CCEP

Hello and thank you for standing by, and welcome to today's Coca-Cola Europacific Partners Q1 2026 trading update conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. To ask a question during the session, you need press star one and one on your telephone. I must advise you this conference 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.

Thank you. Thank you all for joining us today. I am here with Damian Gammell, our CEO, and our CFO, Ed Walker. Before I hand over to Damian, a reminder of our cautionary statement. 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 reports filed with the U.K., U.S., 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 turn the call over to your questions. Unless otherwise stated, metrics presented today will be on a comparable and effect neutral basis throughout. Volume movements, unless otherwise stated, adjust for the impact of six more consumption days in this quarter when compared to the same period last year.

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

Thank you, Sarah, and many thanks again to everyone for joining us today. Firstly, I would really like to thank all of our colleagues for their continued hard work and dedication to this great business, which next month celebrates its 10th birthday. It's been a good start to the year, with CCEP continuing to lead the way in FMCG in creating value for our customers across our markets and in innovative and growing categories where we are gaining share. While Q1 is typically our smallest quarter, we have delivered broadly in line with expectations, and today we are reaffirming our guidance for the full year 2026. Topline growth in the quarter has seen revenue continuing to benefit from the positive mix drivers we saw last year, driven by areas such as more coolers and the growth in Monster.

We also delivered solid comparable volume growth beyond the benefit of a slightly earlier Easter. The category remains really attractive for our consumers and customers. It remains as competitive as ever. Price relevance across all locations remains key, with value continuing to play a role for shoppers in our developed markets. In our emerging markets, we continue to focus on entry-level affordability to build a category for the long term. As we did last year, we continue to build our total beverage offering, leveraging our diverse brand and pack range and our capabilities in revenue and margin growth management. This, of course, goes beyond pricing as we continue to balance premiumization with affordability. We know that value is playing a role for a lot of consumers. We also know they love innovation and they love excitement.

As a category leader, we take the role of bringing this to the consumer more taste innovation with new flavors, more pack innovation, and more promotional innovation, increasingly leveraging AI, which I will come on to next with more win mechanics and more value add. All of this has supported positive share gains in Europe. This has been driven by strong growth in zeros, in colas, flavors, sports, and in energy. We've also seen a sequential volume improvement in APS, supported by share gains in Australia, more normalized volumes in the Philippines, and continued encouraging signs in Indonesia. Volumes in Europe grew by 1.4% on a comparable basis, primarily driven by growth in Germany and G.B., particularly in the home channel, where we typically see more Easter-related spending and typically, in larger future consumption packs.

This was reflected in our revenue per unit case growth alongside those positive mix benefits I mentioned just now, which I'm really pleased with. We grew APS volumes by 1.9% on a comparable basis, driven by the Philippines, double-digit growth in the Pacific Islands and PNG, and further improvement in Indonesia, driven by sparkling, supported by a solid Ramadan festive period. Our revenue per case reflected a headwind from the Suntory alcohol exit, which had just over 3% impact on APS revenues and 1% at a group level. Fantastic in-market execution has supported a strong start for new innovations across our markets, which in Q1 have been largely focused around the Coca-Cola trademark. As I said before, bolder moves on Coke are the name of the game, and we are seeing the benefits.

Strong distribution of the nostalgic Coke Cherry Float in G.B. is supporting the rollout of Cherry more broadly, with the excellent The Devil Wears Prada movie sequel campaign supporting recent improvements in Diet Coke. We've seen a great start for the new Coke 500ml super can or Superfan can, as it's known in G.B. We're also relaunching Zero Caffeine now in much more eye-catching black and gold packaging, supported by a partnership with the newly released 007 First Light video game. In ARTD, we've added to our growing alcohol portfolio with the additions of BACARDÍ Spiced with Coke and the recent launch of Absolut Vodka & Sprite Pineapple. Monster more broadly has continued to motor from where it left off last year, with volumes up by 20% or more.

In many of our largest markets, supported by new launches and the strong growth of core variants like Ultra White. There have been multiple Monster launches during the quarter, including Rehab, a lineup of tea-based stills, and the latest juice variant, Viking Berry. This variant has been the strongest energy release to date in, for example, G.B., our largest energy market, where it's already outperformed last year's launches of both Rio Punch and Lando. Q1 saw further progress in away-from-home, with some great customer wins in QSR. These include the American team fast-growing Chili's casual dining chain in the Philippines, and the largest holiday park operator in G.B., Parkdean, boasting 66 sites and attracting 3 million visitors annually. We've also made great progress around placing even more coolers, with a particular focus on convenience of food-to-go outlets, supporting immediate consumption.

As you know, what is cold is sold. So far this year, we've already added around 40,000 more Coke and Monster coolers, with more to come. For example, we'll be adding up to 1,000 in Co-op convenience stores, a great win for our G.B. team. Looking out to the rest of the year, much of our planned pricing is now in market. We have solid commercial programs in place with plenty more innovation and excitement to come. For example, in flavors, new Sprite Chill Zero will soon be available across our markets, together with the latest burst of the Fanta Wanta campaign with the new Gen Z-focused gaming tie-up with Xbox. We've more Fuze Tea flavors to come in Europe, an expansion of Lift in the Philippines, and more in energy across the Monster portfolio.

Of course, as an avid football fan, June sees the start of the FIFA World Cup, which we'll see is front and center with colorful, exciting in-store activations and consumer promotions, particularly around Coke and Powerade. All in all, lots to look forward to to excite both our customers and consumers. More broadly, the macroeconomic environment is increasingly uncertain, particularly given the situation in the Middle East. We are resilient and have a robust operating model. While input prices have been affected, we are able to manage the impact. Our highly hedged commodities position, now at around 85%, ongoing efficiency programs, and control of discretionary spend gives us good visibility on costs for the year.

Our planning has been based on a temporary market disruption, and whilst we aren't currently seeing any material impact on consumers, we're monitoring the situation closely and will adapt our plans accordingly should things change. We're continuing to invest in our business, in coolers, as I mentioned, in our supply chain, and our new mega plant outside Manila on track to begin production at the start of 2027, and also in our digital capabilities. As an example, we've recently launched Kira, a newly developed natural language chat interface for our insights team, helping them analyze complex and diverse data to drive deeper understanding of our brands, markets, and power swifter decision-making as a result. As I mentioned earlier, we have reiterated our guidance for the full year.

As a reminder, that is for between 3% and 4% revenue growth, around 7% operating profit, and comparable free cash flow of at least EUR 1.7 billion, which will be half two-weighted as usual. Today's dividend declaration and our continuing share buyback program demonstrate the strength of our business and our ability to deliver continued shareholder value. Just before we take your questions, and a reminder of our Sustainability Webinar on Thursday, which will provide details on progress on our business forward targets, which we've now updated to include the Philippines. Again, thank you for your time today. Ed and I will now be very happy to take your questions, and I hand the call back over to you, 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. Please stand by while we compile the Q&A queue. It will only take a few moments. Thank you. First question today comes from Edward Mundy from Jefferies. Please go ahead.

Afternoon, Damian. Afternoon, Ed. My question is really around, you know, the current period of inflation and volatility. I mean, when you look back at the last round of inflation volatility in 2022, I'd love you to compare and contrast, you know, what you're seeing today versus then, you know, based on what we know today. COGS looks a little bit less bad for 2027. Consumers could be a little bit more fatigued. I mean, how do you adjust your playbook, you know, for this picture? You know, listening to your opening comments just now, Damian, it does sound like the degree of taste pack promo innovation is pretty much at the fullest it's been, you know, for a long time.

You know, how is that helping to, you know, play into, you know, what you're looking to achieve?

Yeah. Thanks, Ed. Maybe I'll just talk to your last point and then hand the call to Ed in terms of how we see it versus 2022. I mean, I think you're spot on. We've been working really hard to continue to bring a lot of innovation and excitement to the categories. We think that, as the obviously brand leader, category leader, that's a primary responsibility. You're seeing that hitting the market, whether that's with Coke Zero Zero or a number of our other innovations. We see consumers and shoppers responding to that. I mean, value is still important. We know that for a lot of our shopper base.

Over the last couple of years, I think we've navigated that opportunity really well, providing available affordability, but also not forgetting that ultimately what drives the category is innovation, excitement, and passion. I think with the assets we have this year, whether it's FIFA or some of the assets coming in the second half of the year, we will be able to navigate, you know, nicely that balance of creating category excitement and growth, which is ultimately what our customers expect from us, and manage some of those affordability and inflationary challenges. Don't see it as 2022, to be honest. Maybe I'll just pass to Ed, and he'll give a bit more color on how we, how we're thinking about that.

Yes, thanks, Damian. Thanks, Ed, for the question. Yeah, we've learned a lot, I think, from 2022. As we look at these type of crisis, we really split our activities into three areas. Firstly, making sure we have security of supply. So we've done a lot of work over the last few years in making sure we have multiple sources of supply for key commodities and materials, and we're not dependent on particular geographies or particular suppliers and have multiple contingencies for the supply. As we sit here today, we're in great shape and no material risks from a supply perspective. The second area is around cost, as we see the impact on input prices.

As you know, we have a very extensive hedging program, and we're over 85% hedged now for the remainder of the year. Actually since 2022, we've also started working directly with suppliers, and hedging their exposure or looking at how they can reduce the risk within their supply chain, because obviously otherwise, that ultimately can get passed on to us. We're in good shape, certainly for 2026 in terms of that hedging. Finally, is the impact on demand. I think what is similar to 2022 is that, I think the crisis isn't specific to soft drinks or ourselves. It's gonna be a general challenge on inflation across all of food and drink, which in turn can impact consumer demand.

