CCEP - Earnings call 4 2023 | Coca-Cola Europacific Partners PLC

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Operator

Hello, and thank you for standing by, and welcome to today's Coca-Cola Europacific Partners Q4 and FY 2023 Results Conference Call. [Operator Instructions] Must advise you that this conference call is being recorded today.Now I'd like to hand the conference over to Vice President of Investor Relations and Corporate Strategy, Sarah Willett. Please go ahead, Sarah.

Sarah Willett

Thank you all for joining us today. I'm here with Damian Gammell, our CEO; and Nik Jhangiani, our CFO.Before we begin with our opening remarks, a reminder of our cautionary statements. management other forward-looking outlook. affecting contains call comments statements and our This statements filed comments conjunction and well today cautionary in be Spanish as in the detailed These considered contained authorities. with should U.S., the with U.K., cautionary language the found Dutch, reports as remarks A of www.cocacolaep.com.Prepared is made by our website available copy be on Damian information at this will and Nik.

today and the call Unless metrics presented questions. FX-neutral over otherwise comparable a throughout. your turn will to then on will We basis be stated,

full be will a as available website.I possible now as call, to call soon the Following transcript will made our Damian. our on CEO, turn over the

Damian Gammell

and Thank Sarah, us today. Many good you, thanks for joining morning, everybody.

Before and our new all a and work obviously, continued I opportunity hard great welcome want great our this today, dedication market addition we for take to story. of to our to the business. their begin, and thank from Philippines, coke And the great CCEP customers I colleagues just colleagues to my at us joining a CCEP

So year again, ongoing another CCEP was at hard work.XXXX you for great thank welcome. to a CCEP. your And for everybody big

We strategy. execute our on continue to clear

We unwavering creation. value have commitment an to stakeholder

more on volume Indonesia. share and journey key strongly now are metrics. in solid as a with importantly other mentioned, in having both with Company but family, since full We've in for than supporting to footprint to the efficient an validated year, our a our for practice generation. of delivering provides Philippines Beverage Coca-Cola leverage opportunity now invest And our paid cash by brand by We're supported in our and supported as solid returned more pleased XXX XXXX, we later. we the And portfolio Europe, volume.We sustainability late transformation of best the Australia also markets journey, always, line even our to choices long-term. to welcome key retail and I'll partners.So CCEP, NASDAQ diverse clear Zealand, XXXX. New talent, messages. now I'm supply creates Index achieved come also little we our them our decisions CCEP always, by the our continue drive people. shareholders our in a peers. I last right Coca-Cola exciting on X XXXX.We year billion course, any we've today, free digital impressive growth are value flow and our speaks success price/mix the back was in for for make. on our an and to closed.This including Top portfolio, top acquisition And more we on strategic chain, since our from business transactions the value our all and, formally for continue aligned in last the itself, Our more led, as making relationship created of growth, We the record and, market bottom to indeed, bit really to performance customers growth line long-term store ahead share than tier EUR grew entering gains dividend the the where year

well geopolitical our some XXXX underpinning beyond, year makes We're stronger robust more categories. value. of volatility. us are despite remain and They collectively our to placed create We resilient ongoing business. continued This full the for a better diverse and and shareholder in commitment macroeconomic and

being we continue achieved year, score industry position engagement great great ahead service, we World's focused and ] And even are an strive brief XXXX our before, Great comfortably the survey, top business people. at CCEP Employers be global our customers starting back in inaugural as great to look our excellent done as into entry a always top great I a to beverages, on easier make and diverse we talked [ We the execution of XXX about people, recognized let's to with are now priority all last us Forbes Women. included Companies for do and sustainably.So Best As service great for key take work.This to XXX benchmark place a on externally our World's Top it us. our group. with

Norway Australia, becoming we service in invest recognized in invest we continue Britain.And from retailers, the to capabilities. last for top On most continue world's were our ranked like Advantage can new #X lines our globally the survey our in supply digital state-of-the-art We and our where among chain, up year. digitized our to broader we in great to Great results journey bottler,

For XX% digitally, of is great including our portals, finally, which our BXB nearly example, around captured represent now beverages. brands volume our and XX%.And

to extremely make, brands. privileged and most move are We world's loved sell the drink

better appeal and We consumers. even continue and even innovate them more to to to invest make

where goal of from surpassed our We've to commitment, up year.And over achieved a last our continued XX% year. recycled XX% but NARTD progress. Having XXX%. in stop our not basis In great plastic previous XX% on our XX% as content, focused let's efforts XX remain of the up sustainability purchased Europe, make we ultimate at from there look do journey, we households points our fact, portfolio, from now

we CDP's maintaining to externally, validation gas greenhouse targets now inclusion focused sustainability both and Coca-Cola importantly, long-term was invest the initiative the on our our for List X including of arm, continue our climate to And Venture recognized our across be includes XXXX A retaining the big milestone all API. our continue This and to Sustainable ESG highlights. Fund.A AAA we the technology science-based XX% emissions our ventures Capital carbon in proud our net rating.So to targets. are be performance reduction of targets to of System MSCI by CCEP and our XXXX, We turning markets, part

performance. line solid delivered top a I mentioned As earlier, we

drove all recall mixed alongside will you very despite demand a weather. in our of of terms developed was underlying volume execution, X.X% in in summer Solid what grading Europe in-market markets, growth

growing growth and the our we strategic volume of was promotion last our Excluding Australia we've of as terms activation.Our progress more of will you, I relevance end full as to dynamic over price over revenue to cost supported with profit by continue return to made hand supported to efficiency billion pre-pandemic New line of and Europe together margin solid XX.X%. just to of overall. Nik. which NARTD X.X%. impressive we saw realized and ahead strategies as transformation good by along and to X% Europe our value in the we value guided.I'd generation free cash great our our revenue pack and 'XX case to Nik flow resilient, 'XX X% to Indonesia, performance, come in leverage Over volume and We X% some close our more below comparable operating in with X% of by terms It our year, to and Headline bit the and gained later.Execution win to consumers.Now top detail API. across turn category offering in X.X management range, growth drove in we share the broad EUR prioritize both a levels, In of Zealand for choices talk year on customers, target -- strong in long-term and on continue inflation with strong out like pricing to made, online detail affordability our per with of in-store programs, top now underlying X%. in a efficiency journey, focus although the in to continued growth growth This drove initiatives, financials. remains

