BNPP Exane View
Q4 organic volumes are a touch light but this is partly explained by a material decline in China (which itself was c.1/3rd driven by proactive inventory management) and all other key operational metrics are ahead of expectation. Q4 USD EBITDA is a c.+5% beat and we expect consensus FY26 earnings estimates to be subject to similar (c.+4-5%) upward revision. We call the shares up moderately (could be more given the reactions we have seen to other beats in Beverages recently).
Q4 Headline metrics
. LFL: +3.4% (co. cons: +2.4%)
. Vol: -1.9% (co. cons: -1.3%)
. Rev./HL: +5.5% (co. cons: +3.7%)
. Sales: USD14,841m (+4.7% vs. co. cons.)
. EBIT: USD3,824m (+5.7% vs. co. cons.)
. EBITDA: USD5,245m (+5.1% vs. co. cons.)
. LFL EBITDA: +10.1% (co. cons. +7.7%)
. EBITDA margin (%): 35.3% (co. cons. 35.2%)
. EPS (basic, underlying): USD0.88 (+23% vs. co. cons.)
. FY DPS: EUR1.00 (co. cons. EUR0.91)
Q4 Top-line drivers
Scanning the top-line drivers by region, we note that the Q4 LFL sales beat (+3.4% vs. co. cons. +2.4%) was led by North America (+1.7% vs. co. cons. +0.5%), Middle Americas (+6.6% vs. co. cons +4.3%) and EMEA (+8.7% vs. co. cons. +6.1%), all driven by better volume and price/mix. This was partially offset by softer-than-expected trends in Asia Pacific (-10.9% vs. co. cons. -7.0%), impacted by inventory management in China and continued weak on-trade demand, and South America (+3.2% vs. co. cons. +4.2%) driven by weaker volumes.
Note: US LFL sales grew +0.8%. STRs grew +0.5% (outperforming the industry). STWs declined -1.7%.
Q4 Bottom-line drivers
. EBITDA margin: +160bp YOY (+216bp LFL).
. EBIT margin: +160bp YOY (+199bp LFL) which reflects GM +140bp (+153bp LFL); SGandA +30bp; and other op. income -10bp.
. By region, we note that the +5.1% USD EBITDA beat in Q4 was driven by South America (+23% vs. co. cons.) and EMEA (+6.2% vs. co. cons.), more than offsetting a miss in North America (-7.6% vs. co. cons.)
Other
. BEES: USD49bn...
