The Coca-Cola Company’s (KO) CEO Muhtar Kent on Q3 2014 Results – Earnings Call Transcript

The Coca-Cola Company (NYSE:KO) hosted a conference call with investors and analysts to discuss Q3 2014 results on October 21, 2014 at 9:30 a.m. EDT. The following are the webcast audio and the associated transcript of the event…

The Coca-Cola Company (NYSE:KO)

Q3 2014 Results Earnings Conference Call

October 21, 2014 09:30 a.m. ET

Executives

Timothy K. Leveridge – Vice President and Investor Relations Officer

Muhtar Kent – Chairman and CEO

Kathy Waller – CFO

Ahmet Bozer – EVP and President of Coca-Cola International

Sandy Douglas – SVP, Global Chief Customer Officer and President, Coca-Cola America

Irial Finan – EVP and President of Bottling Investments

Analysts

Bryan Spillane – Bank of America Merrill Lynch

Ian Shackleton – Nomura.

Ali Dibadj – Bernstein

Dara Mohsenian – Morgan Stanley

Bill Schmidt – Deutsche Bank

Judy Hong – Goldman Sachs

John Faucher – JPMorgan

Mark Swartzberg – Stifel Nicolaus

Steve Powers – UBS

Operator

Good morning and thank you for holding. At this time, I would like to welcome everyone to The Coca-Cola Company’s Third Quarter 2014 Earnings Results Conference Call. Today’s call is being recorded. If you have any objections, please disconnect at this time. All participants will be on a listen-only mode until the formal question-and-answer portion of the call. (Operator Instructions)

Due to the interest in this call, we request a limit of one question per person. 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 any questions.

I would now like to introduce Tim Leveridge, Vice President and Investor Relations Officer. Mr. Leveridge, you may begin.

Timothy K. Leveridge – Vice President and Investor Relations Officer

Good morning and thank you for being with us today. I’m joined by Muhtar Kent, our Chairman and Chief Executive Officer and Kathy Waller, our Chief Financial Officer.

Before we begin, I would like to inform you that you can find supplemental materials on our website that support the prepared remarks by Muhtar and Kathy this morning. This conference call may contain forward-looking statements including statements concerning long term earnings objectives and should be considered in conjunction with cautionary statements contained in our earnings release and in the company’s most recent periodic SEC report.

I would also like to note that we have posted schedules under the Financial Reports and Information tab in the Investors section of our company website at www.coca-colacompany.com.

These schedules reconcile certain non-GAAP financial measures, which may be referred to by our senior executives during this morning’s discussion to our results as reported under Generally Accepted Accounting Principles. Please look on our website for this information.

Following prepared remarks by Muhtar and Kathy this morning, we will turn the call over for your questions. Ahmet Bozer, Executive Vice President and President of Coca-Cola International; Sandy Douglas, Senior Vice President, Global Chief Customer Officer and President of Coca-Cola North America; and Irial Finan, Executive Vice President and President of Bottling Investments will also be available for our Q&A discussion

Now, I’ll turn the call over to Muhtar.

Muhtar Kent – Chairman and CEO

Thank you, Tim and good morning, everyone. Today I am going to start with an overview of our quarterly performance and then spend the rest of the time addressing the strategic initiatives we announced earlier this morning in our set of release.

So let’s look at our performance for the third quarter. Our overall topline results for the third quarter were below our expectations. Comparable currency neutral net revenues grew 1% in the quarter and after adjusting for structural items due to factors both within and outside of our control. We continue to face a challenging macro environment; more challenging than was expected when we started the year.

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.