The Coca-Cola Company (KO) 10 Feb 212020 Q4 Earnings call transcript

At this time, I'd like to welcome everyone to the Coca-Cola Company's Fourth Quarter Earnings Results Conference Call. Today's call is being recorded. [Operator Instructions] 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. Media participants should contact Coca-Cola's Media Relations department if they have any questions. to like now would introduce Mr. I Vice Analysis. Leveridge, President and and Planning Financial Relations, Investor Tim Mr. may begin. you Leveridge, now

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

I of begin, for results inform to discussion referred to at reconcile that These our of under analysis reported company like posted morning's materials accounting the tab of this structure. in today's certain you and accepted margin find schedules measures be Financial website website to Reports our would senior slides Information principles. we which can also non-GAAP our in the discussion schedules executives note as to and we Before company that under section Investors provide the our our Investors may like financial section an generally by the additional I'd www.coca-colacompany.com. that during you accompanying

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

Please we prepared for questions. Following the one limit question. call yourself morning, turn your to over remarks will this

please one, first than more your re-enter have the you most pressing question ask then If and queue.

turn James. will the to I call over Now,

volatility. and we the term through page and environment and Tim, the current including year past to our provide will on at today's good let's thoughts continue manage fourth Year. reflecting turn I'll Thanks, morning, performance. the by everyone. begin I'd the to how near call on quarter Then, New like look

in and the the confident we John, the I will then outlook will about about quarter year and ahead why share more remain Finally, we're how future. discuss our detail. thinking

stakeholders. appeal is U.S. dispute in appeal. faced dedicating John the believe Court our time. the and misinterpreted the the income is on on prevail tax delivering was XXXX, to clearly for before and dive encourage to the misapplied range our to should provide disclosure. November. opinion Revenue see, Service, you also regulations and We Form resolution, to We with and X-K We important, both I XX.X ultimately driving growth and matter into filed by business, the to global and for the significant we Putting conclusions. all that refer some its will this the on consulted of our long-term go in IRS's morning by we our tax liability. but the its of conducted together, U.S. value in, remain it posed in challenges I'd insight defend this of with Tax claims our will relevant steadfastly the We've information advisors, likely we case we all including unconstitutionality case vigorously resources our in Internal applicable updated risks comprehensive tax favor. are believe imposition we focused not Exhibit that ample in we analysis. the take In tax retroactive considered pandemic. The position. address Now intend like We've to issued court the including the we assert outside

transformation. moving our business agility accelerate adapt proved and with resilience, to Our company our strategic

our done. and progress isn't system. people ongoing and work support, and the from Our And dedication I our recognize appreciate

volume many the improving currently digits. of saw markets, renewed Turning in trends in in mid-single many November, year-to-date modest rise in drove but world. our through the down deceleration recovery a is virus resurgence restrictions in in continued volume to December, resulting impacted lockdowns the fourth in quarter, a we which parts The with

based compared our to on to but the become a from our of and business coupled of lockdown, level are still to durable has we XXXX, have home, trends taken. away tied learnings generally, more Speaking exposure the actions with spring

Our teams there term within the to short challenges. Globally peak the better around as recovery fourth the in crisis from was world ongoing as applied navigate even learnings mixed setbacks. regions, and of well these quarter, have the progress remained

lockdown robust pace. and performing remained showed as trends strong, global in the positive but the dining. AHA home digit a In December states in in India, a In incremental banning China, to stronger, and actions headwind improved soft of premise. due support. machines to restrictions and Latin are stages. traffic the slowed and we gains continued example, In to despite Topo renewed performed as both trends driving decoupling, mineral mix. UK express developed momentum. results QX bars impacting stores, retail their Chico In away Single-serve well. of ventures, of in complement refillables XXXX were thanks remain, vending at through the a water price North Japan countries Mexico percentage are away home signs multiple Western trends Asia-Pacific, and double and sequentially. we of different business, in in West affected experiencing quarter, mix stimulus pressure but at water, Sparkling emerging most impacted simply resurgence, markets. our early multi-serve recovery as the challenges resilience varying also strong, by channels gains For our from remained despite and share Africa Costa fairlife the share of with well. strategic and was strong Turkey home and indeed in dispersion Brazil's pack In the quarter, restricting EMEA off developing America, America, while our lockdowns a volumes recovering drove expansion with indoor on well by transactions Europe saw showed but is in less our through from were between through levels was at holidays. results grew

U.S. We China, into Express Serve in our the continued expansion costacoffee.com further Proud and to with in platforms, and of Testing and Europe Japan along launch the

markets share delivered with operating we as and the margin in its highest and year. rationalization. for achieving a performance improved the sparkling ever were for made and category gained volume perspective, Trademark progress Group delivered Almost outperformance zero quarter maintained X% productivity, for quarter. X% cooler which Investment Our further growth, Coke sugar fourth share. X% From or on up Vietnam offerings Bottling relative all by saw sparkling SKU the