But as we sit here today, you know, we don't think it will be as severe as 2022. Obviously, we monitor the situation carefully. As you also know, we've got a number of our RGM techniques, a very broad portfolio from a brand and pack perspective. There's a number of levers we can pull if things do change to mitigate the risk. But yeah, lots of learnings back from 2022.

Thank you.

Thank you. We'll now take the next question. This is from Bonnie Herzog from Goldman Sachs. Please go ahead.

All right, thank you. Hi, everyone. I wanted to ask about the volume improvement in APS. I guess I was hoping for some more color on what's driving this and how sustainable you believe this is. Also, you know, you touched on encouraging sparkling volumes in Indonesia, so could you provide a little more color on, you know, maybe what innovation and/or activation or marketing is driving this and how we should think about the ultimate opportunities you have in sparkling in that market? Thank you.

Hi, Bonnie. Yeah, thank you. I mean, we're very pleased with our APS volume performance overall. I think there's a number of areas that I'd call out. I mean, firstly, our businesses in Australia, New Zealand, Pacific Islands in particular, have been performing really strong on our, particularly on our sparkling category, and we see that being very sustainable. As you know, we've had the exit of some of our Suntory assets out of there, so that's made the numbers a little bit bumpier, but that's nearly through now. Underlying our sparkling business in those markets is performing really well and benefiting from many of the activities we talked about earlier in terms of new flavor innovation, pack innovation, and great marketing assets.

Philippines has performed well, and continues to be a market that we, you know, really get excited about in terms of its long-term growth, not just on our core sparkling. We've now launched energy. We've brought back Lift, we've got some good brand innovation going into the Philippines. You know, we see that business performing in line with our expectations. Indonesia, you know, it was great, particularly for our team locally to enjoy a successful Ramadan and festive period, really all driven by sparkling, Bonnie. You know, if you look at our underlying numbers, you know, our tea proposition in Indonesia is still work in progress. We're very happy with where we've got to with our sparkling portfolio. Really what's been driving that is continued investment for the Coke company against the consumer.

As we've talked about before, building more relevance for our brands and therefore, the sparkling category. We've made some good decisions around route to market, which we've talked to, which meant we were a very resilient and stable business during Ramadan in terms of just getting all those cases out. That was great. Clearly we're looking at, you know, as we move forward, you know, how do we continue to drive a sustainable affordability so the consumers can enter the sparkling franchise in Indonesia. That's really what drove the business year-to-date. That will be what drives it for the rest of the year. And we're excited about it, and I think it's great to have a winning Ramadan. As you know, that's a key period for us in that market.

Across APS, lots of positive signs coming out of Q1. A lot to do still, which is great. I think that sets us up for multi-year growth in that region, which is really what excites us.

All right. Thank you. Very helpful.

Thank you. Next question is from Matt Ford from BNP Paribas. Please go ahead.

Afternoon, all. Just one question, I suppose, on the portfolio. I think in, within Q1, I think you've, you know, reported Original Taste Coke volumes down, around 3% with growth in APS offset by Europe. Obviously, you had very strong growth in your Zero Sugar and Diet Coke portfolio. Just be interested, Damian, to get your thoughts on, you know, obviously you've got a lot planned for Q2 and beyond, World Cup activation, you know, the new can format for Coke. I'm just interested to get your thoughts on, you know, how confident you are in that sort of Original Taste volume picking up as we move through the year.

Whether actually some of the growth here was being cannibalized by the, you know, the low sugar part of the portfolio. Just one follow-up, I suppose, on that potentially related is just on Easter and Ramadan. If you're able to potentially quantify, you know, how much of a, how much of a boost that was or if that had any impact on this on this Coke picture. Thank you.

Thanks, Matt. I mean, there's a couple of elements to your question that I call out. I would say absolutely our sugar-free offerings continue to accelerate. We, you know, we see that across all of our brands, but particularly led by Coke Zero. Then also we see Diet Coke, as I called out, continuing to benefit from, you know, more focus, more investment. Again, we've talked about that last year that we see those two brands as being key to our midterm growth. It's great to see Diet Coke and Coke Life responding. On Coke Original Taste, I mean, there's a couple of dynamics I'd talk to. One, the brand's performing really strongly, particularly in single serve and smaller pack formats.

We are seeing some of those revenue margin and growth management moves working, whether it's mini cans, small cans. Clearly, the half-liter can where we have, it's performing really well, although it's very early days. Most of the volume weakness has been on large PET. That's, you know, that's been a trend for a number of quarters now. Some of that moves back into Coke Zero, which is great, and some of it moves back into smaller packs in terms of frequency and convenience. You know, we'd expect that trend to continue, which is why we continue to look at building out, whether it's Coke Zero Zero or Cherry on our zero offerings, but also supporting Coke Classic with flavor innovation as well.

In a lot of our markets, for the first time, you'll see a bigger focus on Coke Original Taste Cherry, and some more innovations on Coke Original Taste because that brand also responds really well to innovation and excitement. It'll lead our FIFA campaign as we get into the summer, and will remain, you know, our flagship brand across all of our activations. Yeah, you know, I think it's long term, really good to see the category in robust health. It's driven by sugar-free, as we've talked about. You know, the taste quality of our sugar-free propositions now is just excellent, and we see consumers continuing to respond to that.

As we look at guidance for the full year, as we look at our midterm guidance, you know, that dynamic we will continue to factor into our numbers, Matt, because particularly in our developed markets, we see it as a very healthy dynamic.

Right. Thank you.

Thank you. We will now take our next question. This is from Simon Hales from Citi. Please go ahead.

Hi, Damian, Ed, and Sarah. Damian, could you just talk a little bit more about the channel performance you saw in Europe through Q1 and perhaps what we've seen into Q2? A bit of a slowdown in away-from-home, a pickup in at-home. I understand that's probably a function of the Easter timing impacting, but have you seen a return to more of the long-term trends we've been seeing more recently, i.e. a firmer away-from-home offtake trend as we've come into April? Interested in your thoughts on how we think those different channels should evolve over the coming quarters.

Yeah. We're not seeing a significant change in what we saw coming out of last year, Simon. Clearly, the Easter occasion, particularly in Europe, is a much more at-home occasion, so we do over-index on large packs. You know, that also flowed into our revenue per case performance as well, but that's quite normal. It's a very big period, particularly for markets like Germany. We continue to focus heavily on away-from-home. You know, we're enjoying a little bit of good spring or could I even dare say early summer weather in Northern Europe. That's definitely giving away-from-home a boost as we get into April.

Clearly it's a, it's a channel that performed well for us last year on the back of solid investment, whether it's coolers, new customer wins, and a lot of that product innovation we talked about, particularly in energy, is also supporting our away-from-home growth. Yeah, nothing to read into in Q1. Clearly away-from-home's key focus period for us now is really in Europe, is in the next couple of quarters. We're well set up for a strong performance as we get through the summer.

Thank you.

Thank you. Next question is from Richard Withagen from Kepler Cheuvreux. Please go ahead.

Yeah. Hi, Damian, Ed, and Sarah. I have a question on Europe. How should we view the price mix in Europe? We had obviously Easter and the large pack, they had an impact in the first quarter. Maybe you can talk about what is the underlying trend, and should we assume any pressure on price mix in the remainder of 2026, given the inflationary pressures in Europe from higher energy prices?

Thanks, Richard. We were pleased with quarter one in terms of an overall revenue growth of 9.8% in total. I'm pleased as well with the makeup of it. Obviously, the biggest proportion was from volume with the extra days at just over 8%.

Within the mix, we saw quite a few different factors. We continued to see the very positive brand mix that we saw last year, fueled by energy. We did see some positive package mix, but it was offset because of the impact of Easter, which as we just talked about, is more of a future consumption, multi-serve occasion at home. Generally a lower revenue per case. Nevertheless, when you add that with the brand mix, we did overall see positive mix. We did see a slight headwind from country mix with G.B. and Germany growing slightly faster, and they're slightly lower revenue per case versus the other markets in Europe.

We did see some headline price and benefit from the sugar tax in France last year. Happy with the makeup. As always, I think it's a bit dangerous to look at one quarter in isolation as the promotional program does move around. As we look at the year as a whole and given what we see today, including the impact of the Middle East crisis, we continue to see a balanced makeup of our 3%-4% revenue growth for the year with a nice split between volume mix and rate.

Thanks, Ed.

Thank you. The next question is from Nadine Sarwat from Bernstein. Please go ahead.

Good afternoon, guys. Forgive me for the predictable question, but I'm sure a lot on the call are wondering. Given the news last week on the Pepsi bottling agreement to change hands in Denmark and Finland in 2029, can you talk to your ability and/or desire to get those Coke markets and perhaps, you know, a refresher for us how these discussions with Coke have worked in the past for you when it comes to gaining new markets? Thank you.

Yeah, thank you. We were expecting that question, so thank you for asking it. Yeah, we've talked a lot about our broader ambition to become a bigger bottler in the Coke family, really since we started over 10 years ago. That ambition remains constant. As we think about what we can do to make that happen, clearly performance is key. We remain very much focused on performing where we've got the bottling licenses, and I think our Q1 numbers reflect that. The second is obviously our balance sheet and capital allocation framework retains the capability to do a transaction, so we're in a good place financially.

Ultimately, it comes down to having conversations with The Coca-Cola Company about how they see the future of those markets and if CCEP can play a role in really unlocking value for the company, obviously for our shareholders, but most importantly for the consumers and customers within those markets. I mean, we believe we're well-positioned with our other businesses in the Nordics to do that, and we'll continue to keep a close eye on developments about what happens after those announcements last week. Yeah, obviously stay close to our biggest partner, The Coca-Cola Company, to see how their view in those markets evolves.

As always, not just for those markets, but for other bottling franchises that may present themselves of an opportunity, we remain, yeah, with a healthy appetite and a humble desire to try and continue to grow the CCEP family.

Understood. Thank you.

