Thank you all for joining us today. I'm here with Damian Gammill, our CEO, and our CFO, Ed Walker. First, 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 the courts filed with the UK, US, Dutch, and Spanish Authorities. A copy of this information is available on our website at www.cocacolaep.com. Prepared remarks will be made by Damien. 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. Volume movements, unless otherwise stated, adjust for the impact of six more consumption days in the half 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 you will see on the first slide of the presentation a picture of one of the limited edition two million campion champion gold cans to celebrate our Spanish market winning the World Cup so on that note I will now turn the call over to our CEO Damien who found one of these terms selling online for 20 euros thank you Sarah I didn't buy it but thank you and thank you all for joining and we delivered a strong first half and
I really want to start by thanking our colleagues for their focus hard work and continued dedication to CCEP and most importantly to our customers our people and our strong brand partnerships continue to drive us forward we've seen broad-based growth across markets and categories, continued share gains, robust profit delivery, and strong cash generation. Our value creation strategy is working. We are creating value for our customers. We are a consistent top and bottom line compounder. We are generating significant cash, which is supporting record investment behind future growth, and we are increasing our returns to shareholders. Looking back over the past three years, we've generated $4.4 billion of value for our retail customers and returned $4.3 billion to shareholders through dividends and buybacks. We operate in large, attractive, and a growing beverage market. NARTD is a $180 billion category globally and is expected to grow 3% to 4% annually through to 2030. We are well positioned in the fast-growing categories and across a diverse channel and geographic footprint, including particularly attractive long-term opportunities in Southeast Asia. Looking now at our results, the business continues to perform well. We're pleased to have delivered a strong first half with balanced top-line growth across our markets, continued share gains, and robust profit delivery. We're executing well and innovating at pace, focusing on the categories where consumers are most engaged, including zero sugar, energy, sports, and hydration. As a result, we continue to lead value creation for our customers. We're staying disciplined on costs with our productivity mindset and efficiency programs, continuing to support profit expansion, strong free cash flow and investment in our brands, supply chain, technology, and our people, also enabling us to grow our shareholder returns. We've laid strong foundations through our commercial plans, our innovation pipeline, our in-market execution, and the ongoing development of our strategic capabilities. We are confident in reaffirming our guidance for this year and in the longer-term opportunity ahead. Turning now to the key metrics, you can see a well-balanced performance across the business. Revenue grew strongly with great execution across our markets, positive revenue per case and strong growth in volumes, particularly in Q2, despite Easter falling into Q1 this year. June was actually our biggest volume month ever. We also grew value share by 20 basis points, driven by gains in Europe. Our customer relationships remain a real source of competitive advantage. We continue to maintain high service levels, and we're proud to remain the number one retail value creator, which is important because creating value for our customers is central to how we will grow sustainably. Operating profit reflects the quality of our top line as we've benefited from stronger volumes, as well as disciplined cost management and our ongoing productivity agenda. Cash generation remains a core strength of CCEP. We delivered strong, comparable free cash flow in the first half and continue to invest behind future growth, while also returning cash to shareholders through our dividend and our share buyback program. So overall, the first half demonstrates the strength of our model. We are growing, investing, improving productivity and growing shareholder returns, all within a discipline framework. We delivered revenue of 10.7 billion euro, an increase of 6.1% with volumes growing 5.6% or 2.2% on a day's adjusted basis, with volume growth in both Europe and APS. Revenue per case grew 0.4% against a strong comparative of almost 4% growth in the first half of last year Headline price increases, promotional optimization and positive mixed benefits from the growth of energy and more coolers were partially offset by the growth of larger volume formats in Europe In addition, we also faced a headwind from the Centauri alcohol exit in APS and this is worth just over 1% of total revenue during the first half. In fact, in Australia-Pacific, revenue excluding alcohol grew a really healthy 10%. Cost of sales per unit case increased by 0.6%, lower than our full year of total, around 1.5%. And this largely reflects both a higher half one comparable of 3.6% last year and with much of the absorption of the ongoing uncertain situation in the Middle East still to land in half two. OPEX as a percentage of revenue was 21.4%, an improvement of around 40 basis points, supported by savings on discretionary spend and continued productivity gains. The combination of these factors drove operating profit of $1.5 billion, up 8.1%, with an operating margin of 13.8% up around 30 basis points on last year. Diluted earnings per share of €2.20 was up 10.6%, supported by the share buyback with around $600 million of the full year $1 billion now completed. And finally, free cash flow of $435 million was slightly ahead of last year. This was after investing in key projects, including more coolers, a new warm fill line for Parry in Australia, new can fillers in Sweden, and the development of our exciting greenfield site, Manila, which is on schedule to begin production next year. We do remain on track to deliver comparable free cash flow of at least 1.7 billion euros for the year. Our performance in the first half and a solid start to the second reinforces our confidence in the outlook for the full year, notwithstanding six fewer trading days in the second half. So today, we're reaffirming all elements of our full year 26 guidance. And our 26 guidance is in line with our midterm objectives with a quick reminder of those here. Our performance and the continued delivery of these midterm objectives come back to the execution of our focused and consistent strategy captured in these core priorities. Firstly, we're broadening our total portfolio, investing behind faster growing categories and driving innovation across both established and emerging brands. We bring these brands to life in market with great execution, whether that's through impactful on-shelf, differentiated points of interruption, cooler placements, or recent major activations such as the FIFA World Cup to differentiate our sales in the marketplace. Enhancement of our revenue and margin growth management, investment in commercial capabilities, and productivity improvements ensure we remain competitive. Our investments in the Philippines and Indonesia represent significant long-term opportunities to accelerate growth, and we're encouraged by the progress we're making in both markets. And we're unlocking growth through technology and AI. These investments are helping us to generate new growth opportunities across the business, improve decision-making, enhance customer service, and increase our manufacturing efficiency. Our focus on these priorities is strengthening our business today and creating the foundations for growth and value creation for many years to come. And, of course, all done sustainably. Briefly on that, we recently updated our sustainability goals to include the Philippines, something we explored in our recent ESG webinar and available for replay on our website. So how are we getting on more broadly against these priorities? Our portfolio strategy is working. We're continuing to invest in the core whilst broadening our participation across faster-growing categories and occasions, including sports, energies, and zeros, where we're seeing strong momentum, which I'll come back to shortly. We've seen a meaningful contribution to our growth from some great innovation in the first half. on our coke trademark across original taste and zeros our new cherry variants including cherry float and gb perform well we continue to make good progress with small and more premium packs and the new 500 ml super cans are proving to be a great success especially with younger consumers so watch this space for more to come and we welcome the return to growth for diet coke and gb supported by the addition of Cherry and the collaboration with The Devil Wears Prada. Our Flavors family has seen lots of exciting new introductions from Royal Grape and Lychee in the Philippines, the fantastic Nippy's Mint in Indonesia, and the fun new visual identity for Fanta with Xbox gaming graphics. We're strengthening our presence in sports and hydration with volumes up 