Release Date: August 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Delivered strong first-half results with revenue up 6.1% and operating profit up 8.1%, driven by broad-based growth across markets and categories.
- Continued to gain market share, with value share up 20 basis points, led by gains in Europe.
- Strong momentum in key growth categories, with energy volumes up 19% and zero-sugar volumes up 10%.
- Successful execution of major FIFA World Cup activation, driving consumer engagement and supporting volume growth.
- Southeast Asia operations, particularly the Philippines and Indonesia, are showing strong growth and improving profitability, with the Philippines margins approaching the 10% target.
Negative Points
- Revenue per case growth was modest at 0.4%, impacted by a strong prior-year comparison and a shift to larger, value-oriented formats in Europe.
- Cost of sales per unit case increased by 0.6%, with higher costs expected in the second half due to Middle East-related pressures.
- The Suntory alcohol exit in APS created a headwind, reducing total revenue by over 1% in the first half.
- Core sparkling volume growth in Europe remains challenged, with Coca-Cola Classic volumes slightly down, though revenue is growing.
- Management reaffirmed full-year guidance, implying a deceleration in growth in the second half, partly due to six fewer trading days and conservative outlook.
Q & A Highlights
Q: Can you provide more color on the volume growth in Q2, the drivers behind it, and whether the full-year guidance implies a conservative outlook for H2?
A: Damian Gammell (CEO) stated there was zero pull-forward of demand from Q2 into Q3, with growth being broad-based across geographies, channels, and brands. He highlighted the FIFA World Cup activation and better-than-expected performance from new innovations like Coke Zero Zero and Supercans as key drivers. Regarding the guidance, he acknowledged they may be "a little bit conservative," but with five months remaining, they prefer to reaffirm their existing guidance, which already reflects strong growth. The H2 slowdown is partly due to six fewer trading days and the timing of Middle East cost absorption.
Q: How should we think about the revenue per case evolution in Europe, and what is the outlook for pricing and mix in the second half?
A: Edward Walker (CFO) explained that Europe's Q2 revenue per case growth of 1.4% was cycling a very strong 4.2% from the prior year. He noted a healthy brand mix but a slight adversity in pack mix due to successful FIFA-related promotions. For the full year, he expects a good balance between volume and revenue per case growth, with no reduction in pricing power. Damian Gammell (CEO) added that they are balancing affordability with value-add activations and premium innovations like Supercans, which should support net revenue per case progression in H2.
Q: What is driving the strong performance in Indonesia, and is the turnaround now sustainable?
A: Damian Gammell (CEO) expressed excitement about Indonesia's near and long-term potential. He attributed the strong quarter to structural changes, including a reorganized route-to-market with a more efficient distributor model, and a wave of new innovations like Sprite Nippy's Mint and Powerade. While sparkling is growing ahead of the category, he noted some weakness in tea that needs addressing. He emphasized that while it's too early to declare success, the progress is tangible, and they expect the momentum to continue into H2 and 2027.
Q: Given the potential for higher inflation in 2027, how confident are you in using pricing as a lever, and how might this strategy evolve?
A: Damian Gammell (CEO) highlighted that only 5% of their revenue is in retail, giving them access to a more elastic consumer environment. He emphasized a highly segmented pricing strategy across categories and packs, which provides confidence for 2026 and 2027. Edward Walker (CFO) added that they have many levers beyond headline price, including promotional efficiency and pack mix, and will take a balanced approach to manage inflation while investing in the business.
Q: Can you elaborate on the share trends in Europe and the performance of the away-from-home channel?
A: Damian Gammell (CEO) reported that share has improved in Europe as the year progressed, with volume share slightly better than value share, driven by initiatives like large PET packs and the return to growth of Diet Coke in GB. On away-from-home, he said performance is consistent with last year, with revenue doing better than volume. The channel is benefiting from cooler placements and major activations like FIFA, though they remain conscious of consumers' focus on value, as seen in meal deals at QSRs.
Q: How are you optimizing promotional spending, and what other revenue and margin growth management levers are you focusing on?
A: Damian Gammell (CEO) stated that promotional optimization is a key focus, using technology to identify promos that don't create value. He noted that while promo depth is increasing, they are seeing similar promotions at slightly higher prices, which will support NSR growth. Beyond that, he highlighted innovation in single-serve and premium packs, pack mix optimization, and better leveraging of faster-growing categories like sports and energy as key levers for future growth.
Q: What is the ROI on the significant investment in new coolers, and how are they distributed across geographies and channels?
A: Edward Walker (CFO) explained that the 80,000 new coolers added this year are fairly evenly balanced across markets and channels. He described cooler placements as some of the best investments they make, with well-placed coolers generating returns within a couple of years. The use of connected coolers is providing valuable data on throughput and product mix, ensuring they place the right coolers in the right locations. Damian Gammell (CEO) added that the cold single-serve business is robust and commands a premium, with a cold Coke available for around €1 in most markets.
Q: Can you provide examples of how your agentic AI application, Kira, is providing insights and driving faster decisions?
A: Damian Gammell (CEO) explained that Kira is their first major AI agent that sits above various data sources like Nielsen, Kantar, EPOS, and brand information from the Coca-Cola Company. It allows commercial teams to ask questions and get quick answers on consumer responses to initiatives, steering decisions on resource allocation, promo pricing, and innovation. He noted that what used to take weeks to correlate is now happening much faster, making it a super exciting development for the business.
Q: What progress have you made on improving core sparkling volume growth in Europe, and what is your current hedging position for next year?
A: Damian Gammell (CEO) confirmed that sparkling volumes are growing in Europe, led by Zeros, which are up over 10%. While Coke Classic volume is slightly off, it is still growing revenue. He attributed this to the shift to zero-sugar options and the impact of the sugar tax in France. Edward Walker (CFO) stated they aim to be 80% hedged for the coming year and are approximately 50% hedged at the half-year point. Despite higher forward prices due to the Middle East, they have locked in some competitive rates and have not delayed their hedging program.
Q: How much of the "more customers" strategy is driven by CCEP-specific initiatives versus global partnerships with the Coca-Cola Company?
A: Damian Gammell (CEO) clarified that the majority of new customer wins are within CCEP's control, focusing on local chains and outlets. While they welcome global wins like Marriott, which covers 600 hotels, the upside is primarily from local execution. He noted that their away-from-home share is high relative to retail, but there are still opportunities to pick up new business across their markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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