Thank you. Next question is from Lauren Lieberman from Barclays. Please go ahead.

Great. Thanks. Good morning, everyone. Wanted to just talk a little bit about price pack architecture plans. I know, Damian, there's a bunch of this information on this in your prepared remarks, just thinking about the consumer environment, concerns around European consumers, kind of, you know, in the context of the Iran war and higher energy prices, just any, you know, adjustments that you may be making on that front. Then part and parcel with that is G.B. was really strong this quarter, I know you mentioned Zero Sugar, Diet Coke, and Monster, but anything you can share about the end market execution that were maybe key accelerators, the momentum this quarter versus that low single digit volume number that you know, put up last year. Thanks.

Yeah. Thanks, Lauren. Maybe first to G.B. I mean, I think the team have had a number of really strong quarters. A lot of what we talked to last year also benefited Q1, where we've had, you know, a lot of good execution improvements and customer wins and away-from-home. That's definitely supporting our growth and will continue for the year. Good brand pack innovation from both The Coca-Cola Company and Monster. That's definitely helping. We clearly continue to invest behind our brands in store. Obviously, that's featured around Diet Coke, but particularly Coke Cherry. We had a big push around Coke Cherry in Q1, and that's definitely helping us as well.

I think G.B. has had another great quarter and we're well set up for another good Q2 and into the rest of the year. A lot of innovation and a lot of good execution. Back to your first question. I mean, we've been, you know, for a number of quarters now, balancing, you know, price, value, relevance to our consumers on the back of, you know, previously cost of living pressures, now cost of living due to energy. You know, obviously as we come out of winter, while they remain a concern, it does get a little bit easier in Europe, particularly on the domestic front. As Ed talked to internally and with our suppliers, we're managing those higher fuel costs through to the end of the year.

As you know, in Europe, market by market, it's quite different, but we can have up to 30%-40% of our retail volumes on promo. We already have quite a, I would say, a high level of investment against that need state of value. As always, we'll continue to look at that as we go through the year to see if we need to make any changes. On the other side, in some of our markets, we'll also look at whether pricing in the latter part of the year is also going to be part of our plan as we also look into 2027. You know, we're balancing both sides of that equation, Lauren, at the moment.

Great.

Thank you. Next question is from Charlie Higgs from Rothschild & Co Redburn. Please go ahead.

Hey, Damian, Ed, hope you're well. I wanted to dig a bit more into the Philippines performance, please. I think it picked up quite nicely in Q1. What's been the driving force? Is it still trademark Coke or are you seeing some good success with expanding the sparkling flavors, Predator, ARTD? How are you thinking about energy shortages in the Philippines? I think from memory, your partner there has a very good energy business. Are you seeing any impact at the consumer level or in your distribution supply chain? Thanks.

I mean, I suppose to answer the last part of that, Charlie, from a kind of Ed's point earlier, we've been very focused on continuity of supply, and we've, you know, we have that in the Philippines. We're in good shape there. We are obviously keeping a very close eye on what's happening with the consumer and the higher fuel prices and how that may impact spending. We've a very affordable proposition, as you know, in the Philippines anyway, particularly led by RGB. We plan to maintain that through the rest of the year, and that really gives a good entry point. If consumers come under even more pressure on energy or utility bills, I think our affordability strategy will definitely help us.

I think broadly speaking, beyond that, the Philippines, you know, continues to benefit from a really strong route to market. We're also unlocking some of the supply chain bottlenecks. I mentioned in my statement it's a bit away, but we'll have our greenfield up and running next year. Since we took over that business, as you know, we've put in a lot of capital, both in terms of manufacturing, but also in terms of bottle floats. I think that's just unlocking volume as well for our sales teams. When I speak to Gareth and the team there, it definitely makes the sales team's life easier having, you know, RGB in particular, at a good stock level. We expect that to continue.

It is a market where we'll continue to look at energy contingencies, but so far, we've been in good shape, Charlie.

Thank you.

Thank you. Next question is from Robert Ottenstein from Evercore ISI. Please go ahead.

Great. Thank you very much. Damian, I was wondering if you could give us an update on your implementation of artificial intelligence tools, kinda where you are in the journey, maybe surprise learnings. And also more specifically, is this something that you see eventually integrating with some of your major retail partners and helping grow the entire space, optimize shelf sets and, you know, any green shoots along that front? Thank you.

Thanks, Robert. Definitely a lot happening in that space. Maybe just to call out some of the areas that we're utilizing it and seeing benefits. I think we talked to these before. Certainly, in the planning and forecasting area, I mean, we're getting a much higher degree of accuracy around planning, and obviously that allows us to do a lot in terms of asset utilization, inventory levels, and customer service levels. That's working really well. Like most companies, and I'm sure you hear this in all your calls, tools like Copilot, we've rolled out across our business to, you know, make everybody's job easier and to lean into AI to see what we can develop and learn more from. Beyond that, it's clearly part of our partners' tools, particularly with Salesforce and ServiceNow.

You know, we use a lot of their kit, embedded in that now is AI functionality, so we are benefiting from that. I would say, where I would like us to continue to get better at, is really around the trade promo optimization. I mean, that's a big value pool for us. As I mentioned in my comments to Lauren, we do invest a lot behind promo and value, and we continue to learn using AI on how to use that more efficiently and effective. You know, while we've been using it, I would say we're at the beginning of that journey, that's super exciting. The tools are getting better, which will allow us to continue to leverage that big investment, year-on-year. It's touching on all aspects of our business.

We are using it with customers on a couple of levels. One, a number of our customers provide us with outlet-level sales information. There we can really quickly in-store, you know, look at that data, manipulate it, and then to your point, play it back to fairly basic conversations around share of shelf, cooler space, products on display. And as we also look at our promo optimization, we are building in shopper and customer level information. We get to see what's the impact on household penetration, on frequency, and also on loyalty, which is a key metric for a lot of our retailers. A lot happening. Nowhere near, I would say, getting near the end of that journey. As much progress as we've made and as much of investment we've put in, it's still a really exciting journey.

You know, while we're not at the beginning, we're probably on the way to the middle, I'd say. That's quite a bit away. A lot happening with digital twins in our manufacturing as well, as an example of where we're using AI. Super exciting, and something to your point that our customers really want to lean into as well for their business. It's a great conversation.

Thank you.

Thank you. The next question is from Andrea Pistacchi from Bank of America. Please go ahead.

Yes. Thanks for the question. Damian, you touched on the strong performance in G.B. The other market that looked very solid is Germany, which has returned to volume growth. Could you give a bit of color, please, on what's behind this performance in Germany? Is it the adjusted promo strategy or more than that? And on the sustainability there of Germany in the remainder of the year? Conversely, France seems to have remained quite soft despite an easier comparison. Could you comment a bit on France, how that is looking? Thank you.

Yeah. I mean, I think on Germany, Andrea, we certainly see a big benefit from Easter Q1. I would say, you know, while we're really happy to see volume growth return, it remains quite a competitive market, and I see that remaining through the rest of the year. It is great that we did have a winning Easter, both in terms of share and volume. That gives us momentum into April, but we need to continue to look at some of our price promo architecture in Germany to keep that volume growth sustainable, you know, through Q2 and into next year. Great start to the year. I would have to say a lot of it is Easter-driven. Still more work to do in Germany, we're excited at the progress we could make in Q1.

I'm actually pleased with France. You know, we've had a lot of pricing inflation on our core brand there on the back of taxation. As we've kind of come through cycling that, you know, I think the team has done a great job in France. I was really pleased with the March performance, but also, how we're looking into the rest of the year. Yeah. Yeah, I think the tax in France was disruptive, but we're through it now. Germany, great start to the year. More work to do, but an encouraging start.

That's very clear. Thank you.

Thank you. That was the final question. I would now like to hand the conference back over to Damian Gammell for his closing remarks. Damian, please go ahead.

Thank you, operator. Again, thank you everybody for taking the time to join us. I know it's a busy week when it comes to earnings. It's a busy day, appreciate you taking the time. As Ed and I have spoke to, we're really pleased. Good start to the year with solid underlying volume growth beyond the benefit of an early Easter and a continued progress on our mix. Critically, we remain the number one value creator, gaining share in categories that remain really attractive for our consumers and our customers. Despite the uncertain backdrop, we do remain resilient and very pleased to be reaffirming our full year 2026 guidance today. Clearly, as you'd expect, we'll continue to monitor the situation closely and as always, we'll adjust our plans accordingly. There's a lot to look forward in the rest of the year. Big FIFA activation coming.

We've got our Panini stickers and a lot of innovation coming across all of our brands through to the end of the year and indeed into 2027. Dividends are now 50% complete on our 2026 share buyback, demonstrate strength of our great business and our ability to continue to deliver shareholder value. Look forward to catching up with you after Q2. Have a great summer and speak to you again in August. Thank you, everybody

Thank you. That concludes our conference for today. Thank you for participating, and you may all disconnect.

Hello, and thank you for standing by, and welcome to today's Coca-Cola Europacific Partners Q4 and Full Year 2025 Trading Update Conference call. [Operator Instructions] I must advise you 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.

Hello, and thank you all for joining. I'm here with Damian Gammell, our CEO; and our CFO, Ed Walker, who will make prepared remarks followed by Q&A. Before we begin, our cautionary statements. This call will contain forward-looking management comments and other statements reflecting our outlook. These should be considered in conjunction with the cautionary language contained in today's release as well as the detailed cautionary statements found in reports filed with the U.K., U.S., Dutch and Spanish authorities. A copy of this information is available on our website on which a full transcript will be made available as soon as possible. Unless otherwise stated, metrics presented today will be on a comparable and FX-neutral basis. They will be presented on an adjusted comparable basis reflecting the results of CCEP and our Australia Pacific and Southeast Asia business unit, APS as if the Philippines transaction had occurred at the beginning of last year rather than in February when it completed. Now over to Damian.

