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spk_0: good morning and thank you for joining us today i'm here with james wednesday or chairman and chief executive officer and john murphy or chief financial officer before we began please note that we posted schedules under the financial information have an investor section of our company website at www that coca cola company dot com the scandals reconcile certain nine gap financial measures which may be referred to by our senior executives during this morning discussion to our result as reported on are generally accepted accounting principles you can also find schedules and the same section of our website that provide an analysis of gross and operating margin in addition this conference call may contain bored looking statements including statements concerning long term or needs objectives and should be considered in conjunction with cautionary statement contained in our earnings release and in the company's most recent periodic fcc report falling prepared remarks this morning will turn the call over for your questions please limit yourself to one question if you have more than one please ask your most pressing question first and then reenter the queue now i'll turn the call over to james
spk_1: thanks to him and good morning everyone in what remains a highly dynamic environment our first quarter results show promising signs that a broader recovery is on the horizon
spk_0: we're encouraged by early results in markets where mobility is on the rise this morning i'll share what we're seeing around the world and provide an update on actions we've taken to accelerate a transformation including improvements in our portfolio innovation and marketing approaches enabled by the evolution of my culture and our network organization then of hand over the cool to john to discuss the financial details of the quarter and how will continue to deliver on our objectives over the course of the it
spk_1: in the first quarter week addition that business recovery while executing a get are emerging stronger agenda equipping as system to win
spk_0: the start of the year pandemic related lockdowns was still impacting many markets
spk_1: we move quickly as conditions changed improving along the way and getting better at managing each wave and it's resulting knockdowns
spk_0: you're in the cooler we saw mobility increase in some parts of the world were locked out east and vaccinations accelerated leveraging our learning we drove sequential improvement is not business throughout the quarter
spk_1: and while we saw mid single digit volume decline through mid february trends have improved since then
spk_0: the pleased to say that march market returns a volume levels seen in march twenty nineteen prior to the pandemic we continue to see ongoing strength and am home channels offset by away from home trends which have improved sequentially remain pressured relative to prevent them at level
spk_1: the working with our customers and bottling palm to sustain at home and some and capture improving away from home demand for example in latin america prof better a program with a bottle of health the traditional tried drive through assistance with their marketing efforts resulting in outperformance in this critical channel
spk_2: in great britain will have to open a business accelerator program to support pubs bars and cafes in north america i use of male bundles driving incidents in pick up and delivery transactions with foods of his customs
spk_1: in twenty twenty we gained underlying share in both at home and away from home channels offset by negative channel mix this continues to be the dynamic affecting our share year to date to our ongoing initiatives and as away from home demand improves over the course the it will seek to build on these wins in twenty twenty one
spk_0: there are clear opportunities to refill right share positions of the recovery played out and will invest the drive of a mentor with focus and flexibility
spk_1: a market to the forefront of the recovery we feed early signs that our actions taken during the pandemic are helping of outpaced recovery
spk_0: it's important to note the path to a full recovery remains asynchronous around the world many markets haven't yet turned the corner and i still managing through the restrictions looking around the world in asia pacific china continue to lead the recovery with volume in the first quarter ahead of twenty nineteen results and foot traffic almost back to pre pandemic levels strong performance in india and southwest asia was driven by effective marketing across brands political solution and distribution expansion with two hundred and fifty thousand new outlets and forty five percent more new colors despite the unexpected state of emergency earlier in the year japan expanding successful our gm initiatives geographically and across brands to help drive improvements later in the quarter in a mere vaccine role and europe has been slower than anticipated and many countries have been impacted by ongoing lockdowns eurasia middle east brand coke recruited four point four million the through affordability packages and a focus on publications
spk_1: new marketing campaign drive improvement in play with sparkling soft drink and fuse to he reached an all time high value parenthood in africa mass vaccination is expected to take longer than the developed markets
spk_0: and despite on the volatility africa work closely with our bowlers did live a volume growth that by stepped up execution through cooler placement and affordability pack like returnable glafkos a north america the years of to good start ongoing strength in at home channels was driven michael brown's enough parking portfolio was well as simply fair life and gold peak all with encouraging results away from home began to approve in march as vaccinations and ability picked up a latin america will average a cold ram digital initiatives and refillable packages to recover ahead of the economy and our industry despite ongoing restrictions law from away from home continue to be impacted by lockdown they're expanding the and home consumption opportunity leveraging consumer dynamic like indulgence a single file multi backs global ventures continue to be impacted by lockdowns in the uk but as restrictions loosen with focusing on driving digital engagement and traffic back to the cost the stores of the express machine continue to live a strong performance setting for transformation are operating units are up and running and after very good start in the rollout of a new model across markets and yelling networked organization has as working more collaboratively with the overall enterprise in mind our operating you'd it and category leadership teams are working together did and for the most promising combinations across the industry based on economic outlook can see the trends channel dynamics and execution imperatives the using more disciplined resource allocation to capture the biggest opportunity while making on the ankle politicians faster and a scale with focused on a streamlined growth portfolio actively and thoughtfully transitioning grant to more powerful trademarks using a fate approach to bring the consumer with us on the jet and were maximize a shelf space a new product launches a higher velocity products to drive high quality growth
