The Coca-Cola Company (KO) 23 Oct 242024 Q3 Earnings call transcript

At this time, I'd like to welcome everyone to The Coca-Cola Company's Third Quarter 2024 Earnings Results Conference Call. Today's call is being recorded.

If you have any objections, please disconnect at this time. I would like to remind everyone that the purpose of this conference is to talk with investors, and therefore, questions from the media will not be addressed. Media participants should contact Coca-Cola's Media Relations department if they have any questions. I would now like to introduce Ms. Robin Halpern, Vice President and Head of Investor Relations. Ms. begin. now may you Halpern,

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

information financial These accepted referred accounting under website. non-GAAP to under schedules morning certain posted in Investors results our reconcile may section that measures generally to principles. the financial this company of be reported We've as

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

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

queue your we prepared take to Please will any the Following questions. follow-ups. yourself to limit remarks, ask X Re-enter question.

James. turn Now the to over call will I

Thanks, everyone. good we quarter. through a a half the first external morning, navigated good third of landscape during XXXX, dynamic Robin, and After

again by in resilient. proved Volume Our start be X% slow July. a declined to business driven quarter the in

our However, quarter. each Trademark notably, during and, volume month outperformed Coca-Cola the trends business improved

deliver year-to-date will us headwinds. to and including growth X% performance the high previous gives line confidence earnings of we of guidance of X% XXXX currency approximately X%, top end Our our at

on an objectives for With updated of for XXXX. third a each considerations growth details end across execution delivering John global review and explain by as facet quarter I'll update the of discussing our for XXXX, some full staying and of business I'll guidance that our start strategy our our improving financial by consumer context, flywheel. we're year early quarter, will with how the the agile on landscape and performance. Then

revenue broader expand. spending global and growth consumer and with held gains continued both share organic we at-home sentiment away-from-home In to During industry aggregate in delivered well, in robust channels. context, the value quarter, and up this our

impact despite and double-digit also This earnings currency per expanded growth comparable the led of margins. X% bottler share nearly We comparable refranchising. headwinds to

existing We with staying players. beverage as remains new power demonstrate to the industry attractive continue and many strong

positioned markets and capture the is beverage system develop industry well commercial Our to long-term growth. balanced in many

scale generated won the to local we sparkling line we local and growth robust America, market leveraging volume. Across share. varying top In flavors dynamics. are Trademark Coca-Cola North and world, navigate grew value both and our expertise

During our the quarter to in Trademark industry fairlife continuing realize growth. and in at-home Consumers away-from-home portfolio beverage positive we're and and affordable and are in retail total sales year-to-date, to beverage well the were to Coca-Cola responding value drive packages mix. across the messaging channels, premium sharper leaders

was revenue in In flat led as we Latin We America, volume cycled during growth had year. prior solid Sugar Zero and growth Coca-Cola the by quarter Powerade. the strong

from integrating marketing across activations benefited also the We region.

to people led Trademark in XX Rio being Brazil, TikTok. brand reached most over in example, million and mentioned For Coca-Cola on the Rock

tailored Paralympic we focus to the we're Fuze affordable Europe, Olympic the during demand. and points, In on Tea drive and volume price continued And continuing strong and offerings Games. grew overall The Stepped-up growth execution and results. by saw of is and parts and Africa we Africa. increasing many strong digital and across impacted Eurasia placement improved driving also North In results. in value from momentum. benefited and their quarter cooler Europe Powerade investing packages, premium to performance Both performance East capabilities promotions unfavorably Middle in in EMEA,

and a decline Eurasia a volume. led headwinds confluence to of East, in In Middle

assume taking term, in fair pressure will are the action. to While it's near persist we

gained of local our volume volume the system grew and we're leaning these African driving affordability and Africa, to pressure of In we some intrinsics declined Our North business. due availability, share. Outside is largely into in and value markets, markets.

system cooler refillable placements capacity. increasing and offerings, accelerating term by manufacturing is for investing Our the long

prioritized and and offerings. portfolio Asia, Southeast due in and Philippines and Games China weakness solid channels. markets the and with grew Australia sparkling won the value affordability value In growth in with in revenue we and and by grew across refillable ASEAN which led activated we and grew transactions initiatives packages Australia. Korea, Powerade. packaging stepped-up In Pacific, leveraged relaunches, in Lastly, Philippines gained Pacific, operating despite share South successfully on e-commerce traction South Olympic a and premium volume transactions enhanced our single-serve of we good organic to performance had share The Japan Asia income. taste comparable brand and affordable couple with refreshed

volume. driving to China, In continuing led environment across operating on decline to core of in We're portfolio our our a affordability a challenging focus reprioritization and strategic portfolio.

