Good morning, everyone. I'm Eric Serotta from Morgan Stanley's Beverages, Household Products, and Tobacco team, and I'm very pleased to welcome Coca-Cola Europacific Partners back to Morgan Stanley's Consumer and Retail Conference. Before we begin, please see Morgan Stanley's research website at www.morganstanley.com/researchdisclosures for important disclosures, and if you have any questions, you could reach out to your Morgan Stanley sales rep. CCEP is Coke's largest bottler by revenue, with a strong record of value creation. Joining us today is CFO, Ed Walker. Ed, thanks for joining us.
Thank you. Thanks for having me.
Great. So CCEP is wrapping up another solid year in pretty tough macro environment, you know, 2.7% FX neutral revenue growth through the first nine months. First, can you start by, you know, talking about the drivers of this year's growth, whether it's, you know, in terms of categories, markets or, you know, price versus volume and mix, and then how you see those drivers evolving as we look to 2026?
Yeah, sure. So, yeah, 2025 has been a solid year in what I think is a challenging environment. I'd start off by saying that the category, though, has remained healthy. So soft drinks, you know, in our territories, good value growth and actually volume growth as well, which you can't say that for all categories. For us, we've had some great areas of growth. If I look at the categories to start with, light colas has grown very well, Coca-Cola in particular. Diet Coke has stabilized, so in GB, that had been declining for a number of years. We've invested a lot, and that has stabilized. Also zero sugar flavors like Fanta, Sprite are doing very well. Energy performed excellently, and I know a number of you were at the...
Oh, I can see it there. A number of you were at the Monster event yesterday, and that's been a very strong contributor to growth this year. And then we have growth in stills and growth in ARTD. So lots of individual elements of growth across the categories. From a market perspective, I'd say Australia's had a very good year. GB's had a good year, but cycling some tougher comps from 2024. One of the things we are pleased about is that away from home has returned to growth in Europe. So after a couple of years post the pandemic, it's now growing in line with the home channel, and that's obviously a very important channel and sub-channels for us.
So lots of elements of growth when you look across the portfolio. But in 2025, we've also had some challenges. I think two types, some technical challenges. So we exited NESTEA in Spain and moved to Fuze Tea, which is a better platform going forward. It's been a very successful transition, but that's had an impact on the revenue as we've gone through that. And then in Australia, we've also had the exit of the Beam Suntory contract in the last six months of 2025, which is also another headwind. So some technical challenges, and then we've also had some market challenges. Indonesia is one that really stands out, where, again, the macroeconomic conditions have really impacted volume.
But then also in a number of our developed markets, the general macro and consumer sentiment has really impacted volume. You can see that actually in the most recent market and scanner data over the last few weeks, volume has been impacted. I think yes, a solid year when you look at the performance in that macro context. What that means for 2026 going forward is that affordability remains absolutely critical. You know, for us, affordability is about getting the right pack at the right price, in the right environment for the right drinking occasion.
It doesn't mean prices need to be reduced everywhere, but it means we need to be very segmented, and how to address that affordability in those particular situations, and also how to make sure we communicate effectively the value for money associated with that. But we're positive as we look forward because we don't think the macro challenges will get any worse. We're not assuming they will improve, but we don't think they'll get any worse, and we've got some exciting plans from a marketing and innovation perspective.
Makes sense. A lot there. I want to start unpacking it. So since earlier, you know, this year, you have pointed to some softer consumer demand and some heightened competition in markets like Germany and GB. You mentioned the scanner data a little bit weaker recently. Can you talk a bit about sort of expectations for the European consumer as we, you know, head into the holiday season, and then, what CCEP is doing to kind of tweak your strategy and execution for this environment? You mentioned affordability, but, you know, other levers that you might have, promotions, affordability, price pack, anything else to adjust to this environment that we're in now?
