Coca-Cola HBC upgrades 2026 guidance after volume-led first half

Coca-Cola HBC AG has upgraded its 2026 guidance after a strong first half led by higher drinks volumes across all three reporting segments.

Organic revenue, which strips out currency movements and changes to the group structure, increased by 9.6%. Volumes rose by 7.5%, while organic revenue per case increased by a more modest 1.9%.

That balance matters. Recent growth was not simply the result of Coca-Cola HBC charging more for each case. Consumers bought more products, with particularly strong performances from Energy, Sparkling and out-of-home Coffee.

Profit grew faster than revenue, supporting improved margins and the guidance upgrade. However, cash generation fell as the bottler stepped up investment, while marketing spending weighed on profitability in Developing markets.

The figures and guidance are available in the original company announcement.

Coca-Cola HBC's key first-half figures

Metric	H1 2026	H1 2025	Change
Volume	1,573.5 million unit cases	1,463.4 million	7.5%
Net sales revenue	€6,229.4 million	€5,620.3 million	10.8% reported, 9.6% organic
Comparable EBIT	€760.1 million	€649.8 million	17.0% reported, 15.2% organic
Comparable EBIT margin	12.2%	11.6%	60 basis points higher
Comparable EPS	€1.507	€1.308	15.2%
Free cash flow	€215.7 million	€244.5 million	11.8% lower

Comparable EBIT is operating profit adjusted for items management considers outside underlying trading, including acquisition costs, commodity hedging movements and the impact of the Russia-Ukraine conflict.

Reported revenue grew slightly faster than organic revenue because foreign exchange translation provided a benefit. Currency movements also gave comparable EBIT a modest tailwind.

Volumes did most of the heavy lifting

The strongest feature of the results was the 7.5% increase in organic volume.

Admittedly, the first quarter benefited from four additional selling days. Even so, underlying momentum strengthened in the second quarter, when group volumes grew by 5.8% across a more directly comparable period.

Sparkling volumes increased by 6.4%, including mid-teens growth for Coke Zero. Energy was the standout category, growing 26.1% despite challenging comparisons with the previous year.

Stills volumes rose by 5.2%, helped by Sports Drinks growth of just over 25% and high-single-digit Water growth. Premium Spirits declined by 1.5%, although Coca-Cola HBC said retail challenges affecting Finlandia in Poland had now been resolved.

Coffee presents a more nuanced picture. Total Coffee volumes fell by 14.2%, reflecting the strategic decision with Costa Coffee to prioritise the out-of-home market. Within that target channel, volumes grew by 24.5%, supported by more than 1,300 newly recruited outlets.

This is a useful distinction for investors. The headline Coffee decline looks weak, but growth in the chosen channel suggests the portfolio is becoming more focused rather than simply losing momentum.

Better gross margins funded heavier marketing

Comparable gross profit increased by 14.2%, while the gross margin improved by 110 basis points to 37.8%.

The company attributed this to leverage from higher revenue, with comparable cost of goods sold per case increasing by only 1.3% as inflation eased.

Not all of that benefit reached operating profit. Comparable operating expenses increased to 25.7% of revenue, 50 basis points higher than last year, following increased marketing investment around the FIFA World Cup, Olympic Winter Games and product launches.

Even so, comparable EBIT rose by 15.2% organically and the comparable EBIT margin increased by 60 basis points to 12.2%. Comparable earnings per share also grew by 15.2% to €1.507, despite higher finance costs.

That combination of revenue growth, margin expansion and double-digit earnings growth is the central positive from the announcement.

Emerging markets drove profit growth

All three reporting segments delivered organic revenue growth, but their profit performances differed considerably.

Segment	Organic revenue growth	Organic comparable EBIT growth	Comparable EBIT margin
Established	6.2%	6.9%	10.3%
Developing	9.0%	1.8%	9.3%
Emerging	12.0%	23.9%	14.7%

Emerging markets made the largest contribution, with volumes up 9.0% and organic comparable EBIT up 23.9%. Its margin expanded by 140 basis points to 14.7%, supported by strong revenue growth.

Nigeria and Egypt both recorded low-double-digit volume growth. Russia grew by mid-single digits, with Coca-Cola HBC continuing to operate a self-sufficient business focused on local brands.

Developing markets were the main soft spot. Revenue increased by 9.0%, but comparable EBIT rose by only 1.8% organically and the margin fell by 70 basis points. Higher marketing expenditure was the stated reason.

What changed in the 2026 guidance?

Management now expects organic revenue growth around the top end of its existing 6% to 7% range.

The organic EBIT growth range has narrowed to 8% to 10%, compared with the previous 7% to 10%. This raises the bottom end rather than increasing the maximum expectation, but it still indicates greater confidence after the first-half performance.

Technical guidance also became more favourable:

• Foreign exchange is now expected to provide a €0 million to €10 million tailwind to comparable EBIT, versus the previous expectation of a €0 million to €30 million headwind.
• Net finance costs are expected to be €40 million to €50 million, reduced from €45 million to €65 million.
• The comparable effective tax rate remains forecast at 26% to 28%.
• Significant restructuring costs are not expected.

The upgrade builds on the momentum reported in Coca-Cola HBC's first-quarter 2026 update, although management continues to describe the macroeconomic and geopolitical environment as challenging and unpredictable.

Investment is reducing near-term cash flow

Free cash flow fell by 11.8% to €215.7 million despite a 13.6% increase in operating cash flow before acquisition costs.

The reason was higher capital expenditure, which jumped by €100.1 million to €378.9 million. Spending covered production capacity, supply-chain automation, digital and data systems, and energy-efficient coolers.

Capital expenditure represented 6.1% of revenue, below the company's 6.5% to 7.5% target range because of the planned timing of investments within the year.

This is not necessarily a sign of weaker operations. The cash has been directed towards growth initiatives, but investors should still watch whether those investments translate into sustained volume growth and productivity gains.

CCBA remains the major item to watch

Coca-Cola HBC remains on track to complete its acquisition of Coca-Cola Beverages Africa during the second half of 2026.

Antitrust clearance has been received in four of six jurisdictions. In July, the South African Competition Commission recommended that the Competition Tribunal approve the transaction with conditions.

Completion and integration remain important sources of execution risk. Coca-Cola HBC must align systems, governance and operating models across multiple markets, and the company acknowledges that complexity or changing market conditions could delay the expected benefits.

Alongside that transaction, investors must weigh currency volatility, geopolitical disruption, input costs, beverage taxes, cyber threats and the growing cost of water, packaging and decarbonisation requirements.

Strong trading, with cash and execution now in focus

Coca-Cola HBC's first half was broad-based and, importantly, volume-led. Organic revenue grew in every segment, margins improved at group level and management raised the lower end of its profit-growth expectations.

The weaker points are visible rather than hidden. Free cash flow declined because investment increased, Developing market margins contracted and the CCBA acquisition adds financing and integration complexity.

For the second half, the key tests are whether underlying volume momentum remains healthy without the extra selling days, whether marketing investment produces adequate returns, and whether Coca-Cola HBC can complete the CCBA transaction on schedule while delivering its upgraded guidance.