Coca Cola 2Q15 Earnings Call Notes

Grew double digits in China despite headwinds

“despite a soft macro environment in China, we grew brand Coca-Cola volume double-digits. A record 20 million consumers participated in China’s Coca-Cola Break consumer promotion, which along with the third edition of the Share a Coke campaign, fueled our growth.”

The global economic recovery remains uneven

The global economic recovery remains uneven. Given the continued slowdown of the Chinese economy, the prospective U.S. tightening cycle, as the U.S. prepares to increase interest rates, and the ongoing uncertainty surrounding Greece and its place in the Eurozone. Additionally, many emerging markets, large and small, remain challenged, as evidenced by our low single-digit volume declines in both Brazil and Russia this quarter.”

We estimate an increase in the currency impact

“We estimate an increase in the currency impact in the back half of the year based on the latest exchange rates, and after considering our hedge position, current spot rates and the cycling of our prior-year rates, we now expect an approximate six point currency headwind on net revenue, 11 point headwind on operating income, and a seven point to eight point headwind on income before tax for the full-year 2015”

Diet and frozen categories have been struggling for years now

“the Diet and frozen parts of the food and beverage industry have been struggling for a number of quarters, it’s getting into years now, as the consumer, the U.S. consumer moves really strongly to fresh. It’s a good dietary change, actually, for the country, but the impact on categories and particularly categories that are appealing to diet-oriented positionings has been pretty negative.”

The science and safety of diet sweeteners will be reinforced by one of our competitors

“Our largest competitor is changing their formula and they’ll be launching that in August and that’ll create a lot of buzz in the category, some of it good, as the good science of the safety of non-nutritive sweeteners gets out in the marketplace and is reinforced.”