We raise our PT to £50 (from £49) reflecting FX MTM
UBS view: CCH continues to deliver best-in-class volume growth (Q1 +c3.5% excl. 4 extra selling days) and ahead of consensus, however this was offset by weaker price/mix. Overall Q1 underlying sales growth (ex 4 selling days) is running +5.4%, slightly below FY guidance 6-7%, however Q1 is the smallest quarter, and we expect underlying trends to accelerate. There is no demand impact from the Middle East conflict thus far, particularly in Africa, which should re-assure.
FY26 organic growth guidance unchanged: CCH reiterated its FY26 +6-7% org. sales (cons +6.3%), in line with medium-term target, and +7-10% org. EBIT guidance range (cons +9.2%), which implies organic EBIT margin +10 to +30bps. We make no changes to our FY26 organic revenue/EBIT estimates, however we increase our net finance costs to reflect revised guidance, which is offset by more favourable FX (stronger rouble).
Slight Q1 topline miss on weaker price/mix: CCH delivered Q1 +11.6% org. revenue, slightly below company compiled cons +11.8%. Within this, volumes were +9.6% (or +3.6% excluding 4 extra selling day) v consensus +8.6%, and we estimate includes a c50bps Easter phasing benefit. However, the volume beat was offset by weaker price/mix (+1.8% v cons +3%) across in regions. We highlight;
Established (org volume +6.7% v cons +6.1%), with underlying volumes +0.7% largely driven by Easter phasing – underlying declines in Italy (water depriortisation) and Austria (weaker consumer/DRS impact) was offset by good growth in the rest of region. The miss on price/mix was due to Easter skewing to larger pack formats driving negative package mix and higher promo activity, consistent with recent trends from CCEP in Europe (see note), and should inflect from Q2.
Developing (org volume +7.4% v cons +7.4%), underlying softness in Poland (DRS/weather impact) and Hungary was offset by solid growth in Czech and Slovakia lapping prior year sugar tax.
Emerging (org volume +11.2% v cons +9.7%), underlying strong volume trends was driven by Egypt, Nigeria, Romania and Bambi in Serbia, which offset underlying weakness in Ukraine and Russia. Price/mix across the region was negatively impacted by country mix (Egypt and Nigeria lower net sales per case) and less carryover pricing benefit as inflation has moderated in the region.
Valuation: CCH trades on c17x 2026E P/E and 17.6x EV/NOPAT, a +6% premium / -3% discount to European Staples. We raise our PT to £50 (from £49) reflecting FX MTM.