12%. Aquarius continues to drive strong growth in Iberia, while PowerAid grew double-digit, supported by the FIFA activation. This brand has also been recently introduced to Indonesia, where the sports category is already half the size of sparkling. Energy continues to outperform, with volumes up an incredible 19%. Monster growth is running at roughly twice the category rate. Our share was up 230 basis points. supported by innovations such as Viking Berry and strong activation around our motorsport partnerships with Oscar Piastri, now featuring on the cans of Monster Green. Water is growing well, particularly in GB with Smart Water and in the Philippines with Wilkins. And we've made fantastic progress in coffee in Australia, where Grinders is now the number one coffee bean brand in retail, with sales of over $100 million Aussie dollars. The common theme here is choice. More brands, more packs, more flavors, and more occasions focused on faster growing categories. That's helping us recruit consumers, increase frequency, and capture a greater share of the beverage spend. As I mentioned earlier, we've seen great momentum in the growth of zeros everywhere, whether in Coke Trademark, flavors with Sprite and Fanta, in hydration, or in energy. Both Coke Zero Caffeine, in its eye-catching, caffeine-free in its eye-catching new black and gold packaging, and Zero Chill Sprite, with its refreshing glass of mint, have delivered beyond our expectations, with Sprite overall grown by 6%, supported by the fantastic Sprite and Spicy campaign. We've extended our range of Zero flavors in Fanta, and are seeing good growth in both Zero Sugar sports through Parade and Aquarius, and in energy, where the Monster Ultra range was up over 50%. Overall, zero sugar volumes increased by 10%, and we expect strong growth going forward, with innovation offering more choice for consumers as they increasingly seek out healthier, but exciting and great tasting options. Execution is one of our most durable competitive advantages, and in half one, we turn brand strength and innovation into visible measurable marketplace impact one example is our cooler rollout plan which is running well ahead we've added more than 80 000 coolers this year an increase of five percent more than ten percent since last year when we began our accelerated program to expand cold availability and grow in instant consumption which supports mix we're continuing to win with customers and listings across markets, including Smart Water and Fuse Team McDonald's in selected markets. Domino's was a significant recent win in Australia, with the GB team winning Park Dean Resorts, Papa John's, and Leeds United. This expands our coverage of English Premiership grants to 80% and makes Ed, our CFO, a proud Yorkshire man, very happy. And we've seen a terrific win for the whole system with Marriott International, including over 600 hotels in our markets, and that will start rolling out during half two. Beyond that, execution on our packaging collection progress continued. DRS has landed well in Portugal. We continue to prepare for GB next year, and we launch a cross-border recycling program across the Pacific Islands, all contributing to our decarbonization journey. And finally, we're bringing our brands to life to stronger activation as you can see here on the Fanta and Xbox and of course through FIFA World Cup which I'm keen to touch on next. World Cup 2026 has been our biggest activation program ever providing a great example of how we work with the Coca-Cola company combining world-class assets with exceptional local execution at scale to create value for our customers and excitement for our consumers. We delivered more than 500,000 displays with our field teams continuing to build momentum as the tournament progressed. All of our top European home customers executed a campaign covering more than 47,000 outlets. We activated exclusive Panini sticker on-pack promotions with 163 million packs and produced more than 135 million team and player cans. Importantly, it just wasn't about brand awareness. The activation supported transactions with more than 1.3 million FIFA items awarded to shoppers through the purchase of our brands. On to competitiveness. Sharpening competitiveness is not simply a cost agenda. It is about building a faster business, one that is more efficient and more effective in serving our customers and consumers and one that can achieve something and growing profitably. One important lever is revenue and margin growth management. We are continuing to use sharper insights, better promotional mechanics and stronger pricing tools to balance value for consumers with profitable growth for our customers in CCEP. That is particularly important in an environment where many consumers remain focused on value. Promotions are a good example. They're not only about headline price, but as examples here demonstrate about great promotional mechanics helping to drive higher incidence, whether that's through free meals and QSR, gifts with purchase, or prize-led campaigns for Fuse Tea and Coke Zero Zero. At the same time, we are building more scalable capabilities across the business, expanding integrated shared services with more than 1,500 colleagues, including now over 250 in This is all part of our broader productivity mindset. We are improving how we work, simplifying processes as we leverage AI, reducing OPEX and reinvesting behind the capabilities that matter most across both commercial and our supply chain. Our markets in Southeast Asia are our fastest growing within CCEP, as you saw earlier. In Indonesia, we made solid progress during the first half of this year, with sparkling continuing to grow ahead of the total category. Our new launches, like Sprite, Nippy's Mints, Coke Zero Vanilla, and Powerade are performing well and have contributed significantly to growth in Q2 following a great festive period. This has been supported by a new route to mark model which is helping us strengthen execution and improve category participation with our distribution partners in the Philippines we've continued to see strong momentum our Coke Zero campaign focused around all-out syrup or all-out deliciousness supported double-digit volume growth and we've continued to see good momentum with Wilkins our water brand which is benefited benefiting from new listings We're also investing for future demand. Construction of our new facility remains on track for 2027, and this will provide additional capacity to support long-term profitable growth in the Philippines, with margins now approaching our 10% target. Taken together, Indonesia and the Philippines are becoming a scalable Southeast Asia growth engine for CCEP, combining strong category growth, improving execution, innovation, momentum, and growing profitability. Now, just to talk a little bit to AI and tech. Our approach to AI is clear. We are focused on a key number of strategic opportunities across the business, but we are deliberately centered around growth. By away of few examples, it is providing enhanced analytics to optimize promotional pricing levels. It's supporting our insights team to analyze data to drive swifter commercial decisions. It's cleaning millions of pieces of manufacturing data in days rather than years. And it's helping key account managers prepare more effectively for customer conversations. And it's starting to enhance productivity as we leverage digital twins in our supply chain. So what gives me confidence is that what we're seeing, while we're seeing good progress against all our strategic priorities, we will keep coming back to demonstrate how we are strengthening our business today and creating foundations for tomorrow. We know, however, that we've got more to do. We continue to broaden our portfolio, especially in zeros, bringing even more magic to Coke Original Taste and driving more innovation with new and exciting options coming from our brand partners. In Southeast Asia, we are encouraged by the early progress in Indonesia and the continued strength of the Philippines. Our focus is now to sustain that momentum and scale it into a long-term growth engine for CCEP. All of this voice continue to execute across our markets each and every day, whilst adapting even faster, leveraged ad and tech across our business. So, as you've seen today, we're continuing to build on the consistent track record of delivery over the past 10 years. We've created significant value for customers, consumers, and shareholders, and we believe the opportunity ahead remains just as compelling. We're growing across attractive categories and markets, broadening our portfolio, winning through execution, sharpening our competitiveness, scaling Southeast Asia, and unlocking new growth through data, technology, and AI. The strength of our first half performance demonstrates the resilience of our business and the consistency of our growth model. While we have several key months to go and six less trading days in Q4, the second half has started well, giving us confidence in our full-year outlook and our ability to deliver on our medium-term objectives. We are winning today and we are creating an even stronger platform for tomorrow. Thank you everybody and Ed and I would now be very happy to take your questions as I hand the call back over to you Mel.
