The Coca-Cola Company (KO) - Relatório de resultados do segundo trimestre de 2023

KO-2023Q2-Earnings-20230726-2.mp3: Áudio transcrito automaticamente por Sonix

KO-2023Q2-Earnings-20230726-2.mp3: este ficheiro áudio mp3 era transcrito automaticamente por Sonix com o os melhores algoritmos de conversão de voz em texto. Esta transcrição pode conter erros.

Operador:
At this time, I’d like to welcome everyone to The Coca-Cola Company’s Second Quarter 2023 Earnings Results Conference Call. Today’s call is being recorded. If you have any objections, please disconnect at this time. [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 any questions.

Gostaria agora de apresentar a Sra. Robin Halpern, Vice-Presidente e Directora das Relações com os Investidores. Sra. Halpern, pode agora começar.

Robin Halpern:
Good morning, and thank you for joining us. I’m here with James Quincey, our Chairman and Chief Executive Officer; and John Murphy, our President and Chief Financial Officer. We’ve posted schedules under financial information in the Investors section of our company website at coca-colacompany.com. 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. You can also find schedules in the same section of our website that provide an analysis of our growth and operating margins.

In addition, this call may contain forward-looking statements, including statements concerning long-term earnings objectives, which should be considered in conjunction with cautionary statements contained in our earnings release and in the company’s periodic SEC report. Following prepared remarks, we will turn the call over for questions. [Operator Instructions].

Now I’ll turn the call over to James.

James Robert B. Quincey:
Obrigado, Robin, e bom dia a todos. Depois de um forte início de ano, continuámos a nossa dinâmica no segundo trimestre. A nossa combinação de marcas fortes e adoradas e de um sistema de distribuição abrangente e alinhado está a permitir-nos vencer em muitos ambientes operacionais diferentes. Tendo em conta os nossos fortes resultados do primeiro semestre e a resiliência do nosso negócio, estamos hoje a aumentar a nossa orientação para os resultados e para os lucros.

To give you the full picture of our results and our raised guidance, I’ll start by discussing second quarter performance and provide perspective on the current business and consumer environment. Then I’ll highlight our performance across categories, including how we are driving quality leadership throughout our portfolio. Finally, I’ll touch on why we’re confident in our ability to deliver our long-term objectives. And then John will end by discussing our results for the quarter and our revised guidance for 2023.

No segundo trimestre, os nossos mercados foram afectados por forças macroeconómicas concorrentes. Do lado positivo, muitas pressões na cadeia de abastecimento abrandaram, as preocupações em torno da estabilidade do sector bancário diminuíram e os preços da energia continuam a recuar em relação aos máximos históricos. No entanto, a inflação global manteve-se elevada e as tensões geopolíticas continuam a existir em alguns mercados. Apesar desta confluência de factores, registámos um crescimento orgânico das receitas de 11% neste trimestre.

O volume manteve-se estável e, após um início mais lento, melhorou sequencialmente, sendo junho o nosso mês mais forte no trimestre. No primeiro semestre de 2023, apresentámos um crescimento de volume consistente com o nosso desempenho subjacente desde 2019. De forma mais ampla, nosso setor é forte e acreditamos que temos espaço significativo para aumentar o volume e o valor. E continuamos a ganhar quota. Durante o trimestre, ganhamos participação de valor nos canais em casa e fora de casa.

As we look towards the second half, the global inflationary environment is impacting consumers and our business differently across geographies. In developed markets like North America and Western Europe, inflation is beginning to moderate, and labor markets remain strong. Our elasticities continue to be relatively low. However, we have seen some willingness to switch to private label brands in certain categories. Across the sector, consumers are increasingly cost-conscious. They’re looking for value and stocking up on items on sale. In these markets, our pricing is largely in place and is expected to moderate as we cycle pricing initiatives from the prior year.

It’s more important than ever to be consumer-centric and to partner with customers to provide affordable and premium propositions, which deliver value through basket and incidence growth. In many developing and emerging markets like Latin America, the Middle East and Africa, consumers are more accustomed to persistent inflation. However, the number of markets with intense inflation has expanded.

Five of our top 40 markets are currently experiencing over 20% annual inflation. In these markets, it’s equally important to leverage revenue growth management capabilities to balance affordability with premiumization to be able to take price with local market inflation, which helps offset the currency pressures. There are, as always, a few markets affected by specific local factors. In China, economic recovery slowed in the second quarter, and inflation has declined. Consumer confidence is below pre-pandemic levels. And we continue to monitor our leading consumer indicators and take action to win in the market.

Na Índia, a atividade foi afetada desfavoravelmente por chuvas fora de época e temperaturas mais baixas no trimestre. No entanto, as perspectivas de crescimento permanecem intactas. Num mundo com um vasto espetro de dinâmicas de mercado, desde a inflação à desvalorização da moeda e à alteração das necessidades dos consumidores, o nosso negócio está a revelar-se muito resistente. Dispomos de muitas alavancas para gerir com êxito os diferentes ambientes operacionais. E continuamos a centrar-nos no consumidor e no crescimento. A nossa receita para o sucesso mantém-se inalterada. Continuamos a cumprir a nossa estratégia através de uma combinação de marketing e inovação de classe mundial, excelência na gestão do crescimento das receitas e uma forte execução. Estamos a elevar a fasquia e a aumentar a liderança de qualidade em toda a nossa carteira.