Yes, yes. It's quite early to look at the quarter four numbers at this stage. And also for us, December is such a critical month with the holiday season. And of course, in markets like Australia and New Zealand, it's also their summer. So I think we'll get a much better read on the consumer health and consumer sentiments once we've got through that holiday period. But what we've seen, as we've said in the most recent data, is that the consumer remains challenged. For us, really, affordability is about that right pack at that right price. We've learned a lot as we've gone through the year. So activities where you really effectively communicate that value for money are working better.
So we've had a lot of focus on extra fill type activities, so one and a half liters for the price of two, for example. Or, 12 packs for the 12 cans in a multi-pack for the price of eight. So those kind of mechanics really resonate well with the consumer and give that sense of strong value for money. And also making sure that we have the right packs for consumers that don't enter the category very frequently. So real affordability packs. The key price point in Europe is around EUR 1.50 for a multi-serve. So lots of focus on that. We've recently launched a 50 ml PET pack in a number of our markets, and we're doing a lot more on one liter and one and a quarter liter packs.
For us, as we look at it, you know, it's not, as I said, low prices everywhere. It's being more segmented in our approach, making sure you have the right price point on the packs that make a difference from an affordability, but then leveraging the opportunity where you can take a bit more price, maybe things like mini cans or perhaps in some particular channels or customers, where you can afford to take a bit more price to offset what you're investing in affordability. And as you rightly pointed out, you know, we invest so much money on promotion, there's an awful lot we can do by driving promotional effectiveness, using our tools and the insights that we have, as opposed to always looking at headline price increases. And then finally, there's always mix.
We can always leverage mix and things like stills, energy, immediate consumption. We are seeing benefits with more people returning to the office and being out and about during the day more, so more growth through convenience. All those mix opportunities as well can help us generate the revenue per case we still need, while, you know, meeting the affordability challenge. We will continue to take price in all of our markets, but I think it will be more segmented than we've seen in the past. Certainly, as we build the plans for 2026, there's gonna be more focus on getting that revenue growth through volume than from revenue per case, as we've seen in 2024 and 2025.
Great. So, one of the surprises, at least to me this year, is, you know, given the weakness in the at-home channels, particularly in Europe, that, you know, one of the bright spots that you're pointing to has been a return to growth in your away-from-home business. You know, what's driving this, apart from, you know, the easier comparisons? And how sustainable do you see this away-from-home strength as we go into 2026 and, you know, have some tougher, more normalized comparisons?
Yeah, I mean, all right. I mean, away from home is a critical channel for us. About 45% of our revenue goes through that channel, so it's very important from the overall business perspective in the P&L. But it's also a critical channel for recruitment of consumers for the future. A lot of the young consumers frequent that channel, and it's a great opportunity to get them into the franchise at an early stage. So we're very pleased to see that back into growth in 2025. It was certainly a headwind for the previous years coming out of the pandemic with less outlets and people really downtrading within the channel. So we're very pleased to see what we've been able to do in 2025.
We've invested a lot in that area, and it's across the board. So there's a big focus on coolers. I think we've talked. I think Damian, actually, was here last year talking about the year of the cooler. We're increasing our sales force in many of our markets, so we can visit more outlets more frequently, and influence better within those outlets. We've got big investments in tech in that area, whether it's from our myCCEP platform, which allows people to order directly through our own platform, or through Red One, which is what we use to manage our sales force. And they're using AI to better enable the calls and look for that picture of success, or even GenAI to build things like menu makers and better point of sale in the outlets.
So lots of investment in technology as well. And then a lot of work with the customers themselves on how they adapt their offering to meet the macroeconomic challenges. So you see more meal bundling in the channel, better, more exciting meal combinations, and again, so that giving that consumer, the value for money. And we've had some good account wins as well over the last 12 months. So lots of investment, which looks to be paying off, and I think that investment is long-term in nature, a lot of it. So that is really what's gonna give us confidence as we go into 2026, that we continue to see away from home performing well.
