Coca-Cola Europacific Partners H1 2025 Earnings Report

Coca-Cola Europacific Partners EPS Results

• Actual EPS: N/A
• Consensus EPS: $2.41
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Coca-Cola Europacific Partners Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $12.09 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Coca-Cola Europacific Partners Announcement Details

• Quarter: H1 2025
• Date: 8/6/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 7:00AM ET

Coca-Cola Europacific Partners (NASDAQ:CCEP) PLC, together with its subsidiaries, produces, distributes, and sells a range of non-alcoholic ready to drink beverages. It offers flavours, mixers, and energy drinks; soft drinks, waters, enhanced water, and isotonic drinks; and ready-to-drink tea and coffee, juices, and other drinks. The company provides its products under the Coca-Cola, Diet Coke, Coca-Cola Zero Sugar, Fanta, Sprite, Monster Energy, Coca-Cola Energy, Relentless, nalu, URGE, BURN, Kuli, REIGN, POWERADE, Appletiser, Schweppes, FINLEY, mezzo mix, Royal Bliss, Lift, Vio SCHORLE, Coca-Cola Signature Mixers, NORDIC MIST, smartwater, Chaudfontaine, AQUARIUS, VILAS del Turbon, BONAQUA, Apollinaris, Krystal, Honest, Costa Coffee, Fuzetea, CHAQWA, NESTEA, Capri-Sun, Oasis, Minute Maid, MER, and Tropico brands. In addition, it engages in the bottling and other operations. The company was formerly known as Coca-Cola European Partners plc and changed its name to Coca-Cola Europacific Partners PLC in May 2021. The company was founded in 1904 and is based in Uxbridge, the United Kingdom.

Coca-Cola Europacific Partners H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Solid H1 performance with 2.5% revenue growth and 7.2% operating profit increase, leading to reaffirmed full-year profit and cash guidance.
• Positive Sentiment: Returned to volume growth in Europe in Q2—driven by better weather and Easter timing—and saw improving away-from-home trends continuing into Q3.
• Negative Sentiment: Slower-than-expected consumer demand in Indonesia shaved about 1% off group volumes in Q2 and prompted full-year revenue guidance to be revised to a 3–4% range.
• Positive Sentiment: Generated strong free cash flow (€425 million in H1) and returned over €800 million to shareholders via dividends and share buybacks, on track for at least €1.7 billion in 2025.
• Neutral Sentiment: Continuing to invest in digital and tech—including SAP S/4HANA rollout, AI-powered RED ONE sales tools and a new eB2B platform—to drive long-term productivity and revenue management.

Presentation

[Operator]

Hello, and thank you for standing by, and welcome to today's Coca Cola Euro Pacific Partners Half Year twenty twenty five Results Conference Call. I must advise you that this conference call is being recorded today. I would now like to hand the conference over to Vice President of Investor Relations and Corporate Strategy, Sarah Willett. Please go ahead, Sarah.

[Sarah Willett, VP - IR & Corporate Strategy at Coca-Cola Europacific Partners]

Thank you all for joining us today.

[Sarah Willett, VP - IR & Corporate Strategy at Coca-Cola Europacific Partners]

I'm here with Damian Gammel, our CEO and our CFO, Ed Walker. Before I hand over to Damian, a reminder of our cautionary statement. This call will contain forward looking management comments and other statements reflecting our outlook. These comments should be considered in conjunction with the cautionary language contained in today's release as well as the detailed cautionary statements found in reports filed with The UK, U. S, Dutch and Spanish authorities.

[Sarah Willett, VP - IR & Corporate Strategy at Coca-Cola Europacific Partners]

Copy of this information is available on our website at www.cocolatep.com. Prepared remarks will be made by Damian. We will then turn the call over to your questions. Unless otherwise stated, metrics presented today will be on a comparable and FX neutral basis throughout. This will also be presented on an adjusted comparable basis, thus reflecting the results of CCP and our Australia Pacific and Southeast Asia business unit, APS, as if the Coca Cola Philippines transaction had occurred at the beginning of last year rather than in February when the acquisition completed.

[Sarah Willett, VP - IR & Corporate Strategy at Coca-Cola Europacific Partners]

Following the call, a forward transcript will be made available as soon as possible on our website. I will now turn the call over to our CEO, Damian.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thank you, Sarah, and many thanks to everyone for joining us today. I'm really pleased that we continue to execute on our growth strategy, and I'd like to start today by thanking all of my great colleagues for their energy, hard work and continued dedication to our customers and to our business. As always, this is supported by our strong aligned relationships with The Coca Cola Company, Monster and our other brand partners. In short, our value creation is clearly evidenced by our impressive TSR of around 235% since 2016. We continue to deliver solid top and bottom line growth.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Our cash returns are accelerating, having now completed around EUR $460,000,000 of share buybacks this year, alongside paying a dividend line with our annualized payout policy of around 50%, both within our disciplined capital allocation framework. Beyond today's results, we will also circle back to a few of the areas we covered in detail at our recent Investor event in Manila to provide an update on progress made since then with a little bit more detail on what is coming around the corner. At that investor event, we talked in detail about our resilient categories. So a brief reminder of one of the key slides we shared. Simply put, we are in the right categories, including AORTD and hot coffee that are structurally growing, are profitable and diverse.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We've got relevant share in our core NARTD category, which grew by more than 5% in the last twelve months. We have a matchable scale and localness in our supply chain and in our frontline sales force, and we're investing more than ever before in our key capabilities, while accelerating productivity through technology and digital. We are well positioned from both a portfolio and a geographical perspective with a material presence now across our 31 markets. In short, the fundamentals of our business remain strong, and we operate in a resilient and innovative consumer categories, which are healthy and growing. I'd now like to turn to our performance.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We're pleased to have delivered a solid first half. We continue to grow share ahead of the market and create value for our customers. Given our year to date performance, strong commercial plans for the balance of the year, full year 2025 pricing in place, continued focus on productivity and a good start to the second half, we are pleased to be reaffirming our full year profit and cash guidance. We have updated by providing a range on full year revenue growth of 3% to 4% rather than approximately 4%. This is driven by a slower than expected trajectory in Indonesia, which in Q2 alone impacted group volumes by around 1%.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

But of course, we will update as the year progresses. Our first half interim dividend and ongoing share buybacks demonstrate the strength of our business and our ability to deliver continued shareholder value. So we are winning today, but we're also focused on creating tomorrow. Strong cash generation is supporting record investment of future growth with multiyear plans in place, and we are really starting to lock more value from tech and AI, where we have been investing for many years. So we're confident with the right strategy, all done sustainably to deliver on our midterm growth objectives.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