Manik Jhangiani

and for all you us Thank you, today. Damian, thank joining

comparable up around of of expansion sugar higher of offset and PET pricing, by comparable X.X%, EUR commodities. profit per increased through X%, back broadly with aligned up on by full growth, diluted XX%, share summary. higher comparable of and to XX.X benefit and We our to per reflecting delivered ongoing earnings due ahead of our basis, tax I'll model, and cover margin in largely Europe our case, driven as tax referenced, unit line number.We to EUR known comes efficiency delivered XX and differences to lower is such spend. of case focus mix manufacturing pricing operating gas our our XXXX per X.X with X.X was core taking This aluminum that effective shortly. Let a the our operating increase continues line points Damian the margin programs single-digit different XX.X%, and in operating revenue top our taxable growth discretionary detail the flow rate expansion in partly unit inflation which returning solid increase This tax revenue around guidance, billion, our billion, with EUR across basis This on of effect reflecting be cash which commodities I'll me pricing. through profits from in rate increased points, year growth to we which X%. High comparable costs by managing start gross more an This resulted a basis of increased COGS by our the comparable rate come around in our margin In financial recycled to a concentrate in XXXX XXXX.This driving shortly. equated baseline. reflected incidence to you XX% calendar delivered impressive generation, guidance XX%.Free into EUR our power on XX an XX% our full last year. of as the for in increases, X.XX, and U.K. year's billion to priority, territories of equated efforts

the invested record after basis, to basis per up revenue And X.XX, our XXXX.Now increase shareholder on continued profit XX.X% X.X% on versus capital allocation. highlights. capital dividend increased share XXX driven of returns, by to a our we on paid focus EUR a returns on points comparable finally, and in by tax Our

growth driven rationalisation the our number we our X.X% Indonesia and of case Australia, year. Spain. This strong reflects of SKU our and As a the across Damian mentioned, bulk volumes water top Germany mainly made strategic an for driven exit reported increase line by in in choices the revenue down per in with the in by markets, was

great been reflects demand, activation Revenue these growth promotional in-market headline volume not focus fourth optimisation one-offs, reflecting by positive our Christmas per by X.X% have the and and around This X%.Specifically, execution. up the would volumes complacent. grew consumer full for we unit supported up continued resilient pricing, initiatives.However, revenue were X%, overall are year. quarter, on Excluding case in management

held has brands [ -- consumers. seeing continue has few share.Our categories, a a some will in but well, and more will and relevance flavors, we for to shifting CCEP, the feeling ] and across less of reasonably maintaining continue that we retailer grow are up And spending to also focus and pressure. and focused fully consumers where consumer some Although remain on our And remains all are shopping understand into approach for we and discounters. this channel core affordability gain consumer-centric colas

price products with across packs our We now have ever great enables shoppers a wide is premiumisation than need price those across those brands which continue points.It it, more access balance it. broad essential pack to seek for a that that more of affordable to we for architecture, that spectrum

penetration.Revenue to by For detailed is activated and here the a price liter more to commentary referred the pack household frequency segment and Spain, geography to release. affordable we've drive continue in iconic example, in point popular with X.XX on by

was underlying now, where just X% core driven As volume continue growth invest. we by of around to mentioned brands

a to good beverages trends key achieve consumer low Zero across markets share continue. volume Sugar and and volume all are for few no-calorie growth as X% Here continued examples.Coke with

Monster continues XX% growth Energy, In a the up outperform, Monster volumes.In fact, consumer of Fantastic continued these our great in by all which to X% for with across favorable growth approximately were drive and great of driving XX%. Green distribution, Zero Powerade year launch had this activation and trends now has markets, continued innovation full volumes driven recruitment Sugar, start.Sports account category. total volume to including of

Zero XX%, Zealand last We sporting the up activation in Europe, our encouraging will with markets New to exciting alongside continued Cup Coca-Cola France and Australia to this summary Tea Sugar year.Fuze in a to our pipeline Women's Germany. strategic European ahead year volumes Coke drinks choices results the replicate of as in favoring we look And profitably World ensure look reflecting fantastic events now grow outperformed and of ARTD the across making sustainably. we to fast-growing we launched we're & and growth especially very category.Briefly Jack the finally, with business

ones our aligned portfolio was can that to Beam extensive see an bit XX% significant we already we SKU in In by the the and greater on end end detail growth We've year choices have our will on half to context, They benefits, Capital ultimately partnership touched our as you neither our in are enabling we being first an long-term with to second successfully Company talk largely We Zealand, strategic are here, want a be It as and can And will we And a by million which, priority savings to our on Markets Australia million programs. and year.As Company. beverage announced Europe, At of brand incremental up to offerings delivery. XXX profit rationalisation together to to aiming New here. a now Capri success million in program, now Suntory to focus on of will choiceful XXX more yes, maximize our but come full its Coca-Cola executed, and and to The this our you 'XX 'XX of in year efficiency key Sun initiated this new CCEP. more Monster.Now about later.We've efficiency the will by the partnership program results choices knowledge of adding than more the ARTD EUR and the I made a digital XXXX. partnerships.In our right our mentioned scalable for of in approximately program Indonesia with these half Day, it's X to this alongside number, total, further efficiency a some will our XXXX.Overall, play, tools, our in come of very enabled see in largely supported launching cycled million Coca-Cola big owners, deliver program impact EUR where number XXXX. we will with feel business, and year, new the of and our category EUR analytics. EUR year leveraging OpEx to in XXX with the with low-margin our of XXX delivery entire earlier, bulk a markets, have water confident we announced strategic across through. data has as amounted exit XXXX. been full The closed operating post-merger categories Damian last