While home market highest at value our away overall both pressured. be share as away underlying business home our to share remains gain performance channel by and in mix, home from channels. continued from We did impacted

no It's of clear over see available both this months. emerge availability still in therefore we'll recovery, poised trajectory Amidst near on to uncertainties, asynchronous XXXX, near term the about on the we vaccines term factors. actions We the initiatives emerge further continuing the the coming remains the supply chain by of and stronger. push are to and early most to time, execution become we'd a doubt the that at in is vaccinations flexible championed support we adjust of from different forward Thinking system customers It channels vaccine our in of both seamless to business macroeconomic world, to that impacted as some presence perspective. will look vaccination ensure to while have to ensure be likely see days markets. widely the will due the recovery to more and our stronger expect there distribution improvements pace our in process, virus same other backdrop, depending level the around still and and will is

our today, So Cagny business as our presentation important against let provide on initiatives other progress these Virtual on me well further at drivers touch briefly several week. and detail next we'll as

accountability. and Our decision networked organization is and creating together coming rights through empowerment clear

overall currently changing global a being We have stood X up. established the we operating category team our are and new are structures, work. unit and hubs organization, services way We've platform already

is our and resources analytics tools. investing drive to to digital in goal ultimate new scale Our capabilities and and including consumer growth, value

ensuring are we across equitable the go diverse global have a and through our representation As that we transformation, workforce. we

long brands term consistently. global targeted growth and streamlined master greatest allowing portfolio convert investments XXX Our effectively, to our allocate more quickly brand and to Explorer into be leaders Challenger will identify will investments XXX We've leader brands, teams opportunities and our from category These more powered accordingly. our portfolio. and leverage optimized by profitable brands the

of understanding deep are building us for building occasion-based always a resources into and do This superior To and what enhance Additionally, innovation. that consumer make and with on that best, driven building products. quality on. effectiveness, Great marketing our we campaigns allows more to on are consumer data room begins centric converts our targeted we brand our focus road. attention experiential streamlining products will brand portfolio the down

spend, optimizing and global and moments more snacking time, drinkers initiative Fanta's strongest be world. generated first share eager on to focusing to the marketing refresh. clear", brands Campaign, our are including our are We invites around new upcoming Sprite make by model marketing reset this to same opportunities. ever is And compelling called we "Let's At new it colorful seeks playful the our most work

We a global will reinvestment to our in brands. underway, and agency eliminate processes, improve and review fuel creative have which media drive efficiency duplication,

regional the for This in with Cola. impact, And franchise leverages local trademark first Sugar, the bevs for our like consists along still bevs Coca experimentation includes XX.X Zero there's across strength categories expansion has XXX% coordinated for management PET and Our in to like that of and Coke bottle recycled XXX% initiatives. brands. House intelligent across benefits We're adding new some PET revenue bottles pursuing of hydration innovation XXXX scale the like design pipeline local a Tea our our understanding, packaging and water shaped been functional Authentic of growth global new smart for also U.S. ounce and through Asia. for taste innovation recycled our

in Chico execute opportunity. undoubtedly Europe. in organization also enterprise around been Latin we're and continue years the outlets digital the to has for to Topo of existing shift globe. expedited structuring in several several to is new add expanding We cities up into an is the skillfully both the expand this our and pandemic organization leveraging stepped evolution also We're already to a which Seltze, platform launched that America marketing, Hard e-commerce world, global The offline can digitizing sales and commercial, We've will and and BXB myCoke online. around markets. pockets distribution excellence The and have continues

aggregators multiple and OXO availability with ensure beverage Our partnerships visibility. food

consumers and regions. an is across Thanks through connects several venture scale. digital us in multi-platform ecosystem companies five continents. maintain Our relevance, benefiting has system connectivity The consumer WABI, interest helps XX our an local available of and products is and while collaboration WABI bottler remains apps. now owners end system already powerful network cities in Bottler also to to seamless alignment our model, and attracted ecosystem store it other from global imperative,

can during ESG We our fuel year communities COVID-XX bottling long our in with on our much today, the to and want capabilities. to our for pursuing and engage for remain of work relief John, our business am holistically world. the and support being growth. lift to the successful We We're I over proud future. sustainability create. value partners embedded also to world. continue to term disruption how turn grounded for I express ambitions that to And We to and focus while the by purpose working the shift contributed I our network achievements We is brought our we around the before

