. our with the and declined spicy In both Fuze markets. success during good and and we experiential across on occasions quarter Sprite campaigns the Coca-Cola and like performance innovation grew and Despite Eastern We're We're well Western Also, Zero, more velocities Europe, world Powerade Fantas mixed marketing Sprite. pressure,

and quarter. during the seeing Middle emphasizing of Eurasia confluence a returned despite growth In We're headwinds, localness macro we responses. to East, continued of our and volume business positive the

campaign by integrated by Trademark led the to for had [indiscernible] up during made in strong Fuze execution also volume growth made the Tea momentum Coca-Cola. cooler share year. across placement and affordability inventory good the Turkey visible stepping example, and in increasing region. For driving of

drive momentum volume quarter during took acts quarter ability. Nigeria in the the by pack South price North declined and driven Africa, our and partially further by primarily to in offset In our strong during Africa. architecture pressure by Africa adjusting volume We

our trademark investing adding drinkers better platforms, Our customers on digital we Also, Over America, our of increasing quarter. pressures, needs. during [indiscernible] the and Latin revenue system customers' offerings drive some the the by XX% individual despite In offerings, Coca-Cola profit growth term, and to refillable occasion. equipment system are placing linking more cold in and in fragmented opportunity increasing line to weekly to top focused XXXX our volume on greater trade offerings. allowing meal systems single-serve for trial tailor brand grew now to the capacity customer macroeconomic long We drove for XXXX. plus is manufacturing for drink recruited

and quarter and the Bright, quarter. and juice during in and increased channels well Lastly, and to had offerings top in we integrated Trademark in from package share visible North both execution line messaging of fairlife successful and increased Consumers mix cranberry product, growth Fanta point-of-sale retail limited sales channel to of due the value Coca-Cola at-home flavors and gained stepped grew focused we responded leaders innovations in Winter time like in the increased messaging premium transactions and America, robust and inventory. away-from-home Spice affordable remain up profit quarter. on key distribution Sparkling share volume growth. benefited and and

our momentum dynamics objectives. market responding To We're in business. sum locally we everything have to our good execute up, on to global

commitments, and capabilities to improve execution across flywheel. investing more build our granular our growth on delivering we're we're near-term also get While strategic

harnessing Our model retail passion network product, experiences we in points and and to consumers personalized live with connect ways. integrating is are more marketing digital,

contributed gain the personalized stations, after store Pictures, to great we Partnering Brothers and example, Halloween flavors our life can ever limited campaign bet and customers XX trams juice in during our with train we and juice to experiences over created taking One access Fanta Consumers time was Warner scaled with the packages train nearly activation, sparkling flavor. largest [indiscernible] replicated The quarter. share plantable Halloween was markets. to a metros. first and activated we've global apple

created year, learning and time, acting with Our first culture the This scaling Christmas emphasizes [indiscernible] our successes. increasingly boldly, was for Coca-Cola

our produce power from at lower approach. which emerging creativity, with are we allowed seeing the The to tangible AI marketing cost. technology will generative technologies early emerging We're ad faster and results a still and stages us Combining continue our to of at lead and human like iterate transformation.

to Time's the Over beverage X and have years, past $XX fairlife Coca-Cola, billion. Magazine, in Minute Made Coca-Cola's were world's retail brands named their sales respective Trademark increased best in XXXX. According categories approximately

that bigger our also innovations and bolder capabilities focusing a on While in bets. objectives. have of prioritizes we're innovation building marketing, clear Each

for Sometimes, impact. the and In off than a buzz faster or like to Sprite we other we investments rates innovate This improve on key Winter focused cranberry. greater impact. Tea Xx category. This create retail sustaining is value to success instances, Fuze innovate grew drive Coke Oreo we as innovations and year, short-term multiyear behind lasting paying Spice

strongly Topo excited for for the our Chico about momentum We're success XXXX. Maid were strong innovation its XXXX, continued our In supporters Sugar revenue pipeline and innovation Minute year. prior improved to Zero realized innovation contributed and growth. growth

top our flywheel. across Moving line

system digital is sticking win to recruitment, consumption increase our the investing fundamentals systems we consumer opportunity. accelerate capabilities to in and Ensuring heavily and excellence Our product greatest yet the still market. one of tremendous in of commercial have strengths, is availability

are inventory XXXX tail and increase in out system our there brands our right in outlets, of and headroom placements. to While remains XX improved better the of stock ample reduce outlet million found coverage, with visible offerings our share

