Hello, and thank you for being here. Welcome to the Coca-Cola Europacific Partners Half Year 2025 Results Conference Call. I must inform you that this call is being recorded. I will now turn it over to Sarah Willett, Vice President of Investor Relations and Corporate Strategy. Please proceed, Sarah.

Thank you all for joining us today. I'm here with Damian Gammell, our CEO; and our CFO, Ed Walker. Before I hand over to Damian, a reminder of our cautionary statements. 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 then turn the call over to your questions. Unless otherwise stated, metrics presented today will be on a comparable and FX-neutral basis throughout. This will also be presented on an adjusted comparable basis, thus reflecting the results of CCP and our Australia Pacific and Southeast Asia business unit, APS, as if the Coca-Cola Philippines transaction had occurred at the beginning of last year rather than in February when the acquisition completed. 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 to everyone for joining us today. I'm really pleased that we continue to execute on our growth strategy. And I'd like to start today by thanking all of my great colleagues for their energy, hard work, and continued dedication to our customers and to our business. As always, this is supported by our strong aligned relationships with the Coca-Cola Company, Monster, and our other brand partners. In short, our value creation is clearly evidenced by our impressive TSR of around 235% since 2016. We continue to deliver solid top- and bottom-line growth. Our cash returns are accelerating, having now completed around EUR 460 million of share buybacks this year, alongside paying a dividend in line with our annualized payout policy of around 50%, both within our disciplined capital allocation framework. Beyond today's results, we will also circle back to a few of the areas we covered in detail at our recent investor event in Manila to provide an update on the progress made since then with a little bit more detail on what is coming around the corner. At that investor event, we talked in detail about our resilient categories. So a brief reminder of one of the key slides we shared. Simply put, we are in the right categories, including ARTD and hot coffee that are structurally growing, are profitable and diverse. We've got relevant share in our core NARTD category, which grew by more than 5% in the last 12 months. We have a matchable scale and localist in our supply chain and in our frontline sales force and we're investing more than ever before in our key capabilities while accelerating productivity through technology and digital. We are well positioned from both a portfolio and a geographical perspective, with a material presence now across our 31 markets. In short, the fundamentals of our business remain strong, and we operate in resilient and innovative consumer categories, which are healthy and growing. I'd now like to turn to our performance. We're pleased to have delivered a solid first half. We continue to grow share ahead of the market and create value for our customers. Given our year-to-date performance, strong commercial plans for the balance of the year, full year '25 pricing in place, continued focus on productivity and a good start to the second half we are pleased to be reaffirming our full year profit and cash guidance. We have updated by providing a range on full year revenue growth of 3% to 4% rather than approximately 4%. This is driven by a slower-than-expected trajectory in Indonesia, which in Q2 alone impacted group volumes by around 1%. But of course, we will update as the year progresses. Our first half interim dividend and ongoing share buybacks demonstrate the strength of our business and our ability to deliver continued shareholder value. So we are winning today, but we're also focused on creating tomorrow. Strong cash generation is supporting record investment in future growth with multiyear plans in place, and we are really starting to lock more value from tech and AI, where we have been investing for many years. So we're confident we have the right strategy, all done sustainably to deliver on our midterm growth objectives. I'd now like to turn to some key performance highlights. Our solid top-line performance reflects underlying volume growth, best-in-class execution and solid gains in revenue per unit case. This was driven by sustainable revenue and margin growth management, including our continued focus on price and promotional strategies. In Europe, Easter timing and better weather supported a return to volume growth in Q2, crucially with a better performance in our away-from-home business. Total first half volumes were, however, impacted by a weaker consumer backdrop in Indonesia, though we continue to remain excited about the long-term opportunity and continue to focus on our transformation journey. We will touch on that a bit more later. Our other APS markets performed really well, including the Philippines, despite cycling strong comparables of nearly 20% last year. We grew our overall value share by 10 basis points year-to-date in a category which grew in volume and value both in Europe and APS. The market remains as competitive as ever. As we said before, we continue to take a multiyear view on our promotional and pricing strategies. We remain focused on driving profitable revenue growth and creating value for the category, whilst recognizing that remaining affordable and relevant is important for our consumers. Our strong top-line performance, together with the delivery of our efficiency programs drove solid operating profit growth of 7.2%, with operating margin expansion both in Europe and in APS. We generated solid comparable free cash flow after investing in capacity, more coolers, technology and digital, and we delivered cash returns to shareholders of over EUR 800 million. Ed will go into more detail on our financials shortly. As ever, our business performance reflects our great people, great brands, great execution, all done sustainably. A few brief highlights on our first half, starting with people. We continue to build the capabilities of our teams. For example, our partnership with the London Business School has upskilled over 500 of our top leaders and has now been extended to another 3,500 colleagues. We continue to be recognized internally and externally. In 2025, the Top Employers Institute recognized CCEP across all of our major markets. And we're really excited to welcome around 60 new colleagues into our new integrated shared service center in Manila, which Ed will also touch on a bit later.