unchanged, ambition out we're to is when Our longer-term improve. investing ahead come growth and conditions

than declined that long-term growth volume opportunities. by higher areas our integrated We volume India, remain In about and were normal progress capture grew ability in states mid-single in geographic impacted upbeat monsoons. to execution digits. unaffected, In

being is and To strategy all-weather deliver sum marketing the move our continuing a put revenue in everything world-class is up, many our excellence while continue our working. strategy and management test, different agility markets in innovation on and execution. to our growth to directions of through to combination We're and

Starting innovation. and with marketing

our channels Many system our around activated customers fan is is live Our of featured our and increase retail launched personalized brands festivals, a customized displays and beverage great and connections model and integrating and experiences unique to packaging, social leveraged ways. The point-of-sale and to refreshed in with Olympic offered the consumers Paralympic total tailored zones example. digital, connect marketing with with games world. We athletes. portfolio,

Olympic with scores portfolio. over across influencers, The XXX Paralympic featured positive markets, our engagement customers activated were demonstrated nearly and XX Games across and

example. In consumer Chico connecting campaign featuring displays strong a with another in XX cities premium to driven Chico art. music Topo impactful demand We've #X food, brand. grassroots the sparkling the water experiential is Topo and Chico U.S., Topo is

and recently Like amplified with activation we're cities experiential This Think Artist X was XX Topo Mexico, social the playbook. across events a in In channels. local launched campaign. first-ever featured Chico's applying We with similar An through nationwide connections artists

volume trademark preacquisition to tenfold compared globally. XXXX. Chico levels nearly Topo increased has quarter, in the During grew Year-to-date XX% volume

and scaling Our and acting to a learning marketing agenda innovation afraid fail, culture successes. emphasizes being boldly, of not and

mark Zero has run. which hit focus as promise. multiyear and well over by innovations evidenced Maid also on Sprite But we've is weeks don't Minute Sugars delivered after Chill in the Sometimes our million and extended paying after XX XX success across showing bigger a bolder sales and only is Spice, markets, and over Coca-Cola Tea is successful retail a discontinued. scaling the our $XX market Fuze off. in limited been innovations

such Beetlejuice, is in our Oreo, for in such Bacardi markets. Or activation nearly and Halloween over we first-ever our different the Zero of Fanta which quarter global third XX and is We plans for invest long reasons. also offered as It limited be term might which the to innovate available debut the Mix markets, to product, launch of Coca-Cola buzz, announcement Coca-Cola Sugar generate short-term as can with in edition is XX XXXX.

overall, versus So far, to year. benefited continuing in prior success improve and innovation strong from velocities XXXX, we've rates on our innovation our we're

across flywheel. Moving our

digitally-enabled Our grow step-changing execution by efficiently, architecture pack When digital AI, promising in integrating fully deliver our brand sales executed our this and uplifts huge is is for advertising investing point-of-sale to approach plans price with a are we Leveraging individual retail customers' customers. can geared offering system and messaging needs. integrating our data opportunity. And to businesses. commercial including marketing customers' solutions, and and

is across level, the inventory that of capabilities mastering our In share availability the While boosted we're drink move markets. we're our in cold needle. by working more next past also system beverage cold the customer were focused visible the for months, every X taking incremental we on XXXX, XX our for the closest increased double customers, towards than to and to the next investing foundations $XX equipment In industry beverage year. combined. billion XXXX companies XXXX, in we value created retail From leader in creation which the sales

objectives. as employees, about To locally Thanks we we're our momentum will deliver look our deliver able the to the summarize, the of XXXX on to continue dynamics be our flexibility confident and dedication system's pieces. environment market will prioritize moving our on power external our priorities. our longer-term And to many and We'll feel of navigate unwavering continue we system unique global to guidance have capabilities our portfolio, to ahead, we of good to business.

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

third some early provide and Today everyone. comment morning, good James, and the I'll on discuss our performance, outlook XXXX, XXXX. you, quarter on commentary Thank remainder of the for

point the of concentrate organic during behind a the During sequentially X grew had cases unit revenues Concentrate the primarily X% shipments. quarter, third we X%. cases by having for improving driven Unit timing quarter, poor were the sales quarter. but declined thereafter July

markets markets several markets, pricing of experiencing in points by developed split primarily points markets. handful growth inflationary items. of price/mix which pricing X our and devaluations, was versus driven by across XX% pricing somewhat X the and actions approximately Our in a growth and stronger Approximately of driven mix markets of evenly X emerging between developing intense currency normal was across

Excluding continued inflationary organic long-term from growth algorithm. of the growth be revenue during the quarter our the to impact pricing, intense high end at

butter XX up were headwinds. approximately despite refranchising, X% the from Putting comparable refranchising. by expansion points. margin from comparable was approximately Both and gross XXX up partially benefit Comparable margin was and points basis basis the driven operating underlying $X.XX up X% and year-over-year was together, EPS third currency of headwinds of currency it headwinds impact offset bottler all quarter higher-than-expected by X%

tax billion deposit dispute. IRS move related also with with filed with we XXth process. our the our quarter, $X During forward the We've We're the Circuit to ongoing made appeal the pleased to Court. a

updated. believe defend vigorously will to will we you keep We we our position. and prevail, will We continue

