The Coca-Cola Company (KO) 25 Oct 222022 Q3 Earnings call transcript

At this time, I'd like to welcome everyone to The Coca-Cola Company's Third 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 introduce would to I now Mr. Vice FP&A. Leveridge, Tim President of IR and Mr. may now you Leveridge, begin.

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

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

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

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

have you and ask your queue. one, more please first, the reenter then most pressing than If

turn me James. let Now, call over the to

In momentum Tim, effective the morning, business. and a our After first brands third drive of our a value to challenging. Thanks, pressures, consumers the marketplace global continued we to quarter loved everyone. half with system our growth stayed of in our remains execution the that these continue year, backdrop in face behind resilient, across and strong invest we and the despite good in macro

to raising increased line and our the results rest we strong guidance, invest are of bottom and year-to-date, the line into strategically. our Given while continuing visibility top year,

we expanding of XXXX. financial for details early business I'll year I'll discuss the guidance update morning, for John, and how full for and what we provide discuss the are control. and quarter, considerations the revised will to pass So our XXXX Then he a circumference can some this

many across The mobility renewed continued ahead ahead driving consumers. to and conflict ongoing, crosscurrents in growth. by Inflationary operating providing and of saw revenue are this all accomplished had to in industry growth, of the also well. of is prior in which quarter, China. creates interest growing volume pricing organic growth drove cycling in in retain some challenges quarter, the Against country across macroeconomic share We impact environment. value continued which we that driven away-from-home benefit is higher, growth and packages pandemic-related growth and Consumer is volume gains right which third healthy revenue business restrictions of capabilities. our we the brands and hold as pricing investing by in both robust rates up have continues we our this in actions the remains to COVID-related volume, core in quarter, and strength our elasticities resulting in third the categories management the Notably, add transactions both costs, impacts During forces backdrop, strong and overall reflecting to volatility Ukraine the as currency world. segments. And This well We year. parts include operating the and beyond. delivered channels. of revenue was growth within and from most at-home portfolio and categories, In from

digital occasions engagement points. with leveraging to our link model passion consumption and consumer-centric are We marketing using increasingly

the parts to global system experiences our vast been stronger, from has the world. the systems' various us is of leaders and network never allowing Our of model leverage

scale. sharing We local are responses faster learnings of generating increasingly right and to a changing environment and mix the through relevance

become in Pacific. the of across packs, years, inflationary transactions to on the environment share the Trademark value sparkling In first continued the locally year our of we in the the first world, Now campaigns In Through starting in we Asia a amidst as Happens time performance occasion-based for half in gained with India, to Japan, soft recapping third drinks. quarter in global the strengthen effective Heat and packages. marketing and the $X through has bottles billion expansion Screentime. growth single-serve country in we share, packages. strong intelligent took returnable year-to-date. of large market, the penetration success we like grown strengthen transactions adapted household and to PET points price innovation marketing. many glass Coke increases through and price driven approximately Sprite occasion-based we Year-to-date, billion PET gained by at small an delivered brand drove affordable continue X.X business execution we've

in new our our share of drive our product recovery which sparkling and drove like of the complemented XX,XXX selling unprecedented brand through and coolers the strong, consumers Fans activation availability expansion experiential opportunities. consumer In growth we sparkling choices saw connections in line in experiences East, strong Fanta we growth Pacific, markets engagement year-to-date, excellence second execution on SKU to growth by traffic in our and We've America, We We e-commerce. over helping innovations South sparkling consumers, strong connected most XX,XXX we a at Lemon+ to during than EMEA, continued XX,XXX leadership cross-market music-led accelerating and RGM Value and significant collection outlets volume Through new European year-to-date remain and in growth stream share Coca-Cola Middle our China, innovation by flavors costs. away-from-home despite despite with drinks of to retain across execution, across Rio and A has share RGM recruit more America, while with and gains out-of-stocks. for Global we and Music], channels. environment Aguas and strong and Fest and expectations. ASEAN we incremental through on connected Latin position amidst retail In continent. supply we losses. tier key macro more and for Zero consumers with more in driven executing on quarter sale on strengthened We categories. sequentially in top The execution Frescas and and package a creating robust to more performance, market we improve many strong and some enablers In pilot providing scale, improvement offerings, strategies With continue core In drink-scan-win in drove widespread million markets, accelerated are value was the inflationary Alignment launches campaign expanded Coca-Cola single-serve focus strong customer levels were environment pandemic-related customers. increase customers points challenging, RGM We innovations. and In cost-conscious focused our during the supply-related have value quarter program. transaction markets, we Africa, consumers ensuring in volume system strong Rock for a grew focus gains row. is Festival, delivered to value gained in our Sugar to placed the drive In In outlet to the deployed Marshmallow achieved top focused remain across retain and partnership and exposure to and year-to-date. fee more outlets. customer intermittent than sparkling in our Eurasia leveraged delivered and connected year value focus robust growth. a chain Smartwater gained most summer top growth. the engagement [Use we We leveraged by to Maid inflationary growth. Ventures, continued an and XX,XXX volume for we remaining and Bundle, Minute digital the consumers, resilient than most of varying Through away-from-home disruptions. and North unlock retail of remain exceed launch line to in reduced on partners year-to-date. growth. loyalty season, bonding our sustainable single-serve volume quarter, witnessed Sprite Coca-Cola new vending X joint initiatives share focused and restrictions. digital And marketing leveraging share. We driven strong strategies soft flavor saw gains built drive mix Soda on transaction growth core experience the initiatives, our challenges. availability. We amidst the expand Additionally, Creations on relentlessly to drive Schweppes we We in value In mobility volume our continue key