Turning back to pricing, which you touched upon, you know, Damian's made the comment, you know, you've landed pricing basically every year since CCEP was formed. So you know, you talked about less of a contribution from risk pricing for next year, but I guess, what have you started the discussions yet? I know some pricing goes in early January in some markets. What's been the retailer reception in this market to pricing? I know it's always tough, particularly, you know, in Europe and Australia, but you know, what's the early read in terms of pricing and sort of the pricing versus affordability, you know, push/pull?
Yeah, I mean, we've had a great track record of always getting price within our markets since CCEP was created. And we've done it without disruption or without material disruption, certainly over time. I think the key to that success has been we take a very measured and considered approach when we look at it. As I said earlier, we look at what's right for the consumer. That's right for the category and the customer. So to make sure the category remains very healthy from a retailer P&L perspective, and then what we think we need from our P&L, but also what we need to do for pricing to allow investment back into the category and the products for the future. That's the approach we've always taken.
And even in the kind of more inflationary years after COVID, we were quite measured in how much pricing we took. And I think that stands us in good stead going forward, because I think retailers understand that we look very carefully and only take price where we think, you know, we can afford it, and where it makes sense. Certainly, the conversations for next year won't be any easier. They have started a number of our markets take pricing in the first quarter. But where we are aligned with retailers, is the focus on affordability will remain critical.
So back to what we were talking about earlier, making sure for those key packs, you have the key promotions and the key price points, and the clear communication of that, to ensure we're still bringing people into the category, and we're meeting all of the consumers' needs. Those are most challenged by affordability, but across the whole piece. At the end of the day, the category remains very healthy, from a value and a volume perspective. So the retailers as well are, I think, keen to see us continuing to invest in that category. As we said earlier, I do think we will take price in every market next year, but there'll be a little less emphasis, perhaps, on that, and more emphasis on volume growth next year.
Not just headline pricing, but better management of the promo, the mix, and all the other levers that we have at our disposal to kinda drive that revenue per case.
Great. So shifting gears, I wanted to dig into the API, Australia, Pacific, Southeast Asia. Let's start with Australia. Look, the business struggled for a number of years. It was showing some signs of improvement under a lot of the changes that Peter and the team did, and you know, under Amatil shortly before you acquired it. But you know, clearly took it to a new level under CCEP ownership. So you know, sitting here today, you know, heading into 2026, you know, can you talk about the opportunities to further improve the performance of Australia going forward? Not necessarily in 2026, but you know, over the next few years, and what rate can that business grow at, you know, over the medium term?
Yeah. Yeah, I mean, we're super pleased with the Australia performance. I mean, and also New Zealand, Papua New Guinea and the Pacific Islands. I mean, the, the, you know, the API region has performed extremely well since the acquisition. The Australia business is a brilliant business, and it was before we bought it. But we're pleased with how it's grown since then. There were a number of things that we did, which will stand us in great stead for the future. The first was we invested a lot. So we've invested a lot in the supply chain, more regional production and stronger regional logistics, which means, you know, we're able to better service customers. It also means we have a more efficient, you know, route to market.
And it enables us to really meet the growth opportunity in the market, and expand that mix opportunity. Lots and lots of investment from a capacity and a capability perspective. We also addressed some of the price promo challenges that historically had been in the market. You know, it was a very heavily promoted environment, and I think one of the benefits with CCEP's sale is you can afford to do a bit of a reset in those situations and weather the storm a little bit as it goes through its transition through the trade, but get the pricing and the promo set up much better for everybody going forward. We've invested in tools and tech, building on the capabilities that we have in Europe. But it also, I mean, that was not a one-way avenue.
We took a lot of great capabilities from the market in Australia that we've applied back into Europe, and I think finally, and probably most importantly, is a much stronger alignment with the Coke company. So we did a lot of work with them on the portfolio. We actually sold some brands back to the Coke company, you might recall, and really made sure we were clear for every brand within the portfolio, what was its role, what we were trying to do with it, from a consumer perspective, and so much stronger alignment. So all those things have really set us up for the future, and I think that's why we've had a great couple of years, and that's why that will continue into 2026.
