Coca-Cola Europacific Partners plc Announces Q1 2022 Trading Update

Rhea-AI Summary

Coca-Cola Europacific Partners reported a strong start to 2022, achieving Q1 revenue of €3,709m, a 62.0% increase year-over-year, primarily driven by the acquisition of Coca-Cola Amatil. The company confirmed its FY22 guidance with operating profit growth of 6-9% and plans for a €0.56 interim dividend. While volume recovery is expected, inflationary pressures remain a concern. Despite this, CCEP anticipates 8-10% revenue growth for FY22, reflecting an improving market landscape.

Positive

• Q1 2022 revenue of €3,709m, up 62.0% YoY.
• Pro forma comparable volume increased by 16.0%.
• Maintaining FY22 operating profit growth guidance of 6-9%.
• Declaring interim dividend of €0.56, indicating strong liquidity.

Negative

• Expectations of high-teen range commodity inflation.
• Cost of sales per unit case expected to grow ~7%.

Trading Update for the First-Quarter ended 1 April 2022 & Interim Dividend Declaration

UXBRIDGE, UK / ACCESSWIRE / April 27, 2022 / Strong start to the year, reaffirming FY22 profit guidance despite accelerating inflationary pressures

Q1 2022					Change vs 2021					Change vs 2021 (Pro forma)
	Revenue	Volume (UC)[1]	Revenue per UC[1]		Comparable[2] Volume	Revenue per UC[1],[5]	FXN[2] revenue	Revenue		Pro forma comparable volume[3]	Pro forma revenue per UC[1],[3]	Pro forma FXN revenue[3]	Pro forma revenue[3]
Europe	€2,805m	562m	€4.94		16.5%	5.0%	21.0%	22.5%		16.5%	5.0%	21.0%	22.5%
API	€904m	178m	€4.96							13.5%	(0.5)%	11.0%	13.5%
CCEP	€3,709m	740m	€4.95		53.5%	5.5%	59.5%	62.0%		16.0%	3.5%	18.5%	20.0%

Damian Gammell, Chief Executive Officer, said:

"We have had a fantastic start to the year, delivering strong top-line growth and value share gains^[4]. A huge thank you to all our colleagues. Our thoughts are also with those affected by the conflict and suffering in Ukraine. We join others across the world in calling for a return to peace.

"Together with The Coca-Cola Company and our other brand partners, our relentless focus on our core brands, solid in-market execution and driving price and mix delivered both volume and revenue ahead of 2019. Volume improved strongly as consumers enjoyed the continued reopening of the away from home channel, with resilient demand in the home channel and a record start to our biggest ever activation in Indonesia during Ramadan.

"We remain well placed over 2022 and beyond. Our aim is to be smart and sustainable - through our people centric, data driven and digitally enabled approach. Disciplined investment in these areas, as well as in our portfolio, will support our long-term growth ambitions. And all done sustainably. We are pleased to again be recognised amongst the Financial Times-Statista list of Europe's Climate Leaders as we continue to make progress on our ambition to reach net zero emissions by 2040.

"In the near-term, whilst we expect to see further volume and mix recovery, we are mindful of a more uncertain outlook given accelerating inflationary pressures. So, we continue to manage our key levers of pricing, promotional spend and efficiencies across our business. Focused on driving operating profit and cash, we are reaffirming our comparable operating profit growth of 6 to 9%, and guiding to delivering strong free cash flow of at least €1.5 billion in FY22. These commitments, combined with today's interim dividend declaration demonstrate the strength and resilience of our business, as well as our ability to deliver continued shareholder value."

Note: All footnotes included after the 'About CCEP' section

Q1 HIGHLIGHTS[2],[3]

Revenue

Q1 Reported +62.0%; Q1 Pro forma +18.5%^[5]

• Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil (completed 10 May 2021)
• NARTD YTD value share gains^[4] across measured channels both in store (+10bps) & online (+20bps)
• Pro forma comparable volume +16.0%^[6] (+3.5% vs 2019) driven by the reopening of the away from home (AFH) channel in Europe, solid trading in API, a great start to Ramadan in Indonesia & soft comparables (Q1 2021 volume -8.5% vs 2020)
• Strong AFH pro forma comparable volume: +40.0%^[6] (-1.5% vs 2019) reflecting the reopening of HoReCa^[7] across Europe (+56.0% vs 2021) & recovery of immediate consumption (IC) packs (+52.0% vs 2021)
• Resilient Home pro forma comparable volume: +4.0%^[6] (+7.0% vs 2019) driven by solid in-market execution
• Recent trading reflects the continued recovery of the AFH channel across our markets & our biggest ever Ramadan activation
• Pro forma revenue per unit case +3.5%^[1],[5] (+4.5%^[8] vs 2019) reflecting positive pack & channel mix led by the recovery of AFH, alongside favourable price across all markets

Dividend

• Declaring first-half interim dividend per share of €0.56, calculated as 40% of the FY21 dividend, with the second-half interim dividend to be paid with reference to the current year annualised total dividend payout ratio of approximately 50%

Other

• API integration well advanced; previously announced plans to enable greater focus on NARTD, RTD alcohol & Spirits remain on track, including the sale of NARTD own brands to The Coca-Cola Company. The exit of Australia beer & apple cider products will conclude by the end of the first half, however CCEP will retain ownership of the standalone Feral craft brewery
• Innovation highlights: new What the Fanta Pink & Monster flavour extensions (including Monster Ultra Watermelon & Gold)
• Sustainability highlights:
  • recognised, for the second time, in the Financial Times-Statista list of Europe's Climate Leaders
  • third manufacturing site certified carbon neutral (Belgium)
  • switched to using bio-fuel across our entire third party logistics fleet in the Netherlands

FY22 GUIDANCE[2],[3]

The outlook for FY22 reflects current market conditions. Guidance is on a pro forma comparable & Fx-neutral basis.

Revenue: pro forma comparable growth of 8-10% (previously 6-8%)

• Weighted towards volume growth over price/mix reflecting continued recovery of the AFH channel

Cost of sales per unit case: pro forma comparable growth of ~7% (previously ~5%)

• Stronger volume recovery supporting favourable overhead absorption
• Commodity inflation expected to be in the high-teen range (previously high single-digit)
• FY22 hedge coverage at ~71%

Operating profit: pro forma comparable growth of 6-9% (unchanged)

• Remain on track to deliver our previously announced efficiency savings & API combination benefits & continued focus on optimising our discretionary spend

Please click on the following link to view the full announcement.

http://www.rns-pdf.londonstockexchange.com/rns/4424J_1-2022-4-26.pdf

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SOURCE: Coca-Cola Europacific Partners plc

View source version on accesswire.com:
https://www.accesswire.com/699050/Coca-Cola-Europacific-Partners-plc-Announces-Q1-2022-Trading-Update

FAQ

What were CCEP's Q1 2022 financial results?

CCEP reported Q1 2022 revenue of €3,709m, a 62.0% increase compared to the previous year.

What is CCEP's guidance for FY22?

CCEP anticipates a pro forma comparable revenue growth of 8-10% and operating profit growth of 6-9% for FY22.

What is the interim dividend declared by CCEP?

CCEP declared an interim dividend of €0.56 per share for the first half of FY22.

How did inflation impact CCEP's outlook?

CCEP expects commodity inflation in the high-teen range, which may affect cost of sales.