CCEP

Business Context and Reporting Period

Company: Coca-Cola Europacific Partners Plc (CCEP)
Filing Type: Form 6-K (Trading Update)
Reporting Period: Third Quarter and Nine Months ended 27 September 2024
Key Event: Declaration of second-half interim dividend and reaffirmation of full-year guidance.

Key Financial Metrics

Revenue and Volume Performance (Q3 2024)

Year-to-Date (YTD) Highlights

• Total Revenue: €15,454m (Adjusted Comparable growth of 2.7%).
• Volume: Adjusted comparable volume growth of 0.4% YTD.
• Market Share: YTD NARTD value share gains across measured channels: In-store (+40bps), Online (+20bps), Away-from-Home (+10bps).

Liquidity and Dividends

• Interim Dividend: €1.23 per share (payable December 2024).
• Full-Year Dividend: €1.97 per share, representing a 7.1% increase vs 2023.
• Payout Ratio: Maintained at approximately 50% of comparable earnings per share.
• Free Cash Flow Guidance: At least €1.7bn for FY24.

Material Changes vs Prior Period

• Acquisition Impact: Reported revenue growth in APS (54.9%) is significantly inflated by the acquisition of Coca-Cola Beverages Philippines, Inc. (CCBPI) completed in February 2024. Adjusted comparable metrics normalize this impact.
• Geographic Divergence: Europe experienced volume declines (-1.4%) due to mixed summer weather, softer away-from-home demand, and the strategic de-listing of Capri Sun. Conversely, APS delivered volume growth (+3.3%) driven by the Philippines and solid momentum in Australia/Pacific.
• Pricing Power: Revenue per unit case grew across all regions (Europe +3.2%, APS +1.2%) driven by headline price increases and promotional optimization, offsetting volume headwinds in Europe.
• Category Performance: Energy drinks grew +4.5% (driven by Monster), while the "Other inc. Energy" category declined -8.6% primarily due to the Capri Sun de-listing.

Guidance, Outlook, and Risks

Full-Year 2024 Guidance (Adjusted Comparable Basis)

• Revenue: ~3.5% growth (revised down from ~4%).
• Cost of Sales per UC: ~2.5% growth (revised down from ~3%).
• Operating Profit: ~7% growth.
• Effective Tax Rate: ~25%.
• Capital Expenditure: ~5% of revenue (excluding leases).

Management Commentary

CEO Damian Gammell highlighted robust geographic diversification, with APS offsetting softer European volumes. The company cited successful activations (UEFA Euros, Olympics) and revenue growth management strategies. Management reaffirmed confidence in mid-term growth objectives and the ability to grow shareholder returns.

Risks and Contingencies

• Geopolitical: Risks related to the war in Ukraine and tensions in the Middle East impacting supply chains and specific markets (e.g., Indonesia).
• Integration: Risks associated with the integration of CCBPI and the joint venture with Aboitiz Equity Ventures Inc.
• Regulatory: Potential water use reductions and tax increases (e.g., Netherlands consumption tax).
• Economic: Global inflation, price elasticity, and potential recession impacts on consumer disposable income.

Investor Verification Checklist

• Adjusted Comparable Metrics: Verify the reconciliation between reported and adjusted comparable figures, specifically regarding the CCBPI acquisition impact.
• Europe Volume Recovery: Monitor Q4 performance in Europe to assess if volume declines are seasonal or structural, particularly in the away-from-home channel.
• Cost Inflation: Track commodity costs and hedge coverage (>95% for FY24) to ensure the revised cost of sales guidance is met.
• Dividend Sustainability: Confirm free cash flow generation aligns with the €1.7bn guidance to support the 50% payout ratio.
• Listing Status: Note the transfer of UK listing category to "Equity Shares (Commercial Companies)" effective 15 November 2024.