That market, we think, should grow consistently in the kind of 4-5% revenue perspective. And that should be a healthy mix of kind of volume and revenue per case. Lots of exciting opportunities from a category perspective down there. Things like the sports category is extremely well developed, great energy portfolio. We're going through the slight headwind this year of the alcohol exit from Beam Suntory. So that will phase out by the time we get to the half-year point in 2026. But we actually think the current approach with the Coke company and the partnerships we're enabled to build and put in place there, will actually set us up for a stronger ARTD portfolio in the long run.
But that's obviously gonna take some time to cycle through and then build up, but yeah, 4-5% revenue growth is very achievable in the long run for Australia.
Great. And then, Philippines has been a fantastic market since you acquired it almost two years ago. You know, notwithstanding some of the weather-related disruptions last quarter, I had the benefit of attending your event in Manila, and it was really eye-opening, the opportunities there. But, maybe you could still distill three days of presentations into a three-minute response here as to, you know, discussing some of the opportunities for CCEP to further, you know, build on the business in the Philippines and, you know, sort of the revenue and margin potential as you leverage scale across the broader Southeast Asia or API footprint.
Yes, I mean, Philippines is a fantastic market. You know, we think of it as a developed Coke market, a very developed soft drinks market, operating in a broader, emerging market. So you get the best of both worlds, a very well-understood soft drinks proposition, real love of Coke and the Coke brand, but then all the benefits of those kind of macro drivers in an emerging market with a growing population, growing disposable income within that population. So it's a real sweet spot from that perspective. It's always been a great business. What we've been able to do to really leverage that potential is to invest, certainly in meeting all of the demand. So that had been a bit of a challenge in the past. So we've put a lot of money into the supply chain.
We've actually just broken land on a brand-new greenfield facility north of Manila, which will be one of the biggest plants in the Coke system when it's completed. And it also allows us to really leverage all the mix opportunities. So it's a big RGB market, but there's a lot we can do with single-serve PET, a lot we can do with things like cans. We can further expand the water opportunity through this capital investment. And of course, all this capital investment is state-of-the-art machinery, replacing some very old assets that we have. So it also drives a lot of improvement from a margin and efficiency perspective.
We've done a lot of work on tools and tech and really investing as well in capabilities, particularly for the modern trade, where some of our R&M GM capabilities from Europe or Australia, New Zealand, can really be applied now to the modern trade development within the Philippines. And really giving them as well, investment in making the whole business more efficient going forward. So that means, I think we'll continue to see great growth for the top line from a category perspective. High single digit is what we're planning on the midterm, but even more growth on the bottom line. And we've already seen great margin progression. It was about 6% when we acquired the business.
We're thinking a couple of years away from a 10% margin, and there's no reason why it couldn't get up to the average that we have across the group. So very, very exciting and lots of long-term potential in the Philippines.
Great. And shorter term, is the business back normalized after the flooding and the typhoons back in the third quarter? Are we at sort of a normal rate now, fully recovered? Or, I know some of these markets take an extended time to recover.
Yes, I mean, we look at these weather events very carefully. I mean, there's always weather in the Philippines and that part of the world, and they've built up an incredible resilience in how to adapt to that, and I remember, you know, when we first saw the back in 2024, the first typhoons, and we saw the extent of the damage and the flooding, you know, we were thinking, you know, it's gonna take months to recover, and then within a couple of days, you know, they're back up and running.
Yeah.
So they've got incredible resilience and ability to bounce back. Yes, the business is now fully operational after those events. You know, you do take the hit in terms of the volume, because what you don't sell from a consumer perspective, you know, you don't really recover. But as we say, there's always weather in that part of the world. I think what we're seeing more of this year in the Philippines is more of the macro impact, and in general, a little bit of a slowdown from an economics perspective. There's a lot of data points that support that. Remittances are down across the market. Better than some other territories in that region, but we think that's probably had a bigger effect on 2025 than the weather.