I'd now like to turn to some key performance highlights. Our solid top line performance reflects underlying volume growth, best in class execution and solid gains in revenue per unit case. This was driven by sustainable revenue and margin growth management, including our continued focus on price and promotional strategies. In Europe, Easter timing and better weather supported return to volume growth in Q2, crucially with a better performance in our away from home business. Total first half volumes were, however, impacted by a weaker consumer backdrop in Indonesia, though we continue to remain excited about the long term opportunity and continue to focus on our transformation journey.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We will touch on that a bit more later. Our other APS markets performed really well, including The Philippines, despite cycling strong comparables of nearly 20% last year. We grew our overall value share by 10 basis points year to date in a category which grew in volume and value, both in Europe and APS. The market remains as competitive as ever. As we've said before, we continue to take a multiyear view on our promotional and pricing strategies.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We remain focused on driving profitable revenue growth and creating value for the category, whilst recognizing that remaining affordable and relevant is important for our consumers. Our strong top line performance, together with the delivery of our efficiency programs, drove solid operating profit growth of 7.2%, with operating margin expansion both in Europe and in APS. We generated solid comparable free cash flow after investing in capacity, more coolers, technology and digital, and we delivered cash returns to shareholders of over EUR 800,000,000. Ed will go into more detail on our financials shortly. As ever, our business performance reflects our great people, great brands, great execution, all done sustainably.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

A few brief highlights on our first half, starting with people. We continue to build the capabilities of our teams. For example, our partnership with the London Business School has upskilled over 500 of our top leaders and has now been extended to another 3,500 colleagues. We continue to be recognized internally and externally. In 2025, the Top Employers Institute recognized CCEP across all of our major markets.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

And we're really excited to welcome around 60 new colleagues into our new integrated shared service center in Manila, which Ed will also touch on a bit later. On to our brands. We're extremely privileged to make, move and sell the world's most loved brands, in which we continue to invest and drive appeal to even more consumers. Category highlights are included in today's release. The return of the global iconic Share a Coke campaign was well executed and well received by customers and consumers.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

And the launch of This Is My Taste campaign for Diet Coke is gaining traction by providing a fresh look and identity. Overall, it is fantastic that in Europe, for example, Coca Cola trademark remains the biggest FMCG brand. Monster had a phenomenal first half with volumes up nearly 15%, fueled by great innovation. This is especially the case with Ultra and Zero variants, where volumes were up over 20%, alongside ongoing distribution gains. We grew retail value share in Energy by around 140 basis points during the period.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

In Flavors, as we highlighted at our investor event, we are increasingly focusing on winning with flavor extensions and zeros across Fanta, including Raspberry and Apple and, of course, in Sprite. Excluding Indonesia, these brands are a bigger part of the mix. Fanta Zero volumes grew by around 7% and Sprite Zero by around 13%. The transition from Neste to FuseNiberia is ahead of plan, and we continue to expand in the exciting ARTD category with total volumes up around 9%, supported by new flavor variants for Absolut and Sprite alongside the launch of Bacardi and Coke. And finally, the sports category continues to perform well, supported by the new Red Peach Aquarius variant in Spain as well as larger pack sizes, including one liter Paralade alongside our cans.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So as you can see, we delivered innovation across the board through packaging, flavor extensions, special collaborations and more. A bit later, I will share with you some of the brand plans in place for this year and beyond. We have said this before, but at CCEP, we're fanatical about delivering best in class execution and activation, whether that's in store, online or in outlet, all done locally to drive distribution and visibility every day. We continue to create leading value for our category, adding nearly EUR $450,000,000 of value to our retail customers. And here, I'm anchoring back to what we shared with you at our investor event and our four more strategy.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We love creating engaging displays, especially around key holiday events with the cornerstone and half one being a Share a Co campaign I referred to earlier. This is all driven by the largest sales force in FMCG, over 12,000 total, powered by technology. And when our customers are buying more often, what we want is more volume. And when you get more volume, we leverage our revenue management capability to drive more value sustainably. These examples show how we're bringing this to life.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We've launched an eight fifty ml PET for smaller households in Germany, one of our biggest markets. In markets like GB, Spain and others, extra free and extra filled is a great way to manage affordability, giving ongoing cost of living challenges. We continue to focus on premiumization, whether it be with more multipack mini cans in France, multipack mini PET in Australia or more returnable glass. We're increasing our share of cold drinks space by investing in more coolers across Coke Trademark and Monster. We have new customer wins, including KINOPLAS in Spain and Costco Wholesale in Australia, all helping our brands reach more households.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

And we continue to accelerate our digital capabilities to reach more people, like working even more with The Coca Cola Company on social media campaigns and by adding even better functionality to our B2B portal, myccep.com. Having delivered a record $2,300,000,000 in revenue in Europe last year, we've grown again by almost 10% in half one. And now on to our sustainability highlights before handing over to Ed. We continue to be recognized externally, including retaining our inclusion on CDP's A List for Climate, now for the ninth year. Ongoing progress in the area of packaging collection remains a core focus, including new recycling partnerships in our Pacific region.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

And we continue to invest sustainably in sustainability focused technology through our venture arms across ingredients, manufacturing and packaging to support our decarbonization journey. For example, we've invested in a climate tech company that convert wastewater into a source of renewable electricity. We're currently trialing this technology at one of our sites in GB. Just one example of how we're making CCEP a more sustainable and a better business. I'd now like to hand over to Ed to talk about the financials in more detail. Ed?

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

Thanks, Damian, and thank you all for joining us today. So for H1, we delivered revenue of €10,300,000,000 which is up 2.5. Comparable volumes, selling days adjusted, were marginally ahead, up point 3% despite the challenging backdrop in Indonesia. Excluding Indonesia, volumes were up around 1%, supported by Europe returning to volume growth in q two. Our q two revenue was up 5.4% in total.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

We delivered strong revenue per unit case growth of 3.8%, reflecting positive headline pricing and promotional optimization with a continued focus on consumer price relevance, all built on data and insights. We benefited from slightly earlier headline pricing in GB, and we had favorable pack mix supported by the growth of Monster, favorable pack mix driven by the growth of smaller formats such as mini cans, and favorable geographic mix as a result of the volume decline in Indonesia, which is at the lower revenue per case. Cost of sales per unit case increased by 3.6. This reflects our increased revenue per unit case driving higher concentrate costs due to the incident pricing model and the increase in soft drinks taxes. While a little higher than our guidance for the full year, this is mostly phasing related given our exit from the Beam Centauri relationship in Australia, which will generate a mixed benefit during h two.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