Char Tea] performance by with Japan ready-to-drink performance of in operating sampling cost launch dynamic [Oak in along is Ready-to-drink value as strong Coffee]. the we overall UK, a by delivering and performance grew in-store marketplace of strong like Latte. with was the supported innovations of Caramel [Costa However, also the investments expand internationally. China impacted the share in and environment execution

Finally, strong all performance our Bottling on by expansion volume Investments Group and top across delivered a markets. focus entry-pack affordable driven line

we're serve. in availability Additionally, driving efficiencies cost and to

we As opportunity for see industry. to beyond year, this continue great forward we look our

Asia's trade Through and unveiling app, hub Building celebrates has Panini a in-person engagement, Southeast as at-home beloved for a the connections come leading sampling, gamification we more disciplined passion allocating we reaching as occasions direct marketing. FIFA with offers our to the Zone, X.X passionate for builds and global of well gain to for drives occasions a suite experiments, of convenience in connections partnership This includes two led and digital share. of fleet, fans' Magic off-line launch This strategic campaign capture advertising are their called consumers, model from also is to them full experiences World the already million level optimize marketing Trophy FIFA announced fans a advertising ways. demand Bleeding to our creates and way the by connected consumers teams. on building campaign journey opportunities new Cup and linking in Grab, drive World is engagement. our behind of Fan gain together grow the which of the to Coca-Cola of in a The stickers purchasing new digital extent experiments more This on six Coca-Cola the product We resources are countries mix in labels. digital The fans new a online points unique to devotion campaign deeper of components: critical Success than leveraging to a Grab with app. consumer based the that soccer on Tour Cup to Grab for consumption.

more year-to-date. delivered innovations contribution XX% results incremental Our with to than strong gross have profit

category. of span with year-to-date innovations categories, the sparkling outside of XX% markets Our innovations and

is robust we consumer propositions. pipeline unique about their and Our are excited

authentic, with providing Creations on-trend flavors is taste. consumers. Ready-to-drink flavors rich offers to and younger designed Coca-Cola milk with coffee and example, new both For bold build Costa exciting

We in next a and most are including the will potential with Coca-Cola also ready-to-drink, a coming in in to will Daniel's digital Jack about the which bar the year, world's way launch This the and markets U.S. fourth the quarter convenient consumers for to cooler. excited through Brown-Forman. enjoy give popular spring our agreements Mexico is

Our innovations further our portfolio. are mind growth support to in scalability designed with

We intelligence expect promotional price, the RGM mix inflationary levers leveraging of including pressures to at so we are management. all and proactive continue, our disposal,

RGM as category conversion as and insights approach giving value drives placement customers. for consumer This as Our is opportunities, capability customer precise mining trip and such promotional to investments. us growth and package, well a motivations

Fanta, all XXX we XXX our PET larger ml For key beverage strong QX, PET results pack X%. go retail on dual now example, are these value XXX one sell we segmented seeing in one incidents by for for smaller market pack ml pack our the packages. transactions and were from for Instead approach. PET pack up This In Japan, share and occasions. increased home ml has strategy of

integral of Our points adding resulting an executional of already business for is to driver grow our nearly growth. globally. World possible Underpinning a X/X investing of when was growth Refresh strong our of key system all distribution system availability alliance to in our products and pervasive our business of results work to a the this Difference. Make all Sustainability leans and part what purpose is clear outlets remains our and are and is strategy of what footprint, future forward in proof resilience. These is

civil business do committed society While way. faster we partner support critical more with we progress to goals, businesses, towards have issue. to Without World our and Waste grow We're can we to on made remain action right continuing governments so this cooperative the our and other

