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1. Company Snapshot

1.a. Company Description

Coca-Cola Europacific Partners PLC, together with its subsidiaries, produces, distributes, and sells a range of non-alcoholic ready to drink beverages.The company offers flavours, mixers, and energy drinks; soft drinks, waters, enhanced water, and isotonic drinks; and ready-to-drink tea and coffee, juices, and other drinks.It provides its products under the Coca-Cola, Diet Coke, Coca-Cola Zero Sugar, Fanta, Sprite, Monster Energy, Coca-Cola Energy, Relentless, nalu, URGE, BURN, Kuli, REIGN, POWERADE, Appletiser, Schweppes, FINLEY, mezzo mix, Royal Bliss, Lift, Vio SCHORLE, Coca-Cola Signature Mixers, NORDIC MIST, smartwater, Chaudfontaine, AQUARIUS, VILAS del Turbon, BONAQUA, Apollinaris, Krystal, Honest, Costa Coffee, Fuzetea, CHAQWA, NESTEA, Capri-Sun, Oasis, Minute Maid, MER, and Tropico brands.


In addition, the company engages in the bottling and other operations.As of March 15, 2022, it served approximately 600 million consumers.The company was formerly known as Coca-Cola European Partners plc and changed its name to Coca-Cola Europacific Partners PLC in May 2021.


Coca-Cola Europacific Partners PLC was founded in 1986 and is based in Uxbridge, the United Kingdom.

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1.b. Last Insights on CCEP

Coca-Cola Europacific Partners PLC faced negative drivers over the recent three months. Morgan Stanley downgraded the stock from Overweight to Equal-weight, citing a balanced risk-reward profile. The company's latest earnings announcement disappointed shareholders, despite a 7.2% increase in operating profit. Headwinds in Indonesia and foreign exchange impacts posed challenges. Additionally, the company plans to close a non-refundable PET line in Germany, affecting 21 jobs. These factors may impact the company's short-term prospects.

1.c. Company Highlights

2. CCEP's Solid H1 Performance: Revenue Growth and Margin Expansion

The company delivered a solid financial performance in the first half, with revenue growing by 2.5% to EUR 10.3 billion, driven by volume growth and revenue per unit case. Operating profit increased by 7.2% to EUR 1.4 billion, with operating margin expansion in Europe and APS. The actual EPS came out at '1.73', slightly lower than estimates at '1.76'. As per Ed Walker, CFO, "The company continues to optimize its network, with the rationalization of distribution sites in Germany and the consolidation of production into fewer, bigger, and more efficient plants."

Publication Date: Aug -06

📋 Highlights
  • Total Shareholder Return (TSR):: 235% since 2016, reflecting strong long-term growth and shareholder value creation.
  • Revenue Growth:: 2.5% year-over-year to EUR 10.3 billion, driven by volume growth and revenue per unit case.
  • Operating Profit Increase:: 7.2% to EUR 1.4 billion, supported by margin expansion in Europe and APS.
  • Full-Year Revenue Guidance:: Expected to grow between 3% and 4%, with cost of sales per unit case rising by around 2%.
  • Comparable Free Cash Flow:: On track to deliver at least EUR 1.7 billion for the year, supported by efficiency programs.

Revenue Growth and Margin Analysis

The revenue growth was driven by volume growth and revenue per unit case. The company's operating margin expansion was driven by efficiency programs, which aim to deliver between EUR 350 million and EUR 400 million of savings by 2028. The effective tax rate is expected to be 26%, higher than last year's 25%. The company's guidance implies an acceleration of growth in the second half, driven by volume growth and a strong commercial plan.

Valuation Metrics

Using the given valuation metrics, the company's P/E Ratio is 25.39, indicating a relatively high valuation. However, the Dividend Yield is 2.43%, and the Free Cash Flow Yield is 6.29%, suggesting a decent return for investors. The ROIC is 6.53%, and the ROE is 16.67%, indicating a good return on equity. The Net Debt / EBITDA is 2.99, indicating a manageable debt level.

Regional Performance

The company's performance in Europe was strong, with volume growth in Q2 driven by favorable weather and marketing campaigns. The Away-from-Home channel is growing, driven by cooler placements and listings of energy products. In Indonesia, the macroeconomic slowdown is impacting household consumption, but the company remains excited about the long-term opportunity.

Growth Prospects

The company's conviction around top-line growth remains unchanged, with a guidance of 4% revenue growth in the medium term. Analysts estimate next year's revenue growth at 3.3%. The company is investing in sustainability-focused technology and has retained its inclusion on CDP's A-List for Climate for the 9th year, indicating a strong commitment to sustainability.