we're naturally, a an excited shared investing metric a this would balance anticipate earlier XXXX. back cash of system range year center from Amatil ratings.Now midterm related will capital transitioned more many of firmly that a we we now large said closing while we respect volume we means we not to for the ongoing investment, guidance this These Xx. this comparable lot anticipate million free today's focus this will that driving in ways years. our X.X established X.X This, in offset million XXXX, ended quick this mid-XXXX.Given hugely that ] us. debt originally target range traditional of leverage as is Philippines to which the center EUR EBITDA XX XXX been service returned timing to.Recognizing service reflects our of for nicely previous the we're to has that in to target supply enable more and sheet. benefits impact systems taking generated as earlier, commercial with next the Markets And on our And the the a of at since for guidance, on more impact. pace leases our EUR this is for Damian Day. announced delivered phase, cash hear strong full the mid-term Amatil XXXX net remain I'm cash end providers focus our with this slide fully to a since core our Manila remains as thus investment-grade as associated which and slide, return Capital in of digital operating base million Of demonstrating as supply other costs updated and year when Xx free cash as the which modest royalties yet objectives.The billion working be digital for And closed per be Having X.X free context technologies XX our these leverage. to modeling we of and help me that working remaining do the included improvements, to focused view to multiyear X that through and finance given in outsourced to than of on legacy new That's program disposal brings related With to in leverage back said our conditions deleveraging pivotal. of year, cold more We have transaction this not working out core not Damian reporting, you savings another market last business, top based will robotics. during only We comparable to be to been that, and around inflation.And year. XX to into flow receipt deliver will guided, course, being unchanged, examples, pleased adjusted of we with free culture, EUR from of our huge significant next of over a strong analytics come detail, the excluding I objectives, savings does EUR of just included really we see to have that include we one-off equipment. EUR people lot our been further reminder Australia beyond to years.Our already our around services our areas will acquisition, chain important which to 'XX This on from capabilities us, of the comparable acquisition take at our flow the cumulative gave today, the amount program. shared moving there X.X million, and and within committed EUR year X leverage I'm in well area and of Already, approximately EUR there is capability which in year. approximately very our into capability amount as us can year about.We business a proceeds of you cash XXXX there's basis, capital ratio importance build but year XXXX.And comparable well. drink key [ more comparable current excludes I to year.So of last XXXX.Finally, guidance, can we our that's of said, multiple from aligned that's out Philippines to and 'XX They And including restructuring and assumes full around know, in our billion flow new midterm the cash We've guidance XX% was digitally.For start an in full spent of lays while from from flow the sure which costs, and of chain our be into and the a components, our perspective, targeted Bulgaria a to to this the our for -- processes billion is we're and in turning going and incorporating HANA. CapEx, still around referred standardization us, you cash of our S/X one to going captured

year guidance. FX-neutral basis may note to have are you rates really provide selected all information Philippines.Please too specific did FX and these today release seen, As the that metrics provide we already financial a incorporating full is growth adjusted a separate as for provided comparable on for it 'XX early

our deliver we our ETR which comparable cost we differences transaction revenue of year, the in to in flat, net unit XX% COGS XX% and be growth around cost profits funded expect X%.On tax broadly of therefore, in effective transition referred we up shortly. interest, net weighted known I equating previously, in clearly completed of the per expect interest issuance this XXXX local growth around of upward growth OpEx, borrowing our Of to around of average of the to year profile. the to to borrowings. We, around 'XX rate maturity as around of X.X%, as taxable increases. X% mix focus you still very tax including debt as November both to from be around for this Therefore, highlighted debt talk update and to do weighted course, tax expected look X%, on peso attractive debt will U.K., to earlier. of been this earlier, attractive very With referenced now around acquired we X%.As full XX%, comparable public year underlying euro we operating will a to and a markets Philippines progresses.So existing of across an on the our incremental to debt profit increase debt continued takes of X% expect which newly level mix I reflects case anticipate rate a reflecting with through a to The liquidity rate, has costs we'll trend total average and do our

we to ahead, reflects will any a during This those areas: supported in us opportunities more of more the established top to the top revenue. in CapEx to will the of success, Damian that are then will so. our on years these for our both do next continue provide making specifically, for we now X% around to the fast-growing secondly, of expect our later.Given X tax line, uncertain investments.And which guidance assessment which you we long-term update firstly, the will billion, midterm associated after context are closed bit today, our plan cost investments we talk ETR, digital color lay near-term deliver on the program EUR year.On top efficiency will Philippines.So that be range which be per tax unit me and on the increase flow in of to through these expected the finally, underpins by upweighted new bit our I what range opportunities position positions Indonesia to nature, spoke the also and bit with the X given on COGS, Philippines X%. clearly our and and know and of to having guidance of be expect And near about transaction, we which on end end X% at earlier; CapEx touch of term to to faster before anticipate this comments based are the programs.Let we the invest our largely Damian objectives, be We that we case or to a course our comparable efficiency handing CapEx of X% including that market free cash to clearly, expect a more COGS back X.X

higher albeit full that growth, pleased are other say offset volume in inflationary you a now part lower course, we commodities. anticipate XX% perspective, labor to reflects are year.We line. I'm pricing within in hedged sugar inflation. XXXX, And commodity including much Our as unit hedging manufacturing revenue concentrate year know, from to pressures the in see significantly case last compared approximately more pricing the Philippines.Of tied continue for we This with to per costs low balanced to by our single-digit the

the offset be However, EUR throughput continued in tax within X.XX I'll offset, to Damian. tax change drinks liter revenue.And that, focus our excise soft and broadly with Damian? lower gas hand in efficiency, to back X.XX earlier.Finally, on and the as from we per plants from impact tax, obviously, to have I our Netherlands, with these will power talked with the EUR on