A começar pela Coca-Cola. Estamos a aumentar a nossa base de consumidores da Geração Z, a ganhar quota e a tirar partido da nossa escala para aumentar a eficiência em todo o nosso sistema. Durante o trimestre, ganhámos quota de volume e de valor, associando a Coca-Cola a ocasiões de consumo e envolvendo os consumidores através de experiências locais. Um grande exemplo é a Recipe for Magic, que foi activada em mais de 50 mercados e celebra o consumo de Coca-Cola às refeições. A campanha foi apoiada por experiências com chefes de cozinha locais, com a participação de cerca de 750 influenciadores em todo o mundo, e ganhou vida através das redes sociais e de cartazes com receitas.

A campanha "Coca-Cola das Refeições" também permitiu à Coca-Cola reforçar a sua relevância local. Por exemplo, no canal fora de casa em Itália, a Coca-Cola aumentou a sua incidência com a pizza, a refeição mais consumida, com cerca de 3 mil milhões de pizzas por ano, passando de 10% para 20% nos últimos 4 anos. Embora a marca Coca-Cola seja omnipresente, adaptamos a arquitetura dos nossos pacotes de preços às ocasiões de consumo e continuamos a promover a acessibilidade e a valorização. Durante o segundo trimestre, aumentámos os incidentes no cabaz e o volume por viagem em dois dígitos, ao mesmo tempo que aumentámos o preço por litro.

Passando aos sabores espumantes. Estamos a assistir a um forte envolvimento dos consumidores em todas as nossas marcas de base, que incluem Sprite, Fanta, FRESCA e Thums Up. Simultaneamente, temos uma margem de manobra significativa para impulsionar uma maior liderança em termos de qualidade nos mercados desenvolvidos e em desenvolvimento.

With Sprite, we are driving brand awareness by connecting consumers to passion points and personalized experience at a more granular and locally relevant levels through our global Heat Happens platform. In North America, Sprite celebrated hiphop’s 50th anniversary with the launch of Sprite Lymonade Legacy and sponsorship of concert tours, exclusive experiences and collaborations with prominent artists.

Estabelecemos uma parceria com estrelas pop locais e um produtor de Grammy na China, utilizando o nosso Programa Musical Global Sprite Limelight para os consumidores da Geração Z em 1.500 locais de ensino superior. Na Coreia do Sul, o Sprite WaterBomb Festival também gerou fortes resultados.

Na Índia, a promoção Joke in a Bottle permitiu que os consumidores digitalizassem as embalagens e recebessem piadas personalizadas e localizadas através do WhatsApp para vencer o calor. Em junho, a Sprite foi premiada como a marca mais resiliente pela Kantar por ter acrescentado o maior número de novos lares em 2022 do que qualquer outra marca de produtos de grande consumo.

Passando para a água, o desporto, o café e o chá. Estamos a segmentar as oportunidades mais amplas e a utilizar as nossas capacidades renovadas de afetação de recursos, dando prioridade aos mercados e subcategorias que oferecem o maior retorno do nosso investimento. Estamos a construir a nossa vantagem através do enfoque no consumidor, acelerando a velocidade de comercialização da nossa inovação, medindo os resultados em tempo real e ampliando os sucessos.

Continuamos a criar entusiasmo pelo Fuze Tea através do lançamento do chá verde no México, da edição limitada de verão na Turquia e da expansão das ofertas de 0 açúcar na Europa. Os primeiros resultados mostram velocidades promissoras e o volume de Fuze Tea cresceu dois dígitos durante o trimestre. vitaminwater é outro exemplo. Durante o trimestre, relançámos a vitaminwater zero na América do Norte com um novo sistema de doçura de monk fruit e stevia, o que gerou ganhos de quota de valor. Estamos capitalizando as necessidades dos consumidores de hidratação rápida, um subsegmento de rápido crescimento dentro das bebidas desportivas, com o lançamento do BODYARMOR FLASH I.V. nos EUA e do Flashlyte no México. Apesar de ainda estarem no início, ambos registaram um forte interesse dos consumidores durante o trimestre e demonstraram resultados iniciais promissores.

Os nossos sumos, produtos lácteos de valor acrescentado e bebidas à base de plantas apresentaram 9 trimestres consecutivos de crescimento de dois dígitos e ganharam quota de volume e valor durante o trimestre. Continuamos a inovar e a impulsionar a premiumização sob a marca registada Simply. Simply mixology, que oferece aos consumidores misturas de excelente sabor e mocktails prontos a beber, lançou uma campanha experimental que celebrou o início do verão e o seu lançamento nacional.

Além disso, a fairlife teve outro trimestre excecional, uma vez que tanto o Core Power como o plano de nutrição da fairlife continuaram o seu forte impulso. Em maio, anunciámos um investimento de $650 milhões para construir uma unidade de produção de última geração para ajudar a impulsionar a próxima vaga de crescimento. Por fim, estamos animados com o que estamos a ver nas bebidas alcoólicas prontas a beber. Continuamos a adotar uma abordagem ponderada, explorando e aplicando as nossas aprendizagens. Embora ainda esteja a dar os primeiros passos, a Jack and Coke tem mostrado resultados promissores. Nas Filipinas, a combinação de Jack and Coke e Lemon-Dou proporcionou fortes ganhos de quota.

O lançamento do Schweppes Mojito na Índia também está a ter um bom começo. Estes exemplos ilustram como a nossa transformação de marketing está a ganhar vida. A força da nossa carteira total de bebidas dá-nos ainda mais confiança de que podemos continuar a dar resultados, oferecendo aos consumidores opções de bebidas para todas as ocasiões.

O nosso objetivo é refrescar o mundo e fazer a diferença. E continuamos empenhados em construir um futuro mais sustentável para a nossa empresa e para o planeta, enquanto nos esforçamos por fazer crescer o nosso negócio. Continuamos a progredir em direção à nossa visão de uma economia circular para as embalagens através da inovação e de parcerias. Por exemplo, nos EUA, estabelecemos recentemente uma parceria com a Republic Services para garantir que temos um fornecimento adequado de plástico reciclado para as nossas embalagens. Ao mesmo tempo, estamos a abraçar os recarregáveis. Recentemente, iniciámos um programa com clientes em 4 cidades dos EUA para testar copos de água recarregáveis, com planos de expansão para outros locais.