against which against making target, our goal virgin without to We environment use we to our and framework. reduce coming includes the XXXX Waste as new a creating We'll updates achieving introduction continue a packaging. be global by value XXXX's critical World sustainability is to deliver more report And report, and in zero million successfully X both science-based stop XXXX, a XXXX. for business there. milestone involvement the won't through setting progress families growing carbon PET dynamic world in including while business we Without months. such and are shared which objectives. retail focus our to we progress against women, of on distribution and by in communities, net made social confident priorities to We their carbon our our women We've To of equity, accomplished ambition market racial summarize, target empower the their to our our in will also justice these in that businesses. waste, through have our We're navigate

more will stronger stakeholder stronger greater emerge share, We with impact. higher and economics system consumers,

we more given how manage in shape. are And continue, distributions have visibility the business, recovery we'll for have will the global an into we outlook vaccine our XXXX. confidence to levers take providing the As

fulfill years our staying true to make company in as to will come, life beverages world Importantly, difference. for centricity strategy. and to our we purpose and commitment we're made We've great for consumer win equipping the to our to the progress refresh a

Now our John guidance. and our will details results on provide more

performance good our our and morning, fourth on you, for over and outlook will I go Thank the quarter of touch Today, components everyone. XXXX. James,

with tax start the in comment earlier referred on First, James let call. the me a case that to

analysis disagree Court position we mentioned, he provide to led opinion us we current have applied that the and process courts tax arriving litigated of be steps. the position. be U.S. methodologies while we've has successful, will Thorough with ultimately X-K by and at the believe Form reserve As vigorously In our this next we pricing resolving matters. undergone the in the the of a morning, could will we million recorded in detail determining alternative $XXX and transfer consideration Tax our on defend filed in

rule no end the IRS interest including tax Tax the ultimately affirmed or the XXXX, Court prevails of by aggregate XXXX. IRS any company's To accrued tax and payable Tax the possible going assurance is XX, proposed through tax we estimated effective this adjustment underlying be accrued the and This our Act under favor. That for Cuts to previously for assumes there It that of changes all billion any years XXXX. and made methodology portion the to not have some applies amount and up said, by could liability considers their including will rates that forward. Jobs from the adjustments in courts incremental have is the We and $XX upheld. December transition approximately

takes methodology refer the of liability underlying to you tax our potential effective their in would and change incremental Form tax inform are disclosure the X.X%. rate. in-depth approximately detail. We increase indicated applying more There by puts rates that that have the many to X-K I in also encourage for range and

to outcomes, resolution, we strongly have our long investing generation While are we cash we growth, believe prioritize associated term in of with between to drive and prevail, in well for morning's the ample dividend continue this to and outlined will we there manage business as What our timing supporting ultimate as shareowners. confident balance disclosure. uncertainty is sheet, flexibility the range will the growth we

throughout process. We as will transparent as possible be this

the fourth in and performance our to Turning XXXX. quarter fiscal year

December down flat year-over-year by the the X% and as of slowdown to and well X% from a in at single channel primarily increased X% digits decline revenue we the in and markets. headwinds. and organic in on and for quarter, as year. away virus our margin October pressure QX and due driven November home, gross mentioned, showed restrictions in full a volumes comparable improvement sequential Our home decline many package resurgence decline in between from lockdown continued third James were The the was as But low the saw approaching trends. currency contraction mix

the segment due quarter marketing worth operating noting this by pressure the headwind from SG&A was Additionally, outperformance a phasing Comparable effect decline quarter offsetting cost line. top the to management, mix to over more in group. impacted swung investments due spend our margin year. timing to in through the ongoing reduction of disciplined the bottling expanded than of It's

spend flow On neutral X% quarter results. we reintroducing earnings X% the year As been cash the we've the relative an up way, intensely invest on brands. to of basis, for an categories stated, of represents XX% crisis, previously for were remained decline focused comparable Fourth have opportunities XXXX a a down in quarter countries, goals. have Throughout our reflects X% identifying comparable full of we year. currency our and comparable $X.XX, increase compelling to $X.XX earnings EPS targeted and and across marketing

X% our make XXXX off despite our is cash for reached performance of faced. a and in year, we and down up by have good free free the operations year coming XXXX. flow on business capital, continued progress This momentum cash cash have management to headwinds working strong spend. the flow conversion X% our the We for finished tight over exercised XXX%, our capital our of was While from exemplified

routines, focus and vaccination work for begin maximize in later socializing, returning we on many XXXX, to top recovery our see to line travel, returns. their prospects and converting of driven previous As growth to be a would consumers by

a goes on, year, high currently We in of many expect have into level versus single as double XXXX. XXXX. comparable improving the recovery for of well growth and digits, single to digits us low the last lessons Our per to visibility learned the outlook percentage as year we’ve percentage provide growth as organic revenue enabled high of an share earnings