Thank you, Sarah, and thank you all for joining us today. First, I would like to thank all our colleagues for their hard work and dedication to this great business. Our strong brand partnerships and our people continue to drive us forward whilst making CCEP a great place to work. We are executing on our value creation strategy. Over the last 3 years, we've generated EUR 4 billion of value for our retail customers, returned EUR 4 billion to shareholders through dividends and buybacks and delivered a healthy 90% TSR. We are a consistent top and bottom line compounder and generate significant cash, enabling core investment and growth. 2025 has been another strong year for CCEP, leading the way in FMCG and creating value for our customers across our markets and in our innovative and growing categories. We delivered robust top line growth, especially in our away-from-home channel and grew market share. I'm particularly pleased with our progress on mix, which Ed will talk more to later. Productivity efficiency supported resilient profit growth, we generated strong free cash flow and grew shareholder returns, all while having laid the foundations for 2026 and beyond, including delivery of strategic portfolio changes, which are now largely behind us. Across all key financial metrics, full year 2025 has been a record year for CCEP, as we approach our 10th birthday in May for revenue, profit, free cash flow and returns. Revenue reflects strong execution and solid revenue per case gains. Volumes grew in both home and away-from-home with strong growth in Zeros, up around 6%. This helped offset portfolio changes, softer trends in Indonesia and softer volumes in Germany and France, impacted by the higher sugar tax. The category remains really attractive for our consumers and customers and indeed is as competitive as ever. Price relevance across all locations remains key with value continuing to play a role for shoppers in our developed markets. In our emerging markets, we continue to focus on entry-level affordability to build the category. In 2025, we continue to build our total beverage offering, leveraging our diverse brand and pack range and our capabilities in revenue and margin growth management. The NARTD category remains profitable and growing, up around 6% in value terms, that included volume growth with Europe up 2% and APS up 5%. We were the #1 in FMCG with value share of 20 basis points, driven by APS. OpEx efficiency supported operating profit growth of 7.1% with margin expansion both in Europe and APS. This all supported strong free cash flow of just over EUR 1.8 billion after investing well over EUR 900 million in capacity, coolers, technology and digital. And we returned just under EUR 2 billion to shareholders, including EUR 1 billion from last year's buyback program. Ed will cover the financials in more detail shortly. Our performance reflects our great people, great brands, great execution, all done sustainably. Now I'd like to take a quick look back at each. We were again recognized as Top Employer, and we welcomed over 100 new colleagues via our new shared service center in Manila, a key enabler for future productivity. And we're continuing to build the capabilities of our teams. For example, we're accelerating digital and AI training to equip everyone at CCEP with the mindset, skills and the confidence to unlock value from our investments in tech and AI. A little bit more on that later. Now on to our great brands. Just to touch on a few points given the detail in today's release. We started making bolder moves with Coke in both original taste and Zero Sugar with new eye-catching and impactful campaigns. In Diet Coke, we launched This Is My Taste, supporting an improved performance, particularly in its biggest market, GB. In flavors, new variants and zeros are an increasing focus. For example, Sprite did well supported by the new Green Apple X, and new listings. Monster had another terrific year with volumes up nearly 20%, driving share gains of over 200 basis points. New launches like Juice Rio Punch, the runaway success of Lando Norris, the enduring success of core variants and more coolers supported the performance. In ready-to-drink tea, the Nestea transition in Iberia was a success with Fuze Tea now leading the category. The ARTD category grew by around 10% in value, and we grew share. We introduced multipacks in grocery, launched Bacardi and Coke in flavor variants of the wider offerings, and we commenced the transition away from Suntory. And finally, the sports category continued to perform well, driven by Aquarius in Spain and Powerade in Australia. Great execution focuses on selling to more people more often through increased penetration, incidents and spend per trip. With more volume, we leverage our revenue and margin growth management to create more value, delivered every day by our field sales force of over 12,000 colleagues. This slide just gives a few examples. Through amazing displays, social media channels or increasingly via retail media, our own MyCCEP customer portal closed the year delivering a huge EUR 2.5 billion of CCEP's revenue. We've made great progress with rolling out more Coke and Monster coolers to drive greater distribution and impulse purchase, placing over 75,000 more coolers in 2025. We continue to focus on choice, including premiumization, be it through mini cans in France and Spain, mini PET in Australia or more returnable glass. And with affordability remaining relevant for more consumers, we're also focused on delivering value for money through extra fill on PET or extra cans in our multipacks. And now on to sustainability. We remained on CDP's Climate A list for a 10th year. Packaging collection progress continued, including the imminent launch of DRS in Portugal and preparing for GB next year. And we invested in new cleantech solutions via our CCEP Ventures. This all contributed to our decarbonization journey, proof of which you see here. Now over to Ed to talk about the financials in a little bit more detail. Ed?

Thanks, Damian, and thank you, all of you for joining us. We delivered revenue of EUR 20.9 billion, an increase of 2.8% with comparable volumes marginally ahead. For the year as a whole, transactions were in line with volume, though ahead in Europe. The trend, however, improved in quarter 4 with immediate consumption of single-serve volumes running ahead of future consumption formats. We delivered strong revenue per case growth of 2.9%. Over 1/3 of this came from brand and pack mix, which we're really pleased with, driven by areas such as immediate consumption growth, more coolers and the growth in Monster. Our revenue per unit case growth also reflected headline pricing and promotional optimization whilst ensuring affordability on key packs and the impact of the French sugar tax increase. Cost of sales per unit case increased by 2.7%. This reflects our increased revenue per unit case, driving higher concentrate costs through the incidence pricing model and the increase in soft drink taxes in GB and France. OpEx as a percentage of revenue was 22.1%, an improvement of 40 basis points, driven by continued productivity gains. These elements all combined to drive operating profit of EUR 2.8 billion, up 7.1% and an operating margin of 13.4%, an expansion of around 50 basis points, including an improvement in our gross margin. We delivered earnings per share of EUR 4.11, up 6.2% on a comparable basis. The share buyback drove EPS accretion, though this was offset by the expected increase in our effective tax rate to 26% and the higher interest as we refinance maturing debt at higher interest rates. Free cash flow remains a key priority, and we delivered another strong result of just over EUR 1.8 billion. This was after CapEx investment of nearly EUR 1 billion in key projects such as new aseptic capabilities, a new canning line at our Queensland site, the start of construction of a new site outside of Manila, new ARTD capacity, more coolers and the continued development of digital, AI and SAP S/4HANA. And our investment continues to deliver strong returns with ROIC up 70 basis points to 11.5%. And finally, we returned EUR 1.9 billion to shareholders through our dividend at EUR 2.04 per share and the buyback of EUR 1 billion. Before moving on to talk about productivity and cash, we wanted to highlight a couple of markets. Starting with GB, our largest single revenue market, which has just celebrated its 125th anniversary since the sale of its first Coke. GB had a fantastic year with revenue growing almost 6% and volume growth in both channels with away-from-home benefiting from several new customer wins like Arsenal Football Club, Fullers and Jet2. Our Zero portfolio saw another strong performance from Coca-Cola Zero and Diet Coke supported by Jamie Dornan, This Is My Taste campaign, and the Diet Coke and Cherry flavor extension. Given the greater size of the energy category versus other markets, GB enjoyed more benefit from the growth of Monster, supported by the launch of more multipacks for at-home consumption. Another top performer was Dr Pepper, where a push on Zero and the latest Cherry Crush variant helped the brand become the fastest-growing sparkling soft drink in Europe. Now to APS and Australia, which delivered top line performance, excluding alcohol, of an impressive 7%, its strongest growth for many years. Share gains in sparkling, energy and sports supported low single-digit volume growth, driven by Coke Zero in single-serve and multipack PET, Monster Ultra White and the new grape variant of Powerade. We also saw good growth in our coffee brand, Grinders, which supplies beans and ground coffee to the home and away-from-home channel. While we continue with the transition away from Suntory this year, the new ARTD brands aligned with the Coca-Cola Company are now entering the market, providing a great platform for growth. A bit more on that later. Now on to efficiency and productivity, where, as you know, we have a proven track record with a consistent reduction in OpEx as a percentage of revenue. Our current program will deliver between EUR 350 million and EUR 400 million of savings by 2028 and is on track. We continue to optimize our network. During the year, we reduced the number of distribution sites in Germany, consolidated production in Paris into our Grigny facility and closed 3 single-line sites in Indonesia. And as Damian mentioned earlier, we opened a new shared service center in Manila, enabling us to centralize activities, harmonizing processes and driving efficiency, all enabled by technology. Turning now to cash and the balance sheet. Another strong year of free cash flow generation with over EUR 1.8 billion translating into a healthy free cash flow conversion to net profit ratio. And within this, we invested over EUR 1 billion in CapEx and restructuring initiatives. The strength of our cash generation has driven sustained deleveraging with net debt-to-EBITDA of just below 2.7x, comfortably in our guidance range of 2.5x to 3x. Our debt has a balanced weighted average maturity of around 5 years. Given we refinance around EUR 1 billion per year, much of which related to the acquisition of Amatil when rates were lower, we do expect a modest increase in annual interest expense whilst retaining an overall low averaged and weighted average cost of debt of 2.5%. Which brings me on to our capital allocation framework, which is unchanged. We remain focused on ensuring we maintain a strong and flexible balance sheet, operating ideally towards the bottom end of our leverage range and with a strong investment-grade rating. Our guidance on capital investment is unchanged for 2026, and we continue to remain alert to value-accretive M&A, should an opportunity arise. We remain committed to delivering growing shareholder returns. These comprise our annual dividend payout ratio of around 50%, which grows with earnings, and we are pleased to announce a further EUR 1 billion share buyback to be executed over the coming year. Thank you. And now back to Damian.

