Saturday, Feb 4, 2023
International Finance
Company

Coca-Cola hosts investor day discussing long-term targets

Reaffirms guidance and updates long-term growth targets

Senior leaders from The Coca-Cola Company, led by President and CEO James Quincey, were to meet with investors and analysts yesterday. 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).

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.

2017 outlook
The 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. The company is not able to reconcile its full year 2017 projected organic revenues (non-GAAP) to its full year 2017 projected reported net revenues, the full year 2017 projected comparable currency neutral income before income taxes (structurally adjusted) (non-GAAP) to their full year 2017 projected reported income before income taxes, or their full year 2017 projected comparable EPS (non-GAAP) to their full year 2017 projected reported EPS without unreasonable efforts because they 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 their full year 2017 GAAP financial results.

Long-term targets
The 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. The company is not able to reconcile its 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 its 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 they 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-ColaCompany 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.

 

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