Coca-Cola Europacific Partners Signals Robust Earnings Momentum

Coca-Cola Europacific Partners Plc ((CCEP)) has held its Q4 earnings call. Read on for the main highlights of the call.

Coca-Cola Europacific Partners delivered a confident earnings call, underscoring a record year for sales, profit and cash generation even as management acknowledged pockets of weakness. Leadership stressed strong brand momentum, disciplined pricing and tight cost control, arguing that these positives more than offset volume pressure in Indonesia and softness in parts of Europe.

Record Year Across Revenue, Profit and EPS

CCEP reported 2025 revenue of EUR 20.9 billion, up 2.8% on a comparable basis, with operating profit climbing 7.1% to EUR 2.8 billion. Operating margin expanded by roughly 50 basis points to 13.4%, while adjusted EPS rose 6.2% to EUR 4.11, confirming the company’s ability to grow earnings faster than sales.

Robust Free Cash Flow and Shareholder Payouts

Free cash flow edged above EUR 1.8 billion after CapEx of about EUR 1 billion, giving CCEP ample room to reward investors. The group returned roughly EUR 1.9 billion via a EUR 2.04 per share dividend and the completion of a EUR 1.0 billion buyback, and it announced an additional EUR 1.0 billion buyback planned for 2026.

Healthy Revenue Mix and Pricing Discipline

Revenue per unit case increased 2.9%, with more than one-third of that driven by positive brand and pack mix rather than pure price. Management reiterated a long-term aim that 2026 revenue growth should be balanced, with around one-third coming from volume, one-third from mix and one-third from pricing.

Category and Brand Momentum Across Portfolios

Non-alcoholic ready-to-drink category value grew about 6% overall, with Europe up 2% and APS up 5%, signaling solid consumer demand. Energy, led by Monster, stood out with nearly 20% volume growth and share gains of more than 200 basis points, while Zeros grew around 6% and alcoholic RTD value rose roughly 10%.

Regional Strength in Great Britain and APS

Great Britain delivered around 6% revenue growth, supported by volume gains in both at-home and away-from-home channels and strong wins with hospitality customers. The APS region, excluding alcohol, achieved about 7% top-line growth, gaining share in sparkling, energy and sports drinks and reinforcing its role as a growth engine.

Productivity, Balance Sheet and ROIC Improvement

Operating expenses fell to 22.1% of revenue, a 40 basis point improvement, as the productivity programme stayed on course to deliver EUR 350–400 million of savings by 2028. Net debt to EBITDA ended just below 2.7 times, within the 2.5–3.0 times target range, while ROIC improved by 70 basis points to 11.5%.

Sustainability and Capability Investments Accelerate

CCEP remained on the CDP Climate A list for the 10th consecutive year and continued to advance packaging collection initiatives, including a DRS launch in Portugal and preparations in Great Britain. The company also stepped up digital and technology investments, rolling out AI and SAP S/4HANA and opening a shared service centre in Manila.

Strategic Portfolio Execution and Midterm Targets

Management said portfolio reshaping is largely complete, including the Philippines transaction and the ongoing transition of Suntory brands, simplifying future growth management. With the new footprint in place, CCEP reiterated its midterm ambition and FY26 guidance, targeting 3–4% revenue growth and about 7% profit growth.

Indonesia Volume Decline Remains a Pain Point

Indonesia was a clear weak spot, with NARTD volumes excluding water down double digits in 2025 as macro conditions softened and the tea category came under pressure. Executives expect a recovery over time but are only building in a single-digit turnaround in their near-term plans, signaling caution on the pace of rebound.

Soft Patches in Germany and France

Germany and France both saw softer volumes during the year, contrasting with strength elsewhere in the portfolio and dragging on overall growth. In France, a higher sugar tax on Coke Classic weighed on performance, while Germany suffered from weak first-half momentum and challenging promotional dynamics.

Promotional Missteps and Recalibration in Germany

In Germany, some promotional pack prices overshot consumers’ willingness to pay, leading to hesitation and lower purchase frequency in key channels. CCEP has already reinvested in the second half and is reworking its promotional structure and value messaging to regain volume and restore competitiveness.

Cost, Tax and Interest Headwinds Build

Cost of sales per unit case increased 2.7%, driven by higher concentrate prices and rising sugar and soft drink taxes across several markets. The effective tax rate moved up to about 26%, and management flagged that interest expense will rise as older, cheaper debt is refinanced, despite a still-low average cost of roughly 2.5%.

Near-Term Drag from Portfolio Exits

The exit from Suntory distribution and other portfolio adjustments will create a short-term revenue headwind over the next year. Management estimates the impact at roughly 0.5 to 1 percentage point of top-line drag, which has been fully incorporated into the FY26 outlook shared on the call.

More Cautious Free Cash Flow Outlook

For 2026, CCEP has set a slightly more conservative free cash flow target of at least EUR 1.7 billion, modestly below 2025’s level. The company plans to keep CapEx above EUR 1 billion as it prioritizes capacity, digital and sustainability investments that it believes will support longer-term profitable growth.

Forward Guidance and Capital Allocation Plans

Management guided to FY26 revenue growth of 3–4% and operating profit growth of around 7%, with cost of sales per case expected to rise roughly 1.5% and about 80% of commodities hedged. CCEP expects at least EUR 1.7 billion in free cash flow, will start a further EUR 1 billion buyback while maintaining a roughly 50% payout ratio, and aims to move leverage toward the bottom of its 2.5–3.0 times range.

CCEP’s call painted a picture of a mature beverage giant still finding ways to grow earnings and cash while investing for the future and returning significant capital. Investors will watch how quickly management can fix Indonesia and German softness, but for now the record results, margin gains and reaffirmed guidance underpin a broadly constructive equity story.