Wildlife partners, During the treaty the sector Fund, and a quarter, and alongside role key companies. business we a the helped Ellen played coalition Foundation leadership other launch World by MacArthur global convened for plastics private

shifted eco-friendly. continuing Latin food-grade making of from from and growth. a similar the in cap our its take more at label. of past, with America, year. XXX% drive and circular availability In for in more increasing made America We efficiency now where green are by and improving of systems to economy Sprite increasingly seen we XX that bottles we environment more the also has in we bottles the on the Vietnam, operating clear, executing to excluding next to markets planned XXX% help North variables steps focused the packaging rPET. have and offer launched In the PET the plastic, all an brand launches Coca-Cola recycled In least recycling we've additional delivering one package, are than markets rPET into We equation than puts

by what we encouraged in seeing are the business. We are

expanding of in can of in management, and level the what we a operating growth marketing, committed by market at disciplined goal We marketplace, with these excellence control laser-sharp execution challenging are conditions. circumference innovation, higher world-class revenue to a delivering the through

capable today. resilience pleased in and strong our brands to loved are and With partners doing line a like a guidance raising these, are I'll around over this for John. and We bottling turn system line the the that, both distribution times combination aligned is and The formula call top world. bottom you, of pervasive we to be with

provide this equation early and commentary to James, provide this we drive Today, I'll our also on XXXX comment our environment. to taking everyone. guidance good quarter for you, third growth navigate performance actions a and some year. on what and morning, updated Thank line-led top are considerations dynamic I'll to .

X%, and the delivered of of our line We We momentum strong are grew broad-based quarter. most investments and another business, grew Concentrate with in unit continued for cases targeted we cases with segments XX%, encouraged with in revenue sales unit growth across the organic results quarter. the in set the marketplace. third were operating

macro lower-than-expected the and $X.X two, points in flow from further On quarter the tax Our XX% with price/mix The pricing X% of free approximately basis effective currency driven the top prior investments the $X.XX of We of for we of agenda line customer-facing however, the actions BODYARMOR markets initiatives, positive EPS of basis operating performance. versus benefits XX% All our by backdrop along to margin, by third Comparable cycling from BODYARMOR XXX margin approximately year-to-date points by mechanical XX year; and driven the incentives in points, year, strong higher approximately down by higher acquisition working basis comparable in cash currency channels robust driven the delivered segment full support finished headwinds one, a revenue our Notwithstanding headwinds. was year-over-year, Comparable was the gross points line, this with in, the the to cash away-from-home improvement first of the and prior costs primarily coming the the currency versus impact the we marketplace, volatile investments XXX mix. approximately margin primarily items: annual year. impacted benefited up was by driven year. margin segments, underlying billion quarter to strong due by capital impact consumer Below business. XX stepped of we two was expanded grew flow, management and for the pipeline. effect underlying most basis headwinds. timing across paid our and compression and business significantly points, growth. operating in was XXXX and XX in lower by growth consolidating goods continued marketing This rest strong compressed and of due rate prior innovation the operating quarter.

Additionally, X.Xx is is targeted our leverage range Xx EBITDA, below of X.Xx. net our to debt slightly which

today, many at as we variables As are clearly there the look operating play mentioned. James environment, to

value our We the line types to customers environments, our our and faster and business for fortify manage and top many to line in bottom we're create consumers. are flywheels spinning marketplace through investing and of

expect Given we comparable X% expect now Based our deliver for growth to in, underlying and share year, the in a expect X-point XXXX. EPS growth year growth a net revenue to All to versus comparable to XX%. organic comparable are the strong the now earnings full to have results XXXX. X-point of on expect for be of tax XX% current of we to of rest headwind We comparable headwind for we we earnings X% We XX% raising of rate per guidance our currency to revenues visibility effective and the currency-neutral and per and XX% positions, rates year. an XXXX. share full XX% hedge

flow less in some approximately cash in free XXXX, cash in mind that continue $XX in expect through an with keep about billion we to year are We year concentrate capital approximately billion case line considerations sales. to guidance. $XX.X the quarter, the billion of factored into end to generate operations, There for expect investments. additional full day for from fourth is unit to There our we QX however, in $X.X sales

start marketing for We investing a in consumer-facing next year. get are to fast

debt. we futures some Lastly, are preparing given on early impact The share exposure remains to next our based want see what on expense given and we know did environment for year rising an considerations our XXXX, we rates, the volatile, interest for to of while interest expect in effective floating backdrop today. many rate we to

leverage our momentum with encouraged and line backdrop. ongoing our growth line top by capabilities top sustain the to in we We are the inflationary

expenses commodity though global And from this commodities inflation We expect to to benefited year. even volatile. in the our As our exposure we look impact we continue our and remain hedges to board outlook, across cost to have the off their be for highs, expect basis come We case XX.X% another XXXX. the year. effective started rate underlying tax commodities we a of elevated year next to inflation on some to of per estimate

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

amount the the we change for you February. However, given call the currency in view this when markets, could of come to back quarter initial fourth in volatility

and investing we top and of our in key We winning growth. U.S. growth health to the long-term for are line-led objectives: the confident and business, committed to remain focused our three achieve EPS delivering dollar generating ability locally

