Coca-Cola Europacific Partners PLC Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Q1 Performance: Broadly as expected, with April showing stronger performance. Adjusted for calendar impacts, underlying volumes were flat. Solid commercial programs, innovation pipeline, and activation plans in place, including more cooler investments and Share a Coke campaign rollout.
• Europe Details: GB outperformed with new product launches, Flavors with new Fanta variants, and ARTD with collaborations. Iberia saw energy/sports growth and Nestea-Fuze transition ahead of expectations.
• APS Details: Australia Pacific had volume growth in some regions, Southeast Asia had growth in Philippines but softness in Indonesia. Acquired Bilson’s in Australia for ARTD, enhancing the portfolio.

Segment Performance

• Europe: Comparable volumes overall down 2.1%, but revenue per unit case up just over 4%. Home Channel volumes down 3.6% (notably Germany and France due to sugar tax increase). GB outperformed with new launches like Coca-Cola Zero, Monster Rio Punch, and Dr. Pepper Cherry Crush. Flavors introduced new Fanta variants, and ARTD saw collaborations. Iberia had growth in energy and sports categories, with transition from Nestea to Fuze ahead of expectations.
• APS (Australia Pacific and Southeast Asia): Volumes up 2.1%. Australia Pacific regions had slight decline due to Easter timing and Cyclone Alfred, but Pacific Islands and PNG saw strong growth. Southeast Asia had growth in Philippines modern trade, offset by Indonesia's softness. Revenue per unit case grew 2.1% with price increases in Australia and Philippines offset by geographic mix.

Guidance

• Reaffirmed full-year guidance of 4% revenue growth, 7% operating profit growth, and at least EUR 1.7 billion comparable free cash flow. Volume growth is key to achieving this, with confidence in commercial plans and softer comparables ahead. Commodity input costs over 90% hedged, cost per unit case expectations unchanged.

Risks

• Volatile global macroeconomic environment. Geopolitical issues in Indonesia. Weather impacts. Impact of sugar tax increases in some European markets.

Question and Answer

• **Q: Volumes growth expectations for rest of year?

A: Damian expects volume growth to drive 4% revenue growth, with April, Share a Coke campaign, and softer comparables supporting it.**

• **Q: Portfolio assessment?

A: Strategic decisions on bulk water, juice, Capri Sun are behind, with focus on adding value accretive ARTD brands, like acquiring Bilson’s in Australia.**

• **Q: Indonesia performance?

A: Stabilizing, Ramadan mixed, with home channel better than expected, and focus on cost transformation and route to market changes.**

• **Q: Away from home trends?

A: Positive due to cooler investments, consumer marketing pivot, and new business wins, with momentum expected to continue.**

• **Q: Europe volume growth drivers?

A: Transactions growing, pack pricing architecture, innovation pipeline, ARTD growth, and supply chain efficiency.**

• **Q: GB vs other Europe markets?

A: GB leading with new launches, while France affected by sugar tax, Spain slightly behind but Fuze transition better than expected.**

• **Q: Energy drinks and Predator launch?

A: Energy drinks growing in Europe, Predator launch in Philippines and Indonesia is early but expected to be accretive.**

• **Q: Europe price/mix?

A: Revenue per case up 4%, volume expected to be ~1%, majority from price, with France sugar tax passed on.**

• **Q: Cooler placements?

A: Ahead of plan year-to-date, supporting away from home growth and summer activation.**