Coca-Cola FEMSA (NYSE:KOF) Q4 2025 Earnings call February 24, 2026 10:00 AM ET Speaker9in a listen-only mode. You will have the opportunity to ask questions at the end of the presentation. To do so, please use the Raise Hand feature in Zoom, and we will open your line. If you experience any technical issues during the call, please use the chat function to request assistance. I would now like to hand the call over to Jorge Collazo, Investor Relations Director at Coca-Cola FEMSA. Jorge, please go ahead.Speake ...

Core Insights - SemiCab has been awarded a pilot program with Hindustan Coca-Cola Beverages Private Limited to launch a transportation program on its collaborative freight platform, aiming to cut transportation costs and reduce empty miles for Coca-Cola India [1][2] Company Overview - Algorhythm Holdings, Inc. is a leading AI technology company focused on the growth of SemiCab, which addresses supply-chain problems globally through its AI-enabled, cloud-based Collaborative Transportation Platform [6] - SemiCab's platform utilizes artificial intelligence and machine learning to optimize freight logistics, enabling fully loaded round trips and dynamic route optimization, which leads to improved asset utilization and reduced empty backhaul miles [4][6] Industry Impact - The partnership with Coca-Cola India marks a significant milestone in SemiCab's expansion within India's fast-moving consumer goods (FMCG) sector, following recent contract wins with other industry leaders such as Procter & Gamble India and Unilever India [2][5] - The pilot program is designed to evaluate SemiCab's effectiveness in reducing empty miles and improving delivery efficiency, which could lead to a broader rollout of its solutions if successful [3][5]

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Core Insights - Coca-Cola HBC reported strong financial performance in 2025, with organic revenue growth of 8.1% and volume growth of 2.8%, marking the fifth consecutive year of growth and market share gains [4][7] - The company plans to acquire Coca-Cola Beverages Africa (CCBA), which is expected to enhance its presence in African markets and be accretive to earnings per share in the first full year post-acquisition [6][15] Financial Performance - Gross profit margin improved by 70 basis points, while operating costs rose by 10 basis points overall [1] - Comparable EBIT rose 11.5% organically to nearly €1.4 billion, with a comparable EBIT margin of 11.7%, a record high for the company [3] - Comparable earnings per share increased by 19.7% to €2.72, and free cash flow totaled €700 million [3][7] Revenue and Volume Growth - Organic revenue per case increased by 5.1%, driven primarily by pricing, with category and package mix also contributing [2] - Energy segment saw a significant volume increase of 28%, surpassing €1 billion in revenue for the first time [5][18] - Emerging markets delivered the strongest growth, with organic revenue increasing by 13.2% and volume rising by 4.4% [11] Market Segmentation - In established markets, organic revenue grew by 2.3%, with sparkling volumes showing slight growth, while still beverages declined [9] - Developing markets experienced a 6.1% organic revenue increase, with notable performance in the Czech Republic [10] - The company highlighted strong performance in Nigeria and Egypt within emerging markets, attributing growth to sustained investments and localized marketing strategies [12] Strategic Initiatives - The company is focusing on portfolio priorities including sparkling, energy, coffee, spirits, and snacks, with sparkling representing about two-thirds of group revenue [17] - Planned investments in sustainability initiatives include expanding deposit return systems and disaster relief efforts [27] 2026 Outlook - Management expects organic revenue growth of 6%–7% and organic EBIT growth of 7%–10% for 2026, despite potential risks from geopolitical factors and commodity inflation [5][22] - The company anticipates a more normalized finance cost environment in 2026, guiding to €25 million–€45 million [24]

