Following the release of The Coca-Cola Company’s Q3 2014 earnings this morning, Chairman and CEO Muhtar Kent conducted a conference call with financial analysts. Here are a few highlighted quotes from the call:

Current Conditions

“Our overall top line results for the third quarter were below our expectations.”    

“We continue to face a challenging macro environment – more challenging than we expected when we started the year.”

“There is no question that we need to improve our execution in many markets, especially our consumer marketing and commercial strategies.”

“That said, we are not discouraged, nor are we any less enthusiastic about the opportunities in front of us.”

North America Results

“In North America, our disciplined approach to pricing, supported by incremental media investments, high quality marketing programs such as Share a Coke and disciplined price/pack strategies, as well as improved execution, is paying dividends with increased incidence (particularly among teens) and revenue growth in our sparkling portfolio.”

Emerging Markets

“In key emerging markets, including India, Sub-Saharan Africa and the Middle East, our incremental media investments drove recruitment with solid net revenue and volume growth.” 

Streamlining Operating Model

“We are streamlining and simplifying our operating model in order to speed decision making and enhance our local market focus to drive growth.”

Productivity Program

“We will drive efficiency through aggressively expanding our productivity program. We plan to expand the program from $1 billion in savings by 2016 to $2 billion in annualized savings by 2017 and $3 billion by 2019.”

North America Re-franchising

“In North America, we have a clear and definitive plan to re-franchise the majority of our company-owned bottling territories by the end of 2017. So, at that time, we will retain approximately one-third of the total bottler distributed volume in North America. With respect to the remaining territories, our intent is to ensure the bulk of these are refranchised at the latest by 2020.”

Balanced Approach to Growth

“We will drive disciplined brand and growth investments with a long-term view across both sparkling and still categories. We will take a balanced approach to ensure we can build our business while consistently delivering bottom-line results.”

Portfolio Role of Markets

“We will drive revenue and profit growth across our markets, with a further focus on geographic segmentation, recognizing that each market has an important role to play within our portfolio. We have targeted our markets, with clear roles to drive top-line growth, with some markets focused on price, others on volume and the remainder on a balance of the two. Beginning in 2015, our incentive metrics will be expanded to include revenue growth and will be tied to these clear portfolio roles." 

2020 Vision

“While we have more work to do here, it is clear that our 2020 Vision will remain focused on delivering value growth for our system ahead of the industry.  Importantly, the goal of doubling system revenue is one our system can aspire towards. But it is not a goal to be pursued at any cost over a fixed timeframe – and we are re-aligning our expectations based on where we are today and the outlook for our industry.” 

Long-Term Growth Targets

"We see no change to our long-term target of high single-digit comparable currency neutral EPS growth. We are updating our net revenue target to mid-single-digit growth in order to reflect current reality, including the increased contribution from our new partnership model, which will impact equity income rather than flowing through net revenues and operating income. And we are evolving our primary profit metric, from operating income to profit before tax. Going forward, the profit before tax target will be 6% to 8% on a comparable currency neutral basis, consistent with the previous operating income target of 6% to 8%.”


“While we are very confident in our actions, we are cautious in our outlook. The actions announced today – and the additional work we have to do – will take time to implement and deliver improvement in our results. As such, we expect to be below our long-term EPS growth target for 2014 on a full year basis. We will come back to you with more context in December; however, we see 2015 as a critical year. A year in transition as we flawlessly implement our new operating model amidst a continued challenging macro-economic environment.” 

Note: Miss this morning’s webcast? Listen to a replay here. We will have a transcript of the call available at the same link shortly.