The Coca-Cola Company (KO) 21 Apr 202020 Q1 Earnings call transcript

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

If you have any objections, please disconnect at this time. All participants will be on listen-only mode until the formal question-and-answer portion of the call.

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

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

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

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

can section analysis the find additional also would margin I materials of provide an company you Investors website of that our structure. like to that our in note

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

turn prepared questions. deal call morning, Instructions] this questions. we the remarks good recognize will a [Operator there over We to will Following be of your

call the turn James. me to let Now, over

start Thanks, times in great Tim challenges, many opportunities ahead. good in see key by morning but which times, times noting I'll and that operating also extraordinary we're everyone. truly of we can

of by deepest behalf company our I'd this and on foremost, our all have pandemic. for sympathies our and those been to global First share entire system, who like affected

in those on us working the keep lines of particularly through those safe the been who've also front community. crisis, health care thank to sincerely We the all

who world. supply most which and all many places, recognize with world. We still Through working office-based around our beverages continue we the are the and if we remain of of to is of can business continuity world. ensuring make it world want The difference. the health in grounded purpose are also in in of by crisis most employee a paramount, not our and our support all, safety phase the vast We're system first the to start followed intense associates, around majority I remotely. our to the refresh employees communities

and bottlers and in across practices. hard our manufacturing foresee Through chain. we're to using ensuring, on enhanced well those products consumers. planning time. We're the are which efforts For for distribution disruptions supply are business system includes safely practices, safe at our system we work global -- we they're associates whole that facilities, associates closely this our sanitation and and this to hygiene thanks linked our these contingency material our don't our with delivered and continuity, customers And are any

of has communities markets impacted the times It's important to our note need. a of made business long heritage to has across commitments relief globe. The support in Coca-Cola significant system supporting that efforts in

in markets Foundation. Our as than million system the by the the other commitments to recovery is as Those date hit on during focused medical pandemic. community hardest and developing actions from is the phase phase, grant outbreak equipment committed $XX programs, to relief more on million $XXX well supplies for Coca-Cola charitable and include the contributing

help collaboratively levels, state recovery. at the with federal and nation to working are governments We and towards all local the world steer

home call better can for work that confident we future. all with communities together rebound all if are a we the We we proudly

in our spend different quarter we the weeks, look first approach And truly will to to results. several recognize the changed we guidance take a that discussion last time times. these for backdrop as today. Recognizing Now, has discussing our the will and reason, we that limited we are operating future, unprecedented rapidly our

XXXX year prudent it's in the given providing uncertainty guidance. the to current environment, feel addition, we hold In fiscal great off

expect in our with come clarity. We greater in second back July quarter call to

Today, situation evolves. learning and been what as the I'd we've like observing share, to one,

now adapt we're current the both and environment to future. taking to actions ourselves to the Second, for best the position

we confidence discuss to our I'll to turn stronger. lastly, emerge finally even will and it over that gives And Third, financial what me John strategy.

quarter of began strategy. China, the XXXX. The February, virus across with was exception with ahead momentum coming the solid first had results we well good executing successfully strong the our globe the already off of progression the the were where world. We of strength rest long-term in Through of broad-based

and rapidly China, on were has to increased temporary our our was business growing excluding share. and there and shelter been X% gain our continuing but social home volumes it at customers and business. we practice globally, Looking distancing pressure as at value But profound

away-from-home The sharp important portion our our decline well and of as a on-the-go biggest like been orientated drinking includes which impact convenience channels channels the business, our as retail. in eating has

half our about represents positions. across our While exposure share varies our away-from-home of broadly markets, business strong given

restaurants loading the as certain past get have most the offset we markets phases. helped limited of at operating sharply. In pressure, and initial phases decline lockdown seeing levels normalize. of pantry some at-home the developed however, beginning some seeing are the Then, seen particularly the trips early we carryout of we've the U.S., but channels, in and hours many lockdown of the some drive-thru markets overall are In are on like operations

measures a has determine trips. impacted at-home as it's stabilize to trends like shopping due simply for stage, level distancing the will well, this reduction little markets exactly negatively of early too at. example, severity significant India, other at-home the what in to the At In

We've versus crisis. seen we increase accelerating significant also in presence pre e-commerce where channels a have been the our

of However, a second slowdown from business. quarter given impact the in our away shifts significant in home business these primarily coming on temporary but our net the from we expect effect the

down away we if the are in approximately context, home we For businesses. trends month-to-date at our sharp look driven XX% declines by our April from seeing globally volumes

we on based the projections, impacted. second do expect to Fortunately be latest the the severely most quarter

uncertainty impact. resulting of good around still deal a the of well the as With pandemic that trajectory said, macroeconomic the there as is

across of finally and expect at generally corresponding we a and measures, While its return times, different to impacts phases. re-openings; we're geographies different new outright graduated normal. a The three a with social distancing seeing period

shopping behavior will phase similar greater some vary and that foresee and markets, discuss they'll detail. each patterns we but mindset in be in I'll different Consumer across

