CCEP

Business Context and Reporting Period

Company: Coca-Cola Europacific Partners Plc (CCEP)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Six months ended 27 June 2025
Overview: CCEP reported a solid first-half performance, reaffirming its full-year profit and cash guidance. The company operates across 31 markets in Europe and the Asia Pacific (APS) region, serving nearly 600 million consumers. The period included the full impact of the Coca-Cola Beverages Philippines, Inc. (CCBPI) acquisition completed in February 2024.

Key Financial Metrics

Note: Comparable Operating Profit was €1,390M (+7.3% vs H1 2024). Comparable EPS was €2.02 (+3.1% vs H1 2024).

Material Changes vs. Prior Period

• Revenue Growth: Driven by a 3.8% increase in adjusted comparable revenue per unit case (pricing, promotional optimization, and pack mix) and a 0.3% increase in adjusted comparable volume.
• Profitability: Reported operating profit surged 19.4%, significantly aided by lower business transformation costs (€46M in H1 2025 vs €95M in H1 2024) and a €30M gain from a property sale in Germany.
• Geographic Performance:
  • Europe: Revenue +2.6%; Volume -0.3% (adjusted comparable). Q2 saw a return to volume growth due to Easter timing and weather, offset by a French sugar tax impact and the annualized de-listing of Capri Sun.
  • APS: Revenue +10.0%; Volume +17.1% (reported). Strong growth in Australia/Pacific and the Philippines (cycling high growth from prior year) was partially offset by a volume decline in Indonesia due to a weaker consumer backdrop.
• Costs: Cost of sales per unit case increased 3.6% (adjusted comparable) due to higher concentrate costs linked to revenue growth, manufacturing inflation, and tax increases in France and Great Britain.

Guidance, Outlook, and Risks

Full-Year 2025 Guidance (Adjusted Comparable & FX-Neutral)

• Revenue: Growth of 3% to 4% (previously ~4%).
• Operating Profit: Growth of ~7%.
• Cost of Sales per UC: Comparable growth of ~2%.
• Comparable Free Cash Flow: At least €1.7 billion.
• CAPEX: ~5% of revenue.
• Dividend Payout Ratio: ~50% based on comparable EPS.
• Share Buyback: €1 billion program over 12 months from February 2025 (approx. €460M completed as of July 30, 2025).

Management Commentary

CEO Damian Gammell highlighted strong execution, share growth ahead of the market, and resilience despite a volatile macroeconomic environment. The company is investing in technology and AI to unlock value. An interim dividend of €0.79 per share was declared.

Risks and Contingencies

• Geopolitical: Ongoing tensions in the Middle East and Ukraine impacting supply chains and consumer sentiment, particularly in Indonesia.
• Regulatory: Potential taxes on soft drinks and plastics; discussions on sweeteners and marketing restrictions.
• Tax: A Spanish Supreme Court ruling (July 2025) regarding VAT jurisdiction resulted in a €250M receivable from Spanish authorities and a €280M payable to Basque authorities, netting a €30M impact on previously recognized positions.
• Cybersecurity: Increased focus on threats related to cloud concentration and quantum computing risks.

Investor Verification Checklist

• Indonesia Performance: Verify the extent of volume decline in Indonesia and the sustainability of the "weaker consumer backdrop" cited by management.
• One-Off Items: Assess the impact of the €30M German property sale and the €19M litigation provision reversal on the reported 19.4% operating profit growth.
• FX Headwinds: Monitor foreign exchange impacts, which are projected to be a ~150 basis point headwind to revenue and ~200 basis points to operating profit for the full year.
• Free Cash Flow: Reconcile the 21% year-over-year decline in comparable free cash flow (€425M) against the strong operating profit growth.
• Buyback Execution: Track the progress of the €1 billion share buyback program, with ~€460M already completed.