• Revenue: EUR20.7 billion, an increase of 3.5%.
• Operating Profit: EUR2.7 billion, up 8% with an operating margin of 12.9%.
• Diluted Earnings Per Share: EUR3.95, up 6.5% on a comparable and FX-neutral basis.
• Comparable Free Cash Flow: EUR1.8 billion.
• Dividend Per Share: EUR1.97, up just over 7% for the year.
• Share Buyback Program: New EUR1 billion program announced.
• Volume Growth: APS volumes up 4.9%, driven by the Philippines.
• Operating Margin Expansion in the Philippines: Around 200 basis points.
• Cost of Sales Per Unit Case: Increased by 2.6%.
• Return on Invested Capital: Increased by 50 basis points to 10.8%.
• Efficiency Program Savings: EUR80 million delivered, ahead of guidance.

• Warning! GuruFocus has detected 5 Warning Sign with CCEP.

Release Date: February 14, 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) reported robust top-line growth with a revenue increase of 3.5% to EUR20.7 billion, driven by strong performance in the Asia-Pacific and Southeast Asia (APS) markets.
• The company achieved impressive comparable free cash flow of over EUR1.8 billion, demonstrating strong cash generation capabilities.
• CCEP announced a new EUR1 billion share buyback program, highlighting its commitment to delivering shareholder value.
• The Philippines market delivered double-digit volume growth and significant value share gains, contributing to a healthy operating margin expansion.
• CCEP maintained its strong sustainability credentials, retaining its inclusion on CDP's A List for Climate for the ninth year and maintaining its MSCI AAA ESG rating.

Negative Points

• European volumes were down 2.4%, impacted by adverse weather conditions and softer demand in the away-from-home channel.
• The Indonesian market faced significant challenges due to geopolitical events, leading to a noncash impairment charge of EUR175 million.
• The company experienced higher business transformation costs, impacting reported operating profit, which declined by just under 9%.
• CCEP anticipates continued inflationary pressures, particularly in labor costs, which could affect future profitability.
• The energy drink category, while still growing, showed a slowdown in growth compared to previous years, raising concerns about future performance.

Q & A Highlights

Q: Can you give some color on why you've chosen to increase the free cash flow guide? Is that all driven by operating profit? A: Ed Walker, CFO: We've increased the guidance to at least EUR1.7 billion due to increased confidence in our business's ability to generate operating profit growth and convert it into free cash flow. We are maintaining flexibility due to over EUR1 billion of planned CapEx investment to unlock growth across our markets.

Q: How did the Philippines and Indonesia perform, and what are your expectations for these markets? A: Damian Gammell, CEO: The Philippines had a great year with record volumes, and we expect high single-digit growth in line with our midterm guidance. In Indonesia, despite geopolitical challenges, certain areas showed high single-digit to mid-teens growth. We remain confident in long-term opportunities and have made strategic changes to improve performance.

Q: What are your expectations for the Energy category in 2025? A: Damian Gammell, CEO: Energy remains a standout category, and we expect it to return to high single-digit growth. We are expanding into new markets like Indonesia and the Philippines and have a strong pipeline of innovation with Monster, which will help maintain growth.

Q: How do you plan to support the away-from-home channel in Europe given the current consumer backdrop? A: Damian Gammell, CEO: We plan to support the away-from-home channel with brand innovation, moderated pricing, increased cooler investments, and digital-led campaigns to drive in-store incidents and traffic. We are also winning new business in this area, which supports our growth ambitions.

Q: Can you discuss your pricing and promotional strategy in Europe? A: Damian Gammell, CEO: We aim to price in line with CPI while using data analytics to optimize promotional investments. We focus on making promotions more efficient and relevant, without increasing overall investment, to drive growth and maintain price relevance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.