Navegámos com sucesso na primeira metade do ano, o que apoia a nossa decisão de aumentar a orientação para o ano inteiro. E em vez de tentarmos prever as muitas direcções que as coisas poderiam tomar, continuamos concentrados em cumprir os nossos principais objectivos que delineámos em fevereiro. Por outras palavras, em primeiro lugar, procurar a excelência a nível global e vencer a nível local através de uma implacável focalização no consumidor, a fim de impulsionar o crescimento das receitas; em segundo lugar, investir para a saúde a longo prazo da nossa empresa e elevar a fasquia em todos os elementos do nosso volante estratégico; e, em terceiro lugar, gerar um crescimento do EPS em dólares americanos.

O nosso sistema nunca foi tão forte e o nosso modelo de rede global está a permitir-nos adaptarmo-nos rapidamente a ambientes em mudança. Acreditamos que estamos bem posicionados para cumprir as nossas orientações e objectivos actualizados, graças ao nosso incrível sistema e aos nossos colaboradores em todo o mundo.

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

John Murphy:
Obrigado, James, e bom dia a todos. Estamos satisfeitos com a dinâmica do nosso negócio e com os nossos fortes resultados do segundo trimestre. Começando com a linha superior. Aumentámos as receitas orgânicas em 11%. As caixas unitárias mantiveram-se estáveis. Como James disse, o volume do segundo trimestre teve um início mais lento, mas terminou com uma nota positiva. As vendas de concentrados foram 1 ponto acima das caixas unitárias para o trimestre, principalmente devido ao momento das remessas de concentrados. O crescimento do preço/mix foi de 10% para o trimestre, impulsionado pelos preços de carryover que entraram na base do ano passado, juntamente com algumas novas acções de preços nos segmentos operacionais, incluindo o impacto dos mercados hiperinflacionários.

A margem bruta comparável para o trimestre aumentou aproximadamente 40 pontos base, impulsionada pela expansão subjacente e um ligeiro benefício da refranchising de garrafas, parcialmente compensado pelo impacto da moeda. A margem operacional comparável aumentou aproximadamente 90 pontos base no trimestre. Isso foi impulsionado principalmente pelo forte crescimento da linha superior e pelo impacto das operações de engarrafamento de refranchising, parcialmente compensado por um aumento nos investimentos em marketing e custos operacionais mais altos em relação ao ano anterior, bem como por ventos contrários da moeda.

Em suma, o EPS comparável do segundo trimestre de $0,78 aumentou 11% em relação ao ano anterior, apesar de um efeito cambial superior ao previsto de 6%. O fluxo de caixa livre foi de aproximadamente $4 bilhões no acumulado do ano. Isso foi em grande parte atribuído ao forte desempenho operacional subjacente e aos benefícios de capital de giro, parcialmente compensados por um pagamento de imposto de transição de $720 milhões que foi feito durante o segundo trimestre, bem como pagamentos relacionados a fusões e aquisições.

O nosso balanço é sólido e a alavancagem da dívida líquida de 1,6x o EBITDA está abaixo da nossa meta de 2 a 2,5x. As nossas prioridades de afetação de capital permanecem as mesmas, e continuamos a investir para impulsionar o crescimento a longo prazo. Como James mencionou, estamos encorajados pelo que estamos a ver no mercado. Ao mesmo tempo que continuamos a fazer girar mais rapidamente o nosso volante estratégico para gerar um crescimento liderado pelas linhas de topo, também progredimos na nossa agenda de margens, tal como demonstrado pelo nosso historial consistente de compensar os ventos contrários aos custos para manter margens brutas estáveis.

Temos inúmeras alavancas disponíveis para impulsionar o crescimento das receitas e melhorar a eficácia e a eficiência das nossas despesas a longo prazo. A nossa estratégia para todos os climas, juntamente com os grandes planos que temos em vigor para continuar a criar uma liderança de qualidade em toda a nossa carteira, dá-nos uma boa visibilidade para cumprir a nossa orientação elevada para 2023.

Isto é composto por um crescimento orgânico das receitas de 8% para 9%, que inclui um crescimento positivo do volume, continuando a ser liderado pelo preço/mix. Há algumas considerações a ter em conta. Esperamos que os preços nos mercados desenvolvidos se mantenham moderados ao longo do ano, à medida que avançamos com as iniciativas de preços do ano anterior. Nos mercados emergentes e em desenvolvimento, o nosso objetivo é acompanhar a inflação do mercado local.

Na medida em que a inflação intensa nos mercados conduz a um preço/mix elevado, o impacto é muitas vezes compensado pela moeda, uma vez que é frequentemente difícil cobrir a nossa exposição. Devido ao nosso calendário de relatórios, haverá um dia adicional no quarto trimestre. Esperamos agora um crescimento confortável dos lucros por ação, neutro em termos de moeda, de 9% a 11%. Com base nas taxas atuais e em nossas posições de hedge, estamos atualizando nossa perspetiva de moeda de um vento contrário de aproximadamente 3 a 4 pontos para receitas líquidas comparáveis e um vento contrário de moeda de aproximadamente 4 a 5 pontos para ganhos por ação comparáveis para o ano inteiro de 2023.

Inflationary pressures are beginning to moderate in some ways, including freight rates that are favorable compared to last year. That said, several commodities that are prevalent in our baskets like sugar and juice remain elevated. And we have some hedges that we’ll be rolling off to less favorable rates. Based on current rates and hedge positions, we continue to expect per case commodity price inflation in the range of a mid-single-digit impact on comparable cost of goods sold in 2023. Our updated underlying effective tax rate for 2023 is now 19.3%.

