The Coca-Cola Company (NYSE:KO) Q2 2017 Earnings Conference Call - Final Transcript

Jul 26, 2017 • 09:00 am ET


The Coca-Cola Company (NYSE:KO) Q2 2017 Earnings Conference Call - Final Transcript


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At this time, I would like to welcome everyone to The Coca-Cola Company Second Quarter 2017 Earnings Results Conference Call. Today's call is being recorded. (Operator Instructions) All participants will be in a listen-only mode until the formal question-and-answer portion of the call. (Operator Instructions) 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 questions.

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

Tim Leveridge

Good morning, and thank you for being with us today. I'm joined by James Quincey, our Chief Executive Officer; and Kathy Waller, our Chief Financial Officer.

(Forward-Looking Cautionary Statements)

Following prepared remarks this morning, we will turn the call over for your questions. And we have kept our prepared remarks brief this morning and intend to end the call at approximately 9:45 a.m. In order to allow as many people to ask questions as possible, we ask that you limit yourself to one question. (Operator Instructions)

Now let me turn the call over to James.

James Quincey

Thanks, Tim, and good morning, everyone. As we pass the midpoint of the year, I'm pleased to say that we are where we expected to be and remain on track to deliver our full year guidance.

Importantly, we continue to accelerate the transformation of our business into a total beverage company by driving against the strategic priorities we laid out at CAGNY: mainly, expanding our portfolio with new products, marketing platforms and a consistent strategy to offer our customers the best consumer-centric beverage portfolio; second, driving revenue growth through enhanced revenue growth management strategies and a strengthened system; third, digitizing our enterprise; and fourth and very importantly, unlocking the power of our people as we instill a growth culture and establish a new, leaner operating model.

With this as the backdrop, I'd like to talk about our performance in the quarter and then drill down into actions that we are taking to drive top line growth and finally update you on refranchising and our new operating model. So firstly, starting with the quarter, ultimately amidst a weak consumer retail environment in emerging markets, particularly Latin America, and some softness in North America, our actions are enabling us to win in the market. Globally, we gained value share in total non-alcoholic beverages and in most of our category clusters. As expected, organic revenue grew 3% in the quarter.

Not only did we see a strong performance in rapidly expanding areas of our business, such as Innocent in Europe, but our revenue growth was also largely driven by innovation in sparkling soft drinks where we have continued to roll out Coca-Cola Zero Sugar around the world. Price mix continues to benefit from a focus on smaller pack sizes. Globally, our immediate consumption packs which are typically sold at a higher retail price per ounce