OpEx as a percentage of revenue was 21.8%, an improvement of 50 basis points, and I will touch more on that later in the coming slides. These elements combined to drive operating profit of 1,400,000,000 up 7.2% and an operating margin of 13.5%, an expansion of around 60 basis points, including a modest basis point improvement in our gross margin percentage. We delivered comparable diluted earnings per share of 2 point euros up 3.1 on an FX neutral basis, lower than the 7.2% growth in operating profit driven by our previously guided increase in our effective tax rate to 26%. This impact is more significant for H1 than it will be for the full year due to the phasing of last year's tax expense. Comparable free cash flow generation continues to be a core priority for CCB, and we delivered €425,000,000 in H1.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

This was after investing in key projects such as the addition of new aseptic lines in France and Australia, expanded ARTD capacity for Jack Danielson Coke, and of course more coolers which Damian referenced earlier. We remain on track to deliver comparable free cash flow of at least €1,700,000,000 for the year. And finally, on shareholder returns, our first half dividend was 79¢ per share with around €460,000,000 of our billion euros share buyback now completed. Now on to efficiency and productivity, where as you know, we have a proven track record of delivery. Our current program aims to deliver between 350 and €400,000,000 of savings by 2028 and is firmly on track delivering slightly earlier than our original plan.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

We continue to optimize our network in market to strengthen our local operating model, such as the rationalization of distribution sites in Germany, the consolidation of production into fewer, bigger, more efficient plants, like at Grigny in Paris, which will end up serving nearly half of the French market. And in Indonesia, we recently announced the closure of three single line production sites. In May, I spoke in detail about the development of our leading shared service capabilities, which until now have focused on Bulgaria. In July, as Damian mentioned earlier, I attended the opening of our new integrated shared service center Manila, which will continue to ramp up as the year progresses. And I know, having also visited Bulgaria only last week, that the growing capabilities of our shared services will continue to be a significant source of value creation and competitive advantage, all enabled by technology.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

Before I hand back to Damian, let me update you on our full year '25 guidance, which reflects our current view of market conditions. Our profit and cash flow guidance remain unchanged. From a revenue perspective, we're pleased to have delivered a solid first half performance driven by consistent revenue per case per unit case growth and supported by a return to volume growth in Europe in Q2. We've had a strong start to second half and are encouraged to have seen European volume growth continue more than offsetting a slowdown in Indonesia and the recent impact of flooding in The Philippines. With five months of the year still to go, including the key European summer, we're now indicating a range on revenue for the full year of three to 4%, with the upper end remaining in line with our previous guidance supported by our very strong commercial plans.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

We expect to see volume growth for the full year with growth in Europe and in APS despite the weakness in Indonesia. On cost of sales per case, as I mentioned earlier, we still expect this to grow by around 2% for the year, with the second half benefiting from the exit of Beams Centauri relationship in Australia. While our guidance for full year operating profit remains at around 7% on an FX neutral basis, we are impacted by a higher effective tax rate at 26% versus 25% last year, growth in noncontrolling interest given the positive outlook in The Philippines and a slightly higher finance cost. And then finally on FX, although our guidance is provided on an FX neutral basis based on current spot rates, we do anticipate a full year FX headwind of around 150 basis points to revenue and almost 200 basis points to operating profit. Thank you. And now back to Damian.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thanks, Ed. Just a reminder now of our midterm objectives, which we reaffirmed in May. This was a slide that we also talked to in May covering our focus areas that you can expect us to keep revisiting as we look to our next phase of growth. So I'd like to touch on a few of these now. I've already mentioned the fantastic execution we've seen both the Share a Coke campaign and on This Is My Taste, our campaign to reinvigorate Diet Coke, which has supported an improved performance in both GB and Australia during the half.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

But there's much more to come across original taste and lights, starting with the terrific Star Wars collaboration, a favorite of mine, unlimited edition cans, a new Time for a Co campaign and another favorite of mine, the exciting new tie up with the English Premier League, which we'll see packs in your team's colors during the upcoming season. I also referenced earlier the phenomenal performance in energy during the half with strong share gains and volume growth. There remains plenty of headroom for growth in this category. Given lower per caps relative to The U. S.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

As we highlighted in May, our step up in cooler placements is supporting wider distribution away from home, helping to close the gap relative to Coke, and it's working with Monster growth in away from home of 20% during half one. Early days in our exciting journey in the fast growing alcohol ready to drink category. In Australia, however, we're already a solid number two with around a 20% share in a category that's over 15% of total alcohol. Now is the time to further leverage that expertise we've built up over nearly twenty years in the market by aligning our portfolio with The Coca Cola Company. With that in mind, and as previously discussed, the relationship with Beam Suntory came to an end at the June.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

While this creates a near term headwind reflecting its higher revenue per unit case, as you will see detailed on the slide, this is the right decision for the long term. We are now able to build an even stronger brand platform starting with Biltons and the launch of Bacardi and Coca Cola, which comes to the Australian market in the next few months. Another area of alignment has been in Spain in ready to drink tea, where we are transitioning away from Nestea to the stronger Fuze tea platform. Brilliant execution and marketing are delivering both distribution and performance ahead of plan, demonstrated by our number one year to date category value share with Fuze Tea. We've also recently reformulated and relaunched our ready to drink tea in Indonesia, Pressed Tea.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

This will be rolling out in a variety of new flavors, including passion fruit and apple with lemongrass and with a new look over the coming months. Touching now on Indonesia. As highlighted at our investor event, the macroeconomic slowdown is impacting household consumption, which has affected local, regional and international brands alike. As Ed said earlier, excluding Indonesia, volumes were up around 1% in the first half. Putting aside the near term headwinds, we remain excited about the long term and significant opportunity in a market close to 300,000,000 people, half of whom are 30, very few of whom drink alcohol.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So we are pushing on at pace, particularly with the transformation of our network and route to market Ed mentioned earlier and the closure of three single line plans to make us even more efficient. We've also taken a further step towards completing our move away from direct delivery to a partner distributor model with body now underway and Java set to complete during half two. This will give us the ability to effectively grow distribution and availability as we continue to develop the sparkling category and the reach of our brands supported by The Coca Cola Company to what we see is a very exciting consumer landscape of the future. The last area I wanted to touch on ahead of taking your questions, and arguably one of the most important, is around digital and technology. We've talked before about operating from multiple platforms, our legacy as a business of mergers.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