Thanks, Damian, and thank you all for joining us today. So for H1, we delivered revenue of EUR 10.3 billion, which is up 2.5%. Comparable volumes, selling days adjusted were marginally ahead, up 0.3% despite the challenging backdrop in Indonesia. Excluding Indonesia, volumes were up around 1%, supported by Europe returning to volume growth in Q2. Our Q2 revenue was up 5.4% in total. We delivered strong revenue per unit case growth of 3.8%, reflecting positive headline pricing and promotional optimization with a continued focus on consumer price relevance, all built on data and insights. We benefited from slightly earlier headline pricing in GB and we had favorable pack mix, supported by the growth of Monster, favorable pack mix, driven by the growth of smaller formats such as mini cans, unfavorable geographic mix as a result of the volume decline in Indonesia, which is a lower revenue per case. Cost of sales per unit case increased by 3.6%. This reflects our increased revenue per unit case, driving higher concentrate costs through the incidence pricing model and the increase in soft drinks taxes. While a little higher than our guidance for the full year, this is mostly phasing related given our exit from the Beam Suntory relationship in Australia, which will generate a mix benefit during H2. OpEx, as a percentage of revenue was 21.8%, an improvement of 50 basis points, and I will touch more on that later in the coming slides. These elements combined to drive operating profit of EUR 1.4 billion, up 7.2% and an operating margin of 13.5%, an expansion of around 60 basis points, including a modest basis point improvement in our gross margin percentage. We delivered comparable diluted earnings per share of EUR 2.02, up 3.1% on an FX-neutral basis, lower than the 7.2% growth in operating profit driven by our previously guided increase in our effective tax rate to 26%. This impact is most significant for H1 than it will be for the full year due to the phasing of last year's tax expense. Comparable free cash flow generation continues to be a core priority for CCEP and we delivered EUR 425 million in H1. This was after investing in key projects such as the addition of new aseptic lines in France and Australia, expanded ARTD capacity with Jack Daniel's and Coke, and of course, more coolers, which Damian referenced earlier. We remain on track to deliver comparable free cash flow of at least EUR 1.7 billion for the year. And finally, on shareholder returns. Our first half dividend was EUR 0.79 per share with around EUR 460 million of our EUR 1 billion share buyback now completed. Now on to efficiency and productivity, where, as you know, we have a proven track record of delivery. Our current program aims to deliver between EUR 350 million and EUR 400 million of savings by 2028 and is firmly on track, delivering slightly earlier than our original plan. We continue to optimize our network in market to strengthen our local operating model, such as the rationalization of distribution sites in Germany, the consolidation of production into fewer, bigger, more efficient plants, like at Grigny in Paris, which will end up serving nearly half of the French market. And in Indonesia, we recently announced the closure of 3 single-line production sites. In May, I spoke in detail about the development of our leading shared service capabilities, which until now a focus on Bulgaria. In July, as Damian mentioned earlier, I attended the opening of our new integrated shared service center Manila, which will continue to ramp up as the year progresses. And I know having also visited Bulgaria only last week that the growing capabilities of our shared services will continue to be a significant source of value creation and competitive advantage, all enabled by technology. Before I hand back to Damian, let me update you on our full year '25 guidance, which reflects our current view of market conditions. Our profit and cash flow guidance remain unchanged. From a revenue perspective, we're pleased to have delivered a solid first half performance, driven by consistent revenue per case growth and supported by a return to volume growth in Europe in Q2. We've had a strong start to the second half and are encouraged to have seen European volume growth continue more than offsetting a slowdown in Indonesia and the recent impact of flooding in the Philippines. With 5 months of the year still to go, including the key European summer, we're now indicating a range on revenue for the full year of 3% to 4% with the upper end remaining in line with our previous guidance, supported by our very strong commercial plans. We expect to see volume growth for the full year, with growth in Europe and in APS despite the weakness in Indonesia. On cost of sales per case, as I mentioned earlier, we still expect this to grow by around 2% for the year, with the second half benefiting from the exit of Beam Suntory relationship in Australia. While our guidance for full year operating profit remains at around 7% on an FX-neutral basis, we are impacted by a higher effective tax rate at 26% versus 25% last year. Growth in non-controlling interest, given the positive outlook in the Philippines and a slightly higher finance cost. And then finally, on FX, although our guidance is provided on an FX-neutral basis, based on current spot rates, we do anticipate a full year FX headwind of around 150 basis points to revenue and almost 200 basis points to operating profit. Thank you. And now back to Damian.