Ao todo, estamos atualizando o crescimento comparável de ganhos por ação de 5% a 6% contra $2.48 em 2022. Continuamos a esperar gerar aproximadamente $9.5 bilhões de fluxo de caixa livre em 2023 por meio de aproximadamente $11.4 bilhões em caixa de operações menos aproximadamente $1.9 bilhões em investimentos de capital. Se excluirmos os pagamentos de impostos de transição efectuados no segundo trimestre e vários pagamentos associados a transacções de fusões e aquisições, a nossa conversão implícita de fluxo de caixa livre estaria dentro da nossa orientação a longo prazo. Esta orientação não inclui quaisquer pagamentos relacionados com o nosso atual litígio sobre o imposto sobre o rendimento nos EUA com o IRS.

À medida que entramos na segunda metade do ano, continuamos a construir uma cultura que enfatiza a elevação da fasquia em todos os aspectos da forma como fazemos negócios. Graças ao enorme compromisso contínuo dos nossos funcionários do sistema em todo o mundo, estamos confiantes na nossa capacidade de cumprir a nossa orientação para 2023 e gerar valor para as nossas partes interessadas a longo prazo.

Com isto, Senhor Operador, estamos prontos para responder a perguntas.

Operador:
A nossa primeira pergunta vem de Bryan Spillane do Bank of America.

Bryan Douglass Spillane:
Acho que tenho uma pergunta sobre o facto de estarmos a olhar para a segunda metade do ano e para as vendas orgânicas, a orientação implícita para as vendas orgânicas, que, penso eu, se situa no intervalo de 5% a 6% na segunda metade do ano. Talvez o James e o John possam falar um pouco sobre como é que o ambiente macroeconómico ou as condições operacionais são hoje em dia em comparação com o que pensavam no início do ano?

And given that there’s more of these markets where — or countries where hyperinflation is an issue, is price a little bit more of a driver in terms of the organic sales comp in the back half of the year relative to volume again versus kind of what you were thinking at the start of the year?

James Robert B. Quincey:
Yes. Well, let me try and unpack that a little bit. I think the headline part of the answer is there’s a little more pricing in Q2 and in the downhill than we had expected at the beginning of the year, principally around that basket of countries where inflation is high, above 20% and a little more persistent. That’s the short answer.

The longer version of the answer is, look, we’re executing the strategy we’ve talked about consistently over time and again, in CAGNY, the real focus on upping the bar on marketing, upping the bar on RGM, the commercial strategies and the execution of the marketplace. All with the intent about delivering a good, strong top line-led growth algorithms. And obviously that — we’ve talked historically that in normal times, that 5% to 6% would be split between volume and price on a roughly equal basis. And so what you’re seeing in the back half of the year, which I think is important to note, is we’re expecting volume to be consistent in the second half with the way it was in the first half, which in the end is running our trend, if you like, a CAGR versus 2019, similar to what we did last year.

So we see sustained positive volume growth coming out of ’22. And we’re looking for volume growth in the second half in a very similar way to the first half whether you’re comparing to prior year or to 2019. So we want a business that is growing consumer base for all the right, appropriate strategic reasons. Then what’s going to happen to revenue in the second half is we’re going to see the impact of 3 buckets of price/mix.

The first bucket is the carryover of pricing from prior year. Obviously, there was more cost inflation last year. But logically, that is a set of numbers that is going to tend to 0 by the end of December. And so that is going to step down as we go through Q3 and Q4. So bucket one, carryover. That’s going to step down.

Bucket two is price increases we’ve made so far this year that are leaving aside the large inflation countries, look much more like a normal year in terms of what we’ve taken this year, both in terms of timing, number of price increases and relative level of price increases. So we…

Operador:
Senhoras e Senhores Deputados, estamos a ter dificuldades técnicas. Por favor, mantenham-se em linha.

James Robert B. Quincey:
Quando é que eu parei? Telefonista, sabe quando é que a linha corta com a minha resposta?

Operador:
Infelizmente não, senhor. A próxima pergunta é de Lauren Lieberman, do Barclays.

James Robert B. Quincey:
Operator, let me just finish the other question. I was going to back up. Apologies to everyone for the technical trickiness. I’m just going to back up and if I’m repeating something I said apologies. And if there’s a gap in the logic, apologies again. I think we talked about volume second half similar to first half, whether you talk in prior year or 2019. Pricing, 3 buckets. The bigger piece of the pricing of the 3 factors, which is the carryover, is obviously stepping down through the year towards 0 by the end of the fourth quarter.

The new pricing that’s come in, in ’23 being very consistent with the kind of a normal level of pricing that we would see, and it’s kind of in place already for the year. And that obviously then continues at the same rate through the rest of the second half. And the third piece, which is about 1/4 of what’s happening on PMO at the moment, this bucket of higher inflationary countries and as I said earlier, there was a little more inflation from those countries in the second quarter than we had previously expected. Obviously, that then comes back around in a little more ForEx headwind.

We are assuming that some of those inflation rates will moderate in the balance of the year in the second half and likewise moderate in the ForEx, although it’s very uncertain. So we’ll have to see what happens, but that’s basically the composition of how to think about the effect of our strategy delivering good top line growth in the second half.

Operador:
A próxima pergunta é de Lauren Lieberman, do Barclays.

Lauren Rae Lieberman:
Can you hear me okay because like my line’s got crackly now. That’s okay. Great.

James Robert B. Quincey:
Sim, apanhámo-la, Lauren.