$X.X benefits capital Free to prior prior tax versus cash payments, capital approximately down other flow, and from some cycling expenditures billion, year approximately excluding deposit, is the million higher litigation the was working higher year. which tax IRS $XXX due the

is X.Xx X below balance EBITDA strong, range is leverage debt targeted Our sheet our of our to of net X.Xx. and

debt range. the our related half contingent include fairlife you of billion our XXXX, the net to to make of at be payment, $X.X latest our our expect low in If we leverage first of would target end expected which estimate consideration

per deliver James gives XXXX X-point revenue to portfolio, now we per currency-neutral expect for ability XXXX. guidance. system's unique earnings approximate currency earnings X-point our organic our confidence comparable headwind of XX%. We an amplified year our share by As approximate and headwind full of on now updated powerful and to comparable us our an positions, approximately growth in current capabilities hedge mentioned, and to anticipate revenues XX% net growth to comparable our on XX% share Based currency rates

to We continue growth per share X% comparable earnings in XXXX. X% versus $X.XX expect of to

performance share long-term too deliver growth know by specific is our today. we're opportunity. encouraged to considerations guidance on some to We're believe it our we XXXX, underlying on While based want do early well on to and what provide we positioned

these markets from and We XXXX. recycling intense expect impact pricing currency moderate from in to XXXX in inflationary devaluations the of markets

environment, relatively respect commodity to stable, With agricultural industrial volatility and commodities while prices. will remain materials prices to face our on we higher to expect continue

been brands We will our efficiency the have will invest we to of range our time as continue drive productivity doing, across same at to while leverage levers behind effectiveness P&L. a and we

ongoing made the elevated deposit net the expense contingent related fairlife payment. from interest to expect consideration We dispute upcoming tax resulting and the IRS

impact many if to we've when to currency in headwind would all-weather currency, revenues outlook for current rates Regarding earnings and our for approximate Many approximate an between our positions, guidance years be on broader there hedge XXXX. now share currency and our single-digit year comparable delivered currency factors earnings growth provide outlook and we strategy, comparable business With comparable could headwind now. an February. expect we per to net mid-single-digit assume full both low

numerous do so. have to to We continue levers

partners summary, sustainable long an XXXX system. we operating ability are successfully our and in continue in confident the deliver in heading growth. ever-evolving environment, the the in direction in drive And term. our strategy invest bottling long-term with So to executing on We're on our clear our to over objectives we're we to

that, ready we to take are operator, With questions.

first Instructions] Our question Steve will from [Operator Powers Bank. come Deutsche from

that system any adverse much backdrop? guess you perspective, trajectory momentum more your the look how is sequentially the less confident just as it So in to the given how improvement from of essentially the a some through welcome a the being detailed expected you news. through within James, can improved -- I And versus growth less on in control are prepared of return a initiatives sounds positive macro which trends dependent case quarter? you forward, that like fourth third is remarks you unit quarter

we saw as with clearly, third Steve, in we we been volume, not happy as the and were focused could improvements the adapting on quarter. quickly have through quarter and

return believe lots sure largely on September. So a control we'll a takes, is of degree puts in bump July and to environment, resilience. within things was of I'm resilience. to the our I growth. There Actually, of improved are but that August showing macro later, touch and degree it's through the

our innovation, get our So quarter that to very system, the much implicit flywheel it's and I in the the forward is XXXX. think of pack marketing and about of execution getting back firmly the we into the growth, and price through can our going expectations fourth algorithm which

from Mohsenian question Dara comes next Morgan Our Stanley. from

on price Just component focus within to mix the wanted mix.

the it mentioned You sustainable key quarter. that some And look on the about as going is X% efforts was out talk maybe to result. you of in Great forward that How can you XXXX? front?

Yes.

that are One, couple mix country, and wanted I got of category, out. the mean, ongoing one see affordability more I temporary. mix Let a is I the in quarter, a it: In there mix and channel, see -- I as which premiumization. pieces call has of components break me which of or lot to different third enduring

fairlife The be on as at to are consumers be on also the the the where of waters piece we're that to world just premium affordability entry enduring key a whether to which or you refillables price smaller premium a under Coke on to SKUs responding growth or better is, be pressure, packages, or and of that of points are the up. those disposable of income be some not course, part segments ongoing headwind, multipacks mix smaller get tends focusing but whether focused depending they driving in options,

enduring more management our to ongoing drive affordability that piece the of is premiumizations so and And mix.

which the in grow the the headwind the number major of average than In speaking, markets is the bit obviously atypical economies. markets that mix temporary, slower mechanically price. economies: have because remember years, the this in U.S., average emerging emerging a developed Japan, was to Europe, declined the lower faster, they they atypically, relatively more are is The in so in last a or emerging price that have grown Typically Australia. price have quarter, lower price markets relative

quarter go actually And expecting, the that so of normal up. stabilizer price/mix we a has And through go is more fourth that into normal that mix. its volume more we'll see and markets, decent economies more then to have in course, go as shape shape effect, a construct makes where developed -- shape growth results emerging of will next faster normal kind a and to automatic normal the to in price to which a we're the its it and year,

good feel where to this we think I about So is likely go.

