Q2 2026 Coca-Cola Europacific Partners PLC Earnings Call

Speaker #1: Hello, and thank you for standing by, and welcome to today's Coca-Cola Europacific Partners half-year 2026 results conference call. At this time, all participants are in a listen-only mode.

Operator: Hello, and thank you for standing by, and welcome to today's Coca-Cola Europacific Partners H1 2026 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. I must advise you that this conference call is being recorded today. I would now like to hand the conference over to Vice President of Investor Relations and Corporate Strategy, Sarah Willett. Please go ahead, Sarah.

Speaker #1: After the speakers' remarks, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone.

Speaker #1: I must advise you that this conference call is being recorded today. I would now like to hand the conference over to Vice President of Investor Relations and Corporate Strategy, Sarah Willett.

Speaker #1: Please go ahead, Sarah.

Speaker #2: Thank you all for joining us today. I'm here with Damian Gammell, our CEO, and our CFO, Ed Walker. First, a reminder of our cautionary statements: this call will contain forward-looking management comments and other statements reflecting our outlook.

Sarah Willett: Thank you all for joining us today. I'm here with Damian Gammell, our CEO, and our CFO, Ed Walker. First, a reminder of our cautionary statements. This call will contain forward-looking 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 the courts filed with the UK, US, Dutch, and Spanish authorities. A copy of this information is available on our website at www.cocacolaep.com. Prepared remarks will be made by Damian. We will then turn the call over to your questions. Unless otherwise stated, metrics presented today will be on a comparable and FX neutral basis throughout. Volume movements, unless otherwise stated, adjust for the impact of 6 more consumption days in the H1 when compared to the same period last year.

Speaker #2: 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 the courts filed with the UK, US, Dutch, and Spanish authorities. A copy of this information is available on our website at www.cocacolaep.com.

Speaker #2: Prepared remarks will be made by Damian. We will then turn the call over to your questions. Unless otherwise stated, metrics presented today will be on a comparable and FX-neutral basis throughout.

Speaker #2: Volume movements, unless otherwise stated, adjust for the impact of six more consumption days in the half, when compared to the same period last year.

Speaker #2: Following the call, a full transcript will be made available as soon as possible on our website. You will see on the first slide of the presentation a picture of one of the limited edition £2,000,000 Champion Gold cans to celebrate our Spanish market winning the World Cup.

Sarah Willett: Following the call, a full transcript will be made available as soon as possible on our website. You will see on the first slide of the presentation a picture of one of the limited edition 2,000,000 Campeones Champion Gold cans to celebrate our Spanish market winning the World Cup. On that note, I will now turn the call over to our CEO, Damian, who found one of these cans selling online for EUR 20.

Speaker #2: So, on that note, I will now turn the call over to our CEO, Damian Gammell, who found one of these cans selling online for £20.

Speaker #3: Thank you, Sarah. I didn't buy it, but thank you. And thank you all for joining. We delivered a strong first half, and I really want to start by thanking our colleagues for their focus, hard work, and continued dedication to CCEP.

Damian Gammell: Thank you, Sarah. I didn't buy it, but thank you. Thank you all for joining. We delivered a strong H1, and I really want to start by thanking our colleagues for their focus, hard work, and continued dedication to CCEP, and most importantly to our customers. Our people and our strong brand partnerships continue to drive us forward. We've seen broad-based growth across markets and categories, continued share gains, robust profit delivery, and strong cash generation. Our value creation strategy is working. We are creating value for our customers, we are a consistent top and bottom-line compounder, we are generating significant cash, which is supporting record investment behind future growth, and we are increasing our returns to shareholders. Looking back over the past 3 years, we've generated EUR 4.4 billion of value for our retail customers and returned EUR 4.3 billion to shareholders through dividends and buybacks.

Speaker #3: And most importantly, to our customers. Our people and our strong brand partnerships continue to drive us forward. We've seen broad-based growth across markets and categories, continued share gains, robust profit delivery, and strong cash generation.

Speaker #3: Our value creation strategy is working. We are creating value for our customers. We are a consistent top and bottom-line compounder. We are generating significant cash, which is supporting record investment behind future growth.

Speaker #3: And we are increasing our returns to shareholders. Looking back over the past three years, we've generated £4.4 billion of value for our retail customers.

Speaker #3: And returned £4.3 billion to shareholders through dividends and buybacks. We operate in a large, attractive, and growing beverage market. NARTD is a £180 billion category globally, and is expected to grow 3 to 4 percent annually through to 2030.

Damian Gammell: We operate in large, attractive, and a growing beverage market. NARTD is a EUR 180 billion category globally and is expected to grow 3% to 4% annually through to 2030. We are well-positioned in the fast-growing categories and across a diverse channel and geographic footprint, including particularly attractive long-term opportunities in Southeast Asia. Looking now at our results, the business continues to perform well. We're pleased to have delivered a strong H1 with balanced top-line growth across our markets, continued share gains, and robust profit delivery. We're executing well and innovating at pace, focusing on the categories where consumers are most engaged, including zero sugar, energy, sports, and hydration. As a result, we continue to lead value creation for our customers.

Speaker #3: We are well positioned in the fast-growing categories and across a diverse channel and geographic footprint, including particularly attractive long-term opportunities in Southeast Asia. Looking now at our results, the business continues to perform well.

Speaker #3: We're pleased to have delivered a strong first half, with balanced top-line growth across our markets, continued share gains, and robust profit delivery. We're executing well and innovating at pace, focusing on the categories where consumers are most engaged, including zero sugar, energy, sports, and hydration.

Speaker #3: As a result, we continue to lead value creation for our customers. We are staying disciplined on costs, with our productivity mindset and efficiency programs continuing to support profit expansion, strong free cash flow, and investment in our brands, supply chain, technology, and our people.

Damian Gammell: We're staying disciplined on costs with our productivity mindset and efficiency programs continuing to support profit expansion, strong free cash flow, and investment in our brands, supply chain, technology, and our people. Also enabling us to grow our shareholder returns. We've laid strong foundations through our commercial plans, our innovation pipeline, our in-market execution, and the ongoing development of our strategic capabilities. We are confident in reaffirming our guidance for this year and in the longer-term opportunity ahead. Turning now to the key metrics. You can see a well-balanced performance across the business. Revenue grew strongly with great execution across our markets, positive revenue per case, and strong growth in volumes, particularly in Q2, despite Easter falling into Q1 this year. June was actually our biggest volume month ever. We also grew value share by 20 basis points, driven by gains in Europe.

Speaker #3: Also enabling us to grow our shareholder returns, we have laid strong foundations through our commercial plans, our innovation pipeline, our in-market execution, and the ongoing development of our strategic capabilities.

Speaker #3: We are confident and reaffirming our guidance for this year, and in the longer-term opportunity ahead. Turning now to the key metrics, you can see a well-balanced performance across the business.

Speaker #3: Revenue grew strongly, with great execution across our markets, positive revenue per case, and strong growth in volumes, particularly in Q2, despite Easter falling into Q1 this year.

Speaker #3: June was actually our biggest volume month ever. We also grew value share by 20 basis points, driven by gains in Europe. Our customer relationships remain a real source of competitive advantage.

Damian Gammell: Our customer relationships remain a real source of competitive advantage. We continue to maintain high service levels, and we're proud to remain the number one retail value creator, which is important because creating value for our customers is central to how we will grow sustainably. Operating profit reflects the quality of our top-line as we benefited from stronger volumes, as well as disciplined cost management and our ongoing productivity agenda. Cash generation remains a core strength of CCEP. We delivered strong comparable free cash flow in the H1 and continue to invest behind future growth, while also returning cash to shareholders through our dividend and our share buyback program. Overall, the H1 demonstrates the strength of our model. We are growing, investing, improving productivity, and growing shareholder returns all within a disciplined framework.

Speaker #3: We continue to maintain high service levels, and we're proud to remain the number one retail value creator. This is important, because creating value for our customers is central to how we will grow sustainably.

Speaker #3: Operating profit reflects the quality of our top line, as we benefited from stronger volumes, as well as disciplined cost management and our ongoing productivity agenda.

Speaker #3: Cash generation remains a core strength of CCEP. We delivered strong comparable free cash flow in the first half, and continue to invest behind future growth.

Speaker #3: While also returning cash to shareholders through our dividend and our share buyback program. So, overall, the first half demonstrates the strength of our model.

Speaker #3: We are growing, investing, improving productivity, and growing shareholder returns—all within a disciplined framework. We delivered revenue of £10.7 billion, an increase of 6.1 percent, with volumes growing 5.6 percent, or 2.2 percent on a days-adjusted basis.

Damian Gammell: We delivered revenue of EUR 10.7 billion, an increase of 6.1% with volumes growing 5.6% or 2.2% on a days adjusted basis with volume growth in both Europe and APS. Revenue per case grew at 0.4% against a strong comparative of almost 4% growth in the H1 of last year. Headline price increases, promotional optimization, and positive mix benefits from the growth of energy and more coolers were partially offset by the growth of larger volume formats in Europe. In addition, we also faced a headwind from the Suntory alcohol exit in APS, and this is worth just over 1% of total revenue during the H1. In fact, in Australia Pacific, revenue excluding alcohol grew a really healthy 10%.

Speaker #3: With volume growth in both Europe and APS, revenue per case grew 0.4 percent against a strong comparative of almost 4 percent growth in the first half of last year.

Speaker #3: Headline price increases, promotional optimization, and positive mix benefits from the growth of energy and more coolers were partially offset by the growth of larger volume formats in Europe.

Speaker #3: In addition, we also faced a headwind from the Centauri alcohol exit in APS, and this has weighed just over 1 percent of total revenue during the first half.

Speaker #3: In fact, in Australia Pacific, revenue excluding alcohol grew a really healthy 10%. Cost of sales per unit case increased by 0.6%, lower than our full year, which was down around 1.5%. This largely reflects both a higher H1 comparable of 3.6% last year, and with much of the absorption of the ongoing uncertain situation in the Middle East still to land in H2.

Damian Gammell: Cost of sales per unit case increased by 0.6%, lower than our full year target of 1.5. This largely reflects both a higher H1 comparable of 3.6% last year and with much of the absorption of the ongoing uncertain situation in the Middle East still to land in H2. OpEx as a percentage of revenue was 21.4%, an improvement of around 40 basis points supported by savings on discretionary spend and continued productivity gains. The combination of these factors drove operating profit of EUR 1.5 billion, up 8.1% with an operating margin of 13.8% up around 30 basis points on last year. Diluted earnings per share of €2.20 was up 10.6% supported by the share buyback with around EUR 600 million of the full year EUR 1 billion now completed. Finally, free cash flow of EUR 435 million was slightly ahead of last year.

Speaker #3: OPEX as a percentage of revenue was 21.4%, an improvement of around 40 basis points, supported by savings on discretionary spend and continued productivity gains.

Speaker #3: The combination of these factors drove operating profit of €1.5 billion, up 8.1 percent, with an operating margin of 13.8 percent, up around 30 basis points on last year.

Speaker #3: Diluted earnings per share of €2.20 was up 10.6 percent, supported by the share buyback, with around €600 million of the full-year €1 billion now completed.

Speaker #3: And finally, free cash flow of £435 million was slightly ahead of last year. This was after investing in key projects, including more coolers, a new warm-fill line for Powerade in Australia, new can fillers in Sweden, and the development of our exciting greenfield site in Manila, which is on schedule to begin production next year.

Damian Gammell: This was after investing in key projects including more coolers, a new warm fill line for Parramatta in Australia, new can fillers in Sweden, and the development of our exciting greenfield site in Manila, which is on schedule to begin production next year. We do remain on track to deliver comparable free cash flow of at least €1.7 billion for the year. Our performance in the H1 and the solid start to the H2 reinforces our confidence in the outlook for the full year, notwithstanding 6 fewer trading days in the H2. Today, we're reaffirming all elements of our full year 2026 guidance. Our 2026 guidance is in line with our midterm objectives with a quick reminder of those here. Our performance and the continued delivery of these midterm objectives come back to the execution of our focused and consistent strategy captured in these core priorities.

Speaker #3: We do remain on track to deliver comparable free cash flow of at least €1.7 billion for the year. Our performance in the first half and the solid start to the second reinforce our confidence in the outlook for the full year.

Speaker #3: Notwithstanding six fewer trading days in the second half. So today, we're reaffirming all elements of our full-year '26 guidance, and our '26 guidance is in line with our midterm objectives—with a quick reminder of those here.

Speaker #3: Our performance and the continued delivery of these mid-term objectives come back to the execution of our focused and consistent strategy, captured in these core priorities.

Speaker #3: Firstly, we're broadening our total portfolio. Investing behind faster-growing categories, and driving innovation across both established and emerging brands. We bring these brands to life in market with great execution.

Damian Gammell: Firstly, we're broadening our total portfolio, investing behind faster-growing categories, and driving innovation across both established and emerging brands. We bring these brands to life in market with great execution, whether that's through impactful on shelf, differentiated points of interruption, cooler placements, or recent major activations such as the FIFA World Cup to differentiate ourselves in the marketplace. Enhancement of our Revenue and Margin Growth Management, investment in commercial capabilities, and productivity improvements ensure we remain competitive. Our investments in the Philippines and Indonesia represent significant long-term opportunities to accelerate growth, and we're encouraged by the progress we're making in both markets. We're unlocking growth through technology and AI. These investments are helping us to generate new growth opportunities across the business, improve decision-making, enhance customer service, and increase our manufacturing efficiency.

Speaker #3: Whether that's through impactful on-shelf, differentiated points of interruption, cooler placements, or recent major activations such as the FIFA World Cup to differentiate ourselves in the marketplace.

