1st BATCH OF FILES AVAILABLE NOW!

Coca-Cola watchers were surprised at the timing but not the personality involved as soda giant announced CEO transition yesterday. Outgoing leader James Quincey, who hands over reins to COO Henrique Braun on Mar 31, drew extensive praise for "stellar" run, as Chris Carey of Wells Fargo termed it, even as identity of his successor in role, Braun, came as no surprise given his elevation earlier this year to COO and increasing presence at investor-facing events. "Braun becoming CEO had increasingly looked a foregone conclusion, with timing seemingly the only real debate," as Carey put it in investor note last night. As for Quincey, his "reputation is stellar, in our view, leading a uniquely successful run for KO that carried the company through Covid, refranchising, portfolio optimization and ultimately an enhanced focus on $ EPS growth. That in mind, KO should be in good hands with the highly experienced Braun." Like Quincey, Braun has spent about 30 years at soda giant, rotating thru various roles and geographies, including Latin America region whose inflation and other dynamics demand the best of soda CEOs. Should be a "seamless transition," figures Morgan Stanley's Dara Mohsenian. "Clearly it&#39;s a loss for KO, but the company is well prepared in our minds with sustained competitive advantage and is set up for the transition, and we view Braun highly." He noted that Quincey presided over 60% share gain vs 33% for mega-cap peers, "a striking outperformance."Tho not without some misfires - say, unwinding of $5 bil acquisition of Costa as key plank in co's coffee biz - KO has largely been a smooth-running machine during Quincey's tenure as he pursued what he likes to call co's "all-weather" model to coast thru macroeconomic and political turbulence in its various global markets. By contrast, PepsiCo went to relatively unknown exec to Wall Streeters when it elevated Ramon Laguarta to top job, while Keurig Dr Pepper's choice, its CFO and ops whiz Ozan Dokmecioglu, was bounced over personal behavior issue in barely 3 months, forcing Bob Gamgort to reclaim job and restart search that eventually landed on a bev outsider in Tim Cofer. Among other big bevcos, Starbucks' Howard Schultz saw his hand-groomed successor, former Pepsi exec Laxman Narasimhan, struggle in role and quickly get ousted in favor of ex-Chipotle chief Brian Niccol. By contrast, analysts seem to be expecting minimal drama as handover approaches next spring at Coke.As for the timing, JP Morgan's Andrea Teixeira offered this context: "Mr Quincey being in the role for 9 years also matched his predecessor Muhtar Kent's tenure, so questions around succession planning had been coming up more recently." She takes comfort from encounter she had with Braun in Brazil in 2018, when she led group of US investors to Brazil, where he'd recently arrived from China posting. "During this tenure he was able to grow volumes despite inflationary pressures, by resourcing to strong revenue growth management capabilities and strong speed to market of innovation," she wrote today. "We think his experience will continue to be very instrumental in KO continuing to gain share and drive category growth."Many analysts were effusive in assessing Quincey's impact over past 9 years. "A transformative CEO," said Mohsenian. "Quincey has been an extraordinary leader . . . driving Coke&#39;s transformation into a total beverage company, rewiring Coke&#39;s organization, shaking up Coke&#39;s corporate culture, enhancing its innovation focus, completing the bulk of the bottler refranchising, reshaping the portfolio (cutting from ~400 to ~200 master brands), investing in digital capabilities, and revamping its marketing function." But Braun is no slouch, he stressed. "We'd be hard pressed to find a better resume. He also has a high degree of respect internally at KO and from the bottling system. Braun will build on a solid foundation in our view, with stated priorities of seeking the best growth opportunities worldwide, driving KO to get even closer to consumer needs and leveraging technology as an enabler of growth."Like Teixeira, TD Cowen's Robert Moskow similarly has come away impressed from encounter with Braun, this one a more recent meeting in Mar at corporate in Atlanta. "We found his efforts to improve operational performance through increased transparency and more open communications with the company&#39;s bottler network as key contributors to the company&#39;s recent success," he wrote, as Seeking Alpha reported.

Tho Timing Was Surprise, Coca-Cola CEO Succession Move Wins Plaudits Across Wall Street

Publishing Info