The alignment of those systems as we move to our new technology platform, S4HANA, is progressing to plan with our first market, Germany, starting to go live in H2. Whilst nobody could ever describe SAP transitions as exciting, the unification of our data on the one platform and the simplification of process is enabling us to start to unlock more value through our multiyear investments in tech and AI, leveraging solution and insights to drive top line growth and productivity, and that is exciting. We continue to evolve and improve RED ONE, our proprietary data driven field sales tool, which gives every rep all of the information and analytics they need to help optimize routes, prioritize visits, review performance and tailor our actions to each specific customer. We recently introduced an AI based tool, which through image recognition enables them to dynamically track and record keystone measurements like share of visible imagery. CAM360 is now used by our eight fifty key account managers to effectively partner with their customers, enabling the creation of joint plans and effective trade investments.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

It supports areas such as price and promo simulations, price elasticity modeling, all of which are a critical part of leading revenue and margin growth management capabilities. And we've recently begun piloting a new e B2B platform in Spain, Up We Go, which greatly simplifies the ordering process and threatens our relationship with partner distributors in what remains a fragmented market. A lot more to come in this space. So back to where I started. We're pleased to have delivered a solid first half performance.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Given our year to date performance, strong commercial plans for the balance of the year, full year 2025 pricing in place, continued focus on productivity and a good start to the second half, we are pleased to be reaffirming our full year profit and cash guidance. It's an honor to lead a great business with strong fundamentals in place and operating in categories that remain healthy and growing. So finally, to a quick reminder of our investment story on a page as we shared in May. We're confident we have the right strategy, done sustainably to deliver on our midterm growth objectives. We are winning today, but we're also focusing on creating tomorrow.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thank you all for joining us, and I'll now hand back to the operator to facilitate your questions. Operator?

[Operator]

Thank you. We will now begin the question and answer session. As a reminder, we kindly request only one question per analyst. If you would like to ask a question, please press star one and one on your telephone, and wait for your name Our first question comes from the line of Bonnie Herzog from Goldman Sachs. Please go ahead. Your line is open.

[Bonnie Herzog, Managing Director at Goldman Sachs]

All right. Thank you. Hi, everyone. I just I had a question on your guidance. I mean, touched on this.

[Bonnie Herzog, Managing Director at Goldman Sachs]

You did lower the top line slightly, but it does still imply an acceleration of growth on the top line in the back half, but essentially stable growth on the bottom line in 2H versus 1H, I guess, suggesting higher expected OpEx. So hoping to get a little bit more color on the drivers of this and maybe a sense of the drivers in terms of contribution you're expecting from pricemix versus volume growth in the second half.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Bonnie, I'll take the first part and then hand to Ted. So we have seen our business accelerate coming out of Q1 with a very strong Q2, both in Europe and APS, and we see that continuing. So you're absolutely correct. Even with the slight change on the revenue top line, we do see acceleration through the second half of the year. And then obviously, our focus will turn into 2026.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

As I mentioned in the comments, a big part of that has obviously been volume growth coming back in our business in Q2. We see that continuing. It's also a reflection of the pricemix. Our pricemix per case, I think, was excellent in the first half of the year. And again, that reflects pricing being in place right the way through to the end of the year.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So that gives us confidence in our top line number. And then I'll pass on to Ed just to kind of talk to the bottom line changes between half one and half two.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

Yes. Thanks, Damian, and thanks, Bonnie. So, yeah, I mean, we're very pleased with h one, you know, 2.5% revenue, very well leveraged to a 7.2%, profit. For h two, although the volume is greater, we see more of that coming from volume itself and a bit less from revenue per case. And as Damian mentioned, you know, the geographical mix will not be as much of a a benefit in the second half, And we, as I said, we expect more from volume.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

We also have some OpEx phasing between the halves, so that's why we're assuming a similar 7% profit delivery for the second half.

[Bonnie Herzog, Managing Director at Goldman Sachs]

Okay. Thanks. I'll pass it on.

[Operator]

Thank you. Our next question comes from the line of Simon Hales from Citi. Please go ahead.

[Simon Hales, MD - Consumer Staples & Beverages Research at Citi]

Hi, Damien, Ed, Sarah. So, Damien, I wonder if you could just sort of touch a little bit more on your comments around the stronger Q3 trading or the good Q3 trading you've seen to date? What have you been seeing a little bit more regionally, particularly perhaps in Europe as the better weather through July and hopefully into early August been helping? Maybe a little bit of color as to the continuation perhaps you're seeing of away from home growth in Europe and the drivers around that, how broadly spread is that across different markets? And then associated with that, the APS performance into Q3, given the flooding you called out in The Philippines?

[Simon Hales, MD - Consumer Staples & Beverages Research at Citi]

How should we think about the scale of the impact that may have on The Philippines business for the rest of the second half?

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thanks, Simon. So maybe I'll touch on the second part and then come back to the more European summer question. So obviously, we've reflected in our guidance some of the tougher weather comps in The Philippines. So that's obviously reflected in what we shared today. I'm also pleased that we've seen a stabilization in Indonesia, particularly in July and through August.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So I think that's great for our teams to start seeing some reward for a lot of efforts. So that's certainly something we're looking to continue into the second half and more importantly, into 2026. So all of that's reflected in the outlook for APS. And just to call it out, again, our businesses in Australia, New Zealand and the Pacific Islands also had a really, really strong performance as well year to date. In Europe, you're quite right.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

As we sit in London today, I'm happy looking out the window to see the sun shining. We have had some really good weather across Europe. That really came in June, definitely had a big impact on our July business, which was great. And clearly, we're looking forward to seeing that continue through August. It's pretty broad across all of our markets.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

I'd say if you look at the first half numbers, GB is a standout. And again, obviously, that reflected a strong performance to June. But then also, we've seen the benefit of that warmer weather in July in GB as well. So yes, long may it continue. It's great for the category, and it's something that we're definitely enjoying, and it's definitely helping.

[Simon Hales, MD - Consumer Staples & Beverages Research at Citi]

Our

[Operator]

Our next question comes from the line of Edward Mundy from Jefferies. Please go ahead.

[Edward Mundy, MD - Beverages Research at Jefferies LLC]

Afternoon, Damian and Ed. So just coming back to Europe and the volume inflection that you've seen, I think it was pretty important to get volume growth back into Europe this year after the difficult year last year. If I do take a step back on what you've seen year to date within Europe, I think it's fair to say the revenue per case has probably been quite a bit stronger than what we'd be modeling medium term as part of that model. But does this give you confidence, putting weather to one side, and the ability of the business to grow volumes within Europe over the medium term in terms of what you're seeing there?

