Edward Mundy

Edward Mundy requested clarification on CCEP's underlying growth over the last two years, backing out one-off technical portfolio changes like Cadbury, Fuse, and Beam. He also asked about the implications of recent leadership changes at The Coca-Cola Company (Enrique and Luisa) for CCEP's future strategy.

Answer

CEO Damian Gammell estimated that excluding portfolio changes, underlying growth would be between half and one point higher, aligning with midterm guidance. He viewed the leadership changes at The Coca-Cola Company as positive, bringing new energy, curiosity, and diverse geographical learning, which strengthens the overall Coke system.

Edward Mundy requested clarification on CCEP's underlying growth over the last two years, excluding one-off technical portfolio changes like Campari, Fuze, and Beam. He then asked about the implications of recent leadership changes at The Coca-Cola Company, both in Europe and Atlanta, for CCEP's future strategy.

Answer

CEO Damian Gammell estimated that backing out the portfolio changes would place CCEP's underlying growth between half and one point higher, aligning with the midterm guidance. He viewed the leadership changes at The Coca-Cola Company, with Henrique and Luisa, as positive, bringing new energy, curiosity, and learning from diverse geographies, which benefits the Coke system's ability to adapt and grow.

Edward Mundy asked how Coca-Cola Europacific Partners is better positioned to navigate a softer consumer environment, considering its digital tools, revenue growth management (RGM) investments, execution capabilities, and evolving category mix, particularly with a larger energy portfolio.

Answer

CEO Damian Gammell expressed confidence in continued volume and revenue growth, attributing it to smart investments in RGM capabilities, a strong pack pricing architecture, and an evolving portfolio including ARTD and dynamic energy. He highlighted ongoing investments in capital and technology, record cooler placements, and positive signs from Diet Coke in GB and improving trends in APAC.

Edward Mundy inquired about how Coca-Cola Europacific Partners is better positioned to navigate a potentially softer consumer environment, specifically referencing the company's digital tools, RGM investments, execution capabilities, and the evolving category mix, particularly with the increased presence of energy drinks.

Answer

CEO Damian Gammell highlighted CCEP's smart investments in revenue and margin growth management (RGM) capabilities, which enable effective price point management while delivering value. He also pointed to the evolving portfolio, including ARTD, dynamic energy drinks, and new brands like BODYARMOR, as well as the NARTD category's inherent growth. Gammell emphasized innovation with The Coca-Cola Company and Monster, record cooler placements, positive trends for Diet Coke in GB, and the strengthening APAC business. CFO Ed Walker added that Indonesia, while undergoing transformation, is not material to CCEP's overall profit.

Edward Mundy from Jefferies LLC asked if the volume inflection in Europe and strong revenue per case performance provide confidence in achieving medium-term volume growth.

Answer

CEO Damian Gammell expressed absolute confidence in medium-term European volume growth. He cited upcoming campaigns like Star Wars, innovation in Fanta and Sprite, a focus on the away-from-home channel, and the revitalization of Diet Coke as key drivers.

Edward Mundy from Jefferies LLC asked if the strong revenue-per-case performance in Europe provides confidence in the medium-term ability to drive volume growth, independent of short-term factors like weather.

Answer

CEO Damian Gammell affirmed absolute confidence in medium-term volume growth for Europe. He cited upcoming brand campaigns for Star Wars and the English Premier League, innovation in Fanta and Sprite, and a strategic focus on growing the away-from-home channel and reinvigorating key brands like Diet Coke as key drivers.

Edward Mundy from Jefferies questioned the relationship between potential European volume growth and EBIT, suggesting favorable operating leverage, and asked how this reconciles with the 7% EBIT growth guidance.

Answer

CFO Ed Walker explained that while revenue guidance is higher at 4%, the 2025 mix is expected to be more balanced toward volume, which is less accretive to the P&L than price/mix, thus supporting the ~7% EBIT growth guidance. CEO Damian Gammell added there is a purposeful focus on driving quality volume in Western Europe for 2025.

Edward Mundy questioned why the 7% EBIT growth guidance wasn't higher, suggesting that even modest volume growth in Europe should create significant operating leverage.

Answer

CFO Ed Walker responded that while 2025 revenue growth is guided higher at 4%, it is expected to be more balanced with volume, which has a less accretive P&L effect than price/mix. CEO Damian Gammell added that there is a 'purposeful focus on quality volume' in Europe for 2025, supported by strong marketing and innovation to drive that growth.

Questioned the relationship between potential volume growth in Western Europe and the company's EBIT growth guidance, and commented on the favorable setup for 2025 volumes.

Answer

The 2025 revenue guidance anticipates a more balanced contribution from volume and price/mix. Higher volume has associated costs, which tempers the impact on EBIT, hence the ~7% EBIT growth guidance. The company is purposefully focused on driving quality volume in Europe, supported by a strong marketing and innovation pipeline for 2025.

Edward Mundy asked for context on beer's role as a passion point and a catalyst for celebration, and how AB InBev, as an industry leader, can promote a balanced message around moderate consumption. He also inquired about the sources of optimism for 2026, specifically whether it stems from consistent strategic execution or early cyclical green shoots.

Answer

CEO Michel Doukeris affirmed that beer serves both as a passion point and brings people together for celebration, emphasizing its role in creating memorable moments. He attributed the optimism for 2026 to re-accelerating momentum observed in Q4 2025, particularly in December, which has carried into early January across most markets. This, combined with consistent execution of AB InBev's growth accelerators like balanced choices, premiumization, non-alcohol beer, Beyond Beer, and BEES Marketplace, supports the unchanged mid-term outlook.