Thank you, Ed. Always good to hand over after a EUR 1 billion share buyback. So as you can see today, we're delivering strong results, but our focus is also for me on creating and winning tomorrow. We're winning business because we operate in growing profitable categories with meaningful share and unmatched scale and execution across our supply chain and most importantly, our frontline teams. Our geographic expansion from Europe into APS provides us with a powerful and diverse platform. We're scaling capabilities, investing behind our brands, with our partners and driving the impact of tech and digital from revenue right the way through to productivity, all whilst executing a multiyear ROIC-accretive investment plan that sets us up for long-term value creation. And above all, we remain committed to maximizing returns for all our shareholders. A brief reminder of the slide we shared before. Simply put, we are in the right categories. We are well positioned from a portfolio, channel and geographical perspective across 31 wonderful markets. And we've got meaningful share of our core NARTD, the largest in FMCG category in retail. We have the privilege to move, make and sell the world's best beverage brands. We have a total beverage portfolio that addresses all drinking occasions across the day. The category is growing, not just in total, but across all subcategories and even more so within Zeros. So having a Zero option for every occasion and across pack sizes too provides our consumers with a matchable choice making our portfolio more accessible than ever. Which brings me on to our revenue, margin and growth management strategy, which, of course, goes way beyond pricing as we continue to balance premiumization with affordability. We know that value is playing a role for a lot of consumers, but we also know they love innovation and excitement. As a category leader, we take the role of bringing this to the consumer, more taste innovation with new flavors, more pack innovation and more promotional innovation with more win mechanics and value add. All of this is brought to life with examples on this slide and those that follow, with plenty more to go for as we become even more sophisticated leveraging data, AI and insights. So now, what's in store from our brands in 2026? Starting with Coke. As I've talked to before, we need bolder moves to drive category volume. 2025 had plenty of highlights. But we've only just begun, and I'm really excited about what is coming this year with almost too much to put on one slide. High-profile activations linked to the FIFA World Cup, and the English Premier League are already in play. We are continuing to reinvigorate Diet Coke through the exciting The Devil Wears Prada movie sequel. And we have a number of packaging innovations like the Gen Z-focused graphics on the new 500 ml Coke classic can, new retro flavors like cherry float and a new black 007 identity for our caffeine-free platform. There's also lots to come across flavors and sports. More innovation, including sour cherry and apple is on the way for Fanta, focusing on faster-growing Zeros whilst stepping into Gen Z passion points through gaming platforms. You'll be seeing new packaging for Sprite with an icy explosion of sensory chill refreshment from a new fresh lemon mint flavor. In sports, we will see new flavor additions in Powerade, a new sports cap packs alongside World Cup activations. And BODYARMOR has just been launched in a variety of flavors in Spain and in New Zealand. I referenced earlier the strength of energy last year with strong share gains and volume growth in a category that has evolved from functional to mainstream with a broadening consumer appeal. There remains plenty of headroom for growth, and our focus is clear: more coolers, more distribution and more innovation. This includes Zeros, continues to drive incremental growth supported by great marketing assets. Lando Norris was the #1 energy SKU in Europe last year in retail. So let's see what happens with Viking Berry and others coming this year. We're also strengthening in ready-to-drink tea and in our alcohol ready-to-drink segments. Suntory distribution has now ended, positioning us for a stronger, more integrated platform whilst leveraging nearly 20 years of expertise in the category. While this creates a near-term headwind, it is the right decision for the long term. And more broadly across CCEP, there is so much more to look forward to this year including the launch of Bacardi Spice Rum and Coke. The Fuze Tea transition in Iberia I've already touched on, which I'm confident will only get stronger from here. And in Indonesia, Fresh Tea was relaunched with new flavors and a new look. Early days, but the Black Current variant closed this year as the #1 flavored tea, which now brings me on to Indonesia. Indonesia had a challenging year with the macroeconomic slowdown impacting consumer demand, affecting local and international brands alike. NARTD volumes excluding water, were down double digits, and our own volumes were consistent with that trend, albeit with an improving performance in the second half. Sparkling performed better with an encouraging exit rate supported by Zeros, where mix increased from 3% to 7%. Black tea, however, remained under pressure, although flavored tea continued to perform better. We continue to push on a pace with our transformation as we unlock the long-term opportunity for growth. We have a strong innovation and brand plan in place, focusing on sparkling and tea. And we've delivered major network change moving from 8 plants to 5, whilst optimizing our logistics through third-party partnerships. And despite a significant change again in [ gender ], including a new route to market, which I'll briefly talk to next, our people are energized by the changes being made, and we've been recognized again as a top employer status. Our new distributor-led route to market enables us to expand availability and optimize cost to serve. We've talked to this before. It is anchored in building a robust network of bigger and better distributors, partners with deep regional knowledge and strong ties to local communities, wholesalers and retailers. These distributors have true accountability, shifting from a service provider mindset to active sellers with skin in the game. We've grown our distributor base from 0 to 182 partners, operating across 300 distribution points now with a sales force of more than 1,700 people in the market and increased by around a quarter. Early results were encouraging, with more distribution points being gained on a sustained basis. The Philippines delivered another great year despite cycling strong comparable adverse weather. Unlike Indonesia, they are not immune from some of those macros I talked to earlier. However, revenue grew 3%, delivering record high sparkling value share of 77% supported by customer wins like the 1,300 strong Angels Burger chain. EBIT margins expanded by around 150 basis points, so well on track to its 10% target, driven by profitable top line growth and efficiency delivery. Ed and I were over there last month for the annual field sales rally, and you can really sense the high energy levels and optimism coming into 2026. We saw solid commercial plans led by Coke trademark where we expect Coke Zero to continue to gain momentum, having grown 20% last year. We're building on the energy opportunity, having really only entered the category recently. And to support our growth ambitions, we broke ground on the largest infrastructure investment to date, the new plant in Tarlac just outside Manila. As we've mentioned already, our CapEx investments include digital and tech, and we're investing more than ever in growing our digital capabilities and the use of AI. AI, particularly machine learning has featured widely across the business for many years, but it is accelerating. We're focused on areas in commercial supply chain and shared services designed to unlock growth, improve operations and enable smarter, faster decision-making. This includes optimization of promotional spend and enhanced demand forecasting to help drive growth and deliver better customer service. But also, AI in our operation is helping to maximize our asset utilization, whether looking at production schedules or assessing the impact of introducing new products to our network. We're also transforming how commercial teams access customer insights. First, through a significant investment to unify our data and now by using gen AI to allow faster access to complex queries under diagnosis of performance. Agentic input is a potential game changer for our sales force, and we have a couple of applications using agents. But really, our goal is to embed it in shaping and enhancing customer contact and support. Driving data and AI across CCEP is not simply a technology challenge. Of course, fundamental to all of this is exploration and learning. Our AI incubator allows us to gather and prioritize ideas from the business, creating an environment to experiment and test solutions before committing at scale. And as I mentioned earlier, we're getting our people ready, rolling out digital and AI training at pace for all CCEP roles to really change mindsets and ways of working. And all of this feeds into our midterm objectives, which remain unchanged. They reflect our confidence in the business. We believe that the top line guidance of 4% on revenue and 7% on profit is sustainable and achievable over the midterm. It provides the framework for us to invest in our business for growth, making us an attractive multiyear creation story. Which brings me on to our full year 2026 guidance, reflecting our current view of market conditions, touching briefly on areas by exception. We remain resilient operating in vibrant categories, even though the consumer environment remains challenging. In that context, we expect revenue growth of 3% to 4% driven by volumes and revenue per unit case. This also reflects the Suntory exit impact. We expect cost of sales to grow by around 1.5% per case. As you know, our concentrate costs are tied to our revenue per unit case growth. On relatively benign commodities, we are approximately 80% hedged for full year '26. We do continue to see inflationary pressures in labor within manufacturing partly offset by our efforts on efficiency. All other metrics remain the same as last year. And our new EUR 1 billion share buyback program will commence imminently to be executed over the course of the year. 2025 has been another solid year for CCEP, and I look forward to the same again in 2026, our 10th birthday year. We have a fantastic total beverage portfolio, and we're operating in growing categories supported by strong relationships with our customers and our brand partners. Our innovation pipeline is bigger than ever before, and we remain focused on value and affordability in Europe. Not everything is perfect. Of course, we continue to learn with even more focus on Zeros, driving more innovation at pace, bringing more magic to Coke Original Taste, and adapting even faster, leveraging tech to strengthen our pricing and promo efficiency. This is all backed up by investments. We're investing more than ever in top line growth and greater productivity to drive those expanding operating margins. Portfolio changes are now largely behind us, and we look forward to a more normalized outlook for the Philippines and an improving outlook in Indonesia. Our full year '26 guidance, combined with the growing dividend and a further EUR 1 billion of share buybacks demonstrate the strength of this great business and our ability to deliver attractive and consistent shareholder value. Thank you for your time. Ed and I would now be very happy to take your questions. And I'll hand the call back over to you, operator.

[Operator Instructions] We'll go ahead with the first question. First question today is from Sanjeet Aujla from UBS.

A couple for me, please. Damian, I was wondering if you could just go through how Europe played out through the quarter, in particular, the exit rate through December? And it seems like the headwinds are really in Germany and France. What are you doing in terms of your commercial plans for 2026 to get those businesses to stabilize or back to volume growth? My follow-up is really for Ed, on free cash flow guidance. I think you're talking about at least EUR 1.7 billion, that would imply maybe flat to slightly down on the '25 base despite another year of talking about 7% EBIT growth. Can you just help us square that, please?

