Coca Cola HBC : Coca-Cola HBC AG Publishes 2020 integrated annual report 'Adapt to win'

March 18, 2021 at 10:36 am EDT

2020 highlights

Volume (m unit cases)

Net sales revenue (€m)

2,135.6

6,131.8

2019: 2,264.5

2019: 7,026.0

Comparable EBIT1 (€m)

Comparable EBIT1 margin (%)

672.3

11.0%

2019:758.7

2019: 10.8%

Profit before tax (€m)

Net profit2 (€m)

593.9

414.9

2019: 661.2

2019: 487.5

Comparable EPS1 (€)

Basic EPS (€)

1.185

1.140

2019: 1.436

2019: 1.340

Primary packaging collected for recycling (equivalent)

In 2020, we started reporting against the SASB framework.

44%

2019: 48%

1. For details on APMs, refer to 'Alternative performance measures' section.
2. Net profit and comparable net profit refer to net profit and comparable net profit respectively after tax attributable to owners of the parent.

You can read more on page 132.

Contents

Corporate Governance

10 Chairman's letter
12 Chief Executive Officer's letter
- 76 Chairman's introduction to corporate governance
  - 230 Alternative performance measures
  - 233 Other supplementary information
14 Our business at a glance
- 80 Board of Directors
  - 234 Assurance statement
16 Our business model
- 84 Corporate Governance Report
  - 238 Glossary
18 Our socio-economic impact
- 110 Directors' Remuneration Report
20 Stakeholder engagement
22 Market review
- 131 Statement of Directors' responsibilities
24 Our purpose and strategy
- 132 2020 SASB index
26 Leverage our unique 24/7 portfolio
Financial Statements
30 Win in the marketplace
34 Fuel growth through competitiveness & investment
- 136 Independent auditor's report
- 144 Financial statements
38 Cultivate the potential of our people
42 Earn our licence to operate
- 150 Notes to the consolidated financial statements
48 Key performance indicators
Swiss Statutory Reporting
50 Sustainability performance
52 Managing risk and materiality
57 Viability statement
- 204 Report of the statutory auditor on Coca-Cola HBC AG's consolidated financial statements
66 Financial review
70 Segment highlights
72 Non-financial reporting directive

210 Report of the statutory auditor on Coca-Cola HBC AG's financial statements
213 Coca-Cola HBC AG's financial statements
224 Report of the statutory auditor on the remuneration report
225 Statutory Remuneration Report

Watch our video and learn more athttps://coca-colahellenic.com/en/investors/ 2020-integrated-annual-report/.

Strategic Report

Supplementary Information

In a year impacted by COVID‑19, we adapted fast to ensure we could continue to create value for all our stakeholders. This meant:

• Caring for our people and the communities we serve page 2
• Flexing our 24/7 portfolio page 4
• Adapting our routes to market page 6
• Driving operational efficiencies page 8

The agility and commitment of our people allowed us to adapt to win, keeping us on course to become the leading 24/7 beverage partner.

Our strategy and purpose are supported by five growth pillars, each of which is a core strength or competitive advantage.

1 2 3 4 5

Leverage our unique 24/7 portfolio go to pages 26-29.

Win in the marketplace go to pages 30-33.

Fuel growth through competitiveness & investment go to pages 34-37.

Cultivate the potential of our people go to pages 38-41.

Earn our licence to operate go to pages 42-47.

Throughout the 2020 Integrated Annual Report, we have identified areas which are relevant to each of these growth pillars.

2 COCA‑COLA HBC

CARING FOR OUR

PEOPLE AND COMMUNITIES

Our company culture, which values the care we show to one another while embracing change and challenge, has proved vital in the face of the difficulties of 2020.

adapting

We stayed close to our communities throughout

2020. Special thanks go to our people who went the extra mile by volunteering their time to support the vulnerable.

Global commitment, local action

Our number one priority throughout 2020 remained the safety of our people, as well as our customers, partners and communities.

Over the last 70 years, partnering with and investing in the communities we serve have always been a core part of the way we do business. In the face of the challenges of 2020, the community networks and partnerships that we have established over the years, including with the Red Cross and other NGOs, allowed us to support those in need, those fighting the COVID-19 pandemic on the front line and our customers who continue to serve our shared communities.

Globally, The Coca-Cola Company and The Coca-Cola Foundation together with Coca-Cola HBC and all other bottling partners provided a $120 million support package focused on the people and organisations engaged in the frontline fight against COVID-19. In addition, we donated approximately 5 million litres of beverages in our markets and used our supply chain to print protective masks and hand sanitiser bottles.

We responded to changing consumer preferences quickly, taking smart risks to meet evolving trends and supporting more at‑home occasions.

FLEXING OUR

PORTFOLIO

Prioritising growing occasions

As movement and trading restrictions forced more people to spend more time at home, consumer preferences changed. For example, with no bars and restaurants open, people sought to recreate their favourite cocktails at home while spending time with family or friends or engaging remotely. We ensured that adult sparkling soft drinks, such as Schweppes and Kinley, were available in the appropriate packs to ensure they remained relevant to this trend.

Thanks to our adaptable category strategy, partnership with our customers and agile people, our consumers continued to enjoy their favourite beverage, even when drinking occasions changed.

With more chances to experiment in the kitchen with meals at home, we also saw sparkling soft drinks play an important role in making these home meals extra special family occasions.

Our Costa Coffee launch also supported our 24/7 vision, offering consumers a full range of high-quality coffee options to enjoy at home, on-the-go or at work in 14 of our markets so far.

With more people enjoying cocktails at home we prioritised our adult sparkling brands which offer consumers a range of sophisticated flavours that can be enjoyed on their own or as a mixer.

ROUTES TO MARKET

ADAPTING OUR

In a rapidly changing environment, excellent customer service meant understanding their needs and collaborating quickly to make the necessary changes.

Supporting our customers

Throughout 2020 our sales teams continued to serve our customers, whilst staying close to those who were not able to operate. For our customers with overstretched supply chains and overworked personnel trying to keep up with demand and changing regulations, we offered flexible supply and merchandising services.

When retail customers' central warehouses could not cope with the spikes in demand, we delivered supplies direct to outlets or offered employees to get the products onto the shelves.

Thanks to the efforts of our people in our markets we were able to adapt the support we provided to our customers almost overnight.

As bars, restaurants and hotels gradually began to reopen, we deployed teams to support them, filling coolers and shelves and offering marketing assistance.

By far the most apparent shift in route to market was the use of e-commerce. We shared knowledge and insights with retailers to help simplify the online shopper journey and initiated strategic partnerships between customers who did not have the capabilities for quick home delivery service with others that did.

DRIVING

OPERATIONAL EFFICIENCIES

Digital investments benefit employees, customers and consumers.

Remaining competitive

Prioritising safety from the beginning, our people were able to keep our supply chain fully operational.

Having secured safety, supply and service across our stakeholders, we prioritised investments behind our highest potential opportunities, allowing us to protect the financial health of our business while continuing to develop for the long term. We invested behind our growth markets, our largest and highest potential categories and growing consumer occasions. We embraced data and sophisticated digital technologies and our digital transformation helped us support our customers and address the needs of consumers in a fast-changing environment.

Structural improvements made to our cost base over many years have created a more flexible, resilient business which can withstand revenue declines while protecting profitability. We moved quickly to identify, and deliver, cost savings in 2020 and have found new digital ways of working which will enable us to continue to drive efficiencies and remain competitive.

By transforming our functional ordering platform into an effective customer portal, we enabled customers to order faster and around the clock to keep up with spikes in demand. Apart from easy navigation and an attractive user experience, this portal now offers a range of information to help our customers, including available promotions, customised portfolio recommendations and order analytics per category, brand and package type.

Thanks to our people's eagerness to advance digital tools and innovation, we were able to continue to drive value for our partners.

Chairman's letter

"Our vision for Coca‑Cola HBC to be the leading 24/7 beverage partner and the strategy underpinning it have proven highly resilient." remain with the people and families who have lost their loved ones.

Dear stakeholder,

The COVID-19 pandemic has caused the largest reduction in GDP since the Great Depression, the result of the largest lockdowns in human history and widespread upheaval in economic activity and daily life. As of early 2021 nearly 2.5 million people had died of the virus, bringing suffering and hardship to millions more. Our thoughts

The ongoing challenges for our people, our

Company and its stakeholders have been immense. Hospitality continues to be one of the most affected sectors, putting many of our customers under severe pressure.

Despite this, we have been able to rise to many challenges. While protecting our people, we have maintained supply for our customers, protected the profitability of our business, grown market share and have continued to make progress on our strategic objectives. This was in large part due to the extraordinary efforts of our people. I want to express my heartfelt thanks to all our colleagues, and special thanks to ourcolleagues who have continued to work daily in our plants and on site with customers throughout the COVID-19 pandemic.

While 2020 was a uniquely challenging year, it was also a time in which we discovered the full measure of our strength, resilience as a Company and our capacity to adapt and improve. Our partnership with

The Coca-Cola Company meant that we received early insight into what was coming from colleagues in China. The Board quickly identified its first priority: ensuring the safety of our people, customers, partners and communities.

The Board endorsed the establishment of a Group COVID-19 Operational Task

Force to oversee the Company's response to both health and safety needs and adaptations made in response to the dramatic changes in our operating environment. To maintain alignment with the Company's culture, values and strategy during the COVID-19 pandemic, the Remuneration Committee oversaw adjustments to incentive arrangements.

This year, more than ever, we have seen the benefits of our Company culture which values the care we show to one another while embracing agility, change and challenge. This culture, which I have seen developed and nurtured under the leadership of Zoran Bogdanovic, will continue to play a crucial role in seizing the opportunities of the recovery period in a way that creates value for all of our stakeholders.

A proactive approach to big challenges

Coca-Cola HBC's long-term success is linked to our ability to manage all our principal risks, including critical sustainability issues.

I am pleased to report that we were once again rated Europe's most sustainable beverage company by the Dow Jones Sustainability Index for 2020, achieving our highest ever score. In 2020, we also retained our leadership positions and top scores in other ESG indices and ratings, including CDP climate change and water ratings, MSCI ESG, FTSE4Good, ISS and Vigeo.

ESG ratings give us insight into our stakeholders' priorities and serve to galvanise action within our organisation, as do sustainability targets. Coca-Cola HBC was among the first companies to set and disclose science-based emissions targets in 2016, and in 2020, we set new 10-year science-based targets for further reductions across our value chain. In the next ten years, we will reduce - at a minimum - our absolute emissions for our direct operations and production, scope 1 and 2 emissions, by 55% compared with 2017 baseline levels.