equipment. billion consumption in coolers. increasing one outlets, incidence, displays winning is retail significant better strongest customer marketing our XXXX, with drink outside Winning cold traditional placing to global drink drive opportunity. units XX invested another beverage we activating beverage add translates equipment of In of opportunity is To approximately incidence XX system in into cold drink on drivers in point-of-sale $XX cold X by equipment in incidence zones our Basket point Final present toolbox XXX,XXX over drive channels, of the approximately our the million million systems more impulse key is aisle. campaigns basket sales. system focused integrated and just additional nearly to our consumption have

area. and and growth enabled recruited expansion. revenue to and capabilities, management and elasticities fuel grew availability, progress is marketing, in this great realizing driving margin we're making premiumization top equipment, volume drink the incidents won our our affordability revenue Strong growth We're we're basket By with across portfolio. growth coupled a XXXX. commercial total execution which by on innovation are and weekly line today our in [indiscernible], strong The management, focusing beverage share testament cold system both

getting While operating made in steady executing XXXX, progress mindset strategy we're all-weather just only with started. that our we we're the

and page turn we will the both challenges. the anticipate we bring year opportunities As to XXXX,

One, the of powerful we us, and primed pervasive and portfolio distribution We operate two, these we dynamic. be we constant: our to a will available opportunities advantages. system three, remain employees Several to of many industry; in system great external clear brands performance; sustained expect unwavering capture the and have are deliver dedication environment underpinnings our are

turn Next the leading in results With backdrops that, CAGNY, about types to call how John. over listen. forward Tuesday, to to I'll everyone deliver more look we're encourage I to and at all sharing of I

John Murphy

XXXX James, the with we said X% and Thank share over growth delivered in prior We earnings per closed as growth And years. share average everyone. comparable strong X per good of X% you, earnings results. year fourth the quarter top James comparable on earlier, morning,

and we the Concentrate points shipments. X grew quarter X which primarily ahead case line of our with the sales During cases XX%. Unit trend. by timing revenues growth in grew days fourth unit is was driven concentrate X%, quarter, of in organic additional multiyear the

Our currency a inflationary price/mix X split of driven of growth points of and normal evenly of two pricing by was pricing handful devaluations pricing mix. our markets in somewhat experiencing actions items: across Approximately intense X% approximately favorable and one point between markets

the approximately to comparable margin. impact our was margin margin approximately gross margin Excluding intense gross and refranchising currency to Comparable growth algorithm. up headwinds larger comparable points was of basis revenue points. a had had was and operating comparable long-term a operating pricing, above Bottlers XX organic inflationary benefit growth basis impact up XXX greater

[indiscernible] despite XX% headwinds X% up $X.XX year-over-year and of bottlers from altogether, EPS headwinds fourth refranchising. quarter XX% comparable was currency

[Audio Gap]

adjusted within our range. targeted conversion is which XXXX, flow free was cash long-term XX%, In

[Audio Gap]

growth long-term algorithm. at our the high of end

and will and will continue focus the smaller driving and pricing in year. XXXX role anticipate throughout We volume balanced a moderate to intense on play price/mix inflationary

expected continue refranchising as comparable of all share bottler also per in cycle net marketing. a and our the we driving of refranchise across We'll productivity brands slight to areas to revenues comparable be Our invest to behind appropriately earnings is XXXX. headwind impact while

currency an approximate comparable significant the line. leverage resource Next is expecting further be our approximate expense positions, not confidence ability believe X-point versus to and X-point allocation manageable, drive transformation we continue earnings we'll hedge to to headwind XXXX. discuss headwind and X we're the current revenues to marketing X- an below per give us week to anticipate on more for our full productivity comparable in net prior share or step-up and currency our elevated Based rates enhanced to at deleverage year to and expect CAGNY, we We capabilities year.

minimum Our to for underlying which to primarily XXXX expected All $X.XX the the in, increase and earnings XX.X% share effective global X% versus countries comparable in expect driven of by is per is to X% impact rate and several regulations. XXXX. tax growth enacting tax of we

this in XXXX payment, approximately less in generate investments. in life capital of free cash are Excluding cash to approximately $XX.X expect contingent operations, $X.X payment, in of year will through $X.X Tax Included approximately we the from XXXX. $X.X fair consideration flow One, guidance XXXX. billion transition billion approximately billion items and versus payment of $XXX an tax X highlight: million that to final is the billion a Jobs a we Act to related the Cuts This increase make

of we're to With of to capital in and progress India invest to shareowners. build XXXX by good portion cash Number flow our agenda. two, is to Driven divestitures, capacity for have timing free and part XXXX A system working continue business in our impact return the free making we that invest expect capital fairlife initiatives and our we significant to underlying Africa. capital that cash on in expected to and flexibility our investment acquisitions flow will reverse flow. benefited generation, cash of and our respect