China have early can Of to the learnings are look for various company about all happy to our course, there some that employees plants we phases. in say offices operating I'm and to Shanghai. returned

improvement of consumption in signs outlets in encouraging increased seeing China. reopen We're resulting sequential as

than consumption we the However, still limits on the is take there still recovery are sizes. to year expect prior as full time crowd especially and lower

actions a momentum sales regain in and anticipate we with planning including pre increased summer to our recovery As China, bottlers placement. promotion cooler key we're

will We traction will before channels as unfolds. adjusted with new normal the that greater the strategy the follow has on packages successful that focus and proved have pandemic

soon That's ourselves what we're near-term continue lay may It by in encouraged trajectory improving to practices why action social now swift same success distancing while best to in head. the and China the gradual. estimate exactly we're is to While positioning taking situation China, trends we the evolve. later. follow in too adapt for could changes other And not might recognize simply may be countries in certainly the

world and roles global a work and to and protecting rising the differently are to the a is being Teams is around workforce they're Our asset asked people occasion. priority. high critical

engagement strategies to knowledge to our across many across the We've adopted workforce stakeholder allocation collaboration people resource routines sharing. practices in best matching have market We adapting supply local real-time regions and geographies. accelerate scaling We're chain, system including management. and dynamic network projects ideas implemented

ability the CAGNY strategy centered ways is that Having remains the laid environment. same, the many recalibrate management at strategy building brand and we this out In aspects dial critical growth to in up innovation, revenue and execution. of around

A culture of key. agility is

system demand the Bottler with to alignment more rapid shifts bearing meet fruit in We work retail recent in is step-up we've years never important real-time done our and are has given patterns. in and working strengthen execution. seamlessly to the been customers bottlers customer the

solutions to longer this taking of a eliminate innovation our For reshape brands stores We're by to SKUs smaller supply key prioritizing tail opportunity deliver relevant customers, projects also on fewer, more to focused maximizing customers for allocate simplify retail core and more efficiency for this pipeline and help chains. to resources and example, and larger, ruthlessly system on we're scalable environment. grocery our their

of less floor. on resulting trade the redeployed stock we maximize minimize visible to work of reps of stocks With world, the out share sales the and browsing, shoppers merchandising, share and of especially that we've time the around ground them it's on those on-premise crucial in increased displays on inventory. spending towards and In markets orientated refocus

As consumers brands. bigger known filling baskets shopping home making to based and at fewer adjust to availability trusted trips lifestyle, orientate often and on they're stay

packaging and and promotions promotional we offerings and ensure needs. working the their mix our to meeting multipack are our Therefore, maximize of product effectiveness with frequency to are customers reconsidering

shoppers or provide to Our that strategy up benefits. hydrate when want has stocking whether consumer essentials deliver enabled centric on beverage refresh, total it's us to products functional

We customers to and also recognize in independent working implementing both small the importance big countries. and measures of to support many support We're retailers. are retailers small

mounting our For but a key only they not and mom-and-pop face business stores pressure are Brazil example communities. in of pillar local

program. leading Small consumer and the We played or retail retailers. to and government the Along small a medium have STAR will role peers, the product with small coalition Trade companies, in connect associations Activity Recovery of STAR help formation

and Revenue package their purpose reallocate doubling growth countries. and rate of an consumer getting are our plays Consumers the management we many strategy the e-commerce delivered promotions as fit shift as in growth cases a to We've sizes towards online sales in are that role also delivery. contactless to in door with many current across experienced for we digital. necessities key upsurge with channel globe the trade in

click's a beverage packs, increased reach desire. companies, For access e-delivery we've within a multi grocery with so on consumers can focus of visibility our in-app

acting the the needs of environment. they also to current are restaurant partners We as adapt to fast address

we fountain to with In North In partners options included delivery. bundles. availability optimization bottle ensuring offered drink accelerate for by menu restaurant America, foodservice national leading to increase value aggregators and the U.S. our beverage customer food and by alternative we've the partnered an profile can product our

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direct our right. will through and we'll plans campaigns focusing consumer market on crisis our with in the vary timing in early communication reduced this pause reengage mind, recovery to from the the when reengagement China. marketing market sizable stages earliest we've of These With is the

our near-term same are realities address to will the opportunities we leveraging subside. longer-term associates time, recognizing At that

recovery for the prepared we be today shape the not Looking to exact but ahead, future. of may we the know taking action are

in as packs addition RGM For premium is the SKU strike ago our was the prepare much recovery are positioned phase when offerings. is our as This balance to we we nearly it where portfolio recruitment better as years to sophisticated affordability of area not today. and key XX is right one versus optionality system and

We'll we is sustainable We channel taking accelerating to also embrace shifts place, well that consumer are seismic some to for expansion believe long-term especially the positioned in the e-commerce. of be behavior and want continue growth.