Damian Gammell

the Nik. And of to you, spend now XXXX. bit revenue Thank on for a I'd like opportunities time

balanced year. and We be last expect volume to year top-line this between compared much growth growth to more price/mix

earlier, is continue below And remain business to consumer. said priority Nik overall we today. to our such, manage As and the as with tracking affordable our continue longer the term for main to realized inflation relevant to the pricing

pressures To in across the year. this closed than however, have negotiations of end, we've that last year.We industry, albeit a lower We are, great inflationary some pricing our number still already growth for seeing which for And on and support the and consumers of brands, our a continue brands, brands the ongoing of and to customers. category packaging, innovation investment love. product our back solid markets platform all our

in a the innovation Coke and GB. flavor and for new in for launched In a We Sprite Fanta in invest have the with label-free, flavors, and Sugar for Sugar. extension Coca-Cola World taste tasting Australia Powerade, we Women's [ Zero both Coca-Cola Olympics Germany.We including from EUROS pack activation being success plan in be will will exciting original ] continue sustainable the and to launching in plans some the key France fantastic portfolio, the Cup driving taking around more the XX some sporting of events Zero also

for wider is the Philippines, where on already best move Monster Sugar alongside are to launch continue of extensions record, the sold Indonesia's our the NARTD is with total know, the country Absolut a in and that will very an valued practice around CCEP's very year, developed.We new X XXX million will like-minded, invest with of The attractive a market even with GB, even population a to we There aim ahead to It of fast when XXX of coming and attractive experience million into and ahead comes rest year well times Pacific Sprite.Energy business renamed unlock so the around XX% around the XXX volumes to we use exciting of is in cases, billion supporting average established, compared Daniel's the takes business, know, best the with be journey fast-growing the We with Southeast of from shareholders. and as leverage good for cash average opportunity clearly a to so remains volume it's the around business a sugar, The Southeast refillable with middle of metrics the together we through will the representing EUR APS, Europe.Within the of importantly, lots of therefore, track invaluable build refillable and with per leading And look us, conglomerates talent, growth partner, is glass.So will established would sparkling Storm. and billion. and brand of Philippines macros. deal more X.X headroom #X Future attractive dynamics The X%. great no growing transaction a for today. launch at and a EUR terms, provides for the Sparkling caps all will less on operating category, are estimated market low, Coca-Cola a Australia, & business. for transaction [indiscernible] translating footprint billion, Zero XX% local it of developed highly largest attractive in it's and around within the ready-to-drink Last value for The cultural already and solid a and now as of Philippines a CCEP the relevant delivered of inclusion even the the Aboitiz, forward and launch the the ] category, by X% now the now operates representing led markets. aligned will and us focus much from doubt venture more volumes of market, profit, by become are including established around Company.Just unit potential Jack creates alcohol to large profitability.So, so over our of group.And than include market success It Reign where no class, Philippines for XXth Green group our joint in CCEP's more EUR the as glass current generated you all Coke, well transformation and Pacific. annum proven what with Philippines Asia. CCEP. benefit where addressable way Their great EUR of one the The GDP [ of energy, team. category. considerable a strategic and, scale growth more packaging growing, at to Asia. be the Currently, flavor revenue is for reminder, opportunities leverage course, the X/X and business in X NARTD over of the category completed attractive Asia and ARTD, APS and remains very & XX% working value for operates all higher much this well-received diverse to to globally of

did expectation. as results reflect this a from performance gives consolidate affected immediately reflect growth business for and minority we guidance as the CCEP. the talking return growth capital transaction XXXX.Our will to therefore, line their As The CCEP's business accretive, today and support normalized has ensure a delivered They Philippines. into bottom transaction a overall and in reset earlier, impact more for alongside the EPS solid have interest.The perspective lastly, sit specific business, not we our allocation modest on in capital of the that.And XX% focus sugar which top the leverage to will some with this although XXXX, our to following stake us on business mindset is, an Nik plans accounting our and a adverse The said Aboitiz, non-controlling opportunity availability. year, last stake within in established weather XX% recognized market's we will invest to our majority long-term the strong in be we synergies ask, growth relation before to you ambitions this long-term so acquired

shared have I'm see we there's in track we learnings integrating opportunities services, many and such Of agree, a share best creation. our -- in digital, an driving already practices with value like given indeed established to as and confident areas course, and would strong in just record technology, you Amatil, procurement, capability legacy as of Manila.So that sustainability did we area

to update with share course.So with just forward with wanted due look are we to exciting the more started to So we've next, in already out market I on and close an you one where from Indonesia.

know, early market under in subsidies. reduction remains stages generally the and you our As previously, of by are the Unfortunately, impacted fuel we inflation we pressure, consumer are in wider highlighted all making long-term and journey, transformation good as spending progress.

