At The Coca-Cola Company, our strengths give us confidence in our ability to deliver long-term, sustainable shareowner value. Our long-term targets consist of solid revenue growth of 4% to 6%, strong operating leverage driving 6% to 8% operating income growth, delivering meaningful EPS growth and improving on our free cash flow conversion. Our focal points remain the two flywheels that drive our Total Beverage Company Strategy – enabling us to convert the top line to value creation.
(b) Comparable currency neutral (non-GAAP)
Note: Adjusted free cash flow conversion ratio = FCF adjusted for pension contributions / GAAP net income adjusted for non-cash items impacting comparability
Our confidence stems from the fact that we operate in an industry that will enjoy growth for a long time to come driven by macro, social, economic and behavioral factors. On top of this we have some category-related headwind while we expect a tailwind from emerging markets.
We are focused on leveraging the growth strategy to drive bottom-line profitability and maximize returns, while continuing to invest for growth through resource allocation, margin expansion, and asset optimization – ultimately leading to strong cash flow generation.
Margins are not dictated necessarily by the category in which you play in, but more by how you choose to play and your leadership position within a category. We believe we can grow our portfolio offerings while expanding margins through disciplined portfolio growth.
2023 will continue to be an inflationary year, and we’ve provided some guidance regarding how we expect prevailing commodity prices to impact our per case cost. But there are many other costs – from freight to marketing – which have seen some level of inflation in the past three years. We continue to use the levers at our disposal from revenue growth management to some of the productivity measures listed here to manage cost pressures to the best of our ability. We remain focused on margin expansion across our lines of business.
We know our balance sheet will need to be both strong and flexible to support our ambitious growth agenda going forward, and as such, have taken a wholistic approach to optimizing our investments, identifying and activating passive capital to drive the business on hand. We will continue to pursue our “asset right” agenda, becoming the “world’s smallest bottler” to allow us and our bottling partners to focus on our core competencies. Lastly, our net debt leverage ratio is below our targeted range, including the impact of acquisitions in 2021.
Our capital allocation strategy supports both our growth ambitions and returning cash to shareowners.
Financial metrics referenced on this page are from Coca-Cola's CAGNY 2023 Conference. View the reconciliation of Non-GAAP Financial Measures for more information.