Czech inflation fell from 2.1% yoy in December to 1.6% yoy in January. This was in line with our estimate, the market consensus and the central bank’s forecast. The structure of January inflation also broadly matched our expectations.

Czech inflation fell from 2.1% yoy in December to 1.6% yoy in January. This was in line with our estimate, the market consensus and the central bank’s forecast. The structure of January inflation also broadly matched our expectations.

Cheaper energy was the main factor behind the decline in inflation below the central bank’s 2% target. According to our estimates, the transfer of renewable energy payments, which are part of electricity prices, from households to the state, contributed to a reduction in annual inflation of around 0.3pp in January. This was coupled with the ongoing decline in market electricity and gas prices, the next round of which began with the start of this heating season. Consequently, household electricity prices dropped by an average of 12.2% yoy in January, with gas prices falling by 6.5% yoy. In contrast, water and sewage prices increased by almost 4% yoy, while heating and hot water prices rose by 2.5% yoy.

Fuel and food prices also contributed to lower inflation. Fuel prices fell by 2.6% mom in January, following a 1.9% mom decline in December. Combined with the higher comparative base from the beginning of last year, fuel prices dropped significantly by 9% yoy in January. Food price growth, including all beverages and tobacco, remained close to 2% yoy, having slowed at the end of last year. Prices for food and non-alcoholic beverages alone increased by just 1.3% yoy. This reflects cheaper energy and fuel, as well as a more favourable agricultural harvest. Furthermore, the stronger koruna is driving down the prices of all imported goods, including food. Food prices rose by around 3% mom in January, but this was largely due to the traditional seasonal effect, also associated with fading pre-Christmas sales.

Services and core inflation remain high. Growth in service prices was unchanged from December, reaching 4.7% yoy in January. The month-on-month increase in service prices averaged 1%, which is as high as in January 2025 and also indicates no slowdown. The rapid rise in housing prices continued to have a significant impact, with annual imputed rent growth accelerating slightly for the second consecutive month to reach 5.1% in January. However, the increase in service prices may also have been influenced by the recovery in consumer demand at the end of last year. Consequently, core inflation slowed only slightly, from 2.8% yoy in December to 2.7% yoy in January, remaining close to the upper limit of the central bank’s tolerance band. January’s core inflation was in line with our estimate and only slightly below the CNB’s forecast of 2.8% yoy. Meanwhile, the fall in goods prices (including food, energy and fuel), supported by the strong koruna, continued to offset the rapid growth in service prices, with a 0.4% yoy decline in January.

We do not expect the CNB to cut interest rates this year, as the decline in inflation below 2% is likely to be only temporary. According to our forecast, annual inflation will remain below the central bank’s 2% target throughout this year, averaging 1.6%. However, we expect core inflation to remain elevated at 2.3% in 2026. Next year, we forecast headline inflation to rise above the target, averaging 2.3%. Core inflation will accelerate to 2.4% in 2027, in our view. This should be due to expansionary fiscal policy combined with a surprisingly strong and rapidly growing Czech economy. As a result, we expect the CNB to remain on hold until year-end.

Kofola will publish only selected operating indicators, revenues, and EBITDA for 4Q25, and probably also guidance for this year. The annual report (April 23, 2026) will then contain a complete set of results. From a seasonal perspective, the 4Q is one of the two weakest. We estimate a slight decline in revenues of 2.3% yoy to CZK2.55bn. EBITDA will increase by +46% yoy to CZK382m. According to our estimates, Kofola should slightly exceed its updated projections for the year.

Announcement date: Wednesday, February 18, 2026, at 5pm

Kofola will publish only selected operating indicators, revenues, and EBITDA for 4Q25, and probably also guidance for this year. The annual report (April 23, 2026) will then contain a complete set of results. From a seasonal perspective, the 4Q is one of the two weakest. We estimate a slight decline in revenues of 2.3% yoy to CZK2.55bn. EBITDA will increase by +46% yoy to CZK382m. According to our estimates, Kofola should slightly exceed its updated projections for the year.

Quarterly Results: According to our projections, revenues for the 4Q25 fell by 2.3% yoy to CZK2.55bn. Kofola reported a 1% decline in revenues and a 7% decline in volume for October. We expect this trend to improve over the remainder of the quarter. ASO Vending will contribute positively throughout 4Q25, unlike 4Q24. We also expect the Christmas season to have an impact. Cost items traditionally demonstrate strict discipline. However, we also expect a decline in the costs of sweeteners and PET.  We believe this will result in total EBITDA of CZK382m, which is a +45.7% yoy increase. The margin should increase by 4.9bps yoy to 15.0%.

Full-Year Results: Kofola last updated its projections on November 25, 2025. EBITDA for 2025 to be CZK1.75bn, with sales down 4% yoy.

We expect Kofola to achieve an EBITDA of CZK1.78bn in 2025, with sales decreasing by 3.3% yoy to CZK10.72bn. Thus, Kofola would slightly exceed its annual targets by +1.9% and +0.7%, respectively.

Dividend: We expect a dividend from last year's profit like that for 2024, when the total amount was CZK21 per share. We expect a payout of 70% of net profit. This would mean a dividend of CZK21.80. Compared to the market price, our dividend estimate would offer a gross yield of +4.5%.

2026 Guidance: This year, we estimate revenue growth of +7.4% yoy to CZK11.5bn. EBITDA should then reach CZK1.99bn. We expect a dividend of CZK 26.7 for 2026 (70% payout).