Coca-Cola HBC AG

Good morning, and thank you all for joining the call. I'm here with our CEO, Zoran Bogdanovic, and our CFO, Anastasis Dimoulis. In a moment, Zoran will share the key highlights of 2025. Anastasis will then take you through our financial performance in more detail and discuss the outlook for 2026, before handing back to Zoran, who will discuss the strategic growth areas for the business. We will then open up the floor to questions. We have about an hour for the call today, which should give plenty of time for a good discussion, but please keep to one question and one follow-up, waiting for us to answer the first question before moving to your follow-up. Finally, I must remind you that this conference call contains various forward-looking statements. These should be considered in conjunction with the cautionary statements in our 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. 2025 was another strong year for Coca-Cola HBC. We've executed against our strategy and delivered a strong financial performance, all while operating through a mixed market environment and continuing to invest across the business for the long term. Let me call out key highlights from the year. 2025 marks the fifth consecutive year of consistent strong growth and share gain both our revenue and ebit growth was strong and high quality underpinned by continued volume momentum despite a range of macroeconomic conditions importantly volume growth continues to be led by two of our strategic priority categories sparkling and energy and we continue to win in the market and deliver value to our customers gaining a further 80 basis points of value share in non-alcohol ready to drink in 2025. We also remain committed to investing in the business to unlock long-term growth. Throughout the year, we continue to invest in our 24-7 portfolio, in our bespoke capabilities, in our people, and in sustainability, which we truly view as a growth enabler. In the year, we made further good progress in our most material areas, packaging, climate, and water. And last, but certainly not least, in October, we took a significant step forward in our growth journey with the agreement to acquire Coca-Cola Beverages Africa, or CCBA. Disciplined execution of our strategy enabled another year of strong financial performance. Let me share the key highlights before Anastasis goes into more detail shortly. revenue grew by 8.1% on an organic basis with volume growth of 2.8%. Comparable EBIT was nearly 1.4 billion euros, up 11.5% organically. We also delivered 60 basis points of EBIT margin improvement, leading to strong comparable EPS growth of nearly 20%. Finally, we achieved free cash flow of 700 million euros, drove a further increase in return on invested capital and increased our dividend. As you know, in October we announced the acquisition of Coca-Cola Beverages Africa, the largest Coca-Cola bottler in Africa. This acquisition presents a highly compelling strategic rationale, which at its core is about growth. The acquisition materially enhances our presence in Africa by bringing together two leading bottlers in the continent with strong track records of growth and deep commitments to investing in talent and local communities. Together, we will represent two-thirds of Africa's total Coca-Cola system volume. This combination further diversifies our geographic footprint, increasing our exposure to high-growth markets with compelling demographics, including sizable and growing populations and economies, with significant potential to increase per capita consumption. The acquisition is consistent with the pillars of our growth strategy and vision of being the leading 24-7 beverage partner. CCBA is a leading player in NARTD across its markets, with a winning portfolio of over 40 global and local brands, further strengthening our exceptional portfolio. We also see a clear opportunity to leverage our strength of operating in dynamic emerging markets. We can share best practices, apply our best-in-class baseball capabilities, and invest further in CCBA to drive growth. Finally, we expect the acquisition to enhance value for all stakeholders. For shareholders, it is expected to be low single-digit EPS accretive in the first full year following completion. with a clear prospect of creating more shareholder value over the long term. In terms of progress towards completion, let me outline where we are. On the 19th of January this year, we received approval from Coca-Cola HBC shareholders of the resolutions put forward at the Extraordinary General Meeting. Our teams continue to work through the customary regulatory filings and antitrust approvals. and preparations for the secondary listing of our shares on the Johannesburg Stock Exchange. Overall, we remain on track to complete the acquisition by the end of 2026 and are working on integration plans so we can hit the ground running. We look forward to sharing more details on the opportunities ahead for the combined group host completion. Sustainability remains at the core of our strategy, enabling us to deliver growth while creating value for the communities we serve, our partners and the environment. In 2025, we saw further recognition of our progress, placing us among the leaders of the global beverage industry with top scores across major benchmarks. Let me share a couple of highlights from 2025. We advanced our circular packaging agenda with the launch of a new collection hub in Nigeria and the expansion of deposit return systems to Austria and Poland. recently launched systems in Romania, Hungary and Austria, achieved average return rate of over 80% in 2025. Partnerships continue to be a key driver of progress. As I mentioned last summer, together with CAFUR and the Coacola company, we initiated a sustainable linked business plan, with Romania piloting a program that unites suppliers to cut emissions and improve packaging sustainability. Supporting communities remains a central priority. In 2025, Europe faced severe wildfires and floods, and I'm proud that the Coca-Cola HBC Foundation was able to commit 2.3 million euros in disaster relief. The group also announced an additional 5 million for the foundation to support communities starting from 2026. Overall, We've made strong progress toward our mission 2025 goals with many targets reached ahead of schedule. Full results will be published in our 2025 integrated annual report in March, along with details on the next phase of our sustainability journey. With that, let me hand over to Anastasis to take you through the financial results of the year in more detail.