Cash Flow and Dividend

The company reaffirmed its full-year profit and cash guidance, with comparable free cash flow expected to be at least EUR 1.7 billion for the year. The dividend yield is 2.43%, indicating a decent return for investors. Ed Walker addressed comparable free cash flows, stating they are down year-on-year due to working capital phasing, but remain confident in delivering EUR 1.7 billion for 2025.

3. NewsRoom

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TMO Stock May Rise Post New PCR Test in Collab With Coca-Cola Partner

Nov -20

Source: zacks.com

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Thermo Fisher Scientific Launches Industry-First, Multi-Parameter Molecular Assay for Rapid Beverage Quality Testing*

Nov -19

Source:

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Ball Corporation reshuffles leadership line-up

Nov -11

Source:

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Coca-Cola Europacific Partners (AMS:CCEP) Is Increasing Its Dividend To €1.25

Nov -08

Source:

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Coca-Cola Europacific Partners plc Announces Q3 Trading Update & Interim Dividend Declaration

Nov -05

Source:

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How Recent Updates Are Shaping the Story and Valuation for Coke Europacific Partners

Oct -08

Source:

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Is Coca-Cola Europacific Partners (ENXTAM:CCEP) Undervalued? A Fresh Look at Its Valuation and Growth Potential

Oct -08

Source:

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Coca-Cola Europacific Partners invests in France production

Oct -06

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.60%)

6. Segments

Making, Selling and Distributing Ready-To-Drink Beverages

Expected Growth: None%

None

7. Detailed Products

Coca-Cola

A classic carbonated soft drink that is sweetened with sugar and flavored with vanilla and lime

Fanta

A line of fruit-flavored soft drinks that come in a variety of colors and flavors

Sprite

A lemon-lime flavored soft drink that is crisp and refreshing

Diet Coke

A sugar-free and calorie-free version of Coca-Cola, sweetened with artificial sweeteners

Coca-Cola Zero Sugar

A sugar-free and calorie-free version of Coca-Cola, sweetened with artificial sweeteners and containing no sugar

Simply

A line of juices and juice drinks made with simple, natural ingredients and no added preservatives

Fuze Tea

A line of tea-based drinks that combine the benefits of tea with the fun of a fizzy drink

Smartwater

A line of electrolyte-enhanced water beverages that help replenish and rehydrate the body

Costa Coffee

A line of coffee drinks made with high-quality Arabica beans and a variety of flavors

8. Coca-Cola Europacific Partners PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

Coca-Cola Europacific Partners PLC faces moderate threat from substitutes, as consumers have various alternatives to choose from, such as Pepsi, Dr Pepper, and other beverages.

Bargaining Power Of Customers

Coca-Cola Europacific Partners PLC has a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand portfolio and wide distribution network make it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Coca-Cola Europacific Partners PLC relies on a few large suppliers for raw materials, which gives them some bargaining power. However, the company's large scale of operations and long-term contracts help to mitigate this risk.

Threat Of New Entrants

The soft drink industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and established distribution networks. This makes it difficult for new entrants to compete with Coca-Cola Europacific Partners PLC.

Intensity Of Rivalry

The soft drink industry is highly competitive, with several established players competing for market share. Coca-Cola Europacific Partners PLC faces intense rivalry from PepsiCo, Dr Pepper Snapple, and other players, which can lead to pricing pressures and advertising wars.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 57.64%
Debt Cost 3.95%
Equity Weight 42.36%
Equity Cost 7.45%
WACC 5.43%
Leverage 136.08%

11. Quality Control: Coca-Cola Europacific Partners PLC passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Imperial Brands

A-Score: 7.7/10

Value: 5.8

Growth: 5.3

Quality: 6.3

Yield: 9.4

Momentum: 9.5

Volatility: 9.7

1-Year Total Return ->

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Ahold Delhaize

A-Score: 6.9/10

Value: 7.1

Growth: 5.8

Quality: 5.0

Yield: 6.2

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Barr

A-Score: 6.2/10

Value: 4.0

Growth: 5.2

Quality: 6.9

Yield: 5.0

Momentum: 6.5

Volatility: 9.7

1-Year Total Return ->

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Coca-Cola HBC

A-Score: 6.2/10

Value: 4.5

Growth: 6.2

Quality: 5.2

Yield: 4.4

Momentum: 8.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Coca-Cola Europacific Partners

A-Score: 6.0/10

Value: 3.6

Growth: 6.0

Quality: 5.0

Yield: 6.2

Momentum: 10.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Henkel

A-Score: 5.6/10

Value: 6.0

Growth: 4.1

Quality: 6.9

Yield: 5.0

Momentum: 1.5

Volatility: 10.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

68.3$

Current Price

68.3$

Potential

-0.00%

Expected Cash-Flows