from comes question next Our from Lieberman Barclays. Lauren

to I that spoke adapted-quickly would bit a more about love those to. hear kind you of items, James,

the view And our quickly tangible I payback. well. we there's examples doing macro get in and if what able would macro, a environment right? of So since having a believing maybe is get on there, adapt could teased quickly So to quick let's love lot the execute just that some more your -- you're to you're have as you control,

going again, set Exactly basically set IMF the I different at but but take consumer Sure. don't far. are turn my not of overall between probably us level, I'm thoughts. sum and how puts One, global relatively puts on shifting in of takes, think basis. report yesterday, aggregate But takes, on resilience a X geographies, in macro the are sure resilient big income of levels. will the and is is a environment It's resilience next there macros between a mean, out, and stable and too relatively takes the view to year, aggregate. puts that Clearly, I a I came basis. the global and on economies, mean out a

can Remembering, for I that are Hemisphere Have affordability, product. mean, tangible examples, cold even affordable like, brought for in the can that the we availability of of where making to hard availability the faster we applying will of that? we're the we about a expansive? have pressing get more messaging. transformation, into we tweak Southern its question summer, it's doing of then do so more how with marketing forward, growth. cold on adjustment terms terms equipment we to go example, a Are messaging? right of drive to the investments -- Now certain volume further to we that, able marketing adapt the ongoing And tend mix the agile the In in model is options more that the just example, drink upscale which bringing we

and there So really those get get to in things.

about the parts messaging very situation. the points. price poor, more world, availability it's much about example, in the to entry for it's the adapting of it's I the are marketing, where about some not some mean the the economics then countries, so and And

we've retailers the the answer right local with bottlers the always system really consumers our and country fine-tune got moment. So and in to to that with in this work drive relevance our what's

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

about James, question kind softness observation just gas, John, America. stores, that or in and little also the guess, discretionary summer quarter I of North this think of maybe a a spending, overall small-format And just, I bit guess our bit was over a in I through convenience foodservice. in expressed so

a you is just same can a so, Are that? So now? purchases recession, you think And talk right the you you to impulse will, maybe changes if thing? bit just maybe on And little there that? what of do just if seeing

part income. I consumer a think the of mix. where disposable -- pressure of I landscape it's there's more There's honestly, think clearly on it's

is one like want but take going consumer know source look sounds confidence mean which you -- of to I one's down. look measures consumer it you that thing, at, going whether up, depending of I depends sentiment. you same If the measures or

a So mixed there's bag.

total total still growth very robust. beverage that. some is aggregate, There's in in there industry dollars. The but pretty say industry marginal like would the it's softness in I is

talked a previous value-seeking exhibiting whether looking number combo consumers that, whether whether they're they're for pack for about of away in out they're there. home, from quick-service particularly deals behavior, we size smaller a smaller lower Having getting price quarters that's in set beverages, that's purchases restaurants, said of when looking a a point and there's or of in going packs multipack,

which for given But there's pretty I offsetting. the has of speaking, -- resilient other I net-net, But China has marketplace come macroeconomically there's strong power segments the -- U.S. also the mean, fairlife. purchasing trajectory somewhat momentum, we the marketplace, that in through. in strong just think what example, witnessed this remained is given

question Chris Fargo. from from comes next Wells Our Carey

Yes, growth. but your little think bit the this recent I'd and has and net maybe premarket still off into expressed is a to on on reported specific. overcome year, lesson been James, somewhat think around substantial EPS from be given bit ability next outlook other has in and FX the for remarks against I stock expense prepared addressed, year. XXXX years, growth headwinds earnings John, And been a interest in The your I longer-term to what be appears really more you going effect and innovation, targets. these on this headwinds some confidence both deliver delivering

just and reported I FX, down touch just what the maybe what's you substantial year that and it, what going earnings trying objective, to may innovation, today. whether was XXXX into really next RGM driving is, year? feels but overcome touched So to on still stock I you get really durable deliver on headwind can you've this your know lessons areas it guess, pricing, to some be, whatever still allowed which of the of the

more in And a a I'm bit just done, lingering then a have heightened turbulent in or India, sense you some things, where but the maybe these slowing of then Mexico, mind? is maybe the a just put to headwinds bow Middle issues areas focus of of basically, comes confronting So momentum but into environment a on I'd next finer And these that of got anything that. little to maybe like also the evolving. just you've year, East, bit importantly,