Thank you, Zoran, and good morning, everyone. So let me start with a strong top-line performance. 2025 organic revenue growth was 8.1%. We delivered another year of good volume growth up 2.8%, driven primarily by sparkling and energy, as Zona has mentioned. I am pleased that all three segments achieved volume growth or maintained volumes despite an ongoing challenging backdrop. Organic revenue per case increased by 5.1% and normalization versus previous years as we expected. We continue to implement targeted revenue growth management initiatives while navigating lower levels of inflation across most markets. Overall, pricing remained the largest driver of revenue per case. However, category mix and packet mix were also positive, with continued improvement in single-serve mix, which expanded by 130 basis points in the year and is now 310 basis points higher on a three-year basis. We achieved another year of double-digit organic EBIT growth, with comparable EBIT growing 11.5% to nearly 1.4 billion euros. Our comparable EBIT margin increased 60 basis points on a reported basis to 11.7%, and 40 basis points organically. This marks a record high EBIT margin for our company, which is great to see, having navigated several years of inflation and currency pressures. Let me break down the drivers of this. we improved gross profit margins by 70 basis points with good top line leverage. Operating costs overall stepped up by 10 basis points in the year. However, breaking this down a bit further, operating expenses excluding direct marketing improved by 30 basis points as a percent of revenue. You may recall that in 2024, we faced headwinds in our operating expense line due to currency devaluation in Egypt, which we cycled this year. However, of setting this, direct marketing expenses stepped up by 40 basis points as a percent of revenue as we invested in activations across categories, but notably the SERE code campaign, the Winter Olympics, and the New Finlandia marketing campaign. Let me now look to the drivers of performance by segment. I'm going to discuss these figures on an organic basis. In the established segment, revenues grew by 2.3%. Volume was in line with last year, reflecting mixed trends across markets. Sparkling volumes were slightly ahead of last year, with high single-digit growth in Coke Zero and mid-single-digit growth in Sprite. Energy continued to grow strongly up high teams. Still declined low single digits, although we delivered mid-single-digit growth in sport drinks. On a country basis, volumes in Italy were slightly positive, despite our decision to prioritize profitable revenue growth in water in the second half of the year. Excluding water, volumes in Italy grew low single digits. In Ireland, volumes grew low single digits with consistent growth throughout the year, whereas in Austria, volumes declined in a more challenging environment. Established revenue per case was up 2.3%, driven by pricing, as well as positive package and category mix. Established segment comparable EBIT declined 2.8%, primarily due to a step-up in investments, as previously noted. Turning to the developing segment, revenues were up 6.1%. Volumes grew 0.8%, with sparking volumes slightly higher than last year, driven by Coke Zero and Sprite. Energy saw accelerating momentum, with strong double-digit growth. Steels declined high single digits, driven by water and juices, despite strong double-digit growth in sport drinks. In terms of country performance, the Czech Republic was a standout performer, growing volumes mid-single digits, despite a tough comparative. In Poland, volumes declined for the year, though we saw an improvement in the second half of the year. Developing revenue per case increased by 5.3%, driven by pricing actions taken to manage inflation, supported by a favorable category and package mix. Comparable EBIT increased by 5.6% year-on-year, with EBIT margin in line with the previous year. In the emerging segment, revenue grew by 13.2%, driven by both volume and good price mix. Emerging markets volume grew 4.4%. Sparkling volumes increased by mid-single digits, with mid-single digit growth in trademark code, Sprite, and adult sparkling. Energy grew strongly despite sagging tough