The COVID-19 pandemic has spotlighted the deep interconnections between our business and stakeholders in the communities where we work. Along with our partner The Coca-Cola Company, it has been our privilege to provide those fighting the virus on the front lines with approximately 5 million litres of beverages, volunteer time and provide financial support with grants from the Coca-Cola Foundation. We also leveraged the capabilities of our supply chain, using our 3D printing capability to make protective face shields, producing special bottles for the dispense of hand sanitisers and loaning a microbiological detector to support laboratory testing for COVID-19.

Dividend

During the course of 2020 we were able to maintain our commitment to pay the 2019 dividend, of €0.62 per share. When considering the correct course of action in 2021, the Board carefully assessed a range of possible approaches weighing our continued balance sheet strength, improved financial performance in the second half of the 2020, emerging, and distribution of COVID vaccines and the degree of remaining uncertainty in the operating environment. After careful consideration, and in view of the strong long-term outlook and our confidence in the Company's strategy, the Board is proposing a full-year dividend payment of €0.64 per share, a 3.2% increase compared with the prior year.

We are pleased to be able to propose this increase to the dividend even after a very challenging year.

Looking ahead

We welcomed Anna Diamantopoulou as a new member of the Board in 2020. Anna was

European Commissioner for Employment and Social Affairs and a Minister of the Greek

Government in the past. She brings a wealth of experience in regulatory matters and stakeholder relations, which we believe will be helpful in light of an increase in regulatory challenges. Meanwhile, let me also take this opportunity to thank John Sechi for his years of service.

The Board approved the creation of the role of Chief Operating Officer, with Naya

Kalogeraki taking up the position. The new structure enables the CEO to focus more time on the long-term strategic direction of the business and partnerships, while enabling us to drive faster business growth.

In early 2021, we remain focused on ensuring the safety of our people, customers and communities as the COVID-19 pandemic continues. We will continue to adapt to capture the opportunities we see in 2021 and beyond. Meanwhile, with vaccine roll-outs progressing, we are eager for the new opportunities which will come once the recovery is underway. The progress on our strategy in 2020 has built a stronger business, even better positioned to achieve future growth.

Our vision for Coca-Cola HBC to be the leading 24/7 beverage partner, as well as the purpose and strategy underpinning it, have proven highly resilient, with the events of 2020 confirming the relevance of our plans. We firmly believe it provides the right path and sets the right milestones for the long-term success of our Company and its stakeholders.

On behalf of the Board, let me extend my good wishes to you and thank all of our stakeholders for your continued support.

Anastassis G. David

Chairman of the Board

Section 172 statement

Section 172 of the UK Companies Act 2006 requires directors to promote the success of the company for the benefit of the members as a whole, having regard for the interests of stakeholders in their decision-making. Engaging with stakeholders is an indispensable part of how Coca-Cola HBC does business. The Board considers the interests of the Group's employees and other stakeholders in its decision-making as a matter of good governance, and understands the importance, and value, of taking into account their views, as well as considering the impact of the Company's activities on the community, environment and the Group's reputation. The Board also considers what is most likely to promote the success of the Company for its shareholders in the long term. Although the Company is Swiss incorporated and as such the UK Companies Act 2006 has no legal effect, this approach is in accordance with the UK Corporate Governance Code 2018.

Read more on pages 42-47, 53.

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Market review

Adapting to evolving trends

Market trends

Dynamic retail environment 2020 marked the biggest shift in retail in decades. The out-of-home channel has taken the biggest hit, with restrictions on its operations continuing into 2021. Online and discounters were the best performing channels and small formats/convenience were also on the rise, especially during the lockdown periods. To maintain their supply chains, retailers streamlined the options on offer in their stores. High-demand brands became even more prominent as a result. The economic effects of the COVID-19 pandemic led to a fall in disposable income, with shopper focus on value fuelling the growth of discounters.

Digital evolution

Trends toward digital channels, which were evident prior to 2020, drastically accelerated as consumers adopt faster virtual solutions and technology during the COVID-19 pandemic. The performance of daily tasks, such as working, getting education or banking online, has led consumers to become more comfortable with technology and to appreciate how much it is needed. Online shopping has seen important growth and online food orders have boomed, benefitting from restricted activity in the out-of-home channel.

Regulatory environment

In 2020, the regulatory environment was deeply affected by the onset of the COVID-19 pandemic. During the first phase, border management and supply chain continuity were the key challenges. The focus subsequently shifted to kickstarting the economy, protecting employment and lightening the burden on businesses through tax deferrals and the subsidisation of salaries and social contributions. In the EU, the Green Deal, a set of policy initiatives to make Europe climate neutral by 2051, remained high on the agenda. A new levy on non-recycled plastic packaging waste was introduced as part of the 2021-2027 EU Multiannual Financial Framework.

Consumer preferences

Consumer preferences shifted significantly as people adjusted to restrictions and lockdowns.

The COVID-19 pandemic strengthened interest in health and wellness, with people looking not only for organic offerings, but also those with less sugar or fat and for functional products that can enhance immunity. Away-from-home needs are now fulfilled at home, including socialising, working or training. Many consumers are willing to spend more to replicate out-of-home experiences in their homes and consumers turn to iconic brands they trust. On the other hand, the economic disruption caused by the COVID-19 pandemic has also increased price-sensitivity, requiring brands to be agile to address both premiumisation and affordability needs.

Sustainability

Environmental, social and corporate governance (ESG) issues became even more prominent following the outbreak of the COVID-19 pandemic. Employee health & safety and community support gained notable importance. In addition, investors have become more activist on climate change issues and sustainable supply chains. While plastic waste has remained a key consideration, the focus on reducing emissions has also increased. Consumers are becoming increasingly aware of the impact their decisions can have on the environment, expecting more from manufacturers and governments. Effective solutions, along with transparency on ESG practices, will help inspire trust, build brand loyalty and eventually create competitive advantage.

How we are responding

With a commitment to safety as our first and primary priority, we implemented best practices that allowed supply chains to remain fully operational and customers to be continuously served. We were quick to assess changing consumer needs, shifting package offerings to ensure that customers had the right product on their shelves, and maximising the impact of our sales force by redeploying them based on market needs. Demonstrating the customer centricity of our business, we supported and celebrated the reopening of the out-of-home customers with initiatives such as our inspirational Open Like Never Before campaign.

E-commerce is one of our most dynamic channels and offers great growth potential.

In 2020, we expanded our reach, partnering with many more customers including food delivery platforms. We have further invested in digital platforms, such as our B2B platform, Hybris, which allows for direct orders from our customers. With the success of our big data and advanced analytics (BDAA) pilot in Nigeria to identify customer needs, we are expanding the model in the rest of our territories. In addition, our investments in connected coolers continued despite the COVID-19 pandemic, enhancing our sales teams' productivity.

We worked with key stakeholders to ensure the safe supply of products and to support key sectors of the economy. In parallel, we made good progress on the Coca-Cola System's

World Without Waste initiative and we are on track to help collect the equivalent of 75% of primary packaging and make 100% of our consumer packaging recyclable by 2025. We continue to enrich our portfolio with low- or no-sugar drink options in every market, provide transparent nutritional information and have committed to a 25% calorie reduction per 100ml of sparkling beverage by 2025 compared with a 2015 baseline.

The rising aperitivo-at-home occasion enabled us to further nurture premium propositions. In hydration, we introduced Aquarius functional water, in energy we broadened our portfolio to span affordable options such as Predator, as well as premium brands such as Coke Energy. Costa Coffee and Topo Chico Hard Seltzer expanded our 24/7 portfolio to capture more drinking moments. On top of innovation, a rigorous focus on the highest potential brands led to market share gains in most markets. To address consumer needs for both premium at-home experiences and greater affordability, we strengthened single-serve multi-pack offerings whilst leveraging entry packs with price points attractive to consumers.

Amid a year of unique challenges, we protected our people and deployed multiple relief initiatives both for our communities, including medical staff and vulnerable people, and for our customers. Reducing our environmental footprint and supporting our communities is part of our vision to be the leading 24/7 beverage partner. Through Mission 2025, we pursue our strategic priorities on climate action, sustainable packaging, water stewardship, low- and no-calorie products and community engagement. In line with the goal of limiting global warming to 1.5°C above pre-industrial levels, we have established a new science-based target to reduce emissions across our entire value chain.

Our purpose and strategy

We will deliver on our vision through a clear purpose and strategy

To deliver on our vision of being the leading 24/7 beverage partner, we introduced a new strategy in 2019. Growth Story 2025 gives us a roadmap to grow with our customers and to delight consumers across our 28 markets, around the clock.

Built on five key pillars of growth, each of which is a core strength or competitive advantage, our 2025 strategy is underpinned by new Growth Mindset Values and guided by clear targets. This plan to achieve our vision reflects the significant opportunities ahead that will help us deliver growth and value for our Company and all of our stakeholders.

Our purpose

Our growth pillars

Our Growth Mindset Values

WINNING WITH CUSTOMERSNURTURING OUR PEOPLE

We are the selling organisation devoted to providing innovative solutions to create shared value

We believe in our people, and have a passion to develop ourselves and others

Read more about our values on pages 38-41.

While 2020 brought unprecedented challenges, Growth Story 2025 allowed us to be clear about what would enable our long-term success as well as what we needed to adapt in 2020 to ensure we kept on our path. The actions we took were fully in line with this vision and the strategic growth pillars which underpin it. In 2021, we will take a similar approach, adapting and prioritising the most relevant initiatives within our pillars as the situation requires. Our financial targets for the business in 2021 reflect the continuing impact of the COVID-19 pandemic.

We expect a strong recovery in FX-neutral revenues, along with a small increase in EBIT margin. Looking further ahead, beverages continue to be a high-potential industry and we see many growth opportunities within our evolving brand portfolio and our markets. We therefore believe that, once the recovery is underway, our business can return to the revenue and EBIT margin growth trajectory that we introduced alongside our Growth Story 2025 strategy.

