Coca Cola Europacific Partners : Financial Release

Results for the six months ended 1 July 2022

Raising FY guidance, reflecting great first-half

																				CHANGE VS H1 2021
						H1 2022 METRIC[1]		AS REPORTED			COMPARABLE[1]
																	AS REPORTED		COMPARABLE[1]		COMPARABLE FXN[1]
						VOLUME (M UC)[2]	1,618		1,618			32.0%		32.5%		-
						REVENUE (€M)		8,280			8,280				40.0%			40.0%			38.0%
	CCEP				COST OF SALES (€M)	5,288		5,300			37.5%		40.0%		38.0%
				OPERATING EXPENSES (€M)		2,025			1,929				30.0%			34.5%			32.5%
	TOTAL				OPERATING PROFIT (€M)	967		1,051			86.0%		52.0%		50.0%
				PROFIT AFTER TAXES (€M)		675			743				174.5%			48.5%			46.5%
						DILUTED EPS (€)	1.46		1.61			175.5%		48.0%		45.5%
						REVENUE PER UC (€)		-			5.05				-			-			4.5%
						COST OF SALES PER UC (€)	-		3.23			-		-		4.5%
						H1 INTERIM DIVIDEND PER SHARE[4] (€)				0.56
		EUROPE			VOLUME (M UC)[2]	1,276		1,276			14.0%		14.5%		-
				REVENUE (€M)		6,451			6,451				20.0%			20.0%			19.0%
						OPERATING PROFIT (€M)	741		825			46.5%		30.5%		30.0%
						REVENUE PER UC (€)		-			5.03				-			-			4.5%
						VOLUME (M UC)[2]	342		342			222.5%		222.5%		-
		API			REVENUE (€M)		1,829			1,829				243.0%			243.0%			229.0%
				OPERATING PROFIT (€M)	226		226			1,406.5%		276.5%		260.0%
						REVENUE PER UC (€)		-			5.12				-			-			2.0%

	4 August 2022
CHANGE VS H1 2021
PRO FORMA	PRO FORMA
COMPARABLE[3]	COMPARABLE FXN[3]
13.0%	-
18.5%	17.0%
20.0%	18.5%
9.5%	8.0%
31.0%	29.0%
-	-
-	-
-	4.5%
-	5.5%
14.5%	-
20.0%	19.0%
30.5%	30.0%
-	4.5%
7.5%	-
15.0%	10.5%
32.0%	26.5%
-	3.5%

Damian Gammell, Chief Executive Officer, said:

"We are pleased to have delivered a great first-half. We achieved strong top and bottom-line growth, gained value share and generated solid free cash flow. Key to this was the continued recovery of restaurants, pubs, cafes and bars, a return to travel and tourism for many consumers and a resilient home channel. All underpinned by robust categories and the strength of our customer relationships.

"Our focus on core brands, leading in-market execution and headline price and mix delivered volume and revenue ahead of 2019. We shared in this success with our retail customers, having delivered more revenue growth for them than any of our peers. And we continued to make progress against our sustainability commitments - using more recycled plastic in our bottles and reducing carbon emissions from our supply chain.

"We remain confident in the resilience of our categories, despite a more uncertain outlook, given macroeconomic and geopolitical volatility and higher inflation. We continue to actively manage key levers of pricing and promotional spend across our broad pack offering, alongside our focus on efficiency. However, given our strong first-half, we are raising revenue, operating profit and free cash flow guidance for FY22. This demonstrates the strength of our business and ability to deliver continued shareholder value."

Note: All footnotes included after the 'About CCEP' section

1

Q2 & H1 HIGHLIGHTS[1],[3]

Revenue

Q2 Reported +26.0%; Q2 Pro forma +16.0%[5]

• Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil (completed 10 May 2021)
• Pro forma comparable volume +10.5%[8] (+5.0% vs 2019) driven by the continued recovery of the Away from Home (AFH) channel, further supported by the return of tourism in Europe, alongside favourable weather

o Strong AFH pro forma comparable volume: +20.0% (+1.5% vs 2019) reflecting increased mobility & the recovery of immediate consumption (IC) packs (+30.5%[9] vs 2021; +5.0%[9] vs 2019)

o Resilient Home pro forma comparable volume: +4.5% (+7.5% vs 2019) driven by solid in-market execution, supported by the recovery of IC packs & sustained growth in future consumption (FC) packs (e.g. multipack cans +4.5%[9] vs 2021; +26.0%[9] vs 2019)

• Pro forma revenue per unit case +5.0%[2],[5] (+7.0%[10] vs 2019) driven by favourable underlying price & promotional optimisation, alongside positive pack & channel mix led by the recovery of AFH

H1 Operating profit

Reported +86.0%; Pro forma comparable +29.0%[5]

• Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil
• Pro forma comparable cost of sales per unit case +5.5%[2],[5] reflecting increased revenue per unit case driving higher concentrate costs, commodity inflation & adverse mix, partially offset by the favourable recovery of fixed manufacturing costs as a result of higher volumes
• Comparable operating profit of €1,051m, +29.0%[3],[5] reflecting the increased revenue, the benefit of on-going efficiency programmes & continuous efforts on discretionary spend optimisation
• Comparable diluted EPS of €1.61 (reported +175.5%)