Summary of Key Takeaways from the 2025 Global Consumer & Retail Conference Industry Overview - **Industry Focus**: Consumer Staples in North America - **Companies Discussed**: Procter & Gamble (PG), Coca-Cola (KO), Colgate-Palmolive (CL), Philip Morris International (PM), Estée Lauder (EL), Clorox (CLX), Molson Coors Beverage Company (TAP), Edgewell Personal Care (EPC), Newell Brands (NWL) [1][2] Procter & Gamble (PG) - **US Market Challenges**: PG is experiencing softness in the US market due to weak consumer spending and tough comparisons from last year, leading to a forecast reduction for FQ2 organic sales growth (OSG) to -1% [6][7] - **International Performance**: Mixed trends globally, with Europe stabilizing, China showing a 5% growth in FQ1, and Latin America performing robustly [7][8] - **EPS Visibility**: Management is confident in maintaining EPS visibility through restructuring efforts, which are expected to save approximately $1.4 billion [9] - **Promotional Activity**: Promotions have returned to pre-COVID levels, but are being used strategically rather than broadly [10][11] - **M&A Strategy**: PG is focused on bolt-on acquisitions in high-quality assets, particularly in consumer health and beauty [12] - **Restructuring Program**: A significant reorganization is underway to enhance efficiency and innovation, including job cuts and a shift to smaller brand teams [13] - **AI Integration**: Progress in AI applications across manufacturing, quality control, and marketing is noted [14] Coca-Cola (KO) - **Market Position**: KO maintains strong pricing power and market share gains despite a challenging macro environment [16][17] - **Revenue Growth Management (RGM)**: Continued focus on RGM to provide value to consumers and manage complexity effectively [18] - **Fairlife Growth**: Anticipated capacity increase for Fairlife to meet demand and expand product offerings [19][20] - **AI Utilization**: Improvements in marketing and sales efficiency through AI applications [21] Colgate-Palmolive (CL) - **Recovery Outlook**: CL expects improvement in OSG and gross margin in Q4, with a focus on resource allocation for growth [23][24] - **Emerging Markets Focus**: Increased investment in emerging markets, particularly in India and Latin America, where premiumization opportunities exist [25] - **US Market Strategy**: CL is enhancing its premiumization strategy in the US to regain market share [26] - **Omni-Demand Generation**: Emphasis on capturing data for targeted marketing across channels [27] - **AI Investments**: Increased investment in AI to improve digital marketing effectiveness [28] Philip Morris International (PM) - **Smoke-Free Growth**: PM's smoke-free products are expected to grow sustainably, with IQOS leading the charge [29] - **Zyn Brand Confidence**: Despite slower growth, PM remains optimistic about Zyn's market position and potential regulatory support [30][31] - **Organizational Changes**: New structure to enhance operational efficiency and visibility [34] Estée Lauder (EL) - **Positive Trends**: Strong performance in the US and China, with a focus on digital channels and innovation [36][38] - **Long-Term Strategy**: Progress in cost savings and organizational changes to support growth [37] - **Digital Strategy**: Enhanced digital marketing efforts driving incremental reach and engagement [40] Clorox (CLX) - **Growth Plans**: CLX aims for low-single-digit OSG in FY26, supported by innovation and distribution gains [42] - **Productivity Improvements**: Investments in digital transformation expected to enhance productivity [43] - **Five Vector Framework**: Focus on driving growth through product, package, place, proposition, and price strategies [44] Molson Coors Beverage Company (TAP) - **Market Challenges**: TAP faces structural pressures in the alcohol category, with a focus on selective investment in key brands [45][46] - **M&A Strategy**: Potential for M&A to fill portfolio gaps, particularly in RTD spirits and Beyond Beer [47] Edgewell Personal Care (EPC) - **International Strength**: Continued growth internationally, with a focus on innovation and market share gains [49] - **North America Turnaround**: New management team expected to stabilize performance in North America [49][50] - **Increased A&P Spend**: Plans to increase advertising and promotion expenses to drive growth [51] Newell Brands (NWL) - **Productivity Plan**: New global productivity plan expected to yield significant savings through workforce reductions [54] - **Topline Growth Expectations**: NWL anticipates outpacing category growth in 2026 through innovation and increased ad spend [55] - **Organizational Progress**: Significant restructuring efforts to streamline operations and enhance efficiency [56][57]