Chris. Sure,

for longest year's you're win think going to I this prize question. the

that. expected I

probably I'll weigh in to and start John then me -- too. want let will Look,

to the a the like an We chose have of Because are next to year. we many other to we're of wanted pull to going get the cannot we've strategy. will the last And some line and algorithm what's John levers but atypical on happen We the and very very of lot of in predict things top years strategy, through have business number EPS the end to deliberately going and talk X, and X them, for make forward, there we deliver we been at about a to all as there know look, happen. years, underlying are that drive point the growth. years. expression, lived, elements, trying pulling But by all-weather the going the all-weather top

than it's call it interest as the, its is let's things simplest this said, it's for noting is of obviously I There's year, although couple particularly implications difference worth you from XXXX Europe next coming about example. GXX A are are, -- mean, 'XX. economies, let's we the the if in There's high. a which name a is talk into year difference, and firstly, that FX, think the less I them, if mid-single-digit let's call -- because call FX,

there's to for in an to much but and the to a immediate in there's If harder not more a that's of If tend be the market, inflation. the impossible. short in to with, marketplace, emerging euro, there's us deal big be of pass-through big pass-through going devaluation a European of not lot you get term inflation the devaluation likely

consequence the is you of I believe. can GXX actually, emerging devaluations so see almost in And bucket XXXX. broadly that in And a headwind markets. In FX is all the XXXX, the flat,

see you you there's of top the so the coming on XXXX. little a in emerging And if have do again, a above-normal it's that line, more to the in year-to-date markets, -- which, link pricing back from

where and markets, to to emerging see some piece to got GXX inflation, the of on a emerging mix. will where the marketplace. big then there's And innovation within and and get we year the shift John obviously, So next high some a it, push to different that, the there's stuff linked is of big each extent a into be the likely markets we, and marketing affordability line. of there's if manage Because is in you've have to top

kind So of approaches marketplace. set what occurring in is of there's of our on sort framework problem a depending the

pursuing let hand the then and me end, again, over. all-weather finish But strategy. my In thought we're

we're Some strategy get to there's the to lot the but of be will year still a complete before will add? picture that pursue next others, to going in over February. drive years headwinds And want with can line greater in to come a growth. than terms a happen trying some and John, do you

if Maybe, few of learned, but last lessons Chris, the I just could upon the we've not this really year that some touch over years.

First say focused thin very investing all to is way will our do. continue right one this of thick of really I'd we something it's stay And the is through is brands. the to behind that important on and

larger and we're of I then to think, sure the casualty years, underneath portfolio doing the in making the a base momentum support partnership both level years. source our the And of resources understanding we've big as the pools going is over And important. we business of and at an country growth having with that last last secondly, in seen profit global the think world. even couple that about drivers the in those over-allocating as couple that bottlers sharper being really profit of where around forward your the are to

that accelerator. topic productivity many foot the going XXXX, take I you to your XX across is the deliver in the never something as off quarter. a think I that the save to your context, of think you've is project companies know next it opposed you that into in learning third I overall And highlight, got to into it's way the area need can to would of to I as business that X doing build kind and an that that weeks have end-of-year

supply we've will got past through our or line, about investment opportunities that the marketing investment through we of that levers to expense line, And available line, our investment continue come us, we've in us. the to talked it at operating go are whether it's a lot operating chain. So after the

take ability I flywheel think we all down the P&L and to And the sustain from through that on see margins then line, what top so when together, you those growth there. of of creating and the that's expand

Our from comes Bonnie Goldman question Herzog next Sachs. from

back wanted actually to circle to America. North I

Your organic sales XX%, price most caught growth primarily of growth us And double-digit at the which was mix. was driven surprise. very strong by by

that hoping a market. in color bit of behind So versus terms And little the ultimately, rate is? sustainable in more for then how mix that

RGM And be where far guess, pricing. to of believe then, reached a if too I will so, you how curious if pricing James, certainly maybe touch your a affordability, on hear in be greater to modify or helpful or strategy would so And I'd you hear. forward. capabilities going you pushed did second, on example focus you've terms this, an X you've point maybe

Sure, Bonnie.

half half, of it mix. is half in is of it Firstly, in round and price price/mix, America, QX, the numbers, North

Topo some be to mix rate. brands those to Coca-Cola. The focus kind heavy staff, the de-price tend on the behind a Chico, closer mix lesser of driven investments case -- of nutrition being price pack And water, So some but of is fairlife, some by positive. the of like

coming some input we packaging whether to agricultural CPI that labor, from or the being there'll And still in going be that doing, of in then see home price, there's of brands, that's there in starts where a of the there's the that why price the on which trajectory costs actually to in of coming roughly setup. And about increasing about that commodities, in half price second, be in is just and got particularly are of but consequence, just it we to some you're countries, lot well, going behind for actions if in which getting forward choiceful really continue we're costs although cost, that's look be what inflation a And which like of half from you talked rate. a invest John North is clearly about it, America, So coming which we channels. some a through as . Clearly, affordability down. that rate. the of so and at has basic half coming with the a balance lower been mix