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. Our first question comes from the line of Edward Mundate from Jefferies.
Afternoon, Damien, Ed and Sarah. Look, I appreciate it's a little bit too early to talk about 2027 guidance, but I'd love to pick your brains as to how you're thinking philosophically about growth next year. On the one hand, you're going to be lapping two really good summers. You've got FIFA. You've got this very strong innovation cycle that we've just been through. But on the other hand, you're broadening your portfolio. You're taking share. Sassy stages seem to be waking up, and AI is moving from a productivity tool to a growth What are the two or three things that you're really excited about, Damien, as you go into 2027?
Yeah, thanks, Ed. I mean, we'll talk later in the year with more specificity around 27, but clearly we're excited about the second half of this year, just to maybe bring it back to 26. As I said, the second half of this year started well. You know, we've continued to see good weather across most of our markets, and we've got a lot of good campaigns coming, whether that's around the Bundesliga, EPL, our new ICOM, look and feel for Coke Zero. We're only at the beginning with Coke 00, super cans are new. So a lot of the innovation that we've brought to market in 26 really will see the full year benefit of that in 27. So that definitely gives me some excitement and confidence. I think the second point I'd make, Ed, is that, you know, clearly when we were preparing for FIFA, we were working very closely with the Coca-Cola company to have a really exciting asset for the same period next year. And I'm really excited about that. Obviously, for various reasons, I can't get into more detail with it. But as you'd appreciate, we have been working hard to make sure we bring a similar level of excitement on store inventory to our consumers for 2027. You're right about Asia. You know, I think we start to see that being a material player in our growth algorithm. It's great to see Indonesia performing. And again, a lot of the innovation we've brought this year will continue into 2027. yeah and to your point around ai and tech you know certainly we will see net revenue per case playing a bigger part of our story in the second half of this year we'll clearly continue to look at pricing opportunities as we exit 26 which again will give us a bit of momentum into 2027 so excited about the second half of this year and looking forward to an even more exciting 2027 Also, some of the foundational work we've been doing around cooler placements, some of those customer wins, I mean, they remain in our base into 27, and that also supports our growth objectives. Thanks, Ed. Great. Thank you.
Operator
Our next question comes from the line of Matthew Ford, BNP Paribas.
Afternoon all. Thanks for the question. The first one is just to pick up on something you just mentioned there, Damien, on the revenue per case kind of evolution. Particularly if we focus just on the Europe performance, Q2, I think, plus 1.3% revenue per unit case kind of in line with what we saw in Q1. And obviously, Q1 was impacted to a degree by the earlier time of Easter. Just how much of the sort of slightly softer revenue per case is reflecting sort of the tougher consumer environment and the focus on affordability and large packs? Or is there something else in there? And should we expect the kind of European revenue unit case to also sequentially improve? Clearly in APS, we'll fully cycle the Beam Suntory impact there. But specifically on Europe, what's your thoughts into the second half? And then very, very quickly, if I can follow up on the Philippines, we're cycling, I think, as we go into Q3, the quite devastating typhoons you saw in July and August last year. Is there any update on how July and potentially the first couple of days of August have trended in the Philippines? Thank you.
Yeah, thanks, Mal. Maybe I'll deal with the second part of your question and then hand back to Ed for your questions around NSO for case. yeah as I said you know we're pleased with the way half tools started across CCP including the Philippines so so far we haven't seen similar weather that we had to deal with last year so that will definitely help as we look at Q3 but generally you know the momentum we saw in June is continuing across our business so that gives us a lot of excitement for a solid Q3 and I'll hand back to Ed on the NSO per case question. Ed?
Yeah, thanks, Matt. So on the revenue per case, and looking specifically at Europe, so yes, absolutely, as you said, we grew 1.4% per case in the quarter, and that was quite nicely balanced between rate and mix. I think one thing we need to remember is that last year, for the same time period, so Q2 2025, we grew 4.2% per case. So So we're citing a very strong revenue per case growth from the previous year. And as we look at the year as a whole, I think evening out the impact between different quarters, we still expect a good balance between volume growth and revenue per case growth. I think in Europe specifically, if you look at Q2, so we continue to see healthy brand mix coming through. We did have a bit more adversity in pack mix, but that's really as a result of the success of a lot of the activation we did with promotions and particularly around FIFA. So that's probably Q2 specifically. And then when we look at the rate, as I said, when we look at the year as a whole, we think that will be will be fairly balanced. We don't see any reduction in our ability to take price in our market. And as always, as we've talked about before, these pricing decisions within quarter are quite dynamic and are always influenced by the period that we're cycling. We continue to focus on affordability, as we talked about last year, and making sure we have the right packs at the right price for all of our consumers, but also that we give consumers great experiences to either our packs, to our innovation, or some of the great activation we saw around FIFA, like Panini, as Damien mentioned earlier.