spk_1: we discuss the cagney with focusing on what we do best marketing i love brands in more efficient and effective way that's right let's be clear campaign kicked off the mark is from asia to africa the latin america
spk_0: the message is reddit id with consumers with impressions views and engage with levels above last year and a ten to purchase metrics from some signs this campaign aligns with that transition to a more sustainable clear bottle which is important in helping us achieve our world that wise goals our media and creative agency read reviews are progressing and were also executing more target the opportunities in addition to the big strategic shit for instance with they get a scaled digitized approach to buying trade materials result the are up to fifteen percent cost reduction and improved user experience all while offering more consistent better quality and sustainable hunters with extended this cool buying opportunity to a bottle as many of whom are already on board to share the benefits if the mine i'm more disciplined innovation approach is yielding results as we balance big bets with intelligent experimentation you the and network approach with scaling our best innovations quickly and effectively while being disciplined with those that don't get the traction require further investment local experiments like aquarius with functional benefit and i attack at cafe match your lap the in japan find is exciting mystery flavor innovation in europe and package innovations like the thirteen point two and recycled eighty barkley north america could all be lifted a shifty globe the time simulate what we're doing this year with a half live it's fucking water abby bad for twenty twenty one include ongoing work to scale up coffee platform and acosta expanding way to drink coffee in china attacking a portfolio approach to complement a powerful georgia coffee brand in japan we're also rolling out hands formula and package design for cover gotta zero for sure that this month in europe and latin america and across markets globally later this year
spk_2: improve recipe brings his take even close to that of the a comic coca cola regional taste it was influenced by consumer insight and i focus on constant improvement and despite his enormous success cover color zero to the still represents a relatively small percentage of the trademark and we continue to respond to consume a desire for lower sugar option and the rollout will be supported by global occasion base mccain campaign
spk_0: finally it's early days though we're excited to come back and report on i expanded experimentation inflame an alcoholic beverages with top of chico hard silva in latin america europe and most recently the us
spk_1: we also continue to rapidly digitize our ecosystem for example a chat bot in south africa engages with consumers on social media to increase away from home transactions
spk_0: in china with use digital campaigns to harness consumer data to drive traffic and incident leading to incremental growth we're using machine learning an ai to stay on top of a rapidly evolving consume consumer friends and identify emerging me a dedicated digital transformation structure it leading to strong online or offline growth hussein a coma she again in a p advance markets like north america japan angry bring a market by turkey weather channel is still developing the more than tripled sales and gained almost ten points to share this
spk_3: last year
spk_0: as always we're supporting these an issue is with strong revenue growth management execution through our gm we continue captcha at home occasions with multi back options in both premium and affordable segments while expanding distribution of smaller packaging like athlete camps in china and we have affordability played like a successful refillable the latin america the philippines and now africa the thought of our new organization with dedicate a more resources to our gm continuing to raise the bar that even higher than that in many markets were working with up only parliament optimized cooler place been driving incremental volume through outstanding customer service i call a part to the and innovation
spk_1: i bottling partners are executing strongly and together we are working on unleashed is across the enterprise to identify more efficiencies were operating in a net worth way leveraging our platform services organization to scale i collected data marketing digital and supply chain capability
spk_0: a system continues to evolve as shown by the pending combination of cover girl european partners and the color amateur and just this morning we now our intent the lit coachella beverages africa as an independent african bottle up to an initial public offering
spk_1: i'm especially proud of how we're delivering on our purposes company every action is guided by our ambition to create a more sustainable business and battleship future the makes a difference in people's lives our communities and the planet
spk_0: throughout the pandemic we focused on helping communities through relief funds from the company and the cathedral a foundation in his next fight we're supporting vaccination efforts in regions where distribution has been slower for instance in brazil our system has partnered with countries ministry of health code create a vaccine awareness campaign using our network deliver seven hundred thousand versus with vaccine information the more than three hundred and fifty thousand mom and pop stores tomorrow they'll release at twenty twenty business and yesterday report where we will highlight last year progress or twenty twenty with a milestone year into the meeting and exceeding some previous gold i women's empowerment and global water replenishment we continue to will work toward an even more ambitious agenda they include that twenty twenty five and twenty thirty packaging goals at twenty thirty climate gold and i knew twenty thirty what a security strategy with more detail the come later this year
spk_1: in conclusion were optimistic about the future and bullish about our ability to continue to live on the object is whether you laid out at the height of the crisis
spk_0: morgan see him as more share better system economics and a positive stakeholder back now authentic the to john discuss how are delivering results through i continued dynamic environment thank you damn and a good morning to everybody on the call
spk_4: today i will highlight or fourth quarter performance and go over our top line and earning guidance
spk_5: could we are he is reading
spk_0: then i'll provide a product of ten i'm working capital our ability to manage through the current of the environment other factors that may impact or outlook
spk_2: twenty twenty one is off to the thought with a quarter showing that he he clenches monthly improvement