Thanks, Ed. Just a reminder now of our midterm objectives, which we reaffirmed in May. This was a slide that we also talked to, in May, covering our focus areas that you can expect us to keep revisiting as we look to our next phase of growth. So I'd like to touch on a few of these now. I've already mentioned the fantastic execution we've seen both the Share a Coke campaign and on This Is My Taste, our campaign to reinvigorate Diet Coke, which has supported an improved performance in both GB and Australia during the half. But there's much more to come across regional taste and likes, starting with the terrific Star Wars collaboration, a favorite of mine, on a limited edition cans, a new Time for Coke campaign and another favorite of mine, the exciting new tie-up with the English Premier League, which we'll see packs in your team's colors during the upcoming season. I also referenced earlier the phenomenal performance in energy during the half with strong share gains and volume growth. There remains plenty of headroom for growth in this category. Given lower per caps relative to the U.S., as we highlighted in May, our step-up in cooler placements is supporting wider distribution Away-from-Home, helping to close the gap relative to Coke and it's working with Monster growth in Away-from-Home of 20% during Half 1. Early days in our exciting journey in the fast-growing alcohol ready-to-drink category. In Australia, however, we're already a solid #2 with around a 20% share in a category that's over 15% of total alcohol. Now it's the time to further leverage that expertise we've built up over nearly 20 years in the market by aligning our portfolio with the Coca-Cola Company. With that in mind and as previously discussed, the relationship with Beam Suntory came to an end at the end of June. While this creates a near-term headwind reflecting its higher revenue per unit case, as you will see detailed on the slide, this is the right decision for the long term. We are now able to build an even stronger brand platform, starting with Billson's and the launch of BACARDÍ and Coca-Cola, which comes to the Australian market in the next few months. Another area of alignment has been in Spain in ready-to-drink tea, where we are transitioning away from Nestea to the stronger Fuze Tea platform. Brilliant execution and marketing are delivering both distribution and performance ahead of plan, demonstrated by our #1 year-to-date category value share with Fuze Tea. We've also recently reformulated and relaunched our ready-to-drink tea in Indonesia, Frestea. This we'll be rolling out in a variety of new flavors, including passion fruit and apple with lemongrass and with a new look over the coming months. Touching now on Indonesia. As highlighted at our investor event, the macroeconomic slowdown is impacting household consumption, which has affected local, regional, and international brands alike. As Ed said earlier, excluding Indonesia, volumes were up around 1% in the first half. Putting aside the near-term headwinds, we remain excited about the long-term and significant opportunity in a market of close to 300 million people, half of whom are under 30, very few drink alcohol. So we are pushing on a pace, particularly with the transformation of our network and route-to-market, Ed mentioned earlier and the closure of 3 single-line plants to make us even more efficient. We've also taken a further step toward completing our move away from the direct delivery to a partner distributor model with Bali now underway and Java set to complete during Half 2. This will give us the ability to effectively grow distribution and availability as we continue to develop the Sparkling category and the reach of RUN, supported by the Coca-Cola Company to what we see as a very exciting consumer landscape of the future. The last area I wanted to touch on ahead of taking your questions and arguably one of the most important is around digital and technology. We've talked before about operating from multiple platforms, our legacy as a business of mergers. The alignment of those systems as we move to our new technology platform, S/4HANA is progressing to plan with our first market, Germany starting to go live in H2. Whilst nobody could ever describe SAP transitions as exciting, the unification of our data on the one platform and the simplification of processes is enabling us to start to unlock more value through our multiyear investments in tech and AI, leveraging solutions and insights to drive top-line growth and productivity, and that is exciting. We continue to evolve and improve RED One, our proprietary data-driven field sales tool, which gives every rep all of the information and analytics they need to help optimize routes, prioritize visits, review performance and tailor our actions to each specific customer. We recently introduced an AI-based tool, which through image recognition, enables them to dynamically track and record key store measurements like share of visible inventory. KAM 360 is now used by our 850 key account managers to effectively partner with their customers, enabling the creation of joint plans and effective trade investments. It supports areas such as pack price and promo simulations, price elasticity modeling, all of which are a critical part of leading revenue and margin growth management capabilities. And we've recently begun piloting a new eB2B platform in Spain, Up We Go, which greatly simplifies the ordering process and strengthens our relationship with partner distributors in what remains a fragmented market. A lot more to come in this space. So back to where I started. We're pleased to have delivered a solid first half performance. Given our year-to-date performance, strong commercial plans for the balance of the year, full year 2025 pricing in place, continued focus on productivity, and a good start to the second half, we are pleased to be reaffirming our full year profit and cash guidance. It's an honor to lead a great business with strong fundamentals in place and operating in categories that remain healthy and growing. So finally, to a quick reminder of our investment story on a page as we shared in May. We're confident we have the right strategy, done sustainably to deliver on our midterm growth objectives. We are winning today, but we're also focusing on creating tomorrow. Thank you all for joining us, and I'll now hand back to the operator to facilitate your questions.

Our first question comes from Bonnie Herzog from Goldman Sachs.