are investing We're methods, digital the and similar fulfillment using seeing to for consumer these capabilities looking are further results BXC future. several to connections days or strengthen We with early piloting in to partnerships more in demand and in consumption to capture customers. home initiatives scale whether many in online countries BXB platforms good digital-enabled at-home different

company's of be can now and a the refreshed when more make last refresh the to times world it business In future. ever. to hit statement: easy long-term a for Late sight the but purpose sustainable continue difference to build our we we year, crisis purpose more lose is our will than important and a

publish the a and business. a Sustainability more its company driving Tomorrow journey will XXXX reflecting Report, Business towards sustainable continued

know of end. are the pandemic that stronger Company they of ahead, business we've types and many in years military, there still many seen While do has economic the or Coca-Cola we crises, XXX be unknowns emerged over always

downs done actions accelerate and to reshaping capabilities, pivoting were a Undoubtedly, into heading We've bottling redirect today with our the we and our focus there be of the bottling in our now culture. we future in are our our But be are clear our periods progress partners, challenge. into better in business, meaningful accelerating coming than needs manage to made and our on our previous transforming our system, both ups and portfolio strategies, We will position investments. months. what

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

bottling cash system for Thank you, flow, thanks a allocation remarks our capital and you of and James, particular on areas: our people, and priorities, like us. the I'd joining complement to with profitability focus readiness. to following all our XXXX James' post-COVID

we maybe The these accomplish absolutely stood and impossible. the sacrifice, in right manner to a start able is have seemed place little adaptability has start. to the we past and seen times on normal in it which It have in the in to review but weeks unusual resilience things finance times which people, commitment, been have would out,

As on this full of so The our and of us, with how have this will thoughtful done be for some employees period. companies, the impact out people. concern we many through have job And through is furloughed will we priority been and approach. we ultimately length, and overall on it pay a crisis very June. security severity a our will determine navigate has come as necessary we we key Where for

that enabling to agility the in ways work are matters impressive to has a that the What are we and we more see across quickly this us The the times. as the regard world is seeing in been do most working redeployment new mentioned lot lot of responsive. allowing these is opening of with pivot company James be to door a

some levers profit we to cash at many me have use disposal of and matters of work most flow. the that is the For smart maximize our

side, and in that affordability revenue have crisis our made on have value us well to past changes leveraging playbooks the so brand focus portfolio the we substantial the world. On served around pack and are

on it have staying Staying for close second. and is a focus on a to a back quarter One, On the marketing key into close particular consumers with way as mentioned, spend James four I appropriate expenditure and we a to in our would pulling demand now. an guiding X. side, our key principle, emphasis been relevant divide areas ROI is disciplined

taking with our similar trade are we a Two, dollars. approach

this While willing both that America to be bottlers our and is area important effectively much and is our of to bottling businesses an spend managed investments in manage North reengineer. by

essential being attacking are we making is services, and expenses every et meetings, and operating sure Three, discretionary all dollar what on cetera challenging travel, is appropriate. spent

the absolutely spend And spend already for the will on is essential outlook. we moving or all us capital avoid ROI waste, four, flexibility half have we improve and paused what gain maximum and than as give decisively the has committed. By we other clarity quickly second of year been and

over trade quick as your reminder will of get a the year. Finally to balance and for spend models, the reductions the phased marketing

framed sheet. and should balance Our against be capital position allocation priorities our liquidity our

overall the is liquidity and our taken strong actions to With March, is our sheet. so since balance

progress continue dividend. and on will We of made on to we course in focused flow investing much context, remain to this prioritize cash and focus on our business protecting free continuing And priorities our the capital support very our operations wisely in XXXX. allocation working capital to

change regard with our to we Specifically intentions have dividend, to approach. currently the no

we not foresee forward repurchase going Regarding significant nor intend year, do we shares. M&A, any activity do this to

to close mindful have We the we staying debt of highlighted. previously are also range

know more allocation overall the We as we crisis. course about capital and severity approach of our the of to review will length

their to stay their is coronavirus overstate partners bottling pandemic. our cannot earlier of have strengthen spoke how sheets comes customers are I to their their heartened taking when battle and and preserve are managing steps crisis them balance cash, P&Ls. know to communities. it people, system bottling to global about everything the all close we adapting the our manage I admiration they Many doing are for to James their proactively and

situation currently our perspective do the bottling are and partners Currently where effectively major more closely with from them a have we and scenario anticipate severe working concerns we with anticipated. deal not and liquidity is any to longer than surrounding coronavirus a

unable release, full year an noted XXXX to to we outlook. provide update we our financial our As are in

picture we unfold of a better when have report July. will results second to the our recovery how quarter expect in We

spot I the like the Meantime, positions, looking net a full for current revenues rates headwind. hedge based year expect highlight would to In we and comparable currency impacts including impact following. at of mid-single-digit on

a company's most the developing year. for high current with on be the We coming rates, our to rate also tax of spot underlying markets. headwind from effective still and the emerging For XX.X% income comparable based expect headwind operating single-digit expect

important a win Emerging positioning adapt challenge taught to do post-COVID it's ahead also time in the stronger environment status this last we this crisis, Looking to willingness world. the while the best To already using to demands ourselves current that. that from we do months us are how couple things to end many The that quo. have just of to differently. quickly very

Coca-Cola hold across part been be system the indeed me of I closing, In more taking never transformation optimistic. let are more of the the testament have say, It's to to organization. a culture proud

confidence our not current people to system the the but it of from me through our gives crisis Our the alignment to stronger. strategic ability emerge manage in only and