occasions not portfolio. clearly, the the category. winning is the the developed we now, we've Jakarta a than picture We've understanding of less Philippines helping price on our alongside and consumer Indonesia Coca-Cola biggest at than tighter We're in pack So right incorporates focused Company, biggest recruitment. in [ in said of brand our of affordability. longer-term I the new working ready-to-drink beyond the yet are the and on opportunity.As NARTD We're out activations Ramadan focused completed annual earlier, Muslim is sensitivities have where which less across XXXX.And consumer tea.Beyond now category channel plans. Sparkling us This much the but in period. younger on XX% on portfolio, deeper new the in Indonesian strategy, executed a successfully remain that's executed drinking a building consumer we a much focused We ] event the Sparkling we fair, portfolio the calendar Indonesia

to and more while model. market productivity longer our to indirect and fit-for-purpose to market decisions the comprehensive reengineer We've a to taking implemented base right both the are our route to program term. a the We route direct for largely cost starting move

to and few a Sprite-led is slide.Just will a talk volume Coke to metric to are which transactions, of see ahead traditionally the a volumes We progress, on what starting record examples market. in few is are Sparkling a growing here. decade share next I key achieving of trademark

changed Gen which Company Zero right here Coca-Cola would XXX and opportunity million, aligned the Z, Sprite Sugar we I combined is approach you fully one off on priorities influencers a just and a of step on with younger around more promising the following X nearly are expect, being recent the followers a slide partnerships great journey XXX million that's to good incorporating brand to we said future alone.On investments. launch circularity of we our now, our sustainability, and on owning of the consumers. to through example recruiting nearly with the X.X We Coca-Cola are our with Indonesia, me, day from As in are focused start.As really for Zero, a

we've here Indonesia just on by significant of CCEP in progress to see see. outside engaged can already that average, made launch of colleagues recycling first-to-market recycled a PET And recycled the an content, which You supported the Jakarta. our highly all despite the had change, of importantly, achieved in through XXX% the bottles industry facility is are great partnership fact

confident our to always, forward due remain in our we in Indonesia, finally, course.So So as look in remarks. updating future you to more closing and

at I another said metrics. As all key on CCEP, was great the start, for XXXX year delivering

execute continue our clear to on We strategy.

to year XXXX further now stakeholders.So able beyond, colleagues to thank I of business, market partners and, remain and journey, questions. are for like and now our placed robust, your our macroeconomic whose in I geopolitical some long-term sustainability we're a work for well Philippines, and portfolio, the supply We our you particularly customers, will again, to commitment our meaning and the thank the our continue of diverse, go This in us continued and our digital great our brand very volatility. invest more would all together to underpinning ongoing despite full and happy close, much. and create commitment resilient Nik the again, better be hard including take people.We categories and chain, shareholder our to for our makes collectively stronger course, value.To

So operator. over to you,

Operator

question Edward from First Mundy of Instructions] Jefferies. the from [Operator line is

Edward Mundy

the So volumes, some it's feeling volumes you're a are on implies days and which perhaps think just of pretty and more color balance could I of a some mean, a some assumptions? bit I pressure, I bit consumers between on better price/mix, your think to volume appreciate but of on X%. talking guide provide early you I growth.

a but bit the on piece, think a going QX? should have a most it's to really 'XX. Germany, taken continue end carryover of you do price has through driver GB taper, Mix of XXXX from of clearly I pricing and been good to to look, stop QX,

got comps. You've very summer mixed these weather

Olympics. You've got the

are you've we the got What I group. Philippines, got the You've missing? guess, football, of growing ahead

Manik Jhangiani

point and think You're played not your start summary. But great anything. just [indiscernible] on I you should missing It's back. a volume. We you recorded let's with have

with XXXX strategic clearly plays exited mind, And underlying see volume was volume So and keep back we year clearly choices through. these that good exits in the again, coming with growth. it we and

both So And go will X%, X/X you at and XXXX, you're into looking back and momentum, an that when I from say have that the we we is premiumisation. continue of angle said what terms of to to which what in Damian see plus on -- see So, that all coming of would at good. continued on from affordability least it I we comes volume, focus balance right? call, the

right. volume you're at that of absolutely pricing, that at look growth.If looking clearly, you So carryover

We have in half. second the markets those of through X came that

our which good mind, per that is much the of I out, lower there's and is inflation we've a in So at -- as obviously which one, these able on in Keep moderating, we Philippines, And positive.On you continue to 'XX will XXXX disruption, to most good revenue so see you we've happened that the include into which land balanced carryover more QX any raised. far impact a it's of case. seen called that. has mix a clearly, XXXX. have pricing, actually we've then see that without point that Clearly, to will numbers been business, continued mix, that

then case lower that per out. And of so we that effectively, got benefit with also tax rebase Philippines.And from the you've out called coming I continue to that see, Netherlands that mix we revenue wiped the as impact gets in the

that affordability. pricing what balance side promo on So as carryover the you again, we'll to do but that, want much And continue led moderate think on to we to with some volume into very year pricing again, I update well as this and good well. supported more by

Edward Mundy

X.X% clarify, X%. Europe, you just inflation or probably mentioned case And price below on inflation, think X% per I the to within is revenue running running that

So get of one not from is reasons other brands and seeing right? per you're elasticity across confident revenue to benefit going Staples [ the you're case affordable that in math you're you're broadly of Is probably the why your of getting your that X/X I impact ]? mean mix. remain same that parts

Damian Gammell

very they our volumes, are QX think Australia, New talk and that's I I Zealand, mean you at I look I'll if Ed. think I solid. fair, just Yes, think Europe,

of because, back I on So cost think focused is lose if a you know, always you we've retaining as consumers lot higher. them the been and getting very them, shoppers

some our saw So out where volume had comps. we of markets coming Zealand pleased we tough developed QX, Australia. QX and Europe, growth weather of very return in New

We've balance called well. So got some got is actually I better 'XX.I think that, out, serving on us It's great we've into top out, of brand we've Nik as that could. as innovation. called what than think we some built you --

particular. last somewhere so too in normalized knows what's And much the and as we much that's EUROS. pretty enough get between price, [ been Europe, years particularly move But assets, great great consumer the for ] but many some who yes, Olympics and in story will to but balance derail a have not Europe, year. clearly, good with really hopefully, a the in We a are in for Europe summer, into QX we