Lauren Rae Lieberman:
Fixe. Queria fazer uma pequena pergunta sobre a Costa e o café em geral, à luz do modelo de afetação de recursos e da identificação dos principais grupos de lucro, etc., que não foram mencionados nas observações preparadas, mas que foram definitivamente referidos no comunicado de imprensa desta manhã, com especial destaque para o Reino Unido.

So I guess broad question would be how coffee overall is kind of fitting in on this thought process and resource allocation models if they are getting their particular differences by geography or is it for different emphasis on the category by different bottlers. And then specific to the numbers called out in the release and Costa U.K., should we think about that as recovery with mobility, COVID or tweaks or adjustments to the strategy you’ve made that are beginning to come through in performance?

James Robert B. Quincey:
Yes. Sure, Lauren. Let me do it in reverse order. The Q2, I think, is more recovery than new stages of growth. Having said that, the Express machines have continued to expand numerically in terms of numbers of placements all the way through COVID and including so far this year. So the Express business, the B2B business, the U.K. is — has been strong, remains strong and still growing, still gaining share. The retail — the store numbers are much more about a recovery kind of completing the play on mobility perhaps and gain share a little bit. And obviously, we’re focused on how to drive growth going forward, and we see plenty of headroom in the U.K. market.

But I would characterize year-to-date more on — more of a biased recovery on stores than new and the bias on Express on new. Internationally speaking, in — if you just break it down into — there’s a couple of different buckets, the ready-to-drink bucket, we’ve made some good progress in China. We made some good progress in Japan with launches of ready-to-drink Costa in the case of Japan complementing Georgia. And actually Japan had a pretty good start to the year growing both Georgia and Costa. So kind of a full coffee strategy in the ready-to-drink looking good, and that’s still the most important ready-to-drink coffee market for us.

And then the B2B, which is a mix of Express along with kind of we’re serving to providing machines and beans, starting to see that getting some traction in Europe with the bottling partners there and starting to kind of find its feet in the U.S., too. And those are the ones I’ve called out as the most — as at the front of the program in terms of geographic expansion.

Operador:
A nossa próxima pergunta é de Dara Mohsenian, da Morgan Stanley.

Dara Warren Mohsenian:
So I just wanted to follow up on Bryan’s back half question. You did mention a weaker start in April post the Q1 call and then the stronger June volume performance, obviously, on this call. Is that engendering additional confidence internally around top line? And the reason I’m asking is it sounds like conceptually, you’re not necessarily guiding to the June volume strength continuing in the second half. I’m just trying to understand that. Is that more just prudence, given the inflationary environment you mentioned and consumer volatility? Or are there other factors there?

E quando pensamos no seu intervalo de orientação para o crescimento orgânico das vendas para o ano inteiro, como parte dessa pergunta, foi apenas a vantagem no segundo trimestre? Houve alguma vantagem em relação ao primeiro trimestre? Alteraram as expectativas para a segunda metade do ano no âmbito do aumento da orientação para o crescimento orgânico das vendas para o ano inteiro?

James Robert B. Quincey:
Acho que Dara, você pode obter o preço dessas perguntas em uma pergunta. Olha, o - claramente, no segundo trimestre, como havíamos antecipado na chamada anterior, abril começou suavemente. Mas depois as coisas normalizaram no final do trimestre, e junho foi um bom mês de crescimento sólido.

But I think the easier way to think about it is take the whole of the first half because you’re always going to have some good months and some bad months. April happened to concentrate some price increases in developed countries and bad rains in India. Look, that will always happen on any given month. I think what is a question of what gives us confidence in the back half of the year by just saying January to June with its combination of good, middling and bad months, the growth rate in the first half, what we’re expecting is a similar sort of growth rate in the second half, whether you compare to 2022 or to 2019.

And so we think the momentum is there. We think in the developed markets, we’ve got through the pricing that needed to be taken in ’23. We don’t foresee substantive new pricing in the downhill. But we think this is going to be a well set up run through in the second half.

And as I called out on that other answer with Bryan that the uncertainty factor is really around a concentrated in a few of these more inflationary marketplaces. Guidance going up, I guess there’s obviously some flow through. We had a good first quarter, obviously, versus consensus. About a second quarter — we clearly feel confident in our outlook for the full year, which is why we’re taking it up. So there’s some flow through.

Obviously, there’s some timing factors in the relative performance in Q2. And as we’ve talked on previous calls, given the nature of our business and where we sit in the supply chain relative to final sales, I think it’s always good to take a multi-quarter average to the way of thinking about volume or pricing or even the flow-through to EPS. And I think that’s kind of something that we always think about. Otherwise, you can get too distracted by the ups or downs on any given quarter. So we’re going up. In the guidance, we feel confident about the second half. There’ll always be some puts and takes, but we think we have a great strategy and a great plan to execute for the rest of the year.

Operador:
A nossa próxima pergunta é de Bonnie Herzog, da Goldman Sachs.

Bonnie Lee Herzog:
Muito bem. Acho que tinha uma pergunta sobre as margens operacionais da Ásia-Pacífico, que foram novamente pressionadas neste trimestre. E depois, James, referiu-se a alguns mercados que ainda enfrentam pressões, mas esperava que pudesse partilhar um pouco mais de informação sobre alguns destes ventos contrários na região. E, em seguida, quaisquer iniciativas-chave que possam ter implementado para mitigar algumas dessas pressões? E, como resultado, como devemos pensar sobre a tendência das vossas margens operacionais durante o resto do ano na região?

James Robert B. Quincey:
Sure. As it relates to Asia Pacific, what we — there’s obviously a set of things that happened in Q2 that were specific to Q2. There were some destocking in the China operating unit that was kind of a significant piece there. And there was some strong demand for some of the juice businesses in China and India. And those are 2 kind of atypical factors that happened that depressed on a timing basis the margin in Asia Pacific. It is worth noting that there is a sort of structural headwind when seen specifically just at the Asia Pacific region level. And what I mean by that is that we have a very big business in Japan, which is an excellent business and has a good operating margin.

