A Case for Coca-Cola in 10 Slides

Distribution system

Coca-Cola and its 250 bottling

partners and 900 plants comprise the largest non-

alcoholic distribution system

in the world.

Solid long-term fundamentals

Coca Cola grew revenue, net income, and free cash flow 116%, 77% and 53%, respectively, over the past 10 years.

Emerging markets

Coca-Cola experienced robust growth in the emerging markets in the most recent quarter.– Global volume grew 3% in developing and emerging

economies versus a 1% decline for developed markets during that time.

– Brazil and China grew 4% and 12%, respectively, during that time.

– Approximately 29% of Coca-Cola’s revenue came from emerging economies last quarter.

Brand strength • No. 3 Interbrand’s Best

Global Brands in 2013• #6 Brand Z’s Top Most

Valuable Global Brands 2014• Trademarks value: $6.7

billion last quarter• 17 brands rake in over $1

billion in revenue each• More than 500 sparkling

and non-sparkling brandsSource: Interbrand website, Brand Z website, Coca-Cola investor relations

$olid dividend and balance sheet• Coca-Cola increased dividends for 51 years straight.• In 2013, Coca-Cola paid out 61% of its free cash flow

in dividends.• Coca-Cola currently pays $1.22 per share per year,

equating to a 3% yield.• $16 billion in cash + $18.9 billion in marketable

securities equate to 49% of stockholder’s equity.• Long-term debt to equity registers at 57%. Low debt

means less interest to choke out free cash flow.

Market dominance and ubiquity• Coca-Cola commands 8.4% market share globally

according to Bloomberg industry leaderboard.• It is served in 23 million retail outlets.• Coca Cola’s owned and licensed beverages

account for 1.9 billion of the 57 billion beverages served globally, representing 3.3% of the total.

What should investors expect?• Carbonated soda demand shows signs of slowing

growth due to the healthy lifestyles movement.• Expect future fundamental growth to come from

non-sparkling beverages, which exhibits more commoditized characteristics.

• Moreover, expect more growth to come from emerging markets.

Foolish takeaway• Coca-Cola

represents a solid blue chip company.

• Expect slow buildup of dividends and capital gains over the years.

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