Coca Cola 3Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Deteriorating economic environments

“In many of our key emerging markets we see deteriorating economic environments coupled with continued softness in consumer spending in the U.S. and particularly in Japan and Europe. This is placing strong pressure on the short term performance of our business. These factors have driven a deceleration in personal consumption expenditures and as a result the non-alcoholic beverage industry is growing one to two points slower than our initial forecast at the beginning of the year.”

We have to change faster

“we’ve taken a hard look at our progress to date. Our strategies and our actions and realize that while the five strategic priorities we laid out at the beginning of the year are on the right track we recognize that we must do more. Above all, the slope and pace of our actions must change to improve our ability to capture non-alcoholic beverage industry growth.”

cutting costs

“we will drive efficiency through aggressively expanding our productivity program. We plan to expand the program from 1 billion in savings by 2016 to 2 billion in annualized savings by 2017 and 3 billion by 2019.”


“third action is to refocus on our core business model of building the world’s greatest beverage brands and leading an unmatched global system of strong local bottling partners. In North America, we have a clear and definitive plan to refranchise the majority of our company owned bottling territories by the end of 2017, so at that time we will retain approximately one third of the total bottling distributed volume in North America. ”

Still generating a lot of cash

“We generated $8 billion in cash from operations year-to-date and returned $1.9 billion to share on us through net share repurchases.”

A 7 point currency impact??

“After considering our hedge positions, current spot rates, and cycling of our prior-year rates, we now expect a seven-point currency headwind on operating income during the fourth quarter of 2014, with a six-point impact on operating income for the full year 2014′

We’re in a challenged disposable income environment

“firstly it’s fair to say that we are in a challenged disposable income growth environment, that’s no question. The consumer is challenged everywhere around the world. Its not related to Western developed markets of Europe and Japan, United States and Canada, but it’s also related to emerging markets. There’s a lot of volatility in the world when you look at in the currencies, when you look at interest rates, when you look at the growth rates and when you actually factor in all the different geopolitical issues around the world. There just is a lot of apprehension.”