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Yes, absolutely, Ed. I mean I think volume growth is a key focus for us in Europe and across all of our markets. But as you rightly pointed out, particularly in Europe, we've seen that in Q2. We'll see that in the second half of the year as well. Clearly, our priority is to try and get that volume accelerated.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

I think some of the campaigns that we have coming, whether it's STAR WARS, whether it's EPL in The UK, whether it's some of the innovation around Phantom, Sprite, and a lot of this will roll into 2026, certainly provides us with the consumer excitement to drive volume. We have seen volume growth in Q2. As I said, we'd like to see that accelerate as we go through the year. Our price mix has over delivered, and we've made some, I think, sensible choices around price promo in some of our markets, and that's reflected in certainly a higher pricemix in the P and L. So as I look midterm, to kind of come back to your question, I see volume growth in Europe.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

I see away from home growing again. That's a different narrative than we've had for quite a while. That's exciting. We're committed to driving away from home. We're taking a very active role in that through cooler placements.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Share a Cope was a great example of trying to excite consumers away from home. Also, Monster and away from home is becoming a bigger part of our narrative as we place coolers, but also secure listings of our energy portfolio in probably not your typical energy outlets like QSR and FSR, but obviously that works. And then if I move beyond that, you kind of get into some probably more medium term initiatives around AORTD, which certainly on the revenue side contribute obviously a bit less on volume. But putting all that together, I think, to me, gives us a lot of confidence in midterm volume growth. A couple of passion points that I think are worth calling out.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Certainly, Coke Classic. We're launching a half liter can in some of our markets. We're bringing more innovation around Coke Classic. And then for all of us who live in The UK, I think it's fantastic to see Diet Coke back as a focus for the system with This is My Taste campaign. That's starting to work.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

And clearly, again, that's another initiative that would support volume growth in what is the most competitive segment of soft drinks, but also the fastest growing. Yes. So all of that together gives us confidence in midterm volume growth. That starts in Q2. It's got to continue in Q3 and into Q4, and that gives us confidence for the full year.

[Edward Mundy, MD - Beverages Research at Jefferies LLC]

Great. Thank you.

[Operator]

Thank you. Our next question comes from the line of Lauren Lieberman from Barclays. Please go ahead.

[Lauren Lieberman, Managing Director at Barclays]

Great. Thanks. Good morning. First, I have to comment on the q and a slide in the deck. Very, very cute, guys.

[Lauren Lieberman, Managing Director at Barclays]

I like it. If anyone hasn't noticed, you gotta check it out. Question is, Damien, I felt like you had some pretty pointed commentary on the competitiveness in the market and emphasizing it. You take a, quote, multiyear view on the approach. So just kind of wondering what's beneath that.

[Lauren Lieberman, Managing Director at Barclays]

Are you seeing particular flare ups in given markets, given categories that feels a bit different than maybe what we would have been talking about a couple of months back? Thanks.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thanks, Lauren. Not significantly different, I would say, to what's been really part of our story in Europe. I mean, it's a very exciting, high growth, profitable category, so it always remains competitive whether you look at soft drinks or energy. I don't see a massive change in that space. I do see in some of our markets, we have had maybe a little bit less promo intensity as we haven't quite landed some of our commercial agreements with some of our bigger customers.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

It hasn't got to the point of a lot of delistings, as you may have seen in other industries. But clearly, that's something that we continue to manage. And that comes back to Ed's point in terms of really managing the category for sustainable value creation. So we will continue to make decisions beyond the calendar year to make sure that we maintain solid profitable growth for us and our customers, we continue to do that. So it's not, I would say, more challenging than other years.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

It just remains part of the ongoing doing business in Europe. We have seen some aggressive promo pricing from some of our competitors, particularly in GB. Again, that's not a new dynamic, and it's something that we're responding to. But again, we've got a very profitable business in Away From Home. And as we've talked about before, we look at our pricing and promo decisions through that lens to make sure we continue to protect and grow that away from home business.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So, yeah, it's it's good. It's a good competition, I'd say, particularly in energy. Yes. But I wouldn't say it's much different to previous years, Lauren.

[Operator]

Our next question comes from the line of Richard Withigan from Kepler Cheuvreux. One

[Richard Withagen, Analyst at Kepler Cheuvreux]

question on the Share of Coke campaign. It's been launched earlier this year. And Damien, you mentioned it's been well received. So what are some of the metrics that you track to analyze the success of the Share A Co campaign? And what are the pros and cons of a global campaign compared to a more local oriented campaign?

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thanks, Richard. Well, I mean, I think with our brand portfolio and with a full calendar, we'll continue to have global and local, and both of them, I think, play a great role in our growth story. I think Share of Coke was particularly impactful because it's a great example, I think, of going above the line, whether that's on social media all the way through the packaging in store. It's obviously something that excites consumers, so we've seen that on our customers. So when we think about metrics that we would look at, we clearly look at our way to display, share a shelf distribution, and obviously campaigns like that allow us to drive more of that.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We'd look at weekly and monthly drinking consumption, and we see that improving. And then obviously, over time, it will reflect in brand health metrics that we look at with the Coke company. But it's clearly innovative across our cola portfolio. A lot of focus on single serve. That really helps our price mix that you've seen in our results.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So we were particularly happy, and it kind of goes back to what I talked about in terms of getting behind that away from home growth. We talked about it in Q1 that share of Coke would be more skewed towards single serve, and that would definitely help support growth in away from home when we're seeing that. So still early days in some of the metrics, but overall, really positive. And yes, very well received. I think it was eight years since we last did it.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So a lot of people were really happy to see it come back, and certainly, we're happy to see it coming through in our volume and pricemix numbers. Our

[Operator]

Our next question comes from the line of Eric Sarota from Morgan Stanley. Please go ahead.

[Eric Serotta, Executive Director at Morgan Stanley]

Great. Can you good morning, good afternoon, guys. Can you talk a bit about the acceleration that you've seen in away from home this year and any read into the state of the consumer from that? And then, Damian, you talked in Manila about the I think your your your language was, sparkling growth in Europe represents, you know, one, one of the, biggest midterm opportunities for CCEP, you know, just when you look at the scale of that business. So Mhmm.

