Summary of Coca-Cola HBC's Q3 2025 Earnings Call Company Overview - **Company**: Coca-Cola HBC (OTCPK:CCHG.Y) - **Event**: Q3 2025 Earnings Call - **Date**: October 21, 2025 - **Key Acquisition**: Coca-Cola Beverages Africa (CCBA) Key Points Acquisition of CCBA - Coca-Cola HBC announced the acquisition of a 75% majority stake in CCBA for $2.6 billion, with a path to full ownership [5][12][31] - This acquisition positions Coca-Cola HBC as the second-largest Coca-Cola bottling partner globally by volume, covering 43 markets in Africa and Europe [6][12] - The strategic rationale focuses on growth opportunities in Africa, which has attractive demographics and potential for increased per capita consumption [6][13][20] Financial Performance - Q3 2025 revenues grew by 5% organically, leading to an 8.1% organic revenue growth for the first nine months of 2025 [9] - Volume growth was reported at 1.1%, with sparkling volumes up 0.7% and energy drink volumes up 34.3% [9] - Organic revenue per case increased by 3.8%, driven by price and mix [9] Market Dynamics - CCBA accounts for approximately 40% of all Coca-Cola beverages sold in Africa by volume, with a strong portfolio of over 40 global and local brands [16][17] - The acquisition is expected to enhance Coca-Cola HBC's presence in Africa, serving over 800 million consumers and covering two-thirds of Africa's total Coca-Cola system volumes [19][20] Growth Strategy - Coca-Cola HBC aims to leverage its experience in emerging markets to drive growth in CCBA's markets, focusing on operational efficiencies and revenue growth management [26][40] - The company plans to invest in local talent and community initiatives, emphasizing sustainability and local production [29][30] Financial Projections - The acquisition is expected to be low single-digit EPS accretive in the first full year following completion, with a clear prospect for long-term shareholder value creation [15][32] - Post-acquisition, leverage is expected to be at the top end of the medium-term target range of 1.2 to 2 times net debt to EBITDA [32] Challenges and Risks - Emerging markets present certain risks, including currency volatility and geopolitical factors, but Coca-Cola HBC believes the opportunities outweigh these challenges [58][60] - The company has a robust planning and contingency framework to navigate potential risks in these markets [60] Future Outlook - Coca-Cola HBC is committed to a secondary listing on the Johannesburg Stock Exchange post-acquisition, reinforcing its commitment to the African market [12][30] - The company is optimistic about the growth trajectory in Africa, with forecasts suggesting a 2% annual population growth and a 4% increase in GDP per capita through 2050 [20] Additional Insights - The integration of CCBA will focus on sharing best practices and leveraging Coca-Cola HBC's bespoke capabilities to drive growth [25][26] - The company is prepared to invest upfront to accelerate growth and improve profitability in the acquired markets [49][52] This summary encapsulates the key points discussed during the earnings call, highlighting the strategic acquisition, financial performance, growth opportunities, and future outlook for Coca-Cola HBC.