Senior leaders from The Coca-Cola Company, led by President and
CEO James Quincey, will meet with investors and analysts today. As
part of that meeting, the company is reaffirming its full year 2017
guidance as well as its previously provided full year 2018 outlook
considerations.
The company is also reiterating its long-term targets of mid
single-digit organic revenue growth (non-GAAP) and high
single-digit comparable currency neutral EPS growth (non-GAAP). The
company is now targeting comparable currency neutral operating
income growth (non-GAAP) of 6 to 8 percent. In addition, the
company is introducing a new long-term target of 95 to 100 percent
for adjusted free cash flow conversion ratio (non-GAAP) (refer to
“Long-Term Targets” below for a definition of this ratio).
The company has set a target for comparable currency neutral
operating margin* (non-GAAP) of at least 35 percent by 2020. The
company is also providing a near-term expectation for 2018 capital
expenditures of $1.9 billion and a long-term expectation for
capital expenditures of 4.5 to 5 percent of net revenues.
Presentations and a Q&A session will be broadcast live
through an audio and video webcast from 12:30 p.m. to 4:30 p.m. ET.
The company invites interested parties to join the webcast on its
website at www.coca-colacompany.com/investors. Downloadable files
of the audio and video recordings, as well as presentations and
transcripts, will be available within 24 hours after the event on
the company’s website. Materials for the event will also be
available through an app on Apple iOS and Google Android devices.
The app is available through the App Store or Google Play under the
name Coca-Cola Investor Day 2017.
*Target margin for 2020 is currency neutralized based on 2017
foreign currency exchange rates.
2017 Outlook
Our 2017 outlook for organic revenues, comparable income before
income taxes, comparable currency neutral income before income
taxes (structurally adjusted) and comparable EPS are non-GAAP
financial measures that exclude or have otherwise been adjusted for
items impacting comparability, the impact of changes in foreign
currency exchange rates, acquisitions and divestitures, and the
impact of structural items, as applicable. We are not able to
reconcile our full year 2017 projected organic revenues (non-GAAP)
to our full year 2017 projected reported net revenues, our full
year 2017 projected comparable currency neutral income before
income taxes (structurally adjusted) (non-GAAP) to our full year
2017 projected reported income before income taxes, or our full
year 2017 projected comparable EPS (non-GAAP) to our full year 2017
projected reported EPS without unreasonable efforts because we are
unable to predict with a reasonable degree of certainty the actual
impact of items impacting comparability, changes in foreign
currency exchange rates and the exact timing of acquisitions,
divestitures and/or structural changes that may occur during the
remainder of 2017. The unavailable information could have a
significant impact on our full year 2017 GAAP financial
results.
Long-Term Targets
Our long-term targets for organic revenue growth, comparable
currency neutral operating income growth, comparable currency
neutral operating margin, comparable currency neutral EPS growth,
and adjusted free cash flow conversion ratio are based on non-GAAP
financial measures that exclude or have otherwise been adjusted for
items impacting comparability, the impact of changes in foreign
currency exchange rates, acquisitions and divestitures, and the
impact of structural items, as applicable. We are not able to
reconcile our long-term targets for organic revenue growth
(non-GAAP), comparable currency neutral operating income growth
(non-GAAP), comparable currency neutral operating margin
(non-GAAP), comparable currency neutral EPS growth (non-GAAP), and
adjusted free cash flow conversion ratio (non-GAAP) to our
long-term projections for reported net revenue growth, reported
operating income growth, reported operating margin, reported EPS
growth, and reported cash flow conversion ratio, respectively,
without unreasonable efforts because we are unable to predict with
a reasonable degree of certainty the actual impact of items
impacting comparability, changes in foreign currency exchange rates
and the exact timing of acquisitions, divestitures and/or
structural changes that may occur in future periods. The
unavailable information could have a significant impact on our GAAP
financial results for future periods.
The company defines adjusted free cash flow conversion ratio
(non-GAAP) as free cash flow adjusted for certain cash payments for
pension plan contributions (non-GAAP) divided by net income
attributable to shareowners of The Coca-Cola Company adjusted for
non-cash items impacting comparability (non-GAAP). The company
defines free cash flow (non-GAAP) as net cash provided by operating
activities less purchases of property, plant and equipment.