How we are growing

Growth Story 2025 targets

• Build unrivalled teams of true partners for our customers, executing with excellence in every channel for prioritised drinking moments
• Fast-forward critical capabilities for growth

• Be an environmental leader, engage our communities behind water and waste initiatives, and empower youth, together with our partners

EXCELLENCE

INTEGRITY

LEARNING

PERFORMING AS ONE

We strive for unparalleled performance by amazing customers with our passion and speed

We always do what is right, not just what is easy, and are accountable for the results

We listen, have a natural curiosity to learn and are empowered to take smart risks

We collaborate with agility to unlock the unique strength of diverse teams

Highlights in 2020

• Continued expanding to become the leading 24/7 beverage partner, creating shared value with our consumers and customers
• Maintained resilience in the sparkling category by leveraging low- and no-sugar variants, flavour and pack architecture
• Achieved another year of double-digit revenue growth in energy drinks and continued the roll-out of Coca-Cola Energy and Predator Energy
• Launched Costa Coffee in the first 14 countries
• Entered the hard seltzer category with the launch of Topo Chico in the first five markets

Priorities in 2021

• Continue our work on the rationalisation of our portfolio, prioritising scalable and profitable brands as well as products, whilst driving disciplined innovation
• Maximise our efforts to capture growing at-home occasions
• Increase the penetration of single-serves and affordable entry packs helping expand our price/mix
• Continue the roll-out of Costa Coffee, building our presence in one of the most attractive beverage categories
• Accelerate the expansion of Aquarius functional water in our markets

A resilient portfolio for a new reality

As the COVID-19 pandemic created upheaval in many aspects of daily life, our broad 24/7 portfolio gave us a wealth of options to continue to provide consumers with well-loved and trusted brands. We had the flexibility to shift production quickly, providing the right packs and categories to meet the changing needs and buying patterns of our consumer base.

We were able to capitalise on all the work we had already been doing to strengthen, broaden and flex our portfolio to capture more occasions and drinking moments.

This gave us a particular advantage as consumption shifted from out-of-home to at-home during the lockdowns and restrictions were imposed across our markets.

As lifestyles changed, many consumer activities were brought home. We focused on helping consumers replicate out-of- home occasions at home, and capturing increased opportunities like 'socialising'

and 'screen time' experiences. The changed landscape made affordability a greater factor, and we adjusted our activations in response, shifting towards packs with relevant price points for the consumer.

At the same time, premiumisation will continue to be an opportunity, particularly in at-home drinking occasions. This focus on creating upscale drinking experiences at home supported our revenue per case expansion.

Our broad and flexible portfolio, together with our expertise in adjusting our pack/price architecture, will continue to allow us to leverage these trends.

Well‑loved brands support growth

As the COVID-19 pandemic hit our markets during 2020, we focused on key sparkling products as the main drivers of all our activities. Trademark Coke and Adult Sparkling were prioritised as the main growth and premiumisation drivers in the category.

Our long-term efforts to provide healthier options across our portfolio also helped ensure the resilience of Sparkling, which was one of the best performing categories during the year.

We managed to gain share in the majority of our markets in the sparkling category. The power of our portfolio and the resilience of well-loved brands like Coke, supported by our unrivalled execution in our markets, allowed us to deliver strong market share performance.

Our focus in recent years on providing healthier new options across our portfolio of sparkling and still beverages, while emphasising low or no-sugar choices to our consumers, is reaping benefits. Overall our low- and no-sugar variants grew 2.7% during the year with brands like Coca-Cola Zero and Fanta Zero growing 2.5% and 67.8% respectively.

Percentage of Coca‑Cola HBC revenue

Sparkling 74%

Hydration 7%

Juice 5%

Energy 5%

RTD Tea 3%

Premium Spirits 3%

Plant-based<1%

Coﬀee<1%

Snacks 2%

Leverage our unique 24/7 portfolio continued

To celebrate the emergence from lockdowns, the Coca-Cola System launched the new Open Like Never Before campaign.

The message of emerging stronger and creating a better shared future, highlighted in a manifesto film featuring spoken word artist George the Poet, is an extension of our Company's purpose to partner with our customers, delight our consumers and enrich our communities. The call to action for communities to support their local businesses translated into tangible support for our retail partners.

Beyond Coke brand products, we continue to build our adult sparkling category which is composed of three diverse and complementary brands: Schweppes, Kinley and the recently acquired Lurisia. These products provide a variety of sophisticated flavours that can be consumed on their own or used as mixers. During 2020, we leveraged the rising trend of the socialising-at-home drinking occasion, advancing our joint activation of Premium Spirits with our adult sparkling products.

Still products with high relevance in 2020

As changing consumer patterns impacted on-the-go occasions and bottled water sales, we turned our focus to new growing segments with products highly relevant in the context of 2020. We have introduced Aquarius functional water, a hydration proposition enhanced with minerals, in 12 of our countries. We also rolled out innovations in the juice category, where we are capturing revenue opportunities through Cappy lemonades and Dobry Water+ juice.

Energy, one of the best performing categories during the year, delivered a fifth consecutive year of double-digit volume growth. Our growth came from both existing products and innovations, and the category benefited from both affordable brand options like Predator Energy and premium propositions such as Coca-Cola Energy. This enriched portfolio supported market share gains in the majority of our markets. We also achieved value share gains in the energy category during the year, with an increase of 1.5pp.

Adez, our plant-based, sugar-free beverage line, has continued to add to our revenue per case and recently expanded its range into new dairy-free, multi-seed variants. This new multi-seed range consists of two unsweetened propositions and provides a sophisticated flavour experience, offering health-conscious consumers the benefits of protein and fibre.

Within only six months, the AdeZ multi-seed range captured 8% of total AdeZ 2020 sales volume in countries where it was introduced, showing high potential for further growth.

We also continued to build on the introduction of FuzeTea, the differentiated and innovative ready-to-drink tea we launched three years ago. We introduced no-sugar formulas in several of our markets during the year, responding to consumer preferences and a renewed focus on health and wellness.

Expanding our offerings

At Coca-Cola HBC, we expanded into alcoholic beverages over a decade ago through our premium spirits distribution. Our spirits portfolio includes brands like Jack

Daniels, Aperol, Macallan and Famous Grouse, and is distributed in 25 of our markets.

In line with our vision of becoming the leading 24/7 beverage partner, this is a strategic category for us, allowing us to expand our offerings into every consumer occasion. It provides us with strong cross-selling opportunities for our core beverage portfolio through mix activation and creates a compelling offering for hotels, restaurants and cafés, the HoReCa channel, offering a one-stop-shopping partner.

In 2020, we also entered into the dynamic hard seltzer category with the launch of Topo Chico in selected markets. The new drink, which is a sparkling water with alcohol and natural flavours, is inspired by the 125-year old Topo Chico sparkling mineral water brand, which has long been popular with mixologists in the US and Latin America.

As we move forward, we plan to learn from the launch in our first markets and build our presence in this promising category.

Our targeted approach to Snacks saw the acquisition of Bambi, a leading Serbian confectionery business, in 2019. This acquisition added to our footprint in Snacks where we already had a presence through the Tsakiris business in Greece and Cyprus.

Bambi, with its iconic Plazma brand, is now present in 10 of our markets and offers a good complementary opportunity for our existing beverage portfolio. This portfolio has led to very strong performance in 2020 with products that were highly relevant for the consumer throughout the COVID-19 pandemic as well as through successful innovations.

Supporting consumer health and wellbeing

The COVID-19 pandemic strengthened existing trends related to health and wellness, with consumers looking for products with less sugar but also for functional products that support wellness. Consumers' tastes and preferences continue to evolve, and we continue to innovate to meet these needs. Our portfolio includes reformulated recipes to reduce added sugar and we offer diet, light and zero-calorie as well as functional drinks.

To help consumers make informed choices, we facilitate portion control through the introduction of smaller packages, and we provide clear and transparent nutritional information on all our packs. The Guideline

Daily Amount labels provide at-a-glance information on calories as well as sugar and all key nutrients.

At the same time, we continue the trial of 'traffic-light' front-of-pack labels in several of our markets, a colour-coded evolution of the current monochrome Reference Intake model used across Europe.

The World Health Organization recommends that no more than 10% of total energy/ calorie consumption comes from added sugars, and we have committed to reduce calories per 100ml of sparkling soft drinks by 25% between 2015 and 2025 across all of our markets. At the end of 2020, we achieved an 11.2% reduction compared with 2015 levels.

Responsible marketing

At Coca-Cola HBC we are focused on aligning our commercial practices with sustainability and business goals. The way we engage in direct commercial activity and the way we advertise and promote are central to cultivating a relationship of trust with all of our stakeholders.

We adhere to The Coca-Cola Company's Global Responsible Marketing Policy, as well as its Global School Beverage Guidelines, which means that we do not market directly to children under 12 and we do not offer our beverages in primary schools, except when required by local law, or requested by school authorities. In addition, through the

European Soft Drinks Association (UNESDA)

we remain committed not to offer added- sugar beverages in secondary schools across the EU and Switzerland.

Freshness and quality

Throughout the COVID-19 pandemic, we continued to offer the highest quality beverages by applying end-to-end quality and food safety standards. In order to further enhance this culture of excellence, we maintained a strong focus on capability building and development.

UN Sustainable Development Goals

We serve our consumers with a broad range of high-quality products. In doing so, we create value by contributing to global goals for good health and wellbeing, innovation, responsible production and consumption as well as partnerships.

Expanding our portfolio with Costa Coffee

In 2020, as part of our vision to become the leading 24/7 beverage partner, we launched Costa Coffee, bringing high-quality coffee to 14 of our markets with an ambitious plan to expand coverage to all our territories by 2023.

Coffee is a growing multibillion-dollar category across our geographies, forecast to grow 4% annually. The coffee category is allowing us to capture more consumer occasions, partner even more closely with our customers across all channels and strengthen our ability to address every drinking moment throughout the day.

Coffee is also on a premiumisation journey, providing an accretive revenue opportunity. In recent years, we have developed the required infrastructure, processes and capabilities around coffee. These assets, together with our best-in-class route to market, mean we are well positioned to capture this growth opportunity with a strong brand like Costa.

Through increased collaboration with our suppliers of key ingredients and packaging materials, we further improved our partnerships, with only one critical non-compliance in the year.

As a result of the lockdowns in our markets, we replaced product age audits on the shopfloor with a delivery age measure, providing us with all relevant freshness information for products leaving our warehouses.

As every year, we carefully monitored consumer complaints. In 2020, we registered 19 complaints per 100 million bottles sold. Whilst our aspiration will always be zero complaints, we implemented market-specific improvement plans which we expect will help us limit the number of complaints to 17 per 100 million bottles sold in 2021.

Tackling food loss and food waste in our value chain

We are preventing food loss to preserve water and other natural resources, to avoid related carbon emissions and to mitigate the related social and economic effects in agriculture.

Our offering consists of a full range of Costa Coffee products covering diverse consumer needs and preferences.

This includes: beans, roasted and ground coffee; Nespresso1 and Nescafé Dolce Gusto1 compatible coffee pods; ready- to-drink coffee; and Costa Express, a self- serve, barista-quality coffee on-the-go.