With questions. for ready that operator we are

comes first Powers [Operator Instructions] Bank. Deutsche Our from question Steve with

open. line Your is

hope likely where Hi, that prepared well guys. call think remarks I thanks for you're is you and bottom all everyone trying is guess side. Good how on tease your I system back a emerge and detail. Thanks. in what out to all duration the hopefully the of and on some XQ on the morning. likely building extent James, I focused depth to to then the is

also implications emerging or the far common Thanks. your help have whether us better get the where experiences And are you When China about elsewhere the underneath Italy, can what or Brazil like along but pass think forward how are question? partners negative prospects are taking India, Europe that now you just shape? positive that in in key you you markets handicapping arguably seen that there and thus and U.S., bottling in can

me whether Let that and see few a helps. thoughts offer

the shape economic the crisis of degree and downs that a way. there's crisis volatile how the on the the in long famous influence and of ups and unknowns and set Firstly, resulting last of – this will known virus expression here the heavily

known unknowns we And the take markets the there determine all markets, important are earlier way the like while beginning. that's do that? are they're learnings there some which going beginning. I at at still or Korea even And we're to those European by of think from and the can't I still some South us. We're out because China, What mean

follow the by as how they into brand, crisis, and Singapore, can in path China or behavior; the by some those started Korea We that up occurred how countries has stabilize. the change the then South channel, see consumer being able by came of to to of journey pack, thing or lockdowns opened have and the

can that we in year double-digit minus start doing to And build fantastic in profound China, back from and It kind had than see deeper great you a globally We to up neutral we we it's to in and we below think started week-to-week were of emphasize towards seeing we're XX% mean were February, the very volatile where January. was a close last lockdown growth. January. currently we're it's much important the were now, March. where I China doesn't getting year still over. And in But in

can they from have a of second kind Japan We the Tokyo wave a of lockdown. see or Singapore

what world. what on experiences we've happens those, of a the phase in the of et cetera. load And cetera, clear job done first the around we channel is et So link great very see moving changes pantry lockdown

retreats could where phase world. of are How generalized include new around the further is we come the we lockdowns the get couple to global on to Now expect in to as a depends see a next from known We're long countries. graduated we've seen of unknowns, to they normal the of these take now and will see which re-openings set post going lockdowns. to crisis

the a what focus can't do good can ideas. we known beverage industry is is a on at. focus industry. we simple few great can -- unknown. We So One What on we're

every the crisis on years, call, come or Coke in that said XXX the last pandemic economic I military Company out stronger. has As previous

Houston the from two business a having revenue innovation, which manage done at to day-to-day, economic that the time. market. to growth on manage the the quarter-to-quarter amount using basis, our next week-to-week, flexibility building One, of We've things crisis by manage how of brand whatever, doing the our in system do and same resulting essentially an adaptability right DNA knows

eye this long-term end our at such crisis us, emerging of winding the path where what have stronger. is as the same in on takes But work we through the we that, time, an going way the up

haven't would provided I obviously so we that's full emphasize. And year And why guidance.

beginning. way big lockdown, We global are may the but still at end be new some the we We normal. still the the are from at of

Thank you.

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

line now is open. Your

Hey. Good morning, everybody.

you I in made as of out. business, lockdown thinking thinking initial about about changes So the packaging. focus to about dynamic a you're this is to on? maybe that we phase sort And just maybe guess, and the the trying get James that sort maybe What past that linking year comments of

second Is more it value, it or maybe one patterns? a consumer-focused consumer behavior changes focused recession and more being a in consumer the on the is

more buying about reluctant that that phase? the we get how of thinking trying kind more past to consumers Maybe consumption have to how away-from-home understand e-commerce lockdown once just you're changes business

does greater maybe it imply at-home a again shift And away-from-home? packaging versus the to

of Yeah, to we're clear see which a the packs. channels set multi heavily. away-from-home could great which clearly the immediate much packaging. I the means mean larger down obviously in packaging be are question. more at-home down the are heavily or And tends consumption on on focused Look, trends lockdown, you

in e-commerce. doubling the our for step-up of -- growth big near a sees us. also of of We've a seen the it But e-commerce importance of

with past of graduated an reality re-openings us lockdown once the an I virus So these of we think, of a through the still impacted the environment over society economy. we'll get spectre see with

see is I is step like like It lot a I economically step-up already e-commerce. spectre e-commerce. and a trends virus of kind ongoing attractive of a think to think some both the friendly, we'll more And what we'd in see so in change

behavior ultimately in it highest are But the back. consumer come the there will new end. we animals. to new for will time I aggregation be time, take I because the come in channels they think normal social In will back that at think point

lockdown a I in lockdown very not But we're the theme just affordability. see profound channels. seeing What to will of think, is effect also the of we're of going aggregation certain come the That back.

where is going. going in by But uncertainty. I an think economy of face this There's economic of the that impact. consumer anticipation We're be the the all to

we're to South lot a Africa. again a more affordability PET see launched we've going back lot So refillable where -- in more

how investing can for We're at America. affordability in looking drive refillables them. we in Latin We're really

the lot next more profound e-commerce a in see in future, certainly theme to we're coming So going a affordability years. the up of