I had a question on your guidance. I mean you touched on this. You did lower the top-line slightly, but it does still imply an acceleration of growth on the top-line in the back half, but essentially stable growth on the bottom line in 2H versus 1H, I guess, suggesting higher expected OpEx. So hoping to get a little bit more color on the drivers of this and maybe a sense of the drivers in terms of contribution you're expecting from price/mix versus volume growth in the second half?

Bonnie, I'll take the first part and then hand to Ed. So we have seen our business accelerate coming out of Q1. We had a very strong Q2, both in Europe and APS, and we see that continuing. So you're absolutely correct. Even with the slight change on the revenue top-line, we do see acceleration because we're through the second half of the year. And then obviously, our focus will turn into 2026. As I mentioned in the comments, a big part of that is obviously mean volume growth coming back in our business in Q2, we see that continuing. It's also a reflection of the price/mix. Our price/mix per case, I think, was excellent in the first half of the year. And again, that reflects pricing being in place right the way through to the end of the year. So that gives us confidence in our top-line number. And then I'll pass on to Ed just to kind of talk to the bottom line changes between Half 1 and Half 2.

Yes, we are very pleased with the first half performance, achieving a 2.5% increase in revenue, which translated to a 7.2% profit. For the second half, even though the volume is expected to be higher, we anticipate that more of this growth will come from the volume itself, with slightly less impact from revenue per case. Additionally, as mentioned, the geographical mix will not provide as much of an advantage in the latter half. Therefore, we expect to see more reliance on volume. We also have some operational expense phasing between the halves, which is why we project a consistent 7% profit delivery for the second half.

Our next question comes from the line of Simon Hales from Citi.

So Damian, I wonder if you could just sort of touch a little bit more on your comments around the stronger Q3 trading or the good Q3 trading you've seen to date. What have you been seeing a little bit more regionally, particularly perhaps in Europe as the better weather through July and hopefully into early August has been helping? Maybe a little bit of color as to the continuation perhaps you're seeing of Away-from-Home growth in Europe and the drivers around that, how broadly spread is that across different markets? And then associated with the APS performance into Q3 given the flooding you called out in the Philippines. How should we think about the scale of the impact that may have on the Philippines business to the rates for the second half?

Thanks, Simon. So maybe I'll touch on the second part and then come back to the more European summer question. So obviously, we've reflected in our guidance some of the tougher weather comps in the Philippines. So that's obviously reflected on what we shared today. I'm also pleased that we've seen a stabilization in Indonesia particularly in July and through August. So I think that's great for our teams to start seeing some reward for a lot of efforts. So that's certainly something we're looking to continue into the second half and more importantly, into 2026. So, all of that's reflected in the outlook for APS. And just to call it out, again, our business is in Australia, New Zealand, and the Pacific Islands also had a really, really strong performance as well year-to-date. In Europe, you're quite right. As we sit in London today, I'm happy looking at the window to see the sun shining, we have had some really good weather across Europe. That really came in end of June, definitely had a big impact on our July business, which was great. And clearly, we're looking forward to seeing that continue through August. It's pretty broad across all of our markets. I'd say if you look at the first half numbers, GB is a standout. And again, obviously, that reflected the strong performance until June. But then also, we've seen the benefit of that warmer weather in July in GB as well. So yes, long way continue. It's great for the category, and it's something that we're definitely enjoying and it's definitely helping.

Our next question comes from the line of Edward Mundy from Jefferies.

So just coming back to Europe and the volume inflection that you've seen, I think it was pretty important to get volume growth back into Europe this year after the difficult year last year. And if I take a step back on what you've seen year-to-date within Europe, I think it's fair to say the revenue per case has probably been quite a bit stronger than what we'd be modeling medium term as part of that model. But does this give you confidence putting weather to one side and the ability of the business to grow volumes within Europe over the medium term in terms of what you're seeing there?

Yes, absolutely, Ed. I mean, I think volume growth is a key focus for us in Europe well, across all of our markets. But as you rightly pointed out, particularly in Europe, we've seen that in Q2. We'll see that in the second half of the year as well. Clearly, our priority is to try and get that volume accelerated. I think some of the campaigns that we have coming, whether it's Star Wars, whether it's EPL in the U.K., whether it's some of the innovation around Fanta and Sprite, and a lot of this will roll into 2026, certainly provides us with the consumer excitement to drive volume. We have seen volume growth in Q2. As I said, we'd like to see that accelerate as we go through the year. Our price mix has over-delivered. And we've made some, I think, sensible choices around price promo in some of our markets, and that's reflected in certainly a higher price mix in the P&L. So as I look midterm to kind of come back to your question, I see volume growth in Europe. I see Away-from-Home growing again. That's a different narrative than we've had for quite a while. That's exciting. We're committed to driving Away-from-Home. We're taking a very active role in that through cooler placements. Share a Coke was a great example of trying to excite consumers in Away-from-Home. Also, Monster and Away-from-Home is becoming a bigger part of our narrative as we place coolers, but also secure listings of our energy portfolio in probably not your typical energy outlets like QSR and FSR, but obviously, that works. And then if I move beyond that, you kind of get into some probably more medium-term initiatives around ARTD, which certainly on the revenue side contribute obviously a bit less on volume. But putting all that together, I think, to me, gives us a lot of confidence in midterm volume growth. A couple of passion points that I think are worth calling out. Certainly, Coke Classic. We're launching a 0.5-liter can in some of our markets. We're bringing more innovation around Coke Classic. And then for all of us who live in the U.K., I think it's fantastic to see Diet Coke back as a focus for the system with This Is My Taste campaign. That's starting to work. And clearly, again, that's another initiative that would support volume growth in what is the most competitive segment of soft drinks, but also the fastest growing. Yes. So all of that together gives us confidence in midterm volume growth. That starts in Q2. It's got to continue in Q3 and into Q4, and that gives us confidence for the full year.

