Fitch Ratings has affirmed
The Outlook is Stable.
The IDR reflects CCEP's strong business profile as the largest bottler, by revenue, in
The Stable Outlook reflects Fitch's expectations that EBITDA net leverage will remain in line with the company's financial policy, comfortably under 3x in 2025-2028 despite continued cost pressures in 2025. CCEP has demonstrated its ability to pass higher costs on to customers across most regions and product categories. Our expectations of resilient profit margins are also supported by CCEP's ongoing savings programmes and sales premiumisation strategy.
Key Rating Drivers
Normalised Revenue Growth: We expect CCEP's organic revenue growth to stabilise in the mid-to-low single digits in the next four years. This will be driven by moderated pricing but positive changes in the sales mix supported by the group's premiumisation strategy, resulting in a gradual rebalancing between price/mix and volumes contribution to the revenue growth.
We forecast revenues to increase by 3.8% in 2025, following robust 11.7% growth in 2024, driven by consolidation of Coca Cola Philippines (CCBPI). We expect lower revenue growth in
One-Notch Uplift for TCCC Support: Fitch maintains a 'bottom-up plus one notch' approach to CCEP's SCP of 'bbb', reflecting our assessment of TCCC's operational and strategic incentives for supporting CCEP as 'medium', and 'weak' legal incentives for support.
The uplift is constrained to a single notch due to TCCC's moderate 17% ownership of CCEP. This creates some uncertainty at the current rating about the extent of potential support to CCEP, given the existence of two other majority shareholders, and CCEP's public listing. The operational and strategic ties between TCCC and CCEP are strengthened by shared brands portfolio and marketing functions, and strategic, experience and innovation support provided by TCCC to the bottler.
Resilient Profitability: We expect the EBITDA margin to grow to 16.3% in 2025, supported by the stabilisation of key raw materials and CCEP's ongoing efficiency programmes, despite persisting inflationary pressures from sugar prices and labour costs. We expect profitability to gradually reach 17% by 2028, supported by growing sales volumes, increasing share of profitable premium offering and efficiency measures. CCEP's Fitch adjusted EBITDA margin declined to 15.8% in 2024 (2023: 16.1%), due a weaker performance in
Superior Free Cash Flow: We project CCEP's pre-dividend free cash flow (FCF) at
Improving Leverage, Conservative Financial Policy: We expect CCEP's net leverage to decrease to 2.8x in 2025, from 2.9x in 2024, driven by EBITDA generation. We expect leverage to remain comfortably below 3.0x over the rating horizon, despite the assumed
Strong Business Profile: CCEP is the largest bottler by revenue in TCCC's bottling system globally, with substantial scale providing scope for a coordinated operational strategy and enhanced capabilities to maintain resilience against market pressures on carbonated soft drink products. Its credit profile benefits from improved geographical diversification following the
Peer Analysis
CCEP's rating is lower than its peers in the
CCEP's IDR is higher than that of Turkiye-based Coca-Cola Icecek AS (BBB/Stable), which has lower leverage but is smaller and operates in markets that require more capex and are more vulnerable to demand and currency volatility.
Key Assumptions
Fitch's Key Assumptions within our Rating Case for the Issuer:
Organic revenue growth of 3.8% and 4% in 2025 and 2026 before normalising to around 3.5% annually over the rating horizon
EBITDA margin at 16.5% in 2025 (2024: 16.3%), trending toward 17.0% in 2028, driven by positive product mix change, and gains from synergies and cost efficiencies
Fitch assumed annual dividends of about
Capex at 5.0% of revenue in 2025 before normalising to 4.5% annually over the rating horizon
FCF margin (after dividends payments) at around 1.6% in 2025 (2024: 3.8%) and around 3% over 2026-2028
Fitch-assumed share buybacks of
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Change in financial policy towards tolerance of higher EBITDA net leverage above 3.0x
EBITDA margin falling toward 16% and resulting in low single-digit FCF margins
EBITDA interest coverage below 8.0x
Significantly diminished strategic or operational ties with TCCC
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Shift in financial policy towards a lower EBITDA net leverage target at below 2.0x
EBITDA margin above 20%
Liquidity and Debt Structure
CCEP had healthy liquidity at end-2024, with
Issuer Profile
CCEP is sole licenced bottler for TCCC in many European markets. It is also present in
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Click here to access Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in our credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
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