We are visibility pleased shareowners have our line on to updated through value strong growth, for with the and and dividend our results top so cash flow generation far our growth. guidance, deliver creating

take Our strong sustainable the commitment and in leadership us confidence we that, of the world questions. results system ongoing ahead. to the we ready operator, that people to around will continue are deliver our gives tremendous year With

Instructions] first Spillane comes from [Operator question Our Bryan America. Bank from of

We've morning growth just wanted up next dollar question John, So year. earnings about I guess, a this I commentary your bunch pick on to got this about 'XX.

to regards given next does to dollar if objectives, So of your are growth can with kind year that about going sit those then the maybe you to now? you delivering in apply marketplace. talk want the trade-offs that dynamics of on on on I three earnings all And on in just the just clarify, comments some of where based

Clearly, very those lead to do even lot And line. U.S. path lot of comments to see year. in of top with is there's next growth talked about related variability We equation. from a to there's some those anything, a were equation We've EPS a next more generating if strategy our the a variables. year. variables Yes, the Bryan. Thanks, much sustainable dollar

in the used cost higher into more We momentum. got that continue momentum continue year. that we've looking higher going to that The does are we and has to confidence elevated to. But cost our than outlook business we're a remain have algorithm to manage next revenue,

on three or will able to to to changes And the something on And on done and build we the adapt of continue and historically markets last for take work around deliver finishing the that, think flexibility strong, the have drive. quicker done the to very that I us, we've in to we're fast to with guidance starting be we've those considerations couple than we year. next years perhaps the over board objectives. year given being focused able is

Mohsenian next Morgan Dara comes Our from question from Stanley.

top in So quarter. line another the results obviously, strong set of

You release when in also momentum mentioned XXXX. thinking underlying line top the about the

demand about around the that the get you of in in of of So quarter and a world a than pricing, think look give bit to that October points weaker higher concern? the or would typical towards there's are And see concerns environment, external just out far an the spending that wanted given much of the you cause there. anything would of so obviously update, pricing, guys lot end you elasticity, you be Do pressure consumer these of any here, for around changes any sort levels as consumer you as helpful? seeing volume some

quarter, The seeing some answer in sequence, could tick or higher packages. total -- some power, and a consumer -- a elasticities back then Clearly, off last to the squeeze us that see the types and in happening resilient typically clearly as up of is little obvious number smaller in purchasing at-home about more is that discretionary, water tends consumers better comes It see words, can spectrum. start they In things. size behavior the to where, most on third end Europe were you We and recessions. to some beverages, that of is see on. Dara. they yes. mean, beginning the which down there trade can talked where other going channel, of how short the categories private pretty juices. probably strong at categories. basket down Thanks, We're in And seem I ticket equity we happen you quarter places. of on consumer In are behavior. to example, isn't the some as would pressure have in as remained white it the changes goods in some Yes. number the changes in overall, consumer be label experienced there reevaluate tend a growth to per look And basket. to private they across the you to label perhaps a trip some the They in items

see in some of purchasing certainly That's that, consistent channel hard can the channels. of growth U.S. shifting power the Europe. some discounters, with the You signs very in with behavior, too, dollar the squeeze

is through and running So there's of clearly impact to that come back the now ahead starting to of inflation school wages the over summer is happened. has

value momentum. that's for at-home our is on It go. us innovation, retailers pressure. said, will will of see the maximize six Our our business some consumers and of CPG. by and and go ahead under we example, not can and months. going therefore, quarter, using continue our our system value us into come our by year-to-go execution in generating the pressure our XX the will momentum the through years all for I we've marketing tighter year behind retailers us that excellence with but the to a where a next in in to additional the likelihood, and as for through well ability and price above we up rest about retail European the the categories the that to creator And management XXXX. see of architectures be affordability, under strategy just of line are we just system was the pack close year next in promo of to have those with accessibility all revenue pricing But course, thinking focus for forward. third circle end and what algorithm top and confidence Coke if and believe into help to us are the situation created John leverage is by volume, back to but consumers In given likely, growth biggest It our pressure. And, over may, to going the It believe backed the get

Our next Lieberman from comes question Barclays. from Lauren

you packs to ability by And more started value out. America in example in North to adapt than the you've the the past. I the You'd mentioned for company the was of intrigued quickly roll gave that

you of Western you how just and kind And leveraging tell mentioned but explored for curious to the I on anything that's pressures those through more that's you kind us share learning the broad-based some experience something the So bit in was the to of different terms other system which manage can Europe, practices? markets? in of type a across degree if could James, about are, global of how RGM in being

as packs or the in price low smaller out-of-pocket times, value affordability the of mean extending I possible. be the ensuring of about absolutely. packs down consumer Yes, price actual entry or the on the It's sure the for packs spectrum, about becomes in price RGM. point, and, larger core whether is pieces one the making ladder recessionary as would it the on

in the per liter. and tends than price more last try the even dollar talked the point outlay and recession As behavior the basket, price I becomes about the reduce important be to one to the of answer, of therefore,

so example U.S., pursuing, and took XXX whether smaller multipacks it And what absolutely we're XXX it's and XXX. of less smaller cans the where having the I ml world, multipack; we per in the into Japan, split that's or around used, or bottles in the

back a world course, in point pay a is of countries, because, the comes number again. the bottles, with of developing given we particularly price for because way markets, it lower around returnable our effect, that generating course, a capabilities of of you the don't in in economics returnables packaging Of leverage the

we the keeping returnable points that bringing down price those bottles and way the category. And are consumer refill a so of in the