To secure a great in-cup result, a broad range of fully supported coffee machines are available to our out-of-home customers, along with other services to make Costa Coffee the best coffee experience. We help these customers avoid downtime and meet demand more efficiently with digital solutions, connecting all our professional and automatic coffee machines to a live data feed. By investing in top quality direct-to-consumer solutions, we are also enabling our non-HoReCa customers to offer barista-quality coffee to their shoppers.

As part of our commitment to sustainability and creating shared value, Costa Coffee is the only coffee brand which is 100% Rainforest Alliance certified.

This certification ensures that coffee produced for us leads to improved livelihoods for farmers as well as protection of forests and climate change adaptation in forest communities.

We set out a new policy to reduce food loss and food waste, or recycle or reuse food waste in manufacturing, warehouses and distribution as well as at a customer level. We also analyse the potential of food loss and waste per type and category.

In particular, we report the age of our finished beverages, and put into place actions to minimise the number of products which risk being expired. In the last five years, the trend of expired products has decreased from 0.5% to 0.3% in both juices and carbonated soft drinks.

While we made good progress in 2019 to reduce food loss from finished beverages, moving to 0.17% from 0.21% in 2018, this increased to 0.23% in 2020. The main reason behind this was the higher level of product expiries during the out-of-home channel lockdowns, in particular during the first wave of the COVID-19 pandemic.

During 2020, given the restrictions in place in the out-of-home channel due to the COVID-19 pandemic, our initial launch targeted primarily the at-home channel, later expanding into more channels as conditions allowed.

The positive impacts of these investments were already visible in 2020, as we managed to recruit several hundred customers in the out-of-home channel and we have developed a rich pipeline of prospective customers.

In the current year, we are continuing to build our Costa Coffee business by entering new markets and expanding into more channels and platforms in the markets where Costa launched in 2020.

1. Nespresso and Nescafé Dolce Gusto are both brands of Nestlé S.A.

KPIs	Highlights in 2020	Priorities in 2021
• FX-neutral revenue	• Ensured the safety of our people,	• Continue to evaluate our revenue growth
growth
customers, partners and communities and	management approach to address
• Volume growth
maintained business continuity through	consumer needs for affordability as well
• FX-neutral revenue
per case growth	decisive, timely and effective action	as premiumisation

• Provided customers with the best support we could offer as they faced challenges caused by rapidly shifting demand patterns
• Strengthened our relationship with e-retailers and started partnering with new channels, achieving higher market share online
• Accelerated the use of big data, advanced analytics and new technology, including sales force automation, image recognition and web-based ordering
• Launched the new sales academy to drive our salesforce's capability to deliver improved customer service, performance and execution
• 36% of all coolers in the marketplace are now energy efficient and eco-friendly

• Further invest to improve our ability to serve online shoppers and respond to rapid growth
• Advance our big data and advanced analytics capabilities to further enhance our segmented execution model
• Continue our efforts to enhance our digital capabilities through B2B2C platforms (B2B platforms that reach the final consumer)
• Introduce the sales academy in all our markets by the end of the year

By the side of our customers

After first ensuring the safety of our people, customers, partners, and communities, our second priority during the year was to ensure business continuity through decisive, timely and effective action.

Throughout 2020 our salespeople continued to serve every one of our customers that was able to operate, whilst maintaining contact with our customers who were not. We have increased the frequency of our customer engagement, providing customers with the best support we could offer as they faced their own challenges caused by rapidly shifting demand patterns.

Excellent customer service remained our north star ambition. Achieving this in a rapidly changing environment meant listening to customers' concerns and collaborating quickly to make changes. For example, to reduce pressure on some supermarkets' supply chains, in some cases we arranged direct deliveries to stores rather than to the customers' central warehouses.

Efforts to help our customers navigate challenges fulfilling their shoppers' demands also generated value for our business. When our sales team in Serbia determined that an international client was experiencing product shortfalls from a private label supplier, we helped the customer close this supply gap with our products.

We subsequently determined that similar temporary supply issues were occurring in other markets, and we reached an agreement to support one of our most important customers with a listing of 15 additional products in five different countries, some of which have become permanent.

We redeployed salespeople from the out-of-home to at-home channels and increased the remote selling capabilities of our sales teams. In parallel we accelerated our activities in e-commerce, especially on our own sales platform for our customers, partnering with food delivery platforms and working with our wholesale customers to develop direct-to-consumer offerings.

Throughout the COVID-19 pandemic, we have been by the side of our customers, maintaining personal relationships and supporting them to deliver or to build online sales. Our ability to segment customers allowed us to efficiently shift investment to outlets which gained relevance, ensuring flawless execution.

As our customers re-opened during periods of lower restrictions, we continued to provide support and build trust, supplying masks and hand sanitiser for new hygiene needs. Safety was always our first priority, but we continued to prepare to capture the opportunities that will emerge once recovery begins.

Retail moves online

Although the dynamic e-commerce channel is still a small proportion of our overall revenue, it has doubled in value over the last two years. The channel offers great growth potential with high margins, and it also has a greater proportion of single-serve and low- and no-sugar mix compared with modern trade.

E-commerce growth during 2020 was fuelled by lockdowns and restrictions implemented across our markets. This encouraged customers that had never shopped online to try it for the first time.

During the second and third quarters, 70% of our online shoppers were new to the channel, and we expect more than half will continue to order online. As a result, the number of customers we are collaborating with in e-commerce increased by over 80%.

Online shopping has allowed us to further expand our network of online food takeaway partnerships. We have co-operated with food delivery platforms, helping them increase the value of each transaction by including a beverage with every meal.

Win in the marketplace continued

Across our markets, we have designed combination meals, with a meal and beverage for a single price point, and improved product positioning in online menus.

During the COVID-19 pandemic, we also started connecting our brick-and-mortar customers with our food delivery platform partners to deliver grocery products, including our own, to consumers at home.

To support our e-commerce success, we accelerated capability development through various bootcamps, sharpening our digital skills, sharing best practices and aligning our system priorities. In 2021, we will continue to invest to improve our ability to serve online shoppers and respond to rapid growth.

Commercial capabilities as a competitive advantage Accelerating our critical growth capabilities is a key driver of our Growth Story 2025 strategy. These capabilities have strengthened our response to the COVID-19 pandemic and will be even more relevant in the new environment that emerges.

Our business is equipped with five crucial capabilities: growth-focused big data and advanced analytics, value-led revenue growth management (RGM), tech-enabled route to market, customer-centric key account management and disciplined innovation.

These attributes enable us to better understand the real and changing needs of our customers and consumers, drive rapid revenue recovery in a profitable manner and anticipate or react to new challenges faster and smarter than our competition.

During 2020 we prioritised building the skills immediately required to best support our customers and our front-line employees in such volatile times. We also captured all the capability-related learnings from the COVID-19 pandemic in order to be better equipped to manage the changing environment.

As route-to-market plans and sales and distribution models shifted during the year, our people required new capabilities quickly.

Our new sales academy is developing a sales force that constantly strives to improve our service, executing with excellence in every channel for prioritised drinking moments.

In 2020 we piloted the sales academy in

Russia, Romania and Poland, giving our sales force the experiences and the full curriculum to build the capabilities needed at each stage of their development. Developed as a transformative digital learning approach to help build our teams' capabilities on the job, the sales academy will be introduced in all of our markets in 2021.

While our capabilities are centrally led in an aligned way across our business, we make sure that each country has the flexibility to make their own choices, focusing on the development of capabilities that are most relevant to their local realities.

Big data and advanced analytics

We are accelerating our use of big data, advanced analytics and artificial intelligence capabilities across our business with the aim to cover our largest markets by 2021.

We use data and analytics capabilities to identify and capture value-creation opportunities, particularly for top-line acceleration and cost optimisation, and to improve our service and operations across all functions.

We are now able to analyse data at a granular level, allowing us to make decisions and implement focused initiatives that generate incremental value in targeted areas of the business. These capabilities greatly enhance our segmented execution model by identifying customer needs in different locations and different types of outlets. As a result, our sales force is able to have a bigger impact per customer visit. In the fragmented market of Nigeria, where we rolled out these enhanced analytics capabilities in 2019, we have continued to see promising results, including volume increases and improved outlet prioritisation for new product launches. We are currently expanding this model to the rest of our markets.

UN Sustainable Development Goals

As we build our business by helping our customers to grow and thrive, we make substantial contributions to the achievement of the Sustainable

Development Goals related to ending poverty, decent work, sustainable communities, responsible production, justice and strong institutions, as well as partnerships.

We are driving operational excellence through machine learning, improving our forecasting for short and long-term customer demand in our markets. This streamlines inventory management and prevents out-of-stock incidents. We are also transforming our promotion management with increased capabilities to identify profitable promotion tactics and optimise investment. Our algorithms provide a holistic measurement of the return on investment for each promotion, including the negative impact of forward buying, competitive promotions and cross-brand cannibalisation.

To further scale our capabilities we are combining a number of data sets to develop a 360-degree view of each of our customers, while also maintaining strong data governance.

Revenue growth management

Our revenue growth management framework is key to ensuring profitable top-line growth. Through this capability we work to maximise the value and the number of our transactions. We deliver this by improving category and package mix as well as through pricing and increasing the return on investment on our promotions.

RGM continued to increase in importance during 2020 as a key growth catalyst and we continuously evaluated our approach to address consumer needs for affordability as well as premiumisation.

Our smaller multi-serve entry packs offer attractive price points for the consumer in a margin accretive way for us, while growing transactions in smaller baskets. Sales of the multi-serve entry pack format grew by 7.5% in the year, helped by the introduction of smaller PET packs in Russia and Poland.

When it comes to premiumisation, we have continued to expand our multi-pack offerings of single-serves, building on emerging opportunities like the socialising and meals-at-home occasions. These efforts have improved our single-serve mix in the at-home channel, growing volumes by +7.2% in 2020.

To further support premiumisation, we also increased the visibility of our glass packages and launched relevant innovations. We introduced Coke in returnable glass bottles in Austria and in Romania we increased the visibility of the 330 ml glass bottles. Our efforts in Romania have helped us drive more premium occasions at-home, achieving double-digit growth for the glass bottles for the second consecutive year.

Finally, we also continue to drive our portfolio price/mix, focusing on adult sparkling propositions which offer a higher revenue per case. In Russia, the introduction of new smaller packs for Schweppes, along with its expanded assortment, led to the brand growing 36.4% in the country during 2020.

Optimising sales and distribution models

In light of the changing landscape, we increased our efforts to strengthen our offering with existing customers as well as target new outlets. We were able to further optimise sales and distribution because our specialised sales force, intelligent cooler assets, ample use of technology and unparalleled execution make us the industry leader with the most extensive and flexible processes across our territory.

