# How Coca-Cola Europacific Partners makes money

CXProWealth Business Lens · Coca-Cola Europacific Partners (CCEP) · FY2025

Read from the 20-F for the period 2025-01-01 to 2025-12-31, filed 2026-03-13 with the SEC (accession 0001650107-26-000029): https://www.sec.gov/Archives/edgar/data/1650107/000165010726000029/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $20.9B
- Operating income: $2.8B (operating margin 13.4%)
- Net income: $2.0B (net margin 9.5%)
- Gross margin: 35.6%
- Free cash flow: $2.2B (10.5% of revenue)
- Cash conversion (operating cash flow / net income): 1.49x
- Capital expenditure: 3.6% of revenue

## Where the money goes (FY2025)

- Europe → Revenue: $15.4B
- APS → Revenue: $5.5B
- Revenue → Cost of sales: $13.5B
- Revenue → Gross profit: $7.4B
- Gross profit → Selling and distribution expenses: $3.3B
- Gross profit → Administrative expenses: $1.4B
- Gross profit → Operating profit: $2.7B
- Other income → Operating profit: $104.0M
- Operating profit → Total finance costs, net: $203.0M
- Total finance costs, net → Finance costs: $306.0M
- Finance income → Total finance costs, net: $103.0M
- Operating profit → Non-operating items: $21.0M
- Operating profit → Profit before taxes: $2.6B
- Profit before taxes → Taxes: $590.0M
- Profit before taxes → Profit after taxes: $2.0B

## Where the revenue comes from

### Regions (Segment information - Schedule of Operating Results per Geographic Segment (Details))

| Member | Value | Share |
|---|---:|---:|
| Europe | $15.4B | 73.7% |
| APS | $5.5B | 26.3% |

The members sum to total revenue.

## Income statement, as filed

| Line | FY2025 | Of revenue |
|---|---:|---:|
| Revenue | 20,901,000,000 | 100% |
| Cost of sales | (13,461,000,000) |  |
| **Gross profit** | 7,440,000,000 |  |
| Selling and distribution expenses | (3,349,000,000) |  |
| Administrative expenses | (1,402,000,000) |  |
| Other income | 104,000,000 |  |
| **Operating profit** | 2,793,000,000 |  |
| Finance income | 103,000,000 |  |
| Finance costs | (306,000,000) |  |
| **Total finance costs, net** | -203,000,000 |  |
| Non-operating items | -21,000,000 |  |
| **Profit before taxes** | 2,569,000,000 |  |
| Taxes | (590,000,000) |  |
| **Profit after taxes** | 1,979,000,000 |  |
| Profit attributable to shareholders | 1,942,000,000 |  |
| Profit attributable to non-controlling interests | 37,000,000 |  |
| Basic earnings per share (in EUR per share) | 4.3 |  |
| Diluted earnings per share (in EUR per share) | 4.3 |  |

## History

| Period | Revenue | Operating income | Net income | Operating cash flow | Capital expenditure | Free cash flow |
|---|---:|---:|---:|---:|---:|---:|
| FY2025 | $20.9B | $2.8B | $2.0B | $3.0B | $750.0M | $2.2B |

Latest trend (the newest full year against the year before; a reading, not a forecast):

- Revenue: — (year before —): too short a history to read
- Operating income: — (year before —): too short a history to read
- Net income: — (year before —): too short a history to read
- Free cash flow: — (year before —): too short a history to read

## Key insights

### Profit jumped as last year's charges fell away

Operating profit rose 31.0% on revenue growth of 2.27%, mainly because administrative expenses fell 19.15% as restructuring eased and impairment charges did not recur.

Administrative expenses fell from €1.73B to €1.4B, from 8.48% of revenue to 6.71%. The filing's cost note ties the fall to lower restructuring under the group's efficiency programme and to the absence of the prior year's impairment charges, which it says "mainly related to the Group's Indonesia CGU." Operating profit rose to €2.79B from €2.13B. _(from the filing)_
Other income of €104M appeared, against nothing the year before. The filing attributes it to "gains on the sales of properties in Germany and Great Britain" and further consideration on an earlier German property sale. It equals 3.7% of operating profit, and it comes from selling property, not drinks. _(from the filing)_
The core business improved, but by much less. Gross profit grew 3.18% as cost of sales rose 1.77%, lifting gross margin 0.31 points to 35.6%. Operating profit was 37.5% of gross profit, against 29.6% the year before. _(from the filing)_
Analysis: most of the 31.0% rise comes from items that are not designed to recur: lower restructuring, no impairment and property gains. This is why the company also reports a comparable operating profit. The steadier measure of the year is the gap between gross profit growth of 3.18% and the growth of operating costs. _(analysis)_

### Distribution costs stayed flat while sales grew

Selling and distribution expenses rose 0.12% against revenue growth of 2.27%, so the route network carried more revenue for nearly the same cost.