[Eric Serotta, Executive Director at Morgan Stanley]

Maybe you could revisit or or talk about some recent initiatives to, you know, reinvigorate that sparkling growth in Europe.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Yes. Thanks, Eric. I mean, sparkling has been growing in Europe pretty consistently in revenue. I think where we've been more focused on is driving, as mentioned earlier, more volume within that revenue price mix. We're definitely seeing that in Q2.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So as a category in Europe, it's very healthy. It's quite dynamic. There's a lot of innovation both from us, from others. And that's really been a consistent theme in revenue growth. I think what we've recognized is that as volume becomes part of that, it's a more sustainable outlook, and that's really what we're focused on. So we've seen that in

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Q2. Obviously, we benefited from Easter, so that definitely helped our Q2 number. But we expect to see it in Q3 and Q4. So overall, it's really maintaining that revenue growth but bringing volume as a bigger part of the mix, and that's our priority for the rest of this year. It's our priority for '26 and I think into '27.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So we certainly see that opportunity. And then for CCEP particularly, we see that in the Licholas on the back of particularly a stronger Zero platform and Diet Coke. And as we talk to Manila, we under index in our flavor share. And I think we see the opportunity to grow volume in flavors to support that revenue growth. Just coming back to away from home, we do see more people out and about.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Obviously, weather helps. So clearly, terraces are full. People are out enjoying what has been a good period of weather in Europe. We are seeing more people returning to the office. So that has been a drag, particularly in our large cities.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So I think companies and employees are back in the office more than they ever were. That certainly helps our away from home business. And then I think ourselves and a number of others have been supporting that part of the market over a number of quarters, whether that's cooler placements, consumer innovation, investment in signage, menus. And ultimately, it takes a bit of time, but that starts to feed through into footfall and incidents, and we're definitely seeing that. And then also some of our bigger customers like McDonald's are also pivoting their menu offerings, and that seems to also be driving a bit more traffic.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So yes, it's great to see it returning to growth. It's obviously something we want to see on a multiyear basis. As I talked about in Manila, we've got to be a key contributor and driver of that, so I come back to those elements that we can control, so better consumer engagement like share of Coke, better cold drink availability and presence in store with more coolers, better execution on menus and incidents through better price mix, but also combo meals and activation. So again, that will continue through the summer and then into next year. But all of that gives us confidence that the consumer is in a slightly better position in away from home in Europe than we've seen previously.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Having said that, we're very pleased that in retail, maintaining that affordability offering at the lower end is going to be a key part of our offering. And as we've talked to before, I think it's important that that also goes hand in hand with that premiumization that we've done a good job on over a number of years, so whether it's mini cans, glass, small PET, because all consumers are not equal, and and we see an opportunity to drive an offering across all of those price points, and that's what we're doing.

[Eric Serotta, Executive Director at Morgan Stanley]

Great. Thanks so much. I'll pass it on.

[Operator]

Thank you. Our next question comes from the line of Nadine Sawat from Bernstein. Please go ahead.

[Nadine Sarwat, Equity Research Analyst and Director - European & American Beverages at Bernstein]

Hi, thank you. Good afternoon, guys. One question for me coming back to the medium term guidance. So I hear you loud and clear on Indonesia being a headwind that was large enough to at least make you have the full year guidance now as a range versus a previous more specific number. But if we turn our attention to the medium term growth algo, does Indonesia impact your view?

[Nadine Sarwat, Equity Research Analyst and Director - European & American Beverages at Bernstein]

I get that you've reiterated that algo, but are you assuming that Indonesia then subsequently accelerates, or do you feel like you have enough levers elsewhere to offset the weakness? Thank you.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

I think, Nadine, when we look at Indonesia, so we're not assuming that there's a significant turnaround, you know, in the medium term that drives off 4% on the top line. We've talked before about high single digit, which I still think is the right longer term plan for Indonesia. Whilst it's disappointing that the changes that have been made haven't had more an impact and the macro effect is clearly playing on the numbers, We should keep in mind as well though it's a relatively small part of our business. So it's a big opportunity going forward, but it doesn't have a very material effect on our numbers year in year out. So, you know, the long term opportunity still remains, but, no, we're not dependent on a a very significant turnaround to deliver our midterm objectives.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Yeah. Just to build on what Ed said, Nadine, and and and to give some credit to our team in Indonesia, we have seen a slight improvement in our performance coming out of July and into August. And again, we believe in the long term opportunity of that market. But to Ed's point, has more of an impact on revenue and cases, but less on the bottom line, which is really reflected in our guidance today.

[Operator]

Our next question comes from the line of Matt Ford from BNP. Please go ahead.

[Matthew Ford, VP - Equity Research at BNP Paribas]

Thank you. Good afternoon, Damien, Ed. Just a question on COGS actually. Just if you could update us on the situation for '25, where are you in terms of hedging? And then I suppose more interestingly in '26, if you can comment at all on any of the major moving parts you're expecting for '26 without perhaps committing to a number, but and an update on where you are hedging wise for that year as well? Thank you.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

Yes. Thanks, Matt. So yes, we continue to be very pleased with the cost evolution and COGS in general. So we've been enjoying basically flat commodities for this year and we anticipate that will roll into 2026. As you'd expect, at this point, we're very well hedged now for this year.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

So in all the main commodity types, we're over 90% hedged. We're around 60% at this stage for 2026, which is roughly where we would like to be at this stage of the year, so leaving some room still to take advantage of any favorable movements in the market. And actually, some of the volatility that we've seen on the forward rates during 2025 has actually worked to our advantage. So we've actually secured some nice forward prices on a number of our commodities. So the outlook is still good with relatively flat commodities since 2026, which certainly makes life a bit easier in some parts of the P and L as we look forward.

[Matthew Ford, VP - Equity Research at BNP Paribas]

Great. Thank you.

[Operator]

Thank you. Our next question comes from the line of Charlie Higgs from Rothschild and Co Redburn. Please go ahead.

[Charlie Higgs, Equity Research Analyst at Redburn Atlantic]

Yes. Hi, Damien, Ed. Hope you're both well. My question is on Australia, where Q2 marked the four year anniversary of the Amatil deal. And if you go back in time, that Australia business earned a very healthy margin, but perhaps wasn't being run quite as effectively as it couldn't could have been.

[Charlie Higgs, Equity Research Analyst at Redburn Atlantic]

You then came in and, you know, trimmed the promotions, trimmed bulk water, realigned Kurt, etcetera. And as Ed was saying, we still got the Manila Shed Service Center potentially in the background. So can you just provide a bit of an update on where we are on the Australian margin turnaround story and whether you think it could perhaps get back to the very high teens, low 20s level that it previously earned? Thank you.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thanks, Charlie. Yes. Obviously, we're really pleased with our Australian business and the changes that have been made over a number of years. It's far from over in terms of the opportunity from our perspective. You know, we're going through quite a big change, probably from a structural portfolio realignment, the last big one, which is the Beams from Tory change, that's going to allow us to become a bit more efficient, but also align our brand portfolio more to our global footprint.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