We employed external data and leveraged big-data advanced analytics capabilities in 2020 to update our outlet segmentation model and identify new high-potential outlets. We rolled out image recognition technology starting in Russia and expanding into Nigeria and Ireland, and we are ready to further scale it across our markets. This allows our salesforce to spend more time with customers, while obtaining more accurate and granular data from the outlets.

We have continued investing in new coolers to support our business growth and have reached 85% coverage of our top customer outlets. In parallel, we also continue to build our network of internet-connected coolers which help us drive the efficiency of our assets and enhance our sales teams'

productivity. We have a total of 1.4 million coolers on customer premises, and more than a third, 39%, have online connections.

In 2020, we developed and evolved a range of digital solutions for customer service and ordering, and to provide solutions for our customers' shoppers. One of these solutions is our Hybris platform, which has been transformed from a functional ordering platform to a user-friendly customer portal for business owners who want to order regularly or who have requests. The re-designed platform is used in 22 of our markets and has been a notable success. In Russia, for example, active users increased from 2,000 to 46,000 during 2020, with 18% of all orders in the country coming through this channel.

We also supported our customers with their digital transformation. We created e-Partnershop, an exclusive selling platform providing direct home delivery for our wholesaler customers.

This allowed them to shift their focus to online retailing due to the closures in the out-of-home channel.

In addition, we are investing further in the growth of our own direct-to-consumer platform in Switzerland, Qwell. The platform includes a web-based ordering system and a mobile application, which offers potential scaling opportunities.

Supporting customers through key account management

As we evolve into an even more customer- centric business, we need to ensure our people have the skills to build exceptional customer partnerships. We constantly assess our people's readiness and potential to take customer partnerships to the next level, and we address any gaps in skills.

In 2020, we designed and delivered a number of analytical tools in record time to help our key account managers analyse profitability in the new reality and take fast actions around investment, activities and assortment mix to drive improved profitability. This has enhanced and automated planning processes, in collaboration with our customers.

In light of the challenges our customers faced to maintain business continuity, we took the opportunity to redefine the role of our key account managers, better aligning our internal functions with those of our customers. This generated quicker actions and efficiencies on both sides, allowing for uninterrupted operations and delivering enhanced profitability.

We also supported our key account managers with training in negotiations.

This helps them successfully build plans with our retail partners.

KPIs

• OpEx as % of NSR
• CapEx as % of NSR
• Comparable EBIT margin
• ROIC

Stakeholders

Partners in efficiencies

Shareholders

Risks

• Cyber incidents
• Foreign exchange and commodity costs
• Geopolitical and macroeconomic
• Quality
• Sustainability: Plastics and packaging waste

Highlights in 2020

• No disruption to the supply chain, with all production plants and warehouses remaining operational
• Cost savings of €120m versus original plan, supporting profitability
• KeelClipTM installations in Ireland and Austria, as a first step to replace shrink film from can multi-packs across Europe
• Digital transformation investments to improve serving our customers and consumers, enhance employee experience and increase operational productivity

Priorities in 2021

• Enhance flexibility in production to support our 24/7 portfolio and innovation
• Kick off in-house production of recycled
PET pre-forms, ensuring availability at lower cost and boosting circular economy
• Continuous investment in packaging solutions that reduce carbon footprint and improve recyclability
• Enable Company-wide core processes digitisation leveraging SAP S4
• Further roll-out of augmented reality technologies and new production maintenance strategies

Prioritising safety from the beginning,

Coca-Cola HBC demonstrated strong resilience, maintaining production and avoiding any supply interruptions in our territory. This success required a mindset that encourages innovation, a willingness to embrace data and sophisticated digital technologies, and a culture of investing in people and capabilities.

To support local communities, we used our facilities and equipment in ways that we had never tried before. Whether it was producing custom-made hand sanitiser bottles in our plant in Northern Ireland or printing face shields using our 3D technology in Russia,

Nigeria, Poland and Romania, we did our best to address local needs by being agile and adaptable.

As the COVID-19 pandemic began in the first quarter of 2020, we took decisive and early action to reduce operating costs, delivering €120 millions of cost savings for 2020 versus our original plans. About 80% of these savings came from reduced direct marketing expenses as we worked with The Coca-Cola Company to prioritise in-store promotions and delay or adjust new product launches. There were also other sources of savings, including for business travel, meetings and events. This cost control helped support profitability as we faced lower revenues.

While spending will return to more normal levels as revenues recover, we do expect some cost reductions to be permanent.

One benefit of lockdown was learning we can operate effectively using new digital ways of working, with fewer physical meetings and less travel.

Optimising infrastructure

Despite a reduction in capital expenditure compared with our original 2020 plans, we continued upgrading production lines as required to keep up with our expanding 24/7 portfolio. Twelve production lines were installed in nine countries and we started installing equipment for KeelClip™, a minimalist paperboard packaging solution replacing shrink film for our can multi-packs.

We intend to continue with these investments in 2021.

To improve manufacturing efficiency, we continued investing in automatic line changeovers to reduce idle time, expanding production line capacity by nearly 1% annually.

This technology supports smaller runs of new products, helping us respond quickly to changing consumer needs and preferences.

We have launched a new maintenance strategy with a customised, condition-based approach to servicing important machinery. By replacing a standardised, planned maintenance approach with one that is more flexible, we have reduced maintenance costs by 10% over three years while limiting equipment downtime.

In 2020, we piloted new maintenance approaches in 25 production lines and we plan to implement this approach further in 2021.

Across the business, our optimisation efforts have resulted in a 30% reduction in plants across our territory, from 80 in 2008 to 56 at the end of 2020. At the same time, we increased our production lines per plant by 42% which allowed us to maintain our capacity and create more efficient and flexible facilities. To improve our service offering while reducing our costs, we have optimised our logistic network by reducing our distribution centres by 65% and our warehouses by 35% over the same time period. These structural improvements in the cost base and the shift of fixed costs to variable ones where possible, have created a lean and resilient operating model, able to maintain good profitability despite challenged revenues, as happened in 2020.

Fuel growth through competitiveness & investment continued

Leveraging technology and big data

Our ongoing investments in technology, together with the commitment of all our people, helped us move fast to tackle the challenges of the COVID-19 pandemic.

Expanding our capabilities in this area, we introduced new digital tools in 2020 related to customer and consumer centricity, remote working for our employees and operational productivity.

Following the outbreak of COVID-19, we moved quickly to have as many employees as possible work from home. Even though the number of employees working remotely doubled overnight in early 2020, we achieved a smooth transition and ensured business continuity, exploiting in full our systems' functionalities. Processes such as order taking, production planning, delivery, settlements and invoicing can all be handled by employees working remotely.

In less than one month, we managed to roll-out a multi-factor authentication system and enforced a stronger password policy to protect our digital corporate identities. Overall, we have aligned our cyber strategic programme with the NIST Cyber

Security Framework and we are continuously investing in cyber security in order to ensure business resilience. Our efforts have been recognised by the Dow Jones Sustainability

Index which ranked Coca-Cola HBC at 2nd place in Europe and 3rd globally for the cyber security criterion in 2020. In addition, our two main IT centres (Sofia & Athens) have been awarded the ISO 27001 certification in recognition of our Information Security Management System (ISMS) credentials.

Technology has proved invaluable in maintaining a healthy supply chain in the face of lockdowns and other restrictions. Fortunately, we had already been working with remote monitoring tools, such as virtual and augmented reality smart glasses, and we were therefore able to quickly expand use of these tools for remote quality, safety and environmental audits and virtual plant tours.

Augmented reality technology allowed engineers and operators to complete installations and commissioning of new production lines remotely, even at the height of the COVID-19 pandemic. Augmented reality technology also aids our warehouse colleagues in picking inventory from stock and combining goods for customer delivery.

It is currently used for a third of all picking orders, delivering near 100% accuracy and improving productivity.

The technology was introduced at eight additional sites in 2020, and we are working to introduce it in 11 more warehouses in

2021. We are also introducing a real-time transport tracking and traffic monitoring platform to step change supply chain visibility and give customers insight into the arrival time of our shipments.

As we expand our use of machine-learning algorithms for demand forecasting and planning, our next step is to combine all the elements of manufacturing into one digital platform for more insight into production lines, energy use and maintenance needs.

To transition our procurement online, we have completed the design of the SAP Ariba e-procurement solution with plans to launch in Romania in the first quarter of 2021 and roll out to additional countries by the end of the year. The Mercateo e-marketplace, offering significant cost-efficiencies in tail-spend activities, has been deployed in six countries while a new digital buying platform for trade marketing materials has gone live in 16 countries.

Our digital transformation also helped us support our customers and address the needs of consumers in a fast-changing environment. Our use of technology drove e-commerce solutions and helped us address new requirements for business-to-business and direct-to-consumer product distribution.

We acted to help wholesaler customers manage severe disruption to their businesses during the year. By analysing online delivery platforms, we identified difficulties in filling the increasing number of incoming orders. In response, we created a web shop in only two weeks for wholesalers, providing them with a direct path to consumers. This platform is now live in Armenia, Bosnia & Herzegovina, Greece, Italy, Ireland and Nigeria.

We also increased our investments in the Hybris business-to-business e-commerce platform. The new system design and functionalities transformed the platform into an easy-to-use customer portal for business owners who want to order regularly. The enhanced Hybris portal is available in 22 of our markets.

Innovations and investments reduce our environmental impact

Despite challenges and disruptions caused by the COVID-19 pandemic, we focused on our sustainability commitments and succeeded in improving and reducing product packaging. These efforts were supported during the year by online

Innovation Days for our suppliers where key strategic partners in packaging, manufacturing and digital supply chain applications shared their most innovative ideas.

To ensure we have a reliable supply of recycled PET (rPET) to achieve our 2030

World Without Waste target, we are investing in innovative technology for our

Krakow bottling plant in Poland. The installation of the SIPA EREMA system will allow us to produce ready-to-fill pre-form bottles from PET flakes we produce from pulverised PET waste. By skipping the production of PET pellets, the usual process for processing rPET, and finely pulverising PET to reduce the need for sorting, this technology cuts energy consumption, helps with ensuring rPET supply, decreases transport costs and boosts the circular economy. Our installation of the SIPA EREMA system in Poland is the first of its kind in Europe and will be completed in 2021.

In line with the EU's Directive on single-use plastic, we are on course to produce tethered caps for more than 90% of relevant packs by 2023, one year ahead of the deadline. We are also working to develop alternatives to plastic straws, cups and lids.

We have already introduced paper straws in

Italy and Croatia and will introduce these across Europe in 2021.

"Even though the number of employees working remotely doubled overnight in early 2020, we achieved a smooth transition and ensured business continuity, exploiting in full our systems' functionalities."