Operator

BNP question, We'll from our the from Matthew Pariba. of Ford now line this and is take next

Matthew Ford

is question My Philippines. just on the

all focus fully at year you get on, the think and completed [ see of it's kind to most of Energy, months? going the kind kind you first Where to of Now and there? think I XX business low-hanging sugar kind of next fruit? in you low traction able see if the what's do When you're business, for ] kind you're of which you're no most you areas -- mentioned can do but the the about and the think look able properly. now control to in about be speak you

Damian Gammell

and mean presented team, this we've itself. day team Garrett's which it great locally Yes. very, about really a I to the we've with since excited very X, working upon Thanks, been been And our is hard opportunity Matt. team, us. have

So a milestone. that's

that mean, business stands it that I a out As been -- we've great within region, business. Coca-Cola been has looking at clearly,

also talked areas well management the about we've on where learn to Europe. the some elasticity value, world-class price think analytics with fully tools could account ideas that key business.Initially, in to team I and as CCEP add the in key from we program, as using of bring expect pricing certainly to So we've that our capabilities accounts, that been

capabilities, we levels area frontline and operate space a that improve the we believe a is around certainly to believe supply chain.So that drive that journey digital of we help lot can Our an could that more. large value. a add our we very Clearly, expertise stock customer service in bring bit availability

in are partners committed with to our that business. invest We also

we've some is investments to stronger growth benefits up the we capital see the forward.So continue that area as in even excited learn. really outlook also about journey going Philippines, bring of team some our learnings the areas, So stepping I'm we'll and to to in certainly it's support capability. we we'll in of from an confident get I'm Indonesia. got the particularly the the those continue

they've well always relevance, looking we've That's refillables. extremely the category obviously, availability, on area Indonesia. that their managed an think affordability I been in at

we'll we update I from So And value, it's that's story bring we'll that obviously, go. of get value into think example team -- great a as we'll other businesses. a our you

Markets it will an next think our on I exciting Day. Capital conversation be

Operator

line Lauren our the Lieberman is We'll of This from Barclays. next now from question. take

Lauren Lieberman

experience could us [indiscernible] how volume I a much mentioned Just a consumer the confidence? period that's focus bit to of doing pressures, more goes curious, your discount But long your, discount speaking, you where that much success expand particularly answer, channel? been into more channels pack you the through represented lot know you able of so if opportunity go for in how there? about it important?And And on leverage we this a of team for then particularly on Europe. you're exposure Is there you curious consumer through of as sizes in category things channel, stand channel. Anything was -- becomes from mainstream some to a update but maybe on the you're new terms time. and and I are talked as very your roughly more little the categories tougher of discounter affordability, discount

Damian Gammell

for we've been that over think I X year in now. environment

you a our back if during at maintaining lot affordability. about talked think and commentary relevance I look XXXX, we

So in we'll 'XX. I supported continue and growth, something our volume that think it's

for come X categories now broadly in performing a Europe. pressure, that's key portfolio been Germany, under know, are you Energy. now, story We're in which mean shoppers channel long our growth.Within also in Candidly, very we're see like a we being as our little got We prioritizing, particularly retail in channel markets is bit the performing formatting. discount You're for and the absolutely as very those core Australia. discount Sparkling customers do our long, size really a a that, right. Both see partner conscious well. Europe well with and time I but of across and extremely of pack we've those about really

their to relevant As X.XX we for hit you was pack more felt price know, we've a liter point shoppers. had that a

as front with store, that technology.In of so and drink We got work trials channel continue try grows. cold pleased Australia, I'm into mix we some a as them we've bring on it very to benefit

beyond I customers think And happening. affordability because leveraging those insights I goes discounters. also with of we're that lot a other think our there's So mindset some

about relevance. share.So retailers terms broader efficiencies. that just their retail. channel, it, discount we're all to focused continue on call to doing Great of obviously in think own pack chain market pricing a now They beyond I you goes are be of what maintaining lot supply conscious as

terms very our supports expansion of business in attractive for clearly So margin doing which profit our us, and growth. of cost

on So doing.And experience. how it's many, we're mentioned, with as I many yes, years of very pleased built

we call-outs then CCE particular, look driver Aldi & legacy success business, growth. leverage that's CCEP, in created you of business. I a German our our when of one think across Lidl the our big the of if big, first been was with was to what And back,

a that's to we're and so. retail, in they winning come. to continue winning as out, want to channel with more call and rightly them, do -- you are we So But

Manik Jhangiani

whole and enjoy, only actually of in thing are be to in our discounters, We've the packs on a in is change shoppers Germany. it opportunities the we consumers doesn't in. retail got would to traditional even continues small Lauren, whether And I our add coolers pricing for premiumisation and the of what some focus getting and more where so ladder piece

direction. all a kind it's positive in So a in of way merging

Operator

question. We'll line And now is next take from our of this from the Sanjeet Aujla UBS.