we're perspective, see the mid-single we the the much to is many be hit the XXXX Currently lingering line our term, comparison expenses as near this range of will uncertainty the synchronous While as to confident home toughest have usual this wider eliminated more than cadence, of about we the the well that fewer be There year. the account dealing a five were digits, will expect that are for of To left quarterly quarter year significant at and will half play. a considerations to first expansion. guidance. in are there likely are many you the package the quarter is XXXX, by improvement above acceleration or this gross recovery that we've year, the second year trajectory better pandemic see reduced The experienced the think the significantly before In additional challenging and last potential than A nature. shift in driven the operating in earnings levels, drivers or six that back with year. we COVID-XX be deliver come calendar of degree part to to at provided impact down and XXXX first to were away the to as pressures several a for likely top be a From for as recovery the year-to-date factors cost fourth days to the of And would and which recovery, half. days as XXXX, mix in drive price quarterly expect with factor. we base, we would expect world. margin a from volume channel we

step to top brands will We of our drive investment behind line. continue the up to levels

our we mobility return The more the that favorable channels our to expect become to streamlined driving over spending productive more changes are as with and away These innovation We time. from approach. changes include will marketing regain transformation and on lead home disciplined efficient organizational spend momentum. stabilizes portfolio, strategic and optimized restructuring,

will We conditions spend our flex us. relative continue to dictated market what around to by is the

begin be While rise, we currently benign. to prices hedge to given to we the goods positions, of impact are sold seeing our commodity cost expect

line, As we spot based to X% we to the expect release, noted and to top in positions, of and current tailwind in XXXX. rates approximately approximately our EPS hedge on X% be X% currency our a to comparable to X%

as continue We we to in This any am our of the payment global for will will XXXX we to tax emerge I us undertaken they With Presentation to pandemic, set at Cagny I'm we focus Q&A. to a the does to that such environment. to the more $XX excited billion. our cash free the General expect operator, execute that earnings very strategic stronger. contemplate for and are I world XXXX that extremely promising confident while expenditures relating a this work on able through we've to up us around grateful overall expect direction face operations, into deliver are and not billion approximately $X.X case. pivot levels, for deliver were and or am of challenging also cash In We week. take the above at Virtual capital insight ready way look team our flow outlook, enable future. to forward providing least the drivers about next

go from Your first the Bank. line from of [Operator Steve you. Instructions] ahead. Please Thank question comes Deutsche Powers

is now open. line Your

Thanks. morning. guys. Hey, Good

continue. headwind and cash is a the and in kind given good that's and But thing. top of free an XXXX by capabilities, aided assume That driven that to a complexities So before to facing. strategic is in of productivity also lot set line marketing clearly it's demand flow upswing. to I'd part by the guided of been the to of the come profit continue investment for diminished year that you've know on through you're that set is I level flow, level the 'XX is some delivered underlying impressive, probably more of

to of question investment frame perhaps to expect of phasing. think other to there's So, with where some you've hit do way I just a that strategic guess long you is in you're those investment sure dynamics how a term right that rate be recovery? bit or will outlook, how positioned in thinking run a relative talk benchmark? the if post-pandemic embedded about to is, the targeting? it the And the high-end come is Should be about little would the make to a way basis much investment Does XXXX recovery, 'XX the algorithm level there you. been on to we coincident you're be of great? Thank And ahead

Good Sure. Steve. morning,

morning. Good

XXXX, drive new top think marketing. we consistent that but the levels me start we'll that the necessary the the sort business post-pandemic, have the with backwards. pressure world clearly the become to rework growth just other Let in components the line back, new benefits of organization, not comparing all open. work long a we into will margin When And fully marketing fashion have of that is normal clearly, term about at is to you that as believe with baked accretive and the investing of the and the of is of And fundamental be things the future models.

a obviously other disclosures. things. which of in gets that's number most reflected and are do goes the where board things we we the relooking the we there we agencies, where show how enabling, much in spend, of called But the relooking the advertising do at can or marketing it marketing efficient, right typically all our make digitization and a we Some really major way research, reprogramming from across at is program many that have the to that at look the more

were believe normal when the open, drive be cash of and that was view sorts at that pressures, the marketing of we'll to cautious run an will corridor pressure levels can the will reapplying the flow be and the revenue looking through mentioned achieving and rate in it to or is new are of the reapply and the And little end, taken flow the 'XX if levers new believe we But in if opening, of or cash free view, some are we board. channels what growth. will we one XXXX vending our in we view the they're will the we that that the pull things free ultimately, from of in into where or the the in we XXXX of CapEx. manage you across and at new we slower in equipment profits our up which a in a back we get for. In So of our of found off about need on look degree the than obviously And and start pressure marketing pressure our whether embedded be the we of have in levers to will the line with innovation the on not we the as sorts be view marketing CapEx revenue things more Or flow those until Simply there's balanced growth see on corridor will there to are efficiency no the measured was when the now year the to growing to were verge equipment. understood, being 'XX, some we equipment that open. last or fact course future, point similar rates like. putting starting comparing quicker think in sustaining a better, is new guidance of the