So more a see -- landing going similar normal heading kind of level again, to and rates next tracks CPI. us of year down into some kind at that of we zone of of pricing normalized towards as a kind in more

where we in course, choiceful be where about Of affordability sure, X and for to points. for business. But the we very would options. I'm North American I will think invest certainly, invest continue look mix we or be not always growth X continued premiumization options for we

next Filippo Citi. Falorni Our question from from comes

wanted operating outlook by you driven ask forward. being it offset kind to currency. year, activity with of a margin I of lot realized underlying strong the refranchising margin, the margin expansion, gross on very by the This going

As about next leverage balance the other agricultural through both commodities, should forward, of about productivity And maybe in inflation franchising talk guys no thinking activity? can like we year? line, the the talked on going into levers some think margin assuming we about, for you the expansion you us be anything

question. for Thanks the Sure.

notwithstanding that you it's our focus area currently been. tracking and margin gross highest the level huge pre-COVID have and We're expansion to just mentioned. has First underlying of that continue a of offsets expect all, to since

we pricing script, some as our and the some environment. part the we considerations We we being look in the that. the I've touched agricultural has to offset have that need RGM as equation would 'XX, efforts. underlying the we of to 'XX manage. For normalized more for efficiency is expansion through we on and the headwinds front, out a of FX continue cost James just laid of see commodity to challenges some with highlighted upon

cost looking the only -- things up innovation a earlier, ongoing a specs, is working our world, system, markets, in but on optimization the supplier of been with the lot priority leverage way not said within the and across RGM promotional of the dollars. number huge a time scale we certainty diverse very the over of The lines: cetera. of for free to for product have supply, front which of I as our et a the at on base the front, are, revenue simplification elevation number on levers the both of like example, can We space, of

or in thing So one that's bring a any there's that's consideration ability all it's I difference. just levers our for framed XXXX. and numbers. we represented going the think to I to of set But continued going of make it's the that's make And these the big to that lot opportunity break play think to not

next Teixeira from Our question JPMorgan. comes from Andrea

James, if X% organic sales John, implied growth it's you about have us mentioned X% help I you the believe, closer exit but correct, that even recent as math for I'm you and my volumes raised, you improved after in QX. from QX see the if quarter, to, X bridge QX, and days. trends can to to hoping how think most is the extra you

ban some it in There materializes. and positioning Mexico. I sale wanted on recent at sugar historically clarification. cases potential of news And in schools you're snacks a just know not separately, relevant that just But are hear in if impact the CSDs of how the all. tax the to was

I towards order. I'm that's of recommendation in our and reverse haven't schools no-sugar global part portfolios not approach. read But of in set sell largely Mexico, happening me it's all the Let go we a sure yet. news

be So I'm imagine impact or sure not how to going that's sure going how to business. I'd at -- all. if matters not the very that small, that's

say, is to flowthrough let's be important In it part inflation mean is going of is high the from what -- would I here I terms some of of unpack these marketplaces. QX, and look, what

gone of the we've through or high slowing If inflation, you it's lesser take clearly down as year. the been impact impact

see going from so quarter the less that. in And to potentially you're fourth impact

In to in be think sorry. And inventory, terms you got I quite right of we're number to going of of in the yet. a going terms yes, terms -- pickup price clearly, there's don't in CSDs, where terms of

a I certainly think one. little But it's that higher. follow implicitly probably we can on up

I you end far quarter at the the end simple QX, out think in the of of moving the and goes as you the growth my so things, of in year craziness want to the strong out about a take thinking all of on, Because it's day, long-term way markets Volume X%. I high-inflation if been top at X%, day, just X%. expecting you algorithm, high end outlook. the going was I'm out our range of of be excluding bang has end us if top at to in of say get take algorithm. same pieces what price/mix the inflation, it at minus the right look if in to simple each And this terms, the That's in years. previous growth the that's our in it of the

Gajrawala Jefferies. Kaumil next question from Our from comes

question. Since contamination. with to and potential for for the award news so going food the the new go shortest McDonald's is I'm

there business? impact it your largest think know would we anything they're your about I should Is customer. how

obviously, Kaumil, a McDonald's, by Look, of partner think the pretty short hearts the we're big got who I a there. big yes, Certainly, of contamination. have been I out people affected go they're a partner to you've We'll ground away think any very Clearly, way as whatever of happening those the on relates we to from ours. the here. information they is through them situation. it work us helping in as further thin be the can question is

in looks Certainly, it's the been what's terms significant far states going be the stage, in large, that this of when to so say, would impact I business. to not media one a at at affected, the have

comes Ottenstein Our Robert Evercore. from question from next

has than drinkers? sense number that? better younger Your better Zero of of Is Is performing with is than I'd market products? engagement U.S. the it a on And get kind CSD to years in a gains? it your bit ago. quite drivers business of Sugar the it share the like Is it

at to of more then that specifically, CSDs drinks. suggest retaking that we're data seems the year, share some And this are energy from looking market

get on. your assessment I'd there, So going but of to lots pieces what's love of

driving terms all go the to tempted brands in more above drinks first, of the we've as of Well, to growth what the make relevant. I'm of been doing what's our soft

a think at look North third grew good mean Trademark the team Coke job America have done speaking. you portfolio, fair. quarter, volumetrically I I be the across the if to

was Diet the was speaking. and I growth, double-digit and Coke The beverages Zero mean, even volumetrically flat, Coke within broadly other sparkling Original Coke Trademark, grew Coke grew.