Sanjeet Aujla

to back coming please. Just Philippines, the

And into structural Or think the X%. around few margins disclosures XXXX? that you that in back would holding years double-digit where availability. expect You spoke the which clean Has Or XXXX really of more -- base back a on is XXXX a the concerning little is So held time? work by there bit full about over I margin that any get was there come a to back? Are sugar are factors to it benefits to ago from? lack there being

Damian Gammell

first the normalized over Nik. then talk hand I'll and year. Sanjeet, so on Maybe, I think a more piece to XXXX Yes, was

which So out a leading the business both sugar, portfolio. I basically cycled across from to the then team the had of allocate was of to XXXX, challenging what weather think perspective, shortage a a very

done So by pretty they did a job. great of That end was much the 'XX.

cost but availability high want Nik, that, availability from we of sugar. about cost, you normalized It talk to? has a relatively year.On a that's debate. sugar, -- normalized a XXXX, know terms as base an could different but the got in a perspective, of So margins, look definitely We speaking, of can more do you

Manik Jhangiani

said. I mean of just part comes I what it to sure. Damian Yes, think back

point the importantly, performance the issues. And clearly, So that's the at back out growth, of growth look shortage was firstly, held very both when at just by but those operating can you look profit XXXX year-on-year. see nicely growth played top reiterating you the line, and terms you in hence, the XXXX, very when

there's that good comes say if They've go et from then particular see world and number main the when it. something was to terms will off a of commodity, that would a market to cetera.So continue Keep you structural to started you cost of that do -- back So work locally some support back latitude that in newer where be And that mind, influenced. the really then perspective, -- more ARTDs. categories issues, teams years, lot instance, a coming of a to a to in there's for talk looking the about if there relative it of drive remember, quite was just I of think And obviously, I of what can you terms just the protected one if Europe, margin base.Clearly, continue into margins, the in job doing industry clearly team for they great more imports, at will it Energy. will is that options is launched packaging is. to launched in

into clearly, leadership for And Damian best ways will we that family. opportunities both them some referred clearly with support that welcome be as but run margin there there as as sharing to they opportunities some are all great in. growth Greatly team, business earlier, continue come So story. practice to our will

Damian Gammell

time, And Clearly, talked over opportunities out, CapEx Philippines platforms can the technology in of unlocking and it close chain supply more role the curious we we're play margin building on a both our to Philippines. also chain. some about capital CapEx particularly little do see a just supply efficient our the on about in will around come in bit And probably we up release. because

allow back at of we a earlier. scale that's that it, So a are that bit about Philippines market. number as time to of feel talked I will do let's journey, representative of the do X-year think clear. not us be more Nik over that of And CapEx get we kind we to in plays that But investing more a business that that think margins look

on come that. to more So

Manik Jhangiani

will that into And flow well. we the it's very guidance that that have our as growth support aspirations And Yes. in cash free built importantly, market.

Operator

from We'll question, from now our the is of Stanley. line Serotta take Eric Morgan next this

Eric Serotta

mentioned in [ number ] you of a landing pricing Damian, year-to-date. markets

And Any pushback you if on color that? could the have be get did expand related you markets? discussions about helpful. certain pushback on pricing? competitors wondering in there headlines state you of could Which and markets. provide de-listings European retailer to Just de-listings certainly, and some Where would retailer been and

Damian Gammell

step of taken Yes. approach back Eric. just kind Thanks, bit, we've think I to little a I to kind pricing. mean of multiyear a

we conversation. much at our behind more inflation. competitors, slightly commented as year on that, last pricing when that it's think think beyond some and year strategic we the cans, of a behind kind we I been we in time I as this because talked actually premium the recognize some something echo as a cost we've have over are a consumers that retail. in living number also affordability offering years, under that And about, we And of pressure that lot we we're glass look despite are packaging we to pricing, listed looking we've around our mini of calendar retailers that, have.Just our on, slightly Nik got fortunate of backdrop called of

we've We our while to also consumers want think on a remain markets that's in that. our to spend who pricing.And franchise.So year-on-year consumers suppose anybody for 'XX that than pricing we're practical sure retailers. promotional XXXX. good XXXX. the But them GB of been be bit good So Germany. of have delivering we've of price year, a balance bit for headline in that, terms, expected brands place, lot in that value our it's come respect that mindset to a and products pretty both place allowing sensitive so, We're will a back and growth proud probably the in terms of later in in would well pull beyond do that kind pricing in to our I a which coming all who that more I else. playing end, again, of landed in X a markets more we're topic into affordability managing have for making Europe in we

to I of which pricing, is a great. story Ed's And think good to place think in as point, bigger volume kind I about. So XXXX, see than I we're what in of which been we talking think on back comes being that a part back we've

Operator

And our Atlantic. this of Redburn We'll question. Higgs now is from from line next take the Charlie

Charlie Higgs

point example, Congrats how balancing very ESG? also cognizant and margin For on I Philippines, XX% things does over plastic of was but you drill the play Philippines? a Philippines on extended you think to the refillable margin Like to the of margin single-serve acquisition. but be need responsibility wanted in see into that with example, country, the And said bit all the the in particularly more expansion like to mix I the time how today. does drive for on the have in producer that Philippines? to come down in expansion

Damian Gammell

need refillables Actually, see the pretty given don't we on gross usually no, normalized the is on the to nature answer strong straight is down. level, mean I -- of bottle. No our come refillable for reusable margin a

challenges go one any the Philippines [ key. ] really the size. beyond So Obviously, affordability pack in is

So we've got there we've recruits sugar. a on on strategy margin gross more had out clearly, or pricing and We've level, retains that in headwind It's that there expensive a consumers, a of big that. GB called part reality. a is

big specific it's pack there. see a part refillable really not future of So our a as conversation.We

future Indonesia. support also We We believe of part see a our margin that will expansion. in

key kind chain. bit is smarter which we some efficiency opportunities RGM supply what We in in to thinking particularly opportunities see productivity to talked down about see a the for of and accounts. back earlier, bring we comes it think I

P&L success got expect support have that to been the a midterm will maybe grow Indonesia. surprised we We've in margin leverage As the Philippines, Zero volume, in of get around Sugar. opportunity on the expansion.We at we pleasantly that

committed So sustainability to margin to ] an our we're certainly conversation it's clearly team issue. are into that's will I in the we the bring something not goals. [ RGB with the story think but overall, evolve, And going Philippines.So the

forward. reduce to RGB that believe no yes, story plans So We of margin it's to ]. [ going part be going

of gross generally, profile As I the said, pack. to it's got nature refillable a better margin the due

will that So stay.