Dividend

• First-halfinterim dividend per share of €0.56 (declared at Q1 & paid in May), calculated as 40% of the FY21 dividend, with the second-half interim dividend to be paid with reference to the current year annualised total dividend payout ratio of approximately 50%

H1 Reported +40.0%; H1 Pro forma +17.0%[5]

• Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil
• NARTD value share gains across measured channels both in-store[6] (+30bps) including sparkling (+90bps) & online[6] (+30bps)
• Delivered more revenue growth for our retail customers than any of our FMCG peers in Europe[7] & our NARTD peers in API[7]
• Pro forma comparable volume +13.0%[8] (+4.5% vs 2019) driven by the solid recovery of AFH, further supported by the return of tourism in Europe, sustained growth in the Home channel & strong trading during the festive Ramadan period in Indonesia

o Comparable volume by channel: AFH +28.5% (flat vs 2019); Home +4.5% (+7.5% vs 2019)

• Pro forma revenue per unit case +4.5%[2],[5] (+6.0%[10] vs 2019) driven by favourable underlying price & promotional optimisation, alongside positive pack & channel mix led by the recovery of AFH

Other

• Generated strong free cash flow of €1,281m (net cashflows from operating activities of €1,653m) driven by strong first-half performance & working capital initiatives. Continued focus on returning to our target leverage range (Net debt/Adjusted EBITDA of 2.5x-3x) by FY24
• Reorientation of the API portfolio to maximise system value creation to enable greater focus on NARTD, RTD alcohol & spirits well advanced:

1. Sale of NARTD own brands to The Coca-Cola Company for A$275m substantially complete; annualised EBIT impact of ~A$25m

1. Previously announced plans to exit production, sale & distribution of Australia beer & apple cider products completed[11]; minimal EBIT impact

2

SUSTAINABILITY

• Recognised, for the second time, in the Financial Times-Statista list of Europe's Climate Leaders & 2022 Bloomberg Gender Equality Index
• Third manufacturing site certified carbon neutral (Belgium)
• GB launched new attached caps to PET bottles, thereby improving recyclability
• France to become first supplier of non-alcoholic beverages to distribute 100% of its beverages to hotels, restaurants & cafes using returnable, refillable glass bottles by end of 2022
• New lighter weight PET bottle necks in Europe, saving c.7,000 tonnes of plastic annually by 2024

•

FY22 GUIDANCE & OUTLOOK[1],[3]

The outlook for FY22 reflects current market conditions. Guidance is on a pro forma comparable & Fx-neutral basis.

Revenue: pro forma comparable growth of 11-13% (previously 8-10%)

• Weighted towards volume growth over price/mix reflecting continued recovery of the AFH channel, further supported by the return of tourism
• Positive mix led by the continued recovery of the AFH channel
• Additional headline pricing & promotional optimisation

Cost of sales per unit case: pro forma comparable growth of ~7.5% (previously ~7%)

• Higher concentrate costs reflecting increased revenue per unit case
• High teen commodity inflation, weighted to the second-half
• FY22 hedge coverage at ~90%
• FY23 high single-digit commodity inflation expected

Operating profit: pro forma comparable growth of 9-11% (previously 6-9%)

• Remain on track to deliver our previously announced efficiency savings & API combination benefits (multi-year programmes amounting to €350 to €395m in total (vs 2019))

Comparable effective tax rate: c.22-23%(unchanged)

Dividend payout ratio: c.50%[12] (unchanged)

Free cash flow: at least €1.6bn (previously at least €1.5bn)

3

SECOND-QUARTER & FIRST-HALFREVENUE PERFORMANCE

BY GEOGRAPHY[1]

API[13]:			EUROPE: Q2 €3,646m (+18.0%,+17.5% FXN); H1 €6,451m (+20.0%,+19.0% FXN)
Q2 €925m; H1 €1,829m
API PRO FORMA[3]		FRANCE[14]		GERMANY		GREAT BRITAIN		IBERIA[15]		NORTHERN EUROPE[16]

Q2 €925m					Q2 €805m		Q2 €723m
	Q2 €554m		Q2 €736m	Q2 €828m
(+17.0%, +10.0% FXN)		(+14.0%)		(+18.0%)	(+16.0%, +14.5% FXN)	(+27.5%)	(+13.0%, +13.5% FXN)
H1 €1,829m		H1 €1,017m		H1 €1,296m	H1 €1,463m	H1 €1,371m	H1 €1,304m
(+15.0%, +10.5% FXN)		(+13.5%)		(+19.0%)	(+22.5%, +19.5% FXN)	(+28.5%)	(+14.5%, +15.0% FXN)

Q2 volume growth reflects strong trading during the festive Ramadan period in Indonesia & continued momentum in Australia & New Zealand. H1 volume ahead of 2019.