So back up and running and, you know, looking forward to a good Q4.
Great. And then, you know, Indonesia, you know, one of the most attractive markets from a longer term standpoint, demographics, GDP growth, underdeveloped sparkling category, but obviously, you've had, you know, first the geopolitical headwinds and more recently, the macro headwinds. I believe you said that the RTM, the route to market transformation, will be, you know, sort of wrapped up around year-end. So I guess, what's next on the agenda for Indonesia? And then, you know, how are you thinking about the long-term growth and margin potential for the business? And, you know, I guess, what can you really expect over the next two to three years?
Yeah, yeah. So Indonesia is a—I mean, it's a fantastic opportunity for the long term, and our view on that certainly hasn't changed. You know, when you look at the characteristics of, you know, 300 million-plus people, you know, relatively low average age across the country, that not a lot of alcohol is consumed, it's almost your perfect soft drinks kind of environment. So huge opportunity for the long run, but very frustrating one to crack. So, yes, in 2023 and 2024, we saw the impact of the geopolitical situation impacting demand in the country, and we could actually pinpoint that quite clearly because you could see very different demand across the region. We don't think that's got any worse, but then for 2025, we've been hit more by a macro, the macro perspective.
And you see those impacts across multiple categories, and across local players. So not just a kind of a geopolitical challenge against Western brands. So we hope that we're coming through the end of that. Yes, I think it's a bit early to say that we've bottomed out in terms of that. But we haven't been wasting time while the top line has been down, and we've done a lot of transformation in the business. So as you rightly said, we've totally transformed the route to market. That's just now been completed for Jakarta, so that was the last region. And we've done a lot on the supply chain. We've reduced the manufacturing footprint, taking out three sites.
We've done a lot of transformation in the back office. The business is a lot leaner and more efficient now, going forward. It's a much better place for when that demand does start to react to it. I think what's important for us now going forward into 2026 is, what is the right pack price combination? We're trialing a number of different combinations across the country today. In fact, Damian's there this week, looking at the results of some of that. We're doing that in combination with the Coke company in terms of what's the right marketing, you know, to really bring some excitement into the sparkling category. That's really what the future is focused on, getting that right combination of pack, price, architecture, with the right marketing to really unlock that potential.
It's too early to say how quickly that will come. You know, is it 2026? Is it 2027? But at the end of the day, it's such a long-term opportunity, you know, we have to look at it as something we're in for the long term, and just do the right things for the long term. It isn't material to our bottom line, as you know, from a business. So it's not impacting our results today. You know, it's not a very profitable market for us today, but it's also not a drain on profit. So, you know, we can afford to make sure we get it right for that long term to unlock that opportunity.
Yeah, and then, you know, briefly, you know, zooming back out from API, energy has been a very nice contributor to CCEP's top line growth, really driven by the Monster portfolio. I was just in a meeting with them downstairs. Clearly, a lot of respect and excitement for what you guys are doing and what's happening with Monster in your markets. So how are you thinking about sort of targets or how fast energy could grow in your markets over the next few years, and how is that split between Europe and API?
Yeah, I mean, Monster has had a fantastic year for us. We have, we've seen a real broadening of the category from all aspects, you know, some amazing innovation, and a lot of the growth that we've seen this year has come from innovation, but not all of it. We've also seen a lot of growth from the core, so a very healthy balance of that growth. We've seen great growth in availability and distribution. We've seen growth in terms of the consumption occasions during the day, and also growth in terms of the consumers. You know, it's becoming much more balanced in terms of age profile, male, female, and those drinking occasions.
You know, we think there's a lot more opportunity to come when you look at a number of the metrics versus the U.S. We see lots of opportunity to continue growing that availability and that distribution. We're seeing a big growth in their ability to place Monster equipment now. You know, as the category gets bigger and the Monster portfolio gets bigger, there's many more situations now where you can justify with a retailer having a dedicated Monster piece of equipment in the store. So we see no reason why that won't continue, and we're planning for another year of double digits next year, and it's a very significant contributor now to our growth, so we're very excited about the energy plans in our developed markets, so that's Europe and Australia.
