Release Date: February 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more insight into the consumer environment globally, especially in developed markets like the US and Western Europe? A: James Quincey, CEO, explained that the overall consumer environment is stable with good economic growth globally. In developed markets, lower-income segments face pressure, but the rest of the consumer base is gaining disposable income and spending. Emerging markets show robust consumer demand, with improvements in India, China, and the Middle East. Coca-Cola is focusing on delivering value through marketing, innovation, and affordability to meet consumer needs.
Q: How do you plan to balance volume and pricing in your 2025 organic revenue growth forecast? A: James Quincey noted that the 2025 growth will likely lean more towards pricing than volume, with expected volume growth still present. The company aims for a balance of 2% to 3% in both volume and price over the long term. In 2024, high-inflation countries contributed significantly to price/mix, which is expected to moderate in 2025.
Q: Can you discuss the expected phasing of organic sales growth in 2025 and how it compares to industry growth? A: John Murphy, CFO, mentioned that pricing from inflationary markets is expected to moderate throughout the year. James Quincey added that Coca-Cola aims to gain share, with industry growth expected to normalize. The company anticipates industry growth rates of 4% to 5%, with Coca-Cola targeting the high end of its growth algorithm.
Q: What are the key drivers for margin and profitability progress in 2025, and are there any timing considerations? A: James Quincey highlighted that margin expansion in 2025 will come from marketing and SG&A efficiencies, including the use of generative AI for marketing. John Murphy added that modest gross margin expansion is expected, with low single-digit commodity pressures and currency impacts being managed.
Q: How is Coca-Cola addressing potential impacts from tariffs and changes in the global trade environment? A: James Quincey stated that Coca-Cola's supply chain is largely localized, minimizing exposure to tariffs. The company uses hedging and adjusts sourcing to manage commodity price changes. Despite recent tariffs on aluminum and steel, Coca-Cola remains predominantly a local business, with most products consumed in the US being made domestically.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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