Speaker #3: Enhancement of our revenue and margin growth management, investment in commercial capabilities, and productivity improvements ensure we remain competitive. Our investments in the Philippines and Indonesia represent significant long-term opportunities to accelerate growth, and we're encouraged by the progress we're making in both markets.

Speaker #3: And we're AI. These investments are helping us generate new growth opportunities across the business, improve decision-making, enhance customer service, and increase our manufacturing efficiency.

Speaker #3: Our focus on these priorities is strengthening our business today and creating the foundations for growth and value creation for many years to come. And, of course, all done sustainably.

Damian Gammell: Our focus on these priorities is strengthening our business today and creating the foundations for growth and value creation for many years to come. Of course, all done sustainably. Briefly on that, we recently updated our sustainability goals to include the Philippines, something we explored in our recent ESG webinar and available for replay on our website. How are we getting on more broadly against these priorities? Our portfolio strategy is working. We're continuing to invest in the core whilst broadening our participation across faster-growing categories and occasions, including sports, energies, and zeros, where we're seeing strong momentum, which I'll come back to shortly. We've seen a meaningful contribution to our growth from some great innovation in the H1. On our Coke trademark across Original Taste and zeros, our new cherry variants including Cherry Float in GB performed well.

Speaker #3: Briefly on that, we recently updated our sustainability goals to include the Philippines—something we explored in our recent ESG webinar, which is available for replay on our website.

Speaker #3: So, how are we getting on more broadly against these priorities? Our portfolio strategy is working. We're continuing to invest in the core, whilst broadening our participation across faster-growing categories and occasions.

Speaker #3: Including Sports, Energies, and Zeros, where we’re seeing strong momentum, which I’ll come back to shortly. We’ve seen a meaningful contribution to our growth from some great innovation in the first half.

Speaker #3: On our COCA trademark, across Original Taste and Zero, our new cherry variants, including Cherry Float and GB, perform well. We continue to make good progress with smaller, more premium packs, and the new 500 ml Super Cans are proving to be a great success, especially with younger consumers.

Damian Gammell: We continue to make good progress with small and more premium packs. The new 500ml Supercan are proving to be a great success, especially with younger consumers. Watch this space for more to come. We welcome the return to growth for Diet Coke in GB, supported by the addition of Cherry and the collaboration with The Devil Wears Prada. Our flavors family has seen lots of exciting new introductions, from Royal Tru-Grape and Lychee in the Philippines, the fantastic Nipis Mint in Indonesia, and the fun new visual identity for Fanta with Xbox gaming graphics. We are strengthening our presence in sports and hydration with volumes up 12%. Aquarius continues to drive strong growth in Iberia, while Powerade grew double digits supported by the FIFA World Cup activation. This brand has also been recently introduced to Indonesia, where the sports category is already half the size of sparkling.

Speaker #3: So, watch this space for more to come. And we welcome the return to growth for Diet Coke in GB, supported by the addition of cherry and the collaboration with The Devil Wears Prada.

Speaker #3: Our flavors family has seen lots of exciting new introductions, from Royal Grape and Lychee in the Philippines, the fantastic Nippy’s Mint in Indonesia, and the fun new visual identity for Fanta with Xbox gaming graphics.

Speaker #3: We're strengthening our presence in sports and hydration, with volumes up 12%. Aquarius continues to drive strong growth in Iberia, while Parade grew double digits, supported by the FIFA activation.

Speaker #3: This brand has also been recently introduced to Indonesia, where the sports category is already half the size of sparkling. Energy continues to outperform, with volumes up an incredible 19%.

Damian Gammell: Energy continues to outperform, with volumes up an incredible 19%. Monster growth is running at roughly twice the category rate. Our share was up 230 basis points, supported by innovations such as Viking Berry and strong activation around our motorsport partnerships with Oscar Piastri now featuring on the cans of Monster Green. Water is growing well, particularly in GB with smartwater and in the Philippines with Wilkins. We have made fantastic progress in coffee in Australia, where Grinders is now the number one coffee bean brand in retail with sales of over AUD 100 million. The common theme here is choice. More brands, more packs, more flavors, and more occasions focused on faster-growing categories. That is helping us recruit consumers, increase frequency, and capture a greater share of the beverage spend.

Speaker #3: Monster growth is running at roughly twice the category rate. Our share was up 230 basis points, supported by innovations such as Viking Berry and strong activation around our motorsport partnerships with Oscar Piastri, now featuring on the cans of Monster Green.

Speaker #3: Water is growing well, particularly in GB with Smartwater, and in the Philippines with Wilkins. And we've made fantastic progress in coffee in Australia, where Grinders is now the number one coffee bean brand in retail, with sales of over 100 million Aussie dollars.

Speaker #3: The common theme here is choice: more brands, more packs, more flavors, and more occasions focused on faster-growing categories. That's helping us recruit consumers, increase frequency, and capture a greater share of the beverage spend.

Speaker #3: As I mentioned earlier, we've seen great momentum in the growth of zeros everywhere—whether in COCA trademark, flavors with Sprite and Fanta, in hydration, or in energy.

Damian Gammell: As I mentioned earlier, we have seen great momentum in the growth of zeros everywhere, whether in Coca-Cola trademark, flavors with Sprite and Fanta, in hydration, or in energy. Both Coca-Cola Zero Sugar Caffeine Free in its eye-catching new black and gold packaging, and Sprite Zero Chill with its refreshing blast of mint have delivered beyond our expectations, with Sprite overall growing by 6%, supported by the fantastic Sprite and Spicy campaign. We have extended our range of zero flavors in Fanta and are seeing good growth in both zero sugar sports through Powerade and Aquarius and in energy, where the Monster Ultra range was up over 50%. Overall, zero sugar volumes increased by 10%, and we expect strong growth going forward, with innovation offering more choice for consumers as they increasingly seek out healthier but exciting and great-tasting options.

Speaker #3: Both Coca-Cola Zero Caffeine, in its eye-catching new black and gold packaging, and Sprite Zero Chill, with its refreshing glass of mint, have delivered beyond our expectations.

Speaker #3: Sprite overall grew by 6 percent, supported by the fantastic Sprite and Spicy campaign. We've extended our range of zero flavors and Fanta, and are seeing good growth in both zero sugar sports through Powerade and Aquarius, and in energy, where the Monster Ultra range was up over 50 percent.

Speaker #3: Overall, zero sugar volumes increased by 10%, and we expect strong growth going forward, with innovation offering more choice for consumers as they increasingly seek out healthier, but exciting and great-tasting options.

Speaker #3: Execution is one of our most durable competitive advantages, and in half one, we turned brand strength and innovation into visible, measurable marketplace impact. One example is our cooler rollout plan, which is running well ahead.

Damian Gammell: Execution is one of our most durable competitive advantages. In H1, we turned brand strength and innovation into visible, measurable marketplace impact. One example is our cooler rollout plan, which is running well ahead. We have added more than 80,000 coolers this year, an increase of 5%, more than 10% since last year when we began our accelerated program to expand cold availability and grow instant consumption, which supports mix. We are continuing to win with customers and listings across markets, including smartwater and Fuze Tea in McDonald's in selected markets. Domino's was a significant recent win in Australia, with the GB team winning Parkdean Resorts, Papa John's, and Leeds United. This expands our coverage of Premier League grounds to 80% and makes Ed, our CFO, a proud Yorkshireman, very happy.

Speaker #3: We've added more than 80,000 coolers this year—an increase of 5%, and more than 10% since last year, when we began our accelerated program to expand cold availability and grow instant consumption, which supports mix.

Speaker #3: We're continuing to win with customers and listings across markets, including smartwater-infused tea in McDonald's in selected markets. Domino's was a significant recent win in Australia, with the GB team winning Parkdean Resorts, Papa John's, and Leeds United.

Speaker #3: This expands our coverage of English Premiership grounds to 80 percent and makes Ed, our CFO, a proud Yorkshireman, very happy. We've also seen a terrific win for the whole system with Marriott International, including over 600 hotels in our markets, and that will start rolling out during H2.

Damian Gammell: We've seen a terrific win for the whole system with Marriott International, including over 600 hotels in our markets, and that will start rolling out during H2. Beyond that, execution on our packaging collection progress continued. DRS has landed well in Portugal. We continue to prepare for GB next year, and we launch a cross-border recycling program across the Pacific Islands, all contributing to our decarbonization journey. Finally, we're bringing our brands to life through stronger activation, as you can see here on the Fanta and Xbox and of course, through FIFA World Cup, which I'm keen to touch on next. World Cup 2026 has been our biggest activation program ever, providing a great example of how we work with The Coca-Cola Company, combining world-class assets with exceptional local execution at scale to create value for our customers and excitement for our consumers.

Speaker #3: Beyond that, execution on our packaging collection progress continued. DRS has landed well in Portugal, we continue to prepare for GB next year, and we launched a cross-border recycling program across the Pacific Islands.

Speaker #3: All contributing to our decarbonization journey. And finally, we're bringing our brands to life through stronger activation, as you can see here on Fanta and Xbox, and of course through the FIFA World Cup, which I'm keen to touch on next.

Speaker #3: World Cup 2026 has been our biggest activation program ever, providing a great example of how we work with The Coca-Cola Company, combining world-class assets with exceptional local execution at scale to create value for our customers and excitement for our consumers.

Speaker #3: We delivered more than 500,000 displays, with our field teams continuing to build momentum as the tournament progressed. All of our top European home customers executed the campaign, covering more than 47,000 outlets.

Damian Gammell: We delivered more than 500,000 displays, with our field teams continuing to build momentum as the tournament progressed. All of our top European home customers executed the campaign, covering more than 47,000 outlets. We activated exclusive Panini sticker on-pack promotions with 163 million packs and produced more than 135 million team and player cans. Importantly, it just wasn't about brand awareness. The activation supported transactions, with more than 1.3 million FIFA items awarded to shoppers through the purchase of our brands. On to competitiveness. Sharpening competitiveness is not simply a cost agenda. It is about building a faster business, one that is more efficient and more effective in serving our customers and consumers, and one that can be sustaining and growing profitability. One important lever is revenue and margin growth management.

Speaker #3: We activated exclusive Panini sticker on-pack promotions with 163 million packs, and produced more than 135 million team and player cans. Importantly, it just wasn't about brand awareness.

Speaker #3: The activation supported transactions, with more than 1.3 million FIFA items awarded to shoppers through the purchase of our brands. On competitiveness, sharpening competitiveness is not simply a cost agenda.

Speaker #3: It's about building a faster business—one that is more efficient and more effective in serving our customers and consumers, and one that can keep something and growing profitably.

Speaker #3: One important lever is revenue and margin growth management. We are continuing to use sharper insights, better promotional mechanics, and stronger pricing tools to balance value for consumers with profitable growth for our customers and CCEP.

Damian Gammell: We are continuing to use sharper insights, better promotional mechanics and stronger pricing tools to balance value for consumers with profitable growth for our customers in CCEP. That is particularly important in an environment where many consumers remain focused on value. Promotions are a good example. They're not only about headline price, but as the examples here demonstrate, about great promotional mechanics helping to drive higher incidents, whether that's through free meals in QSR, gifts with purchase, or prize-led campaigns for Fuze Tea and Coke Zero Sugar. At the same time, we are building more scalable capabilities across the business, expanding integrated shared services with more than 1,500 colleagues, including now over 250 in Manila. This is all part of our broader productivity mindset.

Speaker #3: That is particularly important in an environment where many consumers remain focused on value. Promotions are a good example. They're not only about headline price, but—as the examples here demonstrate—about great promotional mechanics helping to drive higher incidence, whether that's through free meals and QSR, gifts with purchase, or prize-led campaigns for Fuze Tea and Coke Zero.

Speaker #3: At the same time, we are building more scalable capabilities across the business, expanding integrated shared services with more than 1,500 colleagues, including now over 250 in Manila.

Speaker #3: This is all part of our broader productivity mindset. We are improving how we work, simplifying processes as we leverage AI, reducing opex, and reinvesting behind the capabilities that matter most across both commercial and our supply chain.

Damian Gammell: We are improving how we work, simplifying processes as we leverage AI, reducing OpEx, and reinvesting behind the capabilities that matter most across both commercial and our supply chain. Our markets in Southeast Asia are our fastest-growing within CCEP, as you saw earlier. In Indonesia, we made solid progress during H1 of this year, with sparkling continuing to grow ahead of the total category. Our new launches like Sprite Nipis Mint, Coke Zero Vanilla, and Powerade are performing well and have contributed significantly to growth in Q2 following a great festive period. This has been supported by our new go-to-market model, which is helping us strengthen execution and improve category participation with our distribution partners. In the Philippines, we've continued to see strong momentum.

Speaker #3: Our markets in Southeast Asia are our fastest growing within CCEP, as you saw earlier. In Indonesia, we made solid progress during the first half of this year, with sparkling continuing to grow ahead of the total category.

Speaker #3: Our new launches, like Sprite, Nippy's Mint, Coke Zero Vanilla, and Parade, are performing well and have contributed significantly to growth in Q2, following a great festive period.

Speaker #3: This has been supported by our new route-to-market model, which is helping us strengthen execution and improve category participation with our distribution partners. In the Philippines, we've continued to see strong momentum.

Speaker #3: Our Coke Zero campaign focused around all-out startup or all-out deliciousness, supported double-digit volume growth, and we've continued to see good momentum with Wilkins, our water brand, which has benefited from new listings.

Damian Gammell: Our Coke Zero campaign focused around all-out sarap or all out deliciousness, supported double-digit volume growth. We've continued to see good momentum at Wilkins, our water brand, which is benefiting from new listings. We're also investing for future demand. Construction of our new facility remains on track for 2027, and this will provide additional capacity to support long-term profitable growth in the Philippines, with margins now approaching our 10% target. Taken together, Indonesia and the Philippines are becoming a scalable Southeast Asia growth engine for CCEP, combining strong category growth, improving execution, innovation momentum, and growing profitability. Just to talk a little bit to AI and tech. Our approach to AI is clear. We are focused on a key number of strategic opportunities across the business, but we are deliberately centered around growth. By way of few examples, it is providing enhanced analytics to optimize promotional pricing levels.