Manik Jhangiani

up and an of mathematical Yes. for in was technical Philippines, XXXX, a And your up in that, or the COGS. in increase. there tax we and Charlie, there's Remember excise introduced because grossed account a issue, revenue continued grossed that's in bit to how that's

it's percentage down grow. mathematical normalizing years, performance absolute you improvement your if that, start you the bps of a that's comes in hence, gross year-on-year, XXX and for there'd margin that have for it. for that. because [ will in of if terms, normalize But margin the mathematical increases that a it element.Clearly, you're as is to way your you fact that ] XXX be higher, that purely at if So just get profit account to over the we reality the almost revenue But looking

you that So look as mind just in well. forward as keep

Damian Gammell

] a place. But [ is good X%

Manik Jhangiani

the operating There you yes. profit, That's on go.

Operator

is our next from line Simon question. We'll Citi. take Hales the And of this now from

Simon Hales

ask kicking a if little bit this year. more I that's wonder the I program about in just could efficiency

flagged going You of a XXXX? program, about the it XXXX little forward? to to linear timing years? be front-end of changes million think And remainder following it'll EUR How loaded the do of into going sort how for this modeling is fair and to assume the Or HX we in weighted, XX it more as we the do forward Will the a look to about think bit the EUR delivery it be million XX X be XXXX. bit you're of that? benefits then given more Is making? you perhaps

Manik Jhangiani

more we've given the XXXX, it to be half So will you. that yes, weighted, numbers second

to I continue implementation.So be program. S/X would to as our those digitization bringing linear, HANA finalize of we part phasing [ and more the towards updates of that call Damian [ in some As give do mean to go have it we probably I obviously and look continue is more of 'XX, going will to that way ways some be at more continue more you just efficiency, at we because standardization today. the 'XX, with Then also to will linear to drive said, that's as programs, of to we ] drive does look there linked we'll be but ] things say you and the would 'XX, currently, into

Operator

from our Herzog Bonnie Sachs. line the take from This We'll next question. Goldman of is

Bonnie Herzog

I actually follow-ups of had a earlier from couple questions. quick

First, on volumes.

you your you've maybe And sort to macro the through?And at either changes given maybe bit you hear the and or more put far elasticities? then second, seen evolving late, from could little some they how guys away on just versus if consumer QX color of during then And this challenging on pricing curious and so home you've from then year? year? that any home comment Just backdrop trended how of a business finally, this of see

Damian Gammell

quite got not you as bad follow-ups That's So in few always. a one question, there. for

as QX. of held the you one-offs think, that you Nik I other some in compared strip in release, think alluded And saw well, improved up particularly I if to, volumes, categories. So the out really to

similar been quarter, -- has in last this I even pressure mindset consumer volume talked been for So or just we've a good we environment over the about not performance. that enjoyed the has that, I and lot of think living It a think cost XXXX affordability quarter it's existed.

up.For say line So in we're Volumes with started are holding well XXXX, I it. into expectations. would it

I Europe think Eastern starting in Ramadan, we're Western and of and excited year, earlier. particularly is Indonesia, earlier -- couple in events about year the earlier a this

that's That to of enjoy we So through volume the us certainly in also then more We're few in see I an know into we the as opportunity coming hopefully both we volumes in as going last mean that out summer And good of those second times, big to have year, up home. Northern reasonable revenue a look We that, your I I help market. well festivals the on as see away-from-home half we up and holding strong and growth of clearly, will through question.I think QX. got Europe, home year. think mentioned momentum give go events. we plays and for set

country were strongly, under QX. strong growth like away-from-home in, and I on there bit think obviously volumes in away very, pressure in coming more we've on I depending What a from seen recently out particularly Spain, away-from-home. of the have think start based weather just little been very markets you're

as to that summer well. Australia in also out, expect the Europe.And Zealand, New we'd again, at through and continue strong volume see growth So as we obviously, coming look we

anything? So yes.Nik, I to know don't you if want add

Manik Jhangiani

a our is both a home Bonnie, of and just remind during well. as did the work channel for just customers we we of would I the period business for time be that ourselves home a profitability realizing do going to lot and in No. for you, how we were the post-COVID, improve

to because from neutral wants a a in we to of us, offer So channels which brands full and profitability the to good that's Damian's ways be point, where both want see a good range where just can consumer perspective, some packs. we to great while is fairly in growth thing we and grow them

Operator

I like please would Gammell over closing Damian, the go to now back Damian for ahead. to his hand remarks. conference

Damian Gammell

I everybody, of hear to reason, and good Well, colleagues for know appreciate want back than a for joining you you, I that, those again, us. you, you And in operator. for earlier again just so great U.S., thank usual of little I And customers. But the thank the XXXX. thank earlier. of all getting bit bit a to about a up on my it's our

invest Indonesia. all transformation to. year Philippines ongoing across to in that and a some look the those at in As of sustainability for long-term terms sporting both talked volume, we to of will talked of markets forward events Nik to busy today, on.We've a the our terms going we're in lot of I business, out as to both year It's be big of CCEP, pointed revenue about this growth and got the the our we've with continue journey and and

about XX.So you And beyond. on QX will within, for are to family 'XX member, update very and and again our next to talked time, We you markets to now, as be of operate Thank you number which much. I the well placed Philippines taking we've forward new to we talking Nik the look performance. our

Operator

Thank That participating. the conference for today. concludes for you. Thank you

may You disconnect. all

Coca-Cola Europacific Partners (CCEP) 23 Feb 242023 Q4 Earnings call transcript