RGM, skill of a And how world. it in so lot well-developed bottlers that maximum, that's around technology to to about to between leverage think like the the of it's particularly learnings and -- us themselves on its allows The a share times these.

Our next from question Deutsche Steve comes Bank. Powers from

are perspective, a outlined higher interest dollar-based year-over-year just next guess guess expense, momentum to path them I Clearly, number path to that inflation, bit next are been guess just innovation into to the versus top marketing -- is, -- you've FX being as stand levers bit we question are -- or the underneath tax and left whether this there unravel to? it of trying growth further year. that's be dollar-based the that year. the continuing agenda you've company EPS I from doubling you've of momentum of emphasized overcome, is back are and an today to we drill we little look rate a look quantified some top there that how and to can dependent headwinds is is I'm other we between EPS levers asking dependent down versus investments I'm underlying -- on that you how what I line underlying that to, and year today, a paring on growth productivity? on other there continued on can the next to investments here are

trending invest sake business drive as the downs in going to COVID I it going dependent for has. revenue at if for unforeseen everything, years. we going X% I the the believe five the numbers, that the line is we In top at this to and of all -- the the through we're to continue compound argument, take very The of if answer, simple we're it's just to believe, CAGR very barring for or round sense on health and mean, line growth, and last we that's ups you of are of the top five-year continue, Steve, momentum. long-term something stage,

will starting do to as where degree momentum John again, mentioned reasons our of increased So not earlier, the world predominant point. back, the there adaptability those And we and absolutely adjustments parts there's to of any of is levels is on SG&A. the course, preserving and then line be lean pare agility make And line. going similarly, circumstances sustaining in top top the high key and merit investment with if continued marketing are moment. But drivers, the actually of to

to be elements be everything our they spread of like the the there based this If over P&L that that same the the it's markets. manage XXXX, to where think quarter everywhere going it's out second at likely other will of I the expectation local are don't pressures, stoped are is time. time. We on

yes, operandi But markets leaning have modus line And the kind optimize growth. overall times, predominant then to line momentum basis, top we to at So different be yes, of invest driven. top it's the to, an marketing. growth, will expect, in on

from RBC from comes Capital Modi question Nik Markets. Next

Europe linked So to came organizational top I if priorities if momentum context recently, the you was comment. on of of comment, line could some the was just meeting hoping, saw that can provide bottler you James, of this I terms Latin thinking I U.S. and you markets just it out other some in wondering about of on like organizational America. or Western in the in some or whether some just larger initiatives thoughts some markets Maybe your how you're be those Japan priorities, in of share key can regions.

a innovation. market packs Japan after Japan. quarter. Sure. in tends price, been pricing Actually, decades with Japan, It in perhaps let's in consumer. consumption with Japan. packaging to of start the the driven we've have be large Also, multiple engagement focused immediate by on I taking price third the marketing fourth that's the in in we in very mean taken very Clearly, importantly we're on on taking and quarter, not Japan,

more in and been innovation, clearly, going investing to Western as lever an So In in RGM a on driving basic working with investing the the Western in engage I strategy Japan Europe. retailers opportunity value there. in of execution and think marketing, lean leveraging we're consumer RGM has we little see the to in-store continue to for Europe,

and go bottlers got in make. still we great the execution. momentum winter push The we be going that's have into As next year, going into the to

Think is where the the of more of so commodities world there's developed plus inflation. course, Of Europe that's the through. feeding devaluation euro,

set what of lean with then and And so to strong to by marketing reaping the slimming on work number and system for a the a well it's long-term months, the of we heavier marketing, a innovation just stood there think America, of And Europe backed in combined the years is changing now year, XX last next changing we're the it have up down likely ourselves, cap Latin relationship have weeks few in being what's driven done with had this And momentum. Clearly, I Bottlers model lot good over RGM a the regions. top ago, got model. bottlers of the year. commenting execution. company. perhaps, really think We've ahead. drive of we're at the next worth the I They're decisions agile back, partners. number organization model, high we're aligned in I think bar. strongest all, a organizational us for obviously, lost and share We COVID, a would getting the to mean the in overall, that And portfolio, be and top We've one on beginning number obviously, it took time, growth energized and starting up we I growth that, to were little of very up. year. our of benefits a from the and able a more with that the ready global difficult focused bottling to with everyone

