Coca-Cola Europacific Partners plc

Thank you all for joining us today. I'm here with Damien Gamble, our CEO and our CFO at Walker. Before I hand over to Damien, a reminder of our cautionary statements. This call will contain forward-looking comments, management comments, and other statements reflecting our outlook. These comments should be considered in conjunction with the cautionary language contained in today's release, as well as the detailed cautionary statements found in reports filed with the UK, US, Dutch, and Spanish authorities. A copy of this information is available on our website at www.copacolaep.com. The answer will be made by Damien, who will then turn the call over to your questions. And as otherwise stated, metrics presented today will be on a comparable and effective basis throughout. They will also be presented on an adjusted comparable basis, thus reflecting the results of CCP and our Australia, Pacific and Southeast Asia business unit, APS, as if the Coca-Cola Philippines transaction had occurred at the beginning of last year, rather than in February when the acquisition completed. Volume movements also adjust for the impact of two less selling days in this quarter when compared to the same period last year. Following the call, a full transcript will be made available as soon as possible on our website. I will now turn the call over to our CEO, Damien. Thank you.

Thank you, Sarah, and many thanks for everyone joining us today. I'm pleased to have a year started, reflecting our great brands and great in-market execution, as always all delivered by our great people. So I'd like to start by thanking them for their energy, hard work, and continued dedication to our customers and to our business. And as always, underpinned by our strong, aligned relationships with the Coca-Cola Company and their other brand partners. Performance during the first quarter has been broadly as expected in what is traditionally our smallest quarter of the year. We've continued to grow share ahead of the market, create value for our customers, and deliver solid gains in revenue per unit case, up just over 3% through our ongoing revenue and margin growth management activities. While reported volumes were down 3.8%, this reflects calendar-related phasing, driven by a later Easter and two less selling days versus last year. Adjusting for this calendar impact, comparable volumes were marginally down with a decline of 0.6%, our Capri Sun business, which from now on has annualized. So underlying volumes are broadly flat. Given the timing of Easter, we've seen a stronger April. And as I look to the rest of the year, we have solid commercial programs in place supported by a great pipeline of innovation, fantastic activation plans, including more cool investments across our Coke trademark and Monster. Importantly, our full-year 2025 pricing is substantially in place, and with softer comparables over the summer given the adverse weather in Europe last year, I remain confident that we are well-placed for 2025 and beyond. This across our geographically diverse footprint in our core NARTD category, which remains resilient and continues to grow across our markets. So looking a little more closely at Q1, starting with Europe, where the impact of the Easter phasing was most prominent. Comparable volumes overall were down by 2.1%, with some growth in away-from-home, supported by softer comparables. In the home channel, where we traditionally see more Easter-related spending, volumes were down 3.6%. This was most notable in Germany and France, which at short notice also saw the sugar tax increase from the start of March. Outperforming was GB, where we've seen fantastic in-market execution around several new launches. Highlights were Coca-Cola Zero, Monster Rio Punch, supporting double-digit energy growth, and the new limited edition Dr. Pepper Cherry Crush, which was very well received by consumers. And we've seen an improved trajectory for Diet Coke following the launch of the This Is My Taste campaign. We've introduced a range of new Fanta variants, including Apple, Raspberry, and Tutti Frutti, supported by the colorful rainbow llama Fanta campaign. And in ARTD, we've started a rollout of Bacardi and Coke, Absolute Sprite and Watermelon, and Jack Daniels and Cherry Coke. In addition to innovating through collaborations and flavor extensions, we continue to support a great brand with the return of an old favorite, the search for name cans, which will soon begin in earnest as the iconic Sherco campaign rolls out across our markets. In Iberia, we've seen good growth in both energy and sports categories, mitigating the Easter effect and the impact of some weather in March. The transition from Nestea to Fuse is ahead of expectations, driven by a strong performance in grocery, where we secured listings with Aldi, Lidl, and Mercadona. And revenue per unit case for Europe was up just over 4%, supported by headline price increases and the continued growth of our energy and sports brands. Turning now to APS, where volumes were up 2.1%. In the Australia-Pacific regions, volumes saw a slight decline during my Easter timing and cyclone Alfred, which impacted our business on the east coast of Australia in March. This was largely offset by the Pacific Islands and PNG, where we continued to see strong volume growth. Positive mix driven by the growth of minicams, new Monster multipacks, and the launch of Monster Ultra Ruby Red all contribute to an increase in revenue per case, alongside the recent headline pricing increase in Australia. Growing volumes in Southeast Asia were driven by the modern trade channel in the Philippines, which continues to see good growth, particularly in Coca-Cola original taste and water, despite cycling strong overall comparables across the first half of last year. This was partly offset by a weaker performance in Indonesia, reflecting wider macroeconomic softness and the ongoing geopolitical situation, which we are now beginning to cycle. Revenue premium in the case for APS grew by 2.1%, with headline price increases in Australia and the Philippines offset by geographic mix. So in summary, given Q1 calendar impacts for the year today, including April, we're broadly where we expect it to be. In that context, and the confidence they have in our plans for the rest of the year, I am pleased to be reaffirming our guidance for the full year, which reflects our current assessment of the market conditions. While the global macroeconomic environment is volatile, we remain resilient with leading market positions and locally driven operations across our 31 markets. Almost all of our drinks we sell are sourced regionally and produced locally. Our commodity input costs are over 90% hedged for the year, with our cost per unit case expectations unchanged at around 2% compared to last year. We expect 4% revenue growth, more balance between healthy underlying volume and revenue per case growth, implying that we do expect volume growth in the year to go. and we expect 7% operating profit growth and comparable free cash flow of at least $1.7 billion. Although our guidance is provided on an adjusted comparable and FX digital basis, we are seeing some FX adversity, but given we are early in the year, we will update on this as the year progresses. Today's dividend declaration and our ongoing $1 billion share buyback program collectively demonstrate the strength of our business and our ability to deliver continued shareholder value. So on that note, we look forward to sharing more with you on our future plans taking place in Manila in two weeks' time. Thank you for your time today, and Ed and I would now be very happy to take any questions over to you, Operator.

Thank you. We'll now begin the question and answer session. As a reminder, we kindly request only one question per analyst. If you would like to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Once again, please press star 1 and 1 if you wish to ask a question. Please stand by while we compile the Q&A queue.