added via we've XXXX, billion acquisition. $X brands Since

these time XXXX, is in of Importantly, demonstrating in at only investments In brands we billion bottling XXXX. consolidated X billion-dollar XX% from progress the refranchising from $X of down acquisitions. realized as gross of $X.X proceeds brands in net XX%, revenue a acquisition, percent scaling were

done at X Related capital up unwavering we've an return, time. to grow invested years. for capital Return our dividend points priority to the have we consecutive is XX on same as

supported flow free as paid a dividends cash dividend by generation. XXXX, Our long-term In [indiscernible] percent, free adjusted cash XX%. our was flow is our

in repurchased year. repurchases, from offset of given share dilution by options stock the any shares exercise On we've to typically employees the

health committed of Our capital and business to long-term the agility prioritizes and value stakeholders. we're our creating allocation driving our for policy

There to keep XXXX. considerations for are mind some in

refranchising refranchising of the the bottler first a cycle during quarter and the to which revenues expect impact comparable the net impact XXXX. have Philippines, We earnings share per as greater to first during closed comparable we of quarter

Due have the first our latter expect a calendar, the benefits quarter reporting half that and to will additional in X less impact during discussed in the XXXX. be previously X to there productivity the quarter. fourth We I day larger of days

we're So summary, deliver in on successfully our to objectives. strategy all-weather executing our

focused incredibly motivated. Our and remains system

inception to We positioned continued that, ready since so. and operator, with line over growth will drive of take enduring and margin we discipline company expansion. expect we A to questions. value its continue has to our to believe invest well time, deliver quality are to With been hallmark ability we're create top to continue and do our

Operator

from Lieberman [Operator Lauren Instructions] Our first question comes from Barclays.

Lauren Lieberman

companies buck that to and seen for The many strong the business we've of between upper seemed staples XQ conviction XXXX. results from the algorithm other end trend in the sales

you flags the So hear in I'd Europe, from your globally, lagging. been where perspective so environment some just certain be markets to been sentiment has on about mixed. consumer markets there more U.S. Western curious particularly have about developed

of global kind environment. your curious perspective the on So consumer

James Quincey

Sure. Lauren.

in be sense one see robust demand. view more the segments in developed and more income all. that both It's North possibly yes, is America markets, under at and in economic the perhaps more perhaps in and world. the affordability for income I in and aggregate, are think they're for get it's China developed across even and is respond we actually If notably Europe is Maybe in look East the delivering the bit premiumization. U.S. But more that base little but with pretty the Europe part got and consumers continue that softer, focus U.S., in strong we sustained little the and all where Middle emerging that lower and growth execution still than spending was with pressure doing little been consumer the a income in the a We disposable we of well The pretty whilst the see in strategies terms 'XX, and downs. India fits enduring the a But direction volatile better. And you the a saw rebound. a gaining a them again, and or demand disposable includes innovation Europe, and bit will going across the markets, saving, of absolutely environment the stable the pretty the in a marketing emerging still have of and spending. ups there true broad-based Latin 'XX, better, size similarly, level saw there's Western markets. quarter, consumer pretty on consumer in some particularly have. the continued to rest quite the that is to to need world, on to developed to America, and a Western it overall We I overall, not need Africa. we grow the good In around robustness

the quarter for we focus have what there. company. to in I And demand has on to fourth get you result continuing been is we're do a XXXX. the see So to the think good that's ability in confident what our what for And

Operator

next Our from Morgan Stanley. Dara comes question Mohsenian

Dara Mohsenian

us just forecast X% can XXXX. component pricing and wanted And organic for you XXXX, price granularity just the as just volume your on on a well give more balance as revenue see growth plans you the mix? in focus on to that bit So on that

There's few with pricing results, on markets your You to there recent there's be in seems But some clearly, QX stress after inflation also consumer mentioned low-end years. FX from a in Coke pressure. well. handling

there's just a of So circumstances. number volatile external

in that the on does year, how manage might XXXX you how the front? and typical mix different be pricing a impact either or pricing that how Just than