as some reduces marketing the and market logically and back between is the self-regulation will If come a and CapEx greater, on. there's things open, more of lockdown the back then we lockdown So is those off the on. will the

so, and but more more CapEx really and guidance into revenue. that's have drive more stronger spend the provided emerge marketing future. of And the can corridor within we growth believe why we'd operate we've than the we this And

of Please go next from comes Your from Barclays. the ahead. question line Lieberman Lauren

Your open. line is now

Great, news North struck profitability by the to a nice change But was there tough little step I look obviously bottle. talk I morning. in want you longer XXXX over I thanks. was isolation. up, XX-ounce bit I Good about term. but year, a guess, mentioned today, at as and America mean, this to the it the

So curious way, the of broader starting get supply efforts revenue nature if in in and chain management, to in And price about on about here. I you are was to there's tag terms supply just management structure what the in the U.S. addressing U.S. of profitability chain anything without even mean America, Talked aggressive growth more that could for by term the your North Thanks. explore longer

North growth good reviewed America. multiyear from management some more We've see that. benefits to journey in journey revenue Sure. been The globally, [ph] recently through and indeed, started come has a

revenue our over to in worth good point very Just that's obviously from It growth XX-ounce Without the linked bottle the U.S., PET bottle Coke, mentioning first is World is is Waste of view. which also on that strategy. recycled a XXX% one

on as of some management providing continue So the whether or cans bottle in. explore previous is for sleeker revenue our to pay the on story. said revenue runway are the efforts is front, that I time, that our RGM clearly, the part on on America over I frankly, as sizes dividends this are of but a going margin consumers And smaller to packages, just not and calls, multiyear helping This helping believe it's smaller are in with growth is drive we that some the of interested particularly to connects starting North also front. that

of margin. that America. there's drive I that's think a kind in category done And that in can to be of lot underlying So, North more the

or in do there course, whether margin our therefore, the role or internal products, if bottlers whether are we re-franchised continue system's finish -- or we exact bottlers to And those Of or what is we the manufacture to chain. have on supply structural of the not changes the we products. get kind

is effective we ourselves most options course, ecosystem overtime bottling efficient and supply will our what and to partners. Of for look do the of do

to ourselves efficient to have lines But We of consider the most we other opportunities have consumers. and have between and recently moved there, some we'll and as co-packing to effective the satisfy bottlers them. the water. And when are chain third-party supply ultimately,

comes question the line go Morgan from next Mohsenian Please Stanley. of Dara Your ahead. from

is line open. Your now

Hi, good morning.

appeal the might dividend ahead impact versus a that terms that could how about you of to just wanted outflows do How cash if if of what just there bit impact handle out the detail dividend well that's And allocation? opinion understand believe, think in that plans an scenarios. billion we looking you case flexibility tax One, sort it on as potentially were type to more and about ample through judgment. be think on up way about far you to sustainability? that more Or significant unfavorable I have term John, think just to in a Are the time do if conceptually? the adjust post but then your plans. short for have the to was not what think doesn't decade, I as second, the two of cash do $X follow scenario. separate comments subsequent have So, the in unfavorable of order you around that, enough outcome, you I and you capital to And

Dara. Thanks,

take in along cash last think the we've flexibility feel that our the through two the us about think been in consider year pretty when believe generation few years the which And I we've that of with flexibility. when any in more balance we the next the But work unlikely manage scenario. case organize about into I years, strong beginning next generate consideration, to to we've And As managing case I worst way can scenario, the think a sheet. confident to to ample any way three done, just for gives continue the take in we to and prospects scenario. we have have we mentioned, got a cash very care portfolio debt that will script, we we that to both really

comes question from Gajrawala line go Suisse. of Kaumil Please ahead. from Credit next Your the

open. Your line is now

you. for a Thank I'd few advertising like to ask details more spend. on

Creative you similar I marketing review, of being kind phrases you efficiency pressure I levels. to a few such. Media mentioned 'XX, think Then John, also, think marketing 'XX and mentioned

is back much out that than we we look the ad that to was to around figure Should XXXX. obviously where at perhaps year? what a was roughly this running was than that 'XX, expect is for it that's if Or figure become lower lower X% get billion, sort $X.X thing of And you've efficient? it's before? or spend more So, it just a lower XX%