About The Coca-Cola
Company
The Coca-Cola Company (NYSE: KO) is the world’s largest total
beverage company, offering over 500 brands to people in more than
200 countries. Of our 21 billion-dollar brands, 19 are available in
lower- and no-sugar options to help people everywhere more easily
control added sugar. In addition to our namesake Coca-Cola drinks,
some of our household names around the world include: AdeS
soy-based beverages, Ayataka green tea, Dasani waters, Del Valle
juices and nectars, Fanta, Georgia coffee, Gold Peak teas and
coffees, Honest Tea, Minute Maid juices, Powerade sports drinks,
Simply juices, smartwater, Sprite, vitaminwater, and Zico coconut
water. At Coca-Cola, we’re serious about making positive
contributions to our world. That starts with reducing sugar in our
drinks and bringing new and different drinks to people everywhere.
It also means continuously working to reduce our environmental
impact, creating rewarding careers for our associates, and bringing
economic opportunity wherever we operate. In fact, together with
our bottling partners, we employ more than 700,000 people around
the world. For more information, visit our digital magazine
Coca-Cola Journey at www.coca-colacompany.com and follow The
Coca-Cola Company on Twitter, Instagram, Facebook and LinkedIn.
Forward-Looking
Statements
This press release may contain statements, estimates or
projections that constitute “forward-looking statements” as defined
under U.S. federal securities laws. Generally, the words “believe,”
“expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and
similar expressions identify forward-looking statements, which
generally are not historical in nature. Forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from The Coca-Cola Company’s
historical experience and our present expectations or projections.
These risks include, but are not limited to, obesity and other
health-related concerns; water scarcity and poor quality; evolving
consumer preferences; increased competition and capabilities in the
marketplace; product safety and quality concerns; perceived
negative health consequences of certain ingredients, such as
non-nutritive sweeteners and biotechnology-derived substances, and
of other substances present in our beverage products or packaging
materials; an inability to be successful in our innovation
activities; increased demand for food products and decreased
agricultural productivity; changes in the retail landscape or the
loss of key retail or foodservice customers; an inability to expand
operations in emerging and developing markets; fluctuations in
foreign currency exchange rates; interest rate increases; an
inability to maintain good relationships with our bottling
partners; a deterioration in our bottling partners' financial
condition; increases in income tax rates, changes in income tax
laws or unfavorable resolution of tax matters; increased or new
indirect taxes in the United States and throughout the world;
increased cost, disruption of supply or shortage of energy or
fuels; increased cost, disruption of supply or shortage of
ingredients, other raw materials or packaging materials; changes in
laws and regulations relating to beverage containers and packaging;
significant additional labeling or warning requirements or
limitations on the marketing or sale of our products; an inability
to protect our information systems against service interruption,
misappropriation of data or breaches of security; unfavorable
general economic conditions in the United States; unfavorable
economic and political conditions in international markets;
litigation or legal proceedings; failure to adequately protect, or
disputes relating to, trademarks, formulae and other intellectual
property rights; adverse weather conditions; climate change; damage
to our brand image and corporate reputation from negative
publicity, even if unwarranted, related to product safety or
quality, human and workplace rights, obesity or other issues;
changes in, or failure to comply with, the laws and regulations
applicable to our products or our business operations; changes in
accounting standards; an inability to achieve our overall long-term
growth objectives; deterioration of global credit market
conditions; default by or failure of one or more of our
counterparty financial institutions; an inability to renew
collective bargaining agreements on satisfactory terms, or we or
our bottling partners experience strikes, work stoppages or labor
unrest; future impairment charges; multi-employer pension plan
withdrawal liabilities in the future; an inability to successfully
integrate and manage our Company-owned or -controlled bottling
operations; an inability to successfully manage our refranchising
activities; failure to realize the economic benefits from or an
inability to successfully manage the possible negative consequences
of our productivity initiatives; failure to realize a significant
portion of the anticipated benefits of our strategic relationship
with Monster; inability to attract or retain a highly skilled
workforce; global or regional catastrophic events, including
terrorist acts, cyber-strikes and radiological attacks; and other
risks discussed in our Company’s filings with the Securities and
Exchange Commission (SEC), including our Annual Report on Form 10-K
for the year ended December 31, 2016 and our subsequently filed
Quarterly Reports on Form 10-Q, which filings are available from
the SEC. You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. The
Coca-Cola Company undertakes no obligation to publicly update or
revise any forward-looking statements.
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The Coca-Cola CompanyInvestors and
Analysts:Tim Leveridge, +1-404-676-7563orMedia:Scott Leith, +1-404-676-8768
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