Summary of Coca-Cola HBC Conference Call Company and Industry Overview - **Company**: Coca-Cola HBC - **Industry**: Beverage Industry, specifically Coca-Cola bottling and distribution - **Acquisition**: Coca-Cola Beverages Africa (CCBA) Key Points and Arguments 1. **Acquisition Announcement**: Coca-Cola HBC announced the acquisition of CCBA, the largest Coca-Cola bottler in Africa, creating the second-largest Coca-Cola bottling partner globally by volume across 43 markets in Africa and Europe [3][8][28] 2. **Strategic Rationale**: The acquisition is primarily focused on growth, leveraging CCBA's presence in attractive markets with significant potential for long-term growth in Africa [3][8][10] 3. **Market Presence**: The combined entity will serve over 800 million consumers, representing over 50% of Africa's total population and two-thirds of Africa's Coca-Cola system volume [13][14] 4. **Financial Overview of CCBA**: CCBA reported net sales revenue of over €3.4 billion and EBIT of €246 million in 2024, with a three-year volume CAGR of 4.5% and currency-neutral revenue growth of over 12% [11][12] 5. **Revenue Growth**: Coca-Cola HBC achieved organic revenue growth of 8.1% in the first nine months of 2025, with Q3 revenues growing by 5% [5][6] 6. **Volume Growth**: Sparkling volumes increased by 0.7%, while energy drink volumes surged by 34.3% [6] 7. **Investment in Africa**: Coca-Cola HBC plans to pursue a secondary listing on the Johannesburg Stock Exchange to reinforce its commitment to Africa [8][23] 8. **Demographics and Consumption Potential**: CCBA's markets have favorable demographics, with a young population and low per capita consumption, indicating significant growth potential [9][15] 9. **Operational Synergies**: The acquisition is expected to enhance operational efficiencies and drive margin expansion over the medium to long term [10][44] 10. **Sustainability Commitment**: Coca-Cola HBC emphasizes sustainability and community impact, aligning with CCBA's initiatives [22] Additional Important Insights 1. **Financial Structure of Acquisition**: Coca-Cola HBC is acquiring a 75% stake in CCBA for $2.6 billion, financed through a €1.4 billion bridge facility [7][24] 2. **Earnings Accretion**: The acquisition is expected to be low single-digit EPS accretive in the first full year post-completion, with a clear prospect for long-term shareholder value creation [10][25] 3. **Market Challenges**: The management acknowledges potential risks in emerging markets but emphasizes the opportunities outweighing these risks [49] 4. **Integration Strategy**: Coca-Cola HBC plans to leverage its experience in Nigeria and Egypt to integrate CCBA effectively, focusing on talent development and operational excellence [18][86] 5. **Future Growth Projections**: The company aims to maintain its mid-term guidance of 6-7% organic revenue growth, with expectations for CCBA to potentially exceed this due to its growth opportunities [80][95] This summary encapsulates the critical aspects of Coca-Cola HBC's conference call regarding the acquisition of CCBA, highlighting the strategic importance, financial implications, and growth potential within the African beverage market.

Q3 2025 Trading Update - Coca-Cola HBC experienced solid performance, reiterating its 2025 guidance[7] - The company achieved revenue growth of 50% and volume growth of 11%[7] - Revenue per case increased by 38%, driven by targeted RGM initiatives[7] - The company continued to gain value share in NARTD, with an increase of 80bps YTD[7] Acquisition of Coca-Cola Beverages Africa (CCBA) - Coca-Cola HBC has agreed to acquire a 75% shareholding in CCBA for $26 billion[13] - The acquisition is targeted for completion by the end of 2026, subject to approvals[13] - CCBA's 2024 volume was 1102 million unit cases[22] - CCBA's 2024 net sales revenue was €3357 million[22] - CCBA's 2024 EBIT was €246 million with a 73% EBIT margin[22] - South Africa accounts for 60% of CCBA's 2024 volume[24] - Sparkling soft drinks represent 81% of CCBA's 2024 volume by category[28]

