Coca-Cola Europacific Partners(CCEP) - 2019 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported an 8.5% increase in revenue, or 5.5% when excluding the impact of soft drink taxes [8] - Revenue per unit case grew by 2.5% excluding the impact of incremental soft drinks taxes [9] - Comparable unit case volume increased by 4.5% when adjusting for a one selling day shift, or by 3% in reported terms [10] Business Line Data and Key Metrics Changes - The company continues to focus on revenue management initiatives, driving growth in revenue per unit case [9] - Volume growth benefited from lapping soft comparables from the previous year, particularly in markets like Great Britain and Iberia [10] - The introduction of new products, such as Coke Energy and Honest Tea, is part of the strategy to diversify the beverage portfolio [12][13] Market Data and Key Metrics Changes - The company experienced strong growth in the sparkling beverage category, with NARTD (non-alcoholic ready-to-drink) up about 4% and sparkling up about 6% [68] - The Iberia market showed improved momentum despite the absence of Easter in Q1, indicating strong underlying performance [71] Company Strategy and Development Direction - The company aims to become a total beverage company, aligning with the Coca-Cola Company's broader strategy [12] - Continued investment in business initiatives to support top-line growth and maintain sustainable shareholder returns through share buybacks and dividend increases [15][16] - The company is focused on building momentum as it approaches the key summer selling season, despite strong comparatives from the previous year [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance, despite the first quarter being the smallest [15][33] - The company is mindful of strong comparatives from the previous year, particularly in Q3, but remains optimistic about the start of Q2 [34] - Management noted that the energy category is dynamic, with significant growth potential for Coke Energy [20][58] Other Important Information - The company is launching several new products, including Coke Energy and Costa ready-to-drink coffee, to capture growth in emerging beverage categories [12][27] - The company is seeing positive consumer feedback for new product launches, which is expected to drive future growth [21][22] Q&A Session Summary Question: How does Coke Energy differ from other energy drinks? - The differentiation lies in the Coca-Cola brand presence and unique product formulation, appealing to both energy and non-energy drinkers [20] Question: What is the opportunity in the coffee segment? - The company sees potential in the ready-to-drink coffee market, with plans to leverage multiple brands to capture growth [27] Question: Why is there no change in full-year revenue guidance despite strong Q1 results? - Management reiterated guidance due to the small size of Q1 and strong comparatives expected in Q3 [33][34] Question: How is the company managing the impact of Brexit? - The company noted some stock building by key customers in preparation for Brexit, but it is not expected to have a significant impact on overall results [74][75] Question: What is the outlook for the Coke trademark? - The trademark continues to perform well, benefiting from improved marketing and product offerings, with expectations for sustained growth [50][64]