James Quincey

start on let's I down Look, from think level 'XX. the top

little a volume more less a between last still likely over obviously, volume which franchise will pursued each. and year, for be X volume been called algorithm the than franchise, be will more of than But price solid It but but is growth. just perhaps X long-term end, our X a there'll our 'XX, long and an of to to but seems little there there continued be long little what years, be long-term a little X in the say expect and have in which to a out, at I'd price, momentum, want term. the we in price growth price and we top balance to weighted has growing a so we keeping term of volume enduring more number feature volume not Our the people so

we take you've of And so of of is XXXX. a headline where XX%, if the which say countries, XXXX, what half to you of got that kind I that's a like expect headline would And out to expect in we high-inflation largely drop see. from price/mix these about

of high continue way ex thinking as And and to a helped of of has that you going number to Another inflation give high-inflation a down of mix kind had really to the price countries is moderated factor. about dropout see in XXXX, that if X% you XXXX. these in slightly a inflation, it in you're largely XXXX lower moderate

got that actions we're to relative the support and And innovation, commercial proportionate through actual level through is so premiumization the relative across we feel reasonable can we've whole and execution the to taking we and the marketplace the pricing all and the a affordability flywheel from of execution. in what marketing, inflation the

Operator

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

Bryan Spillane

guess, from guess we the as growth saw Dara's John, countries two in can just -- think given markets sales of some or through the some of the just a question. I perspective? organic kind from fade inflationary of Maybe the moving Does the just perspectives. give as it move One, I think of up XQ, kind we should about pick the emerging phasing pricing how for we about XXXX, just -- and is this you of the parts year. we -- to some can James, you Maybe us on

can last that's you growth? context one. on was against a forgot perspective is I And what that rate industry time, just the just doing organic industry to the some So sure called for gets just recognized. of for maybe about I amazing. a of the last the It second, first how And kind X% could make one, if change. And give thinking I real music kind X% was year? should us growth that, then maybe If also exit and the -- hold of her that you're what have us job. and give want Robin you but nice sales stands this next to out

John Murphy

comment question. Well, not Bryan. the last was glad Thanks, I'm a

to less guidance the the I'm quarter, going for -- the We inside into going of days get of commentary not a in quarter. coming momentum it. out the 'XX X On decent lot have into do

markets a we're itself, front, -- see QX, moderate highlighted moderating -- throughout the of more which we the on the as there's pricing looking is I probably uphill said, from ahead. inflation 'XX, James in throughout phasing headline I we've say, the the I that inflationary the some And think, more -- in expect on intense that challenging at think to On as numbers, volume year. quarters the the in markets On we affecting intense year. the QX,

James Quincey

are planning the industry I clearly, share. we growth, on expect and aim I gain to Yes, and mean to if

So to is X% more normalized growing the we idea that that on up then based the at industry the growing level. a X%, is end that to extent

long-term to X you a tend X. industry, rate the at If or get look of a the growth you

expecting absolutely quarter, idea industry rate, you with are normalization in in QX, model, out about, this the [indiscernible] of consistent rate long-term growth with the see winner towards been very growth a kind we've kind growth if and growth. ongoing high-inflation It's is our rate us share. which moderates industry robust we a is being the talking which X the we the with industry X gaining both were happening and industry or the what take of we countries is the So was underlying fourth of in

Operator

comes next from Powers Steve Deutsche from Our Bank. question

Stephen Robert Powers

down guess the moving I income statement.

underlying and rate. net and imply seems tax the just Your the profitability FX pretty higher strong some of progress margin to outlook pressures

considerations number the just I over then, So of in question, we there? fiscal days of could beyond quarter. the you talk should course drivers year to mind some in the about guess, Brian's And each timing keep similar any key of the

James Quincey

John considerations. then weigh and start I'll Maybe will in on some of Sure. these

And of implied to marketing of Firstly, SG&A. get place last we've been from get of some yes, example QX is of small XXXX, over is the out simplest to a just and expenditure marketing but helping effectiveness culmination coming margin is AI where in in example, Christmas the the transformation to with -- expansion quicker the year, the continue and many us the putting made last some there the some was the is efficiency. years of it ad. which This in continue both it generative as take the number programs we cheaper to not make

including And off to so marketing important work going growth. the investor our what to say spend. that are that is of in you're is productive bias to backing seeing that's of across organization, in It's productivity XXXX more is some producing been transformation XXXX. we come on this the marketing, not is some fruition not less the This

XXXX the be. going operations to the will that We will in growth old our in year believe so industry. And be continue into

are to to way to the growth. going into commercial the marketing system order in all continue drive We levers down the through invest from the

John, the minuses As flexible, to but we been adapt invest on want benefits of do some some to of going leaning the add of this able the we continuing that's and is franchise transformational to being growth, work and world, you about of into around find years. capture to drive the be will considerations? a course, number over pluses and

John Murphy

Sure.

