Coca-Cola HBC AG

Thank you for standing by, ladies and gentlemen, and welcome to Coca-Cola HBC's conference call for the 2025 half-year results. We have with us Zoran Bogdanovic, Chief Executive Officer, Anastasios Stamoulis, Chief Financial Officer, and Jemima Benstead, Head of Investor Relations. At this time, all participants are in a listen-only mode. There will be some opening remarks followed by a question-and-answer session. If you wish to ask a question, please press star 1 1 on your telephone keypad at any time and wait until your name is announced. I must also advise that this conference is being recorded today, 6th of August 2025. I now pass the floor to one of your speakers, Jemima. Please go ahead. Thank you.

Good morning and thank you all for joining the call. I'm here with our CEO, Zoran Bogdanovich, and our CFO, Anastasia Stamoulis. We have about an hour for the call today, which should give plenty of time for a good discussion. Please keep to one question and one follow-up, waiting for us to answer the first question before moving to your follow-up. I will also remind you that this conference call contains various forward-looking statements. These should be considered in conjunction with the cautionary statements in our press results press release this morning and at the end of our slide deck. And with that, I will turn the call over to Zoran.

Thank you, Jemima. Good morning, everyone, and thank you for joining the call. This morning, I will start by sharing our operational review for the first half with updates on a few strategic areas of the business. Our staff will then take you through our financial performance in more detail. I will then come back to touch on the environment and discuss the outlook for 2025. I am very pleased with our progress in the first half of 2025. We've continued to execute our strategy delivering a strong performance in a mixed market environment while investing in our portfolio and capabilities. I'd like to call out three things that stand out for me in the period. First, the high-quality top-line growth we've delivered. Organic revenue grew 9.9%, with good volume growth of 2.6%. Growth was led by two of our strategic priority categories, sparkling and energy, And I'm pleased that we saw an improved volume performance in the second quarter. Second, the strong EBIT performance, both in terms of organic growth and margin expansion. And even better, delivery of EPS, growing nearly 26%. Anastasios will get into more detail here shortly. Third, we continue to win in the market and deliver real value to our customers. we gained a further 100 basis points of value share in NARTD year to date. And we remain the number one contributor to our retail customers' absolute revenue growth within FMCG in Europe. The numbers we have reported today show that our growth strategy is working and give us the confidence to update our guidance for 2025 as well. More on that later. Let's get straight into the drivers of our strong top-line performance from a category perspective, starting with Sparkling. Sparkling remains the most important engine of growth for our company and has performed well this half with organic volume growth of 2.3%, supported by our focus in market execution of campaigns and innovations. In April, we launched the Share a Code campaign across most of our markets, with locally relevant consumer and customer experiences across all channels. This campaign has had a great start and will continue throughout the summer. We are looking forward to launching the campaign in Nigeria in Q4 during their peak season with a record 1,000 popular first names on bottles. We saw good ongoing performance from Coke Zero up high single digits. Sprite delivered an improved performance up mid-single digits. The reformulation we had at the end of last year is seeing good results, and we continued with the Sprite Spicy Meals campaign. Fanta grew low single digits, and we launched a new limited edition flavor across several markets, Fanta Tutti Frutti. In adult sparkling, we also delivered mid-single digit growth, with a good performance from Schweppes, particularly in Nigeria and Egypt. In the second quarter, we launched the new purple flavor with a strong market activation. Energy continues to perform very well, up 30%, even against increasingly tough comparatives. All segments saw strong growth, with our segmented portfolio allowing us to tailor the offering to different markets, demographics, and affordability needs. Monster performed well, helped by successful innovations such as Rio Punch and Ultra Strawberry. Predator and Fury, our affordable offers in Africa, also continue to perform strongly, supported by locally relevant marketing and partnerships that resonate with consumers. The innovation continues, and we are really looking forward to the launch of the new Monster drink with Lando Norris, which we've started rolling out already and is coming to most of our markets in Q3. Moving on to coffee. As I mentioned in the last few sets of results, we have made a strategic decision with our partners at Costa Coffee to prioritize the out-of-home channel. Now, with both Costa Coffee and Café Bernano, we are putting our full focus behind this channel, because that is where we see the greatest potential for sustainable, profitable growth. This means we are seeing an impact on total coffee volumes this year, and in the first half, volumes declined 7.6%. That said, I am really encouraged that we are seeing good results from the out-of-home channel, with volume growth of 17% from both existing outlets and newly recruited outlets. Steel's volumes were broadly flat. We are focused on capturing growth in the highest value parts of the portfolio. That means prioritizing