Edward Mundy asked about the nuanced role of beer as a passion point and a catalyst for celebration, and the factors driving optimism for 2026, specifically distinguishing between strategic progress and early cyclical green shoots.

Answer

CEO Michel Doukeris clarified that beer serves both as a passion point and a means for celebration, enabling memorable moments. He attributed 2026 optimism to re-accelerating momentum seen in December 2025, strong early January performance, and upcoming activation opportunities like the FIFA World Cup, all underpinned by consistent investment in long-term strategic growth drivers such as balanced choices, premiumization, non-alcohol beer, Beyond Beer, and BEES Marketplace.

Edward Mundy asked about AB InBev's $6 billion two-year share buyback program, inquiring if it signals clearer capital allocation priorities or offers more flexibility. He also questioned the broader beer category's medium-term outlook of 1% volume growth and the importance of moderating pricing to stimulate volume after years of high inflation.

Answer

Fernando Tennenbaum, Chief Financial Officer, explained that the capital allocation framework remains disciplined, but an improved balance sheet provides increased flexibility. He noted the buyback is an effective use of capital and a natural evolution alongside the progressive dividend ambition and debt reduction. Michel Doukeris, Chief Executive Officer, added that organic growth is the number one priority. He confirmed the category's potential for around 1% growth in normal conditions, potentially higher with Beyond Beer. Doukeris highlighted the significant impact of Latin America on beer volumes and discussed pricing, stating that while inflation normalization should reduce pressure, disciplined revenue management is crucial to recover margins and invest, balancing affordability with brand building.

Edward Mundy inquired about the board's rationale for the $6 billion two-year share buyback program, specifically regarding capital allocation priorities and operational flexibility. He also asked about the broader beer category's medium-term volume outlook and the potential for pricing moderation to stimulate growth after recent inflationary pressures.

Answer

CFO Fernando Tennenbaum explained that the capital allocation framework remains disciplined, with the improved balance sheet offering increased flexibility. The buyback is an effective use of capital, part of an evolution including progressive dividends and debt reduction. CEO Michel Doukeris added that organic growth is the top priority, and the category's full potential is around 1% growth in normal conditions, with Beyond Beer expanding the addressable market. He noted that while Latin America's unseasonable weather and cyclical factors impacted beer, pricing discipline is crucial, and normalizing inflation should lead to less pressure, allowing for a balance between affordability and brand building.

Edward Mundy of Jefferies LLC asked if strong performance in developed markets gives more confidence in medium-term group volume growth. He also inquired about the scale of the opportunity from major sports activations like FIFA 2026, given the company's improved marketing.

Answer

CEO Michel Doukeris affirmed that the resilience of developed markets is pleasing and supports the long-term growth perspective derived from the company's global footprint. He described the FIFA 2026 World Cup as a significant opportunity, especially given its location in the Americas, and noted it will be a larger event than previous tournaments. He also highlighted the upcoming Winter Olympics and the positive ROI from these mega-platform investments.

Edward Mundy questioned the strategic nuance in shifting focus from 'occasions development' to 'balanced choices' and asked about the sustainability of the strong leverage from EBITDA to EPS seen in the quarter.

Answer

CFO Fernando Tennenbaum explained the P&L leverage is sustainable, driven by lower interest expense from deleveraging and future benefits from lower depreciation as CapEx reductions flow through. CEO Michel Doukeris clarified that 'balanced choices' (non-alc, low-carb) is a key platform for growing occasions by removing consumer barriers, representing a business of over $5 billion.

Edward Mundy asked about the implications of the significant increase in free cash flow on capital allocation strategy, particularly the balance between deleveraging and shareholder returns, and inquired about the plan to balance investment and optimization in the underperforming China market.

Answer

Fernando Tennenbaum, CFO, explained that the capital allocation priority is organic growth, followed by a dynamic balance of deleveraging, shareholder returns, and selective M&A. He noted that with leverage below 3x, the company has increased flexibility. CEO Michel Doukeris added that the focus in China is on executing a plan to reignite growth through increased investment in mega brands and strong execution, despite the recent soft consumer environment.

Edward Mundy of Jefferies asked about the sustainability of margin recovery beyond 2024, questioning whether drivers would be at the gross margin or SG&A level, and inquired about the specific execution capabilities provided by the BEES digital platform.

Answer

CFO Fernando Tennenbaum stated that margin recovery is sustainable as past pressures from variable costs were not structural, and future gains are expected more from the gross profit level. CEO Michel Doukeris added that without the BEES platform, the company would lack its advanced capabilities in direct customer communication, personalized machine-learning-based sales proposals, and large-scale promotional optimization.

Edward Mundy from Jefferies LLC inquired whether broadening growth would be driven more by A&P reprioritization or execution, and asked if the 'balanced growth' goal in the US applies to both portfolio and the volume/price/mix equation.

Answer

Interim CEO & Director Nik Jhangiani emphasized that both A&P investment and strong execution are codependent and essential for broadening growth. For the US, he confirmed the goal is balanced growth across the portfolio and volume/price/mix, but noted the challenging consumer environment may push significant volume growth to fiscal 2027 and beyond. He also highlighted a focus on driving 'transactions' through smaller formats.