spk_0: we're leveraging are learning and strategic initiatives from twenty twenty
spk_4: and leaning into growth in it out for way
spk_0: are you one organic revenue was up to fix present driven by concentrate shipment of five percent and price make improvement of one percent
spk_4: by shipment benefit from certain timing impact and the five additional days this quarter vs last year
spk_2: unit kid valuable flat rest of the toughest quarterly compare of twenty twenty and march volume was in line with twenty nineteen levels largely driven by strength in asia pacific comparable gross margins although still down year over year improved sequentially driven by less pressure from channel and package make and a currency was still somewhat of a dry it was less of a headwind than prior quarters comparable operating margin expanded to ongoing discipline path management we continue to reintroduce marketing stand in a to that way particularly as a ramp up investment in markets that are seeing recovery
spk_0: fourth quarter comparably ps a fifty five cents it an increase of eight percent year over year and was driven by top line graph margin improvement and some contribution from equity income off this by the headwinds
spk_4: regarding our ongoing tech and with the ira
spk_0: there are no material updates since our last report our decisions and actions from last year certainly we're not a the
spk_2: but we are seeing results our efforts sought to come through and our organization is embracing the changes as we move forward into the recovery phase
spk_4: we stayed very focused on driving a healthy top line
spk_2: and we remain on a journey to maximize returns including strong castro generation
spk_4: we never relented on our cash flow goals and indeed have added even sharper focus on managing capitals then and working capital since we embarked on a journey toward best in class working capital performance we've made great strides in extending our payment terms generating a working capital improvement of more than a billion dollars over two years
spk_0: in the same vein we are implementing accounts receivable stifling program which are rolling out across the number of markets
spk_2: and also looking at initiative to better manage inventory days at the center of the the effort is a robust digitization and automation agenda
spk_0: in addition and you heard of talk conceptually about the network model this is a great example of the network in action
spk_4: and when you put the right people from different parts of the organization
spk_6: against key initiative
spk_2: it delivers the theft tens in performance
spk_0: last quarter with that that despite arriving tomorrow the environment we expected a relatively benign impact and twenty twenty one given our heads to positions
spk_6: while it's continued to be the case
spk_0: were closely monitoring upward pressure in some input such as high fructose corn syrup
spk_4: pt metals and other packaging materials and the impact of as well as or buffy partners
spk_2: given the environment we continue to benefit from revenue growth management initiative through an intelligent the the worst price tag architecture we can produce a range of options that meet the needs of consumers across the in income spectrum while also capturing value for customers twenty twenty provided great learning on how to be more surgical and data driven in our promotions and we continue to be purposeful in our approach driven by the consumer and the strength of our brands will also continue to pursue productivity across the supply chain putting all laborers at her disposal
spk_4: since we last provided guidance the us dollar has strengthened and i've been on generalise we now expect currency to be a tailwind of approximately one to two percent to the top line and approximately two to three percent to comparable fps in twenty twenty one based on current spot read and our heads positions
spk_0: for the full year we now expect an underlying effective tax rate of nineteen point one percent putting it all together or quarterly performance
spk_4: and the momentum we saw in march give us confidence and our ability to achieve our twenty twenty one guidance we expect hi single digit organic revenue growth and hi single digit to load double digit growth in comparable earnings per share
spk_2: we still expect recovery to be i think this and to see signs of return to normal and more market later and twenty twenty one we are preparing our into and supply chain for stronger demand and will fuel the momentum in recovering market as they emerged from the pandemic by accelerating investments in our brands there's no doubt that uncertainty remains europe continues to the challenges
spk_4: many countries and regions like latin american africa
spk_2: expect further wave and floor vaccine distribution and india a thing of sarge and cases and responding with localized lockdowns boss
spk_0: as we begin to laugh the most difficult periods from last year
spk_4: we feel good about our position and our ability to navigate the environment as the company and as a system
spk_0: based on the lessons we learned and the agility provided by our new networked organization
spk_2: we remain confident that our actions and the progress we've made with able to deliver twenty twenty one earnings at or above twenty nineteen levels
spk_4: without operator we're ready to take questions
spk_7: ladies and gentlemen to ask a question you will need to press star one on your telephone to withdraw your question press the pound key in the interest of time we ask that you please limit yourself to one question if you have any additional questions you may be joined the queue our first question comes from the light of darragh mycenaean with morgan stanley gareth your line is open
spk_8: hey guys
spk_9: so and
spk_10: clearly toppling growth and in que on him a recovered do greater extent than the market expected you guys mention a good start to the year of his queso improvement so i guess a can you just discuss volume trends in march and market square restrictions have loosened and mobility is picked up such as the u s maybe contrast that with markets where wrist redskins are still in place that and what that portends going forward and then be totally understand that a very fluid environment but with march volume already back to two thousand and ninety levels the top line of heard in the quarter can you just help me understand the unchanged for year topline outlook on is it just that it's early given the volatile they really have one quarter in the books to become more positive on the four year just throwing sort of trying to understand your mind set on the for your revenue guidance relative to the cuban outside backs
spk_11: shaw
spk_12: thanks are so
spk_1: thirdly the first one was strong
spk_13: absolutely we gain momentum and and we we achieved that good momentum in the first quarter which is really the fruition of the emerging strong the plan we set out a year ago family why to get back to twenty nine and pain levels well ahead of the economy
