Andrea Pistacchi

Andrea Pistacchi asked about the drivers enabling CCEP to consistently deliver 7% operating profit growth, despite top-line revenue sometimes falling short of expectations, inquiring if it's due to revenue per case drop-through, a favorable COGS environment, or increased cost savings efforts. He also asked if a cost saving number for 2025 was provided and followed up on the expected momentum for the away-from-home channel in Europe in 2026.

Answer

CFO Ed Walker attributed the strong operating profit to multiple factors, including mix, effective revenue and margin growth management, and the productivity and transformation agenda, which saw OpEx grow slower than revenue. He noted that 2026 expects more volume-driven revenue, which generates slightly less profit than pure rate increases. CEO Damian Gammell confirmed continued momentum for the away-from-home channel in 2026, driven by sustained investment, more coolers, new business wins, and collaboration with The Coca-Cola Company on brand relevance.

Andrea Pistacchi asked about the drivers enabling CCEP to consistently deliver 7% operating profit growth despite top-line revenue falling slightly short of expectations in 2024 and 2025, and for 2026 guidance. He inquired about the role of revenue per case drop-through, the COGS environment, and cost savings. He also followed up on the expected continuation of away-from-home momentum in Europe for 2026.

Answer

CFO Ed Walker attributed consistent operating profit growth to strong mix, effective revenue and margin growth management (RGM) including promotional efficiency, and the productivity and transformation agenda (OpEx growing slower than revenue). He noted that 2026 expects more volume-driven revenue, which generates slightly less profit than pure rate increases, hence the 7% profit guidance. CEO Damian Gammell confirmed continued momentum for away-from-home in Europe for 2026, driven by sustained investment, increased cooler placements, new business wins, and consumer relevance initiatives.

Andrea Pistachi followed up on Indonesia's performance, seeking details on the drivers of improvement in Q3, the impact of completing route-to-market transformation, the relative performance of sparkling versus tea portfolios, and confidence in achieving growth in 2026.

Answer

CEO Damian Gammell noted satisfaction with the finalizing route-to-market transition, which improves execution and cost efficiency. He indicated better performance in the sparkling portfolio, particularly Coke and Fanta, but acknowledged ongoing challenges in the standard black tea proposition. CFO Ed Walker added that while frustrating, Indonesia is not material to CCEP's overall profit.

Andrea Pistacchi asked for more details on the performance of the Indonesia business, specifically the drivers behind its improvement in the quarter despite still declining, the progress of the turnaround plan and distribution changes, the relative performance of sparkling versus tea, and the confidence in returning Indonesia to growth in the next year.

Answer

CEO Damian Gammell expressed satisfaction with the finalizing route-to-market transition, which improves execution and efficiency. He noted better performance in the sparkling portfolio, while the tea portfolio, particularly standard black tea, remains a drag. Gammell anticipates a stronger start to 2026 with early Ramadan and highlighted ongoing work with The Coca-Cola Company on Indonesian-centric marketing and moderating macroeconomic headwinds. CFO Ed Walker reiterated that Indonesia is not material to CCEP's profit, despite the long-term opportunity.

Andrea Pistacchi asked how AB InBev, despite challenging volumes, remains on track for its 4-8% EBITDA guidance, inquiring about any adaptations made to plans, such as agile revenue management or tighter cost control. She also sought details on the environment in Middle Americas ex-Mexico, why it differs from Mexico or Brazil, and confidence in continued volume growth in these high-margin countries.

Answer

Michel Doukeris, Chief Executive Officer, stated that AB InBev has adapted its execution in a dynamic environment, reallocating resources and leveraging its broad portfolio. He highlighted that disciplined cost and revenue management were key differentiators, enabling margin expansion, EBITDA, and EPS growth despite consumer challenges. For Middle Americas ex-Mexico, Doukeris noted its relevance for AB InBev's performance, confirming that brands are performing well and the company is managing controllable aspects. He reiterated that the region remains a significant long-term growth driver for the industry, with AB InBev well-positioned to capture it.

Andrea Pistacchi questioned how AB InBev, despite challenging volumes, remained on track for its 4-8% EBITDA guidance, asking about specific adaptations made to plans, such as agile revenue management or tighter cost control. He also sought insights into the environment and sustained solid volume growth in the Middle Americas Zone (MAZ) ex-Mexico, differentiating it from Mexico or Brazil, and confidence in its continued performance.

Answer

CEO Michel Doukeris attributed the performance to adapting execution in a dynamic environment, particularly given the unseasonable weather in the Americas. He emphasized the agility in reallocating resources, the breadth of their portfolio, and disciplined cost and revenue management as key differentiators enabling margin expansion and EBITDA growth. For MAZ, he reiterated its relevance as a growth driver, noting that while it was impacted, AB InBev is adapting, and brands are performing well, positioning the company to capture long-term growth in the region.

Andrea Pistacchi from Bank of America questioned if AB InBev has sufficient levers to protect U.S. profitability if the industry decline accelerates. He also asked why the company didn't increase its share buyback program sooner, given strong cash flow and an attractive share price.

Answer

CEO Michel Doukeris expressed confidence in levers like the premiumization-driving Michelob Ultra, innovation, and ongoing productivity efforts to support U.S. profitability. CFO Fernando Tennenbaum stated that the capital allocation policy is unchanged but acknowledged that lower leverage and increased cash generation provide greater flexibility. He noted that cash flow is typically weighted to H2.

Andrea Pistacchi of Bank of America questioned the 4-8% EBITDA guidance, asking what risks could temper a strong second-half performance given the solid H1 results. He also sought perspective on the competitive and pricing environment in Brazil.

Answer

CFO Fernando Tennenbaum clarified the 4-8% EBITDA growth is a medium-term outlook, not a quarterly target. CEO Michel Doukeris described the Brazilian market as structurally improved, with the company's portfolio well-positioned in premium segments and less exposed to the more competitive value tier, where relative pricing has remained stable.

Andrea Pistacchi from Bank of America requested more detail on Diageo's updated FX hedging policy and inquired about the strategic focus and growth potential for the Astral tequila brand in the US.

Answer

Interim CEO & Director Nik Jhangiani explained the new FX hedging policy aims to reduce volatility by better aligning hedges with total operating profit exposure. Regarding tequila, he positioned Astral as a key brand for a 'fast build' in the super-premium segment, complementing Don Julio and Casamigos as part of a broader global tequila strategy.