We're going as by see the smaller support by as those outlet well ones of to channel lot a governments attempts be us the the will base, lockdown, in. in to whatever who've they're most suffered

So crisis and able pivot the each been our to we brand our pivot and we of it expect marketing execution continue growth bottlers to stage innovation forward. our have this the revenue moves management as through to by

the memory. We which have faced in system. in is we But pandemic faced of crisis. countries all been the not In who've world have living there the may global managers DNA lots crisis out management around the in a in end, system the have

impacted -- the virus in system an as of the past. with always And an economy and Coke be what spectre new impacted can lifts shine consumer we'll is the when the this economy. but some And left is has shone behaviors

you. Thank

Our question Nik with RBC. comes from Modi next

now open. is line Your

surge. talked really SKUs demand focusing morning core the stock about on obviously good to in with Thanks everyone. order the Yeah. it have some James in you core

shelve of some they they in that? how products a of talk interaction bit of the the community many they longer-lasting been you can make But with about, impacts terms and of the has any how the thinking decisions how about around carry, perspective retail in your kind assortment of little they're terms

to their I you've in of know portfolio how so but curious, community, hearing it's been retail coming I'm already about choices, if of hear assortment they're terms some just back thinking starting early in same? streamlining this the the and

two management for in absolutely. direction supply the period have the come of likelihood same then the And the they in going open, the both and impacted and keeping some in of lockdown which together things chain crisis. Yes think this term while the period crisis is economy of of an you've short we time. restrictions the forward got I And virus these all work

of In to actions get sure those focus things both affordability and most those which well-known and both you're an a the is or similar manufacturer of important on to making a retailer whether most you set can availability brands you biggest lead at-home in circumstances, store.

of -- of had course, system supply one a -- onto the focus strong we've bottling supporting one the reliable grocery that of of mean on can I got customers. Because the deliver lot floor. we've a

we've seen of So the we've because be able to ourselves inventory chain. share able to been supply gain the store sustain in

So floor. really deliver be and customers the on the being able there and for execute product to

a mean cutting and driving it's going be us push the of this sure normal focusing in in come to them both period SKUs choice, I'm of to Will itself? be But Yes, it period. will also a question will. tail to But coming and rationalization longer of on through more will brands innovation more this effective focus. on back set when what's most new and economy the which reestablishes a

you. Thank

Our next with Morgan Stanley. Mohsenian question comes from Dara

now is open. line Your

hard I social disease all the the next I by that a the few if distancing business your to on reemerge a just and of makes pace as hope some of question summer, answer bit the over I quarters? give of could guys, end QX on doesn't thoughts in major want you James Hey expecting all you look it's recovery assumption you you're just this this closures out sort the are know But more and one on it. Steve's to well. government-mandated press us way

even a look impact out U-shaped or as in of more L-shaped direct the sort or the impact secondary it XXXX? economic distancing Is year-end business recovery your V-shaped from through to trying mind we social I'm And for separate forward. more of look as your we going

do being a winter, how you big back? time that assuming a degradation the imagine confident thinking to in XXXX? lot it? social think longer back step hard that taking recovered Is expectations are it up term? these not any way about giving in ends in XXXX obviously things reemerge -- soon. the again most is just then whatever Thanks. XXXX, comes But how Just a it you're in about you doesn't distancing the is, And of Is conceptually of mostly volume

into to answer there What see to Sure. governments the what you we able we question, months would have distancing coming isn't. the and are there to love I that social but the that distancing of into there's is can shape already be tell measures an -- know measures do is, QX.

focused people and and part talking May happening take X three Those Europe up and about are X, in same talking the in of reopening yet re-openings as June, in about very re-openings. the X they're picking phases if the on ever are there We're are on and quarter. Phase government the we not U.S. that

we So distancing of to see severe Maybe to measures way be period to they fourth alphabet as last We -- cannot maybe think the the some V just not know. the will QX. as the will use scenarios quarter. U Hopefully will we not. a your I for -- on social and soup they into this What in of have focus L. second time is,

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took The And you lot is on how middle take prepare I Yes And to that's that we U, understand. the with clearly L we possible the the a measures likely need and think up. more certainly, than possible? is of the act L V go to forward. going Is to clearly we the one too. U the scenario to want

sure to and flexible make charged is approach both ready have spring comes. Our and we the the are back when to and plans go ready

and distancing in also the can periods do with best and recessionary manage specific the to the period We need plans lockdown to those tailored and we periods social things.