Speaker #3: We're also investing for future demand. Construction of our new facility remains on track for 2027, and this will provide additional capacity to support long-term profitable growth in the Philippines.

Speaker #3: With margins now approaching our 10% target, taken together, Indonesia and the Philippines are becoming a scalable Southeast Asia growth engine for CCEP. Combining strong category growth, improving execution, innovation momentum, and growing profitability.

Speaker #3: Now, just to talk a little bit about AI and tech. Our approach to AI is clear. We are focused on a key number of strategic opportunities across the business, and we are deliberately centered around growth.

Speaker #3: By way of a few examples: it is providing enhanced analytics to optimize promotional pricing levels; it is supporting our Insights team to analyze data to drive swifter commercial decisions; it's cleaning millions of pieces of manufacturing data in days rather than years; and it's helping key account managers more effectively prepare for customer conversations. It's also starting to enhance productivity as we leverage digital twins in our supply chain.

Damian Gammell: It's supporting our insights team to analyze data to drive swifter commercial decisions. It's cleaning millions of pieces of manufacturing data in days rather than years. It's helping key account managers prepare more effectively for customer conversations and is starting to enhance productivity as we leverage digital twins in our supply chain. What gives me confidence is that while we're seeing good progress against all our strategic priorities, we will keep coming back to demonstrate how we are strengthening our business today and creating foundations for tomorrow. We know, however, that we've got more to do. We continue to broaden our portfolio, especially in zeros, bringing even more magic to Coke original taste, and driving more innovation with new and exciting options coming from our brand partners. In Southeast Asia, we are encouraged by the early progress in Indonesia and the continued strength of the Philippines.

Speaker #3: So, what gives me confidence is that we're seeing good progress against all our strategic priorities. We will keep coming back to demonstrate how we are strengthening our business today and creating foundations for tomorrow.

Speaker #3: We know, however, that we've got more to do. We continue to broaden our portfolio, especially in zeros—bringing even more magic to Coke Original Taste—and driving more innovation with new and exciting options coming from our brand partners.

Speaker #3: In Southeast Asia, we are encouraged by the early progress in Indonesia and the continued strength of the Philippines. Our focus is now to sustain that momentum and scale it into a long-term growth engine for CCEP.

Damian Gammell: Our focus is now to sustain that momentum and scale it into a long-term growth engine for CCEP. All of this whilst continue to execute across our markets each and every day whilst adapting even faster, leveraging data and tech across our business. As you've seen today, we're continuing to build on the consistent track record of delivery over the past 10 years. We've created significant value for customers, consumers, and shareholders, and we believe the opportunity ahead remains just as compelling. We're growing across attractive categories and markets, broadening our portfolio, winning through execution, sharpening our competitiveness, scaling Southeast Asia, and unlocking new growth through data, technology, and AI. The strength of our H1 performance demonstrates the resilience of our business and the consistency of our growth model.

Speaker #3: All of this while continuing to execute across our markets each and every day, whilst adapting even faster, leveraging data and tech across our business.

Speaker #3: So, as you've seen today, we're continuing to build on the consistent track record of delivery over the past 10 years. We've created significant value for customers, consumers, and shareholders, and we believe the opportunity ahead remains just as compelling.

Speaker #3: We are growing across attractive categories and markets, broadening our portfolio, winning through execution, sharpening our competitiveness, scaling Southeast Asia, and unlocking new growth through data, technology, and AI.

Speaker #3: The strength of our first-half performance demonstrates the resilience of our business and the consistency of our growth model. While we have several key months to go, and six fewer trading days in Q4, the second half has started well, giving us confidence in our full-year outlook and our ability to deliver on our medium-term objectives.

Damian Gammell: While we've several key months to go and six less trading days in Q4, the H2 has started well, giving us confidence in our full-year outlook and our ability to deliver on our medium-term objectives. We are winning today. We are creating an even stronger platform for tomorrow. Thank you, everybody. Ed and I would now be very happy to take your questions as I hand the call back over to you, Mel.

Speaker #3: We are winning today, and we are creating an even stronger platform for tomorrow. Thank you, everybody. Ed and I would now be very happy to take your questions, as I hand the call back over to you, Mel.

Speaker #1: Thank you. We will 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 one and one on your telephone and wait for your name to be announced.

Operator: Thank you. We will 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 one and one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star one and one again. Our first question comes from the line of Edward Mundy from Jefferies.

Speaker #1: If you wish to cancel your request, please press star, one, and one again. Our first question comes from the line of Edward Monday from Jefferies.

Edward Mundy: Afternoon, Damian, Ed, and Sarah. I appreciate it's a little bit too early to talk about 2027 guidance, I'd love to pick your brains as to how you're thinking philosophically about growth in next year. Now, on the one hand, you're going to be lapping two really good summers. You've got FIFA. You've got this very strong innovation cycle that we've just been through. On the other hand, you're broadening your portfolio, you're taking share. Southeast Asia seems to be waking up, AI is moving from a productivity tool to a growth engine. What are the two or three things that you're really excited about, Damian, as you go into 2027?

Speaker #2: Afternoon, Damian, Ed, and Sarah. Look, I appreciate it’s a little bit too early to talk about 2027 guidance, but I’d love to pick your brains as to how you’re thinking philosophically about growth in the next year.

Speaker #2: You know, on the one hand, you're going to be lapping two really good summers. You've got FIFA, you've got this very strong innovation cycle that we've just been through.

Speaker #2: But on the other hand, you're broadening your portfolio, you're taking share. Southeast Asia seems to be waking up, and AI is moving from a productivity tool to a growth engine.

Speaker #2: What are the two or three things that you're really excited about, Damian, as you go into 2027?

Speaker #3: Yeah, thanks, Ed. I mean, we'll talk later in the year with more specificity around '27, but clearly we're excited about the second half of this year. Just to maybe bring it back to '26…

Damian Gammell: Yeah, thanks, Ed. We'll talk later in the year with more specificity around 2027, clearly, we're excited about the H2 of this year. Just to maybe bring it back to 2026, as I said, the H2 of this year started well. We've continued to see good weather across most of our markets. We've got a lot of good campaigns coming, whether that's around the Bundesliga, EPL, our new icon look and feel for Coca-Cola Zero Sugar. We're only at the beginning with Coca-Cola Zero Sugar. Supercan are new. A lot of the innovation that we've brought to market in 2026, really we'll see the full year benefit of that in 2027. That definitely gives me some excitement and confidence.

Speaker #3: As I said, the second half of this year started well. You know, we've continued to see good weather across most of our markets, and we've got a lot of good campaigns coming, whether that's around the Bundesliga, EPL, or our new icon look and feel for Coke Zero.

Speaker #3: We're only at the beginning with Coke Zero Zero. Super Cans are new, so a lot of the innovation that we've brought to market in '26—really, we'll see the full-year benefit of that in '27.

Speaker #3: So that definitely gives me some excitement and confidence. I think the second point I'd make, Ed, is that, you know, clearly, when we were preparing for FIFA, we were working very closely with The Coca-Cola Company to have a really exciting asset for the same period next year.

Damian Gammell: I think the second point I'd make, Ed, is that, clearly when we were preparing for FIFA, we were working very closely with The Coca-Cola Company to have a really exciting asset for the same period next year, I'm really excited about that. Obviously, for various reasons, I can't get into more detail with it. As you'd appreciate, we have been working hard to make sure we bring a similar level of excitement on store inventory to our consumers for 2027. You're right about Asia. I think we start to see that being a material player in our growth algorithm. It's great to see Indonesia performing. Again, a lot of the innovation we've brought this year will continue into 2027.

Speaker #3: And I'm really excited about that. Obviously, for various reasons, I can't get into more detail on it, but as you'd appreciate, we have been working hard to make sure we bring a similar level of excitement on-store inventory to our consumers for 2027.

Speaker #3: You're right about Asia. You know, I think we’re starting to see that become a material player in our growth algorithm. It's great to see Indonesia performing, and again, a lot of the innovation we've brought this year will continue into 2027.

Speaker #3: Yeah, and to your point around AI and tech, you know, certainly, we will see net revenue per case playing a bigger part of our story in the second half of this year.

Damian Gammell: Yeah, to your point around AI and tech, certainly we will see net revenue per case playing a bigger part of our story in H2 of this year. We'll clearly continue to look at pricing opportunities as we exit 2026, which again, will give us a bit of momentum into 2027. Excited about H2 of this year, and looking forward to an even more exciting 2027. Also, some of the foundational work we've been doing around cooler placements, some of those customer wins, they remain in our base into 2027, and that also supports our growth objective. Thanks, Ed.

Speaker #3: We'll clearly continue to look at pricing opportunities as we exit '26, which again will give us a bit of momentum into 2027. So, excited about the second half of this year and looking forward to an even more exciting 2027.

Speaker #3: Also, some of the foundational work we've been doing around cooler placements, some of those customer wins—they remain in our base into 2027, and that also supports our growth objective.

Speaker #3: Thanks, Ed.

Speaker #2: Great, thank you.

Edward Mundy: Great. Thank you.

Speaker #1: Our next question comes from the line of Matthew Ford, BNP Paribas.

Operator: Our next question comes from the line of Matthew Ford, BNP Paribas.

Matthew Ford: Afternoon, all. Thanks for the question. The first one is just to pick up on something you just mentioned there, Damian, on the revenue per case kind of evolution. Particularly if we focus just on the Europe performance. Q2, I think +1.3% revenue per unit case to kind of in line with what we saw in Q1. Obviously Q1 was impacted to a degree by the earlier time of Easter. Just how much of the sort of slightly softer revenue per case is reflecting sort of the tougher consumer environment and the focus on affordability and large packs? Is there something else in there? Should we expect the kind of European revenue per unit case to also sequentially improve? Clearly in APS, we'll fully cycle the Beam Suntory impact there, but specifically on Europe, what's your thoughts into H2?

Speaker #4: Afternoon, all. Thanks for the question. The first one is just to pick up on something you mentioned there, Damian, on the revenue per case evolution.

Speaker #4: Particularly if we focus just on the Europe performance, you know, Q2, I think plus 1.3% revenue per unit case—kind of in line with what we saw in Q1.

Speaker #4: And obviously, Q1 was impacted, you know, to a degree by the earlier timing of Easter. Just how much of the sort of slightly softer revenue per case is reflecting the tougher consumer environment and the focus on affordability and large packs?

Speaker #4: Or is there something else in there? And should we expect the kind of European revenue per unit case to also sequentially improve, clearly, in APS?

Speaker #4: We’ve now fully cycled the Beam Suntory impact there, but specifically on Europe, what are your thoughts going into the second half? And then, very quickly, just if I can follow up on the Philippines—you know, as we go into Q3, we’re cycling the quite devastating typhoon you saw in July and August last year.

Matthew Ford: very, very quickly, just if I can follow up on the Philippines. We're cycling, I think, as we go into Q3, the quite devastating typhoons you saw in July and August last year. Any update on how July and potentially the first couple of days of August have trended in the Philippines? Thank you.

Speaker #4: So, any update on how July and potentially the first couple of days of August have trended in the Philippines? Thank you.

Speaker #3: Yeah, thanks, Mel. Maybe I'll deal with the second part of your question, and then hand back to Ed for your questions regarding runovers per case.

Damian Gammell: Thanks, Matt. Maybe I'll deal with the second part of your question and then hand back to Ed for your questions around NSR per case. As I said, we're pleased with the way H2 started across CCEP, including the Philippines. So far we haven't seen similar weather that we had to deal with last year. That will definitely help as we look at Q3. Generally, the momentum we saw in June is continuing across our business. That gives us a lot of excitement for a solid Q3. I'll hand back to Ed on the NSR per case question. Ed?

Speaker #3: Yeah, as I said, you know, we're pleased with the way H2 started across CCEP, including the Philippines. So far, we haven't seen similar weather that we had to deal with last year.

Speaker #3: So, that will definitely help as we look at Q3. But generally, you know, the momentum we saw in June is continuing across our business, so that gives us, yeah, a lot of excitement for a solid Q3.

Speaker #3: And I'll hand back to Ed on the NSO per case question. Ed?

Speaker #5: Yeah, thanks, Matt. So on the revenue per case, I'm looking specifically at Europe. So yes, absolutely, as you said, we grew 1.4% per case in the quarter, and that was quite nicely balanced between rate and mix.

Ed Walker: Thanks, Matt. On the revenue per case and looking specifically at Europe. Yes, absolutely. As you said, we grew 1.4% per case in the quarter, and that was quite nicely balanced between rate and mix. I think one thing we need to remember is that last year, for the same time period, Q2 2025, we grew 4.2% per case. We're cycling a very strong revenue per case growth from the previous year. As we look at the year as a whole, I think evening out the impact between different quarters, we still expect a good balance between volume growth and revenue per case growth. I think in Europe specifically, if you look at Q2, we continue to see healthy brand mix coming through.

Speaker #5: I think one thing we need to remember is that last year, for the same time period—so Q2 2025—we grew 4.2% per case.

Speaker #5: So we're cycling a very strong revenue per case growth from the previous year. And as we look at the year as a whole, I think, evening out the impact between different quarters, we're still expecting a good balance between volume growth and revenue per case growth.

Speaker #5: I think in Europe specifically, if you look at Q2, we continue to see healthy brand mix coming through. We did have a bit more adversity in pack mix, but that's really as a result of the success of a lot of the activation we did with promotions, and particularly around FIFA.