UN Sustainable Development Goals

Our sustained efforts to reduce our costs and improve our impact have generated significant results for our business, our communities, society and the environment. These results correspond to contributions to the Sustainable Development

Goals for clean water and sanitation, clean energy, economic growth, industry innovation, sustainable communities, responsible production, climate action, life below water and life on land.

To reduce our carbon footprint and improve recyclability, we introduced bio-based aseptic fibre packaging in Serbia with polymer-based internal layers derived from sugar cane, and continued with light-weighting initiatives, ensuring that all our packages are FSC (Forest Stewardship Council) certified. In addition, the cans we use are among the lightest in the market.

By the end of 2020, 50% of the material used for our corrugated cardboard was recycled content and we expect to use more than 70% recycled content in cardboard in 2021. KeelClip™ technology was installed in Austria and Ireland as a first step in our commitment to replace plastic wrap on all can multi-packs in our EU markets. This roll-out will be completed by early 2022, saving more than 3,000 metric tonnes of CO2 emissions and avoiding 2,000 metric tonnes of plastic each year.

During 2020, we launched our Green Fleet programme centred on the aspiration to reduce our vehicle CO2 emissions through new options of Electric, Compressed Natural Gas (CNG), Hybrids and Liquified Petroleum Gas (LPG) powertrains, where practical. We will continue with this initiative across the Company throughout 2021 and beyond, to support reductions in line with our science-based emissions targets while maintaining high-calibre fleet options at competitive pricing.

Managing sustainability risks in our supply chain

We consider our suppliers to be critical partners to the ongoing success of our business. We therefore consider sustainability within our supply chain to be as important as the management of sustainability issues within our own operations.

We monitor the performance of critical suppliers through supply base assessments, audits of compliance and an online platform from EcoVadis which helps us monitor risks using 21 criteria from international standard setters. In 2020, over 800 of our critical suppliers have been assessed using this platform, a 75% increase compared with 2019, and we plan to expand its use further for better supply chain monitoring.

In 2020, we revisited our procurement guidelines to implement stricter rules over human rights, ethics and compliance practices expected from our suppliers, and retrained our buyers' community about the sustainability risk assessment tools available for supplier selection and governance.

We have made significant progress together with our suppliers to assure or certify the farms where our ingredients are cultivated, but we also recognise that there is more we need to do. Together with our partners, The Coca-Cola Company, we have a target for sourcing our priority ingredients, including natural sweeteners and fruit juices, according to our Sustainable Agriculture Guiding Principles (SAGP). We apply these principles with our suppliers through preferred external third-party verifications and encourage suppliers to use sustainable farming standards to maximise value and contain their costs. This framework is integrated into internal governance and procurement processes.

In 2020, we sourced over 82.4% of total key commodities for use as ingredients from certified farms, an increase from 74% the prior year. We will continue our work in this area to achieve our 2025 ingredient sourcing target of 100% certification against our sustainable agriculture principles for our key agricultural ingredients.

Looking beyond the current COVID-19 pandemic environment, it's clear that connectivity based on augmented and virtual reality coupled with robotics and automated vehicles will become ever-more critical, allowing business supply chains to adapt quicker and react rapidly to all sources of disruption. To this end, we are working towards a truly end-to-end digital supply chain, which will strengthen planning, visibility and partnerships with suppliers, logistic providers and equipment manufacturers.

KPIs

• Employee engagement
• Percentage of managers that are women
• Lost time accident rate

Stakeholders

Our people

Risks

• Health and Safety
• People
• Geopolitical and macroeconomic

Highlights in 2020

• Protected our people's health and safety, and provided resources to cope in difficult times
• Listened to our people, acted on their feedback, strove to maintain morale, optimism and performance staying true to our Company values
• Prepared for the new normal, established and promoted new ways of working
• Prioritised development of talent and organisational capabilities that support our long-term growth

Priorities in 2021

• Accelerate the development of talent and the prioritised organisational capabilities for growth
• Drive new ways of working to enable our people to be more productive, resilient and adaptable, and provide care and support to preserve their wellbeing
• Continue building a diverse workforce that reflects our customer base and communities, and an inclusive workplace for all
• Nurture the mindset, skills and value-based behaviours of the evolving profile of leadership for the new era, invest in our leaders' development and inspire them to grow

Our Growth Mindset ValuesWinning with customers

We are the selling organisation devoted to providing innovative solutions to create shared value.

Nurturing our people

We believe in our people, and have a passion to develop ourselves and others.

Excellence

We strive for unparalleled performance by amazing customers with our passion and speed.

Integrity

We always do what is right, not just what is easy, and are accountable for the results.

Learning

We listen, have a natural curiosity to learn and are empowered to take smart risks.

Performing as one

We collaborate with agility to unlock the unique strength of diverse teams.

A foundation of trust

In a period of tumultuous change, our strength was our ability to trust our people to do the right thing. Our most important decisions and actions in 2020 involved protecting our people and listening to find out what they needed to stay safe and to support and care for our customers, ensuring the continuity of our business. This was true across our markets struggling with pandemic-related restrictions, but also in war zones such as the conflict in Armenia.

Our trust in our people was re-confirmed in 2020 as we witnessed their impressive dedication and extraordinary efforts.

By striving to create an irresistible place to work, where our people feel heard, valued and supported in their safety, wellbeing and personal and professional growth, we seek to re-confirm their trust in our Company.

Supporting our people in the COVID‑19 pandemic

Our first and primary priority for 2020 was to ensure the safety of our people, as well as our customers, partners and communities. This was the focus of our Company leadership as well as the cross-functional teams leading our COVID-19 pandemic response across the Group and in each market.

There have been significant changes to how work is done and how we keep ourselves and others safe. Special guidelines and protocols were developed and implemented across all our facilities, including the use of personal protective equipment.

Very quickly, we encouraged approximately 10,000 employees to work from home.

We upgraded connectivity and provided the digital collaboration tools they needed to continue to be productive and successful. We expanded communication channels to ensure that our people remained well- informed and our front-line leaders maintained a dialogue with their team members. For further support, we also set up webinars on remote working, resilience and wellbeing.

Family members were also offered support. We introduced a global employee assistance programme, providing 24/7 confidential support service for our people and their families, whereas previously only some markets had such a plan. Through an external partner, the programme offers trained specialists for challenges ranging from work-related issues and relationship difficulties to isolation and trauma support.

In early April, when the COVID-19 pandemic began to dramatically affect our markets, we were quick to adjust different rewards and benefit plans, while we maintained all incentives for employees working on the front lines with our customers as well as in our plants, to maintain supply. At the same time the Operating Committee forfeited their own merit increases and instituted pay increase freezes.

We were quick to find new ways to work with each other and to collaborate with each other and our customers. Beyond our short-term crisis management response, we used agile principles to work out our mid-term response to the changing commercial and talent market place, with 145 people collaborating across 14 cross-functional and cross-market teams.

This project, called Key Initiatives for

Tomorrow, defined priorities regarding commercial activities and organisational capabilities as well as digital tools needed to navigate the coming period.

We were also very quick to listen. It was essential to really understand what our people needed in different markets, all with different restrictions but radically changed operating environments. We conducted three all-employee surveys, with special pandemic-related surveys in May and July 2020, in addition to our annual Employee

Engagement Index Survey later in October.

Survey results helped us understand what worked, and where more help was needed.

By October, results showed that 90% of respondents felt well-informed, 93% were satisfied with the protective equipment and 95% were aware of pandemic-related safety protocols. We found that 16% of our people required more support from their direct manager, and we took immediate action to address this need. In Hungary, our leaders publicly re-committed to supportive leadership behaviours and in Nigeria we re-trained our people through simulating typical situations where our people required support and showcasing the leaders' potential responses.

Cultivate the potential of our people continued

To increase support and peer learning, we built communities with virtual networking sessions for our people to connect and share their experiences. Our revived weekly

Group-wide news bulletin, 'We Stay

Connected,' offered tips on self-care and employee support, as well as other tools for peer learning and sharing. It was also used to share information about what we were doing across the markets to support our people, customers and communities and how our business was adapting to the new environment.

Health, safety and wellbeing

While we undertook many new measures to ensure the safety and continued health of our people in the extraordinary environment of 2020, our workplaces have become increasingly safe over the past few years and we aim for continual improvement. In 2020, we continued our focus on behaviour-based safety programmes implemented in 53 of our production plants and warehouses as well as in 18 markets for our sales employees.

Of the barriers to safety identified under this programme in 2020, 72% have already been fully eliminated.

Employee accidents in our workplace fell for the 11th consecutive year in 2020. We achieved a Lost Time Accident Rate of 0.23 compared with 0.33 in 2019. This 30% improvement reflects the best result we have achieved as a Company. The overall

Lost Time Incident Frequency Rate for Coca-Cola Hellenic contractors fell by 16% in 2020 compared with 2019.

While there were no employee fatalities, we regret to report that two contractors died in road accidents during the year.

This compares with nine contractor fatalities in road incidents in 2019.

Our fleet safety training programmes aim to improve safety for all drivers within the Group. The number of accidents per million kilometres travelled fell to 2.20, compared with 2.63 in 2019.

Lost Time Accident Rate trend (# LTA per 100 FTE)

0.0

We adapted our wellbeing framework and programmes early on in 2020 and quickly introduced changes addressing the COVID-19 pandemic. In some markets, we enhanced our insurance programmes, providing more consistency in coverage for all our people.

Different wellbeing programmes are available in different markets, but our employees are offered programmes for healthcare, dependant care, financial support and emotional wellbeing. Relevant initiatives include medical and health insurance benefits, preventative measures such as medical check-ups, a savings scheme and life insurance, as well as counselling and relaxation techniques.

A culture of sharing, learning and adaptation

One of our greatest strengths is our values-based culture. It was a source of resilience as our common beliefs helped us adapt with speed and flexibility as the

COVID-19 pandemic spread. It also allowed us to prioritise our actions based on limited available data and most importantly to care for our people and their safety.

As we seek to increase support and sharing to empower our people, we have introduced storytelling tools like Red Talks to help our people connect and get inspired by each others' experiences. Importantly, this is as much about learning from failures as successes.

We introduced storytelling at our Top 300 leaders conference in 2020 with a subsequent roll-out across our markets. The COVID-19 pandemic required us to adapt tools for this, helping people use smart phones to film their stories about learning from failures and growing as a result of challenges. This approach helped with connection and supported peer learning.

In addition, our Red Talks storytelling programme shares stories of personal transformations across the Group, inspiring our people to change, grow and adapt for success in a rapidly changing environment.

