Coca-Cola Femsa Sab L New

At this time, I'd like to welcome everyone to the Coca-Cola Company's first quarter 2026 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 listen only mode until the formal question and answer portion of the call. I'd 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. would now like to introduce Todd Beiger, Vice President and Head of Investor Relations. Mr. Beiger, you may now begin.

Good morning and thank you for joining us. I'm here with Henrique Braun, our Chief Executive Officer, and John Murphy, our President and Chief Financial Officer. We've posted schedules under financial information in the investor section of our company website. These reconcile certain non-GAAP financial measures that may be referred to this morning to the results as reported under generally accepted accounting principles. You can also find schedules in the same section of our website to provide an analysis of our gross and operating margins. This call may contain forward-looking statements, including statements concerning long-term earnings objectives, which should be considered in conjunction with cautionary statements contained in our earnings release and the company's periodic SEC reports. Following prepared remarks, we will take your questions. Please limit yourself to one question. Re-enter the queue to ask follow-ups. Now, I will turn the call over to Henrique.

Thanks, Todd, and good morning, everyone. We're off to a good start this year. We delivered strong first quarter results despite the complex external environment. I'd like to thank our system associates for their continued commitment. We're focusing on becoming more consumer-centric, remaining constructively discontent and leveraging our digital capabilities to create enduring value. I'm confident we are well positioned to deliver on our updated 2026 guidance. This morning, I will provide perspective on the global operating landscape before diving into our business performance. Then I will share how we are getting closer to consumers by operating with both granularity, and scale. Finally, John will discuss our financial results and 2026 guidance. During the quarter, the external environment differed greatly across our market. While many consumers remain resilient, others are under pressure due to persistent inflation, greater macroeconomic uncertainty, and volatility driven by the conflict in the Middle East. Against this backdrop, we operate in an expanding industry. We harness the power of our brands, and our unmatched system reached to deliver 3% volume growth, and we grew volume across all segments. We also extended our streak of gaining overall value share for the past 20 consecutive quarters. Excluding the impact from six extra days in the quarter and the timing of constant trade shipments, organic revenue growth is on track with a full year guidance. We also expanded comparable operating margin, which contributed to double-digit comparable earnings per share growth. We're always pushing ourselves to do even better and focusing on getting more from our market and more from our brands to drive balanced growth. Starting with North America, while we benefited from cycling an easier comparison versus the prior year, we delivered solid performance. We gained both volume and value share and grew volume, revenue, and profit. The softness in price mix can be attributed to Easter timing, coupled with unfavorable category mix from packaged water and constrained production capacity for Topo Chico and Fairlife. We had broad-based strength across our total beverage portfolio. As trademark Coca-Cola, Fanta, Fresca, Body Armor, Powerade, Dasani, Smart Water, and Minute Maid each grew volume. Trademark Coca-Cola also led the industry in retail sales growth. Innovation contributed strongly to revenue growth. For example, we're tapping into the consumer insights favoring all things cherry, with Coca-Cola Cherry Float, Diet Coke Cherry, and Mr. Peeb. Also, Powerade Power Water and the expansion of mini cans into the convenience retail channel both had strong performance. In Latin America, we gained value share and grew volume, revenue and profit by focusing on fewer but more impactful initiatives. Volume growth in Brazil and Central America more than offset declines in Mexico and Argentina. Across the region, to drive resilience, we are balancing relevance with scale and more closely integrating our marketing and commercial plan. For example, we activated Coca-Cola with the FIFA World Cup trophy tour and offered fans interactive experiences, music, games, and product sampling. Consumers access ticket giveaways by scanning our connected packaging, which allows us to gather insights to customize future offerings and content. In EMEA, we gained value share and grew volume across all operating units. We also grew both revenue and profit. In Europe, despite a cautious consumer environment, we gained value share. We are better linking our brands to key drinking occasions, including the Coke and Mills campaign, and passion points like the FIFA World Cup Trophy Tour and the English