And I think that's a positive. In some ways, that was a bit of the unlocker with the Kirk's deal as well, was to just line up with the Coca Cola Company, and we've seen the benefits of that. And we will see that also in alcohol. It will probably take a bit more time, but we're excited about that change. That will allow us also to look at our cost base.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We've invested some good capital into Australia to become more efficient. So all of that will support margin expansion. We're not guiding to a target on a market specific number. But if I look at the macros in Australia, whether it's GDP, population growth, some of the great commercial work that we're leading down there, obviously, margin expansion due to the top line is definitely something we're excited about. And maybe I'll pass to Ed, who'll talk a little bit more about the shared services opportunity as well that we see coming to play.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

Yes. Thanks, Damian. Yes, John. I mean, we're very pleased with the progress. I mean, we don't give the specific Australia profit numbers, but what I can tell you is that our revenue from 2021 has grown at a CAGR if you look until the 2024 by 8% per year, so a fantastic revenue performance.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

And we've done better than that on the bottom line. So we have had operating profit margin accretion over that time period. And as you called out, I think it's due to the investments we've made in capacity, which have helped reduce the cost to serve, promo, r and m GM capabilities that we've leveraged in the market, and then some portfolio rationalization both in terms of focusing on the core parts of the portfolio that add value, but also the work with Coke company in terms of aligning the roles of the different brands within the portfolio. And last but certainly not least, we've taken advantage of our shared services capabilities. Some activities out of Australia have already moved to Bulgaria, and we're looking forward to moving more stuff to Manila with the opening of our new new center.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

So great progress. Really pleased, and more to come there.

[Charlie Higgs, Equity Research Analyst at Redburn Atlantic]

Thank you very much.

[Operator]

Thank you. Our next question comes from the line of Robert Ottenstein from Evercore ISI. Please go ahead.

[Robert Ottenstein, Senior MD at Evercore]

Great. Thank you very much. Damian, it's been about two years, I think, since you rolled out Jack and Coke, in Europe. I was just wondering if you could maybe stand back and give an assessment of how that and other, ARTD initiatives have gone. Any surprises, disappointments?

[Robert Ottenstein, Senior MD at Evercore]

What have you had to change and how you see that developing over time? Thank you.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thanks, Robert. I mean, overall, really pleased with where we are, particularly in a big market like GD. I think some of the learnings that we we've taken on board from our experience in Australia is it's it's got to be a portfolio play. You know? So I talked about Bacardi and Coke.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

I talked about Sprite and Absolut. So we certainly see a stronger performance across all of those brands, including Jack and Coke, when we go to the market with a category play. And that takes a bit of time. But clearly, we're seeing the benefits of that quarter by quarter and year on year. So along with energy in terms of absolute volume growth versus prior year, it's up there.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

And revenue growth, it's even higher just given that it's all single serve. And it's something that we're looking to expand across all of our markets in Europe. So, yeah, it's been a quick two years, but I think the capability and the brand offering that we have now sets us up for many more years of exciting growth. And obviously, you talk about Europe, the changes that are referenced in Australia are also very exciting because acquiring a brand like Bilson's, I think, demonstrates that we will be opportunistic with the co company in a category like this where maybe having local brands from time to time plays a bigger role. But the bulk of the growth will come from those global brand partnerships.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So, yeah, overall, really good, Robert, and, yeah, more to come.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

I think what's particularly pleasing as well is, you know, we're really gaining momentum. So, you know, these things don't happen overnight. So it takes a while to get to know the category, for the retailers to better understand the category, but we've certainly seen an acceleration in the last, six months to a year in ARPD, particularly in Europe.

[Operator]

Thank you. Our next question comes from the line of Mitch Collett from Deutsche Bank. Please go ahead.

[Mitch Collett, Director at Deutsche Bank]

Hi, Damien. Hi, Ed. Hi, Sarah. I've seen the tagline from the CMD was four and more. Clearly, fiscal 'twenty five has been impacted by a few factors outside of your control.

[Mitch Collett, Director at Deutsche Bank]

But how do you feel about that ambition for four or more beyond fiscal twenty twenty five? Do you think fiscal twenty twenty six is going to be at that range or above four? I appreciate you're probably not that likely to guide now, but can you talk about how you think about fiscal twenty twenty six and the steps that are going to take you there? Perhaps it's what you put on Slide 15, but I'd be interested to know what you're expecting to do to be able to accelerate to 4% or more.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Yes. Thanks, Mitch. I mean there's no change in our conviction around top line growth at CCP. I think Q2 was a solid quarter, demonstrated that. And I think if you look at what we've guided for the full year, you'll see that growth continuing in Q3 and Q4.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We have had a couple of drags on revenue certainly in the first half of this year. Some of them may continue into the second half, which is why we've updated today as we have. We've had the tea transition in Spain. Obviously, we've got some Tory out of Australia. We've had Indonesia, although, as I said, that is starting to show signs of improvement.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So some of those are 2025 events. So 2026 and beyond, I think you'll expect us to stick with our four percent revenue guidance And as we continue to build out our portfolio and get smarter at some of the things that we're doing, our ambition for growth is only in my view, is only going to get higher. But I think a 4% guidance is a pretty good number, particularly with a 7% bottom line and that free cash flow. So yes, to answer your question, no change from Manila. It doesn't feel that long ago.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

And certainly, a good Q2 and a good start to Q3 continues to support that midterm outlook on growth.

[Mitch Collett, Director at Deutsche Bank]

Understood. Thank you.

[Operator]

Thank you. Our next question comes from the line of Sanjit Aujla from UBS. Please go ahead.

[Sanjeet Aujla, MD - European Beverages Equity Research Analyst at UBS Group]

Hey, Damian. It's Sarah. Most of mine have been, asked already, but just a point of clarification on some of the commercial agreements, you missed out in Europe. Is something that's impacting through the course of the rest of the year? Or some of that been resolved? And which markets in particular were impacted, please? Thanks.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Yeah. No. So I mean, these are quite typical, Sanjee, as you know, as we try and land pricing and commercial terms for a year. We don't always land them in the time frame that we'd like to. But again, nothing out of the ordinary.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Their resolve was mainly in Q2, mainly a little bit in Germany and a little bit in Sweden were the two markets that I think were most impacted. But now in a good place for certainly the rest of this year. So yes, no lingering effects from those as we go into the second half of the year.

[Sanjeet Aujla, MD - European Beverages Equity Research Analyst at UBS Group]

Got it. And just a quick follow-up on Indonesia. Damien, you're talking about some sequential improvement and stabilization. I'm assuming that means stabilization in the rate of decline as opposed to getting back to growth.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Depends on what period you pick to compare to. I'd say, genuinely, on our Sparkling portfolio, we start to see stabilization, which is really encouraging. I think on tea, we're probably a bit off that. We're launching a new tea format and a new tea pack and viz. That's only going to come in in q three.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So I'd say on sparkling, yes. Tea, we have a bit of a way to go. But on a combined level, it certainly, you know, feels better than it than it has has been feeling, which is great. You know, on a consolidated level, it's important for us, but it's really important for the team locally to start to see some early wins and also for our customers as well because it's it's still a very valuable category for them in Indonesia. So, yes, more to come on that as we go through the second half of the year.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

But yes, sparkling, leading it, tea still to come, Sanjeet, will be the way I think about it.