spk_0: by guy anymore shamil customers better system economics
spk_13: and i think what that's what you're starting to see happen in the first quarter and obviously we've been driving that by focusing on the brands and on the innovation and the borders of in executing in the marketplace and it certainly heartening to see if get back to twenty nineteen volume levels in march
spk_0: and and we did all of that while doing finishing the the implementation of the reorganization so in other the employ them that on the canvas i were able to both deliver the results and stand up a new organization with the operating in as a platform services and and really hit the ground a running fucking is actually a super credit
spk_14: or a performance
spk_13: in in the first quarter secondly the the downhill and that and the question about guidance i mean ultimately it it early and and it's not early just in a normal fans it's early in the context of the pandemic
spk_0: i'm also in are breaking the news today is that weekly new cases of called it has hit an all time peak for the the and while vaccinations are rising in many countries us uk excedrin the the the flip side is that actually a new high in terms of cases are obvious the a number of developing markets and developing markets but also
spk_2: a europe as well continental europe as well so the visibility into the downhill is very much link to the trajectory of the pandemic
spk_13: and and and and and and as it relates to our business the trajectory of the lockdown
spk_0: you know very clearly as we talked on a previous for this lockdowns because we have half a business in away from home are impacted
spk_13: directly by a degree of the degree of lockdown and and out there are still locked out coming on you know a number in europe or some of the developing markets conversely as market stop open and after the u s o in the present in the u s or the fountain volumes were still negative in march because wild
spk_0: people are going out the restaurants in that more mobility i'm not back to what it was you know that
spk_13: the the occupants levels of offices are nowhere near one hundred percent
spk_0: and follow reopening is not an on off switch there's they rebuilding of if a series of phases of reopening and so that's than a very important factor it's it's somewhat unproductive the downhill so it's it's too early to call not in a business sense but in a lockdown and reopening sense and and the reality is that there are more cases now than there were a while ago so week we still feel very confident in i guidance on the top of the bottom line but there's a lot of managing left to do and we certainly focused on giving ourselves the flexibility and the to be outcome to this them that more revenue is always gonna float straight out the bottom line much as we did in twenty twenty we are gonna be very tradition of but we believe reopening and demand is coming back and not the best thing or if we don't think is there are you gonna say as we go through twenty twenty one we will be looking at both leave as if we see that demanded coming in or are coming in at the kind of it
spk_13: iran has more reopening happened more quickly for whatever reason at the eerie accelerate the
spk_15: conversely if if
spk_0: whatever reason revenue staff the look a little weaker and we will we are like the whole back on full of them off things i think it's important that you think about the rest the year
spk_13: that use that don't think of it as a normal times one half thing
spk_16: about how we are
spk_2: using the rest the drive growth
spk_17: ah and get back to normal
spk_7: your next question comes from a line of brian stuff
spk_18: i up and hey i beg you operator good morning everyone i can i wanted to pick up on some of the the comments he made relative to are inflation and i ah you know twenty one into the twenty two pick given the recent trends you know which have elevated pretty meaningfully you know across a lot of input thrill across our call covered universe on it that's the in effect for twenty two can you talk a little bit about what what you can do working with this huh try to manage that inflation and and really beyond revenue management so just how much what type of of actions can you take turns the procurement or maybe finding inefficiencies that exists between you know the coca cola company the bottling system does it really kind understand you know in a in a scenario where inflation stayed meaningfully elevated in a way that you know we haven't seen in a real long time just what types of things you know you can contemplate the try to help the system manage that voice
spk_19: thank you brian good morning
spk_4: the topic and and one but
spk_19: with are bottling partners around the world
spk_0: our we're looking at the very holistic manner
spk_4: the of managing inflation is not new to the system a working closely
spk_20: in partnership with with our partners there is the edges
spk_0: particular surrounding looks like it is going to be more of a headwind and twenty two twenty one we are as as we said in the really pretty well covered and and in good shape
spk_13: and so when you think about the the actions we take for some form of the think it is important to to to highlight that as a as an over arching principal around the world with any luck to take pricing in line with inflation
spk_19: and i would expect the that principles will continue to be
spk_0: here to as we move into the back half of twenty one and even and into twenty two secondly file i know you mentioned beyond our gm i do think it's important to to reinforce the value that our gm brings to the inevitable a peculiar pricing strategy in the most relevant and many profession locally
spk_4: and for that will continue to be a key priority at hardly on the thing that we can do on the productivity area
spk_0: i how i would point to the plate and particularly with our with our bossing partners in the last six to twelve months
spk_4: coming through the pandemic indeed coming out of us that the level of an engagement we've had with are within the system on
spk_13: unlocking value in the supply to and through greater efficient than faith has been has been phenomenal and with expect that momentum to continue into the rest of this
spk_2: here and into twenty twenty two we have had over the last number of years at the benefit of
spk_4: leveraging are cross enterprise procurement group a group of people that work on behalf of scale of the system
spk_21: and them and i think arrive us some of them off come and guess and anybody can guess when it comes to a key and put so when you take her as of a sort of an overarching holistic view of us
spk_13: we we've got
spk_4: but of i think of try and should practice of inevitable
spk_22: take pricing in line with inflation leverage your gm to do with and
spk_13: the most intelligent fashion