Core Viewpoint - Kimberly-Clark Corporation has appointed Stacey Valy Panayiotou as Chief Human Resources Officer, effective September 10th, succeeding Viviane Cury who will return to her previous role [1][2]. Group 1: Appointment Details - Stacey Valy Panayiotou will oversee the global human resources function, which includes talent recruiting, development, performance management, labor relations, compensation, and employee benefits [2]. - Panayiotou will report directly to Mike Hsu, the Chairman and CEO of Kimberly-Clark, and will be part of the executive leadership team [2]. Group 2: Leadership Background - Panayiotou is recognized as a transformational leader with over two decades of global human resources experience, previously serving as Chief Human Resources Officer at Ball Corporation [3]. - At Ball Corporation, she led the global human resources function and established the company's first enterprise-wide learning university [3]. - Prior to her role at Ball, she held senior HR positions at Graphic Packaging International and Coca-Cola Company, where she was Global Vice President and Head of Talent and Development [4]. Group 3: Educational Background - Panayiotou holds a Bachelor of Business Administration from the University of Iowa and two master's degrees from Loyola University Chicago [5]. Group 4: Company Vision - Panayiotou expressed her commitment to enhancing Kimberly-Clark's workforce capabilities and building on the company's legacy of performance and care for consumers, customers, communities, and employees [6].

Group 1 - Mondelēz International has joined the 100+ Accelerator, becoming the sixth corporate partner alongside AB InBev, The Coca-Cola Company, Colgate-Palmolive, Danone, and Unilever [1][3] - The 100+ Accelerator, launched in 2018, aims to rapidly pilot and scale solutions in areas such as regenerative agriculture, circular packaging, and energy efficiency, having supported approximately 190 startups across more than 40 countries [2][9] - The addition of Mondelēz International enhances the program's cross-industry collaboration, indicating a trend among major brands to work together on sustainable innovation [3][7] Group 2 - The 100+ Accelerator provides startups with funding, mentorship, and opportunities to pilot innovations in real-world corporate environments, allowing entrepreneurs to refine and scale their technologies [4][9] - Recent innovations from the program include support for smallholder agricultural sustainability, low-emission logistics, circular systems for packaging, and water efficiency solutions [8][9] - Applications for the seventh cohort of the 100+ Accelerator are now open, inviting entrepreneurs globally to participate [5]

Core Viewpoint - Berkshire Hathaway has historically prioritized reinvesting profits over paying dividends, with the exception of a single cash dividend in 1967, which Warren Buffett now views unfavorably [1][5] Group 1: Coca-Cola's Dividend Performance - Coca-Cola has increased its quarterly dividend by 5.2%, marking the 63rd consecutive increase, and its dividend has grown by approximately 55% over the last decade [3][4] - Coca-Cola is classified as a Dividend King, a designation for companies that have raised dividends for at least 50 consecutive years, and it offers a forward dividend yield of 2.94% [4][6] Group 2: Buffett's Investment in Coca-Cola - Buffett has held Coca-Cola since 1988, making it his longest-held stock, and it constitutes 9.3% of Berkshire's total portfolio [6][5] - In his 2023 letter to shareholders, Buffett included Coca-Cola among stocks he intends to hold indefinitely, indicating strong confidence in the company [5][6] Group 3: Market Performance and Valuation - Coca-Cola has outperformed the overall stock market in 2025, showing a double-digit percentage gain [6][7] - The stock trades at 23.3 times forward earnings, which is not considered cheap, contributing to Buffett's decision not to increase his position in recent years [8][9] - Coca-Cola's earnings per share (EPS) rose by 12% year over year in Q4 2024, with expectations of 8% to 10% growth in 2025, but these growth rates may not be sufficient to attract value investors [10][11]