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The Coca-Cola Company

The Coca-Cola Company's Guidance and Outlook

2024 Guidance

Revenue Growth:

  • Organic Revenue Growth: The Coca-Cola Company expects organic revenue growth of 6% to 7% for full-year 2024. This guidance reflects the company’s continued focus on executing its all-weather strategy and leveraging its scale to navigate varying market conditions.
  • Price/Mix Contribution: The company anticipates that pricing in developed markets will moderate as it cycles through previous inflationary periods. However, hyperinflationary markets will continue to contribute to price/mix growth, albeit at a lower rate compared to 2023.

Earnings Per Share (EPS):

  • Comparable Currency-Neutral EPS Growth: The company projects comparable currency-neutral earnings per share growth of 8% to 10% for 2024.
  • Currency Impact: The company expects a 4- to 5-point currency headwind to comparable net revenues and a mid-single-digit currency headwind to comparable earnings per share. Much of this impact is attributed to hyperinflationary markets.
  • Overall EPS Growth: After considering the refranchising of bottling operations, the company expects comparable earnings per share growth of 4% to 5% for 2024, versus $2.69 in 2023.

Volume Trends:

  • Unit Case Growth: The company expects modest volume growth, with a 2% to 3% increase in volume, driven by the company's focus on maintaining consumer franchise and affordability initiatives.
  • Channel Dynamics: The company anticipates a more balanced growth between at-home and away-from-home channels, with a slight tilt towards away-from-home channels as consumer behavior normalizes post-pandemic.

Capital Allocation:

  • CapEx: The company plans to increase capital expenditures, particularly in areas like fairlife and India, where there has been robust growth.
  • Share Repurchases: The company remains flexible in its approach to share repurchases, balancing reinvestment in the business with returning capital to shareholders.

2025 Early Considerations

Revenue Growth:

  • Moderation in Pricing: The company expects pricing from hyperinflationary markets to moderate in 2025, as these markets stabilize.
  • Volume Growth: The company aims to return to a more balanced growth equation, with volume growth picking up as inflation moderates and the company cycles through the high-inflation periods of 2024.

Earnings Per Share (EPS):

  • Interest Expense: The company anticipates elevated net interest expense due to deposits related to the ongoing IRS tax dispute and the fairlife contingent consideration payment.
  • Currency Impact: Assuming current rates and hedge positions, the company expects a low single-digit currency headwind to comparable net revenues and a mid-single-digit currency headwind to comparable earnings per share for 2025.

Commodity Environment:

  • Stability in Industrial Materials: The company expects prices for industrial materials to remain relatively stable.
  • Volatility in Agricultural Commodities: Agricultural commodities are expected to continue facing volatility and higher prices, which the company will manage through productivity levers and revenue growth management (RGM).

Long-Term Strategy and Levers

Marketing and Innovation:

  • The company will continue to invest in marketing and innovation to maintain brand relevance and capture long-term growth opportunities. This includes leveraging digital platforms and AI to enhance marketing efforts and personalize consumer experiences.

Revenue Growth Management (RGM):

  • The company will focus on optimizing price-pack architecture and tailoring promotions to drive both affordability and premiumization. This approach is crucial in markets where consumers are under disposable income pressure.

Operational Efficiency:

  • The company will continue to drive operational efficiency through productivity initiatives, supply chain optimization, and leveraging AI and digital tools to improve decision-making and execution.

Geographic Focus:

  • Developed Markets: The company expects developed markets to continue growing, albeit at a more normalized pace as inflation moderates.
  • Emerging Markets: Emerging markets like India, Latin America, and parts of Africa are expected to drive significant volume growth, with the company investing in capacity and execution to capture these opportunities.

Key Risks and Uncertainties

  • Hyperinflationary Markets: The company remains cautious about the unpredictable nature of hyperinflationary markets, which can create volatility in both revenue and earnings.
  • Currency Fluctuations: Continued currency headwinds, particularly in developed economies, pose a risk to earnings. However, the company has multiple levers to mitigate these impacts.
  • Macroeconomic Conditions: The company is mindful of ongoing macroeconomic challenges, especially in regions like China and the Middle East, and is prepared to adapt its strategy accordingly.

Conclusion

The Coca-Cola Company remains confident in its ability to deliver on its 2024 guidance and long-term objectives. The company’s all-weather strategy, combined with its focus on marketing, innovation, and operational efficiency, positions it well to navigate the evolving global landscape and create sustainable value for stakeholders.

Last updated on 01/14/2025 05:14 AM

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