not so can gross and Steve, front little expansion provide I go additional guidance me gross bit commentary. It's as we our to largely an expansion. talk a enormous FX, a about alluded building the But margin. for into do off have offset margin equation. of that's of some amount there's expect of the quite 'XX, the We're on inside by margin maybe lot moving currency. underlying some parts to to continue you Let anticipated gross

as an juice So for in will range base. agricultural a and enormous on -- not coffee of particularly the of singles our we've built the some part pressures overall, guidance amount are I we've be in big said, expansion. low that Commodities purposes

those. We XX margin deploy and for alive have But gross the of the assume can set will said, for of we've the certainly line. for expansion modest is environment as that well. some mantra guidance as time, -- for And cover same, I more usual sort you levers and been quite purposes, anticipating the; to at the Jim more less said, for

Operator

comes question from Filippo Citi. Falorni from Next

Filippo Falorni

exposures I on the wanted global your largely obviously, just countries. supply localized ask can into import it lot and I coming some commodities. also just also to on thoughts secondary export? the seems trade tariff of impact just on the talk And play recent a in chain more terms aluminum of in here. thoughts environment, with most know It tariffs is you bold is about on your steel. you to system, your but But on

James Quincey

Clearly, there's -- there. it's a dynamic out macro environment

price One, assure one look And how whether number a programs we for through frankly, out. to down, we we that based input in the do our at we weather-based other objective that. tariff or is the aluminum recent obviously, going and tariffs or in place supply whatever it's number commodities, other look things. -- change any or variation reason, As any as up to commodities have or of mitigate hedging

relative prices sources of get the we as of change, imports Secondly, ingredients, look efficiency, productivity, from. where different of our adjusting materials course, and at we mitigation,

this through All we as how agricultural industrials, manage the it. to -- actions, recent through. mentioned, Net-net, of goes than that manage more we equation in constantly notwithstanding are variation will expecting have just into we goes John

is around a the in making country merged every U.S. it are said, the made the business beverages. of predominantly world. you As that's each U.S. local consumed when comes of to in we The Similarly, we've everything vast majority the

it's global while local. And very so business, a it's

are bottler importing predominantly a economics be global. are will piece somewhere but local the every than puzzle, yes, of they from the something as So more

through. piece it's manage need so a we to of And puzzle the

adjust As through we control said, manage have dynamic, be and on believe, from doubt the margin. be way continue and year. gross will but and under continue we of that, to will the to John point our we mitigate and flexible the environment a of No agile sustaining view

John Murphy

comment. just additional And one

we Your I was to team for reasons. to of vast chain our an is challenge the the enjoy sure we're that continue many markets that economics, just the to well industries, and continuity for in an 'XX world network a around a to in. cross-enterprise and supply that. consistently addition be, supply And advantage, stranger variety are procurement I in to think key important priority. as making our no ongoing And markets continues many think, a can managing

Operator

from Goldman comes from Our Sachs. next Herzog Bonnie question

Bonnie Herzog

then on right. guess I'll I if lately, you more about portfolio potential changes? quickly seen how or administration since of you potential subject but can changed again your domestic this topical thinking impacts cetera. pivot regulatory strategy, potential it's Have thinking implemented. consumption these what And new some GLP-X to has any on how James, are headwind some percentage it All terms are And adapt might potential et then, of innovation, impact? become ask from your thinking And drugs. and year-over-year you in your about portfolio changes be the of changes,

James Quincey

impact come. all and we've that might More the this prize question tempted the we to will calls, year are Well, by Bonnie, to adapt course, happen of things, scenario I'm previous There subject specifically the on with answer do question what win see of we they happen things first start consumption GLP-Xs to on the the of planning sorts in out commented Vegas the when saying that changes. so many for economics far on And of as and evidence on with food you the there world. could to anecdotal continue on of beverages. GLP-Xs and regulations, and as we

So the volume nonalcoholic industry is the fourth for not far, witness the North up or our in our big a America. factor was beverage the take aggregate it's industry beverage X% for sales quarter in

perhaps, So we in America. is less momentum, overall, and that North There continue But total sustained alcohol consume sustained to seeing beverages. nonalcoholic are company. momentum they evidence anecdotal beverage we see pretty and a in some switching do we're slightly people

of consumers. toolbox is we drugs us. can to ingredients whether a to that to portfolio believe that we at of it's total super our we or ingredients, which for safety, biggest quality to the anything high make have believe we and and So possible GLP-X works adaptations And use adapt regulation comes beverage objective changes

Operator

comes Kaumil Our from next question Gajrawala from Jefferies.