Selling and distribution expenses were €3.35B in both years, and their share of revenue fell 0.34 points to 16.02%. They absorbed 45.0% of gross profit, against 46.4% the year before. After the product itself, getting drinks to shelves and coolers is the group's largest cost. _(from the filing)_
Growth came where the group is largest. Europe grew 2.89% to €15.4B, while APS grew 0.55% to €5.5B. In Europe, the segment note shows revenue rising in Great Britain, France, the Netherlands and the Nordic markets. _(from the filing)_
Analysis: once trucks, depots and sales reps cover a territory, extra sales along the same routes cost little to deliver, so distribution cost can fall as a share of revenue. One year of flat cost does not yet show a trend, and the filing figures here do not split the cost by segment. _(analysis)_

### Free cash flow exceeded net profit

Free cash flow of €2.2B was larger than profit after taxes of €1.98B, even after €750M of capital spending on plants and equipment.

Operating cash flow was €2.95B, 1.49 times profit after taxes of €1.98B. Capital spending of €750M was 3.59% of revenue and 25.4% of operating cash flow, leaving free cash flow of €2.2B, a margin of 10.54% on revenue of €20.9B. _(from the filing)_
Analysis: a bottler owns plants, lines, trucks and coolers, and depreciation spreads their cost over years, reducing profit without using cash in the year. Non-cash charges such as impairments work the same way. That makes cash a steadier read of this business than the swing in reported operating profit. _(analysis)_
Caveat: the record holds cash flow for this year only, so whether free cash flow above profit is typical for the group cannot be judged from these figures. _(analysis)_

### Net profit outgrew operating profit on a lower tax rate

Profit after taxes rose 37.05% against 31.0% for operating profit, as taxes fell to 23.0% of pre-tax profit from 25.4%.

Taxes were €590M on profit before taxes of €2.57B, 23.0%, against 25.4% the year before. Net finance costs rose to €203M from €187M, but grew more slowly than operating profit, and were 7.27% of it this year. Profit after taxes reached €1.98B and basic earnings per share were €4.26, against €3.08. _(from the filing)_
Caveat: the filing text supplied for this record does not give the reason for the lower tax rate, so no cause is stated here. Part of the gain sits on the same one-off items that lifted operating profit. _(analysis)_

### Competitive edge

- **Licensed to bottle TCCC brands across its territories** Bottling agreements let the group make, sell and distribute The Coca-Cola Company's drinks in its territories, with marketing funding from the brand owner.
- **Europe is 73.7% of revenue and growing faster** Europe brought in €15.4B, 73.7% of revenue, and grew 2.89%, against 0.55% for APS, so growth came from the larger network.

### What to watch

- **The brand owner sets key terms and funding** The group depends on TCCC for concentrate and marketing funding, and the filing says TCCC need not continue past levels of funding.
- **APS growth stalled as its markets diverged** APS grew 0.55% to €5.5B as gains in the Philippines and Papua New Guinea offset declines in Australia, New Zealand and Indonesia.
- **Reported profit still carries restructuring charges** The efficiency programme runs for several more years, and its severance costs mean reported operating profit can swing apart from the underlying business.

## Investor view

**Operating profit rose 31.0% on modest sales growth, mostly because the prior year's restructuring and impairment charges fell away**

### How it makes money

Coca-Cola Europacific Partners is a bottler, not a brand owner. Its filing describes one activity: "making, selling and distributing an extensive range of primarily non-alcoholic ready to drink beverages." It holds bottling agreements "to make, sell and distribute products of TCCC within the Group's territories", buys concentrate from The Coca-Cola Company, and turns it into finished drinks it sells to retailers and outlets. Revenue was €20.9B against €20.44B the year before. _(from the filing)_
The brand owner is paid through the cost line. The filing states that the group "purchases concentrate from TCCC and also receives marketing funding", under "an incidence based concentrate pricing model" across most territories, while certain Asia-Pacific territories use "a fixed price model with marketing rebates and support." Cost of sales was €13.46B, 64.4% of revenue, leaving gross profit of €7.44B, a gross margin of 35.6%. _(from the filing)_
Getting drinks to shelves and coolers is the largest cost after the product itself. Selling and distribution expenses were €3.35B, 16.02% of revenue, against €3.35B the year before. Administrative expenses were €1.4B, 6.71% of revenue. What remained was operating profit of €2.79B, an operating margin of 13.36%. _(from the filing)_
The business has two segments. Europe brought in €15.4B, 73.7% of revenue, and APS (Australia, the Pacific and Southeast Asia) €5.5B, 26.3%. The segment note says the Board assesses them on "volume, revenue and comparable operating profit", and no single customer exceeded a tenth of revenue. _(from the filing)_