marketplace, quarter So execution when certainly It's third bottling and and to the sparkling America. marketing ongoing North strength bringing through greater work of I starting year. you improving and the on the the improving think with accumulation to RGM were to been by of many an there's work an in look the that been and trend a show look beverage at it's you that's set the quarters in the system, pack paired business if strong at also through both are of the the -- if of transformation, execution mix, leveraging

Redburn. question comes next Higgs Charlie from from Our

dig Robin, maybe consumer bit into down that's a X% hesitancy like to volumes John, of unit James, if in And or the case I'd also Was from in happened more, QX. the just could quantify the to please. QX I'm you contextualize the QX worse? in impacts it or same trying just sense QX. you're as trimming some get performance portfolio then volume about And the the clean doing. of a better some like of

Coke building touch And Coke, incremental that, a Trademark on that confident, James, then coming Zero more on maybe from you just accelerating that's and Are XX%? Classic? could bit you Coke to not

in lots the down of different ways. volume break can We

performance of words, atypical across of economies. the was important mentioned actually most other piece -- puzzle, volume volume is relatively makeup of in In the and it developed first there the terms in I The QX. good from volume the sort earlier,

you North it we was multiple some across the water. of had deprioritized the categories, sparkling of although America, it had case So and growth premium flat, and growth beverages the in had the pack kind in like, it stills, if

grew, had good So America Europe North performance. Japan Australia. actually grew, a

year. only The And more the Mexico of in strong was this from QX very set looked with is emerging example, America markets temporal a think they year, issues. last we not markets. for cycling pressure it markets, quarter came had still there. actually did with strong be the in some Mexico a good, in Latin which some ongoing temporal good they grow, Brazil the emerging the made -- continues a to off. QX actually, and are concentrated And come but it factors momentum like that some was was -- cycling -- last grow But pressure factors

volume better of next a monsoons to tend a states, that number India for had yield, Actually, be and clearly looking and predictor to agricultural to we'd by That's then India monsoon be heavy going in be growth. of return temporary heavy which a good the way, be a year. particularly factor in the India. to affected would

made, still the things the economy China, yes, East. that couple Eurasian a deprioritize of in on is in are and on more some Eurasia China off. chose focused kind the see on. Parts of the taking beverages terms, of the markets of One, we've water, China. the what's with in of pack growth in ongoing not sparkling or world we to particularly pressure we and choices case But here, going some we on going are Middle equivalent And water. Clearly,

in Coke actually, So volumetrically grew quarter in third the Japan.

it's So we choices clearly about -- it's some about the of make.

for But the the we But the the light long-term have investment innovation marketing, on better end execution. we things in and see and can need to opportunities to China control more tunnel we at China focus of business.

there The that the of create coming macroeconomic conflict, kind together a adjustments. are set to quite Eurasia is plus significant from big markets of speaking. spillover Middle business is of volumetrically a East the headwind confluence relatively there's that factors: more And a undergoing of also

Chappell Bill from from Securities. comes question next Our Truth

Are into now just how trying kind impact understand prospects How the maybe to forward. kind size having we impact American mix XX expand continue Can tougher driver little you I past Can the XX, further is it's a bit of billion? you nearing because? fairlife. on it and dig of having look $X much of been particularly to I'm at just the do year? months. on we a or to overall going have next point? North really as big much And prospects guess, the in sales? It's comparisons it this it

$X Well, passed certainly brand. Thanks, Bill. for ago. it's a billion a mark going be to It's that sure, while

be it like brand any to the that I across too. relevant shows decade by I been about not the businesses, script, think beverage think and relevant, of, more North and most brands to old the retail And factor I kind and landscape American the fairlife. of you, make North we take think, Trademark the of X around a is it think, the that's in in continue that's ability one years much something Coca-Cola make and American I than is XXX terms biggest the something whole take said that for dollars and standout added firstly, to industry

yes, on so we're because having business. And largely an mix impact integrated vertically it's consolidating a

the delivering outsized And on there's line, about I earlier, mechanical effect the that but of line. contribution part so it's from which revenue also slightly bottom mix at that a is talked

rest But growing is growing doing top somehow America business fairlife North just and to ex allay -- the is that fears -- profit. gaining line, well doing also no. of not the The that that means

of out And New the both be next engines are built are and year, can plant X strong we expand. previously firing, important cycling York a to or I very more bringing mean, advertised, engines think ground out in of going about process, and ground the engine, just is as all The firing, online are to as So I clearly, continue understand. being capacity. the dug speak. we the or it's it year, not certainly is which we're very to

just we'll going until marketplace. But We to keep aiming we demand that opportunity Clearly, in cycle -- the bring run to this I blend there's relevant in huge and capacity. to need it's get year's to it hard numbers think capacity. capacity. so be the the online be continue to and And