Edward Mundy: We did have a bit more adversity in pack mix, that's really as a result of the success of a lot of the activation we did with promotions and particularly around FIFA. That's probably Q2 specifically. When we look at the rate, as I said, when we look at the year as a whole, we think that will be fairly balanced. We don't see any reduction in our ability to take price in our markets. As always, as we've talked about before, these pricing decisions within quarter are quite dynamic and are always influenced by the period that we're cycling.

Speaker #5: So that's probably Q2 specifically. And then, when we look at the rate—as I said—when we look at the year as a whole, we think that will be fairly balanced.

Speaker #5: We don't see any reduction in our ability to take price. In our markets, and as always, as we've talked about before, these pricing decisions within the quarter are quite dynamic and are always influenced by the period that we're cycling.

Speaker #5: We continue to focus on affordability, as we talked about last year, and making sure we have the right packs at the right price for all of our consumers.

Ed Walker: We continue to focus on affordability, as we talked about last year, and making sure we have the right pack for the right price for all of our consumers. Also that we give consumers great experiences through either our packs, through our innovation, or some of the great activation we saw around FIFA, like Panini, as Damian mentioned earlier.

Speaker #5: But also that we give consumers great experiences, either through our packs, through our innovation, or some of the great activation we saw around FIFA—like Panini, as Damian mentioned earlier.

Speaker #3: Yeah, and I just think, to build on that—I mean, on our last call—you know, we've been very explicit about trying to balance pricing with value add.

Damian Gammell: Yeah, I just think to build on that, on our last call, we've been very explicit about trying to balance pricing with value adds, because we think, obviously, the brands that we have bring a different level of excitement to our consumers. What you'll see in Q2 and into Q3, a lot of our on-floor activation, particularly in retail, is to win, to collect, to get access to tickets. We think that's important. While it offers value, it also brings excitement. We think with the brands that we have, that's what consumers and indeed customers are looking for. We'll continue to look at a balance of affordability to price value. We've got a lot of premium plays out there. A lot of our innovation is more in the premium space, Supercans, Coke Zero Zero.

Speaker #3: Because we think, obviously, the brands that we have bring a different level of excitement to our consumers. So what you'll see in Q2 and into Q3, a lot of our on-floor activation, particularly in retail, is to win, to collect, to get access to tickets.

Speaker #3: And we think that's important—while it offers value, it also brings excitement. We think, with the brands that we have, that's what consumers and, indeed, customers are looking for.

Speaker #3: So, we'll continue to look at a balance of affordability and price-value. We've got a lot of premium plays out there. A lot of innovation is more in the premium space—super cans, Coke Zero Zero.

Speaker #3: And then we'll shift some more of those promotional funds back into value add. We're seeing that responding really well. And no surprise, the Gold Can for the Spanish team has been a huge hit in Iberia.

Damian Gammell: We'll shift some more of those promotional funds back into value add. We see that responding really well. No surprise, the gold can for the Spanish team has been a huge hit in Iberia. Elements like that we think are something that brands like Coke can do better than anybody else, and we'll keep leveraging them.

Speaker #3: So, you know, elements like that we think are something that brands like Coke can do better than anybody else, and we'll keep leveraging them.

Speaker #4: Great. Thank you.

Matthew Ford: Great. Thank you.

Speaker #1: Our next question comes from the line of Bonnie Herzog at Goldman Sachs.

Operator: Our next question comes from the line of Bonnie Herzog, Goldman Sachs.

Speaker #6: Thank you. Hi, everyone. I had a question on your volumes. I guess I was hoping to get a little more color, you know, on your volumes in the quarter.

Bonnie Herzog: Thank you. Hi, everyone. I had a question on your volumes. I guess I was hoping to get a little more color on your volumes in the quarter, and maybe how they trended relative to your internal expectations. Damian, you mentioned both the World Cup and favorable weather were two drivers of strength. Hoping maybe you could give us a sense of the lift you saw from this and maybe any other call-outs that surprised you from your perspective. Also, your guidance implies a decent deceleration of growth in the back half. I guess I'm trying to understand how much was possibly pulled forward into Q2 versus conservatism on your part. Finally, maybe just expected phasing of growth between Q3 and Q4. Thank you.

Speaker #6: And maybe how they trended relative to your internal expectations. You know, Damian, you mentioned both the World Cup and favorable weather were two drivers of strength.

Speaker #6: So, hoping maybe you could give us a sense of the lift you saw from this, and maybe any other call-out that surprised you from your perspective.

Speaker #6: Also, your guidance implies a decent deceleration of growth in the back half. So I guess I'm trying to understand how much was possibly, you know, pulled forward into Q2 versus conservatism on your part, and finally, maybe just the expected phasing of growth between Q3 and Q4.

Speaker #6: Thank you.

Speaker #3: Yeah, thanks, Bonnie. I can confirm there was zero pull forward or impact on Q3, so really healthy volume growth across the quarter. I would say it was a quarter where we delivered growth from a geographic perspective that was very balanced.

Damian Gammell: Yeah. Thanks, Bonnie. I can say there was zero pull forward or impact on Q3. Really healthy volume growth across the quarter. I would say, it was a quarter where we delivered growth from a geographic perspective, very balanced. From a channel perspective, we were pleased. Also, as Ed mentioned, from a pack perspective. It was broad across brands and packages. We came in with a lot of momentum into Q3. As I said, it started off well for us. Zero impact on the growth from Q2 into Q3, which is great. In fact, probably some of the people who are working the hardest at CCEP are our supply chain colleagues as we continue to meet that increased demand coming out of H2 and rebuild inventories. Overall, very pleased.

Speaker #3: From a channel perspective, we were pleased. And also, as Ed mentioned, from a pack perspective, it was broad across brands and packages.

Speaker #3: We came in with a lot of momentum into the third quarter. You know, as I said, it started off well for us. So, zero impact on the growth from Q2 into Q3, which is great.

Speaker #3: In fact, probably some of the people who are working the hardest at CCEP are our supply chain colleagues, as we continue to meet that increased demand coming out of the second half and rebuild inventories.

Speaker #3: You know, so overall, very pleased. I would say, obviously, FIFA is a callout just in terms of its scale and impact. I would say some of the new innovations are doing better than we expected.

Damian Gammell: I would say, obviously FIFA is a call-out just in terms of its scale and impact. I would say some of the new innovations are doing better than we expected. Coke Zero Zero. I think the Supercan has surprised us, really connecting with a different user, and I think that's working really well. Obviously we talked to some of the innovation in Asia, but particularly Powerade in Indonesia surprised us to the upside. That's great. Quite broad, which is exciting. Quite sustainable into Q3, Q4, and as I mentioned to Ed's point, into next year. You could call us conservative. Ed and I looked at our numbers for H1, reflected on year-to-go. There's still five months to go. Clearly, we'll be able to update everybody in November on how we see the full year.

Speaker #3: So, Coke Zero Zero—I think the super can is surprising us, really attracting a different user. And I think that's working really well. And obviously, we talked about some of the innovation in Asia, but particularly Parade in Indonesia surprised us to the upside.

Speaker #3: So that's great—quite broad, which is exciting. Quite sustainable into Q3, Q4, and as I mentioned, to Ed's point, into next year. You could call us conservative.

Speaker #3: I mean, Ed and I looked at our numbers for the first half of the year—reflected on the year to go. You know, there's still five months to go.

Speaker #3: And clearly, we'll be able to update everybody in November on how we see the full year. But at this stage, given the volatility that we've seen, particularly on the cost side, it's great to be able to reaffirm what was pretty good guidance anyway.

Damian Gammell: At this stage, given the volatility that we've seen, particularly on the cost side, it's great to be able to reaffirm what was pretty good guidance anyway. That gives us a lot of excitement for H2.

Speaker #3: And, you know, that gives us a lot of excitement for the second half.

Speaker #6: All right. Thank you.

Bonnie Herzog: All right. Thank you.

Speaker #1: Our next question comes from the line of Lemon Hales. City.

Operator: Our next question comes from the line of Simon Hales, Citi.

Speaker #7: Oh, thanks. Hi, Damian. Hi, Ed. Hi, Sarah. Damian, I wonder if I could just sort of pick your brains a little bit further on your comments around, you know, the H2 guidance and potentially, you know, some of perhaps the prudence you're building in there.

Simon Hales: Thanks. Hi, Damian. Hi, Ed. Hi, Sarah. Damian, I wonder if I could just sort of pick your brains a little bit further on your comments around the H2 guidance and potentially some of perhaps the prudence you're building in there. I'm just still trying to square the circle because from everything you've said today, clearly Q3 has started strongly. Momentum is very good. It's obviously through June. That's continued into July and perhaps early August. We've got perhaps lower promo coming in Europe in H2. Generally, as you said, higher revenue per case, further cost efficiencies coming through. Yet overall comparable EBIT growth is expected to slow to probably around 6% and change in H2 to meet your guidance. You just flagged there your worries perhaps around some of the cost volatility we're seeing.

Speaker #7: I'm just still trying to square the circle, because, you know, from everything you've said today, clearly Q3 has started strongly. Momentum is very good.

Speaker #7: You know, it's obviously through June; that's continued into July and perhaps early August. We've got perhaps lower promo coming in Europe in H2. Generally, as you said, higher revenue per case, further cost efficiencies coming through.

Speaker #7: And yet overall, comparable EBIT growth is expected to slow to probably around 6% and change in H2 to meet your guidance. You just flagged there your worries, perhaps, around some of the cost volatility we're seeing.

Speaker #7: Are you really sort of being pretty conservative because of the higher COGS per case we're seeing in the second half? And is that really driven by what you're seeing out of the Middle East in particular?

Simon Hales: Are you really being pretty conservative because of the higher COGS per case we're seeing in H2, and is that really driven by what you're seeing out of the Middle East in particular? I'm just trying to get a bit more of a flavor as to what's driving that potential conservatism on your part.

Speaker #7: I'm just trying to get a bit more of a sense as to what's driving that potential conservatism on your part.

Speaker #3: Yeah, I mean, we look at the year in totals, Simon. I mean, I know everybody gets excited by quarters and, you know, the half-year outlook. When you take, you know, you take the first half and you deduct it from our guidance.

Damian Gammell: Yeah. We look at the year in total, Simon. I know everybody gets excited by quarters and the half-year outlook when you take H1 and you deduct it from our guidance. You guys do the numbers as well as if not better than us. I suppose really it just comes down to, we still have five big months. We still got to get through what is a really good summer for us in Europe, and we're excited about that. Then we move into spring, summer in our Australia, New Zealand businesses. It more reflects a kind of timeframe that we still have five, what we hope will be great months to go. That was it really. There's nothing specific. When we look at our hedging, we're in a good place. We look at our pricing, we're in a good place.

Speaker #3: I mean, you guys do the numbers as well as, if not better than, us. I suppose really it just comes down to, you know, we still have five big months.

Speaker #3: You know, we still have to get through what is a really good summer first in Europe, and we're excited about that. Then we move into spring and summer in our Australia and New Zealand businesses.

Speaker #3: So it more reflects a kind of timeframe—that we still have five, you know, what we hope will be great months to go. And that was it, really.

Speaker #3: I mean, there’s nothing specific when we look at our hedging. We’re in a good place. We look at our pricing. We’re in a good place.

Speaker #3: We would like to see a little bit more NSR per case progression in the second half. You know, we're clearly working on that with our commercial teams.

Damian Gammell: We would like to see a little bit more NSR per case progression in H2. We're clearly working on that with our commercial teams. From a listings perspective, we're in good shape. Yeah, there's a lot to be positive about. We just felt with five months to go, sticking to our guidance is probably the best decision at the moment. Then obviously, should that change, we'll update it as we go through the year anyway as normal. Yeah, nothing specific. More really that we felt we're just halfway through the game. Yeah, maybe we are a little bit conservative, but maybe that's our way a little bit. I don't know, Ed, do you want to comment?

Speaker #3: From a listings perspective, we're in good shape. Yeah, so there's a lot to be positive about. We just felt with five months to go, you know, sticking to our guidance is probably the best decision at the moment.

Speaker #3: And then, obviously, should that change, we'll update it as we go through the year anyway, as normal. So yeah, nothing specific—more really that we felt we're just halfway through the game.

Speaker #3: Yeah, maybe we are a little bit conservative, but, you know, that's—yeah, maybe that's our way a little bit. I don't know. Ed, do you want to come on?

Speaker #5: Well, maybe just one

Ed Walker: Well, maybe just one point to add. We have to remember, of course, that there were more selling days in H1 than H2. When we look at our reported revenue and our reported profit, they reflect that. Obviously that means a few less selling days in H2. That's all as per our plan and how we anticipated the year would roll out at the beginning of the year. I think on the Middle East, as you mentioned, Nat, we're in a good place in terms of our coverage for the year, but the majority of the costs will fall in H2. That's all built into our guidance.

Speaker #2: A point to add: We have to remember, of course, that there were more selling days in the first half than in the second half. So, when we look at our reported revenue and our reported profit, they reflect that.

Speaker #2: So, obviously, that means a few less selling days in the second half. But that's all as per, you know, our plan and how we anticipated the year would roll out at the beginning of the year.

Speaker #2: I think on the Middle East, as you mentioned that, I mean, we're in a good place in terms of our coverage for the year.

Speaker #2: But the majority of the costs will fall in the second half. That's all built into our guidance. But obviously, given the timing of that and given we're always a little bit more hedged in the near term than the midterm, we will see more of that cost in the second half.

Ed Walker: Obviously given the timing of that and given we're always a little bit more hedged in the near term than the midterm, we will see more of that cost in the H2. Of course, the Middle East itself is still an open item in terms of how it really affects all of us the rest of the year. Just a couple of points there that might help, Simon.

Speaker #2: And of course, the Middle East itself is still an open item in terms of how it really affects all of us for the rest of the year.

Speaker #2: So, just a couple of points there that might help, Simon.