But then Asia Pacific concentrates a set of fast-growing emerging and developing markets, India, China, some of the Southeast Asian countries. And given the nature of how fast they grow and their emerging profile, i.e., they have price points that are lower than Japan, they create a negative geographic mix effect to the Asia Pacific reporting segment. And that’s been a feature for an extended period of time. In other words, you have to sell 1-point-something cases in India and China to make up — to kind of compensate the mix effect relative to Japan. So that kind of structural headwind is always slightly there.

Obviously, our objective is through our strategies, our marketing, RGM execution and the way we invest to try and offset that headwind. So if you look back over time, you’ll see that the — whilst the margin fluctuates up and down, it has kind of had a certain stability when you look, for example, 2019 versus 2022. And so I close by saying don’t over-rotate to 1 quarter in the case of Asia Pacific, given some of the issues. But I would also point out that this is not a region seen on its own where operating margin is likely to grow all the time because of the structural mix effect.

But when seen at the company level, we obviously manage it as part of the overall portfolio so that it is a piece of the puzzle in looking at our total strategy of, as we’ve talked about, using the levers to hit that top end of the revenue 5 to 6 with a little bit of aggregate operating income margin expansion for the total enterprise. And we understand the role of each segment within that equation.

Operador:
A próxima pergunta é de Steve Powers, do Deutsche Bank.

Stephen Robert R. Powers:
Na verdade, gostaria de abordar dois tópicos, mas gostaria de começar por abordar, James, o que acabaste de referir no contexto mais alargado da empresa. No trimestre, a linha superior foi obviamente forte. Mas acho que, em relação às expectativas externas, vimos um pouco mais de fluxo de margem e alavancagem de SG&A do que o esperado, especialmente em regiões como a América do Norte, onde a margem foi excecionalmente forte em relação ao histórico.

So I’m curious in terms of how to think about the balance of managing top line growth versus continued margin expansion as you think about the back half. But then also more broadly, just in the context of your top line-led algo, is there maybe more cost efficiency opportunities that we should be thinking about longer term? Or is what we see in the quarter maybe more just a matter of timing?

I also, John, if I could, I just want to loop back to a question I asked last quarter on below-the-line dynamics. You came into the year talking about below-the-line deleverage, interest expense and so on. We haven’t seen that again this quarter, especially with the lower tax rate. So I’m just curious if that has changed in the full year and if that factored in to the full year guidance raise?

John Murphy:
Steve, let me take the second piece first. It’s fairly straightforward. In the quarter, we benefited from higher equity income and from interest that we earned on our overseas cash, which was in both cases ahead of what we had soon when we guided at the start of the year. And from the second half of the year, I don’t expect either of those 2 to be as strong. So I do think we’ll have a little bit of deleverage in the second half of the year but modest, not a significant variable for your consideration in the second half of the year.

James Robert B. Quincey:
Sim, voltando ao elemento de margem da pergunta. A América do Norte, de certa forma, é um lado fluido do que acabámos de falar na Ásia-Pacífico. Obviamente, os resultados foram muito fortes na América do Norte, tanto na linha superior como na margem. Mais uma vez, há uma série de factores temporais que, no caso da América do Norte, tornam a estrutura da margem do segundo trimestre mais plana, incluindo, por exemplo, a - um pouco como a Costa U.K., uma vez que a taxa de crescimento do mercado norte-americano foi muito mais rápida no mercado fora de casa do que no mercado doméstico.

And obviously, that’s margin accretive. That should be seen as, in a way, more completing the play of the recovery versus COVID. So the completion of the reopening of restaurants, cafes, theme parks, et cetera, et cetera. And so that channel mix, if you like, flatters the operating income in the short term. There’s a number of timings of other things that impact that, BODYARMOR integration, et cetera. I think the way to think about margin going forward by segment and most importantly for the company overall is, firstly, not to over-rotate on any 1 quarter.

Remember that there are a number of expense items and deduction items that we accrue on the basis of sales curve, not just what actually happened in the quarter. So timing is a feature. And that’s why I’m very strong on let’s take 4 quarters in a row and look at that relative to history.

And when you do that, whether in North America or Asia Pacific or more importantly, the company in the overall, what you’re going to see is us sticking to our strategy, which is to drive the growth from the top line and then to look for modest or moderate increments of the operating margin, which we deliver not just by effective strategies to allocate resources, whether they be marketing or operating expenses so that we are efficient and get a little bit of leverage there.

But the design of the portfolio itself and the RGM strategies also is a component in creating sales that inherently have a little more gross margin. So we use all the levers to try and deliver. And so don’t take these segments over or under deliveries as a sign of something new and radical happening. If they are features of our business model and the big overall idea is top line growth with small income and operating margin expansion.

Operador:
A nossa próxima pergunta é de Rob Ottenstein, da Evercore.

Robert Edward Ottenstein:
James, I’d like to talk about the global system. Recently, there’s been a lot of interesting developments from some of the bottlers. You had CCH buy Finlandia. You’ve had a lot of your bottlers, particularly in Latin America and elsewhere, talk about B2B platforms that they’re developing. And so my question is, how are you thinking about these developments? Are there new models, revenue, earnings sharing models? And how do you make sure that the bottlers stay focused on those products that drive the most value for The Coca-Cola Company?