[Charlie Higgs, Equity Research Analyst at Redburn Atlantic]

Our

[Operator]

Our last question for today comes from the line of Carlos Laboy from HSBC. Please go ahead.

[Carlos Laboy, Managing Director at HSBC]

Yes. Hello. Thank you. Hi, Damian. Can you expand on your or give us a view on your trade management outlook in in in Europe given where you are on your digital capabilities and the implementation of your digital capabilities?

[Carlos Laboy, Managing Director at HSBC]

There's usually a lot of low hanging fruit there. Have you captured most of that already, you think? Or is there a little bit more to go there?

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thanks, Carlos. It's certainly an area that we're very passionate and excited about, and we've invested quite a bit in terms of our tech capabilities. I kind of look at it through two lenses. So the more organized segment of of particularly in Europe, Australia, and New Zealand, you know, our myccep.com platform is managing and capturing a lot of value in terms of information, revenue, and also driving good customer engagement. So as I talked to, we're on our way to a 3,000,000,000 revenue through that platform.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So I think on a consolidated trade level, always more to do, but a great foundation. I think where we've been making the most progress is in fragmented. So as you know, a lot of our markets in Europe, a lot of the away from home is fragmented and goes through wholesale. It goes through a more diverse route to market, let's put it that way. So currently, we're up 70% plus of the revenue in that part of the trade that we get visibility on at an outlet level, so that's a big improvement from a few years ago.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

And then we're overlaying that with our broader eB2B play in Spain, which mirrors some of the work you would have seen in Latin America and from Hellenic around a broader category platform for our distributors, which will allow them digitize their route to market, allow us to get access to information. And as you know, the size of our partners in that part of the market, they don't have the balance sheet capability to build these platforms. So I think we're bringing a tool that they need. Gives us transparency and it'll allow us, I think, to accelerate some of that market development capability in the fragmented trade, particularly in Europe. Clearly, it could have a bigger role in Philippines and Indonesia, and that's certainly where we're going next.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So we'll continue the journey in Europe. We're already rolling out myccep.com platform, and then the next one will be that more fragmented trade tool. But yeah. Yeah. So so a a lot has happened, but it's a super exciting part of the business.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

We'll continue to invest in it, and we'll continue to learn from other bottlers. I think one of the benefits of of where we are now as part of the Coke system is there's a lot of sharing going on, particularly in this space. So we're definitely, you know, moving a bit faster thanks to kind of lifting and shifting some capabilities from elsewhere.

[Carlos Laboy, Managing Director at HSBC]

Thank you.

[Operator]

Thank you. Our last question comes from the line of Usama Tariq from ABN AMRO ODDO BHF. Please go ahead.

[Usama Tariq, Equity Research Analyst at ABN AMRO – ODDO BHF BV]

Hi. Good afternoon, team. Thank you for the opportunity. I just have a quick question with regards to the comparable free cash flows. So correct me if I'm wrong.

[Usama Tariq, Equity Research Analyst at ABN AMRO – ODDO BHF BV]

They're down year on year. Am I correct in to assuming that this is more working capital related? And then going into h two, I do understand that h two is way stronger on a comparable basis. But do you see some risk there with regards to your comparable free cash flow guidance, especially if Indonesia remains weak? Thank you.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

Hi. Thank you for the question. So yes, I mean, comparable free cash flow at the first half is slightly below last year, but that is really working capital related and is purely phasing. So actually, when you look at the calendar, the half ended a little bit earlier than last year, ended on the June 27, I believe. So it's purely a phasing item.

[Ed Walker, Chief Financial Officer at Coca-Cola Europacific Partners]

If you look at previous years, we always do more free cash flow in the second half of the year than the first half of the year given the big summer selling period in Europe. And as we sit here today, no, we're confident to reaffirm the guidance for the year. Indonesia is, as I've said earlier, a small part of our business and not a heavy drain from a free cash flow perspective. So we're confident in delivering at least GBP 1,700,000,000.0 for 2025.

[Operator]

All right. Thank you. Thank you. I would now like to hand the conference back over to Damian Gamal for his closing remarks. Damian, please go ahead.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Thank you, operator. And again, a big thank you to everybody for joining us today. So we're really happy we continue to execute on our growth strategy and are excited about the midterm outlook for CCEP. Very solid first half. I'm pleased that we reaffirmed our full year profit and free cash flow guidance today.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

Europe's returned to growth in Q2, and we see a better performance in Away From Home. Indonesia is a bit slower. However, we continue to be excited and make the changes necessary to unlock what we believe is a great longer term opportunity for the group. Full year, we expect volume growth in Europe and in APS despite Indonesia. And fundamentally, we continue to generate a lot of value for our customers on the back of being a great business with very strong brands, solid route to market and a very exciting commercial calendar between now and the end of the year.

[Damian Gammell, CEO & Executive Director at Coca-Cola Europacific Partners]

So again, thank you for joining us. We look forward to updating you on our Q3 in November. Thank you.

[Operator]

That concludes our conference for today. Thank you for participating. You may all disconnect.

Participants

Executives

• Sarah Willett, VP - IR & Corporate Strategy
• Damian Gammell, CEO & Executive Director
• Ed Walker, Chief Financial Officer

Analysts

• Bonnie Herzog, Managing Director at Goldman Sachs
• Simon Hales, MD - Consumer Staples & Beverages Research at Citi
• Edward Mundy, MD - Beverages Research at Jefferies LLC
• Lauren Lieberman, Managing Director at Barclays
• Richard Withagen, Analyst at Kepler Cheuvreux
• Eric Serotta, Executive Director at Morgan Stanley
• Nadine Sarwat, Equity Research Analyst and Director - European & American Beverages at Bernstein
• Matthew Ford, VP - Equity Research at BNP Paribas
• Charlie Higgs, Equity Research Analyst at Redburn Atlantic
• Robert Ottenstein, Senior MD at Evercore
• Mitch Collett, Director at Deutsche Bank
• Sanjeet Aujla, MD - European Beverages Equity Research Analyst at UBS Group
• Carlos Laboy, Managing Director at HSBC
• Usama Tariq, Equity Research Analyst at ABN AMRO – ODDO BHF BV