premium water, sports drinks, and ready-to-drink tea, with offers tailored to the local markets. In ready-to-drink tea, we launched Peace Tea in Switzerland in Q2, with activations focused on Gen Z consumers. Sports drinks continues to be a standout performer. delivering mid-teens growth. With Powerade, we leveraged relevant global football activations featuring new ambassadors, Barcelona's Jamal and Real Madrid's Rodrigo. We also executed many local activations to drive growth across summer sporting activities such as running events and in local gyms. We launched Powerade in Romania in the period and rolled out flavor innovations such as Mountain Blast Zero. Premium spirits volumes grew by 24%, with good growth across all three segments. I'm pleased that we saw growth from both Philandia Vodka and our brand distribution partners. In April, we launched a new marketing campaign for Philandia Vodka. While it's still early days, we've had a positive feedback from consumers and customers. We are also investing in our team and capabilities. with a refreshed Premium Spirits Academy for our salespeople, and we are building stronger marketing capabilities. We also launched Bacardi and Coca-Cola in 11 markets in the first half, with encouraging initial signs. One area of the business we don't talk about every quarter is our digital data and AI transformation and Coca-Cola HBC. These capabilities are truly an accelerator of business growth and transformation, and they are constantly evolving. Our investment is focused in three key areas to drive growth and transformation. Firstly, consumer and customer centricity. This is how we use data, digital tools, and AI to power our commercial capabilities, like revenue growth management and route to market. We continue to enhance our ability to drive personalized execution for every outlet with suggested orders, personalized marketing, and optimize promotions, to name just a few. Secondly, operational productivities within our enterprise. We've been investing ahead of the curve in this area for a number of years. For example, we've been live with SAP S4 HANA across 28 markets since 2021 and added Egypt last year. This gives us the latest capabilities from SAP, including real-time reporting, and is, we believe, a real competitive advantage. And across our supply chain, we are driving industry 4.0 transformation, which basically means leveraging automation, computer vision, and advanced analytics. Thirdly, transforming and digitizing the employee experience to drive collaboration, productivity, and foster a digital workplace. Let me touch for a moment on digital commerce. We've been investing and developing our digital commerce platforms to better serve the growing numbers of consumers and customers choosing to shop online. We broadly split these opportunities between route to customer and route to consumer. In our route to customer, Customer Portal is our largest B2B platform, which allows our customers to buy CCH products through our platform any time of the day. This platform is most relevant for our direct sales delivery customers, and we are live in 20 markets. We continue to see good growth in the number of active customers, orders, and revenue generated. We also have serviced our B2B marketplace for the Horeca channel, which is mostly relevant for indirect customers, as well as offering our own 24-7 beverage portfolio The platform also offers a range of products from our wholesale partners and a range of services. After piloting this in 2022 in Italy, we've seen a great increase in its share of orders. Service is now live in five markets, with Croatia having launched earlier this year and more markets coming. And in Nigeria, as you might have seen in the Bitesize event a few weeks ago, We have developed the WhatsApp chatbot, a tool made specifically for customers in Nigeria to effortlessly place orders directly via the platform. When it comes to route to consumer, we are partnering with e-retailers and food delivery platforms. This area of our business grew by 25% in the first half and is margin accretive. At Coca-Cola HVC, we believe sustainability is key. to our business growth. Let me share some of the highlights during the first half. We are pleased to be part of a co-developed sustainable link business plan announced by the Coca-Cola company and our valued customer CAFUR. This is the first time that the retailer and a manufacturer have formalized joint goals in sustainability with an aim to reduce packaging waste and cut carbon emissions. Our team in Romania will be one of the first markets to implement this. It is collaboration with our partners that can help us deliver our sustainability targets and drive value for our customers and consumers. Packaging circularity remains at the top of our agenda. Deposit Return Schemes, or DRS, are one way to ensure both high packaging collection rates and supply of feedstock for recycling. DRS went live in Austria in January this year with a promising start. In general, we are finding that the transitions to DRS are progressing in line with plans and customers and consumers are responding positively. For example, both Romania and Hungary have seen average return rates of around 80% this year. Achieving our decarbonization targets requires innovation. We started using biomethane a clean and renewable source of energy at our Knockmore Hill plant in Northern Ireland. This should contribute up to 25% of the energy at the plant by the end of 2025. Finally, it's great that we have retained our A-list position in CDP's 2024 Supplier Engagement Assessment and the highest score in the FTSE RASTEL ESG report of the soft drinks category. Let me now hand over to Anastasis. to take you through the financial results.