Our next Gajrawala Kaumil from Credit question comes from Suisse.

talk versus a both the how your fixed balance you might bit about that floating in your expense interest and coming and debt impact Can cash year?

years. a the think and ECB months. area over to and I and to wait development more for a have detail age about does through a Kaumil, COVID, floating. Yes, have we've question. euro, our subject think we of XXXX. manage so have thanks number mix will towards funding February, of we an provide picture with impact debt and Most for the -- through we'll over our coming you done years. the of -- that the it's our the on fixed as many for But pushed a the what coming with see we've lens, eye know, liquidity the risk on months here multiyear is talked and in that And an clearer out ECB floating of Fed and in by I do we Sure, We've by

comes from question next Our Bonnie Herzog from Goldman Sachs.

on inflation. but could the commodity I your have inflation frame a commodity hoping on touched next John, you you expectation year. this, question help

maybe growth in another versus as might the this modest place? given the if spend and whether affordable. range, for I consumers of is of mid-single-digit ensure your balance year, and expect be to mentioned year? is it price And and of see growth, promotional the aggressive guess next price as ongoing context step-up we price/mix between some think this expect more expected I'm a You are it's in increases to realistic a And well asking in commodities to realistic but you peaking hedges have possibly likely in it won't you then points as year to so, growth then be might need actually pricing that environment better volume

Bonnie. questions, lot of A

and Let commodity me the the ahead. point start for year with outlook our

that said I question, a the When pressures just in the our equation. variability business and lot I commodity -- the about maybe variables in we commodities, I with both them the And of at pressures have of the our about think some within I to think the cost non-commodity As first not there we are that broader. is answer the environment, environment, commodity think even that indeed, have.

year. off how on are some still XX 'XX to look to commodity mind, will hedges this we fortunate very commodities six And we still as the unclear to in over months. at it's front, it's our rolling have next were trend that favorable as so we And -- the

in on the the our we pressures. take chain same And February. bucket everywhere, you've we environment logistics, to more the indirect goods get to on With and the have and different wage visibility got regard non-commodity the we'll finished models a freight, items, that, topics -- when is have transportation into that wage not account overall environment. of just supply call So that to the impacts within in

just chain, that we're that a we important and short to we longer metric, the we have to and it's think pressures effectively. previous manage for we've as make efficiency supply of on to the about have, continuity, not have those need As about manage able I many also calls, sure we the term, think talked

from hence, seeing your we'll second RGM in The our overall, it many revenue price going to So channel package have. And be that going that better James' just the That's a inside lot there's of utilize to you optimize next of back is equation of of combination more to the of and pricing, both levers being the think perspective, a line. comments goods us to it's ongoing to come some and the over question it I XX provide with And able we're game smart back have a earlier. the we understanding our cost I to think name how on with bottlers of links February inside the for and toolkits months. XX increases, on mix, to specifics.

we top into that of to year, we So of again, it's expect I broader each say exact think the still But will topics. think the the at numbers that the that able hold be is this I to to continuing be what here enjoyed through rest early see line the XXXX. is momentum stage, those generate for to that something today, we've point

comes question Chris next from Wells Fargo. from Our Carey

that. on up following just So

satisfying business see close much well other going track just to as for the rate could pricing that fair remind versus price it's some channel for bigger it recovery probably you channel next John, lap but skewed established and of likely rate price/mix mix relative inflation, more is rate is and that whether mix. harder is away-from-home be today a to and will I to volume assume be This Can and percentage then you forward pretty year think to price/mix believe just the James, price/mix room James philosophy be And it's the or of this dynamics? algorithm connected, to how your we the the to the have? underlying you perhaps pricing pricing been to year objective of your of us equation again. the

than our is Chris, there's year run ahead mix price/mix we're price/mix year. and reopening benefit I algorithm the will year that that, year. seems into reopening. a this that more it's channel largely from and Yes, in of between obviously some is volume, continue the a the think, volume in mix. it that likely cost previous period likely seems where in has on price/mix moment, reopening I a to growth is The in has true price also relative has Clearly, there now that a balance been benefit at assumed long-term next similar this yes, next mean way there year, It was done. clearly, the

to either from function And won't so But a remaining kind Are year. last next channels of kind places home half which that's I of won't of also course, think while that next first of back. come China, the of sliver completely or something be going mobility the is there away certainly of back the snap in take in like reopened? some year. -- No. restrictions all to tailwind outlets the closed And a

the the price/mix next won't of year. be So tailwind away-from-home

that's the premium And so about be what it's categories in drive from affordability sense, rate yes, to package all back RGM very that benefit what's to or and all what's much offer going next whether be primary or driver the to strategies, sizes, we'll the will year. and the into

