Coca-Cola Europacific Partners PLC (CCEP) (H1 2025) Earnings Call Highlights: Strong Profit ...
Operating Profit: EUR1.4 billion, up 7.2%.
Operating Margin: 13.5%, an expansion of around 60 basis points.
Comparable Free Cash Flow: EUR425 million in H1.
Dividend: EUR0.79 per share for the first half.
Share Buybacks: EUR460 million completed out of EUR1 billion planned.
Revenue Per Unit Case Growth: 3.8%.
Cost of Sales Per Unit Case: Increased by 3.6%.
Comparable Diluted Earnings Per Share: EUR2.02, up 3.1% on an FX-neutral basis.
Volume Growth: Comparable volumes up 0.3%, excluding Indonesia up around 1%.
Monster Volume Growth: Up nearly 15%.
Fanta Zero Volume Growth: Up around 7%.
Sprite Zero Volume Growth: Up around 13%.
ARPD Category Volume Growth: Up around 9%.
Full-Year Revenue Growth Guidance: Updated to a range of 3% to 4%.
Effective Tax Rate: Increased to 26%.
Warning! GuruFocus has detected 1 Warning Sign with BOM:531508.
Release Date: August 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Coca-Cola Europacific Partners PLC (NASDAQ:CCEP) delivered solid top and bottom-line growth, with a 7.2% increase in operating profit and a 2.5% increase in revenue for the first half of 2025.
The company completed around EUR460 million of share buybacks and paid a dividend in line with its annualized payout policy, demonstrating strong cash returns to shareholders.
CCEP's strategic focus on resilient categories such as ARTD and Hot Coffee, which are structurally growing and profitable, supports its long-term growth strategy.
The company has made significant investments in technology and digital capabilities, enhancing productivity and supporting future growth.
CCEP's strong brand portfolio, including successful campaigns like 'Share a Coke' and the launch of new products, has driven consumer engagement and market share gains.
Negative Points
The company's revenue growth guidance for the full year was adjusted to a range of 3% to 4%, down from approximately 4%, due to slower-than-expected performance in Indonesia.
CCEP faced challenges in Indonesia, with a weaker consumer backdrop impacting volumes, although there are signs of stabilization.
The exit from the Beam Suntory relationship in Australia created a near-term headwind, affecting revenue per unit case.
The company experienced some delays in landing commercial agreements in Europe, particularly in Germany and Sweden, impacting Q2 results.
CCEP anticipates a full-year FX headwind of around 150 basis points to revenue and almost 200 basis points to operating profit, affecting financial performance.
Q & A Highlights
Q: You lowered the top line guidance slightly, but it still implies acceleration in the second half. Can you provide more color on the drivers of this growth and the expected contribution from price/mix versus volume growth? A: We have seen our business accelerate coming out of Q1, with a strong Q2 in both Europe and APS. We expect this to continue, driven by volume growth and price/mix per case. Our pricing is in place through the end of the year, giving us confidence in our top-line number. The bottom line changes between the halves are due to more volume contribution and some OpEx phasing.
Q: Can you elaborate on the stronger Q3 trading you've seen, particularly in Europe, and the impact of flooding in the Philippines on APS performance? A: We've seen stabilization in Indonesia and strong performance in Australia, New Zealand, and the Pacific Islands. In Europe, good weather has positively impacted our July business, and we expect this to continue through August. The flooding in the Philippines is reflected in our guidance, but overall, we are seeing positive trends.
Q: How do you view the medium-term growth algorithm given the headwinds in Indonesia? A: We are not assuming a significant turnaround in Indonesia for our 4% top-line growth target. While Indonesia presents a long-term opportunity, it is a relatively small part of our business. We have enough levers elsewhere to offset the weakness, and our midterm objectives remain unchanged.
Q: Can you provide an update on the Australian margin turnaround story and the potential for it to return to previous high levels? A: We are pleased with the progress in Australia, with revenue growing at an 8% CAGR since 2021 and operating profit margin accretion. Investments in capacity, promo, RGM capabilities, and portfolio rationalization have contributed to this. The shared services capabilities in Manila will further support margin expansion.
Q: How has the "Share a Coke" campaign been received, and what metrics do you track to analyze its success? A: The "Share a Coke" campaign has been well received, driving improvements in display share, distribution, and consumption metrics. It focuses on single-serve, supporting price mix and away-from-home growth. The campaign has been innovative across our Cola portfolio and is positively impacting our volume and price mix numbers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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