Coca-Cola Europacific Partners PLC (CCEP) Cash Flow Statement

The OCF/NI ratio of 0.95 in 2026Q2 suggests that reported net income was not fully backed by cash generation, possibly due to working capital outflows. Conversely, the 3.12 ratio in 2024Q4 implies substantial non-cash add-backs or favorable working capital timing. Investors should monitor the sustainability of these swings, as they may indicate earnings volatility from non-operating items.

The FCF margin contraction in 2026Q2 appears to be driven by a combination of lower operating cash flow and elevated capital expenditures. While the company's FCF remains positive, the trend suggests that the post-Amatil integration may be consuming cash, and the recent revenue deceleration could further pressure FCF if not offset by cost discipline.

The rising capital intensity suggests that CCEP is investing heavily in its distribution network and emerging markets, which may support long-term growth but pressures near-term free cash flow. The depreciation and amortization line has also grown, reflecting the expanded asset base, but the gap between CapEx and D&A suggests that maintenance capex is being supplemented by growth projects.

The large swings in working capital appear to be driven by seasonal factors and retailer buying patterns, as well as potential inventory build-ups or payables management. The negative working capital change in 2026Q2 contributed to the weak cash conversion, suggesting that the company may be funding growth through working capital outflows. Investors should monitor whether these swings normalize over time.

The company has consistently returned capital to shareholders, with dividends growing steadily and buybacks appearing in 2025Q4 and 2026Q2. However, the fact that capital returns exceed FCF in 2026Q2 suggests that the company may be relying on balance sheet capacity to maintain its payout, which could be a concern given the elevated leverage. The acquisition activity, including the Amatil integration, also consumes cash, but the net acquisition figures are relatively small in recent quarters.

The cumulative OCF/NI ratio of 1.65 suggests that CCEP's earnings quality is high, with significant non-cash add-backs like D&A and favorable working capital timing. However, the recent quarters show a compression in this ratio, which may indicate that the company is facing headwinds in converting earnings to cash. This divergence warrants monitoring, as it could signal a shift in the quality of earnings.