spk_7: an increasing the operate as a global system to leverage or scale taking into account some of the for the has crossed enterprise procurement but also new a new opportunity the founding as a result of the overall strategy we've been pursuing during and after the pandemic
spk_23: your next question comes from a line of neck modi with rbc capital market neck your line is up
spk_12: thank you good morning everyone gets kinda hoping you could provide some tangible examples of how the completely decision making infrastructure and benefit manifesto better outcomes i'm generally on negative can't contract know what those things would have looked like under the older model
spk_1: monkey
spk_12: chara nick
spk_0: i have a few examples one i think john's already mentioned the cash flow we we struggle for many years to get up into best in class
spk_24: cash commercial working capital on the work that have been done by the finance their work as produced the great result and that's you know clearly flowing through ah i'm not just in terms of the kind of the radical amount of days working capital but the actual cash coming into the company in the first call
spk_25: auto which was a really strong result of and and something that we have struggled
spk_13: how to do it in in the past another example with the we have been rolling out a
spk_12: a global campaign on sprite which has got excellent early traction in terms of consumer engagement in terms of purchase intent
spk_13: and that was developed by the category leads and and and the key or off writing units and a thing
spk_0: rolled out across the world something that we are
spk_13: were unable to do on able to convince us out the up are historically and so we believe that that is making some cut through
spk_0: the supply chain optimization working with the model isn't and really focusing on reducing that that the unit cost of what we do and looking across all the matrix
spk_25: an increasing data transparency
spk_13: it is happening and then you you you go to some of the a platform services
spk_24: where were really darling to be able to implement
spk_0: especially in those areas where one single global solution makes total sense
spk_13: we we've we've had examples from buying trade materials
spk_2: of fruit through global platforms driving significant savings for i felt and the system
spk_7: and then hopefully light of this month will turn on our latest effort the up there with will go from the one that was done twenty years ago which would probably one of the world's most complicated and therefore most expensive too much more effective solution sliding across the company from the front end of marketing and guy
spk_26: i usually consumers through our operations through to the bottomless ah we are able to my the contact points and and get faster better solutions your next question comes from the line of lauren lieberman with barclay florent your lines health and great think how much the morning i'm pagan bleeding from our three and last question but am i want a little bit about profitability because it was in you think any that i think margins and almost every division outside of any more comfortably ahead of where they were in the first quarter twenty nine pm and knowing that common comfort necessarily a dynamic for all regions in the first quarter of last year by filled benchmark back pain a popularly improvements are significant and
spk_27: so i was curious you know how much knowing came your comments and wanting to invest his support recovery is a very important dynamic but how much you think of them that market improvement and were thing healthy at this point is high these are broad range of cost management and the hidden
spk_28: the an el caso board and and our game and clinton or his timing of marketing at the need to put back in and continue funding ss and it may be different region to region of course as well thanks
spk_0: yeah by flirt looked up clearly the that the reimbursement of a marketing is gonna vary somewhat a by region in in twenty twenty one and for the for the reasons i outlined in that answer to the first question so i think it's it's important as you think about margins to recognize that twenty twenty one is also gonna be a somewhat a typical that will be markets around the world where we were we judge the situation such that we don't have a normal level of marketing and so that does tend to favor margins operating margins are at that point in time
spk_13: as and so it it it is it is important to break it
spk_0: break it apart and look at it by the different regions of we certainly not coming out with with with some numerical them
spk_29: margin target for many the same reason
spk_0: we remove the previous sorry but we are focused ultimately on growing the business and embedded in our long term growth model is an implicit assumption that weekend slowly and steadily perhaps better said or improve margins over time because there is a lot all the fish
spk_14: should see we're going on
spk_0: within the cost of goods sold out within the dm a particular the not working part of the me week got a lot of focus on
spk_2: the agency roster and how we spend the money we spend before even get to see that the consumer or anomaly we've done the network organization which was about making us are better able to support the growth aspirations are but it is also more efficient organization
spk_25: as all those things will go into the mix
spk_1: i on it would be remiss of me and not include or the impact of our gm because it to the extent that we can leverage our gm that also helps on a gross margin
spk_7: and ultimately operating income on the we will be pulling all those labels
spk_30: as we go through twenty twenty one but it but again i won't be a fully normal year in every region until you will see some of these strange effects
spk_0: your next question comes from the line of color from the boy with hsbc cholesterol and it's open
spk_4: yes good morning everyone could you could you give us a sense of where you are seeing some notable progress this past year
spk_1: on digital transformation perhaps tied into into this inflation
spk_12: and margin question right by commenting on how digital tools or perhaps helping you mitigate or stay ahead and inflationary pressure in some in some markets them that might be getting ahead of the curve you
spk_2: i mean that the digital transformation is is is much above and beyond
spk_0: coping with him with inflation a lower cost of some of the to will help us a manage if isn't that isn't as deflationary as bike you know clearly you could look at the digital transformation in terms of our engagement with with consumers in there are there are some good examples of progress now china which is started the a very strongly not just compared to twenty twenty but compared to twenty nine thane have been a much bigger shifted the digital engagement with consumers or even
spk_13: in in japan with that with our own coke on apps that that we use a to connect people to the vending machines and them and the cash with options in a large uptick in in monkey that he was there is a great deal of progress being made in terms of how we a through digital media how we engage directly