Our next question comes from the line of Lauren Lieberman from Barclays.

First, I have to comment on the Q&A slide in the deck. It's very cute, guys. I like it. If anyone hasn't noticed, you got to check it out. Question is, Damian, I felt like you had some pretty pointed commentary on the competitiveness in the market and emphasizing that you take a multiyear view on the approach. So just kind of wondering what's beneath that? Are you seeing particular flare-ups in given markets, given categories that feels a bit different than maybe what we would have been talking about a couple of months back?

Thanks, Lauren. Not significantly different, I would say, to what's been really part of our story in Europe. I mean it's a very exciting high-growth profitable category. So it always remains competitive, whether you look at soft drinks or energy. I don't see a massive change in that space. I do see in some of our markets, we have had maybe a little bit less promo intensity as we haven't quite landed some of our commercial agreements with some of our bigger customers. It hasn't got to the point of a lot of delistings, as you may have seen in other industries. But clearly, that's something that we continue to manage. And that comes back to Ed's point in terms of really managing the category for sustainable value creation. So we will continue to make decisions beyond the calendar year to make sure that we maintain solid profitable growth for us and our customers, and we continue to do that. So it's not, I would say, more challenging than other years. It just remains part of the ongoing doing business in Europe. We have seen some aggressive promotional pricing from some of our competitors, particularly in GB. Again, that's not a new dynamic, and it's something that we're responding to. But again, we've got a very profitable business in Away-from-Home. And as we've talked about before, we look at our pricing and promotional decisions through that lens to make sure we continue to protect and grow that Away-from-Home business. So yes, it's a good competition, I'd say, particularly in energy, yes, but I wouldn't say it's much different from previous years, Lauren.

Our next question comes from the line of Richard Withagen from Kepler Cheuvreux.

One question on the Share a Coke campaign. It's been launched earlier this year. And Damian, you mentioned it has been well received. So what are some of the metrics that you track to analyze the success of the Share a Coke campaign? And what are the pros and cons of a global campaign compared to a more local-oriented campaign?

Thanks, Richard. Well, I mean, I think with our brand portfolio and with a full calendar, we will continue to have global and local. And both of them, I think, play a great role in our growth story. I think Share a Coke was particularly impactful because it's a great example, I think, of going above the line, whether that's on social media all the way through the packaging in store. It's obviously something that excites consumers. So we've seen that on our customers. So when we think about metrics that we would look at, we clearly look at our way to display, share of shelf, distribution and obviously, campaigns like that allow us to drive more of that. We'd look at weekly and monthly drinking consumption, and we see that improving. And then obviously, over time, it will reflect in brand health metrics that we look at with the Coke Company. But it's clearly innovative across our cola portfolio. A lot of focus on single-serve, and that really helps our price mix, as you've seen in our results. So we were particularly happy, and it kind of goes back to what I talked about in terms of getting behind that Away-from-Home growth. We talked about in Q1 that Share a Coke would be more skewed towards single-serve and that would definitely help support growth in Away-from-Home, and we're seeing that. So still early days in some of the metrics, but overall, really positive and very well received. I think it was 8 years since we last did it. So a lot of people were really happy to see it come back. And certainly, we're happy to see it coming through in our volume and price/mix numbers.

Our next question comes from the line of Eric Serotta from Morgan Stanley.

Can you discuss the acceleration you've noticed in Away-from-Home this year and what that indicates about consumer trends? Additionally, Damian, you mentioned in Manila that the growth in Sparkling beverages in Europe is one of the most significant midterm opportunities for CCEP, considering the size of that market. Could you elaborate on some recent strategies aimed at revitalizing that Sparkling growth in Europe?