Yeah, and I just think to build on that, I mean, on our last call, you know, we've been very explicit about trying to balance pricing with value-adds, because we think, obviously, the brands that we have bring a different level of excitement to our consumers. So what you'll see in Q2 and into Q3, a lot of our on-floor activation particularly in retail is to win to collect and to get access to tickets and we think that's important while it offers value it also brings excitement and we think with the brands that we have that's what consumers and indeed customers are looking for so we'll continue to look at a balance of affordability to price value we've got a lot of premium plays out there a lot of innovation is more in the premium space super cans coke zero zero and then we'll shift some more of those promotional funds back into value-add. We see that responding really well. And no surprise, the gold can, for the Spanish team, has been a huge hit in Iberia. So elements like that, we think, are something that brands like Coke can do better than anybody else, and we'll keep leveraging them.
Operator
Our next question comes from the line of Bonnie Herzog, Goldman Sachs. Thank you. Hi, everyone.
I had a question on your volumes. I guess I was hoping to get a little more color, you know, on your volumes in the quarter and maybe how they trended relative to your internal expectations. You know, Damian, you mentioned both the World Cup and, you know, favorable weather were two drivers of strength. So hoping maybe you could give us a sense of the lift you saw from this and maybe any other call-off that surprised, you know, you from your perspective. Also, your guidance implies a decent deceleration of growth in the back half. So I guess I'm trying to understand how much was possibly, you know, pull forward into Q2 versus conservative, you know, conservatism on your part. And finally, maybe just expected phasing of growth between Q3 and Q4.
Yeah, thanks, Bonnie. I can say there was zero pull forward or impact on Q3. So really healthy volume growth across the quarter. I would say, you know, it was a quarter where we delivered growth from a geographic perspective, very balanced. From a channel perspective, we were pleased. And also, as Ed mentioned, you know, from a pack perspective. So it was broad across brands and packages. We came in with a lot of momentum into, you know, the third quarter. You know, as I said, it started off well for us. So zero impact on the growth from Q2 into Q3, which is great. In fact, probably some of the people who are working the hardest at CCEP are supply chain colleagues as we continue to meet, you know, that increased demand coming out of the second half and rebuild inventories. You know, so overall, very pleased. I would say obviously FIFA is a call out just in terms of its scale and impact. I would say some of the new innovations are doing better than we expected. So Coke Zero Zero, I think the super can has surprised us, really connecting with a different user, and I think that's working really well. And obviously, we talked to some of the innovation in Asia, but particularly Powerade in Indonesia surprised us to the upside, so that's great. So quite broad, which is exciting, quite sustainable into Q3, Q4, and as I mentioned to Ed's point, into next year. you could call us conservative I mean Ed and I looked at our numbers for the first half of the year reflected on year to go you know there's still five months to go and clearly we'll be able to update everybody in November and how we see the full year but at this stage given the volatility that we've seen particularly on the cost side it's great to be able to reaffirm what was pretty good guidance anyway and you know that gives us a lot of excitement for the second half all right thank you our next question comes from the line of
lemon hails city ah thanks um hi damien hi ed hi sarah um damien i wonder if we could just sort of pick your brains a little bit further on your comments around you know the h2 guidance and potentially you know some of perhaps the prudence you're building in there i'm just still trying to to square the circle because you know it from everything you've said today clearly q3 has started uh strongly momentum is very good you know it's obviously through june that's continued into july and perhaps early august we've got perhaps lower promo coming in europe in h2 generally as you said higher revenue per case further cost efficiencies coming through and yet overall comparable ebit growth is expected to slow to probably around six percent and change in h2 to meet your guidance you you just flagged there your worries perhaps around you know some of the cost volatility we're seeing are you really sort of being pretty conservative because of the higher cogs per case we're seeing in the second half and is that really driven by what you're seeing out of the middle east uh in particular i'm i'm just trying to get a bit more of a flavor as to what's driving that potential conservatism on your part yeah i mean we look at the year in total simon i mean i know everybody gets excited by quarters and um you know that the half year outlook when you take you know that you take the first half and you deduct it from our guidance i mean you guys do the numbers as well as if not better than us um i suppose
really just comes down to you know we still have five big months um you know um we we still got to get through what what is is a really good summer for us in europe um and we're excited about that then we move into spring summer in in our australia new zealand businesses so it's more reflects a kind of time frame that we still have five, you know, what we hope will be great months to go. And that was it, really. I mean, there's nothing specific. When we look at our hedging, we're in a good place. We look at our pricing, we're in a good place. We would like to see a little bit more NSO per case progression in half two. You know, we're clearly working on that with our commercial teams. From a listings perspective, we're in good shape. Yeah, so there's a lot to be positive about. We just felt with five months to go, you know, sticking to our guidance is probably the best decision at the moment. And then obviously, should that change, we'll update it as we go through the year anyway as normal. So yeah, nothing specific, more really that we felt we're just halfway through the game. Yeah, maybe we are a little bit conservative, but you know, that's, yeah, maybe that's our way a little bit. I don't know, Ed, you want to come up?
Well, maybe just one point to add. We have to remember, of course, that there were more selling days in the first half and the second half. So when we look at our reported revenue and our reported profit, they reflected that. So obviously, that means a few less selling days in the second half. But that's all as per our plan and how we anticipated the year would roll out at the beginning of the year. I think on the Middle East, as you mentioned that, I mean, we're in a good place in terms of our coverage for the year, but the majority of the costs will fall in the second half. That's all built into our guidance, but obviously given the timing of that and given we're always a little bit more hedged in the near term than the midterm, we will see more of that cost in the second half. And of course, the Middle East itself is still an open item in terms of how it really affects all of us the rest of the year. So just a couple of points there that might help, Simon.