Our recent transition to ongoing performance conversations with mutual accountability served us well in the new working environment of 2020. We know that continuous feedback, as opposed to one-off annual reviews, makes us a better company, helping our people learn and adapt. More than 75% of our people with on-line access provided feedback to their managers in the last quarter of 2020.

We conducted three all-employee surveys during the year to better understand what our people needed. Our Employee Engagement Index score, the outcome of a survey conducted in October 2020, was 88%.

2009

2018

2019

2020

2025 goal

This represents a drop of two percentage points compared with our 2019 survey

Employee engagement: outperforming peer companies (%)

2017

2018

2019

2020

results while participation remained high at 75% of our workforce.

The drop in 2020 reflected a change in responses from employees working on the front lines in production plants and warehouses. Survey responses from employees able to work remotely remained steady.

While respondents confirmed that they have the right resources and tools to perform their work, there was interest in even greater support from line managers.

We immediately acted to address this important finding, introducing new tools to help leaders support our people.

We continue to benchmark our employee engagement against other high-performing companies, partnering with Qualtrics, our new partner in measuring company culture. Our 2020 results were three percentage points above the Qualtrics Global Top Decile Norm, which represents the top 10% of more than 15 million people from more than 350 companies.

Unlocking our unique strengths and building new capabilities

As a Company, we are focused on developing organisational capabilities that support our success and long-term growth. Half way through 2020, our Key Initiatives for

Tomorrow project, which leveraged agile methods with cross functional teams, developed our mid-term responses to the changing operating environment and also highlighted the changing importance of certain organisational capabilities. This led us to a full review of all our organisational capabilities, and subsequent review of organisational design and resource allocation required for them. These works confirmed the relevance of our Growth Story strategy, including the capabilities needed to support it: big data and advanced analytics, revenue growth management, route to market, key account management, disciplined innovation and talent development.

UN Sustainable Development Goals

Efforts to foster an engaging workplace, nurture and develop the capabilities of our people, increase gender balance in our management ranks and reduce stress and support employee wellbeing all contribute toward global goals for development. The specific Sustainable

Development Goals supported are those for: good health and wellbeing; gender equality; decent work and economic growth; reducing inequalities; and peace, justice and strong institutions.

To help our people adapt to evolving customer needs and based on the insights from the advanced analytics of business developers' performance and retention, we developed and launched a comprehensive developmental experience for our sales force. The new digital Sales Academy was successfully piloted in Poland, Romania and Russia in 2020 and roll out to other markets will take place in early 2021. More information about the Sales Academy is in the Win in the marketplace section of this report on pages 30 to 33.

With about half of our employees working remotely, digital tools became more necessary and important. Our digital capabilities, that we have been building for some years to democratise learning, helped us to adapt quickly to the new environment and move the majority of the volume of learning to a digital setup. More than 800 internally developed digital learning resources are available including, commercial and leadership skills, compliance training and tools relevant for the COVID-19 pandemic. Virtual learning events were popular in 2020, attended by 12,000 employees. This includes our first Learn Fest which was attended by 5,000 of our colleagues. New functionalities were added to our cloud-based platform for all online employees, HELO (hiring, empowering and learning online), which now also has a new digital assistant to quickly answer questions about programmes and policies.

Learning through conversations and knowledge-sharing complements formal learning. In 2020, 700 mentors and 70 newly certified internal coaches accelerated the development of more than 1,400 employees. Our mentoring programme was recognised as the 'Best coaching and mentoring initiative'

by the CIPD People Management Awards 2020, which praised the initiative for its 'impressive rigour and scale'.

A passion for talent development

The COVID-19 pandemic provided valuable insights about the mindset, skills and tools required for our leaders in a changing business and talent environment. Our ability to internally develop the next generation of leaders to be ready for the future is more important than ever.

Even during the most difficult times of the COVID-19 pandemic, we continued to focus on and evolve our Talent Review Framework towrds ongoing, structured discussions on talent. We aim to identify future leaders earlier in their careers and to provide more opportunities for them to get important development experiences fast. Our focus also remains on building talent pools for key commercial roles across our territories, and in 2020 we continued mapping the market, sourcing new capabilities while working internally on strengthening the development of commercial leaders and their successors.

Leadership acceleration centres were fully digitalised in 2020 to support unlocking the potential of future leaders. The centres help our people improve their development plans through an understanding of their strengths and the areas of opportunity for progress in their current and future roles.

In 2020, our Fast Forward experiential learning programme accelerated the transition to new leadership roles for 490 people. This programme was recognised by the Global Association of Talent

Development 'Excellence in Practice' award for its overall architecture and quality.

We have also increased our focus on cross-functional moves, which is enabling us to develop new organisational capabilities with new skills as we adapt to the changing world.

The pandemic created a new environment with many new projects. To match project opportunities with the right people and skills, we leveraged our Opportunity Market

Place application. Nearly 500 people were appointed through this cloud-based tool, helping us grow our internal talent through new experiences and acquire new skills faster.

To support our efforts to recruit the best teams, we extended our social media presence in 2020 despite the pause in all activities between July and September, taking part in a larger movement against racism and hate speech on social media.

As a result of our Employee Advocacy programme launch, we are proud to see nearly 300 of our employees posting positive stories about their working experience, acting as ambassadors. We are particularly proud of the 77 (+28% vs. 2019)

recognitions we received across 28 countries reflecting different measurements of employer attractiveness.

Championing diversity, inclusion and human rights

The percentage of management roles held by women edged up by half percent in 2020, to 38%. At the end of 2020, women made up 29% of our total workforce.

We foster diversity in our talent pipeline by aiming to recruit a balanced number of male and female candidates, particularly for our management trainee programme.

To enable our leaders to promote an inclusive environment, we continued the roll-out of

Inclusive Leadership modules, with more than 1,000 participants by the end of 2020.

To support our long-term efforts to develop a workforce that reflects the diversity in our markets, we began training our human resources staff in 2020 to identify and disrupt bias in people decisions and to constructively intervene to ensure optimal talent decisions.

To mark International Women's Day in March 2020, we ran an internal communications campaign, also shared through social media, to promote our position challenging stereotypes at work: #nojobhasagender. We also stepped up efforts to engage with external organisations driving inclusion. Some 20 of our women leaders participated in the Women's Forum and Women's International Network in 2020, increasing our exposure to best practices.

In 2020, our CEO acted as a judge in the WeQual Awards, designed to recognise women at C-suite minus one level in FTSE companies, and participated in events of the EU LEAD Network in the retail and consumer goods industry, which promotes the acceleration of gender inclusion.

Some 20 of our women leaders participated in the Women's Forum and Women's International Network, increasing our exposure to best practices.

Our Human Rights Policy and our Code of Business Conduct are on our website athttps://www.coca-colahellenic.com/en/ about-us/corporate-governance/policies. We regularly review these as well as our internal standards to ensure we adhere to all applicable laws and regulations and demonstrate best practice as stakeholder expectations evolve.

KPIs

• Mission 2025 sustainability commitments

Stakeholders

Our people

Our communities

Our consumers

Partners in efficiencies

NGOs

Our shareholders

Government

Risks

The Coca-Cola

Company

• Sustainability: Plastics and packaging waste
• Sustainability: Climate change
• Sustainability: Water availability and usage
• Ethics and Compliance

Highlights in 2020

• Community support during the
COVID-19 pandemic
• New science-based targets for 2030 set for emissions reduction across the value chain
• Solar panels installed in three plants in Nigeria
• Romanian Dorna water brand launched in 100% rPET
• KeelClip™ paperboard solution for can multipacks launched in Northern Ireland, Republic of Ireland and Austria

Priorities in 2021

• Reduce emissions scope 1, 2 and 3 in line with 2030 science-based target
• Develop plan to reach net zero emissions by 2040
• Continue reduction of water consumed in priority plants
• New technologies for in-house recycled PET production
• Launch of KeelClip™ paperboard solution for can multi-packs in Italy, Switzerland, Romania, Poland and Greece

Community support during the COVID‑19 pandemic

Our people and their safety are always our priority. Throughout the COVID-19 pandemic, we have operated under the World Health

Organization's health and safety guidelines to avoid any health risk to our people. We are committed to continually improving safety in our workplace, and our efforts in 2020 achieved a 30% reduction in Lost Time Accidents (LTA) compared with 2019.

The COVID-19 pandemic spotlighted the deep interconnections between our business and the communities where we work. To support vulnerable groups, medical staff and health care workers as well as our customers that continued serving our communities, we have partnered with

The Coca-Cola Company, the Red Cross, Caritas Austria, the Bulgarian Donors' Forum, and the Bodossaki Foundation in Greece amongst other organisations.

Thanks to the Coca-Cola Foundation, we provided donations and support packages for those fighting COVID-19 on the frontlines in all of our markets and we have donated approximately 5 million litres of our products to hospitals, shelters, NGOs including the Red Cross, and food banks.

We have also leveraged our own supply chain, for instance using our 3D printers for protective face shields, producing special bottles used for hand sanitiser, or using a microbiological detector for laboratory tests in a hospital.

We also used vending machines to offer masks in shopping malls and smaller cities.

Our people supported communities by volunteering, for instance helping the Red Cross to pack care packages for those in need, supporting retail initiatives setting up medical units or participating in initiatives to help vulnerable people at home.

A comprehensive overview of our initiatives in different markets can be found on our website.

Employment skills for young people

With the grave economic disruption resulting from the COVID-19 pandemic, our #YouthEmpowered initiative to improve the employability of young people is more important than ever. We continued to accelerate our flagship programme in 2020. 134,5481 young participants benefitted from the programme's modules, with more than 330,000 participating since #YouthEmpowered was launched.

While many of our initial plans for improving the effectiveness and impact of the programme, including workshops and trainings were challenged by lockdown measures, we continued to make progress with digital formats.

Total community investment 2020

1. In 2020, the definition of #YE was amended and we included specific requirement for the training duration.
2. Excluding donations from the Coca-Cola Foundation for specific COVID-19 pandemic frontline activities.

Earn our licence to operate continued

Modular #YouthEmpowered curriculum

Social skills

• Understanding & development of self
• Interaction
• Feedback
• Communication

Business skills

• Business planning
• Financial literacy
• Project management
• Sales skills
• Negotiation skills

• Time managementIn Bulgaria, Hungary, Ukraine and various other markets, we were able to step up engagement with young people through digital platforms re-designed for a local approach. During the year, #YouthEmpowered was recognised as the best innovative project for Ukrainian youth. Our iLearn platform helps the country's students prepare for their graduation exams.

In Italy, we redesigned the

#YouthEmpowered partnerships and turned physical workshops into online webinars and we continued our award programme recognising excellence and leadership for girls in science, technology, engineering and maths (STEM). In Croatia, Greece, Russia and Serbia, we re-oriented #YouthEmpowered tools to support the hard-hit hospitality and tourism sectors.