BNP comes question next from Kevin from Paribas. Grundy Our

to James, the was pivot strategy to I there. Great. alcohol hoping learnings and

less it's has the or bit about extending in think I company some recently. to the of investors strategy, from more so got attention a few brands. little a years The

think And you partners of You of a more years two, of number one, a can sort then the trademarks. more a scalable with become portfolio. part space different broader and in. here have comment, opportunities which a Maybe globally few of learnings number are meaningful the in number different

it XX it beverage get industry, was till breaking hard of things years. X very scale, advertise to a would back of I of to if scale And took learning brands, whether days. even to a early X in, true, still look often work to going couple a very at at that they're really the successful arrive most and much a through we're scale about any that's you at the It's least minimum year kind to longer. Yes. until an out whether and take overall here year most years tell decade

So relatively a years really few out building something early at days is of terms scale. still in

So that's number one. point

things And Two, continued we've we've and out things will we've of been good where taking to work. work, a measured are work learnings, and kind what some got to approach where we've pivoted advance didn't working.

I going think implicit in work to of question of work? -- these one terms and -- going not is of to the you like, is kind the in other is

this think category that to I I there's way. going SKU that I be of think is see one don't killer market. don't XX% the

approach And I variety-seeking think of using Sprite, more be us it's complemented and going alcohol about the set Coke, likely and going to I a about Bacardi partnered the has a in combination going it's brands, is some our variety think and more to industry Minute Absolut be of that in to or like I think and be choice, be therefore, portfolio own is Coke, ARTD. to do -- more with like Jack Simply portfolio ready-to-drink to it's ARTD, robust a well Spiked effect. behaviors. of more offerings going having Maid, a And much

a is stands meaningful that relatively few, beer, that's And markets, few relative if characteristic you only of percentage a to out. look there and the around the world beer, ARTD the then at the are where

terms, question of relevant in can possible, we put be making which category? together a terms but ARTD is size the share a So in think I effective, just bundle not could is, that

question TD from next from Robert Cowen. comes Moskow Our .

A quick question.

You next expect price/mix year. decelerate to

due Some it's North it's to due of markets. some hyperinflationary America, of to

positive to did You about do is elasticity XXXX. So expect volume you from assumption? any there Like very that? benefit into sound volume

expect words, but of growth, contribute traditional more will words, but it developed quarter. a expecting would the which Yes. the obviously faster to inverse volume markets economies, contribute 'XX a to There emerging won't than the be positive to In position retake their the price/mix. other effect to growing to -- mechanical I'm certain other third of I price/mix and In is volume. instead of

growth, think pricing, XXXX such more of level high-inflationary likely of that a is some normal relationship like, be top-up And of volume look kind where normal be you've more more a that this level stabilization where essentially looked of to year residue a that's be got volume what So kind I is to heading. a of with is next going will amount like which still a there will in countries. of growth, some what year

come will today question Carlos from from Laboy HSBC. last Our

make improving look Can I promising capabilities digital investments And and these are the about capabilities? might more being you have behind growth? you accelerating to us bottlers that to how America-specific most are revenue find compelling volume question. as a North tell you system built the forward you

retail in mean, Yes. mean I view, Sure, bottling it's expansion system the from been the of point while. there of around the the electronic a way, modern digital with always Carlos. system. I think a trade, and that's in I a engagement was the ordering long

part also to bottler a might in be start might get just coming retailer that's bottler orders there events But to interacting there add. retailer the system of order, the some add they retailers like service these what's with request with than service the also from suggesting buy as engage the you with the engage terms for to They things on is waiting XX/X in can the up. independent is allows interesting of for ability pre-seller the more can not for or product system add rather provide mom-and-pop which coolers to which should engagement, we and AI, is up, the ordering of material. people kind actually to -- to you the the sorts platform, the whatever going from the What's orders register turn the trade merchandising really just into not start about suggested trade retailer or to of to the a happening, because ordering of can marketplace, traditional be order

so are who market And we a out there. of developers see enhancement really combination the to

go a electronic from system. entirely an to It's system human not going to being

the the be developers those to themselves. pre-sellers, are they humans as enablement market the about be to going it's or productive can be, think of retail whether as operators I

And so think this I and very it's area. exciting, to bottlers the are investments in the leaning in

to long managing think over near-term we continue value just our we're we XXXX We're create And that, with So build positioned for stakeholders. and we our on system confident the well our to for term. deliver will to certainly long term. we're ambitions sustainable uncertainty to as conclude,

us interest, for your for joining in Thanks the and morning. your company, this investment

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

You may now disconnect.