And then it's very early days, but we've just launched Predator in the Philippines. And again, I was very encouraged to see the, you know, performance of Predator in other markets around the world when we attended the Monster event there yesterday. And that could be a huge unlocker of potential for us in the Philippines, and then maybe Indonesia, you know, in the months and years to come. And so a big, a big contributor to our growth and a core part of our plans going forward.
Great. And then, you know, looking for your overall algorithm, you know, back in Manila, you reiterated the midterm algorithm, the 4 and 7 top line, OI, all organic. 2024, you did about 3.5% organic. This year, consensus is around 3.1. You know, we're all aware of the macro headwinds. So can you talk briefly about the sort of the building blocks to kind of get back to and sustainably deliver on that 4%?
Yeah. So, yeah, as we talked about in Manila, when you look at the components and all of the individual elements of the business, it actually adds up to, you know, a very healthy 4% or more. So whether that's like colas and the growth we see in that category, the ability to grow more zero sugar within flavors, lots of headroom there. We've talked already a lot about energy. We think a lot of opportunity in stills, a lot of opportunity in ARTD as well, that we haven't really talked about today. And then you look at some of our markets, you know, 2%-3% is what we should certainly be doing year in, year out, within a European developed market context.
A bit more in Australia and New Zealand, more like 4-5%. Then our emerging markets like the Philippines, the Pacific Islands, Papua New Guinea should be growing, you know, high single digits. So when we look at all of that together, you know, that gives us a lot of confidence that on a consistent basis, over the midterm, 4% is very possible. There's always gonna be good years and bad years, and we've talked already about the headwinds. Also, where we have a lot of confidence is our ability to turn that 4% into a 7% at the operating profit line. You know, helped with some of that volume growth, as we're a very fixed cost business, as you can imagine but also our ability through RGM to take a bit more price than cost, perhaps. And then also fueled by our transformation and productivity agenda, lots of confidence in our ability to deliver that 7%.
Maybe you could give us a little more sort of granularity on that, productivity and transformation. I believe it's EUR 350 million-EUR 400 million-
Yeah
Of, savings by fiscal 2028. You know, what are sort of the key buckets there? And then I know the ERP backbone integrating from what? You know, four systems to one, is a big enabler there. So, you know, what's sort of the timing and milestones and frankly, the risk points, as that's been a source of risk throughout CPG over the past ver the decades.
Yes.
Yeah.
Productivity and transformation to start with, so this is our third program since CCEP was created. This is EUR 350 million, as you say, between 2024 and 2028. We're a couple of years into that. Going very well. You know, we really plan to be able to deliver roughly EUR 100 million a year from that. The big elements, I would say, are the supply chain and the network itself. Still opportunities to better consolidate in Europe and in markets like the Philippines, in manufacturing and in the logistics area. Opportunities to invest in new equipment that runs more efficiently with less people, better output, so a lower cost per case.
So really a lot of that enabled as well by the technology and what technology can now do in terms of better forecasting, demand planning and resulting in better asset utilization. The second big area is shared services. We've been on a long journey on shared services. It really started with finance, which 90% of the activity in shared services was finance related a couple of years ago. We're already now at more like a 70-30 split. We do commercial operations, people services, some logistics and procurement activity out of our shared services environment, and we see that as a real competitive advantage now, going forward. One of the other benefits of being in the Philippines is there's an amazing access to talent out there in Manila, in this environment.
We just opened a second shared service center in the last six months, out in Manila. And then the third thing is really how we can drive efficiency through tech, across the business, also through shared services. So maybe you can look at situations where you can centralize activity. You can look at situations where you can do the same activity with less people, more efficiently. So all of those really combine to generate the majority of our productivity and transformation, agenda. And then you're right.