Operator
Our next question comes from the line of Andrea Pistaki, Bank of America.
Yes, thank you. I have a question on Indonesia, please, which delivered a strong quarter, albeit against a pretty easy comparison base. Is there anything in sort of the performance of this quarter and the previous ones that really is maybe increasing your confidence that the turnaround is gaining traction beyond the counterfex? effects. And do you think now Indonesia is in a situation where it can start sustaining positive volume growth?
Yeah, great question. We're really excited about Indonesia for the near and long term, obviously just given some of the macros that we all know about. I think when we look at our business, we started the year off with a great festive. You know, that's continued into Q2. A couple of drivers of that, one is structural. I mean, and we've spent some time reorganizing our route to market and moving to a more efficient distributor model, we firmly believe that's a driver of growth for the long term. We've brought more innovation, whether it's on the mint side with Sprite or on Powerade. That's definitely driving growth. Our underlying performance on sparkling is actually better. So when you look at a consolidated number, within that is still a little bit of weakness on T, and that's something that we need to deal with as we get through the second half of this year. But what that really shows is where we've been focused, which is on our sparkling portfolio, that's continued to go from strength to strength by quarter. So, yeah, a lot of moving parts in Indo. So I think, you know, while we're super excited, we're very happy with the route to market change. I'm particularly pleased for our team in Indo. I mean, they've been working through a lot of change. it's great for them to see you know the positives particularly on sparkling month after month quarter after quarter so we expect that continue to through half two and then into 2027 so you know obviously our objective for that business that it does become a consistent driver of revenue volume for CCEP we're starting to see that this year and clearly we can update as we get into next year. Yeah, but definitely too early to talk about success. I would say it's great to talk about progress, and that's where we are at the moment.
Thanks. Can I squeeze in, please, a very quick follow-up on how the supply chain has coped with maybe the increased strain because of the incremental demand because of the weather?
Has there been any pressure on the cost space maybe logistics or production or have you coped with that normally thank you yeah I'd say the team I mentioned it earlier and a big call out to all our colleagues in customer service and supply chain we've managed it really well I mean we've had to make some you know I would say short-term tactical decisions about prioritizing certain SKUs and we came into the summer with reasonably good inventories our customers usually have good inventory so you know that buffer certainly helps us to manage the uplift we've seen, particularly in June and into July. So, yeah, not without pressure. And I would say a lot of hard work, but nothing significantly impacting our call space or anything like that. It's been really good to see that the team and our factories can respond to that uplift. Thank you.
Operator
Question comes from the line of Chris Carey, Wells Fargo Securities.
Hi, everybody. Thank you for the question. I wanted to follow up on confidence levels around using pricing as a lever. Clearly, coming into 2026, there was a key strategy across the Coca-Cola system to drive improved or balanced top-line growth with volume. you've talked about in this call, providing consumers with the appropriate value and price points. But as we look at 2027, it certainly does seem like inflation will be higher than it is in 2026 based on what we can see today with acceleration in the back half. So how does this strategy in 2026 evolve into 2027, can the pricing line continue to be as robust for you when you need it most, when inflation is rising? Or is there a step change in the thought process about how to manage these inflationary backdrops, say, relative to 2022 and 2023? And I just wonder if if you could maybe, you know, one level down, talk about how you would view this in your Europe versus APS businesses as well. Thanks so much.
Yeah, thanks. So I'll let Ed give you a little bit more color. Just to kind of, you know, I suppose, I mean, we're very fortunate when we look at the shape of our size of high percentage of the revenues are up to the retail, so a lot of those similar placements away from home customers in those things, gives us access to a much more elastic to consume environment of pricing. So I think it's quite different to a lot of other businesses in CPG. We're also more diversified than ever across categories and packs. So again, when we look at pricing, it's a very, very segmented strategy. And I think that gives us confidence that pricing will remain part of our mixed story through 26 and into 2027. to similar environment in APS, albeit, I would say, we're focused on affordability, as you'd expect, more in markets like Indonesia and Philippines, where we just know out-of-pocket spends under more pressure. But ultimately, we feel with that diversity and a segmented approach, we're in good shape for this year and next year. I don't know, Ed, do you want to?
Yeah, I think you're absolutely right. I mean, if you look back over our history, You know, we've managed successfully, I think, periods of low inflation and periods of high inflation. It will be a balanced approach, as you said, Chris. You know, we're very conscious of the need for volume growth across the business and revenue per case growth. I think one of the strong things about CCP is, you know, we have many levers to that pricing, whether it's the headline price, a lot of opportunity always to make our promotions work harder and be more efficient. And then as you look across the portfolio, you know, many different packs and brands, which really lends ourselves to being able to take that very segmented approach. And I think 27 will be no different from any of the other years. It will be a very carefully considered approach. And we'll look at what's the right thing from a consumer pricing perspective from affordability. What's the right thing for the category from a customer perspective? And, of course, what do we need to do to cover cost in our business, but also to invest in the future? So I think we will see the same type of trends and the same type of activities as we've seen in previous years of maybe slightly higher inflation.
Yeah. And I think we're also leveraging innovation as well. I think a lot of the innovation you'll see coming through smaller pack sizes, generating a higher revenue per case, commanding a bit more of a premium. And there's more of that to come as we look at brands like Body Armour, what we do with Parade, I talked about earlier. Obviously, energy is mainly single serve, drives a nice revenue per case. So to Ed's point, I think we've a lot of different levers beyond that kind of headline price element. But there will be some headline price as well.
But the combination of all of those gives us confidence that we can maintain a quality top line growth, which for us is really a little bit of price mix and volume and also sustain margin expansion on the P&L which were obviously very focused on thank you thank you very much next question comes from the line of Sanjit Aujla UBS hey Damien Ed I just wanted to dig into your share trends across Europe I think we started the year with some weaker momentum particularly in Germany and france how have you seen your competitiveness uh develop uh through the course of the half year period and specifically on the away from home channel uh i think volumes were were only at 0.5 percent um are there any um any parts of europe where uh performance is uh is lagging i i think there was a a bit of momentum build last year but um has that faded a little bit this year or would you assess your way from home performance in Q2? Thanks.