James Robert B. Quincey:
Sure. Let me start just by headlining actually, we’ve just come off. Last week, we had a Global Bottler Meeting in Atlanta. I think it’s in 30-plus years since we had that meeting in Atlanta, but we had it in Atlanta last week with the majority of the biggest bottlers in the Coke system. And I think it was a very clear meeting on our collective will and ability and interest in investing in this business and our overall level of alignment on what’s important and what should we drive individually and what needs to be driven collectively.

So actually, you guys all go around and talk to the bottlers as well, and I think you will get it reflected back from them that there is a very high degree, not just an alignment on what needs to be done, but enthusiasm on the opportunities ahead of us to drive the business, our collective business forward. On some of the specifics, clearly, you’ve got in that basket, there are things that happen around the world that are local and a biased set of dynamics that are important and relevant and not necessarily projectable around the world. And the case of CCH and the distribution, now the ownership of Finlandia, I think, is one of those.

The B2B platforms, which are progressed very nicely in Latin America, are a feature of the business in multiple other countries. We’ve been testing and exploring and developing individually and collectively B2B platforms with the principal objective of enhancing the system and most importantly, the bottlers’ relationships with the retailers.

To the extent that we can compliment, and here we’re largely talking the fragmented channel because the relationship with the modern trade is already set on electronic platforms anyway. We’re talking about the fragmented trade, and the majority of the almost 30 million customers we visit as a system is to enhance that relationship, to make it no longer a hostage to the visit of the Coke sales rep but to make it a 24/7 opportunity to enhance relationship, to order product, to ask for a service call, to get a new cooler, to put some umbrellas up or to add to an order that’s already about to delivered.

And that is certainly when we have evaluated how those customers where the B2B platforms are available how they’re doing versus where it’s not yet rolled out. There’s clearly an improvement, not just in the relationship however you want to measure it, but also in the sales. So there’s a lot going on in the system. And I think the last thought there is you should take it also as examples of the willingness of the system to experiment and try and be on the front edge of what drives value in the marketplace.

Operador:
A próxima pergunta é de Chris Carey, da Wells Fargo Securities.

Christopher Michael Carey:
You made a comment on some private label switching happening in certain markets. Can you just expand on where you’re seeing this specifically geographically and perhaps by category and the playbook that you’ll be deploying in these markets, the sorts of developments that you’d be looking for to respond to these actions ahead?

And I asked that a bit in the context of, clearly, some of your ingredients are still quite inflationary and whether you see any potential risk to being able to price against that inflation in some of these markets going forward. Obviously, you have a playbook with a lot of different levers. And I’m just curious to hear your thoughts on where these developments seem to be happening and how do you think about responding to these a bit more specifically.

James Robert B. Quincey:
Sure. So private label switching is principally a feature firstly in Europe, and then to some extent also in the U.S. If you were to include price brands or B brands, you might see some of that also in Latin America depending on how you want to define it. But very specifically on private label, that’s number one, a European effect; and number two, a U.S. effect. And it’s, in our view, highly related to the strength of the brands in any specific category.

Por isso, vemos isso mais em termos de bebidas, o que acontece com a água e os sumos, mais do que com os refrigerantes, e certamente menos quando se chega às colas. A estratégia, para além do que precisamos de fazer em termos de marketing e de continuar a tornar as marcas relevantes para os consumidores e a atuar no mercado, é, obviamente, a estratégia RGM. Sim, a premiumização continua a ser uma oportunidade, mas temos de manter uma âncora e continuar a evoluir e a adaptar as nossas estratégias em matéria de acessibilidade, quer se trate de recargas, quer se trate de embalagens pequenas acessíveis ou de embalagens de consumo acessível, o que se tornou uma estratégia testada em ambientes inflacionistas, bem aprendida na América Latina, por exemplo, mas agora aplicada, há vários anos, na Europa e nos EUA.

And we have more things we can do in both marketplaces to have an anchor in both affordability and premiumization. And that’s a playbook that we’re rolling out and executing in those marketplaces. As it relates to the inflation and the COGS coming through, obviously, some of that, whether it be juice or sugar and corn syrup, affects different markets. The most of the inflation is in a set of markets where we do price for local inflation. And in a way, the higher inflation gets, the more likely it is we’re just — you’re going to follow inflation.

And so the risk not following is not really there as it goes up. The risk actually appears on the volume side. But this is a select group of markets. So if it were to err towards the more inflation in the back half of the year, we think it’s manageable. If we were to err for the less inflation, that would be good, but we think it’s in a bucket of manageable things.

And as it relates to the total company relative to some of those input costs, we have very long-term relationships with most providers and long-term hedging programs, which allow us to kind of — they don’t avoid inflation, but they smooth it that they make it much more manageable from a pricing and packaging point of view.

Operador:
A próxima pergunta é de Filippo Falorni, do Citi.

Filippo Falorni:
Can you guys talk a bit more about your alcohol strategy broadly, particularly with the Red Tree Beverages subsidiary? And specifically in terms of like new innovation, any other subcategories or areas where you’re looking to expand within alcohol? I know you’re experimenting, but just any color on the future plans will be great.

James Robert B. Quincey:
Yes. Thanks, Filippo. Look, the Red Tree entity that we stood up in the second quarter is more of a technicality than some new big step. It isn’t a change in strategy, and it’s not a vehicle to distribute in the U.S. It allows us a better platform to engage with the partners that we’re working with in the U.S. in terms of coordinating and influencing the marketing and allows us a better separation of the alcohol versus the non-alcohol band. So it’s more an optimization of the model and how we want to execute things rather than a different thing. And then in terms of progress, look, it’s still a small part of the business. And as I talked about, I think it was CAGNY, that’s great, and there are lots of runs on the board.