Yes, thanks.

on don't to I a linked think number we're that's necessarily fixed So, XXXX.

believe We area. for are that efficiency Given that greater around a doing the a enabling marketing the particularly portfolio, the drive us there's of and couple highlighted, we opportunity factors, one, efficiency. across have spend to number in tremendous we work

tap done of order a also market-to-market then to and turn that to, perhaps you more become to in the be last spending the the handle as be to we've landscape, need required that. will learned that And mix is to We've And we lot at past. look evolve. us going flexible. flexible a year off greater in thirdly, on with in we've much fluency I so think, speak, the the than Secondly, lot allows marketing

both So well the as is continue mix these of as markets. we focus in to our will investment that's each terms, of spend need, in appropriate total for markets what net-net on

kind both we continue efficiency effective the we but to now available that as the means good is handle in drive of of efficient, being a know landing spot I in think us. I world. dollars, being across terms got And investing We we've land total will think to and recover appropriately markets whatever that on

Bonnie of Sachs. line Your Goldman go ahead. next from from Please Herzog comes the question

Your line open. is now

And you're But morning, I'm your progress this. job sounds think to at a I of innovation. this and innovation stifling all organization? some streamlining messaging all at I how making and Good innovation term? a portfolio long of strategy then, are you're to your trying taking within understand risk been wanted you. managing this you've possibly on more lot doing, good your guess of discouraging touch Thank it Obviously, increases like over portfolio initiatives. new, that everyone. you balancing risk streamlined the concerned on I And

'XX I to it stifle engagement, driving where terms was revenue guess the we continue, innovation in don't to and therefore an in interest the opposite, 'XX growth think on of role we're customers, we're for innovation, of in headline profitability. looking quite and answer playing consumer and to is, important no, actually going

the an is There's going from to point that the a about role to understanding think going a best of so ones going the outset, within And there's very identify to be innovation absolute pipeline, to of personal view for be what finding as might very to just important be one forward. the this experimentation. biggest no knowing able matter which way are best no much from still way

Clearly, in we So we're innovation. did to back less XXXX.

be We at had are will in beverages innovation Very financial consumers on degree greater done our to portfolios, for had more greater to lot, allowing We meaningfully while of looked and is in attracting looking innovation some our more focused frequently at increasing it. a Ultimately, prices. pipeline, we're perhaps these had enjoy our them XXXX. or it inefficiency we we more impact. the

we get greater that achieve impact, will which in and XXXX. were for driving we're able again in to XXXX, we So

right the is of successful the more portfolio the rationalization there's the least next XXXX. most you We'll away this of and learn like, about through So there's so But if stifling, as continue for go focus clearing It's about of absolutely level on room contrary. quite for we none I innovation. successful think the innovation. more to generation

Your the Please question from go Sean King with comes ahead. UBS. next of line

is now line open. Your

last With disruption organization? your Hi, has opportunity and restructuring guess or most on to any across I time. are just plans the year, greater throughout for areas longer your for than savings morning. announced streamlining mid-last seeing good the dragged you respect given that

agile, a of given the to different ever be organization, have needed more we the find importance scale done the some and the organizational more the logic ways been I that everywhere. to at up increasing the Let's pre-existing, lots that activities focused of to we as go need and plan level, made think organization way data on implementing COVID Again, objectives change make the to a of moment Forward. what the the platform can't a resetting clear that is and very of have we especially we we knew were more

accelerate So, we we opportunity or it was a course like, implementation. of XXXX, took preexisting to that the if idea the its necessity, in the

future. opportunities, happen ongoing at be evolve the and will of moment. the world at there'll productivity course, learn levels evolve, impact will will sorts that the recurring I planning years, and start of not would couple these with levels, will the it we'll into we of change current Of this beyond But the much is

Your of ahead. next Please question go Truist Securities. Bill comes from the from Chappell line

line is Your now open.

Thanks. Good morning.

effort. just you don't by country mean, and the I quarter with fully do XXXX. around outlook interested this lot of open a figure what comments vaccination -- how I'm kind I appreciate giving fourth days assuming world off to XX do by year? the you up later? balanced I there's wider bottoms how do up that I then Just and you a country a up approach I a mean, come But it's the of for going like are rates country of out look uncertainty. mean, you're of rough of things sales ballpark? and a third, to even looking kind in on guidance, question But range appreciate any a at I to

actually biggest with team a assumptions simple as terms, year, all going on the indicator our and to or happened driver in on came work last back economic at Great analyses disparate second rounded lot the to that last looking looking to scenarios a very of what to set take back on Bill. question, Look, years, would of to XXXX long quarter there a we the shaped how the its intense and was pandemic view the in military, up on get GDP. and crises, our And did we going faced country at prior curves. interesting levels of of crisis, a set and was then long that therefore, history, a how relatively we way or would what view whether the each early pandemic, back And of were. the

obviously, quite scenarios And progress what that world take the can that years, we our able there. and world four the in we've were in you And idea. years, them is you three to to the by done. countries take So, the get them overall there can in the the end macro and into, all the it'll segment the years XXXX, countries it'll countries them one progress see, of them are and closely take it'll two year, followed will of of and take back take that model,

continue we'll region. corridor of into 'XX into year sense likely look and looking country through at given some of be it So, 'XX we forward to by as as has us sort two what by those like going to projections, is or