Thanks, Andy. So our share has improved, particularly in Europe, as the years progress. We're actually seeing a slightly better volume share than value share, and that comes back to some of the points Ed talked about. We've seen some of our large PET initiatives pay off, particularly on Diet Coke. I'm a Diet Coke fan, So I want to call it Diet Coke, where we've seen that brand return to growth in GD. So our volume share is improving, and so is value share in Europe. And as you see, overall in NARTD, we gain share. In terms of away from home, I would say it's pretty consistent with last year. Obviously, revenue is doing a little bit better than volume. Across all of our markets, it's pretty consistent. and obviously it's picked up a bit as the weather kicked in particularly in June and into July yeah so nothing structural there obviously it continues to be a channel where we've got to drive more availability so our coolers are a big part of our away from home strategy and we've got to manage you know clearly particularly down to trade you'll see a bit more meal deals and you've seen that from some of our big customers a bit more value from mcdonald's and i think that just reflects what ed talked to that while you know we see the business being very resilient we are conscious that some consumers you know still respond more to value
and that's also true and away from home um yeah but but you know two years now where we've seen growth and away from home and we're really happy with that great thank you our next question comes from the line of richard with again kepler shivra yeah good afternoon uh damien and sarah uh thanks for the question um uh you mentioned promotions and promo spending a few times on the call today and i i think also on previous calls you mentioned it can you can you perhaps quantify promo spending is there more optimization potential and you know what else in in revenue and margin growth
management are you focusing on to optimize yeah there's always opportunity when i speak to my key account and commercial theme. It's a big pot of money. So I do think optimization has really improved. I mean, we've done some good work using technology. We clearly understand what promos don't create value for us or our customers, what promos drive better household penetration. So we will continue with that. I think beyond promo optimization, and you'll probably see that a little bit in some of our markets some of the promo depth is increasing and you know so we see similar promos but at a slightly higher promotional price clearly to Ed's point earlier that will support some of that NSR growth through to the second half of the year beyond that I mean I think you know as I talked to earlier our innovation plays a good role and it's mainly single serve, it's mainly more premium compared to large PET, and a lot of it's on the go, which commands a higher price. And then within retail, we see an opportunity, particularly, I'm just back from a visit to the US with Ed, you can really see how they've taken mini cans, small PET, even further than we have in Europe. I mean, that's been a good part of our story, but when you visit markets like that, you We can see how that can be even a bigger part of our story in Europe and in Australia. So I think packaging, pack mix, pack innovation will be a bigger part of our R&M GM story going forward. And then clearly categories. So when we look at sports, particularly Parade and Aquarius, they drive a much better mix for us. And again, just referencing my North American trip, when you stand in front of a fixture in the U.S. And also, I would say in Australia, to our team's credit in Australia, they've just done a much bigger job on making Powerade and that whole sports category relevant. We see the growth in that in Europe, but there's a long way to go. So it's a combination of that price promo optimization, pack mix optimization, and better category leverage. And I think that gives us confidence, not just for 27, but over the next number of years in Europe. and in Australia, New Zealand.
Operator
Our next question comes from the line of Nadine Sawat Bernstein.
Hi. Thank you guys for taking my question. One for me, please. That 20,000 new coolers added is a pretty incredible number, and you referenced it quite a lot in a helpful manner in your prepared remarks. Can you give us a sense of how this incremental cooler capacity is distributed across your geographies or channels? and just help us understand the ROI or incremental sales or positive mix generated by an investment like that in whatever way in terms of quantifying that, that you can. Thank you.
Thanks, Nadine. Great question. So actually, it's 80,000 coolers that we've done this year, and that was building on a significant increase as well last year. So, yeah, we're very pleased with our progress on cooler placements. I would say it's fairly evenly balanced across our markets and actually pretty evenly balanced across channels, both in the home channel and away from home. We've found lots more opportunities to place coolers, both coat coolers and monster coolers. From a finance perspective, they're some of the best investments we like to make. Every cooler is different depending on where you place it, but you can be looking at returns of certainly within a couple of years for a well-placed cooler. we give quite specific guidance to our sales teams in terms of what type of throughput we need to be seeing in order to generate the return and then if that throughput is delivered then you can be very comfortable with the return and of course we're starting to see more and more the use of connected coolers and that gives us great feedback on the number of purchases what's the right distribution of products and brands, the right rates of sale that we should be seeing through those coolers. So again, another area where technology and AI is really giving us fantastic insight to make sure we put the right coolers of the right size in the right location. But certainly from a finance perspective, very happy with the returns we receive from our cold drink placement.
Understood. Thank you. And one follow up on that, actually, it clearly is meeting the consumer at a place where they want something cold, they want something convenient. What does that say about underlying consumer dynamics today, single-serve versus multi-packs, and how are you expecting that to evolve over the coming years?
Yeah, I mean, I think, you know, our single-serve business, particularly as we bring more flavor and innovation, is really robust And it's something that, you know, we know that our category is an impulse category, right? So it's a huge benefit that if you put it in the right place and it's cold, it gets old. And that's been through for a long, long time in our business. It's also an area where you can get price elasticity. So I think people realize and accept that for that convenience and for that immediate cold product, they'll pay a little bit more, which is good for us and for our customer. and typically when you look at our beverages across our markets you know while we have taken pricing I mean you can get a cold coke in most of our markets for around a euro a dollar fifty and so so while we do talk about pricing the absolute spend to enjoy one of our products you know I would argue is always still very reasonable let's put it that way and then on top of that you got categories like energy and sports that command a premium and you know
candidly our distribution particularly on sports and in away from home and cold is very low so that's something we've got to find a better way to unlock that opportunity I think it also says quite a bit about the customer and the customer sees you know the value in the category overall and then it's a great you know value greater from them from an outlet perspective so we see the increasing signs of the customer wanting to place more and more equipment and then give more and more space to soft drinks, which I think is a great thing for us, obviously.
Fantastic. Thank you very much.
Operator
The question comes from the line of Mitch Collette, Deutsche Bank.
Hi, Damien. Hi, Ed. Hi, Sarah. I enjoyed your third slide, the new one, so thank you for that. And there was a bullet on there about Kira, your agentic AI application. You say that it gave you deeper brand insights and faster market decisions. So I just wondered if you could give us any examples of those insights and decisions, and how do you expect that tool to develop and contribute to the business going forward? Thank you.