### What shifted

Revenue grew 2.27%, and gross profit grew faster, 3.18%, because cost of sales rose only 1.77%. Gross margin moved up 0.31 points to 35.6%. Selling and distribution costs grew 0.12%, so their share of revenue fell 0.34 points to 16.02%. The core bottling economics improved a little; they did not drive the jump in profit. _(from the filing)_
The jump came from charges that stopped. Administrative expenses fell 19.15%, from €1.73B to €1.4B, a drop of 1.78 points of revenue. The filing's cost note ties this to lower restructuring under the group's efficiency programme and to the absence of the prior year's impairment charges, which it says "mainly related to the Group's Indonesia CGU." Operating profit rose 31.0% to €2.79B, from €2.13B. _(from the filing)_
Other income of €104M appeared, against nothing the year before. The filing attributes it to property: "additional consideration received from the sale of a property in Germany" and "gains on the sales of properties in Germany and Great Britain." That income is part of the operating profit of €2.79B, and it comes from selling assets, not drinks. _(from the filing)_
Europe grew 2.89% to €15.4B while APS grew 0.55% to €5.5B, so Europe's share of revenue rose 0.45 points to 73.7%. The segment note shows the mix inside APS: revenue rose in the Philippines and Papua New Guinea and fell in Australia, New Zealand and the Pacific Islands, and Indonesia. In Europe, Great Britain, France, the Netherlands and the Nordic markets all rose. _(from the filing)_
Below operating profit, finance costs rose 12.5% to €306M and finance income rose 21.18% to €103M, leaving net finance costs of €203M against €187M. Taxes of €590M were 23.0% of profit before taxes, against 25.4% the year before. Profit after taxes rose 37.05% to €1.98B, and basic earnings per share were €4.26 against €3.08. _(from the filing)_

### Risks in the filing

Dependence on The Coca-Cola Company. The filing states that the group buys concentrate from TCCC and receives marketing funding, and that "TCCC is under no obligation to participate in the programmes or continue past levels of funding." The brand owner sets the terms of a large part of the cost base and of the support that offsets it. _(from the filing)_
Bottling rights are granted, not owned. The filing describes bottling agreements with an initial fixed term that "may be renewed for successive terms", and an incidence-based pricing model in most territories. The right to make and sell the core brands in each territory rests on those agreements continuing. _(from the filing)_
Acquired businesses can disappoint. The prior year's impairment charges, which the filing says "mainly related to the Group's Indonesia CGU", show that the carrying value of an acquisition can be written down when its outlook weakens. The group also still records deal and integration costs for the Philippine acquisition. _(from the filing)_
Restructuring is ongoing. The filing ties this year's restructuring cost under its efficiency programme "primarily" to "expected severance payments", and the programme runs for several more years. While it runs, reported profit carries such charges, which is why the company also reports a comparable operating profit that excludes them. _(from the filing)_
The numbers already show two of these at work. The fall in administrative expenses of 19.15% is mostly the restructuring and impairment risks receding rather than disappearing, and APS growth of 0.55% shows the uneven performance of the newer Asia-Pacific territories that the Indonesia impairment first signalled. _(analysis)_

## Founder view: mechanisms

### A franchise bottler shares its price with the brand owner

The company does not own most of the brands it sells. It buys concentrate and marketing support from the brand owner and supplies the factories, trucks, coolers and retail relationships. With incidence pricing, the concentrate price follows the bottler's own selling price, so both sides gain from a better price and mix, and the bottler's margin depends on what it does with everything outside the concentrate. _(analysis)_

### A dense route network absorbs growth

Once trucks, depots and sales reps cover a territory, each extra case sold along the same routes costs little to deliver. Revenue can grow while distribution costs stay nearly flat, so the cost of reaching the shelf falls as a share of sales. _(analysis)_

### One-off charges kept separate from the run rate

The company runs a multi-year efficiency programme and has bought businesses, so its reported profit carries restructuring costs, integration costs, impairments and asset-sale gains. It reports a comparable operating profit beside the reported one, so readers and managers can see the underlying business apart from these items. _(analysis)_

### Cash runs ahead of profit in an asset-heavy business

A bottler owns plants, lines, trucks and coolers. Their cost is spread over years through depreciation, which reduces profit without using cash in the year, so operating cash flow can sit well above reported profit. The question is how much of that cash must go straight back into equipment. _(analysis)_

## Member research

Signed-in members read, on the page: what Coca-Cola Europacific Partners's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Coca-Cola Europacific Partners 20-F for the period to 2025-12-31: https://www.sec.gov/Archives/edgar/data/1650107/000165010726000029/ (2026-03-13)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02 · as of 2026-11-02