Please Laurent ahead. comes Your the question Guggenheim. go from from line next Grandet of

Your line is now open.

year to to on It ForEx top I'd like and morning, in and guidance. John. terms soft it. the on good Hey, top organic of you in seems the growth, James this digit 'XX expect X% growth focus where them line high EPS the tailwind especially of morning in X% single

So profitable. guide? it EPS a should you conservative it's help the probably embed fast more is we of on-premise doesn't But think that recovery could reconcile or channel

that lot finished in as starting the this on business. reconcile do goods a simple the some is XXXX of that our a Laurent. not came businesses point have the impact few levels margin concentrate to points, of the it think One, same I

on business. disproportionate impact the of concentrate profits simple revenue selling products closure a for a example, the through versus not versus Costco store So, coke has a some

recovery expect product are XXXX these BIG it the greater home, particularly whether or away we Costa businesses businesses, our headwinds finished a what the So, is bottlers, of in be from of margins. and terms of those in mechanically in some some

number in XXXX, of the as, our expenses, we of CapEx clearly reversal course, of reasons the And to that occurs of facing be in resources are we recovery then which a more market XXXX. those elements in the will do more facing the in stewarding was XXXX. as is, decision schemes not the XXX% took would very in of effect good not at or in there incentive course, or operating reinstate marketing important expenses, invest The well of if to second the We market so. for budgeted going XXXX

line-by-line for your to within typical not gone not have moving another moving pieces There's comparing a guidance normal and XXXX. from year of it year normal we why year. that's are So so many that

got which we still what's actually in we corridors the cash flow. way given able the and the top weird we wider are bottom effects today. we've and stewarded the You've line, measured resources to of most can why we're and the and XXXX that have free these drive given and balanced think some approach give That's

ahead. the of Grundy Please Kevin line with from Your next comes go question Jefferies.

open. now is line Your

from to product little bit sort Latin the Great, Europe, and of in time launch thanks. the Good you a the within earlier of context of the call. spend but little U.S., Seltzer wanted a the spent Hard time in bit the morning, of America I everyone. of James, Topo Chico learnings in launch on

with some some recall, I As in to the learnings on formulation the tweaks company Energy made Europe. Coke

of line a objectives U.S.? some a all rank that. is sort of sort you handful this even of in can the the a global Sprite, terms is U.S. we high share delivering of Chico the the sourcing in a just mentioned, then occasions? on How the spent been market characterize so success around with Topo does campaign for launched those big priorities? Has us, priority Maybe Tea against Hard Where You far of it the for is in that the Seltzer regions? how questions. And Asia. product time importance thanks investment. the in product of So in So Where expectations? in level, year other maybe

sure. Yes,

markets tell. even to repeats in but the very and a Mexico, but Seltzer obviously market still and launched Rico, launched encouraging. rate sale look early we've too sale rate very we've repeat to to the feedback Puerto from rates and Latin initial early But Brazil. look share number Peru, Hard America in in Strong a of of of tell, Europe, Also, consumers Chile, still Chico markets, few have early very good, customers, again, really a So Topo still rates.

And of sure so learnings we'll in learnings. we'll and there'll some we happy tweak I'm the quarters, those coming be to forward. be as share go things

how remember question it of regulations. to alcohol U.S. to because market, U.S., your the international it's about different the important as rest Now, relates market U.S. of versus here is the the U.S. The Molson will company Hard Coors the stroke in a system bottling Topo the collaboration It Chico be by Seltzer be with all not going the will through handled the team.