Yeah, thanks, Mitch. I mean, we have got a wealth of information as a system. I think that's the starting point, whether it's from our customers, from our own structured research with the Coca-Cola company and Monster, EPOS data. I mean, we really have a lot of information. Our challenge was trying to put that in a place where we could access it and use different sources to make better decisions. And this is, I think, a challenge of many companies. So Kira really is our, you know, first big attempt to have an AI agent that sits above a lot of those sources, whether it's Nielsen, Kantar, EPOS information, brand information from the Coca-Cola company. And it is giving us a better understanding of how consumers respond to some of our initiatives, whether that's promo or new pack innovation. and clearly then that steers the next decision about where we prioritize resource. So it's really allowing our commercial teams to ask the right question, get a very quick answer and then bring that to our customers to shape, you know, whether it's space in a cooler, better promo pricing or better innovation as we go forward. So I think we're at the beginning of that. I mean, we've also done some work with McKinsey on trying to look at how AI can sit above even more information and really consolidating a great data set from the Coca-Cola company with what we have and I think yeah that's where Cura kind of sits in the middle of that so early days but you know it's certainly amazing to see how you know what took weeks to try and get some correlation between Nielsen shopper panel or customer data is now happening a lot, lot quicker. Yeah. So super exciting.
Operator
Our next question comes from the line of Eric Sirota, Morgan Stanley.
Great. Good afternoon, everyone. Two quick ones. First, Damien, back in Manila, you talked about the potential for the potential upside for improving kind of core sparkling volumes in Europe. Looks like you made some progress in terms of Diet Coke and light in a couple of markets. Original taste seemed a little on the soft side, but even taking sort of a step back from the quarter to quarter volatility. Could you talk about, you know, your progress and your confidence in achieving that core sparkling volume improvement in europe um you know since since we uh heard from this uh you know a little over a year ago and then a quick one for ed um usually around this time you're you know around mid-year you're you're typically about 50 hedged on uh commodities for the following year um where do you guys stand today? Are you a little bit less because of maybe elevated prices earlier in the year, or were there some opportunities given the forward curves on commodities? Thanks so much.
Yeah, thanks, Eric. Good memory back to our Manila meeting. Yeah, so we have seen sparkling volumes grow in Europe, and I think that's been great. It's been led by zeros, which are, you know, over 10%. You're absolutely right. The brand that hasn't grown volume has really been Coke Classic, and we've talked about that. I think there's a couple of factors at play. Obviously, people are enjoying great-tasting zero-sugar options, particularly Coke Zero, but now Diet Coke, which is great. So on a consolidated level, we can grow our Coke trademark franchise and volume, and that, for us, is really important. Coke Classic is still, you know, the best-tasting brand. so we still see that performing and it's still growing revenue so while on a volume level it's off a little bit it is growing revenue and I think that will continue as we have as I mentioned earlier mini cans you know probably smaller portions around our classic variants both coke and and Fanta and clearly a better zero proposition so the category is growing it will be led by zeros, we see that gaining momentum both in energy and in soft drinks. And as we've reformulated, we're now really in a solid position to take that forward. Also, fair to say to Coke Classic, you know, when you look at in the shorter period, we did have the sugar tax increase in France, and clearly that was mainly on Coke Classic, and that obviously impacts volume in the short term. and but we you know we generally cycle out of that through the year yeah but overall great to see the category sparkling category in growth and great to see it led by zeros just pass the call to Ed on your second question yeah thank you Eric so yes as you say we aim to be 80% covered by the time we start in the coming year we don't give specific guidance at this stage in terms of the year coming at where we are at the half year point but we aim to build
it up fairly evenly over the year so as you say 50% is probably a reasonable approximation we haven't delayed any of our hedging activity this year despite the Middle East because obviously we try to avoid or we do avoid speculation and we do the hedging to give us certainty in terms of as far as possible on costs for the coming year although the forwards are higher you know I think what we have seen through the Middle East crisis is quite a lot more volatility on individual commodity prices. So we have locked in what I think are some good competitive rates for next year already. But we haven't overall delayed our hedging program just as a result of the Middle East.
Great. Thank you so much. I'll pass it on.
Operator
Our next question comes from the line of Lauren Lieberman Barclays.
Great. Thanks. Good morning. I wanted to just talk for a second about the, quote, more customers element of your strategic priorities. There were a couple of calls out in the release, but it's interesting to think about the range of large customers that would be directly linked to, you know, KO level conversations like Marriott versus things that are more specific to your markets. So it's curious if you could talk a little bit about that process, maybe how much of this, you know, more customers do you think of as being CCEP specific things that are driven by your ability to cover more accounts with the productivity you're finding in your sales force versus, you know, big global strategic partnerships? Thanks.
Yeah. Hi, Lauren. It's mainly within CCEP's control and mandate. We want a lot of new business, both small and large. We want businesses in the event space. I talked about football. We won, you know, the biggest local chain in Spain in terms of pizza and food to go, Domino's in Australia. So clearly we leverage any global relationship we can get with the Coca-Cola company. But, you know, the majority of the outlets are very local. And we're very focused on that. You see a lot of multiple buying groups, particularly in Europe and Australia, where, you know, they have 10 to 12 outlets. and they're exciting obviously a win like Marriott lifts all boats so you know when when the coca-cola company shared that news it was fantastic for us 600 hotels um and i think globally when you look at you know our global franchise partners through the coca-cola company are very strong already so i would say the upside for us we'll always welcome a gift from atlanta if they can land one of the big global ones but really for us it's in our control and it's mainly local chains and our sharing away from home is quite high relative to retail but that doesn't mean we don't have
opportunities and we'll keep picking up new customers and new business as we go through this year okay great thanks so much our next question comes from the line of charlie higgs rothschild and co-redburn yeah hi damien ed hope you're well and also want to say happy birthday to ccp for 10 years in the quarter and i hope it was a good party and on that note i was wondering if we look back over the last 10 years in europe specifically there's been a lot of volatility at macro level sugar taxes and whatnot and yet ccp europe has still delivered very resilient four percent or so organic sales growth per annum. And then it seems like a lot of the themes in the presentation today is about really dialing up the execution at the local level with KO, more cooler placements, more customers, bigger, stronger innovations. So how should we think about the growth set up for Europe going forwards?