Thank you, Eric. Sparkling has been consistently growing in Europe in terms of revenue. Our focus has been on increasing volume within that revenue price mix, which we're definitely seeing in Q2. The category in Europe is quite healthy and dynamic, with a lot of innovation both from us and others, which has been a key driver of revenue growth. We've realized that incorporating volume into this mix leads to a more sustainable outlook, and that’s our main focus. In Q2, we certainly benefited from Easter, which positively affected our numbers, and we anticipate continued growth in Q3 and Q4. Overall, our goal is to maintain revenue growth while increasing volume as an essential part of our strategy for this year and into 2026 and 2027. We see opportunities, particularly in light colas due to a stronger Zero platform and Diet Coke. Regarding flavor share in Manila, we recognize the chance to grow volume in flavors to boost revenue. In the Away-from-Home segment, we're noticing more people are out and about, positively influenced by favorable weather, allowing terraces to fill up as people enjoy the pleasant conditions in Europe. More individuals are returning to the office, which had been a challenge, particularly in larger cities. Employee return to offices is higher than it has been, which supports our Away-from-Home business. We, along with others, have been actively enhancing this market segment over the past few quarters through cooler placements, consumer innovation, and investments in signage and menus. While it takes time, we’re starting to see an increase in foot traffic and sales, and notable clients like McDonald's are also adjusting their menu options, leading to increased traffic. It’s promising to see growth returning, which is something we aspire to maintain over the long term. As I mentioned in Manila, we aim to be a significant contributor to this recovery. We focus on aspects we can control, which include improving consumer engagement through initiatives like Share a Coke, ensuring better cold drink availability in stores with more coolers, and enhancing menu execution through better price mix and combo meals. These efforts will persist through the summer and into the next year. Overall, we are confident that consumers are in a better situation in the Away-from-Home segment in Europe than before. That said, we remain focused on maintaining affordability in retail, particularly at the lower end, which is crucial to our offer. As we've discussed previously, this needs to align with the premiumization efforts we've successfully implemented over the years. By offering options across all price points, including mini cans and small PET, we aim to cater to all consumers.

Our next question comes from the line of Nadine Sarwat from Bernstein.

One question for me coming back to the medium-term guidance. So I hear you loud and clear on Indonesia being a headwind that was large enough to at least make you have the full year guidance now as a range versus a previous more specific number. But if we turn our attention to the medium-term growth algorithm, does Indonesia impact your view? I get that you reiterated that algo, but are you assuming that Indonesia then subsequently accelerates? Or do you feel like you have enough levers elsewhere to offset the weakness?

I think, Nadine, when we look at Indonesia, so we're not assuming that there's a significant turnaround in the medium term that drives our 4% on the top line. We've talked before about high single digit, which I still think is the right longer-term plan for Indonesia. Whilst it's disappointing that the changes that have been made haven't had more of an impact and the macro effect is clearly playing on the numbers. We should keep in mind as well, though it's a relatively small part of our business. So it's a big opportunity going forward, but it doesn't have a very material effect on our numbers year in, year out. So the long-term opportunity still remains, but no, we're not dependent on a very significant turnaround to deliver our midterm objectives.

Yes. And just to build on what Ed said, Nadine, and to give some credit to our team in Indonesia. We have seen a slight improvement in our performance coming out of July and into August. And again, we believe in the long-term opportunity of that market. But to Ed's point, it has more of an impact on revenue and cases, but less on the bottom line, which is really reflected in our guidance today.

Our next question comes from the line of Matt Ford from BNP.

Can you provide an update on the situation for COGS in 2025 regarding hedging? Additionally, could you share any insights into the significant factors you anticipate for 2026, without committing to specific numbers, as well as an update on your hedging status for that year?

Yes. Thanks, Matt. So yes, we continue to be very pleased with the cost evolution and COGS in general. So we've been enjoying basically flat commodities for this year, and we anticipate that will roll into 2026. As you'd expect, at this point, we're very well hedged now for this year. So in all the main commodity types, we're over 90% hedged. We're around 60% at this stage for 2026, which is roughly where we would like to be at this stage of the year. So leaving some room still to take advantage of any favorable movements in the market. And actually, some of the volatility that we've seen on the forward rates during 2025 has actually worked to our advantage. So we've actually secured some nice forward prices on a number of our commodities. So the outlook is still good with relatively flat commodities into '26, which certainly makes life a bit easier in some parts of the P&L as we look forward.

Our next question comes from the line of Charlie Higgs from Rothschild & Co Redburn.

My question is on Australia, where Q2 marked the 4-year anniversary of the Amatil deal. And if you go back in time, that Australia business earned a very healthy margin, but perhaps wasn't being run quite as effectively as it could have been. You then came in and trimmed the promotions, trimmed bulk water, realigned curve, etc. And as Ed was saying, we still got the Manila shared service center potentially in the background. So can you just provide a bit of an update on where we are on the Australian margin turnaround story and whether you think it could perhaps get back to the very high teens, low 20s level that it previously earned?