Kaumil Gajrawala

substantial behind this have year, laid of you -- all which been list year payments long of cash made will last soon. be a that John, almost very very out you

you more allocation when can capital you're whether talk how it buybacks, So whether it maybe or just other you on of about it, think side aggressive be the cash be around year about the so year, versus the to magnitude have how The of it next amount M&A. cash substantial. change differently. you'll see this might hand on you think like of I'd of about

John Murphy

me Let answer that maybe parts. in two

we to the And as in First don't has. secondly, change the continue business dividend. just focus we underlying I that and of foresee our in a the support momentum substantial all, guidance, the will about talked that, to our support

two can top will areas, priorities. assume So remain those you

as will you anticipate transition for deliver As the we us. the get early we in what But 'XX, rearview -- into will little said, clearly, be it's mirror. a tax 'XX exactly to

a M&A to the Some will look us of agenda. as the the give opportunity and it likewise. closer take payments share the M&A And repurchase

looking actually it's So us. But 'XX for so. I the too on bring might to challenge forward year get deal to with what in next that think to I'm or having premature specific

aware, have, sheet, of health on overall the a also also the we'll keen and we focus as account have We the puts and into takes that. you on take are balance well

to case continue with. the deal the years We have of tax in couple to next

flexible for name me present the be of to themselves. of game may in So is some more the that a would it have opportunities manage the manner to to

Operator

Our comes next from Ottenstein Evercore from Rob question ISI.

Robert Ottenstein

so-called to speaking. And your and you modern do kind have seems guess, in shelves. like this category, you is at the that some area of that on have how needs? created love it Is to better consumer very thoughts this that in product Walmart in? fad confidence you Or call what Walmart is just the that I I'd soda to some something get soda has broadly departure modern is least now, Fairlife, just Is view? represents play a where responsive your a So something something

James Quincey

whole and industry, people is to space willing a the Yes, idea which more create industry it's growth. to with shelf for think, the brands great new innovating dedicate goals that I news vibrant are and beverage is, also look,

that So one. first

to M&A beverages to end, But we total most great the the in important consumer of stuff from we'll scaling extent this we that track far away to, Look, we Company clear continue the in a everywhere of to as of That's record into the our of thing to industry goes enduring and beverage overall confidence tasting. leaders that the including are take I grow. and hard talk at we'll CAGNY, -- really look brands, think and terms central it. Coca-Cola the And the compete the here. billion-dollar is see in John bolt-on organically winners. at when you at we the And alluded idea. take saying, demand some to I the by the company, are traction, Secondly, look that think small solder look the more and creating are industry and beverages in these

Operator

question from from Chris Fargo. next Wells Our Carey comes

Christopher Carey

James, you agricultural commodities. mentioned

from be and to not Can outlook, affordability number system inflation climbing inflation. the per just think, You case impacted comfort watching assuming maybe to aluminum. element there's to something moves system the that this less, just incremental if incremental to might you're to aluminum one. aluminum. Can also, but how need are your durability to you volume in effect on said about just industrial context, cost related, respond the you're a of talk moving number respond perhaps provide speaking I'm of bit impact And you I some will will one, developments. commodities needs

and X-part the the a forward months. the coming model So what in it's the required the question a be and protect impact but to bit on to looking little may also the a impact bit of model and consumer

James Quincey

in piece a Firstly, predominantly the North of puzzle. an obviously the sure. which the is American mean, the North business in say, business, Yes, this impact American U.S. is with, let's or I

So from in the ensuring to space. a speaking, today. as that as total X company here input perspective, bear in increase continue us allow compete demand. costs, mind will in of this other we and sit our around is relates over course, If to of have suffers we it to affordability consumer one package offerings just the largely strategies, affordability segments And packaging ensuring X

for So we put cans become et can aluminum expensive, more et example, cetera. more if emphasis bottles, on cetera, PET

in the adapt in will function change costs that. we of packaging So into the input of what goes relative strategy

the of is that that part use adaptation plan world. around total we So the

is, if the short the you believe the well of answer of this is in do XXXX? no. is don't in I going undermine So half do to second volume question fundamentally think ability part the to system The in

hedging, between packaging all going look from the management And about To variables a enough adapt. control is of seek different of that because what and mitigate we think it's can relative to way our it's can It's key mix we to we materials. happening the on use we're adapt we to is combination pricing. to through materials. where the pricing at supply do relative because I course, an which extent opportunity changes,

of I we came this the think is manageable of that think mitigatable XXXX I dynamic so and And through. and X elements