Sanjeet, yes, I mean if I just look at the quarter, I mean, clearly, we exited it really well. We had a very strong Christmas campaign in Europe, summer campaign across Asia Pacific, so really happy with the momentum. Really happy with the execution we delivered in store. Had the benefit to be out in a lot of our markets and with more pallets on floor, more coolers and more product available and really strong pack communications. So I think this year, we really stepped up with the quality of our on-pack communication. So quarter started a slow, but clearly gained momentum as we got towards year-end. Yes, you're spot on. If you look at Europe, I mean, a lot of our markets were ahead of our expectations in 2025. Obviously, GB being the standard. And then on the other side of the equation, clearly, France and Germany were more challenged. I think the French situation is more transparent. Really, we had that tax increase on Coke Classic, which is a massive brand for us in France. To be honest, the brand performed stronger than I would have expected, given the size of the tax that we passed on to the consumer. So that was a positive, albeit it still was a drag on volumes. Clearly, as we move into 2026, we've got a number of activities going on in France. One is, a continued push on our great Zero portfolio. There's still a big opportunity in France around Zero and sugar-free. And then also, we're looking at our brand pack architecture around Coke plastic, given that new tax, and trialing some smaller pack variants to hit better price points, but also looking at value on our large 1.75 liter. So more to come on France, but I would say very transparent. Yes. Clearly, Germany was the other market. Really, we had a better second half in Germany, but clearly, the first half was quite difficult, mainly driven by higher promo prices, Sanjeet. So what we've seen is a number of our customers took up some promo pricing above levels that maybe for the consumer, given some of the macros, proved a bit more challenging. We did reinvest some more money and value in the second half of the year into Germany. That certainly helped. But obviously, making up for a slow first half was challenging as we got through. But again, the exit rate in Germany I'm pleased with, also pleased with the plans we have in place around that promo value proposition as we move into 2026. And Ed, do you want to talk about...

Sanjeet, yes, on free cash flow, so we're very pleased with 2025. We delivered over EUR 1.8 billion. And '26, we're guiding to at least EUR 1.7 billion, which is in line with our objectives. We are investing a little bit more on a net basis in CapEx in 2026 and 2025. And we see -- because we see opportunities to invest strong business cases with great returns. So we don't really want to constrain our ability to invest by quoting a number too high on the free cash flow. So we think EUR 1.7 billion is a good number to start the year with. Obviously, we'll review as we go through the year and should things improve, we'll let you know.

We'll now move to our next question. This is from Bonnie Herzog, Goldman Sachs.

I had a quick follow-up question on Europe. I guess wondering how big of a tailwind you're expecting from the World Cup? And any early sell-in ahead of the events as you work to increase activation? And then I do have a question on your guidance. Your top line guidance this year is just slightly below your medium-term targets. So just hoping to hear a little more color behind this and maybe the key puts and takes? And ultimately, what are you expecting in terms of the balance between volume growth and price mix?

Bonnie, so maybe just to start with World Cup. I mean, as I hopefully demonstrated in some of the slides I shared this morning, we have a fantastic calendar of activity starting now. So if you're actually in our markets now, we've really tried to bridge the World Cup all the way through to the event itself. Also, we've got obviously the EPL, which is a massive asset for us in GB. So World Cup activations really starts now and will run all the way through to the event in July. So lots of on-pack activity, lots of win activity. I mean one point I touched on, as Ed mentioned it, we recognize value has been a key need for some of our consumers. What we really recognize that excitement and innovation is absolutely essential. So while we will offer value, we also know there's lots of consumers who want to engage with brands like our brands, that give them something a bit more, whether that's more on taste or package innovation or particularly more on great consumer promos. So winning tickets, guessing the goals at the Premier League, having a chance to secure only Coke Can assets for us is going to be critical as we build out FIFA. So from a consumer engagement perspective, we've got super plans right away through 2026. From the guidance side, it's really reflecting what we talked about in 2025. I mean, broadly speaking, if you look at the exits that we're dealing with in the Suntory space, very high revenue products. And effectively, when you put all that together, it's about 0.5 to 1 point of growth, right? So there's nothing else really beyond that and that we're just reflecting that in our '26 guidance because we know we'll be through it in '26. Beyond that, if you look at our performance last year, it was bang in line with our midterm guidance. So we still feel very confident about the 4%. And as you can see from our activity calender, there's a lot to support that and potentially, as we move forward, look to even beat it with a lot of innovation coming down the line. So nothing more really on guidance. It's just a pure reflection on the changes that we're already in the middle of. Ed?

And then, Bonnie, on your question about the shape of the '26 revenue, so we're expecting about 1/3 from volume, 1/3 from mix and about 1/3 from price. So we're very pleased, as we said earlier, in 2025 to see mix come back and play such a prominent role in the revenue growth. And we're looking forward to seeing that continue into '26. And as we talked about earlier, I mean, volume growth is critical for us in the long term and certainly the plans from a marketing and consumer and innovation perspective are all built around that volume growth for '26. So we expect about 1/3, 1/3, 1/3 for this year.

Maybe just to build on Ed's point because I think it's really exciting. We've put a lot of effort into reenergizing away-from-home. We talked about that, I think, on all our calls last year. We put a lot of effort into more cooler placements. So it was a record year for us in 2025. And it's great to see that coming through in the P&L through mix. And we know that a sustainable 4% will be a healthy mix of top line volume, reasonable pricing and brand and pack mix. And that brand and pack mix sentiment was very strong in '25, and we're really happy to see that coming through.

We'll now take the next question. This is from Edward Mundy from Jefferies.

So just a quick point of clarification and then my question. So the clarification is that like the last 2 years or so, there have been quite a lot of sort of one-off technical portfolio changes, Cadbury, Fuse, Beam. If you back all these factors out, what do you think your underlying growth would have been the last 2 years? And then my question is really around the changing of the guard at the Coca-Cola Company. We've seen this both in Europe with Luisa, and then in Atlanta. What do you think this means, if anything, for CCEP's next chapter?

Thanks, Ed. I mean we'll get a more accurate number than I'm going to give you, but all of the work we've done in terms of backing out all of those changes you talked about, which, let's be honest, will set us up for a stronger platform going forward. It's between 0.5 and 1 point of growth, right? So if you strip that out, we'd be bang in line with our midterm guidance. And that's what gives us confidence in reiterating our midterm guidance today. And also, we've just decided to reflect that in the 3% to 4%, bearing in mind, we already know that for a period of this year, we'll be at the final phase of that exit. When you strip it all out, anyhow that's what gives us a lot of confidence for '26 and beyond. We get bang on that 4%. And I think that's a great number given everything else that we're looking at. On your comments around the Coca-Cola Company and the system, I would say change is good with both Henrique coming into role, and then as you mentioned, Luisa in Europe. It's always a great time for us to get executives who've had experience outside of our markets coming in and looking at how we do things. Obviously, they learn, but also they can challenge, bring new learning from different geographies. I think that's one of the strengths of the Coke system is that, we can lift and shift and learn from different parts of the world. And as we've got a very diverse group of markets now from very developed, emerging right away to developing, having executives like Henrique and Luisa, who worked in multi-jurisdictions really helps us. So overall, those changes are good, brings new energy. And as I said, really new curiosity and learning, and I always think that helps any business.

We'll now take our next question. This is from Matthew Ford from BNP.

My question is just on energy. Obviously, you saw a very, very strong performance, 19% volume growth from energy in the year and you had various innovations. You've spoken in the past and today as well around the strong innovation pipeline next year and beyond. But obviously, the 19% growth was quite a bit stronger than we've seen over the last couple of years in the business. How are you thinking about the kind of the quantum of that growth next year and beyond? I mean, should we be expecting a similar level of growth? Or would you expect that to moderate after what was potentially a particularly strong year?

Yes, it's been a fantastic category for us over a number of years. Some of that CapEx and cash, that Ed talked to, has gone into some more accounting lines to make sure we're ahead of the demand. So that's a really nice problem to have as a bottler, to be honest. I expect that category to remain in its kind of 2- to 3-year cadence of mid-teens. I think there's no reason why we don't see it on the back of a number of fundamentals. One, we still have a job or a work to do as a bottler in terms of distribution and bringing those brands to more locations on the back of higher cooler placements. The Monster organization is doing a fantastic job bringing really strong innovation, and we see that. I think I mentioned when we last spoke, I enjoyed a visit to our innovation lab and had a view of the innovation, not just for '26, but for '27 and our thoughts on '28. So that's going to keep coming. So all of that gives me confidence that the energy category will remain the leading NARTD growth category. We're well positioned. We're a share leader or very close to share leadership in all our markets. And on the back of that, I see those growth levels being maintained. Will it be another year of 20-plus percent? Who knows. It certainly has the potential. Will it remain at that mid-teen growth level? I see no reason why not.

I think one thing that's very encouraging as well is that about half the growth for energy each year comes from the core and about half the growth comes from innovation. So I think that's very healthy. It wasn't the '25 was just built on innovation and is a one-off. So yes, I think to Damian's point, we see there's no reason why the trajectory won't stay the same.

And Zeros are playing a much bigger role, much bigger role, which also, I think, gives it more accessibility to a different profile to consumer and the taste profile on the Zero products is fantastic. So yes, a lot to be positive about.

We'll now take the next question. This is from Nadine Sarwat from Bernstein.

Two questions for me, one on the quarter and one bigger picture. So on the quarter, good to see you guys call out moderating volume decline in Indonesia in the fourth quarter. Could you perhaps provide some more color as to what's driving this and how Q1 is going so far and what your guidance for the full year bakes in for the country? And then my second bigger picture question. As you called out in your presentation, revenue growth management has been a hugely powerful lever. You guys have been able to utilize to deliver, both top and bottom line growth. And in your mature European markets now, how do you view the potential for further revenue growth from this lever that you have? Is all the low-hanging fruit achieved in these mature markets? Or do you see continued significant opportunities? And if so, could you give us a few examples?