Speaker #7: Brilliant. Thanks, guys.

Simon Hales: Brilliant. Thanks, guys.

Speaker #1: Our next question comes from the line of Andrea Pistachi, Bank of America.

Operator: Our next question comes from the line of Andrea Pistacchi, Bank of America.

Speaker #8: Yes, thank you. I have a question on Indonesia, please, which delivered a strong quarter, albeit against a pretty easy comparison base. Is there anything in the performance of this quarter and the previous ones that really is maybe increasing your confidence that the turnaround is gaining traction beyond the comp effects?

Andrea Pistacchi: Yes. Thank you. I have a question on Indonesia, please, which delivered a strong quarter, albeit against a pretty easy comparison base. Is there anything in sort of the performance of this quarter and the previous ones that really is maybe increasing your confidence that the turnaround is gaining traction beyond the comp effects? Do you think now Indonesia is in a situation where it can start sustaining positive volume growth?

Speaker #8: And do you think now Indonesia is in a situation where it can start sustaining positive volume growth?

Speaker #3: Yeah, great, great question. We're really excited about Indonesia for the near and long term, obviously, just given some of the macros that we all know about.

Damian Gammell: Yeah. Great question. We're really excited about Indonesia for the near and long term, obviously just given some of the macros that we all know about. I think when we look at our business, we started the year off with a great festive. That's continued into Q2. Couple of drivers of that, one is structural. We've spent some time reorganizing our route to market and moving to a more efficient distributor model. We firmly believe that's a driver of growth for long term. We've brought more innovation, whether it's on the mint side with Sprite or on Powerade, that's definitely driving growth. Our underlying performance on sparkling is actually better. When you look at the consolidated number, within that, there's still a little bit of weakness on tea. That's something that we need to deal with as we get through H2 of this year.

Speaker #3: I think when we look at our business, we started the year off with a great festive, you know, that's continued into Q2. A couple of drivers of that.

Speaker #3: One is structural. I mean, we've spent some time reorganizing our route to market and moving to a more efficient distributor model. We firmly believe that's a driver of growth for the long term.

Speaker #3: We've brought more innovation, whether it's on the mint side with Sprite or on Parade. You know, that's definitely driving growth. Our underlying performance on sparkling is actually better.

Speaker #3: So, when you look at the consolidated number within that, there's still a little bit of weakness on tea. And that's something that we, you know, we need to deal with as we get through the second half of this year.

Speaker #3: But what that really shows is where we've been focused, which is on our sparkling portfolio. That's continued to go from strength to strength by quarter.

Damian Gammell: What that really shows is where we've been focused, which is on our sparkling portfolio, that's continued to go from strength to strength by quarter. Yeah, a lot of moving parts in Indo. I think, while we're super excited, we're very happy with the route to market change. I'm particularly pleased for our team in Indo. They've been working through a lot of change. It's great for them to see the positives, particularly on sparkling month after month, quarter after quarter. We expect that to continue through H2 and then into 2027. Obviously our objective for that business that it does become a consistent driver of revenue volume for CCEP. We're starting to see that this year. Clearly we can update as we get into next year. Yeah. Definitely too early to talk about success.

Speaker #3: So yeah, a lot of moving parts in Indo. So I think, you know, while we're super excited, we're very happy with the route-to-market change.

Speaker #3: I'm particularly pleased for our team in Indo. I mean, they've been working through a lot of change. It's great for them to see, you know, the positives—particularly on sparkling—month after month, quarter after quarter.

Speaker #3: So we expect that to continue through half two, and then into 2027. So, you know, obviously our objective for that business is that it does become a consistent driver of revenue and volume for CCEP.

Speaker #3: We're starting to see that this year, and clearly we can update as we get into next year. But, you know, it's definitely too early to talk about success.

Speaker #3: I would say it's great to talk about progress, and that's where we are at the moment.

Damian Gammell: I would say it's great to talk about progress, and that's where we are at the moment.

Speaker #8: Thanks. Can I squeeze in, please, a very quick follow-up on how the supply chain has coped with maybe the increased strain because of the incremental demand due to the weather?

Andrea Pistacchi: Thanks. Can I squeeze in, please, a very quick follow-up on how the supply chain has coped with maybe the increased strain because of the incremental demand because of the weather? Has there been any pressure on the cost base, maybe logistics or production, or have you coped with that normally? Thank you.

Speaker #8: Has there been any pressure on the cost base, maybe logistics or production? Or have you coped with that normally? Thank you.

Speaker #3: Yeah, I'd say the team—I mentioned it earlier. And a big callout to all our colleagues in Customer Service and Supply Chain. We've managed it really well.

Damian Gammell: Yeah. I'd say the team, I mentioned it earlier, and a big call-out to all our colleagues in customer service and supply chain. We've managed it really well. We've had to make some, I would say, short-term tactical decisions about prioritizing certain SKUs. We came into the summer with reasonably good inventories. Our customers usually have good inventories, so that buffer certainly helps us to manage the uplift we've seen, particularly in June and into July. Yeah, not without pressure, and I would say a lot of hard work. Nothing significantly impacting our cost base or anything like that. It's been really good to see that the team and our factories can respond to that uplift.

Speaker #3: I mean, we've had to make some, you know, I would say, short-term tactical decisions about prioritizing certain SKUs. We came into the summer with reasonably good inventories.

Speaker #3: Our customers usually have good inventories, so, you know, that buffer certainly helps us to manage the uplift we've seen, particularly in June and into July.

Speaker #3: So, yeah, not without pressure. And I would say a lot of hard work, but nothing significantly impacting our cost base or anything like that.

Speaker #3: It's been really good to see that the team and our factories can respond to that uplift.

Speaker #8: Thank you.

Andrea Pistacchi: Thank you.

Speaker #1: Our next question comes from the line of Chris Carey, Wells Fargo Securities.

Operator: Our next question comes from the line of Chris Carey, Wells Fargo Securities.

Speaker #5: Hi, everybody. Thank you for the question. I wanted to follow up on confidence levels around using pricing as a lever. Clearly, coming into 2026, this was a key strategy across the Coca-Cola system to drive improved or more balanced top-line growth with volume.

Chris Carey: Hi, everybody. Thank you for the question. I wanted to follow up on confidence levels around using pricing as a lever. Clearly coming into 2026, there was a key strategy across the Coca-Cola system to drive improved or more balanced top line growth with volume. You've talked about, in this call, providing consumers with the appropriate value and price points. As we look at 2027, it certainly does seem like inflation will be higher than it is in 2026, based on what we can see today with acceleration in the back half. How does this strategy in 2026 evolve into 2027? Can the pricing line continue to be as robust for you when you need it most, when inflation is rising? Or is there a step change in the thought process about how to manage these inflationary backdrops, say, relative to 2022 and 2023?

Speaker #5: You've talked about, in this call, providing consumers with the appropriate value and price points. But as we look at 2027, it certainly does seem like inflation will be higher than it is in 2026, based on what we can see today.

Speaker #5: With acceleration in the back half, how does this strategy in 2026 evolve into 2027? Can the pricing line continue to be as robust for you when you need it most, when inflation is rising, or is there a step change in the thought process about how to manage these inflationary backdrops, say, relative to 2022 and 2023?

Speaker #5: And I just wonder if you could maybe, one level down, talk about how you would view this in your Europe versus APS businesses as well.

Chris Carey: I just wonder if you could maybe one level down, talk about how you would view this in your Europe versus APS businesses as well. Thanks so much.

Speaker #5: Thanks so much.

Speaker #3: Yeah, thanks. So, it's a much more elastic consumer environment on pricing. I think that's quite different to a lot of other businesses in GPG. We're also more diversified than ever across categories and packs.

Damian Gammell: Yeah. Thanks, Chris. I'll let Ed give a more color. In terms of the fact that the 70%, I suppose, I mean, we're very fortunate when we look at the shape of our P&L. A high percentage of the revenues are outside of retail, so a lot of those replacements, away from home consumers. That gives us access to a much more elastic consumer environment on pricing. I think it's quite different to a lot of other businesses in CPG. We're also more diversified than ever across categories and packs. Again, when we look at pricing, it's a very, very segmented strategy. I think that gives us confidence that pricing will remain part of our mix story through 2026 and into 2027.

Speaker #3: So again, you know, when we look at pricing, it's a very, very segmented strategy. And I think that gives us confidence that pricing will remain part of our mix story through '26 and into 2027.

Speaker #3: So, similar environment in APS, albeit I would say we're focused on affordability, as you'd expect more in markets like Indonesia and the Philippines, where we just know out-of-pocket spend is under more pressure.

Damian Gammell: It's a similar environment in APS, albeit I would say we're focused on affordability, as you'd expect, more in markets like Indonesia and Philippines, where we just know out-of-pocket spends under more pressure. Ultimately we feel with that diversity and a segmented approach, we're in good shape for this year and next year. I don't know, Ed, do you want to?

Speaker #3: But ultimately, we feel, with that diversity and a segmented approach, we're in good shape for this year and next year. I don't know, Ed, do you want to?

Speaker #4: Yeah, I think you're absolutely right. I mean, if you look back over our history, we've managed successfully, I think, periods of low inflation and periods of high inflation.

Ed Walker: Yeah, I think you're absolutely right. I mean, if you look back over our history, we've managed successfully, I think, periods of low inflation and periods of high inflation. It will be a balanced approach, as you said, Chris. We're very conscious of the need for volume growth across the business and revenue per case growth. I think one of the strong things about CCEP is we have many levers to that pricing, whether it's the headline price. A lot of opportunity always to make our promotions work harder and be more efficient. Then as you look across the portfolio, many different packs and brands, which really lends ourselves to being able to take that very segmented approach. I think 2027 will be no different from any of the other years.

Speaker #4: It will be a balanced approach, as you said, Chris. You know, we're very conscious of the need for volume growth across the business and revenue, or case growth.

Speaker #4: I think one of the strong things about CCEP is, you know, we have many levers to that pricing, whether it's the headline price—a lot of opportunity always to make our promotions work harder and be more efficient.

Speaker #4: And then as you look across the portfolio, you know, many different packs and brands, which really lends yourself, lends ourselves to being able to take that very segmented approach.

Speaker #4: And I think '27 will be no different from any of the other years. It'll be a very carefully considered approach, and we'll look at what's the right thing from a consumer pricing perspective, from affordability.

Ed Walker: It'll be a very carefully considered approach and we'll look at what's the right thing from a consumer pricing perspective, from affordability, what's the right thing for the cash carry from a customer perspective, and of course, what do we need to do to cover our cost in our business, but also to invest in the future. I think we will see the same type of trends and the same type of activities as we've seen in previous years of maybe slightly higher inflation.

Speaker #4: What's the right thing for the category from a customer perspective? And of course, what do we need to do to cover our costs in our business, but also to invest in the future?

Speaker #4: So, I think we will see the same type of trends and the same type of activities as we've seen in previous years, with maybe slightly higher inflation.

Speaker #3: Yeah, and I think we're also leveraging innovation as well. I think a lot of the innovation you'll see coming through is from smaller pack sizes generating a higher revenue per case.

Damian Gammell: Yeah. I think we're also leveraging innovation as well. I think a lot of the innovation you'll see coming through smaller pack sizes, generating a higher revenue per case, commanding a bit more of a premium. There's more of that to come as we look at brands like BODYARMOR or what we do with Powerade, I talked about earlier. Obviously energy is mainly single serve, drives a nice revenue per case. To Ed's point, I think we've a lot of different levers beyond that kind of headline price element, but there will be some headline price as well. The combination of all of those gives us confidence that we can maintain a quality top line growth, which for us is really a little bit of price, mix, and volume. Also sustain margin expansion on the P&L, which we're obviously very focused on. Thank you.

Speaker #3: Commanding a bit more of a premium, and there's more of that to come as we look at brands like Bodyarmor, what we do with Powerade, or talked about earlier.

Speaker #3: Obviously, energy is mainly single-serve, drives a nice revenue per case. So, to Ed's point, I think we've got a lot of different levers beyond that kind of headline price element.

Speaker #3: But there will be some headline price as well. The combination of all of those gives us confidence that we can maintain quality top-line growth, which for us is really a little bit of price.

Speaker #3: Mix and volume, and also sustain margin expansion on the P&L, which we're obviously very focused on. Thank you.

Speaker #5: Thank you very much.

Chris Carey: Thank you very much.

Speaker #1: Our next question comes from the line of Sanjeet Aujla at UBS.

Operator: Our next question comes from the line of Sanjeet Aujla, UBS.

Speaker #6: Hey Damian, Ed. I just wanted to dig into your share trends across Europe. I think we started the year with some weaker momentum, particularly in Germany and France.

Sanjeet Aujla: Hey, Damian, Ed. I just wanted to dig into your share trends across Europe. I think we started the year with some weaker momentum, particularly in Germany and France. How have you seen your competitiveness develop through the course of the H1 period? Specifically on the away from home channel, I think volumes were only up 0.5%. Are there any parts of Europe where performance is lagging? I think there was a bit of momentum build last year, but has that faded a little bit this year? Or how would you assess your away from home performance in Q2? Thanks.

Speaker #6: How have you seen your competitiveness develop over the course of the half-year period? And specifically on the away-from-home channel, I think volumes were only up 0.5%.

Speaker #6: Are there any parts of Europe where performance is lagging? I think there was a bit of a momentum build last year, but has that faded a little bit this year, or how would you assess your away-from-home performance in Q2?

Speaker #6: Thanks.

Speaker #3: Thanks, Sanjeet. So, our share has improved, particularly in Europe as the years progress. We're actually seeing a slightly better volume share than value share.

