Coca-Cola Company (KO.US) 2024 Q4 financial report conference call: Organic revenue growth is expected to be in the range of 5% to 6% in 2025.

The beverage industry is vibrant and continues to grow. As a full-service beverage company, the company will compete in areas with sustainable consumer demand and appeal, with the core being the good taste of carbonated beverages. The company will carefully study and consider that this reflects the confidence that the beverage industry will continue to grow, and the company is a leader in the industry in creating organic products and expanding brands.Q: How does the change in aluminum prices affect costs? A: The change in aluminum prices mainly affects North American operations, but is only a part of the overall company. If packaging input costs increase, the company has other packaging options, such as emphasizing PET bottles more when aluminum cans become more expensive. The company will adjust packaging strategies based on relative input cost changes. By using hedging, portfolio management, and seeking alternate sources of supply, the company can mitigate cost pressures. We believe we can manage the impact of aluminum price changes on the business without fundamentally undermining the ability to achieve good sales volume by 2025. Q: You have the best bottle packaging partner in Mexico, can you talk about your strategy? To what extent is North American price combination growth driven by fairlife or impacted by the recovery of out-of-home consumption, and what is the future growth trend? A: In Mexico, packaging can be found at almost every price point. We have the most extensive beverage portfolio in the world in Mexico, covering all categories. Therefore, Mexico is a market we have long focused on nurturing. About half of North American fourth-quarter pricing is due to a combination of factors, and this proportion will gradually decrease by 2025. Due to the construction of the New York fairlife factory, the growth in 2025 will be reduced, thereby normalizing the US price/combination. Q: In 2025, organic growth seems to lean more towards price than volume. Will the volume increase be lower than the 2%-3% level? A: Volume growth in 2025 is expected to be around 1%-2%, with price compensation, resulting in an overall growth range of 5%-6%. Although there are many unknowns and dynamic factors in 2025, the company believes it can manage it and expects better overall results compared to 2024. Q: The performance of the Indian business in 2024 was good, and in the fourth quarter, 40% of the business was franchised to local partners. What are the characteristics of this partner and their role in driving the business? A: The company is advancing its franchise plan in India, looking for partners who are ambitious, opportunistic, have capital, and have the ability to build development capabilities, similar to the company. Jubilant Group has shown excellent performance in these areas, and we believe their involvement will enhance the company's execution in the Indian market. We will update everyone on the progress of the franchise plan in the future. Q: Inflation, while easing, continues to impact pricing measures in high inflation markets until 2025, and some countries have not truly slowed down in their inflation environment. Will the company stop raising prices or take price reduction measures? A: The company will not stop passing input costs in high inflation markets. While inflation has indeed eased in some countries, such as a significant decrease in monthly inflation rates in Argentina. Although pricing measures have a greater impact in the first half of the year, inflation has decreased in many countries. However, due to high costs, the company still needs to pass on costs while implementing affordability strategies. Q: Please explain the reasons for the decrease in prices/combinations in the Asia-Pacific region. A: On one hand, there is the base effect of 2023. On the other hand, the Asia-Pacific market has significant differences, including developed markets like Japan and Australia, as well as emerging markets like Bangladesh and Indonesia, each market showing different relative sales performance, which also significantly affects the price combination.