Nadine, thank you. Maybe I'll start with your second question, on the whole revenue and margin growth management. I see immense opportunity going forward. I think we've done a lot. But if you look at our results over the last number of years, '25 stands out as being the first year in a while where we've seen mix really coming back into our revenue delivery, which is fantastic. Some of that's channel mix, particularly with away-from-home performing well. Some of it is category mix as we move into ARTD. But a lot of it's coming from smarter decisions around pack pricing, pack offerings, whether it's mini cans, small PET. So when you look at the options beyond that, there's still a lot out there that we can play for. We've got massive manufacturing flexibility in terms of pack formats and sizes. What we need to do better is run that through some of the AI, I referenced, and some of the analytic tools just to sharpen exactly either the price point or the exact pack offering. We have an 850 ml out in trade now, both in France and Germany, we need to review that as an idea to enter small single households. We've got a 12 pack 300 ml PET in Australia. That's doing phenomenally well. That's only really in Germany and Europe. So we know we've got an opportunity there. We've launched a 500 ml Coke can. So for those of you in the same age bracket as me, that was a super can when I was growing up. We brought that back. So there is a lot of opportunity in revenue and margin management. And I haven't even touched on, which is my personal passion, how we spend our promotional money. That can be a massive driver of value and mix accretion going forward. We're getting better. But as I've called out, obviously, our decisions on promo in Germany didn't work last year. And we've seen that impact our business. So we know we can continue to get smarter on what is a lot of cash that we reinvest with our customers behind promo points. So in some ways, we're not at the beginning, but certainly, there's a long way ahead of us in terms of OR and MGM. We deliberately included margin in that capability a number of years ago, because we do think revenue growth for revenue sake may be good. Revenue growth with margin is great, and that's what we're really focused on with our teams. On Indonesia, definitely a stronger finish to the year, definitely a good start of the year. I would just caution that with, you know, Ramadan is 10 days earlier every year. So our teams in Indonesia now are really looking forward to that key and very special period for all of our consumers and our employees in Indonesia. And then obviously, we'll have Eid following that. So myself and the team are down in Jakarta in April, that will be able to allow us to look back at our business in terms of the momentum from Q4. Clearly, we see momentum in Q1. What we got to just look at and see is that momentum is sustainable and at what level into Q3 and Q4. But really happy with our Ramadan execution, really happy with our performance across some of our key packs. To your question on guidance, we haven't materially reflected anything significantly different in Indonesia. We expect Indonesia to grow this year, both on volume and revenue. That is clear. But the size of the potential, we haven't reflected in our guidance. I think it's only prudent to get a good few quarters under our belt in Indonesia, and then we can talk a little bit more about how that may impact that top line for our guidance going forward. At the moment, I'm just happy we finished the year stronger. We started the year really well. We're benefiting from an early Ramadan, that's been really well executed. And then we'll take a look and see, and take a view on how the rest of the year is performing. The macros look a bit more favorable. Consumers are spending a bit more money. We see sparkling doing well. As I called out, my message is, tea is still a little bit of a headwind for us, but we cycled through that. So from an absolute volume growth perspective, we should see that coming in '26 and we will be on the back of sparkling.

And the next question is from Lauren Lieberman from Barclays.

First, I just had a clarifying question. Damian, you mentioned in Indonesia that you're not anticipating a big acceleration or change in trend for 2026. But I think you said you expect the business to grow. And I think in the presentation, you mentioned that volumes were down double digits. So I just wanted to clarify what's built -- is there an improvement built in or not? And if I'm right in reading the way you presented the Indonesia stats in the presentation?

Yes, for sure, Lauren, there is an improvement built in, absolutely, and we see that coming out of Q4 and into Q1. And I suppose it is about comps. When you look at the year we had last year, growing volume in 2026 is in our plan. I suppose when I think about Indonesia, I have much bigger ambition and plans for that market in terms of it being sustainably impacting our long-term revenue algorithm. It will help in 2026, but really, it will be probably a single-digit volume turnaround, which is very happy to see and off a new cost base. So we're very pleased with that. But honestly, it's the unlocking of that future growth potential that gets me excited. And we will see that in '26. Yes, so we'll be, I'll say, turnaround is a word I don't normally use about Indonesia, but I do see big improvements in the end of last year and starting this year.

And I think, Lauren, it's just worth reminding ourselves that from a materiality perspective, from a profit and revenue perspective, it's small for CCEP, a bit more impactful from a volume perspective, for sure. But when you look at the revenue, I think the decline this year only had a 0.2% impact for CCEP overall.

Okay. Understood. And then just mentioning earlier that the balance you're looking for the revenue build, 1/3 each across volume, price and mix. When I look at the second half performance for '25, it looks like that's about where you were. So would you say you're kind of -- is that a fair assessment? Kind of your strike in the second half of the year overall kind of struck that right balance between the 3 elements of organic revenue growth. And then the idea for '26 is just a little bit better across all fronts. Because I know from KO, a huge focus on volume overall through the system this year. But if I look at your performance in the second half, it looks, overall, again, like your volume is kind of contributing at the pace you might anticipate within the overall revenue build.

Yes, I think as we look into '26, I mean pricing is pretty much where we want it to be. And as you know, Lauren, we talked last year, we did invest a lot in incremental value activity, particularly in the second half. So I think on pricing, we're in a good place, and we're in a good place in value as well, which is great. Mix, as we talked about, is also coming through nicely. That's on the back of not just chasing price because, as I called out, I firmly believe that this category is so valuable to our customers and also to our consumers in terms of excitement and innovation. So we've really got to focus on what grows the category. So flavor innovation, pack innovation, great marketing, and consumer connection is key with some value to make sure particularly those shoppers that need it can access our products. And we delivered that in 2025. That will continue in '26. So you will see a nice balance of pricing that reflects some of those macros, mix that reflects innovation and premiumization and excitement and then obviously, volume coming through as well. And we saw that in the second half of the year, and that's really our model going forward.

The next question is from Andrea Pistacchi from Bank of America.

So I have a question on the operating profit, please. So you've delivered again on the 7% operating profit growth, despite top line falling a bit shy of expectations. The same in 2024. In fact, you did 8% EBIT growth then. And for '26, again, you're guiding to 7% in line with your mid-term algo, although top line guidance is slightly below the midterm. So with, I guess, a bit less leverage from top line than you would have anticipated, what drivers are enabling you to still consistently deliver on operating profit? Is it the solid revenue per case drop-through, the COGS environment, which is, I guess, pretty favorable? Or are you having to push a bit harder with the cost savings, please? And I may have missed it, but did you give a cost saving number, please, for 2025?

So yes, we're very pleased with our '25 operating profit doing 7% despite the fact that the revenue could have been a little bit higher in some areas. It was a great result to still deliver that 7%. It comes from many areas. We talked about some of them already. I think mix was clearly a great lever for us both on the revenue side but also on the profitability side. Strong R&M GM and making sure those promos really work and generate a return, and we end up with a bit better revenue per case than our cost per case in the margin. And then also critical is our productivity and transformation agenda. So again, we were delighted that our revenue grew faster than our OpEx in 2025 and continuing that kind of improvement as a ratio of 40 basis points in the year. And we see that continuing as we go into 2026. So yes, very pleased with the profit performance. I think going into next year, we do expect more of the revenue growth to come from volume as a whole for the year than in 2025. And obviously, although that's still accretive at the profit line, it generates a bit less profit than revenue per case or a pure rate increase. So that's why even with a slightly higher revenue number, we're still at the 7% profit line for '26 in our guidance.

If I'm able, sorry, to squeeze in a quick follow-up for Damian, please, on the channels in Europe. So you had a strong performance this year in away-from-home in Europe. And of course, it was a big, big focus for you. Do you expect this momentum to continue in away-from-home? As we go into 2026, how would you see the balance of performance of the channels in Europe?

Yes, I expect it to continue. I mean our investment and strategic intent hasn't changed. That will continue into '26 and into '27 built off what we did in '25 around more coolers, driving more incidents, winning new business and working with the Coca-Cola Company and Monster on driving consumer relevance for those channels, both on pack and in-store. So that's a multiyear program. So I see no reason why that won't continue into 2026.

We'll now take the next question. And this is from Richard Withagen from Kepler Cheuvreux.

On the sports drinks, you're putting more efforts and resources behind those sports drinks, but you have Aquarius, you have Powerade, you have BODYARMOR. So how should we think about positioning of the different brands? And how do you avoid cannibalization?

Yes, we are blessed with lots of brands that come with some choices. So I think Aquarius is a fantastic brand for us really in two markets, really, Belgium and Spain. Our main sports platform will always be Powerade, and we continue to build that out both in terms of functionality, pack sizes, flavors. And then we've got, obviously, large assets like the FIFA World Cup coming. We have a fantastic Powerade business in Australia and New Zealand that I'd love to keep replicating in Europe. So that will be our main platform. I think around that, though, we see that hydration and wellness opportunity even bigger, and that's where brands like BODYARMOR, which are quite different in terms of functionality and ingredients to a Powerade or an Aquarius. So both of those can exist very well together in the segment, and it's a growing segment. So yes, I think Aquarius is probably a little bit more niche. We have tried Aquarius in different market. It didn't quite take off as well as Powerade. So Powerade will be our main platform, and then we'll supplement that with brands that we think can add more value like BODYARMOR and clearly keep our great business in Spain and Belgium with Aquarius. Yes, good choices to have to make, to be honest.

Exactly. And in terms of the growth drivers of these businesses, is it a lot of distribution gain? Is it innovation?

Yes, it's a little bit of everything. I mean, innovation is key, particularly on the product. So we've got some Powerade Zero water. We've got enhanced Powerade. We've got 1 liter Powerade now coming to Europe, which is great. That's a pack we've had in Australia for a while. And then it's clearly -- yes, still distribution, particularly out of retail, but also markets like GB, a great market for us. We really only have 2 SKUs in GB, 2 flavor variants. So when you stand back and look at a business like Australia where you've got multi-packs, you've got small single serve, you've got 1 liter, and then you compare it to a market like GB, we still have a big, big opportunity.

