Coca-Cola 2Q25 Quick Interpretation: The company's financial report remains very robust overall, with the only blemish being a slight miss in revenue compared to market expectations. However, through continuous cost reduction and efficiency improvement, as well as product mix optimization, the final profit, whether gross profit or core operating profit, exceeded market consensus expectations.

In Q2, the company's organic revenue grew by 5% year-on-year, just reaching the lower limit of the company's guidance from the previous quarter.

Breaking it down: concentrate sales & price contributed -1% and 6% respectively. The core reason for the negative growth in sales is the high base from the same period last year (with high growth in North America & Latin America driving the company's overall organic growth to 15%, the highest level in three years). The high-base effect led to a slight miss in sales compared to market expectations, while the price exceeded market expectations due to the increased proportion of high-priced products (including zero-sugar and functional health drinks). Additionally, the impact of foreign exchange headwinds did not further expand.

In terms of gross margin, although the prices of Coca-Cola's core raw materials (corn syrup, aluminum, PET chips) remain high, thanks to the company's strong brand power, the cost pressure was successfully passed on to bottlers & downstream consumers through direct price increases and increasing the proportion of healthy & premium products. The gross margin increased by 1.3 percentage points year-on-year, reaching 62.6%.

On the expense side, benefiting from the company's continuous application of AI in daily operations (including pricing decisions in different markets & creating marketing advertisements) and the ongoing divestiture of bottling operations globally, the expense ratio dropped to 27.7%, the lowest level in three years, and core operating profit also exceeded market consensus expectations.

In terms of guidance, the company maintained its full-year guidance unchanged.

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