spk_0: consumers are in a digital relationship that to the helping their out the system i used i told that example of buying materials with with with with digital platforms the played of a huge piece of the of when it happened with the backbone of both the company in the bottle of in the into operability of all the data ah where we're making a
spk_31: excellent brother and ultimately although when five on although deficiencies help us manage the the the inflationary pressures out there whether we use the inside to engage more consumers are you the inside to to know to to drive the our gm of thinking are and implementations or to identify
spk_12: efficiency them in the in a way digital is becoming just the way business is done
spk_13: and it's just
spk_4: it's just like i curled up and have to manage the business unusual the polls that all the things i gotta do
spk_5: maybe i to fanatical one commentator james
spk_2: if you think about the emerging stronger program the we've outlined or less sick for nine months it would not have impossible to do three years ago
spk_7: i'm the on the degree to which we have you ever to operate in a
spk_32: and a fast and efficient manner across across the globe to deliver this program is all just the fact that we have essentially become digitized and how we work and how we operate just to support button on your last calendar
spk_0: your next question comes from the line of steve powers with deutsche bank steal your line is open
spk_10: thank you
spk_25: maybe accompanied by for top line to be a march going back to even with you that nineteen is it is is very key and promised meltdown and we've seen sequential progress on the last few quarters but i guess i'm i'm curious whether that trend back to do a ninety levels and been relatively smooth on global basis or of there's been more
spk_13: volatility underneath the service service that made me appreciate looking at the had my numbers so maybe you can display framers how performance vs to the my penis trend of the past few months and if you expect those trends to and how you expect the strength to evolve over the course of the year in terms of weather will be relatively smooth and even or are lumpy
spk_33: with case counter vaccinations know like i guess ultimately if he ever did he expect to be back to growth versus nineteen when the dust settled on april or a lead to that you ambitious
spk_13: so the the the progress when you when you stand back and look at the numbers in aggregate clearly you know april was the deepest hold that we fell in food or in twenty twenty and then as we adopted the business on really drove ah
spk_0: what we were doing them here we sequentially got better so kind of with felons the whole lot like minus twenty five or something
spk_19: ah in in in april last year and and it was the no negative teens and then negative single digits slowly improving through the rest of ah
spk_0: twenty twenty ah and then coming into twenty twenty one are obviously within you know cycling
spk_13: the bad a baby compared to twenty nineteen it got better as we went through january february which was still below the ninety levels and and on the march was
spk_0: was about i'm in april april a started well it's obviously the gonna be the way this month because recycling something very low i think most importantly i would refer you back to the comment i made the second thing i said it relatives or in the first as that which is
spk_2: just because march go back the level and i just because i pull a started well one week that note that no guarantee that that is then some kind of train that is in the bank the that the principal uncertainty remains the risk of additional lockdowns much
spk_13: just twenty nineteen or twenty twenty these numbers were you know of heavily impacted by the degree of lockdown that will remain true
spk_0: the he thought whilst we've got back a lot of above the line a flotation in in march there's no guarantee they won't be some extra degree of lockdowns a male september or december
spk_34: that than you know put pressure or back on the basis of
spk_35: i don't think i know i keep hearing this point in a we had a superstar the year the momentum building but this very unusual factor the pandemic the lockdown continues to be an uncertainty fact that the one can't draw a straight line through the historic data now once you get onto the surface of of the overall global numbers were
spk_0: kind of
spk_2: look like the kind of that the tick mark if you like a going down and and kind of steadily improving a clearly eat you get much more variability of a country level again
spk_1: heavily influenced
spk_7: by the degree of lockout so of
spk_36: you know in the same april last year with the worse because you had the most number of countries most the highest degree of synchronization of lockdown globally anna and i think this idea of sighing the recover recovery will be a synchronous is we already see that in the first off you got countries where the vaccine levels are going up and the reopening is occurring us uk china for examples and yet you got country's going in exactly the opposite direction with cake the shooting up
spk_37: i'm more levels of locked up and that's that's what with run a highlight with this i think of it may be that as a total company or it all looks smoothed out someone to this asynchronous feature will be very important and twenty twenty one
spk_12: your next question comes from the line of bonnie herzog with goldman contract bonnie your line open
spk_0: well i think in the morning everyone i was hoping to switch gears a little better and maybe here a little bit more collar behind your decision tie kill africa
spk_24: and i know you guys have explored as sale in the past but why do you think you know this is the right decision for that business and then had you expect this will impact the performance of the business going forward and know maybe potential benefit you might see bass
spk_0: sure face on it up it means certainly i always been our intention to reduce or ownership in cc biya is in line with our strategy as john puts it to become the world's smallest coke bottle ah as the we were always the contemplating a how we would refer uncharted mean the ccp i covered all about his is ice strong well structured capable a bottle and we have always considered as one of the options are weather
spk_38: to have it be a freestanding
spk_0: entity in it and we have a recent inclusion that one thinks about the future potential of the african market on the african continent ah
spk_2: i've had and how much long growth there is there i'm an idiot the youngest billion people are in africa are we think it would weave ultimately counsellor it would be right for the development of the business in africa to have an african headquartered african a bottler
spk_7: that that that is you know operating on the confident and and so the wraith the wraith really is we believe in the future of africa as a continent as an economy out with the we got a great