as well. those to prepared need we the to understand those to to it And if of ourselves some we flexibility course have along or L scenarios is anything respond and be given lines, that need

along that the how us, how get key because this path; crises the and end are and we ourselves on we go cannot years. emerged it has for the range make focus Company to and previous could see to result on the day-to-day, a the stronger always horizon will we XXX do by across have in the yet best as scenarios we focused over act the term retain anticipate flexibility we quarter-to-quarter done winding as of every better sure manage the week-to-week, Coca-Cola long ahead the we setup of give them its be possible this for business So be that whole is, month-to-month, the crisis that

you. Thank

Our next comes with Bonnie Sachs. from Goldman question Herzog

Your now line open. is

across markets you am the on morning some U.S. more this to doing for us recent Good some that everyone. supply thank different hoping versus is I of you're was what is color -- ensure emerging you. demand volatility your in Hi, seen could your And in really little instance? accommodating a how give we've of chain, weeks. the

those you fountain and And your probably same in of point at restaurants excess have then for business. capacity a this servicing lot along lines,

manage you lot that of how there? probably side Thanks. of there's your curious supply So given chain excess capacity a

if in the own manufacturing plants plant, that bottling the there's chain. concentrate concentrate adapting a Sure. very And the I fountain of use then on on or pieces, break our We're course down the the sourcing supply through and distribution. the few focused we manufacturing into it bottling clearly ingredients in

lot it's world the There's congratulate like parts lot pressure of world basically that the world. creaking. the saying, been a There's the be weeks the all provincial bottling I will of of record of at around borders the keeping a ago But the on everything done teams work they've supply would few of running. province-to-province whether incredible chain other at borders, some the at for the some basically are certainly was the borders to company country-to-country challenges. shipped been a partners the countries moving chains at or ingredients supply – in in and I around

drinks advantage The drinks U.S., are once in the the are is Kenya the locally. are in U.S. But made Germany the made basically system Germany, country, our of are the drinks made these, the which Coke drinks in that locally. the made within larger in in is they're great the of Cokes in All the made are Kenya.

then and essential as part to systems allow the the work so food local so run supply of designated is distribution. an able system, service to And production chain to the

that chain more utilization. the there the like But adapt drivers – and XX/X of safety some how are made – able the some the we've that's few manage in running a low for lot we've are to security and relatively countries true plants some drivers plant largely had the are facilities some each it's Those at ingredients. re-openings local And a ensure were are in place concentrate most on the a we'll in a So, had that and quarters. or are to on country. these that. ago. of distribution, down parts of Production for to bottling chain some are start – timing months in There there then ultimately speaking, of here they having we and – issues fountain – odd of have sanitation adaptations employees and And and kept much supply and the And yeah, better issues Yes. the largely the running on running. logistics are generally parts through availability see we've much coming weeks having been We over of of strength borders. we to we've supply supply been graduated great than swap to doubled that as there see places everywhere of shutdown. on and it's just that the and up take and places couple plants

you. Thank

from with next question Our comes Suisse. Gajrawala Credit Kaumil

now Your open. line is

could Hi. maybe just everybody. John, you if Good you morning, link about. things talked two

about of need you need like if out, You the bottlers? way do to of and in we some link the that either bottlers liquidity an the perhaps consolidation environment, available will on reliant them as as areas to – can end where buy your you But have that, you such. be do bail again some in like something have a or the mentioned assistance bottlers well in small you or the them feel comfort liquidity the some conversation various in up within in liquidity

Thanks, Kau.

we position that, Keep have in of anticipate the is of with of and good play Let on came our the strong I with job bottlers, outcome We've some as indifferent. in good bottlers of indeed year. bad number in first. believe quick a or the also me different to our And a half hands March whom globally liquidity – frame public our over actions in anticipate the taken large of bottlers mind that year to for sheets. our we're back XX% I mentioned, the business we've XXXX outcomes into of all balance very whatever doing

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you. Thank

comes from with Lieberman question Our Barclays. Lauren next

now is line open. Your

things the on this of also you're I that ability on talked to immediate right foodservice. together try fountain the guess from But and margins, you perspective. about morning. trimming Great. actions taking pack lot consumption; protect talked – impact with when I to smaller shortfall the weave the on gross a expenses efforts, now efforts, just fiscal could was just so tail, hoping about you about of that thinking innovation sort different affordability Thanks. Good you've and hoping various and all profitability I profitability relative the was in equity you're

for one margins were quarter, the it's the likes about talking but anyways in that there because Just certainly me gross strong – think – I quite no quarter.

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Yeah.

with were lower-margin the quarter relatively from performance the our of margins poor for inventory So positively segments. impacted gross build and the a mix

a number playbooks. of respect points of what the With couple the would system made to focus is a James outlook using is that on also that I

really where in about think started the -- the it in XXXXs. our management during born Argentina growth America crisis of If in you the world Latin world, early revenue and was

value. as margin, capabilities be we're brands, the indeed our to many from very and know, but both of a play, able which, markets well be to to And architectures the favorable to you focus lessons affordability have core to leveraging packs clear the segment our full sparkling on the on an pack price with more benefit as channels in as for and able be appropriate to get

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that the comfort and the focus we've couple higher So typically being us gives momentum on position we for I the packages to a on key know last that on margin bigger and brands a the the years. had continue to can brands work, leader that our the the of prioritize build that -- that margin combination the gross think packages in playbooks of are we and front

you. Thank

Chappell from question next Bill with comes Our SunTrust.

open. is line Your now

morning. Good Thanks.

you of bit maybe can sorry that. specifically, -- kind the more Just a about talk about little

lost Bill, yes, hear can we you. you We now.

