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. Our Emerging Stronger priorities and the acceleration of our transformation have been designed to get us back to this long-term growth algorithm as fast as possible.
** 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.
*Flavored alcohol beverages
Source: GlobalData and internal estimates. Note: 2021 retail value and 2022 to 2025 industry growth for nonalcoholic ready-to-drink excludes white milk and bulk water.
MONSTER is a trademark and product of Monster Beverage Corporation, in which TCCC has a minority investment. Schweppes is owned by TCCC in certain countries other than the United States.
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.
2022 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 two 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.
When it comes to being “asset right,” we’ve continued to move toward our aspiration of becoming the “world’s smallest bottler” to allow us to focus on our core competencies. We’ve prudently managed our debt portfolio and have extended the weighted-average maturity while largely maintaining our weighted-average coupon, and we are in a favorable position relative to our peers. Lastly, our net debt leverage ratio has returned within 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 2022 Conference. View the reconciliation of Non-GAAP Financial Measures for more information.