the that as that with bottlers ourselves being And been reception all by quarters. in So think U.S. all Coors come about other it marketplace. distributors initial in on obviously the way, that the the and the are is any from opportunity form not shape things done in priority U.S., certainly future or a going good I competing very excited in it’s More in Molson to are are

go Please comes Evercore. question of line Ottenstein ahead. next from Your from the Rob

open. now is line Your

much. Great. Thank you very

and reopening How market a the to least that year. in at of little initial as call or was countries better to a just earnings Thank just You Coca-Cola brands press update mix can in full that that QX much had referred question, would particular roughly opposed the then, XXXX? how down much a of on so due give an trends, to release bit as carry share effect? channel for And either Energy? the you on even prior on-premise particular that a into you us you. momentum, And follow-up on commercial expect due to was of

trend. to But QX remembering previous improve had that home. or did So, home away have two both we definitely speaking, they also in fourth higher QX from share share obviously, versus reopening share than generally trend QX market the the share we were materially whilst than from in better at-home we quarter then from will in away been tends benefit overall gaining reopening, in yes, the And quarters. the and the the at-home

we particularly that XXXX as in the launch end then reopenings will in channels. And coming U.S. particularly those the on And the is, share into certainly particularly expect Coke what momentum that gain in would away that built be to obviously, immediate difficult, and in trying commercial share overall, we going of So Energy, the to gain given lockdowns. XXXX into was happen. therefore the was beginning was at-home and

Despite one drinkers to interesting launches we're bringing rates, to going interesting are in Energy had the energy very interesting retail to compared users category the that the other of XXXX. new levels so at we've repeat come and in had Coke dollar rates recruited year on we've category, other And innovations. into new challenges, recent sales in versus by back

proposition there's think attract something original we back in energy there category to to new the the a So space come with was hypothesis the that that working there would category. to in drinkers

that got should we've again So XXXX. think double we in reasons to down

question Please Morgan. the ahead. next of Teixeira JP go comes Andrea from Your line from

now Your line is open.

good you, and Thank morning.

is and question also on follow-up my So RGM. a expense reorganization from have on a the follow-up savings the

impact comments from embedding embedding on RGM on reorg with how for and this in the the the that the savings EPS James, you are year? mix offset much the guidance of the straight the And relationship higher into clarification, the the by or executed you you top on bottlers. on and perhaps spent, So Are be to the XXXX, in cost pricing pandemic partially as lingers? switch bottlers suggest into lower had

and Andrea, on track our And year, savings, million. between expected benefit had deliver the of $XXX let we're last in on highlighted take release me $XXX that. One an expense we that. million to

implementation first Some fall year, progress model. part next the of of it year, new we aligned falls the of make this into that of on kind the to into of will it the some

market. to the of as the our both part top level, when importance on it clear more to comes changes than we key have about has highlighted line in past the if to a on inflation, the forward objectives right enable drivers and that the and us the path algorithm. that conditions deliver teams And We're actually area, our I of on think, around the focused relationship that its having optimal topic on think at don't on even any with to of as to expect more navigate allows that's given whole very the material the market manage packaging us a anything, So go local of world how I ever revenue it. year I outlined. a expenses. an RGM, as us pricing even are to architecture this in way And we've way, the having

Fargo Wells from comes Carey Chris ahead. question Securities. the next Please of Your line from go

Your now line open. is

Hi, morning. good

Just question. term level or higher a longer

outcomes, prior to And structure term? to of on Thanks. the level to have has your gives high mix to probably the that and response and through, factors outlook around your your judging by on you think that flow spending ability any, this appreciating and increased lean margins some in XXXX. your recent potentially margin around I confidence guess margins So case drive changes ability for And for uncertain specifically, North return. just an margin America goals company's might longer you But the that over past, from company where tax that relevant. those if M&A in greater had just you about the margins, longer be questions focus go margins accounting efficiency levels as you thoughts, and some into year term I But the less how even could outlook? operating made learnings the maybe clearly wonder on had given able

Thanks, Chris.

is time we growth into can long And to expand our embedded an you really answer algorithm term margins. our in belief the assumption is and as in rooted think I that the algorithm. over we sustainability will of that continue know,

as of crisis you under think waste to the given efficiency the term bump our be the for performance the perspective. context us year and a plenty as of the longer XXXX. think, different North we they very needs portfolio in that to to markets in model. long profitability I term manage greater that is contribute in journey of to business and it factor earlier and the distinctive any And But taken America it term be the around the think opportunity, and it particularly year, never of would world, term in growth a currently expressed American no growth and XXXX, I is key of have improve unsustainable. unusual our context belief as levels a I the to longer see umbrella say, in a highlighted long opportunity along of different. operating was will, time. that And North doable a drive afforded We model, over is James margin that times at

like I'd frame. that so to And sort a of margin the topic in whole couch

Thanks so very much, everyone.

a volatile at objectives Just driving peak priorities we dynamics. and ourselves few execute ability set to really and through thoughts. continue the of our term company, closing the The the to galvanized the are the near crisis have for

to growth end on our drive long-term at stronger still the of delivering factor model. the of is system a for we're years and path the of entire near term, our virus way flexibility to in the the and While Focus come. to network to Coke the high emerging model the will well returning

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

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

may now You disconnect.