Operator

from Our next Andrea question JPMorgan. Teixeira from comes

Andrea Teixeira

of stronger And discussing Mexico partially of -- Mexico, remarkable. would fair accelerating second cycles, this the on you there. a bottling count obviously on then arguably, in offsetting recession is we their business pockets, And dollar, on then spend results, you both met to the obviously, amount talk you a innovation about point, a volumes on slowdown? which regulation the or meaning or have But potential a one more question at time as risk the are you're a best On have mix. embedding you deceleration playbook? on can follow-up and comment tax you if partners the can and managed of well there? the I And

like America, Fair to still price On believe comparison should to from expect on mix, in Life or that we I on-premise a you better [indiscernible] a recovery? lot in driven growth North there? for you Or potential home away execution posted XX% potentially is the strong and lead see deceleration much distribution by ahead? how And that delivery of

James Quincey

Wow.

there. Okay. That's questions of a lot in

mix. half QX see in to into North you is and try can it XXXX. me North two. of American about American pack Let therefore, of pricing you basically relative And that that park pricing, kind the

been into and sense so to moderate just of but the to that XXXX, we order success the if mix, given need reaching you moderate and running we to that up We'll And continue the unconstrained fairlife. it's and But and XXXX -- just that continue York building growth. American the as that take mix will XXXX. not go are call is continue New the in price the in to you in are going to fairlife also of we've runaway products, get factory grow half North in

some obviously see will the 'XX, the mix. moderate moderation we will So fairlife of growth in then which

whether we quality play quality And innovation, more par much So of the the execution excellence, and overall the consistent normalization dedicated playbook, XXXX. Mexico, is Mexican of unpacking but playbook quality great conversation, it's great had I marketing, -- U.S. RGM. great have in longer a a mean, price/mix play [ I where think ] then quality a execution, is great

mean is in go It's portfolios one almost the world broadest a at and beverage the find all I terms in of package can place Mexico. point options. every pricing categories. the one So of you off price covering the

say, of we're see large Mexico, for XXXX. So countries product commented package on more but normal, on everywhere. the a in long-term we're a impacts in course, the from with of it's come to and U.S. expecting dollar different that's markets call emerging and peso headwinds they headwind expecting the build inflation we by out let's everyone, the house company from on of conversion a system for been we the FX price dedication the Mexico And and nature not taken like a the the intense the to some beverage part that you come to did total have that headwinds a just point XXXX, peso

Operator

UBS. question from from next Grom Our Peter comes

Peter Grom

not surprising. And of So bit which volume, And I'd And in were to follow I X% James, response end if I or to ask the to isn't we growth hitting to sure too you typically the case organic were of misheard but Dara's price on to mentioned growth weighted I get just up entirely to but to your wasn't expecting X% think this, question. you apologize was year. that you lower be I growth X% more the granular, kind unit to relative volume growth a hoping see at if that the implying volume of short range. just of that kind I fall

challenged getting better You quarter. touched markets lot on more of in these a the

XQ start. year So you not But of be not offsets momentum concern have some exiting about. and some that we might sure nice the pretty it a areas if rate thinking I'm exit good would seem maybe to or there's be that place would

James Quincey

correctly. you've think I just fourth take I yes, Yes, the mean, said year. We X% the did quarter. Dara to got did Peter, I we you what overall Yes. if X% in XXXX, for

factor on was mean, the X sort yes, So range I X, of [ kind a ] at pricing is that saying what X around we're I of compensating implying with floating side.

up X% get still still we So X% we get to range. the into

manage is time a think cycling the be think overall feel it's But tougher think through. momentum. volume we going than better And in can for got There I to I think the overall, little terms comment you've be 'XX a John year I are we that like sort unknowns in in clearly. it number clearly So 'XX. we're dynamic also, ballpark. to perspective, decent year, but with from coming And going think to quarter. I of that environment of the it's earlier during I believe a made and a a of We a --

Operator

Higgs Charli.e. Our from next from comes Atlantic. Redburn question

Charlie Higgs

in accelerate XX% please, more a you few I that And market got for QX it's XXXX. good a business to was the even I India, over and saw And past next partner. that I've a refranchised you on been years. that engine on the local you local great had just which partner comment wondering question that perhaps could attributes broadly, could the if a to level? what brings

John Murphy

just back a I to trip from came India.

for to ability ambitious capability had time. take of the build the different handsomely partner as to believe all refranchising on a ticks program who other new are ahead. We capture there look our have India we box opportunity, of that parts to no very the certain So is we capital continues The have are move over Those in one. partner. profile attributes. I'll we've the world. we maybe that And to this place And of these the

there marketplace. to that to year out. you program group will just to step those on of how work it coming the add Jubilant but our tremendously going into next amount is in environment as advise ahead. and change to So is runway we tremendous the And our portfolio. of is remaining And The another our has think the as in for refranchising execution to set. we believe just the competitive in that as chapter abilities for can India continue a program, shapes the in coming pretty in market not got refranchising And vibrant continue Indian tremendous to the months

