The Coca-Cola Company (NYSE:KO) Q3 2017 Earnings Conference Call - Final Transcript

Oct 25, 2017 • 09:00 am ET


The Coca-Cola Company (NYSE:KO) Q3 2017 Earnings Conference Call - Final Transcript


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At this time, I would like to welcome everyone to The Coca-Cola Company's Third Quarter 2017 Earnings Results Conference Call. Today's call is being recorded. If you have any objections, please disconnect at this time. 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.

Now, I would like to introduce Tim Leveridge, VP and IR Officer. Mr. Leveridge, you may begin.

Tim Leveridge

Good morning and thank you for joining us today. I'm here with James Quincey, our CEO; and Kathy Waller, our CFO. (Forward-Looking Cautionary Statements) In addition, I would also like to note that we have posted schedules under the Financial Reports and Information tab in the Investors section of our company website. These schedules reconcile certain non-GAAP financial measures, which may be referred to by our senior executives during this morning's discussion to our results as reported under Generally Accepted Accounting Principles. Please look on our website for this information. Following prepared remarks this morning, we'll turn the call over for your questions.

As a reminder, please limit yourself to one question. If you have more than one, please ask your most pressing question first and then re-enter the queue after that.

Now, let me turn the call over to James.

James Quincey

Thank you, Tim. Good morning, everyone. We were encouraged with our performance this quarter, and we can report that we are on track to deliver our full-year plan. Today, I'd like to talk to you about the performance in the quarter and then drill down a little bit into the actions that we're taking to expand our portfolio and drive topline growth and, finally, update you a little bit on the refranchising process.

In the quarter, we gained global value share and grew organic revenue 4%. This was driven by North America, Europe, Mexico and China. We also benefited from improvements in certain large emerging markets like India. Our strategic focus on small baskets and packs continued in the quarter, resulting in strong 3% price/mix and transactions outpacing volume by 2 points. Finally, our ongoing productivity initiatives helped drive strong underlying operating margin expansion in both the quarter and year to date.

Turning to our operations around the world. We are pleased with our continued good performance in North America, and we have full confidence in our sustainable growth strategy. As we announced on Monday, Sandy Douglas will retire as President of Coca-Cola North America after a remarkable three-decade career with the Company. He'll be succeeded by Jim Dinkins, who currently serves as Head of the Minute Maid business unit and Chief Retail Sales Officer for Coca-Cola North America.

Sandy's done an outstanding job leading our flagship market through a period of enormous system change and has set it up for