Thanks, Charlie. Yes. Obviously, we're really pleased with our Australian business and the changes that have been made over a number of years. It's far from over in terms of the opportunity from our perspective. We're going through quite a big change and probably from a structural portfolio realignment, the last big one, which is the Beam Suntory change. That's going to allow us to become a bit more efficient, but also align our brand portfolio more to our global footprint. And I think that's a positive. And in some ways, that was a bit of the unlocker with the Kirks deal as well was to just line up with the Coca-Cola Company, and we've seen the benefits of that. And we will see that also in alcohol. It will probably take a bit more time, but we're excited about that change. That will allow us also to look at our cost base. We've invested some good capital into Australia to become more efficient. So all of that will support margin expansion. We're not guiding to a target on a market-specific number. But if I look at the macros in Australia, whether it's GDP, population growth, some of the great commercial work that we're leading down there, obviously, margin expansion due to the top line is definitely something we're excited about. And maybe I'll pass to Ed, who will talk a little bit more about the shared services opportunity as well that we see coming to play.

Yes. Thanks, Damian. Yes, Charlie, I mean, we're very pleased with the progress. I mean we don't give the specific Australia profit numbers. But what I can tell you is that our revenue from '21 has grown at a CAGR, if you look until the end of '24 by 8% per year, so a fantastic revenue performance. And we've done better than that on the bottom line. So we have had operating profit margin accretion over that time period. And as you called out, I think it's due to the investments we've made in capacity, which have helped reduce the cost to serve. promo, R&MGM capabilities that we've leveraged in the market and then some portfolio rationalization, both in terms of focusing on the core parts of the portfolio that add value, but also the work with the Coke Company in terms of aligning the role of the different brands within the portfolio. And last but certainly not least, we've taken advantage of our shared service capabilities. Some activities out of Australia have already moved to Bulgaria, and we're looking forward to moving more stuff to Manila with the opening of our new centers. So great progress, really pleased and more to come there.

Our next question comes from the line of Robert Ottenstein from Evercore ISI.

Damian, it's been about 2 years, I think, since you rolled out Jack & Coke in Europe. I was just wondering if you could maybe stand back and give an assessment of how that and other ARTD initiatives have gone? Any surprises, disappointments? What have you had to change and how do you see that developing over time?

Thanks, Robert. I'm really pleased with our progress, especially in a large market like Great Britain. We've learned from our experience in Australia that this needs to be a portfolio approach. I've mentioned the performance of brands like Bacardi and Coke, as well as Sprite and Absolut. We see improved performance across all these brands, including Jack & Coke, when we adopt a category strategy. This does take time, but we are witnessing the benefits each quarter and year after year. Absolut's volume growth compared to last year is strong, and its revenue growth is even better since it's primarily single-serve. We aim to expand this model across all our markets in Europe. It's been a quick two years, but I believe our capabilities and brand offerings position us for many more years of exciting growth. Additionally, the changes I've mentioned in Australia are promising as well, particularly with the acquisition of a brand like Billson's, which shows our willingness to be opportunistic with the Coca-Cola Company in categories where local brands can play a significant role. However, most of our growth will come from those global brand partnerships. Overall, good progress, Robert, and there is more to come.

Our next question comes from the line of Mitch Collett from Deutsche Bank.

I think the tagline from the CMD was 4 and more. Clearly, fiscal '25 has been impacted by a few factors outside of your control. But how do you feel about that ambition for 4 or more beyond fiscal '25? Do you think fiscal '26 is going to be at that range or above 4? I appreciate you're probably not that likely to guide now, but can you talk about how you think about fiscal '26 and the steps that are going to take you there? Perhaps it's what you put on Slide 15, but I'd be interested to know what you're expecting to do to be able to accelerate to 4 or more.

Yes. Thanks, Mitch. I mean there's no change in our conviction around top line growth at CCEP. I think Q2 was a solid quarter, demonstrated that. And I think if you look at what we've guided for the full year, you'll see that growth continuing in Q3 and Q4. We have had a couple of drags on revenue certainly in the first half of this year. Some of that may continue into the second half, which is why we've updated today as we have. We've had the tea transition in Spain. Obviously, we've got Suntory out of Australia. We've had Indonesia, although, as I said, that is starting to show signs of improvement. So some of those are 2025 events. So 2026 and beyond, I think you'll expect us to stick with our 4% revenue guidance. And as we continue to build out our portfolio and get smarter at some of the things that we're doing, our ambition for growth is only, in my view, is only going to get higher. But I think a 4% guidance is a pretty good number, particularly with a 7% bottom line and that free cash flow. So yes, to answer your question, no change from Manila. It doesn't feel that long ago. And certainly, a good Q2 and a good start to Q3 continues to support that midterm outlook of growth.

Our next question comes from the line of Sanjeet Aujla from UBS.

Most of mine have been asked already, but just a point of clarification on some of the commercial agreements you missed out in Europe. Is that something that's impacting through the course of the rest of the year? Or has some of that been resolved? And which markets in particular were impacted, please?