I mean, it's a good linkage because our investment in ERP and S/4HANA will also help that journey because, you know, we're moving from five ERPs, it actually is with Amatil as well from our acquisition history, and we're taking this as an opportunity to move to one ERP with one standard process. We've got an extensive business case with really tangible benefits identified that we can leverage through that journey, but what I think is most exciting is when we get all that data in one place digitally from an analytics and an insights perspective, we're going to be able to drive a massive value in terms of understanding the business better and really using that to leverage better commercial and operational performance.
We're a long way along the journey in terms of the design, complete. The build is done. We're doing now the local configuration for Germany, which will be our first market, which will go live towards the end of 2026, and then we'll quickly follow throughout Europe and then down to Australia. We're taking a very safe approach, I would describe it, from a risk perspective. You know, we have all got scars from previous SAP implementations, so there's extremely strong governance. And it's so important for us, you know, the critical thing is to do it the right way, and if we need to take a little bit longer to make sure it's right, we will certainly, we will certainly do that.
But it'll be a big unlocker of value, but, you know, we're looking three to four years before it's fully rolled out to throughout all of CCEP.
Great. So, you know, having the CFO here, have to ask you about cash flow and capital allocation. You know, this year you're talking at least EUR 1.7 billion, which free cash flow, you know, slightly above your, you know, about EUR 1.7 billion, despite, you know, top line being a little softer. I guess, where are you seeing the upside on cash generation? And then, you know, your leverage is basically at or even slightly below your target, even though you're just finished your buyback program or finishing up your buyback program this year, EUR 1 billion, a few months ahead of schedule. So maybe talk about the capital allocation priorities from here. Doesn't seem like there's anything big in terms of M&A on the horizon.
Can we expect to see, you know, more regular buyback year after year?
Yeah, so cash is super important in CCEP. I mean, we spend a lot of time really driving the understanding of cash throughout all aspects of our business, and we're very confident we can continue to convert that profit very healthily into free cash flow, so no change there and lots of potential going forward that really then feeds into that capital allocation framework, so no change. I mean, we generate a lot of cash as a business. The first call on that is really to invest back in the future growth, and I've talked a lot about examples of that today. We're committed to maintaining that leverage range between two and a half to three, and that investment grade rating.
And then absent any M&A, which I'll come back to, and continue with our dividend, which of course will grow given our policy, we do have extra cash then that we are committed to returning to shareholders over the long run. The share buyback program in 2025 has worked very effectively. So we'll continue to look at those types of mechanics going forward and returning that cash to shareholders for 2026 in the future, and that allocation framework, there's no plan to change that.
Great, so you know, to wrap up, you know, it certainly seems like your relationship or CCEP's relationship with the Coca-Cola Company is really, you know, the strongest I've seen it in, you know, over a decade, and I think the same could be said for a lot of the publicly traded bottlers, so what's CCEP doing to sort of maintain this alignment, you know, stay in a good place, gotta work on the marriage, even when things are good?
Yeah.
You know, and just to continue to make sure everyone's rowing in the same direction.
Yes. I mean, I've been nearly coming up to my thirtieth year now in the system, and certainly I would say the relationship is the strongest that I've seen. I think one thing that helps is good performance. So if we deliver and the system delivers, then obviously that makes that relationship a little bit easier. I think, you know, a lot of trust in each other's capabilities and making sure everyone plays their part within the relationship. A lot of alignment, you know, we look at everything together from long-range planning, midterm, through to kind of tactical day-to-day operation. So a lot of time invested in the relationship from that perspective.
And then I think, you know, from a finance side, I think the economic model that we have and the Incidence Pricing model as well, has been a big unlocker of that value in that relationship. 'Cause it really incentivizes everybody to grow the system and grow the opportunity together. But no, it's great. It's a great place, the relationship.
Great! Well, with that, I'm gonna keep you guys on schedule. I want to thank you-
Thank you.
And, CCEP for attending this year. Continuing the streak here at the Morgan Stanley Conference. So thank you, and-
Thank you. Great to see you.
Great. Thank you.
Thank you.