spk_39: i'm capable of the bottler
spk_40: that can help lead our ability to grow their and then an ip out or will allow us to set that up
spk_19: have to be a source of road for many years come
spk_41: your next question comes from the line of andrea to shariah with jp martin on track your lights up and
spk_4: then kill for it or the morning and also to compromise how much them parts of the winter storms hiding of on in one and as a follow up on your comments before thing you can give us an idea how your training and queue to the same way you then we help us in the first quarter and just becomes a hit hardest by quick one on on the west texas view on what is your bank kids and come for the tiny for the a few at this point and your impact on the castle
spk_20: yeah i'll have taken us and then he started the with it
spk_4: quests and and the thank you for the questions but that sort of the tax question
spk_0: in terms of the say on timing it with we do not have a we do not have a
spk_4: picture at the moment we are dependent on the outcome of another case
spk_19: before any further develop and take place with our own case
spk_4: and we have no visibility into that outcome so we'll keep you apprised as we as we know more
spk_20: on the the storms in the us
spk_4: not a material impact to our business
spk_7: and with regard to volumes and que to
spk_10: but still early in the in that and before a lotta
spk_30: as a more than i think i think the key highlight ready as we have a look at them as we look at the them down downhill is is the fact that march was
spk_42: the significantly improved and a number of market for mobility is is improving and them and will continue with a to see a close relationship between mobility and our performance
spk_13: your next question comes from line of code not as roma from credit suisse canadian months open
spk_0: morning everybody on and and such a transition operator how don't get that frequently thank you i'm and if i asked pounds james john about competition on the new particularly in the united states or looks like that she's getting some momentum we obviously just heard from them on friday jurors that seems of course the pricing remains rational but i'm perhaps from a competitiveness pricing or maybe that's increasing such you could just talk about what you're seeing their mom
spk_13: a be for thanks
spk_0: but
spk_13: they they that certainly that the way always
spk_0: happy to see other company other companies invest in in a into the beverage industry that tends to grandma consumer guys went
spk_13: ah and and obviously we we pay attention to what they're doing so hopefully we can learn from them or there's a lot of very capable competitors out there so we like them we like up we like a learn from them
spk_7: but but in the end we we focus on what we can do anything and in and in the us in particular
spk_43: the cat channel make the side we we ganesha we ganesha going forward and in beverages in the us business and we we feel confident that as the channel trains and the reopening bring back the the the away from home of a businesses which of course they started to do a march then we will be able to capitalize on on those trends as well as it relates to pro promotional activity i mean ultimately will we are seeing a kind a rational a pricing a promotional environment in the us on will certainly be looking to build on that are with our our gm capabilities and with the bottling system to really drive and leverage investments will collectively making as a system in the marketing ah and the execution to to drive the the business though it
spk_44: your next question comes from the line of broth and speak with evercore isi rub your lines of and
spk_2: great thank you very much
spk_0: the couple of questions on on top of chico ah it looks like a very strong star in the us s of about a three percent market share ah but you know you start even earlier i think in october in mexico and brazil
spk_13: hi and now rolling out and europe can you talk to us a little bit about you know how ah
spk_0: i you feel about the execution of the at the bottling network ah with are and adult beverage i any signs of of trends in terms of repeat and some of the early or markets i and any general learnings that you've gotten so far as you evaluate ah you know what can be a new
spk_13: new growth engine for the company thank you
spk_0: i am
spk_13: so in the markets where it's been a long longer the lack of america and europe about forty markets between them
spk_0: the that a couple of a things with thing obviously that the degree of resonances depending on the degree of category development that might already exists or not exist it in some of those markets
spk_13: ah and so we think different levels of engagement depending on whether the categories there are secular a we would clearly in the mode of learning how to compete in this category both the branding point of view
spk_2: and from an execution point of view
spk_0: but with with definitely stand to say improving trains and good repeats
spk_2: in the context of the different markets where it's been launched a whether that be latin american or in europe was still building out distribution a
spk_0: but we we we've we've done a good start in europe a little easier as i said because the categories of bit more developed in the west of us is the east and so i focus is maximizing the amount of learning other with doing and as it relates to the u s a lot that overall sherry's three and i i would double on the line that topic jacob as a brand is well known in the us
spk_29: and therefore you know get drunk driving or creating trial on a well known brand out
spk_0: with an innovation is actually relatively us and we have not yet got to the point of habit
spk_13: having having opened a big caveat umbrella
spk_0: i would comment that you know
spk_7: i have three percent overall in the us but actually in texas
spk_45: ah where we've kind of concentrated some of the the the launch it's almost hit the twenty share in the first two weeks of launch the we we are in
spk_1: courage to by the the early results but it's old and come down to repeat and nothing's worth anything without with eight
spk_12: your next question comes from the line as kevin gandhi with jeffrey kevin your line is open
spk_1: great thanks to my everyone and i congratulations on the night progress is quarter
spk_2: kinda wanted to come back your asia pacific they specifically china honestly really strong result is comes on the heels of pepsico strong result in china as well as i honestly earlier to the pandemic than than other country than than using i strong consumer demand here though a few questions please one can you talk about what you seen by channel though that home and away from home
spk_0: maybe comment briefly on come on the trends in april relative to the throng result in the first quarter and then last please just how the strong demand in china maybe informing forming your view with respect to recover in other markets thank you
