Coca-cola Company (the) · NYSE:KO
Coca-cola Company (the) — The Coca-Cola Company — Q2 2016 Earnings Presentation
17 slides from Coca-cola Company (the)'s earnings presentation, Jul 27, 2016
Slide 1: The Coca-Cola Company 2nd Quarter 2016 Earnings Call
The Coca-Cola Company 2nd Quarter 2016 Earnings Call July 27, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expres
Slide 3: Agenda
Agenda Highlights Operational Review Financial Review Q&A
Slide 4: We Are Transforming Our Company to a Higher Margin and Higher Return Business
We Are Transforming Our Company to a Higher Margin and Higher Return Business Q2 Highlights Value Share Organic Revenues 3% Price/Mix Margin Expansion* ~180 3% bps 4 * Comparable Currency Neutral (Ex-Structural) Operating Margin
Slide 5: Volume and Top-Line Results Fell Short of Our Expectations
Volume and Top-Line Results Fell Short of Our Expectations… Weakening demand in certain large emerging and developing markets impacted volume as well as our Company-owned bottling operations’ revenue growth Bottling Investments segment delivered even organic revenue growth o Positive pricing at our
Slide 6: Revising Full Year Organic Revenue Outlook
Revising Full Year Organic Revenue Outlook… Current Headwinds Are Cyclical, Not Secular Downturns Full Year 3% Organic Revenue However, We Are Not Expecting a Material Outlook Improvement in Remainder of Year …But Maintaining Full Year Profit Outlook 6
Slide 7: Refranchising Remains On Track
Refranchising Remains On Track We expect to complete our refranchising efforts by the end of 2017 CCEP Closed During Q2 Announced Transfer of Certain U.S. Territories to Joint Venture CCBA Closed on July 2nd Territorial Expansion Opportunities We Will Emerge a Stronger Company with Higher Margins an
Slide 8: Operational Review
Operational Review
Slide 9: What Drove Our Top-Line Deceleration?
What Drove Our Top-Line Deceleration? Our volume deceleration from the first quarter was concentrated in a number of markets facing specific macroeconomic challenges. o Main drivers were China, Argentina and Venezuela. Organic revenue slowdown was driven by our Bottling Investments segment o Princip
Slide 10: Taking Action to Address Issues in China
Taking Action to Address Issues in China What’s Going On? What Are We Doing About it? 1 Consumer environment is weakening due 1 Focus on better execution in tier 2 and to the economic transition rural areas with affordable offerings Wholesalers are adjusting inventory levels Rebasing trade incentive
Slide 11: Within Our Core Business, Segmented Revenue Growth Strategies Continue to Drive Positive Results
Within Our Core Business, Segmented Revenue Growth Strategies Continue to Drive Positive Results 4% organic Economic revenue growth, transition in Strong growth driven by pricing China in Japan driven Innovation initiatives by innovation driving strong performance across portfolio Double-digit volum
Slide 12: Summary
Summary Delivering solid pricing Using productivity to prudently fund marketing where we see a solid payback while delivering strong underlying margin expansion Growing underlying profit before tax in line with our expectation despite challenging conditions Confident in our growth strategies 12
Slide 13: Financial Performance
Financial Performance
Slide 14: Financial Highlights
Financial Highlights Key Metrics Results • 3% Organic revenue growth unfavorably impacted ~1% by our segment mix Top Line • Bottling Investments segment grew slower than core business • Expanded over 100 bps Gross Margin* • Driven by pricing, a slightly favorable commodity environment, productivity
Slide 15: Full Year 2016 Outlook
Full Year 2016 Outlook Revising Top-Line But Maintaining Underlying Profit* Top Line • 3% organic revenue growth – UPDATED • 6 to 7% net headwind from acquisitions, divestitures & structural items – UPDATED • 2 to 3% currency headwind – NO CHANGE Profit • 6 to 8% income before tax* growth – NO CHANG
Slide 16: Third Quarter Considerations
Third Quarter Considerations Top Line • 9% net headwind from acquisitions, divestitures & structural items • 2% currency headwind Profit • 3% structural headwind • 2 to 3% currency headwind 16
Slide 17: Q&A
Q&A
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