Operator

from next Chappell Securities. Bill question comes from Truist Our

William Chappell

I that pricing want just And the comment carry don't I have so kind the commentary -- countries you environment, the hyperinflation half, was moderating. inflationary of of the on moderating, up of to I understand more really of through. you're of lot believe follow on down but will environment. think the -- kind took these kind a it's I second you pricing in slowed in their

or -- price be So that of with are and cuts. taking kind would you done you're there saying that pricing you

but seems I'm for reason moderate, for of next at it a not like so least you it to for quarters. environment, general hyperinflation there's couple the So year, have much -- this the but them like guidance a understand I seems real

James Quincey

foot not passing of where through a taking in coming pedal Bill, in. the yes, off input of terms costs absolutely lot we the have

example, inflationary was dropped that look not are the it's There Argentina through the marketplaces. inflation So countries, of I inflationary sake markedly very if not monthly high going you the the rate the moderation. has for passing those through dealer been mean XXXX. costs has in single input are it to we these at be for there and -- concentrated

to month. X% a now a down it's think I few or percent month a

countries you'll in inflation of back lot and sense, half definitively moderation. the first a a the handful So it you're a that see year. a first see of than it was Turkey. a the in countries African you in will definitely and couple the quarter the of these Yes, in right more concentrated end has very dropped Argentina, but in of because you

but its category, the of overwhelming. down. our fall we because And strategies, those so in affordability Even into doesn't up, it's the inflation There's has will if we just will look come If there's that through input continue. pass though price. have pass moderate, costs countries environments we those -- in we costs to this go because other too all execute to through sorts it

Operator

Moskow comes Cowen. from question from [indiscernible] TD Robert

Robert Moskow

you than can Is to change wanted of packaging in change more delineate a bit react aluminum does less like -- aluminum costs. cost. a mix may to I this, a be kind a your is more you maybe toward enough of that? event the really there your not to or bigger It aluminum much of increase cost in necessary tariffs how push X% little mix that any in big have towards way cans plastic, it to commentary can go influence of mix to the Or higher structure? be fair on but to much is to something sharp a question, shift

James Quincey

increase radically in the the multibillion total system. only the is it's danger aluminum is change a dollar to impact component of XX% Look, business. cost we're the of the small not in And going I It's relative packaging insignificant, of to a total think -- structure. U.S. not but price exaggerating

it's not more It's problem cost. multimillion firstly, number. dollar relative -- billion dollar a much a input So to the manageable

business, U.S. cost. not are mitigation it [indiscernible]. going in cans, of It that [indiscernible] level It be huge to a is be context have to business. don't swing total factor some U.S. weights It's to [indiscernible]. so of better managed. conclude And this the will the the a increase should you to should of -- manageable in U.S. we of the the we but It's would have supply not sourcing, problem potentially the switch the some think between I chain, cans at And business. price

Operator

Piper from Our Lavery Michael from next comes question Sandler.

Michael Lavery

wanted bit Just to bit little you the Pacific pricing. Asia commentary, unpack gained had lost or for in and and that mix. a But partially a South offset like apples little full seem year declined positive know down share I Bangladesh more. Japan and some share share by market mix price Indonesia oranges, and is there which grew then or Korea a would

the reconcile are So help little What maybe you us do better. some that moving of those? parts? how And just bit a understand

James Quincey

Sure.

cycling I last year. Pacific think what here in the in is biggest Asia we're QX factor

And So look a Asia I like very true big volume reasons very difference you've would some Bangladesh got you, emerging Indonesia. markets some can called as mix. relative and like developed for but in is the markets and Asia particular, make their Australia you at Pacific, overall, Japan encourage out, to and you performances

be in Asia just Pacific price to base very but I effect over, seeing for out. any XXXX would coming because mix you're it's So encourage what is a the analysis of very multi-quarter you called choppy reasons from just

your and our our much, guidance look for this better CAGNY. over Thanks much, Perfect. we the maintain investment for on morning. the interest, in are marketplace. getting We well very more winning agility the for us everyone. we We're value discussing next We everything we are on do. and on create forward you joining term. believe everyone. our company long summarize, our stakeholders Thanks week very Thank to at to To continue in to and focus deliver to positioned going XXXX

Operator

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

You may now disconnect.

The Coca-Cola Company (KO) 11 Feb 252024 Q4 Earnings call transcript