Damian Gammell: Thanks, Sanjeet. Our share is improved, particularly in Europe, as the years progress. We're actually seeing a slightly better volume share than value share. That comes back to some of the points Ed talked about. We've seen some of our large PET initiatives pay off, particularly on Diet Coke. I'm a Diet Coke fan, so I want to call out Diet Coke, where we've seen that brand return to growth in GB. Our volume share is improving, and so is value share in Europe. As you see overall in NARTD, we gained share. In terms of away from home, I would say it's pretty consistent with last year. Obviously, revenue's doing a little bit better than volume. Across all of our markets, it's pretty consistent. Obviously, it's picked up a bit as the weather kicked in, particularly in June and into July.

Speaker #3: That comes back to some of the points Ed talked about. We've seen some of our large PET initiatives pay off, particularly on DICOC. So, I want to—I'm a DICOC fan, so I want to call it DICOC.

Speaker #3: We've seen that brand return to growth in GD, so our volume share is improving, and so is value share in Europe. And as you see overall in NARTD, we gained share.

Speaker #3: In terms of away-from-home, I would say it's pretty consistent with last year. Obviously, revenue is doing a little bit better than volume.

Speaker #3: Across all of our markets, it's pretty consistent. Obviously, it's picked up a bit as the weather kicked in, particularly in June and into July.

Speaker #3: Yeah, so nothing structural there. Obviously, it continues to be a channel where we've got to drive more availability, so our coolers are a big part of our away-from-home strategy.

Damian Gammell: Nothing structural there. Obviously, it continues to be a channel where we've got to drive more availability, so our coolers are a big part of our away from home strategy. We've got to manage, clearly, particularly down the trade. You'll see a bit more meal deals. You've seen that from some of our big customers, a bit more value from McDonald's. I think that just reflects what Ed talked to, that while we see the business being very resilient, we are conscious that some consumers still respond more to value, and that's also true in away from home. Two years now where we've seen growth in away from home, and we're really happy with that.

Speaker #3: And we've got to manage, you know, clearly, particularly down the trade, you'll see a bit more meal deals. You've seen that from some of our big customers.

Speaker #3: Bit more value from McDonald's. And I think that just reflects what Ed talked to a while ago. You know, we see the business being very resilient.

Speaker #3: We are conscious that some consumers still respond more to value, and that's also true in away-from-home. Yeah. But, you know, it's now two years where we've seen growth in away-from-home, and we're really happy with that.

Speaker #6: Great. Thank you.

Sanjeet Aujla: Great. Thank you.

Speaker #1: Our next question comes from the line of Richard Whittigen, Kepler Cheuvreux.

Operator: Our next question comes from the line of Richard Withagen, Kepler Cheuvreux.

Speaker #7: Yeah. Good afternoon, Damian, Ed, and Sarah. Thanks for the question. You mentioned promotions and promo spending a few times on the call today.

Richard Withagen: Yeah. Good afternoon, Damian, Ed, and Sarah. Thanks for the question. You mentioned promotions and promo spending a few times on the call today. I think also on previous calls you mentioned it. Can you perhaps quantify promo spending? Is there more optimization potential? What else in revenue and margin growth management are you focusing on to optimize?

Speaker #7: And I think also on previous calls, you mentioned it. Can you perhaps quantify promo spending? Is there more optimization potential? And, you know, what else in revenue and margin growth management are you focusing on to optimize?

Speaker #3: Yeah, there's always opportunity when I speak to my key account and commercial team. It's a big pot of money, you know, so I do think optimization has really improved.

Damian Gammell: Yeah. There's always opportunity when I speak to my key account and commercial team. It's a big pot of money. I do think optimization has really improved. We've done some good work using technology. We clearly understand what promos don't create value for us or our customers, what promos drive better household penetration. We will continue with that. I think beyond promo optimization, you'll probably see that a little bit in some of our markets, some of the promo depth is increasing. We see similar promos but at a slightly higher promotional price. Clearly, to Ed's point earlier, that will support some of that NSR growth through to H2. Beyond that, I think as I talked to earlier, our innovation plays a good role. It's mainly single serve. It's mainly more premium compared to large PETs.

Speaker #3: I mean, we've done some good work using technology. We clearly understand what promos don't create value for us or our customers, and what promos drive better household penetration.

Speaker #3: So, we will continue with that. I think, beyond promo optimization—and you'll probably see that a little bit in some of our markets—some of the promo depth is increasing.

Speaker #3: You know, so we see similar promos, but at a slightly higher promotional price. Clearly, to Ed’s point earlier, that will support some of that NSR growth through to the second half of the year.

Speaker #3: Beyond that, I mean, I think, you know, as I talked to earlier, our innovation plays a good role. It's mainly single-serve. It's mainly more premium compared to large PET.

Damian Gammell: A lot of it's on the go, which commands a higher price. Then within retail, we see opportunity, particularly, I'm just back from a visit to the US with Ed. You can really see how they've taken mini cans, small PET even further than we have in Europe. That's been a good part of our story, but when you visit markets like that, you can see how that can be even a bigger part of our story in Europe and in Australia. I think packaging, pack mix, pack innovation will be a bigger part of our RGM story going forward. Then clearly categories. When we look at sports, particularly POWERADE and Aquarius, they drive a much better mix for us.

Speaker #3: And a lot of it's on-the-go, which commands a higher price. And then within retail, we see opportunity, particularly—you know, I'm just back from a visit to the US with Ed.

Speaker #3: You know, you can really see how they've taken mini cans and small PET even further than we have in Europe. I mean, that's been, you know, a good part of our story.

Speaker #3: But when you visit markets like that, you can see how that can be even the bigger part of our story in Europe—and in Australia.

Speaker #3: So, I think packaging, pack mix, pack innovation will be a bigger part of our—and MGM's—story going forward. And then, clearly, categories.

Speaker #3: So, when we look at sports, particularly Powerade and Aquarius, you know, they drive a much better mix for us. And again, just referencing my North American trip, when you stand in front of a fixture in the US—and also, I would say in Australia—to our team's credit in Australia, they've just done a much bigger job on making Powerade and that whole sports category relevant.

Damian Gammell: Again, just referencing my North American trip, when you stand in front of the fixture in the US, also I would say in Australia, to our team's credit in Australia, they have just done a much bigger job on making Powerade and that whole sports category relevant. We see the growth in that in Europe, but there is a long way to go. It is a combination of that price promo optimization, pack mix optimization, and better category leverage. I think that gives us confidence, not just for 2027, but over the next number of years in Europe and in Australia and New Zealand.

Speaker #3: We see growth in that area in Europe, but there's a long way to go. So, it's a combination of price and promotion optimization, pack mix optimization, and better category leverage.

Speaker #3: And I think that gives us confidence, not just for '27, but, you know, over the next number of years in Europe, and in Australia and New Zealand.

Speaker #7: Thanks, Damian.

Richard Withagen: Thanks, Damian.

Speaker #1: Our next question comes from the line of Nadine Salwat, Bernstein.

Operator: Our next question comes from the line of Nadine Sarwat, Bernstein.

Speaker #5: Yes, hi. Thank you guys for taking my question. One for me, please. That 20,000 new coolers added is a pretty incredible number, and you referenced it quite a lot in a helpful manner in your prepared remarks.

Nadine Sarwat: Hi. Thank you guys for taking my question. One from me, please. That 20,000 new coolers added is a pretty incredible number, and you referenced it quite a lot in a helpful manner in your prepared remarks. Can you give us a sense of how this incremental cooler capacity is distributed across your geographies or channels? Just help us understand the ROI or incremental sales or positive mix generated by an investment like that in whatever way in terms of quantifying that you can. Thank you.

Speaker #5: Can you give us a sense of how this incremental cooler capacity is distributed across your geographies or channels, and just help us understand the ROI or incremental sales or positive mix generated by an investment like that, in whatever way in terms of quantifying that you can?

Speaker #5: Thank you.

Speaker #3: Thanks, Nadine. Great question. So actually, it's 80,000 coolers that we've done this year, and that was building on a significant increase as well last year.

Ed Walker: Thanks, Nadine. Great question. Actually, it's 80,000 coolers that we've done this year, and that was building on a significant increase as well last year. Yeah, we're very pleased with our progress on cooler placements. I would say it's fairly evenly balanced across our markets and actually pretty evenly balanced across channels, both in the home channel and away from home. We found lots more opportunities to place coolers, both Coke coolers and Monster coolers. From a finance perspective, they're some of the best investments we like to make. Every cooler is different depending on where you place it, but you can be looking at returns of certainly within a couple of years for a well-placed cooler. We give quite specific guidance to our sales teams in terms of what type of throughput we need to be seeing in order to generate the return.

Speaker #3: So, yeah, we're very pleased with our progress on cooler placements. I would say it's fairly evenly balanced across our markets, and actually pretty evenly balanced across channels, both in the home channel and away from home.

Speaker #3: We've found lots more opportunities to place coolers, both Coke coolers and Monster coolers. From a finance perspective, they're some of the best investments we like to make.

Speaker #3: Every cooler is different depending on where you place it. But you can be looking at returns certainly within a couple of years for a well-placed cooler.

Speaker #3: We give quite specific guidance to our sales teams in terms of what type of throughput we need to be seeing in order to generate the return.

Speaker #3: And then, if that throughput is delivered, you can be very comfortable with the return. And of course, we're starting to see more and more the use of connected coolers.

Ed Walker: If that throughput is delivered, then you can be very comfortable with the return. Of course, we're starting to see more and more the use of connected coolers, and that gives us great feedback on the number of purchases, what's the right distribution of products and brands, the right rates of sale that we should be seeing through those coolers. Again, another area where technology and AI is really giving us fantastic insight to make sure we put the right coolers of the right size in the right location. Certainly from a finance perspective, very happy with the returns we receive from our cold drink placements.

Speaker #3: And that gives us great feedback on the number of purchases, the right distribution of products and brands, and the right rates of sale that we should be seeing through those coolers.

Speaker #3: So again, another area where technology and AI are really giving us fantastic insight to make sure we put the right coolers, at the right size, in the right locations.

Speaker #3: But certainly, from a finance perspective, we're very happy with the returns we receive from our cold drink placements.

Speaker #5: Understood. Thank you. And one follow-up on that, actually. It clearly is meeting the consumer at a place where they want something cold and convenient.

Nadine Sarwat: Understood. Thank you. One follow-up on that, actually. It clearly is meeting the consumer at a place where they want something cold, they want something convenient. What does that say about underlying consumer dynamics today, single-serve versus multi-packs, and how are you expecting that to evolve over the coming years?

Speaker #5: What does that say about underlying consumer dynamics today—single serve versus multi-packs? And how are you expecting that to evolve over the coming years?

Speaker #3: Yeah, I mean, I think, you know, our single-serve business—particularly as we bring more flavor and innovation—is really robust. And it's something that, you know, we know our category is an impulse category, right?

Damian Gammell: Yeah, I think our single-serve business, particularly as we bring more flavor and innovation, is really robust and it's something that we know that our category is an impulse category, right? It's a huge benefit that if you put it in the right place and it's cold, it gets sold. That's been true for a long time in our business. It's also an area where you can get pricing elasticity. I think people realize and accept that for that convenience and for that immediate cold product, they'll pay a little bit more, which is good for us and for our customer. Typically, when you look at our beverages across our markets, while we have taken pricing, you can get a cold Coke in most of our markets for around a euro, EUR 1.50.

Speaker #3: So, it's a huge benefit that, if you put it in the right place and it's cold, it gets sold. And that's been true for a long, long time in our business.

Speaker #3: It's also an area where you can get price elasticity. So I think people realize and accept that for that convenience, and for that immediate cold product, they'll pay a little bit more—which is good for us and for our customer.

Speaker #3: And typically, when you look at our beverages across our markets, you know, while we have taken pricing, I mean, you can get a cold Coke in most of our markets for around a euro.

Speaker #3: A dollar fifty. So, while we do talk about pricing, the absolute spend to enjoy one of our products, you know, I would argue is always still very reasonable—let's put it that way.

Damian Gammell: While we do talk about pricing, the absolute spend to enjoy one of our products, I would argue, is always still very reasonable, let's put it that way.

Speaker #3: And then, on top of that, you've got categories like energy and sports that command a premium, and, you know, candelier distribution—particularly on sports—in away-from-home and cold is very low.

Damian Gammell: On top of that, you've got categories like energy and sports that command a premium. Candidly, our distribution, particularly on sports, in away from home and cold, is very low. That's something we've got to find a better way to unlock that opportunity.

Speaker #3: So that's something we've got to find a better way to unlock— that opportunity.

Speaker #2: I think it also says quite a bit about the customer. And the customer sees, you know, the value in the category overall, and that it's a great, you know, value creator for them from an outlet perspective.

Ed Walker: I think it also says quite a bit about the customer, and the customer sees the value in the category overall, and that it's a great value creator from them from an outlet perspective. We see increasing signs of the customer wanting to place more and more equipment and then give more and more space to soft drinks, which I think is a great thing for us, obviously.

Speaker #2: And so we see increasing signs of the customer wanting to place more and more equipment and give more and more space to soft drinks, which I think is a great thing for us, obviously.

Speaker #5: Fantastic. Thank you very much.

Nadine Sarwat: Fantastic. Thank you very much.

Speaker #1: Our next question comes from the line of Mitch Collette at Deutsche Bank.

Operator: Our next question comes from the line of Mitch Collett, Deutsche Bank.

Speaker #3: Hi Damian. Hi Ed. Hi Sarah. I enjoyed your third slide, the new one, so thank you for that. And there was a bullet on there about Kira, your agentic AI application.

Mitch Collett: Hi, Damian. Hi, Ed. Hi, Sarah. I enjoyed your third slide, the new one, thank you for that. There was a bullet on there about KIRA, your agentic AI application. You say that it gave you deeper brand insights and faster market decisions. I just wondered if you could give us any examples of those insights and decisions, and how do you expect that tool to develop and contribute to the business going forward? Thank you.