comparatives, driven by affordable brands. Steel's volumes grew low single digits, led by water, and further supported by very strong growth in sport drinks on a small base. At the country level, the performances of both Nigeria and Egypt have been very strong, despite external challenges, with volumes growing mid-single digit and low teams, respectively. Emerging segments' revenue per case increased 8.5%, and moderation compared to previous years, reflecting lower levels of inflation and currency headwinds for Nigeria and Egypt. We benefited from pricing actions, as well as from positive category mix. Comparable EBIT grew 23.2%, a strong rebound due to organic growth, as well as citing the impact of the foreign currency measurement in Egypt last year. Moving back to the Group E&L, we saw comparable earnings per cent grow 19.7% to €2.72. This was supported by the strong EBIT delivery, lower net finance costs than previous year. As mentioned at the first half results, we have seen lower than usual finance costs this year due to several factors. We benefited from lower foreign exchange losses compared to 2024 due to greater currency stability, as well as higher finance income in the year. As you will have seen from the guidance, we do expect a more normalized finance cost environment in 2026. As expected, our comparable tax rate of 27.1% was in line with our guidance range. Our return on invested capital expanded by 100 basis points to 19.4%, driven by higher profit. We have seen very good improvement in ROIC over the last five years, and it remains a very important metric for us. CAPEX increased €148 million in the year to €828 million in line with our plans as we continue to invest in future growth initiatives such as production capacity, ongoing automation in supply chain, digital and data solutions, and energy-efficient coolers. CAPEX as a percent of revenue was 7.1%, up 80 basis points year-on-year, but well within our target range of 6.5% to 7.5%. We delivered free cash flow of 700 million euros. I'm really pleased that even in a year where CAPEX stepped up materially, we have still delivered robust free cash flow. Our balance sheet remains very strong, and we've closed the year with net debt to comparable EBITDA at 0.7 times. Clearly, this will increase as we complete the acquisition of CCBA. However, we expect leverage post-completion to remain within our medium-term target range of 1.5 to 2 times. Importantly, we do not expect any impact to our credit rating, and we have a strong commitment to sustainably maintaining an investment-grade profile. Leveraging this strong balance sheet, we have a robust and disciplined capital allocation framework which remains unchanged. Our top priority is investing in the business organically to drive long-term growth for the company. We pursue a progressive dividend policy and target a 40% to 50% payout ratio. With another year of strong growth in comparable earnings per share, we are recommending a dividend per share of €1.20, an increase of 17% from 2024. When it comes to strategic M&A, as you know, in 2025, we announced the milestone acquisition of CCBA. The strategic expansion into African markets underpins our focus on driving long-term growth and will enhance value for shareholders. We expect low single-digit EPS accretion in the first full year following completion and more shareholder value in the long term. Overall, when it comes to our capital allocation in 2025, I'm really pleased that we have delivered a combination of investment in the business, a value-enhancing acquisition, increased shareholder returns, as well as a strong improvement in EROIC. As we look to the rest of 2026, we expect the macroeconomic and geopolitical backdrop to remain challenging with a mixed consumer environment across our markets. However, we have high confidence in our 24-7 portfolio, our bespoke capabilities, the growth opportunities across our diverse markets, and most of all in our people. In 2026, we expect to make further progress against our medium-term growth targets with organic revenue growth in our medium-term range of 6% to 7%, and organic EBIT growth in the range of 7% to 10%. Thank you for the attention. Let me pass the call back to Zola.