Premier League. Also, we are more granularly focusing on value offerings at attractive absolute price points. In Eurasia and the Middle East, we gained value share. While we grew volume for the quarter, Our volume declined in March after the onset of the conflict. Our top priority is supporting the safety and well-being of our system associates and partnering closely with customers across the region. Lastly, in Africa, we are highlighting the localness of our system and sharpening our revenue management capabilities. For example, In Egypt and Algeria, our Ramadan campaign linked our brands to the meals occasion and emphasized refillable packaging. In Asia Pacific, we grew volume across all operating units despite cycling a strong comparison versus the prior year. We also grew revenue, but profit declined driven by commodities, headwinds in tea and coffee, and phasing of inventory costs. In ASEAN and South Pacific, despite a continued challenging external environment, we leaned into impactful marketing campaigns like the FIFA World Cup and innovations like the front of pineapple. We also focused on refillable packaging and driving availability. In China, we activated our broad portfolio and stepped up execution in targeted channels during the Chinese New Year. In India, we drove affordability and linked our brands to consumer's passion points. For instance, by connecting Thumbs Up with the T20 Cricket World Cup. We also expanded Sprite into more rural regions with content tailored to local languages. Lastly, in Japan, we gained value share by doubling down on consumer needs. We grew volume across our T brands with Georgia Coffee, we refined our package options to address different drinking occasions. In summary, we are adapting our execution as needed and focusing on improving performance across all dimensions of our strategic growth flywheel to recruit consumers and drive balanced long-term growth. At Cagney, I discussed how we are becoming even more consumer and customer-centric by applying the four I's. innovation, intimacy, and integrated execution. Levering data and our digital capabilities are unlocked to be much more precise in how we serve consumers and customers. Here are a few examples of the four eyes in action this quarter. In Europe, in select markets, approximately 60% of adult drinkers monitor caffeine intake in the evening. To capture incremental drinking occasions, we relaunched Coca-Cola 00, which offers zero sugar, zero caffeine, and zero calories with a new visual identity, expanding availability and activations tied to the evening meals occasion. Coca-Cola 00 had a strong trial, positive repeat rates, and contributed to the trademark Coca-Cola growing volume in Europe. For Sprite, we recently launched our global campaign, It's That Fresh, which includes partnerships across music, basketball, spice food, and fashion. We're also scaling and launching products tailored to local needs. In China, we launched Sprite Prebiotics and lifted and shifted Sprite Plus Tea from North America. In Eurasia and the Middle East, To refresh consumers during Ramadan, we are linking Sprite lemon mint to local festivities and key drinking occasions. Globally, Sprite has strong volume growth. Finally, Fuse Tea, which is available in more than 80 markets, appeals to consumers who are looking for greater balance. While we execute Fuse Tea's Made of Fusion campaign globally to scale the brand, We deliver intimacy with a highly localized product portfolio, tailored to taste profiles, tea types, and zero sugar options. In Turkey, for example, we accelerated growth by emphasizing peach, lemon, watermelon, and dragon fruit flavors, along with strong activation during Ramadan. Globally, Fuse Tea grew volume double digits. It goes without saying that marketing and innovation do not come to life without commercial excellence. And our system is working towards mastering the fundamentals of integrated execution to drive customer value creation. In the past year, our system added more than 600,000 outlets, which increased outlet coverage. To drive basket incidents, We increased our share of visible inventory and grew off the shelf points of interruption by double digits to capture impulse purchase. To drive transactions, our system also placed over 340,000 units of cold drink equipment. For the past eight years, we have been the leaders in customer value creation for our industry. Overall, greater focus across each element of the four eyes resulted in both volume and value share gains, volume growth, and more weekly plus drinkers during the quarter. In summary, it's early in the year and we know the external environment remains complex and it's quickly evolving. However, we continue to benefit from three unwavering beliefs. One, we are in great resilient industry. Two, we have a powerful portfolio, as demonstrated by our $32 billion brand. Three, our pervasive yet local system is a clear advantage. Moving forward, we'll continue to invest in these beliefs and leverage our all-weather strategies to achieve our objectives. With that, I'll turn the call over to John.