Speaker #3: And you say that it gave you deeper brand insights and faster market decisions. So, I just wondered if you could give us any examples of those insights and decisions.

Speaker #3: And how do you expect that tool to develop and contribute to the business going forward? Thank you.

Speaker #4: Yeah, thanks, Mitch. I mean, we have got a wealth of information as a system. I think that's a starting point, whether it's from our customers, from our own structured research, with the Coca-Cola Company, and Monster ePOS data.

Damian Gammell: Yeah, thanks, Mitch. We have got a wealth of information as a system. I think that's the starting point, whether it's from our customers, from our own structured research with The Coca-Cola Company and Monster, EPOS data. We really have a lot of information. Our challenge was trying to put that in a place where we could access it and use different sources to make better decisions. This is, I think, a challenge of many companies. KIRA really is our first big attempt to have an AI agent that sits above a lot of those sources, whether it's Nielsen, Kantar, EPOS information, brand information from The Coca-Cola Company. It is giving us a better understanding of how consumers respond to some of our initiatives, whether that's promo or new pack innovation. Clearly then that steers the next decision about where we prioritize resource.

Speaker #4: I mean, we really have a lot of information. Our challenge was trying to put that in a place where we could access it and use different sources to make better decisions.

Speaker #4: And this is, I think, you know, a challenge for many companies. So Kira really is our first big attempt to have an AI agent that sits above a lot of those sources, whether it's Nielsen, Kantar, ePOS information, or brand information from the Coca-Cola Company.

Speaker #4: And it is giving us a better understanding of how consumers respond to some of our initiatives, whether that's promo, our new pack innovation, and clearly then that steers the next decision about where we prioritize resource.

Speaker #4: So it's really allowing our commercial teams to ask the right question, get a very quick answer, and then bring that to our customers to shape, you know, whether it's space in a cooler, better promo pricing, or better innovation as we go forward.

Damian Gammell: It's really allowing our commercial teams to ask the right question, get a very quick answer, and then bring that to our customers to shape whether it's space in a cooler, better promo pricing, or better innovation as we go forward. I think we're at the beginning of that. We've also done some work with McKinsey on trying to look at how AI can sit above even more information, really consolidating a great data set from The Coca-Cola Company with what we have. I think, yeah, that's where KIRA kind of sits in the middle of that. Early days, but it's certainly amazing to see how what took weeks to try and get some correlation between Nielsen shopper panel or customer data is now happening a lot quicker. Yeah. Super exciting.

Speaker #4: So, I think we're at the beginning of that. I mean, we've also done some work with McKinsey on trying to look at how AI can sit above even more information.

Speaker #4: And really consolidating a great data set from the Coca-Cola Company with what we have. And I think, yeah, that's where Kira kind of sits in the middle of that.

Speaker #4: So, early days, but, you know, it’s certainly amazing to see how, you know, what took weeks to try and get some correlation between Nielsen shopper panel or customer data is now happening a lot, lot quicker.

Speaker #4: Yeah. So super exciting.

Speaker #3: Thank you.

Mitch Collett: Thank you.

Speaker #1: Our next question comes from the line of Eric Sarota at Morgan Stanley.

Operator: Our next question comes from the line of Eric Serotta, Morgan Stanley.

Speaker #6: Great. Good afternoon, everyone. Two quick ones. First, Damian, back in Manila, you talked about the potential for the upside in improving core sparkling volumes in Europe.

Eric Serotta: Great. Good afternoon, everyone. Two quick ones. First, Damian, back in Manila, you talked about the potential upside for improving core sparkling volumes in Europe. Looks like you made some progress in terms of Diet Coke and Light in a couple markets. Original Taste seemed a little on the soft side, but even taking sort of a step back from the quarter-to-quarter volatility, could you talk about your progress and your confidence in achieving that core sparkling volume improvement in Europe since we heard from this a little over a year ago? Then a quick one for Ed. Usually around this time, around mid-year, you're typically about 50% hedged on commodities for the following year. Where do you guys stand today? Are you a little bit less because of maybe elevated prices earlier in the year, or were there some opportunities given the forward curves on commodities?

Speaker #6: Looks like you made some progress in terms of Diet Coke and Light in a couple of markets. Original Taste seemed a little on the soft side.

Speaker #6: But even taking sort of a step back from the quarter-to-quarter volatility, could you talk about your progress and your confidence in achieving that core sparkling volume improvement in Europe?

Speaker #6: You know, since we heard from this a little over a year ago. And then a quick one for Ed. Usually, around this time—around mid-year—you’re typically about 50% hedged on commodities for the following year.

Speaker #6: Where do you guys stand today? Are you a little bit less because of, you know, maybe elevated prices earlier in the year or were there some opportunities given the forward curves on commodities?

Speaker #6: Thanks so much.

Eric Serotta: Thanks so much.

Speaker #3: Yeah. Thanks, Eric. Good memory back to our Manila meeting. Yeah. So we have, you know, seen sparkling volumes grow in Europe. And I think that's been great.

Damian Gammell: Yeah. Thanks, Erik. Good memory back to our Manila meeting. Yeah. We have seen sparkling volumes grow in Europe, and I think that has been great. It has been led by zeros with Europe over 10%. You are absolutely right. The brand that has not grown volume has really been Coca-Cola Classic, and we have talked about that, and I think there is a couple of factors at play. Obviously, people are enjoying great-tasting zero sugar options, particularly Coca-Cola Zero, but now Diet Coke, which is great. On a consolidated level, we can grow our Coca-Cola trademark franchise and volume, and that for us is really important. Coca-Cola Classic is still the best-tasting brand, so we still see that performing, and it is still growing revenue. While on a volume level it is off a little bit, it is growing revenue.

Speaker #3: It's been led by zeros, which in Europe, you know, is over 10%. You're absolutely right. The brand that hasn't grown volume has really been Coke Classic.

Speaker #3: And we've talked about that. And I think there are a couple of factors at play. Obviously, people are enjoying great-tasting zero sugar options, particularly Coke Zero, but now Diet Coke, which is great.

Speaker #3: So, on a consolidated level, we can grow our Coke trademark franchise and volume. And that, for us, is really important. Coke Classic is still, you know, the best-tasting brand.

Speaker #3: So we still see that performing. And it's still growing revenue. So while on a volume level, it's off a little bit, it is growing revenue.

Speaker #3: And I think that will continue as we have, as I mentioned earlier, mini cans, you know, probably smaller portions around our classic variants, both Coke and Fanta.

Damian Gammell: I think that will continue as we have, as I mentioned earlier, mini cans, probably smaller portions around our classic variants, both Coca-Cola and Fanta, and clearly a better zero proposition. The category is growing. It will be led by zeros. We see that gaining momentum both in energy and in soft drinks. As we have reformulated, we are now really in a solid position to take that forward. Also fair to say to Coca-Cola Classic, when you look at in the shorter period, we did have the sugar tax increase in France, and clearly that was mainly on Coca-Cola Classic, and that obviously impacts volume in the short term. We generally cycle out of that through the year. Yeah. Overall, great to see the category, sparkling category in growth, and great to see it led by zeros.

Speaker #3: And clearly a better zero proposition. So the category is growing. It will be led by zeros. We see that gaining momentum both in energy and in soft drinks.

Speaker #3: And as we've reformulated, we're now really in a solid position to take that forward. Also, fair to say, the Coke Classic you know, when you look at in the shorter period, we did have the sugar tax increase in France.

Speaker #3: And clearly that was mainly on Coke Classic. And that obviously impacts volume in the short term. But we, you know, we generally cycle out of that through the year.

Speaker #3: Yeah. But overall, great to see the category sparkling category and growth. And great to see it led by zeros. And I've just passed the call to Ed on your second question.

Damian Gammell: I will just pass the call to Ed on your second question.

Speaker #2: Yeah. Thank you, Eric. So yes, as you say, we aim to be 80% covered by the time we start the coming year. We don't give specific guidance at this stage in terms of the year coming at where we are at the half-year point.

Ed Walker: Yeah. Thank you, Erik. Yes, as you say, we aim to be 80% covered by the time we start the coming year. We do not give specific guidance at this stage in terms of the year coming at where we are at the half-year point, but we aim to build it up fairly evenly over the year. As you say, 50% is probably a reasonable approximation. We have not delayed any of our hedging activity this year despite the Middle East, because obviously we try to avoid, or we do avoid speculation, and we do the hedging to give us certainty, in terms of as far as possible on costs for the coming year. Although the forwards are higher, I think what we have seen through the Middle East crisis is quite a lot more volatility on individual commodity prices.

Speaker #2: But we aim to build it up fairly evenly over the year. So, as you say, 50% is probably a reasonable approximation. We haven't delayed.

Speaker #2: Any of our hedging activity this year, despite the Middle East, because obviously we try to avoid or we do avoid speculation. And we do the hedging to give us certainty in terms of as far as possible on cost for the coming year.

Speaker #2: Although the forwards are higher, you know, I think what we have seen through the Middle East crisis is quite a lot more volatility on individual commodity prices.

Speaker #2: So, we have locked in what I think are some good, competitive rates for next year already. But we haven't, overall, delayed our hedging program just as a result of the Middle East.

Ed Walker: We have locked in what I think are some good competitive rates for next year already. We haven't overall delayed our hedging program just as a result of the Middle East.

Eric Serotta: Great. Thank you so much. I'll pass it on.

Speaker #6: Great, thank you so much. I'll pass it on.

Speaker #1: Our next question comes from the line of Laurent Lieberman at Barclays.

Operator: Our next question comes from the line of Lauren Lieberman, Barclays.

Speaker #7: Great, thanks. Good morning. I wanted to just talk for a second about the "more customers" element of your strategic priorities. There were a couple of call-outs in the release.

Lauren Lieberman: Great. Thanks. Good morning. I wanted to just talk for a second about the quote, "more customers" element of your strategic priorities. There were a couple called out in the release, but it's interesting to think about the range of large customers that would be directly linked to KO-level conversations like Marriott versus things that are more specific to your markets. I was curious if you could talk a little bit about that process and maybe how much of this more customers do you think of as being CCEP-specific, things that are driven by your ability to cover more accounts with the productivity you're finding in your sales force versus big global strategic partnerships. Thanks.

Speaker #7: But it's interesting to think about the range of large customers that would be directly linked to, you know, KO-level conversations like Marriott, versus things that are more specific to your markets.

Speaker #7: So I was curious if you could talk a little bit about that process and how much of this, you know, more customers do you think of as being CCEP specific, things that are driven by your ability to cover more accounts with the productivity you're finding in your sales force, versus big global strategic partnerships.

Speaker #7: Thanks.

Speaker #3: Yeah. Hi, Laurent. It's mainly within CCEP's control and mandate. We won a lot of new business, both small and large. We won businesses in the event space.

Damian Gammell: Yeah. Hi, Lauren. It's mainly within CCEP's control and mandate. We won a lot of new business, both small and large. We won businesses in the event space. I talked about football. We won the biggest local chain in Spain, in terms of pizza and food to go, Domino's in Australia. Clearly we leverage any global relationship we can get with The Coca-Cola Company, but the majority of the outlets are very local. We're very focused on that. You see a lot of multiple buying groups, particularly in Europe and Australia, where they have 10 to 12 outlets, and they're exciting. Obviously, a win like Marriott lifts all boats. When The Coca-Cola Company shared that news, it was fantastic for us, 600 hotels. I think globally, when you look at our global franchise partners through The Coca-Cola Company are very strong already.

Speaker #3: I talked about football. We won, you know, the biggest local chain in Spain. In terms of pizza and food to go, Domino's in Australia.

Speaker #3: So clearly we leverage any global relationship we can get with the Coca-Cola company. But, you know, the majority of the outlets are very local.

Speaker #3: And we're very focused on that. You see a lot of multiple buying groups, particularly in Europe and Australia, where they have 10 to 12 outlets.

Speaker #3: And they're exciting. Obviously, a win like Marriott lifts all boats. So when the Coca-Cola company shared that news, it was fantastic for us. 600 hotels.

Speaker #3: And I think globally, when you look at, you know, our global franchise partners through the Coca-Cola company are very strong already. So I would say the upside for us, we'll always welcome a gift from Atlanta if they can land one of the big global ones.

Damian Gammell: I would say the upside for us, we'd always welcome a gift from Atlanta if they can land one of the big global ones. Really for us, it's in our control, and it's mainly local chains. Our share and away from home is quite high relative to retail, but that doesn't mean we don't have opportunities, and we'll keep picking up new customers and new business as we go through this year.

Speaker #3: But really for us, it's in our control. And it's mainly local chains, our share and away from home, is quite high relative to retail.

Speaker #3: But that doesn't mean we don't have opportunities. And we'll keep picking up new customers and new business as we go through this year.

Speaker #7: Okay. Great. Thanks so much.

Ed Walker: Okay, great. Thanks so much.

Speaker #1: Our next question comes from the line of Charlie Hicks, Rothschild & Co. Redburn.

Operator: Our next question comes from the line of Charlie Higgs, Rothschild & Co Redburn.

Speaker #4: Yeah. Hi, Damian. Ed, hope you're well. And also wanted to say happy birthday to CCEP for 10 years and a quarter. Hope it was a good party.

Charlie Higgs: Yeah. Hi, Damian, Ed. Hope you are well. Also want to say happy birthday to CCEP for 10 years in the quarter, and hope it was a good party. On that note, I was wondering if we look back over the last 10 years in Europe specifically, there has been a lot of volatility at the macro level, sugar taxes and whatnot, and yet CCEP Europe has still delivered very resilient 4% or so organic sales growth per annum. It seems like a lot of the themes in the presentation today is about really dialing up the execution at a local level with KO, more cooler placements, more customers, bigger, stronger innovations. How should we think about the growth set up for Europe going forward?