Can you hear me now?

yes. Yes,

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is impact the to we're in obviously, how degree And, together. Olympics, And, talking has pushed of in biggest can of Now, which what sponsorship. year. been the do assets fixed the next that one there's partners investment obviously, disruption the this our how virus about now to that? Obviously, some we the of adapt the we and asset all to out

in spend money is sort marketing activation activation, the The largely another majority be that other variable buys, tend or to programs and or cost a we to can the where things. repurpose actually of one those with of asset marketing the media the

talked in very the about on So, and of the call, and degree as all John assertive marketing the reprioritization we been have OpEx. of increasing flexibility

from all one to But day flexibility, the up next. when year channels we the which maximize potentially downhill of just in to open know spend are the to or because marketing change going and events the

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you. Thank

from Ottenstein Evercore. with question Robert Our next comes

Your line is open. now

the you. the you've to very also, to and Thank you're situated to mean those Company. add looking can affordability days and environment? changes you to accountability a and in lines XX-or-so push that the pack for bit forward talk in meet right? done that you've things that speed Perhaps you've years? was about crisis kind And the beginning done that tried you you changes make culture the into given of one some you big what given much. I challenges post-COVID along culture, the Thank in if wondering moving you what are price architecture significant your the first of as, you're from either of doing changes last how can of, Coca-Cola the little the the over I for Great. the issue, do is environment, your feel

on work culture the the some we organization. From global few has been that commented -- last in developing of point some and view, the nimbleness the of been the responding of Coke in of clearly the We degree a certainly little to through DNA skill of system. earlier a increase organizational a have changes, the years crisis Sure. agility, on part training of the of through cultural building focused the

got way But that have also the can global is no fantastic value to got networking networked things the obviously better two crisis. certainly the the learnings And better degree at high. because been which when of organization there's become has moved much work in time more of a two things together, a those which the you've than very a be world around has

culture, things been focusing number the networked a we've the on but of a ramping and the agility certainly So organization crisis. this certainly network, up us creating has helped in

we part and crisis revenue the born years management over the -- around many in years manufacturing in to last of a mentioned capability big it we that growth another management push our been the -- around world affordability, approach And John the the drive crisis was we then earlier, couple have focused or as has on actually revenue over had capability crises of developed one.

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whichever system towards talking phase the the have the is country pivot about. and affordability relevant we're our you're ability using that bottlers, and really in to brands us whatever And in upgraded so means in shape the in

in crisis the a a shape for time. into we've I So have we than long global been going think best been are we

on of agility. amplify James, could I And side on just if management networking to point cost add and the the sort

committed, to very over decision weeks key half will an that us the non-committed, to work what's closely and clear of to able are go with be we four and all it pivot of the market what's the as the we the markets fixed, coming year to to on opportunity what last variable, think will points be I weeks over into what's then year rest second the very the have the be we've appropriately what's had six centric. into

to want elements some moment. some accelerate in the -- allow digital we we certainly markets the network very are is back. us place serving connect have markets pull in well In are to that's us investments infrastructure that the will and to But at

Thank you.

comes Our from Teixeira with next JPMorgan. Andrea question

Your line is now open.

against impact, in do Are and cities decelerate March? the you and accelerate in in offset And shopping commerce in places and epicenter or mostly seeing India York? morning. said alluded some fewer to most like consumption you countries you, like trips negative by Thank mostly localized good you New the you at-home view April

the accelerate as out-of-stocks trying I'm of management how could really other appreciate. still revenue expect In destocking initiatives? concerned should in your price/mix there words, Are at you. because we this and the center view at you of see Thank few And we progress you actually a the the bigger with your negative I see of retail, weight at-home impact are lot multi-serve to in next point? quarters?

have the run maybe our been all integrated There quarters. all of fountain sorts effects, future if coming a Sure. the Taking mix some in business it any -- a given bit of headwind vertically through shift mix be mentioned businesses impacted. as other versus order, to in will BIGs. there's packages if consumption in consumption in yeah, towards coursed the country that we a John immediate our We big reverse

one in So a headwind of as be there'll mix be coming that a future will about the the think quarters, quarters. lot we effects but

consumption. and following see in the started versus the obviously and you to normalize future for path. volumes in you March you then in some channels at-home, at-home big to virus get start the starts footfall get are in own spike of numbers off, channels to each occur footfall in see the and look get declines stability one and a because and country lockdown the of a lockdown then What see the you the some the at to we stock-up the start weeks, away-from-home few to into you April terms has away-from-home take can't starting its then start trajectory In simply as in of is decline to is

consumers response and Now categories from channels is economically what's we're the layer and happening of they the channel. to of to within within conceptually consumer to even a of at-home the you therefore but all I have channel prioritization an at uncertainty that closure or B, A at-home in think on just the moving anticipation a a going shift the where least buy not

the clear it's pattern a the a So, visible very it's not pattern same always and categories quite but it's world. around visible

see You the up spikes what deem at-home channels. stays and consumers as essential in up

but more losses sell away-from-home the beverages channels. nearly like not things the to in compensate enough for Some

categories smaller heavily customers and get And the by and SKUs consumers. by some deprioritized the both the then

though So, losses total complete very e-commerce doubled that those even It's category offsetting the of is still it's relatively to e-commerce percentage a important away-from-home certainly beverage not -- sales trends. see the beverage small the from for category. case a it's in it's

place by need literally you on there's a and to go So, of going place. lot adaptation

Thank you.

question Laurent comes from with next Our Grandet Guggenheim.

