The Coca-Cola's CEO Discusses Q4 2011 Results - Earnings Call Transcript

The Coca-Cola (KO)

Q4 2011 Earnings Call

February 07, 2012 9:30 am ET

Executives

Jackson Kelly - Vice President

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Muhtar Kent - Chairman, Chief Executive Officer, President, Chairman of Executive Committee and Chairman of North America Business Integration Team Steering Committee

Gary P. Fayard - Chief Financial Officer, Executive Vice President and Member of North America Business Integration Team Steering Committee

Analysts

Mark Swartzberg - Stifel, Nicolaus & Co., Inc., Research Division

William Pecoriello - Consumer Edge Research, LLC

Bonnie Herzog - Wells Fargo Securities, LLC, Research Division

Bryan D. Spillane - BofA Merrill Lynch, Research Division

Judy E. Hong - Goldman Sachs Group Inc., Research Division

Caroline S. Levy - CLSA Asia-Pacific Markets, Research Division

Presentation

Operator

At this time, I would like to welcome everyone to The Coca-Cola Company's Fourth Quarter and Full Year 2011 Earnings Results Conference Call. Today's call is being recorded. If you have any objections, you may 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 questions. I would now like to introduce Jackson Kelly, Vice President and Investor Relations Officer. Mr. Kelly, you may begin.

Jackson Kelly

Good morning, and thank you for being with us today. I'm joined by Muhtar Kent, our Chairman and Chief Executive Officer; and Gary Fayard, our Chief Financial Officer. Following prepared remarks this morning, we'll turn the call over for your questions.

Before we begin though, I'd like to remind you that this conference call may contain forward-looking statements, including statements concerning long-term earnings objective and should be considered in conjunction with cautionary statements contained in our earnings release and in the company's most recent periodic SEC report.

In addition, I would also like to note that we have posted schedules on our company website at www.thecoca-colacompany.com, under the Reports and Financial Information tab in the Investors section, which reconciles certain non-GAAP measures, financial measures that may be referred to by our senior executives in our discussion this morning, and from time-to-time in discussing our financial performance to our results as reported under generally accepted accounting principles. Please look on our website for this information.

Now I will turn the call over to Muhtar.

Muhtar Kent

Thank you, Jackson, and good morning, everyone. Today, I'm pleased to share The Coca-Cola Company continues to operate from a position of real strength. Our brands continue to get stronger. Our strategies continue to be sound, and our execution continues to be focused and effective. All of this continues to drive sustainable growth and continues to bring us closer to achieving our 2020 Vision. One day, one week, one month and one quarter at a time. Thanks to the extraordinary determination and resolve of our 146,000 company associates around the world, we delivered volume and revenue growth this quarter in every one of our 5 geographic operating groups. And we achieved financial results for both the quarter and the full year in line with or ahead of our long-term growth targets, making this the seventh consecutive quarter we have either met or exceeded our long-term growth targets.

Our global sparkling beverage portfolio kept growing, up 2% for the quarter and a solid 4% for the full year. Our global still beverage portfolio is also performing well, up 6% for the quarter and a strong 8% for the full year. And we gained global volume and value share in nonalcoholic ready-to-drink beverages, while also gaining global share in both sparkling and still beverage categories. We achieved these results for both the quarter and the full year against the backdrop of a volatile global economic landscape. Even as we believe that the unease in the global markets will continue in the near term, the breadth of our global footprint and the strength of our brands create a business that was built for times like these, resilient and resolute to grow.

Our solid performance in 2011 reflects the consistent investments we have made over time to strengthen the health of our brands, starting with brand Coca-Cola, the very oxygen of our business, up 3% in both the quarter and the full year. In fact, brand Coca-Cola grew by at least 24 million servings in 24 different countries this past quarter. Our brand health and brand value have been created over the long-term through strong and consistent investments in our business, rather than through short-term incremental actions. And this is why we remain so committed to our long-term brand investment strategies. Our 2011 performance results underscore how our company, together with our global bottling partners, is well aligned and positioned to lead in this difficult environment.

As we enter into the third year of our 2020 Vision, our roadmap for winning together remains clear to us and our committed bottling partners. The assumptions that shaped our vision have not changed. Our expectations for strong performance have not wavered. The key to our calculus for growth and achieving our 2020 Vision will be to ensure that we keep creating balanced growth across both emerging and developed markets, as well as sparkling and still categories.

We successfully achieved this balance in 2011. For the full year, we delivered almost 1 billion unit cases of incremental organic volume growth, or the equivalent of adding another Japan to our business. And importantly, we delivered positive full year growth in key developed markets like North America, Japan and Germany, while also generating double-digit full year growth in key emerging markets like India and China. And we will continue to make significant investments in our future, all across the world.

In fact, in order to achieve our 2020 Vision, we anticipate our global system will add about 100,000 jobs in this decade as we invest to support the tremendous opportunity we see in nonalcoholic beverages, one of the fastest-growing industries in consumer packaged goods.

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