Speaker #4: And on that note, I was wondering, if we look back over the last 10 years in Europe specifically, there's been a lot of volatility at the macro level.

Speaker #4: Sugar taxes and whatnot. And yet CCEP Europe has still delivered very resilient 4% or so organic sales growth per annum. And then, it seems like a lot of the themes in the presentation today are about really dialing up the execution at the local level with Kayo, more cooler placements, more customers, bigger, stronger innovations.

Speaker #4: So how should we think about the growth setup for Europe going forwards? And I guess where I'm coming from is, why isn't the European guidance more like 3% to 4% over the medium term rather than the 2% to 3%?

Charlie Higgs: I guess where I am coming from is why isn't the European guidance more like 3% to 4% over the medium term rather than the 2% to 3%? Thank you.

Speaker #4: Thank you.

Speaker #3: Thanks, Charlie. Well, thank you for the birthday wishes. We're all very busy during the summer. We had a little bit of a party. Yeah.

Damian Gammell: Thanks, Charlie. Well, thank you for the birthday wishes. We are all very busy during the summer, but we had a little bit of a party. Yeah, Europe, since we created CCEP, has been a massive value creator compounding year-on-year. We see that continuing. Obviously, we look at guidance on the midterm, and as we look at the group guidance around that 4% revenue, to your point, that implies Europe around 2% to 3%. Yeah, we think on a steady state, that is a good number. If we can do better than that, obviously we will. Within that, we have factored in that transition from classic to more zero. That is accelerating, and we see that we are benefiting from that this year. Yeah, we will review guidance as we get more visibility on innovation with The Coca-Cola Company and Monster for Europe as we go into 2027.

Speaker #3: I mean, Europe, since we created CCEP, has been a massive value creator, compounding year on year. And we see that continuing. I mean, obviously, we look at guidance on the midterm, and as we look at the group guidance around that 4% revenue, to your point, that implies Europe around 2% to 3%.

Speaker #3: Yeah. And we think, on a steady state, that's a good number. If we can do better than that, obviously we will. Within that, we have factored in that transition from Classic to more Zero.

Speaker #3: That's accelerating. And we see that we're benefiting from that this year. Yeah. And we'll review guidance as we get more visibility on innovation with the Coca-Cola company and Monster for Europe.

Speaker #3: As we go into 2027. But I think, overall, that range of 2% to 3% is a good number. That leads to the 4% for the group.

Damian Gammell: I think overall, that range of 2% to 3% is a good number, leads to the 4% for the group. Obviously, your next question would be, if we did change Europe, would we change the group? Clearly we want to manage all that within our current framework. Yeah, happy to stick to the 2% to 3% for Europe. Yeah. Thanks, Charlie.

Speaker #3: Obviously, your next question would be if we did change Europe, would we change the group? And clearly we want to manage all that within our current framework.

Speaker #3: But yeah, happy to stick to the 2% to 3% for Europe. Yeah, thanks, Charlie.

Speaker #4: Thank you.

Charlie Higgs: Thank you.

Speaker #1: Our next question comes from the line of Robert Ottenstein with Evercore ISI.

Operator: Our next question comes from the line of Robert Ottenstein, Evercore ISI.

Speaker #5: Great. Thank you very much. Damian, at this point, you've managed through a number of the FIFA World Cups. And so I was wondering if you could reflect on how the execution, the stuff that we don't see, but kind of the nuts and bolts that goes into success has changed over prior World Cups, whether it's coordination with the Coca-Cola company, dealing with more social media now, more agility, changing things on the run.

Robert Ottenstein: Great. Thank you very much. Damian, at this point, you've managed through a number of the FIFA World Cups. I was wondering if you could reflect on how the execution, the stuff that we don't see, but the kind of the nuts and bolts that goes into success has changed over prior World Cups, whether it's coordination with The Coca-Cola Company, dealing with more social media now, more agility, changing things on the run, just some of the things underneath the hood that we just can't see. Love you to reflect on that. Just one small question, just sort of coming into work today. I saw a headline about possible tax changes in Philippines on CSDs. Maybe give some context. I don't know if that's a special thing or something that was expected. Thank you.

Speaker #5: Just some of the things underneath the hood that we just can't see. Love you to reflect on that. And then just one small question, just sort of coming into work today.

Speaker #5: So a headline about possible tax changes in the Philippines, on CSDs. Maybe give some context. I don't know if that's a special thing or something that was expected.

Speaker #5: Thank you.

Speaker #3: Thanks, Robert. I mean, I think and obviously you listened in, obviously, on the Kayo side. I mean, it was the biggest feedback activation globally.

Damian Gammell: Thanks, Robert. I think, obviously you listened in, obviously on the KO side. It was the biggest FIFA activation globally. Certainly, CCEP played a big part on that. It's always been a big event for us, but I think there was something very special about this year. I think it was mainly in the space of digital, and being able to drive more transactions with FIFA. I think Manolo and the team, both in Atlanta and locally in Europe, really focused on making FIFA a transaction event. We obviously had the Panini initiative, which was huge in Europe. We had a lot of opportunities for our consumers to engage on pack. That was quite different to previous FIFAs. I think overall, that led us to be able to activate more cases on the floor, et cetera. Also, you mentioned speed.

Speaker #3: Certainly, CCEP played a big part in that. It's always been a big event for us, but I think there was something very special about this year.

Speaker #3: And I think it was mainly in the space of digital and being able to drive more transactions with FIFA. I think Manolo and the team, both in Atlanta and locally in Europe, really focused on making FIFA transaction events.

Speaker #3: We obviously had the Panini initiative, which was huge in Europe. We had a lot of opportunities for our consumers to engage on-pack. That was quite different to previous FIFAs.

Speaker #3: Yeah. And I think overall, that led us to be able to activate more cases on the floor, et cetera. Also, you mentioned speed. I mean, I think the goal can coming out so quick for Spain.

Damian Gammell: I think the Gold Can coming out so quick for Spain, again, that just shows how as a system and as a business, we're able to move fast, make fast decisions, and be prepared. We had a number of Gold Cans ready just in case. I won't name the ones that didn't make it, clearly, we're happy Spain, given it's one of our key markets, made it. Probably the digital tech and social engagement, Robert, would be what I'd call out as being at a very, very high level compared to previous FIFAs.

Speaker #3: I think again, that just shows how as a system and as a business, we're able to move fast, make fast decisions, and be prepared.

Speaker #3: With a number of goal cans ready, just in case. I won't name the ones that didn't make it. But clearly, we're a happy Spain, given it's one of our key markets that made it.

Speaker #3: So probably the digital tech and social engagement, Robert, would be what I'd call out as being at a very, very high level compared to previous FIFAs.

Ed Walker: On the sugar tax, there is some stuff in the media today. I think we need a bit of time to go through that. I think if you take a step back, though, we're well used to dealing with tax changes across all of our markets. If you look last year, we had the France sugar tax, which had some impact within the year. As a good example, in Q2, we were back into volume growth in France. I think when you look across our portfolio with the number of packs and brands that we have and our RGM capability, we're in a good position to be able to manage the impact of those types of tax changes as they come. We'll do a bit more digging on what's actually proposed for the Philippines and reflect on that for our plans for 2025.

Speaker #2: I mean, on the sugar tax—I mean, there is some stuff in the media today. I think we need a bit of time to go through that.

Speaker #2: I think if you take a step back, though, we're well used to dealing with tax changes across all of our markets. If you look at last year, we had the France sugar tax, which had some impact within the year.

Speaker #2: But as a good example, in Q2, we were back into volume growth in France. I think when you look across our portfolio, with the number of packs and brands that we have, and our R&MGM capability, we're in a good position to be able to manage the impacts of those types of tax changes as they come.

Speaker #2: So we'll do a bit more digging on what's actually proposed for the Philippines. And reflect on that for our plans for 2027.

Damian Gammell: Yeah. We already have a tax in the Philippines.

Speaker #3: Yeah. And we already have a tax in the Philippines. It's an excise tax. So it's across all beverages, sugar, and sweeteners. So that's already in place, Robert.

Ed Walker: Yeah.

Damian Gammell: It's an excise tax, so it's across all beverages, sugar, and sweeteners. That's already in place, Robert. Let's see what changes they propose to that as well.

Speaker #3: So, let's see what changes they propose to that as well.

Operator: Our last question for today comes from the line of Carlos Laboy, HSBC.

Speaker #1: Our last question for today comes from the line of Carlos Lavoie, HSBC.

Speaker #6: Yes. Hello, everyone. Thank you. Damian, I was hoping you could follow up a little bit on Lauren's question. What has changed that is helping you drive recruitment of more customers better?

Carlos Laboy: Yes. Hello, everyone. Thank you. Damian, I was hoping you could follow up a little bit on Lauren's question. What has changed that is helping you drive recruitment of more customers better? Is it an internal mindset? Is it that you have new tools that allow you to crack the code on these opportunities better? Is this something that you think can continue to drive growth in your client base going forward?

Speaker #6: Is it an internal mindset? Is it that you have new tools that allow you to crack the code on these opportunities better? And is this something that you think can continue to drive growth in your client base going forward?

Speaker #3: Yeah, thanks, Carlos. I mean, it's something that's been a consistent part of our story at CCEP. I mean, I think probably a couple of years ago, we talked about having a bolder view on the away-from-home market.

Damian Gammell: Yeah. Thanks Carlos. It's something that's been a consistent part of our story at CCEP. I think probably a couple of years ago, we talked about having a bolder view on the away-from-home market. That market had been in decline for a while, we talked about not being passive about that and actually working across a number of areas to drive growth in away from home, including customer wins. One pillar was customer wins. The second pillar, which we talked about, was cooler placement, to drive more availability in that space. The third element was leveraging our consumer assets better to drive transactions, I talked of FIFA doing that as well. Clearly, as we broaden our portfolio, we become a very compelling partner for customers.

Speaker #3: I mean, that market had been in decline for a while. And we talked about not being passive about that, and actually working across a number of areas to drive growth in away-from-home, including customer wins.

Speaker #3: So one pillar was customer wins. The second pillar, which we talked about, was cooler placement. So to drive more availability in that space. And the third element was leveraging our consumer assets better to drive transactions.

Speaker #3: And I talked to FIFA; they've been doing that—FIFA doing that as well. Clearly, as we broaden our portfolio, we've become a very compelling partner.

Speaker #3: For customers. We bring to all of them a hydration platform, a leading energy platform. Clearly, the leading CSD portfolio. And then obviously, we're looking at bringing more innovation in sports and hydration.

Damian Gammell: We bring to all of them a hydration platform, a leading energy platform, clearly the leading CSD portfolio, obviously we're looking at bringing more innovation in sports and hydration. When you look at NARTD, there's no one really with the breadth of portfolio that we can bring. There's a lot of companies with individual strengths in different segments. I think that's definitely compelling, Carlos. I think the more we talk to that total portfolio and the category opportunity, the more it plays into customers' needs for profit and growth. Typically, they earn good margin on our products, particularly in out of home. Obviously, as businesses become tougher with rates or with inflation around labor, selling a category that generates good margin definitely makes life a little bit easier for our sales force. Yeah, probably a combination of all those elements.

Speaker #3: So when you look at NARTD, there's no one really with the breadth of portfolio that we can bring. There's a lot of companies with individual strengths in different segments.

Speaker #3: I think that's definitely compelling, Carlos. And I think the more we talk to that total portfolio, and the category opportunity, the more it plays into customers' needs for profit and growth.

Speaker #3: And typically, they earn good margin on our products, particularly out of home. And obviously, as businesses become tougher with rates or with inflation around labor, selling a category that generates good margin definitely makes life a little bit easier for a sales force.

Speaker #3: So yeah, probably a combination of all those elements. It's always been part of our story. It's always been a passionate part of our business that we want to onboard a lot more customers.

Damian Gammell: It's always been part of our story. It's always been a passionate part of our business that we want to onboard a lot more customers. That's definitely true in the Philippines, Indonesia. We're having a lot of customer wins in Australia, and also in Europe. Yeah. Happy to be able to talk to it today.

Speaker #3: That's definitely true in the Philippines, Indonesia, we're having a lot of customer wins in Australia. And also in Europe. Yeah. So happy to be able to talk to it today.

Speaker #6: Thank you.

Carlos Laboy: Thank you.

Speaker #1: Thank you. I would now like to hand the conference back over to Damian Gammell for his closing remarks. Damian, please go ahead.

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

Speaker #3: Thanks, Mel. And a big, big thank you to everybody who joined us this morning or this afternoon. So as Ed and I talked to, strong first half.

Damian Gammell: Thanks, Mel. A big thank you to everybody who joined us this morning or this afternoon. As Ed and I talked to, strong H1, and very happy that today we're reaffirming our full year guidance. We are very pleased with the progress against our strategic priorities, as we've outlined today. Also pleased with the start of H2, and I think the strength of our business demonstrates resilience and the consistency of our growth model. We do look forward to speaking to you again at Q3. In the meantime, I hope everybody can get a break and enjoy a great summer, ideally in one of our markets, and obviously enjoy a nice cold beverage from one of our new coolers. Thank you very much, and have a great rest of the day. Thank you.

Speaker #3: And very happy that today we're reaffirming our full-year guidance. We are very pleased with the progress against our strategic priorities as we've outlined today.

Speaker #3: Also pleased with the start of half two. And I think the strength of our business demonstrates resilience and the consistency of our growth model.

Speaker #3: We do look forward to speaking to you again at Q3. In the meantime, I hope everybody can get a break and enjoy a great summer.

Speaker #3: Ideally, in one of our markets. And obviously, enjoy a nice cold beverage from one of our new coolers. So thank you very much. And have a great rest of the day.

Speaker #3: Thank you.

Operator: That concludes our conference for today. Thank you for participating. You may all disconnect.