And I guess where I'm coming from is why isn't the European guidance more like three to four percent over the medium term rather than the two to three percent thank you thanks Charlie well thank you for the birthday wishes we we were all very busy during the summer we had a little bit of a party and yeah I mean Europe since we created CCP has been a massive you know value creator compounding year-on-year and we see that continuing I mean obviously we look at guidance on the midterm and as we look at the group guidance around that four percent revenue to your point that implies Europe around two to three yeah and we think on a steady state that's a good number and you know if we can do better than that obviously we will you know within that you know we have factored in that transition from classic to more zero you know that that's accelerating and we see that we're benefiting from that this year yeah we'll review guidance as we get you know more visibility on innovation with the coca-cola company and monster for Europe as we go into 2027 but you know I think overall you know that range of two to three is a is a good number leads to the four for the group and obviously your next question would be if we did change Europe would we change the group and clearly we want to manage all that within our current framework but yeah
happy to stick to the two to three for Europe and yeah thanks thanks Charlie Thank you Our next question comes from the line of Robert Ottenstein, Evercore ISI Great, thank you very much Damien, at this point you've managed through a number of the FIFA World Cups and so I was wondering if you could reflect on how the execution the stuff that we don't see but the nuts and bolts that goes into success has changed over prior World Cups, whether it's coordination with the Coca-Cola company, dealing with more social media now, more agility, changing things on the run, just some of the things underneath the hood that we just can't see. I'd love you to reflect on that. And then just one small question, just sort of coming into work today, I saw a headline about possible tax changes in Philippines on CSDs. Maybe give some context. I don't know if that's a special thing or something that was expected.
Thanks, Robert. I mean, I think, and obviously you listened in, obviously, on the KO side. I mean, it was the biggest fee for activation globally. Certainly, CCEP played a big part in that. It's always been a big event for us, but I think there was something very special about this year, and I think it was mainly in the space of digital and being able to drive more transactions with FIFA. I think Manolo and the team, both in Atlanta and locally in Europe, really focused on making FIFA transaction events. We obviously had the Panini initiative, which was huge in Europe. We had a lot of opportunities for our consumers to engage on PAC. That was quite different to previous FIFAs. Yeah, and I think overall, you know, that led us to be able to activate more cases on the floor, et cetera. Also, you mentioned speed. I mean, I think the gold can coming out so quick for Spain, I think, again, that just shows how as a system and as a business, we're able to move fast, make fast decisions, and be prepared. We had a number of gold cans ready, just in case. I won't name the ones that didn't make it, but clearly we're a happy Spain, given it's one of our key markets made it. So probably the digital tech and social engagement, Robert, would be what I call out as being at a very, very high level compared to previous FIFAs.
I mean, on the sugar tax, I mean, there is some stuff in the media today. I think we need a bit of time to go through that. I think if you take a step back, though, you know, we're well used to dealing with tax changes across all of our markets. You know, if you look last year, we had the France sugar tax, which had some impact within the year. But as a good example, you know, in quarter two, we were back into volume growth in France. I think when you look across our portfolio with the number of packs and brands that we have and our R&M GM capability we're well we're in a good position to be able to manage the impact of those types of tax changes as they come so we'll do a bit more digging on what's actually proposed for the Philippines and and reflect on that for our plans for 2020 yeah and we are we already have a tax in the Philippines it's an excise tax so it's across all beverages, sugar, and sweeteners.
So that's already in place, Robert. So let's see what changes they propose to that as well.
Operator
The last question for today comes from the line of Carlos Laboy, HSBC.
Yes. Hello, everyone. Damien, I was hoping you could follow up a little bit on Lauren's question. What has changed that is helping you drive recruitment of more customers better? Is it an internal mindset? Is it that you have new tools that allow you to crack the code on these opportunities better? And is this something that you think can continue to drive growth in your client base going forward?
Yeah, thanks, Carlos. I mean, it's something that's been a consistent part of our story at CCP. I mean, I think probably a couple of years ago, we talked about having a bolder view on the away from home market. I mean, that market had been in decline for a while. And we talked about not being passive about that and actually working across a number of areas to drive growth in away from home, including customer wins. So one pillar was customer wins. The second pillar, which we talked about, was cooler placements, so to drive more availability in that space. And the third element was leveraging our consumer assets better to drive transactions. And I talked to FIFA doing that as well. Clearly, as we broaden our portfolio, we become a very compelling partner for customers. We bring to all of them a hydration platform, a leading energy platform, clearly the leading CSD portfolio. And then obviously, we're looking at bringing more innovation in sports and hydration. So when you look at NA ORTD, you know, there's no one really with the breadth of portfolio that we can bring. There's a lot of companies with individual strength in different segments. I think that's definitely compelling, Carlos. And I think, you know, the more we talk to that total portfolio and the category opportunity, you know, the more it plays into customers' needs for, you know, profit and growth and you know typically they they they earn good margin on our products particularly in out of home and obviously as businesses become tougher with rates or with inflation around labor you know selling a category that generates good margin definitely makes life a little bit easier for a sales force so yeah probably a combination of all those elements it's always been part of our story it's always been a passionate part of our business that we want to onboard a lot more customers that's definitely true in the Philippines Indonesia we're having a lot of customer wins in Australia and also in Europe yeah so happy to be able to talk to it today thank you thank you I would now like to hand the conference back over to Damien Gamal for his closing remarks Damien please go ahead. Thanks Mel and a big, big thank you to everybody who joined us this morning or this afternoon. So as Ed and I talked to, strong first half. I'm very happy that today we're reaffirming our full year guidance. We are very pleased with the progress against our strategic priorities as we've outlined today. Also pleased with the start of half two and I think the strength of, you know, our business demonstrates resilience and the consistency of our growth model. We do look forward to speaking to you again at Q3. In the meantime, I hope everybody can get a break and enjoy a great summer, ideally in one of our markets, and obviously enjoy a nice cold beverage from one of our new coolers. So thank you very much and have a great rest of the day. Thank you.