Your line is open. now

Hey spend crisis. you everyone many year. the your for you pre-remarks on detailed to good advertising advertising approach on in and morning spend are how question you in later comments One back your thanks the your the pushing mentioned

think a give us brand? bit could quarter So, by we and please direction more also sequencing how the should you on about by

now the think finally Thank also you. And on hold? put innovation strong we is for your pipeline year should and

Sure. Yes.

on Go John.

many we the off ahead means in the quarter coming in has so Go in been stay second for the of the to really a relevant James. to approach And talked Yes, the Okay. as consumer year close rest way. markets that actually air.

be efforts We while will later in a our that announcing number priorities of year. now and that for had focus we back communications a have other communities and our on the we take pause on we'll

year back much on shape But the it's looks of in recovery. like the later very going the be to dependent

quarter, creating second half And optionality as so of for thing the markets so the do as can we're we upcoming year. the in right quarter that can the the much

that can the I the rest through the the of for in team take of remarks some phasing year. on you my -- alluded the to the on and implications Tim

Thank you.

next comes from question Laboy HSBC. with Our Carlos

now is line Your open.

some things do kind accelerate in -- protracted of go weak key into rate markets some Yes, remain if the were to North of the and a promising good step momentum emerging here? There In morning you everyone. up transformation how America or to key of developed here, growth? prompt and some change recession can Europe you what do pace markets

appropriate and I of to the look marketing macro mean portfolio we the adopt for and we're strategy the context RGM, going and approach execution the Certainly, to will part here. each of innovation, the have to the consumer right manage that's the of balance the world behaviors. and and have at

great had program We have American so we [Technical a as to business I a and in mean lots and business. North we we the momentum each to roll back out. also coming of step it. different certainly see and scenarios have ready coming the European against of We'll will take the manage Difficulty] things lot

to normal. we the come would new see as and certainly better of be So, we North Europe doing America looking or -- out

you. Thank

Kevin comes Grundy question Jefferies. next with from Our

open. is line Your now

pricing headwinds objectives over of these health Historically, FX some your broadly offset going of sort of ground. key in some Thank to of EMs how to company are number on you everyone. of your share with months? pricing. demand the weighing are put profitability markets. compromise in of But next a morning has of to consumer do wanted ask I Good foresee your lot Thanks. these ability covered of We've overall to markets market And some XX FX? commentary, the with of you. challenges these that a you tried offset James on early sort the some to emerging building

Sure.

approach the than of is local are dollar. the locally. they we more The point starting industry compete economics are Our that

to the short-term, on competitive we will and So consumers does use franchise less profitability to market that offset build context. local not not make that to or close we track in do and try sense. and we locally a in is mean In sustain and pricing focus staying competing share customers local improve the us gain to -- the and ForEx the to

we clearly, the track the hit than don't to pricing the import and they therefore tends as this tend of we We've over pricing that. emerging the medium-term try to devalue, long ourselves some the harder year markets Over and to and offset just run, FX. expected offset to currencies been see from inflation

to profitability. the level the be try and can will business. that we And make on right sustain get therefore, We driving demand of obviously line, affordability and drive sure the try and we top

prior going get in We're manage year. a the going tried stool and year the into as very dollars. to back do have a atypical local pulling sum be Company described. shareholders to legs say going to the balance returns Clearly, will the portfolio out of in we of for losses aim we future the as the few we certainly to tried in local sure balance be not years, this year to Now is of last to be the look all corporation marketplaces But levers and Coca-Cola we are try years. over have U.S. just as we've occasional the making the we achieve the to the three wins objectives

King Our question with Sean next comes UBS. from

now Your open. line is

your Thank I any you. prices. from wanted risk benefit if dig for exposure seen the throughout opportunity supply? production commodity mean, in we've side is on input any there near shuttered, correction with the the do to I certain to into you relative other hedging see and COX system ethanol

can our advantage goods those system both the the and in commodity glad that indeed remarks with my favorable XXXX. company our bottling commodities. year in rest with thanks should and take commodity pricing of on highlighted overall have is and question. it, I so I'm the expect Lauren's question for raised into of outlook Sean, The you I because of some finished the earlier businesses

the yes, On due aware sourcing has don't issue our bioethanol depletion. got the place foresee in challenges, and the foreseeable gas particularly in to the U.S. of COX contingency we But we're of front, raw in this feedstock the a team plans at future number point. an

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

today a resilience the are good doing the right better this challenges of stronger. times been or And manage and this leadership we has situation We've through no matter to be are Coca-Cola positioned even than whether different. of thing, out time you. of no Thank history whether exist. come never will and

joining your great always, So day. in company interest, today. and for thank your we as you the investment for Have us a

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

You may now disconnect.