Yes. No. So I mean, these are quite typical, Sanjeet, as you know, we try and land pricing and commercial terms for a year. We don't always land them in the time frame that we'd like to. But again, nothing out of the ordinary. They're resolved. It was mainly in Q2, mainly a little bit in Germany and a little bit in Sweden were the 2 markets that I think were most impacted, but now in a good place for certainly the rest of this year. So yes, no lingering effects from those as we go into the second half of the year.

Got it. And just a quick follow-up on Indonesia, Damian, you're talking about some sequential improvement and stabilization. I'm assuming that means stabilization in the rate of decline as opposed to getting back to growth.

It depends on what period you pick to compare to. I'd say genuinely on our Sparkling portfolio, we start to see stabilization, which is really encouraging. I think on tea, we're probably a bit off that. We're launching a new tea format and a new tea pack and that's only going to come in, in Q3. So I'd say on Sparkling, yes, tea, we have a bit of a way to go. But on a combined level, it certainly feels better than it has been feeling, which is great. On a consolidated level, it's important for us, but it's really important for the team locally to start to see some early wins. and also for our customers as well because it's still a very valuable category for them in Indonesia. So yes, more to come on that as we go through the second half of the year. But yes, Sparkling leading it, tea still to come, Sanjeet, would be the way I think about it.

Our last question for today comes from the line of Carlos Laboy from HSBC.

Damian, could you elaborate on your trade management outlook in Europe, considering your digital capabilities and their implementation? Is there still some easy progress to be made, or have you already captured most of that?

Thanks, Carlos. We're very passionate and excited about this area, and we've invested significantly in our technological capabilities. I view it through two perspectives. In the more organized segment, especially in Europe, Australia, and New Zealand, our myccep.com platform is effectively managing and capturing substantial value in terms of information, revenue, and customer engagement. We're on track to achieve EUR 3 billion in revenue through that platform. While there is always more to accomplish at a consolidated trade level, we have established a solid foundation. The most progress has been made in the fragmented segment. Many of our markets in Europe, particularly in the Away-from-Home sector, are fragmented and operate through wholesale channels, utilizing diverse routes to market. Currently, we have visibility on over 70% of the revenue in that segment at the outlet level, which is a significant improvement compared to a few years ago. We are also enhancing this with our broader eB2B strategy in Spain, which reflects similar efforts in Latin America and our work with Hellenic to create a comprehensive category platform for our distributors. This development will help them digitize their routes to market and provide us access to critical information. Typically, our partners in that market lack the financial resources to develop these platforms on their own. Therefore, we are providing a necessary tool that offers transparency and accelerates market development, particularly in fragmented trade within Europe. This approach could potentially play a larger role in the Philippines and Indonesia, which is where we plan to focus next. We are progressing in Europe and are already rolling out the myccep.com platform, with plans for the fragmented trade tool following that. A lot has been accomplished, and this part of the business is very exciting. We will continue to invest in it and learn from other bottlers. Being part of the Coca-Cola system has allowed for a significant amount of sharing in this area, enabling us to accelerate our progress by leveraging capabilities from other regions.

Our last question comes from the line of Usama Tariq from ABN AMRO ODDO BHF.

I just have a quick question with regards to the comparable free cash flows. So correct me if I'm wrong, they're down year-on-year. Am I correct in assuming that this is more working capital related? And then going into H2, I do understand that H2 is way stronger on a comparable basis. But do you see some risk there with regards to your comparable free cash flow guidance, especially if Indonesia remains weak?

Thank you for the question. So yes, I mean, our comparable free cash flow at the first half is slightly below last year, but that is really working capital related and is purely phasing. So actually, when you look at the calendar, the half ended a little bit earlier than last year ended on the 27th of June, I believe. So it's purely a phasing item. If you look at previous years, we always do more free cash flow in the second half of the year than the first half of the year given the big summer selling period in Europe. And as we sit here today, no, we're confident to reaffirm the guidance for the year. Indonesia is, as I said earlier, a small part of our business and not a heavy drain from a free cash flow perspective. So we're confident in delivering at least EUR 1.7 billion for 2025.

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 for joining us today. So we're really happy we continue to execute on our growth strategy and are excited about the midterm outlook for CCEP. Very solid first half. I'm pleased that we reaffirmed our full year profit and free cash flow guidance today. Europe's returned to growth in Q2, and we see a better performance in Away-from-Home. Indonesia is a bit slower. However, we continue to be excited and make the changes necessary to unlock what we believe is a great longer-term opportunity for the group. Full year, we expect volume growth in Europe and in APS despite Indonesia. And fundamentally, we continue to generate a lot of value for our customers on the back of being a great business with very strong brands, solid route-to-market and a very exciting commercial calendar between now and the end of the year. So again, thank you for joining us, and we look forward to updating you on our Q3 in November. Thank you.

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