Coca-Cola Europacific Partners(CCEP)2021-09-02 18:07Financial Data and Key Metrics Changes - Pro forma revenue for H1 2021 was €7 billion, an increase of 11.5% on an FX-neutral basis [30] - Pro forma comparable operating profit reached €802 million, up nearly 60% on an FX-neutral basis [30] - Comparable diluted earnings per share increased to €1.09, up 87.5% on a comparable and FX-neutral basis [31] - Free cash flow generation was approximately €650 million on a comparable basis [31] Business Line Data and Key Metrics Changes - The away-from-home channel saw a significant recovery, although it was down 22% compared to 2019 [32] - The home channel continued to perform well, with volumes up 3% versus 2019 during H1 [33] - The Energy portfolio gained nearly 300 basis points of value share since 2019, with volume growth of 50% versus 2019 [22] Market Data and Key Metrics Changes - Europe revenue was up 10.5% in H1 2021 versus 2020 but down 8% versus 2019 [34] - API pro forma revenues increased by 15.5% in H1 2021 and remained flat versus 2019 [34] - The company gained 90 basis points of share in Flavors and 170 basis points in Energy across combined markets [22] Company Strategy and Development Direction - The company aims to be the world's most digitized Coca-Cola bottler, focusing on digital transformation and sustainability [9][10] - Integration of the Australian, Pacific & Indonesian business unit (API) is underway, with joint growth plans being developed with The Coca-Cola Company [8][52] - The company is committed to achieving net zero greenhouse gas emissions by 2040 and is accelerating its rPET plans [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the recovery across markets, despite challenges such as weather and renewed restrictions in some regions [36] - The company is experiencing upward pressure on commodity costs, particularly aluminum, which has been factored into guidance for COGS [41][42] - Management remains focused on efficiency programs and cost management to navigate inflationary pressures [44][45] Other Important Information - The company has committed to a dividend payout ratio of approximately 50% based on the enlarged earnings base of the combined business [49][50] - The company is on track to deliver €350 million to €395 million in efficiency savings, with progress being made in 2021 [44][88] Q&A Session Summary Question: Recent pricing actions and their reception in markets - Management is satisfied with the pricing levels in 2021, which are supporting strong performance, and is engaging with customers for pricing plans for 2022 [63][64] Question: Supply constraints across Europe - Management acknowledged challenges with aluminum and can supply but noted that customer service levels remain high and top-line performance has not been significantly impacted [69][70] Question: Commodity cost outlook into 2022 - Management indicated that commodity costs are expected to increase mid to high single-digit percentages, impacting COGS per unit case [78][80] Question: Guidance assumptions regarding COVID - Management expects a reopening in API by Q4 and does not anticipate significant changes in Europe, maintaining a cautiously optimistic outlook [86][88]