Coca-Cola No Sugar outperformed in Australia & biggest ever Ramadan activation in Indonesia drove H1 Sparkling volume ahead of 2019. Monster continued to grow in all markets.

Revenue/UC[17] growth driven by lower promotions

• positive pack mix led by growth in smaller packs in Australia & favourable underlying price in all markets.

Q2 volume growth reflects the recovery of the AFH channel, supported by increased tourism & favourable weather. Resilient demand in the Home channel supported Q2 & H1 volume ahead of 2019.

Coca-Cola Original Taste & Zero Sugar, Monster & Fuze Tea all outperformed.

Revenue/UC[17] growth supported by positive brand

• pack mix e.g. small glass +93.0% led by the recovery of the AFH channel, as well as favourable underlying price.

Q2 volume growth reflects the on-going recovery of the AFH channel & tourism. Later removal of restrictions slowed the overall recovery of the AFH channel. Continued demand in the Home channel & the border trade business supported Q2 & H1 volume ahead of 2019.

Coca-Cola Original Taste, Zero Sugar, Fanta & Monster all outperformed.

Revenue/UC[17] growth driven by favourable underlying price, as well as positive brand (e.g. Monster volume +23.5%), pack & channel mix.

Q2 volume growth reflects the strong recovery of the AFH channel & favourable weather. Resilient demand in the Home channel further supported overall volume growth, with both Q2 & H1 volume in double-digit growth versus 2019.

Coca-Cola Original Taste & Zero Sugar, Fanta & Monster all outperformed.

Revenue/UC[17] growth driven by favourable underlying price & promotional optimisation, as well as positive pack mix led by increased mobility & the recovery of the AFH channel e.g. small PET +26.5%; small glass +66.5%.

Q2 volume growth reflects the strong recovery of the AFH channel, particularly in Spain which over-indexes in its exposure to HoReCa[18], supported by the return of tourism & favourable weather. Improved trading in the Home channel, after the impact of the increased Spanish VAT rate last year, also supported Q2 volume ahead of 2019.

Coca-Cola Zero Sugar & Monster both outperformed.

Revenue/UC[17] growth driven by positive channel & pack mix e.g. small glass +66.0% led by the recovery of the AFH channel & favourable underlying price.

Q2 volume growth reflects the on-going recovery of the AFH channel with good momentum following the removal of restrictions towards the end of Q1. Resilient demand in the Home channel supported Q2 & H1 volume ahead of 2019.

Coca-Cola Zero Sugar, Fanta & Monster all outperformed.

Revenue/UC[17] growth driven by favourable underlying price alongside positive pack (e.g. small glass +118.0%), channel & brand mix led by increased mobility & the recovery of the AFH channel.

4

Note: All values are unaudited and all references to volumes are on a comparable basis 4

SECOND-QUARTER & HALF-YEAR PRO FORMA VOLUME PERFORMANCE

BY CATEGORY[1],[3],[8]

v

SPARKLING Q2 +10.0%; H1 +12.5%

STILLS Q2 +12.5%; H1 +16.0%

COCA-COLA® TM		FLAVOURS, MIXERS
	& ENERGY

Q2: +9.5%; H1: +11.0%	Q2: +11.5%; H1: +15.5%
Original Taste H1 +12.5%	Fanta Q2 +15.0%; H1 +20.0%
Lights H1 +9.0% reflecting the	Sprite Q2 +9.0%; H1 +16.5%
continued recovery of the AFH	driven by the continued recovery of
channel & tourism	the AFH channel & strong trading
	during Ramadan in Indonesia
Continued outperformance of
Zero Sugar also contributed to the	Energy Q2 +16.5%; H1 +17.5%
volume growth	led by Monster. Innovation &
(H1 +24.0% vs 2019)	distribution supported by solid
	in-market execution continued to
Zero Sugar gained value share[6] of	support volume growth
Total Cola +60bps	(Q2 +61.0% vs 2019;
	H1 +67.5% vs 2019)
Note: All references to volumes are on a comparable basis

HYDRATION

Q2: +18.5%; H1: 19.0%

Water Q2 +16.5%; H1 +17.0%

driven by the continued recovery of

IC reflecting increased mobility

Water in decline vs 2019 (Q2 -22.0%; H1 -24.5%), partially offset by Sports (Q2 +24.0%; +17.5%)

RTD TEA, RTD COFFEE,

JUICES & OTHER[19]

Q2: +7.0%; H1: +12.5%

Juice drinks H1 +7.0% reflecting

increased mobility & the recovery of the AFH channel. Solid growth in Capri-Sun (Q2 +20.0% vs 2019;

H1 +20.0% vs 2019)

RTD Tea/Coffee H1 +20.0% with strong growth in Fuze Tea (Q2 +43.5%[9] vs 2019;

H1 +43.0%[9] vs 2019). Fuze Tea also continuing to grow value share [6],[9]

Alcohol continued to deliver strong

growth in Australia led by Spirits & RTD
(Q2 16.5% vs 2019;
H1 +19.0% vs 2019)	5