We'll now take the next question. This is from Eric Serotta from Morgan Stanley.

Two quick ones. First, from a housekeeping basis, you called out in the press release, as you have previously, the selling day impact for the first quarter and the fourth quarter, the impact on revenue. How should we think of that in terms of the impact in terms of the profit cadence for the first half versus the second half? And then the second question, bigger picture for Damian, would be clearly a nice -- you guys clearly had a nice uptick in mix in the ending 2025. I know you said roughly 1/3, 1/3, 1/3 between price, mix and volume for '26. Can you talk a bit about the mix drivers going forward? And I guess, what you've been doing to really enhance that mix contribution exiting 2025?

Maybe I'll start, Eric, on the selling days. So yes, the 6 extra days in the first quarter and therefore, in the first half, so that does affect absolutely the volume, and we'll see that for sure in our quarter 1 results. I think overall, though, when you look at the operating profit, which is, I think, behind your question, we actually think the operating profit will be fairly balanced for the year. So although we have the benefit of the extra days in the first half, we also have the last bit of the exit from Suntory all in H1. And obviously, that's a higher revenue per case and a higher profit. So there's lots of puts and takes, as always, on the phasing, but we expect an operating profit pretty evenly phased between H1 and H2.

And just your second point, Eric, I mean it's a key focus for us in terms of driving mix and it comes across a number of different aspects. So obviously, category mix as we move into ARTD; energy, we talked about BODYARMOR on the previous question. We continue to look at categories that generate a better mix. Then you look at channel. Clearly, we're seeing the benefit of away-from-home recovering after a number of years, and that clearly is a positive for our mix. Then we drop into packaging. So generally, smaller is better when it comes to mix. So cans, half liter, we're doing a lot around mini cans, more pack innovation. Then we also got to look at price promo, so making sure our price promo strategy drives mix. And then the last point that I'll keep calling out because I do think it's really, really important is the more added value we can bring to our brands is a real driver of mix. So when you look at, for example, our half-liter PET pack today in GB, it's got an excellent EPL promo on it. Guess the goals, very engaging, nothing to do with price, pure value add. And clearly, the more we can bring that to the right packs, it's an enhancement on revenue and it's an enhancement on mix. So I still believe, although consumers and shoppers do struggle for value with cost of living, and we will meet that occasion, and we are meeting that occasion, we can't lose sight of the role we play in terms of bringing excitement, engagement. And for a relatively small price, fantastic tasting products that can put a few smiles on people's places during the day. So value is key. But for me, longer term, continuing to build out the excitement through flavor, through packaging, great taste will also be a big driver mix. So we're very fortunate given the diversity of our channels and the categories we operate within, but we have a number of areas where we can really lean on mix to help that revenue growth.

Next question is from Charlie Higgs from Rothschild & Co Redburn.

My first question is just on the Manila shared service center that you spoke about upgrading. I was wondering if you could just expand a bit more on what the remit of the shared service center will be? We saw some very strong margin expansion in the Philippines there. But will it also help contribute to margin expansion more broadly? And how do you see it interplaying with your existing Bulgaria shared service center? And then my second one for Ed, is just on leverage, where I think on my math, even with the EUR 1 billion buyback, you'll still be running at sort of the low end of your 2.5x to 3x range. How do you think about using the balance sheet at the moment? And what are your key priorities when it comes to capital allocation in 2026?

Charlie, very well thanks. And if I pick up your question starting then with Manila. So we're very excited about the opening in Manila. I think we've already got well over 100 people in the first 8 months. And there's amazing talent in that market. We've been super impressed with the capabilities we found. As we look at the role of the center, it's really to provide global capabilities. So it's not there just to support the APS region. It's an opportunity to centralize more activities and also some new activities using the capabilities that we've got there. But it's also an opportunity for us to reduce the risk profile a little bit. We obviously have a lot of activities today based in Bulgaria. And so having multi-hubs allows us to spread that risk a little bit. And although it's not a regional center, certainly, it does help from a time zone perspective, and being able to directly contact customers and suppliers in markets like Australia and New Zealand and much more time zone friendly in terms of our employees and also the customers. So we see it as a huge asset for us going forward. I think, therefore, it won't really impact the margin specifically in the Philippines. I mean it's a global asset. So it's a key part of our overall productivity and transformation agenda. So we'll see it in the delivery of the overall numbers. On the capital allocation framework, so no change there really in terms of our framework and capital allocation priorities. So we want to maintain that investment-grade rating, and that means keeping that leverage in that 2.5x to 3x. We continue firstly, to generate -- to spend the cash the business generates on what we need to do to grow the business. And as mentioned earlier, investing over EUR 1 billion CapEx again in 2026. Absent any M&A, then we return that cash to shareholders. I think with a EUR 1 billion buyback as you say, we think our leverage will continue to modestly decrease as in fact, it has done in '25 versus '24. And we think that's a healthy way -- healthy trend for it to continue. I think with the current interest rate environment, there's plenty of access to money. We still can borrow at competitive rates. We think leverage in that 2.5x to 3x remains the kind of the efficient level for our balance sheet. So we expect that to continue.

We'll now take the next question, and this is from Robert Ottenstein from Evercore ISI.

Great. Just one question for me. Damian, you mentioned earlier that how you spend the promo money is a personal passion, which makes a lot of sense. So can you maybe just elaborate on how big an opportunity that is? And also perhaps tie in kind of exactly what happened in Germany and what the learnings from that was?

Robert, yes, if you speak to all of my colleagues, they'll also confirm it is a passion point, for a couple of really valid reasons. One, it's a huge amount of money; and two, it has a significant impact on our performance. So it certainly -- it warrants the focus that we're giving it, not just me, to be fair, the whole team. It's a key part of our technology platform build-out, and we have been doing better year-on-year in terms of our promo efficiency and effectiveness, but it's like a never-ending opportunity. So if you just step back and look at it, we are fully funded from a promo investment perspective. We put a bit of extra money in at the end of last year. We saw that benefiting. So from now on, it's really more about promo effectiveness rather than quantity, and it's just finding ways to use those euros and dollars smarter to get a better return for our customer and also a better return from our shareholder. And again, that is sometimes live market tests are an easier way to figure out how consumers will respond. We run a lot of analytics, both through Bulgaria. We'll also do in the future through Manila, the try and model. We've got elasticity survey. So pretty much what any organization in our space will be working on. If I step back and just talk a little bit to Germany, what we saw last year in Germany was obviously an ongoing macro value environment, which we were playing in, and we continue to play in. But a number of our promotional packs did go above certain price thresholds. And I think that's where we saw a little bit of hesitation from our consumers at those higher price points. That hesitation can sometimes be, well, I'm going to wait until the price comes down again or it can be, I'm going to buy a little bit less. And that's really what we've seen. So it's more an impact on frequency. And that's something that we're working on with our team and learning from. So yes, when you look at the number of packs and SKUs we have, we've got a very rich opportunity by pack, by brand, by channel, and that's what we keep using. So I think it's something that will continue to be a key focus of our data and AI. Obviously, in Europe, customers set the pricing on shelf. And some of those dynamics can also be driven by our customers and nothing to do with us. And that's something that we got to deal with. Clearly, the category is super profitable for our customers. And for me, that's the most important. So we continue to get great relevance and great focus from our customers. And they grew their revenues faster than we did last year. And I think for long-term health, that's not a bad outcome.

We will now take our last question. And the last question is from Usama Tariq from ABN AMRO.

Just one quick question from my side on capital allocation. So I heard that you indicated that we remain committed to any accretive M&A opportunity if it comes. If I'm correct, that is one of the earliest times that you have been more positive on it. Can you indicate to me at what scale are you looking into or what geography would you be more interested in? Would it be APS or Europe? And would it be small or big? I'm just trying to gauge your level of interest, if an opportunity comes in this year?

Usama, well, that position hasn't really changed at all. I mean, since we created CCEP, we've been always focused on having a balance sheet and a free cash flow that will allow us to consider M&A that we think will make value for our shareholders. I think whether that was the Philippines or previously Amatil, that hasn't changed. And I don't know whether it was a comment or wording, but certainly, there's nothing significantly different in that space as we close out 2025 and look into 2026. As I said before, we'll always remain curious. I think our performance delivery with the Coca-Cola Company is an essential element of even having the opportunity to look at potential M&A, but we don't really see that in the near term mainly due to the fact of available quality assets. That can change quickly. We always know that, but certainly, nothing has really changed in that space. So if that was one of the takeaways from one of our comments, that's probably not reflecting the reality. So we're pretty much where we were going into '25, same going into '26, focused on delivering the value add of the Philippines, getting Indonesia to where we want it to be and continuing our journey in our other markets around quality top line revenue growth. And if at some stage, a good quality M&A opportunity comes up, we definitely consider it. We've got the balance sheet to do it.

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

Thank you, operator. And again, a big thank you to everybody joining us today and for your questions. 2025 was another great record year for CCEP. We're very much now focused on delivering a really strong start to 2026 and looking forward to a great summer activation across all of our markets in Europe, and enjoying a great summer activation now in APS. And as I mentioned earlier, across all of our markets, clearly, Ramadan will be celebrated, and we look forward to that as well. So really excited about our brand plans. I hope you got a flavor today of the quality and depth across multiple categories. Excited to see mix playing a bigger role to see that continue. And obviously, we look forward to updating you on our Q1 revenue performance a little bit later on in the year. But again, a big, big thank you, and I wish everybody a great rest of the day. Thank you.

Thank you. That concludes our conference for today. Thank you for participating, and you may all disconnect.