The Coca-Cola Company (NYSE:KO) Q3 2015 Earnings Conference Call - Final Transcript

Oct 21, 2015 • 09:30 am ET


The Coca-Cola Company (NYSE:KO) Q3 2015 Earnings Conference Call - Final Transcript


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Q & A

(Operator Instruction) Dara Mohsenian, Morgan Stanley.

Dara W. Mohsenian

So, Muhtar, it's been a year since you announced the plans to focus on greater pricing in developed markets as well as boost marketing spend starting in 2015. And I was hoping you could just take a step back and give us a more detailed review of your progress on those fronts. How much top line growth is responding to those efforts relative to your expectations, both in terms of the market share payback from the higher marketing as well as the demand elasticity from higher pricing?

And then just in terms of the quarter, on an adjusted basis ex the concentrate lag, it looks like underlying revenue results are returning to your long-term goals with 3% unit case result and 3% price/mix. So, at this point, do you feel comfortable you can generally meet those long-term top line growth goals going forward, ex any timing issues, or with emerging markets macros still decelerating and perhaps easy comps from this quarter, it's a bit too early to call for that?

Ahmet Muhtar Kent

Yeah, Dara. Thanks for the question. What I would say in general overall is yes, we're pleased with the quarter and the progress we're making but lots of more work to do. This is a transition year. When we talked to you about 12 months ago, we outlined to you that with the changes we're going to make that our goal is to get to mid-single digit currency neutral revenue growth for the comparable revenue growth for the company overall.

And I think if you look at our progress to date for the first three quarters of the year, we're at sort of the bottom end of that range, the mid-single digit, if you look at where we are in revenue in terms of currency neutral comparable, and what we have posted in this past quarter, in the third quarter, you would see us if you take those numbers that you mentioned in terms of volume growth of 3% and price/mix of 3%, at the top end of that range.

So in essence, we're pleased with the progress that we -- what all the five-point strategy and executing it diligently over the last nine months and even starting at the end of last year has brought us to where we are. And so we feel that we've always said that marketing has a lag, the incremental marketing, there's a lag in terms of when we input it and the results that we're getting, but we see that the plan is working. And we certainly see that we're taking a very strategic approach in terms of marketing spend versus optimal levels.

Consistent quality investment in media continues to be one of the strongest drivers of our business, enabling us to generate those -- that revenue. We look at each market. How many weeks of consumer engagement there is, the goal over time is to apply the right pressure in the right way to each of our