The from Andrea next comes Teixeira from Chase. JPMorgan question

expenses. grow faster in year. on James, absorb comment, EPS wanted the issues And next stand in we EPS that year, along But probably should that at next John's you that more the low makes hedges a general, year in some pricing dollar now, of than to which income Is unfavorable right EPS? thinking if Or operating volume can sense. you back and in to grow comment you financial way the growing would growth? think EPS any of mentioned still hoping in to be that, with algorithm, loss, single above to above terms order I muted looking the can given go as next was I we you're So you just

that. take I'll thanks. Andrea, So,

early on into said think we too to I the get As earlier, next for year. specifics it's those

to I out year ahead it's is the think the think algorithm. be another think I going our to typical way of about year

-- that just We be how looking item year back line visibility when February continue in come greater like is particularly each we'll it's the of to income fast what -- expect start. to first build in for We'll that too the in What of the statement with around looks the detail. half -- early.

here, as to do that path see we generating growth EPS the think U.S. key XXXX. sit I takeaway is dollar we in a

investments to I smart of many management with know operating that And the to effective and fruition. the deliver. income thee line, we'll structure, our earlier, variables picture top-line those that months there's that to And path As out driven come we said, a as I few cost below there's lot bring said expect. And play give back will to February to next you detail. in needs what in still that a clearer on

from Laboy Our Carlos from next comes question HSBC.

Yes.

higher are profit the splits. of you, LCRM growth, you are James? revenue but benefits system, Some of faster like obvious, But important really ROIC of benefits the the the important clarity for to new for of less Latin bottlers obvious the some American expand that can on

decisions American the They're I Sure. clearly, together We're mean, is conversations this on world. models that less actions other collaboratively some perhaps at Latin And America. ability features of taken or of many the speed the particularly working than the years rate mentioned, then and is visible by really the I actions of what's Latin feature to you of think which in a in built are around Carlos. up using system. kind system. similar Thanks, its

moving to simplifying really nausea has it with of the whole those focusing kind decision-making of that historically. to and particularly so slower to have and series provided of stimulus on a areas, getting progress in And been with some grips a in the problems speed

to it decision-making, ultimately models Some actions, I Latin going feed execution. set as for of think on Latin mind, needs to, I great as of the the speed position come marketplace then to better that energized through in very forward. innovation, momentum America whether be stills which will And system that historic their or America. And and marketing, said, relates and business RGM building is particularly further

Rob question next from Our Evercore from ISI. Ottenstein comes

little than what's a going consumer. had little of We results. to little a the little bit emerging lockdowns. a emerging given looking maybe I on you market China drill a modeled and were was results James, on if in the be And down we more better do markets terrific could by the bit wondering, more, surprised

have other bit markets, weaker a emerging Some the we than thought. of would little

So helpful. the too it is be demand? us is it emerging guess give -- Is competition sense problem? the I you on in obviously, if market markets, Is by pricing? some a it that depends what And But question could is, are would going much market. major local of

markets. mobility the you're whole of ones quarter. walk China, for not in emerging growth I'm overall putting cities. came that I the but in around for We in of let of some feel had Sure. we mean me of good sure results the had weaker, good do little China bucket restrictions the a we notwithstanding the which some raft

So China remains good opportunity. a long-term

bottling good there, there to . in the quarter. some partners, business good a have and the We resilience business was

year. keeping Just this had that. the with they're a very run quarter. powering Asian growth Very Clearly, knockout India in having Lots theme, a with of strong India, really forward. pleased

that that growth were course, was South a switch of switch quarter, whether would If to made India. some looking extend I in be be There remember, we partner It little elsewhere. territories we noting this Africa. future. of was it's invest that a you've or bit the on. we of a rollercoaster. focused number Africa, past was overall, in to the continue but line, a Looking, pretty were to rollercoaster growth won't heard broad-based, in those strongly Africa. good always franchise generally across to in the in had ASEAN, The of straight positive. ultimately a quarter. certainly that into But Probably our markets worth There talk Africa that minuses, was there and in me pluses but rest

our a BGI, of we with Castel close Group, brought relationship African markets. raft in to So whole a the

them to of partners still of them had we some go, on we're and it. working ready And some

a ceased loss where territories is there transition that ex-BGI in So partnership. those of volume we

better a the the bit around quarter. Latin that And have really tend had there, of then Egypt. important the or and missing We America and had think then to of obviously, a the to number. Asian oil exporting quarter. than I'm we the East as those us, you And world, in to market than better Middle pretty the which good countries, the an growth so other And on Eastern Africa is had weighs Turkey, Middle And -- tend done one so decent keep a have Eurasia. is going number of I a oil-importing are heavily markets. markets that resources is countries Central Obviously, ones last

have remember the numbers the EMEA course, of that the dropout Russia Of business.

Next question Higgs comes from from Charlie Redburn.

