COCA-COLA HBC (CCH) SHARES: 2025 OUTLOOK, DRIVERS AND RISKS

How did Coca-Cola HBC (CCH) shares perform in 2025?

Coca-Cola HBC AG (LSE: CCH), one of the key bottling partners of The Coca-Cola Company, experienced a dynamic year in 2025 marked by strategic developments, shifting macroeconomic trends, and evolving consumer preferences. With operations in multiple European countries, including a strong presence in the United Kingdom, the company's shares reflected not only its financial performance but also broader sectoral and geopolitical factors.

In 2025, CCH shares saw moderate growth, with the stock price rising approximately 8% year-on-year on the London Stock Exchange. This performance, while not stellar, aligned with overall trends in the consumer staples and non-alcoholic beverages segments, which remained resilient amid market volatility.

Notably, UK-based retail investors and institutions assessed Coca-Cola HBC through several lenses in 2025:

• Revenue Growth: Organic growth remained strong in Central and Eastern Europe, although inflationary pressures in the UK and Western Europe affected pricing strategies and margins.
• Dividend Policy: The company continued its commitment to shareholder returns by increasing its dividend payout by 3.5%, reassuring income-focused investors.
• Sustainability Reporting: Progress in ESG disclosures boosted brand recognition and investor confidence, especially after achieving its 2025 target of reducing carbon emissions by 30% across its value chain.

In addition to financial factors, sentiment around CCH shares was shaped by global trends, including the post-pandemic recovery in on-the-go consumption and a notable shift towards low-sugar beverage products. The company’s innovation pipeline produced several new product lines, targeting health-conscious consumers in the UK and other mature markets.

Despite its relative stability, the share price remained sensitive to currency exposure, raw material costs, and changes in interest rates, which affected discount rate assumptions in equity valuations.

Key 2025 financial highlights

• Revenue: €9.6 billion (+6.2% vs. 2024)
• Operating profit: €964 million (+4.5% YoY)
• Free cash flow: €490 million
• Dividend per share: €1.76

Looking at trading volumes and volatility, CCH shares exhibited relatively low beta, consistent with defensive consumer staples. However, trading in Q2 and Q4 was more volatile due to earnings surprises and macroeconomic data releases in the broader European region.

What drove growth for Coca-Cola HBC shares in 2025?

Several strategic, operational, and macroeconomic factors helped determine the share price trajectory of Coca-Cola HBC in 2025. From innovation and marketing to geographical diversification, the company benefitted from a combination of internal strengths and tailwinds in the FMCG sector.

1. Health-focused product innovation

CCH capitalised on the growing demand for low- and no-sugar beverages by expanding its product portfolio in this category across the UK and wider European markets. New launches under zero-sugar formats of popular brands and entry into functional beverage segments — such as vitamin-enriched sparkling waters and sports drinks — attracted younger demographics and health-conscious consumers.

2. Operational excellence and digital transformation

Digital investments in supply chain automation, route-to-market enhancements, and AI-based inventory management contributed to improved margins. The adoption of predictive analytics for demand forecasting reduced wastage and improved shelf availability for key SKUs in the UK and Ireland.

Additionally, CCH achieved cost synergies from previously implemented restructuring initiatives, including streamlined production facilities in Central Europe and warehouse automation near major UK hubs.

3. Robust emerging market performance

A significant portion of CCH’s performance is attributable to growth in developing markets such as Poland, Hungary, and Nigeria. These territories delivered double-digit volume growth, often offsetting weaker demand maturation in the UK and Western Europe.

4. Sustainability milestones

The fulfilment of CCH’s 2025 sustainability pledges was a key differentiator. The transition to 100% recyclable PET bottles across most of its UK product lines, a 30% reduction in Scope 1 and 2 emissions, and wider deployment of electric delivery fleets across regional depots resonated strongly with ESG-focused fund managers.

5. Stable pricing power amid inflation

Despite macroeconomic challenges, including persistent cost inflation in packaging materials and energy, Coca-Cola HBC maintained stable pricing through strong brand equity and localisation strategies. Fine-tuned promotional campaigns and bundle offerings boosted per capita revenue across UK retailers such as Tesco, Sainsbury's, and ASDA.

Beyond these direct initiatives, regulatory and consumer dynamics also played a role. The UK government’s extension of sugar tax frameworks in early 2025 highlighted the importance of health-oriented product strategies, positioning CCH favourably compared to less diversified beverage producers.

Brand equity and demand visibility

Brand recognition, combined with high frequency of purchase patterns, helped maintain predictable revenue streams. Data from Nielsen in 2025 pointed to Coca-Cola remaining the top-selling soft drink brand in the UK by volume and value.

Strategic marketing, including high-profile partnerships with global sporting events such as UEFA EURO 2024 (whose momentum carried into Q1 2025), further enhanced visibility and helped sustain consumer engagement.

What are the risks and opportunities for 2026?

As Coca-Cola HBC enters 2026, its share price and operational performance will depend on a variety of internal and external variables. While the company boasts robust fundamentals, investors should stay alert to possible risk events as well as value drivers that could influence future valuations.

Key risks to monitor in 2026

• Commodity price volatility: Persistent inflationary trends, particularly in sugar, aluminium, and PET resin, could pressure input costs and impact margins in the absence of effective hedging or price passthroughs.
• Currency exposure: As CCH reports in euros, fluctuations in the British pound and local currencies in operational regions can affect translated earnings, leading to volatility in reported financials for UK-based investors.
• Regulatory tightening: UK and EU regulators may introduce stricter labelling laws, HFSS advertising restrictions, and environmental compliance rules, potentially increasing operational costs and reducing marketing flexibility.
• Climate-related disruption: Increased frequency of extreme weather events could disrupt agricultural supply chains, particularly water sources and sugar production hubs critical to CCH factories.
• Geopolitical fragmentation: Tensions in Eastern Europe, particularly around Ukraine and Russia, may continue to impact logistics, energy costs, and regional consumption trends.

Opportunities on the horizon

• Premiumisation trends: Upselling through premium-mix products, such as Coca-Cola Signature Mixers or high-margin ready-to-drink coffee and tea, can improve average revenue per case.
• Further ESG adoption: Potential for green financing instruments, such as sustainability-linked bonds, could open new capital sources while meeting investor demand for responsible investments.
• AI and data analytics: A planned rollout of AI-driven consumer insights platforms in 2026 may improve marketing yield and personalise brand experiences in Western Europe.
• Emerging markets expansion: Entry into underserved African and Central Asian urban hubs will provide revenue diversification and reduce overreliance on mature European markets.

Analyst sentiment heading into 2026

Most UK-based brokerage analysts currently maintain a “Buy” or “Hold” recommendation on CCH shares, citing the company’s solid cash flows, operational efficiency, and resilience amid systemic shocks. The average target price as of December 2025 hovers around £29.00, implying moderate upside from current levels.

Investors bullish on consumer staples may view Coca-Cola HBC as an attractive combination of defensive exposure with modest growth potential. For 2026, expected earnings per share (EPS) growth is forecasted at 6% to 8% in constant currency terms.

However, fund managers are advised to remain vigilant about short-term risks tied to macroeconomic turbulence and consolidation in the beverage retail channel. The rise of private label competition, especially in continental Europe, could also chip away at market share unless matched by continued product and brand innovation.

Bottom line: Coca-Cola HBC enters 2026 with a balanced profile. While risks persist, disciplined execution and brand resilience position CCH to continue delivering value to long-term UK investors.