spk_2: ah sure
spk_46: yet clearly clearly good results are good result in china
spk_17: with definitely amounted to be lapping are beginning to lack that kind of the worst the twenty twenty but ahead of planning on the the riyadh a jiving a china with with the consumer marketing with a big push into flynn guys were with the consumer with the push into
spk_2: he commerce and and we are we are benefiting from that it is worth noting that that in terms of the channels
spk_0: almost what we say and the his true you know when you look at not just china but if you start looking australia or even or even the you you see canada faisal waves of the reopening
spk_25: and so as the reopening cause actually get a lot of people going out to restaurants
spk_0: and the kind of that the full service
spk_25: eating away
spk_13: athens and that goes up bearing in mind that
spk_7: the universe mom and pop stores in the universe a small restaurant has shrunk people that the number of people are running out of visit has has shrunk and i think we're going to see that all across the world to the busy
spk_0: the the very the consolidation sectors that the reopening goes you see a lot of going out in the evenings to all the channels related to that come back for the second kind of way of improvements in channels are is is loosely in the bucket of office and commuting
spk_4: because you know as reopen happened people go out yet the offices are back to one hundred percent capacity for you not got that ecosystem of commuting and lunchtime in the big city centres ah half full ah and that the kind of the second business coming back in china and actually don't see that back yet in the us in a in march you see the restaurants and of bouncing back be don't see the the kind of the ecosystem of commuting in offices and having bounce back any when it is a grin and as a third phase which hasn't really happened yet ah which is kind of the large gatherings kind of
spk_0: phase of channels with the that they you know cinemas council sporting events etc etc are not only very partial i as i think think of that kind of a set of waves of reopening as as the economy normalizes and we thought about that and and were kind of investing a both in the consumer of
spk_7: oliver doing a great job investing for the customer the retired of them with thing a very nice result
spk_47: the next question comes from a line of sean king with tbs shine your light it's open
spk_10: thanks
spk_47: a have your number of region but as a pet concentrate sell back came and eleven point the head of yeah case volume but what drove that gap besides the i get the calendar chefs and to be expect the alec a reversal in this dynamic or something that is sorted by you're gonna continue add with the market reopen so far as a pact with the or to specifically on your question yes they affected run ahead mainly due to the extra days in the quarter
spk_48: and we also had a timing impact with regard to chinese new year in in china other thing
spk_0: and them and so but for the quarter overall you sell itself gallons running ahead manager to the extra days in the quarter
spk_13: yeah next question comes from mine of the wrong one day with guggenheim not your line until and
spk_0: yeah very nice pronunciation as well so good morning everyone ah yes i'd like to focus on a mature market so you said in your career remarked outside the volume case is corey key to our the consumer mobility driven by vaccination rate so as according to that of that you would show and mean vaccination rates should be about seventy percent by the end of the gary now in developed market but sadly chess about twenty percent in emerging markets so should we consider them that's imagine what market be slower to recover
spk_49: and that really for it makes you cannot provide some are some years to so that their on them maybe some generated between abbott who regions thank you
spk_28: sure so
spk_0: a i think i've as he psych clearly the vaccination rates in the developed markets is gonna be ahead of the developing markets at fault for the duration of this year
spk_13: that the critical factor to add to that is the that the market response to the level of cases ultimate low vaccination rates in the developing markets because the thing that impact our business most directly is the degree of lockdown am and so it's the response
spk_0: to the level of cases of the coal they'd and the resulting lockdowns rather than necessarily directly the level of a vaccination because there are countries where the level of anxiety and his love for because they had a strong lockdown down and and kind of luck the country up say australia whatever than that they they've doughty to reopen south
spk_7: the key fact that the look for is the degree of locked down and and think throw for that market you know what likely to happen
spk_50: connected a cost to the level of vaccination but also to the level of cases and what the policy response
spk_13: in the country
spk_50: is likely to be
spk_13: and they'll be countries where i think
spk_0: frankly and and and unfortunately they don't have the wherewithal
spk_51: on the physical capacity to implement large lockdowns even if they not got all the boxes that they want and the market remain open up and was we will look for life to adapt the business to support the people of support the retailers and and continue to engage
spk_0: with consumers as that goes on
spk_52: your next question comes from the line of del chapel the as the carrying still your lines up and
spk_13: but thanks good morning he did different follow up and in this is fairly near term and acute to the us but i'm determined person that kind of commentary of how you're looking at the business in that i mean it seems that the us will be different in kind of the reopening of everywhere else host
spk_12: maduro hi majority the population will be inoculated in the next thirty days just to schools are getting out just as the weather's getting good you have fun of a sporting events talking about full capacity in june i mean are you is that a scenario you're prepared for and the bling network is prepare for if if the the business the the on
spk_7: premise business just explodes in a in a or do you really think that this this is gonna be gonna go from face to the phase three in may and phase four in june and slowly can open up over the summer
spk_1: i what i think the phases of gonna like this bill that just going to happen very quickly in the us so if i if i look at what's already happening
spk_13: you know i put it up eating and drinking in the evening and gonna phase one i mean those that bit of the away from home was trending negative in volume strongly negative in volume in in in january and february and that the reopening happen it jumps up ah
spk_0: in march
spk_13: and as you say as a good our school as education and at work opens of both of which are still running negative in march
spk_7: i think they're going to jump off again so
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