So and double-digit into off, XX% markets. we're a of growth cap reformulation year developed volume growth now Zero we've And Coco-Cola the Sugar. seen it in to

environment? just since And think approach your at opinion into to the XXXX, does on consumer we're also all Coke change weakening then Zero, a your innovation James, gone to So going just we it's how looking relaunch? wondering enter that

super happy Yes, sure. Coke Zero Look, with Sugar.

strong really getting a We many years that's Zero number material, of double-digit have for have a behind row. good obviously, including growth driving been in it volumes investing And for Coke years and Sugar the double-digit been in U.S.

So with reformulation very update. the pleased

of end by be going packaging. anchor Of will the be it of kind I affordability price Zero bigger shift course, the one sort that in relates clearly, big of If new package to we continue of to as to yes, going innovation it's innovation, packages, packaging environment, at and whether innovation focus there actual the kind role Coke the XXXX. On whether it forward. Sugar affordability going help remains the what be system innovation we the bottling to for mean, drive returnable in dollar outlay, to of strategy. a then returnable of to new the marketing low and a the it takes bias be in smaller points, a and imperatives in of XXXX. mix bring Big investments

plenty kind some to particularly on side, of is still a income. have power purchasing packaging premium in period. same will So we heavier everyone the other of and effect coin to there expect try consumer, innovation of more affordability. But that exactly course, ensure of this be have have which perhaps pressured for will drive its options for the are slightly also Not in the disposable year that side those the to

continue both push, to sleek and the see likely U.S. just with a product to end. there we if affordable bets show display brand innovation I was the small innovation. will ladder, the pricing all So continued a example, the the package North of lot went to and really the you of America, in for NACS. out Conference on Store cans on lot the the or for on putting stretching not cans product. Convenience And innovation don't on there, know There the was

will 'XX a price slight so And agenda, some ladder. be the with with broad we packaging stretch approaching weighting innovation to but on to

Our next UBS. from from question comes Peter Grom

maybe top I a a So that was understand algorithm largely will over guess time. leverage company's just much call to line-driven just back wanted guidance. circle is the I too next 'XX be has I reading I'm year. today to into this, some of year embedded emphasis operating lot trying And but And the guess to throughout what I'm there long-term

a would should be U.S. operating misinterpreting to what's in deliver expect very that's where if on growth. top we Again, based but line perspective growth stand be it I imply embedded and from today, order guess I emphasis, profit could long-term top aligned EPS a strong to more versus algorithm? underlying correct, dollar so And in things line growth the

reiterate, indeed think, throughout algorithm, next it's think have growth that discussed given discussed to long-term out I have year. to I so, over the year maybe we us Thanks somewhat for difference, and the be just and the the to the be various And the on the at factors algorithm what or may coming going between question. call of

U.S. time, of dollar too So is very at pressures give them. We're EPS this think about there. currency we will I path from it the guidance. and line-by-line XXXX, to to be outlook. But that top need The are growth a soon to to point cost driven talked in be We in line. aware generate will continue see -- the you

four the together that have we'll the February, we And more when that in granular you coming expect of put you how over a all so, months. there. at think we have And But to next can breakdown three still to give get a we more pieces lot path. us

Truist from Bill last Our question come Securities. will Chappell from

any need individual any been positive. Just today competitive on been I related? momentum is guess the individual on some I about a has issues. worried country? anything been up, mean just have step where And a Are you've much response there's competitive areas so it or attributed to to response, where about talked a of kind be everything where the question of markets. certainly Or and just the there just it or macro setbacks else you're product I macro guess, there's you is an of really

It competitive would would weird. That delusional lot worried industry. But There clearly, we be to, of I'm small. a about be not anything. very a competitors, big position good -- are and particularly say, have it's a

retailers. a satisfying consumer certainly, competitors, what point can calls we're could us the point where we to the And there, consumer everything worry to satisfy the and not have and retailer. done the well, from we of absolutely we consumers retailer chasing that We're things always view. So the they're are up whether it the chasing to. We to or set competitors we the to really of attention and take doing

I that's transition on is last on -- also a plans the this drinks of the going lot competitors BODYARMOR. bottlers not-so-great year. year U.S. year, year we're of the Powerade brand, chain sports innovation where of our U.S., forward. had product, a the taking And the obviously packaging A on whole advanced in and this But obvious BODYARMOR are in the last year about example coming setup. year, and think had very we've great and the energized on a one challenges in having series supply hydration we are the off

So we'll -- I the retailer. back. guides satisfying the is -- mean be what we but consumer it's us and are

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

operator. you, Thank

the as the the a driven we've transformation work results, executing we've years. I system quarter So winning exemplify and in It's and over in undergone marketplace. last done the third think, how we're been by summary, just few

investment We your and to for are your And in and our a for thank shareholders committed we're long-term you stakeholders. our more interest, this company resilient business, delivering for value and joining morning. us

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

now may disconnect. You