Coca-Cola Europacific Partners (NASDAQ:CCEP) reported what management called a record year across key financial metrics in its Q4 and full-year 2025 trading update, citing continued execution in core non-alcoholic ready-to-drink (NARTD) categories, growing mix contribution, and ongoing productivity initiatives.
Full-year 2025: record revenue, profit, and cash flow
CCEP CEO Damian Gammell said 2025 was “another strong year,” with record revenue, profit, free cash flow, and returns. He highlighted volume growth in both at-home and away-from-home channels and pointed to “strong growth in zeros,” up around 6%, as well as share gains in key categories. Gammell also noted portfolio changes and softer trends in certain markets, including Indonesia and volumes in Germany and France, with France impacted by a higher sugar tax.
Operating profit rose to EUR 2.8 billion, up 7.1%, on an operating margin of 13.4%, an expansion of around 50 basis points. Earnings per share were EUR 4.11, up 6.2% on a comparable basis, with buybacks providing accretion but offset by a higher effective tax rate and higher interest expense as debt is refinanced at higher rates.
Free cash flow was just over EUR 1.8 billion after nearly EUR 1 billion of capital expenditure, which included new aseptic capabilities, a canning line in Queensland, construction of a new site outside Manila, additional alcohol RTD capacity, cooler investment, and digital/AI and SAP S/4HANA development. The company returned EUR 1.9 billion to shareholders, including a dividend of EUR 2.04 per share and a EUR 1 billion buyback.
Mix and productivity helped drive profit outperformance
Management repeatedly pointed to mix as a stronger contributor in 2025 than in recent years. Walker said revenue per case benefited from mix, pricing, and promotional optimization, while cost of sales per case increased 2.7% due to concentrate costs linked to the incidence model and higher soft drink taxes in Great Britain and France.
Operating expenses improved as a share of revenue to 22.1%, down 40 basis points, which Walker attributed to continued productivity gains. He said the company’s current program is targeting EUR 350 million to EUR 400 million of savings by 2028 and “is on track.” Actions taken in 2025 included distribution site reductions in Germany, consolidating production in Paris into the Grigny facility, and closing three single-line sites in Indonesia.
On the earnings call, executives also discussed promotional effectiveness as an ongoing opportunity. Gammell described promotional spend as “a huge amount of money” with a meaningful impact on performance, and said the focus is shifting from the quantity of promotions to improving effectiveness and return.
Market and category highlights: GB strength, France and Germany pressured, energy surged
Walker singled out Great Britain as CCEP’s largest single revenue market and said it had a “fantastic year,” with revenue up almost 6% and volume growth in both channels. He attributed away-from-home strength to customer wins such as Arsenal Football Club, Fullers, and Jet2, while noting continued strength in the zero portfolio and energy.
In Europe, management said France and Germany were the most challenged markets. Gammell said France was affected by a sugar tax increase on Coca-Cola Classic, which remained a volume drag despite performance that was “stronger than I would have expected.” For 2026, he said the company plans to push the zero portfolio, review brand and pack architecture, test smaller pack variants to hit better price points, and evaluate value propositions for larger packs.
In Germany, Gammell said the first half was difficult and pointed to higher promotional shelf prices that crossed thresholds that proved challenging for consumers. He said CCEP reinvested value in the second half, contributing to a better exit rate, and expects plans around promotional value to support 2026.
Energy was a standout performance area. Gammell said Monster volumes were up nearly 20% in 2025 and drove share gains, supported by innovation and cooler placements. Asked whether growth might moderate after a strong year, management said the category’s typical “mid-teens” cadence over a multi-year period remains the expectation, driven by distribution expansion, innovation, and the growing role of zero-sugar offerings.
Indonesia and the Philippines: transformation and investment continue
Management described Indonesia as a challenging year due to macroeconomic slowdown. Gammell said NARTD volumes excluding water were down double digits and that CCEP’s volumes followed the market, though the second half improved. He noted a shift toward zero-sugar in sparkling, with mix rising from 3% to 7%, while black tea remained under pressure.
CCEP also discussed structural changes in Indonesia, including moving from eight plants to five and implementing a distributor-led route to market. Gammell said the distributor base has grown to 182 partners across 300 distribution points, with a sales force of more than 1,700 people, and said early results are encouraging. For 2026, he said Indonesia is expected to grow in volume and revenue, but the company has not “materially reflected” significant upside in guidance until more quarters of progress are visible.
In the Philippines, Gammell said the business delivered another strong year with revenue up 3%, record-high sparkling value share of 77%, and EBIT margin expansion of around 150 basis points, putting it on track toward a 10% margin target. He also highlighted that Coke Zero grew 20% last year in the country and said the company has broken ground on a new plant in Tarlac, described as its largest infrastructure investment to date.
2026 outlook: 3%-4% revenue growth, EUR 1 billion buyback announced
For 2026, CCEP guided to 3%-4% revenue growth driven by both volumes and revenue per unit case, with management noting the impact of the Suntory distribution exit as a headwind. The company expects cost of sales to grow by around 1.5% per case and said it is approximately 80% hedged on commodities for the full year. Walker also said the company expects a “modest increase” in annual interest expense as it refinances roughly EUR 1 billion per year, while maintaining a weighted average cost of debt of about 2.5% and net debt to EBITDA just below 2.7x, within its 2.5-3.0x guidance range.
Management said it expects the mix of 2026 revenue growth to be roughly evenly split among volume, mix, and price. Walker also guided to free cash flow of at least EUR 1.7 billion, describing it as consistent with objectives while allowing flexibility for higher net investment in capital projects.
CCEP announced a further EUR 1 billion share buyback to be executed over the coming year, alongside its stated dividend payout ratio of around 50% of earnings.
About Coca-Cola Europacific Partners (NASDAQ:CCEP)
Coca-Cola Europacific Partners is a major independent bottler and distributor of nonalcoholic ready-to-drink beverages, operating under a long-standing franchise relationship with The Coca-Cola Company. The business manufactures, bottles, sells and delivers a broad portfolio of global and local beverage brands, including still and sparkling soft drinks, waters, juices, sports drinks and ready-to-drink teas and coffees. Its activities encompass production, packaging, marketing and route-to-market distribution for retail, foodservice, convenience and vending customers.
The company was created through the combination of Coca-Cola European Partners and Coca-Cola Amatil in 2021, bringing together beverage operations across Europe and the Asia-Pacific region.
