Sanjeet Aujla

Sanjeet Aujla sought an update on China's commercial execution, specifically progress in off-trade channel penetration and market share gains, and any signs of easing anti-extravagance measures in the on-trade. He also asked about Brazil's competitive dynamics, including the continuation of December's volume growth into January and Q4 market share gains.

Answer

CEO Michel Doukeris noted significant acceleration and share gains in China's O2O channel, with ongoing adjustments in large off-premise distribution. He observed a relative stabilization in the on-trade, with the overall industry down about 1% in 2025, suggesting a more positive outlook for 2026. For Brazil, he attributed improved momentum to normalized weather and closing price gaps, leading to strong brand demand and positive early 2026 performance.

Sanjeet Aujla of UBS Group asked about the performance of the on-premise channel in China amid macro headwinds and government campaigns. He also inquired if market share trends in Brazil had improved in Q3 following a competitor's price increase.

Answer

CEO Michel Doukeris confirmed that China's on-trade channel remains stubbornly weak, with industry growth coming from the off-premise, where AB InBev is under-indexed but sees opportunity. Regarding Brazil, he noted that a soft industry and the company's own revenue management calendar created tough price relativity in H1, but he expects this to improve as the market adjusts throughout the year.

Sanjeet Aujla inquired about the business in China, specifically the channel mix between on-trade and off-trade, and asked about the company's ability to return to positive volume growth at the group level in the second half of the year.

Answer

CEO Michel Doukeris acknowledged underperformance in China due to regional and on-trade softness but outlined a plan to improve execution, invest in mega brands, and expand in the off-trade channel. Regarding group volume, he explained that after adjusting for calendar effects like the leap year and Easter timing, the underlying Q1 momentum was positive, supporting an expected improvement for the rest of the year.

Sanjeet Aujla sought details on CapEx efficiencies and the company's current maintenance CapEx level. He also asked for more elaboration on the evolving strategy for what some call the 'new normal' in China.

Answer

CFO Fernando Tennenbaum detailed CapEx efficiencies driven by technology like AI and a ZBB-like approach to procurement, stating the current guidance is appropriate for long-term growth. CEO Michel Doukeris pushed back on the 'new normal' concept for China, describing it as a cyclical market. He said the strategy remains premiumization, but with improved execution, more resources on fewer mega brands, and better route-to-market leverage.

Sanjeet Aujla of UBS asked for the outlook on China and the company's confidence in returning to volume growth in the second half of the year. He also questioned if the Q2 SG&A decline in the U.S. was a good indicator for future quarters.

Answer

CEO Michel Doukeris explained that while China faces easier comparables in the second half, a full volume recovery is uncertain due to ongoing economic pressures, reinforcing a long-term investment strategy. Regarding U.S. costs, he emphasized that productivity is a continuous focus but declined to provide specific forward-looking guidance on SG&A for any single market.

Sanjeet Aujla asked about the implications of CCEP's 2025 organic sales growth landing closer to 3%, questioning whether technical headwinds like the Suntory exit in Australia and New Zealand would make it difficult to achieve 4% growth in 2026, even with potential volume growth in Europe. He also inquired about the extent to which the new Bacardi distribution could offset the lost Suntory revenue.

Answer

CEO Damian Gammell declined to provide 2026 guidance but reaffirmed the 4% midterm guidance, stating that CCEP is "pretty much bang in line" with this target when technical headwinds are excluded. He mentioned the Philippines returning to normal growth and Indonesia improving. Gammell clarified that the new Bacardi distribution would not cover the lost Suntory revenue in the near term, as CCEP is building a new business to replace a long-established one.

Sanjeet Aujla of UBS Group AG sought clarification on unresolved commercial agreements in Europe and asked if Indonesia's 'stabilization' meant a slowing decline or a return to growth.

Answer

CEO Damian Gammell clarified that the commercial agreement issues were typical negotiations, primarily in Germany and Sweden during Q2, and are now fully resolved. Regarding Indonesia, he specified that the stabilization is being seen in the Sparkling portfolio, while the Tea category still has progress to make following a relaunch.

Asked for clarification on missed commercial agreements in Europe, wanting to know if the issue was ongoing and which markets were impacted. He also asked a follow-up about whether the 'stabilization' in Indonesia meant a slowing decline or a return to growth.

Answer

Management clarified that the commercial agreement issues were typical annual negotiations, mainly occurred in Q2 in Germany and Sweden, and have since been resolved with no lingering effects. Regarding Indonesia, the stabilization refers to the sparkling portfolio, while the tea portfolio still has a way to go ahead of a new product launch in Q3.

Sanjeet Aujla of UBS Group AG sought clarification on unresolved commercial agreements in Europe and whether the 'stabilization' in Indonesia meant a slower decline or a return to growth.

Answer

CEO Damian Gammell clarified that the commercial agreement issues, mainly in Germany and Sweden, were resolved in Q2 with no lingering effects. Regarding Indonesia, he specified that the sparkling portfolio is stabilizing, while the tea portfolio still has progress to make.

Sanjeet Aujla of UBS inquired about CCEP's pricing and promotional strategy in Europe, asking if the plan is to price in line with CPI and seeking details on changes to multipack promotions.

Answer

CEO Damian Gammell confirmed the strategy is to take relevant price moves broadly in line with CPI. He emphasized using data analytics to make promotional spending more efficient and productive, not necessarily increasing it. This involves reallocating funds for multipacks to test what resonates with shoppers and balancing value with premiumization opportunities.

Sanjeet Aujla inquired about the pricing and promotional strategy in Europe's home channel, asking if the plan was to price in line with CPI and seeking clarity on changes to the multipack promo strategy.

Answer

CEO Damian Gammell confirmed that pricing is broadly in line with CPI. He clarified that the promotional strategy focuses on reallocating existing investment more effectively using data analytics to find relevant price points, rather than increasing overall spend. The strategy balances value with premiumization opportunities across the pack-price architecture.

Asked about the pricing and promotional strategy in Europe's home channel, specifically whether pricing will align with CPI and for clarification on changes to multipack promotions.

Answer

The strategy is to implement price moves broadly in line with CPI while using data analytics to make promotional spending more efficient and productive. The focus is on optimizing existing promotional funds, not increasing them. They also continue to see opportunities for premiumization.

Asked if 2023 is a clean performance base for the Philippines business after 2022's sugar shortages, and questioned the structural factors behind the current 6% margin and its potential to return to double digits.

Answer

Executives confirmed 2023 is a clean, normalized base. The primary structural factor impacting margins is the high local cost of sugar. Margin expansion is expected over time through the introduction of new, higher-margin categories (Energy, ARTDs), best-practice sharing, and targeted capital investment in supply chain and technology.

Sanjeet Aujla from UBS Group AG inquired about Diageo's US depletion outlook for fiscal 2026, whether shipments would align with depletions, and the expected performance of its European spirits portfolio following increased investment.

Answer

Interim CEO & Director Nik Jhangiani stated that US inventory levels are now normalized, but the company anticipates a cautious consumer environment in fiscal 2026. For Europe, he explained that the recent spirits decline presents an opportunity to drive growth through a more localized, occasion-led strategy, particularly in markets like France and Spain, as part of a long-term plan.