A Jack and Coke obteve alguns resultados muito promissores, incluindo nos EUA. A Simply Spiked Peach está a ter um desempenho muito bom nos EUA. Se quisermos procurar um ponto realmente brilhante, podemos cobrir as Filipinas e a Jack and Coke e a Lemon-Dou, que é uma bebida alcoólica de limão, obtiveram uma quota de 30% da categoria RTD.

All of this is very encouraging as we continue to take a measured approach to this and to kind of learn and apply our learnings. All of this needs to generate belief that it can be material for the Coke company, not just a nice business, and that we’re still in the process of driving towards. But certainly, so far, we’re pleased with what’s taken place, and we are encouraged about the next steps that we have to take.

Operador:
A próxima pergunta é de Andrea Teixeira, da JPMorgan.

Andrea Faria Teixeira:
And James, on your volumes commentary, and I appreciate that on your 4-year CAGR, I think if our math is correct, it’s 1.7% unit case for total company, which is obviously remarkable. That said, I think EMEA was a bit softer in the quarter. I understand your commentary about Russia. And what is actually happening in EMEA ex Russia? And how we should be thinking going forward?

E, em relação a isso, uma vez que comentou que os EUA eram muito fortes fora de casa e a Europa é - uma grande percentagem da Europa é fora de casa, nos comentários sobre junho, como deveríamos pensar não só na Europa, mas no desempenho do on-premise contra o off-premise a nível global?

James Robert B. Quincey:
I’m trying to process all the questions. I think you’ve beaten, that was Dara. I think you’ve beaten Dara. EMEA was a bit softer. Yes. I think on EMEA, we are — it was even though — so on EMEA, we’re expecting EMEA to be positive in the second half. And so there was a ramp effect from the withdrawal from Russia in the second quarter. But we — so Europe was in pretty good shape, actually, Europe ex Russia. If you take the first half, Europe ex Russia was positive. So we are feeling that now it’s dropped out of the base numbers in the second half that actually Europe and EMEA will be in good shape.

Obviously, EMEA has got a couple of the hyperinflationary countries like Turkey, like Pakistan, so EMEA could get other effects. But if you concentrate where Russia is, which is Europe, which is the biggest impact, actually, Europe had a positive volume in the first half if you take out Russia. And so we’re feeling good about Europe as we go into the second half. And I think the question really is the trade-off between pricing and volume in a couple of countries, particularly Turkey and Pakistan and for those that want to go deep down the rabbit hole, Zimbabwe as well.

Now the next part of the question, which was about our away-from-home versus at-home. Yes. It wasn’t just June, which was the strength in the U.S. basically the first half. You’ve seen the out-of-home growing ahead of the at-home and the recovery. And I think that’s the way to think about it is we’re seeing the back end of the recovery in the away-from-home.

Similarly, in Europe, in fact, globally, transactions were ahead of volume, which tends to imply smaller packages are growing faster than bigger packages from a mathematical point of view. So as a global feature, there’s a little more on-premise consumption or a little more small package consumption than large package consumption, which helps as well. But I don’t — we should see this as a new secular trend, more the kind of the last bit of renormalization post-COVID.

Operador:
A nossa última pergunta de hoje virá de Peter Grom, da UBS.

Peter K. Grom:
So James, maybe just 2 quick follow-ups. One, just on Chris’ question around trade down and improving affordability. Do you expect any changes in the promotional environment, particularly in North America? It doesn’t sound like that’s a shift you expect, but just wanted to be sure. And then just following up on your response to Andrea’s question, I would be curious how you see channel mix evolving as consumers seek more value in some of these developed markets, particularly just given the strength from away-from-home that you just alluded to?

James Robert B. Quincey:
We see the U.S. pricing and promotional environment as pretty rational. We have a set of strategies in place to try and balance our premiumization, regular and affordability strategies in the U.S., which includes a little more promotion than the first quarter. But basically, promo levels are very similar to prior years and not as a step up. And we think that we have the right balance of premiumization and affordability plays to be able to continue to gain as we did in the second quarter volume and value share in the U.S. So we think the environment is rational. We think our strategy works for us because we gain volume and value share. And we’ve got the right mix of — roughly the right mix of promo and price. And obviously, we’re going to continue to push the affordability and the premiumization play.

And then the channel mix question, do we think we’ll see in developing markets what — I think the principal feature is a renormalization post-COVID. I don’t think it’s kind of recessionary or inflationary or that. I think it’s just been — we’ve kind of seen a renormalization of the channel mix. We had talked over prior years about how big an impact on price mix and margin structure, the shift in channels were with what seems ages ago, the lockdowns. That has now largely played out, which is another way of saying, we don’t expect channel mix to be a major feature of the discussion in quarters and years to come.

Operador:
Senhoras e Senhores Deputados, está encerrada a nossa sessão de perguntas e respostas. Gostaria agora de voltar a passar a chamada a James Quincey para quaisquer observações finais.

James Robert B. Quincey:
Yes. Thank you, operator. So just to quickly summarize. Second quarter results, I think, demonstrate the momentum we have in the marketplace. We are navigating a broad set of dynamics in the local markets while driving scale and maintaining flexibility at a global level. We’re confident in our ability to deliver on our ’23 guidance and our longer-term objectives. Thanks for your interest, your investment in our company and for joining us this morning.

Operador:
Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.

Sonix é o mais avançado do mundo transcrição automática, tradução, e plataforma de legendagem. Rápido, exato, e acessível.

Converta automaticamente os seus ficheiros mp3 em texto (ficheiro txt), Microsoft Word (ficheiro docx), e SubRip Legenda (ficheiro srt) em minutos.

Sonix tem muitas características que lhe agradam, incluindo ferramentas de administração de nível empresarial, apoio de classe mundial, pesquisa avançada, transcrever várias línguase transcrever facilmente as suas reuniões Zoom. Experimente hoje o Sonix de graça.