In Russia, for example, we created a special edition of #YouthEmpowered for hotels, restaurants and cafés, with modules designed to build skills and re-train employees.

As the COVID-19 pandemic ends and economic recovery begins, we will continue to engage, refining our efforts for greater impact and seeking to reach one million young people across our markets by 2025.

Supporting our communities to learn

We include NGOs and community partners in our leadership development programmes. During 2020, we offered our managers and our partners online sessions for managing virtual teams and leading in times of crisis.

We also offered special training in a few of our markets. In Nigeria, we partnered with the US Agency for International Development to offer a professional course called

E-WASH (effective water, sanitation and hygiene services) combined with leadership skills, and in Russia, we offered online training in co-operation with the Moscow School for Professional Philanthropy. As a result of these efforts, we have already reached the 2025 target as 13% of the total trained participants in our development programmes were community partners.

Absolute Scope 1 and 2 CO2 eq emissions

('000 tonnes)

Absolute Scope 3 CO2 eq emissions

('000 tonnes)

Renewable and clean* electricity in operations European Union and Switzerland (%)

0 2017

2018

2019

New targets to reduce emissions by 2030

2020

2030 goal

Coca-Cola HBC was among the first companies that committed to a science- based emissions target in 2016. In 2020, we set new 10-year targets across our value chain which will contribute to the aims of the Paris Agreement, to limit global temperature rises to 1.5oC.

In the next 10 years, we plan to reduce our absolute emissions for our direct operations and production, (scope 1 and 2) by 55% compared with the 2017 baseline levels.

Indirect emissions categorised as scope 3, including those associated with distribution and our supply chain, will be reduced by 21%. Those targets have been reviewed and approved by the Science Based Targets initiative, external experts who assess our plans using a rigorous scientific methodology.

Transitioning energy across our operations

In 2020, we made progress against our Mission 2025 commitments despite the challenges arising from the COVID-19 pandemic. We made significant strides in ramping up the use of renewable and clean electricity in our operations with an increase of 7.4% in the EU and Switzerland, reaching 96.7% and an increase of 1.6% across all 28 markets, reaching 44%. We installed renewable energy projects in Nigeria, placing a total of 8,720 solar panels on the roofs of our bottling plants in Maiduguri, Abuja, Asejire and Challawa.

0 2017 2018 2019 2020 2030 goalThese installations are connected to the local electricity grids and have already saved 690 tonnes of CO2 emissions in 2020. They will bring savings of 1,250 tonnes of CO2 emissions per year. All of our electricity needs in Italy, Poland, Lithuania, Croatia, Austria, Switzerland, Northern Ireland, Hungary, Czech Republic and Greece, are generated from renewable sources, saving 87,500 tonnes of CO2 emissions per annum.

In Serbia, we switched to using 100% renewable electricity from the power grid. In Switzerland, our bottling plants were also certified by Swiss Climate as CO2 optimised.

We have also continued to invest in energy optimisation projects across our markets, assessing and selecting projects using our defined internal cost of carbon:

1. In Austria, we have upgraded the hot water boiler, pumps and heat exchangers which will reduce annual use of electrical energy by 2 million kWh.
2. In Belarus, Romania and Czech Republic, we have introduced efficient LED lighting at our manufacturing sites (plant, offices and pathways), reducing the annual use of electrical energy by 290,000 kWh.

0 2017

2018

2019

2020

2025 goal

* Clean source means CHP using natural gas.

3. In our plants in Kostinbrod (Bulgaria), Timisora (Romania) and Sarajevo (Bosnia & Herzegovina) and Duna (Hungary), we have introduced new high-pressure compressors and optimised our equipment processing, delivering 1.4 million kWh of electrical power savings in 2020.
4. In our operations in Greece and Cyprus, we have optimised several operation systems by assessing air leaks and removing them, improving engines in the ventilation system for fillers, enhancing insulation for the hot water systems, advancing the performance of hot water boilers, as well as optimising the cold storage and handling areas. By means of these measures, we have the potential to lower the electrical power usage by 1.6 million kWh annually.

Green Fleet programme

Our efforts to tackle emission reductions extend throughout our value chain, including Company vehicles. In 2020, we launched a Group-wide Green Fleet programme in order to significantly reduce our scope 1 emissions and third-party fleet scope 3 emissions by 2030. As part of our logistics strategy, we will progressively transition the light and heavy fleet to more environmentally friendly powertrains.

Earn our licence to operate continued

UN Sustainable Development Goals

Our community initiatives contribute to the Sustainable

Development Goals (SDGs).

Our initiatives to empower youth and women contribute to the goals for quality education, decent work and economic growth, sustainable cities and communities, and partnerships. Our initiatives regarding water stewardship, CO2 emissions reduction and waste reduction aid global progress towards the

SDGs for clean water and sanitation, and climate action. Our initiatives in communities help advance the global objectives of good health and wellbeing, and sustainable cities and communities.

1. • bPET is PET made from biological or renewable resources (e.g. plant-based PET).

• Our current approach favours the use of rPET over bPET. However, we remain open to the use of PET from renewable sources in the future.

Sustainable packaging

As part of The Coca-Cola System's World Without Waste initiative, in 2020 we continued to work with our suppliers to design more sustainable packaging and act to ensure that our packaging does not end up as waste.

Our commitments and action plans:

• Recover 75% of our primary packaging for recycling by 2025 and 100% by 2030
• Make 100% of our packaging fully recyclable by 2025
• Increase the percentage of recycled
PET in our bottles from the current level of 10% to 35% by 2025 and to 50% by 2030. In our EU countries, we plan to reach 50% rPET by 2025
• Eliminate unnecessary packaging by light-weighting primary packaging and removing shrink film from multi-packs
• Expand reusable packaging in 'refillable'and in 'dispensed' formats from their current levels of 12% and 4% respectively
• Innovate to deliver new sustainable packaging solutions through partnerships and R&D

Packaging collection

A total of 44% of the bottles and cans that we placed on the market during the year were either refilled or collected for recycling.

To collect 100% of our packaging by 2030, significant change in national collection system infrastructure is required in most of our territories. To that end, we support well-designed, industry-led collection schemes. In 2020, we funded or contributed to 10 new modelling studies to help design the most efficient, high-performing collection systems.

Deposit Return Schemes (DRS) are an appropriate, workable solution - especially in the European Union, where 90% separate collection of PET bottles by 2029 is mandated by the Single Use Plastics Directive. A mandatory DRS typically takes two to three years to design and implement and a further three years before it reaches the high rates of collection that we see with existing schemes in countries such as

Estonia or Lithuania.

Given the fact that many countries in our territories are beginning or considering a transition towards DRS, we expect to see future increases in our collection rates following the implementation timeline for these new schemes, with most significant changes anticipated in EU countries from 2022 to 2025.

In 2021, we will continue to advocate for collection infrastructure improvements through modelling work and ongoing support of recovery organisations in all our countries.

rPET

In 2020, 9% of the PET that we purchased was recycled (rPET). This is lower than the 12% reported for 2019, which was a combined figure for both rPET and bio PET (bPET). The decrease in 2020 was driven by several factors, which included:

• A move away from the use of bPET1
• Changes in pack mix, channel mix and volumes linked to COVID-related changes in purchasing habits, especially for packaged water.

In 2021, we expect to significantly accelerate our overall rPET usage, as we introduce new 100% rPET packs in several markets for water brands and key Coca-Cola packs.

This acceleration will be supported by the introduction of some innovative new technology. The SIPA/EREMA 'hot washed flake to pre-form' technology will allow us to manufacture 100% rPET pre-forms directly from hot washed PET flakes. Hot washed flakes, which are produced from washed and shredded post-consumer PET bottles, are widely available at a more affordable price than food-grade rPET pellets, thus having the potential to support easier access to recycled materials with a significantly lower price premium versus virgin PET. The technology will also help us to reduce energy consumption for 100% rPET pre-forms by 30% - a real win-win. Our first SIPA/EREMA system will be installed in our Krakow plant in

Poland in 2021 and we expect to expand this technology to more countries in the future.

Secondary packaging

In 2020, together with our partners, we developed and launched the new plastic- free 'Grip & Go' pack for can multi-packs using the KeelClipTM technology, which requires 30% less carton than other solutions in the market and uses cardboard from sustainably managed forests. 'Grip &

Go' packs were introduced in Ireland,

Northern Ireland, and Austria with positive feedback from both consumers and customers. Italy, Switzerland, Poland, Romania, and Greece will follow in 2021 and all EU countries will have 'Grip & Go' packs by early 2022. The initiative will save more than 3,000 metric tonnes of CO2 and 2,000 metric tonnes of plastic each year.

In 2021, we will also look at developing the next generation of multi-pack solutions for cans with 'ECO-KeelClipTM'. This evolved format will further reduce carton usage, delivering an additional reduction in the carbon impact of can multi-packs.

Securing water availability

Coca-Cola HBC is supportive of

The Coca-Cola Company's 2030 Water Framework. The objectives include reducing shared water challenges, improving watershed health and sustainable supply chains as well as enhancing community water resilience with a focus on women and girls.

Russia, Nigeria, Armenia and Cyprus. In line with our Mission 2025 and to act where it matters most, we are committed to improve water efficiency in these areas by 20% in 2025 versus the baseline of 2017 and to help to secure water availability for the communities and environment.

As a result of the new framework, we have reclassified our water priority plants (production facilities in water stress areas, or in areas which lack access to drinking water). Based on this classification, 19 of our 541 bottling plants are waterpriority plants.

These plants are in Bulgaria, Greece, Italy,

We have reduced our water use rate, which is the volume of water used per litre of beverage produced, in our water priority plants by 7.5% compared with the 2017 baseline. The improvement of the water use rate of all our plants has saved 256 million litres versus 2019. We achieved these reductions by optimising cooling towers, boilers and cleaning processes as well as through reuse of backwash water and package rinse water.

In 2020, we have also completed the certification of all of our bottling plants against the standards of the Alliance for

Water Stewardship or the European Water

Stewardship, with the exception of recent acquisitions (Lurisia and Natura plants), where certification is still ongoing.

Water use ratio in water priority plants (litre/litre of produced beverage)

The certifications confirm that we meet the global benchmark for responsible water stewardship, with 31 bottling plants achieving a Gold or PlatinumStandard certification.

To secure water availability for local communities in Nigeria, we trained a total of 217 participants from five state municipal water suppliers. This training was done in partnership with the Research Triangle

Institute (RTI International) and US Agency for International Development with the aim of developing technical and managerial capabilities, supporting the municipal supplier to secure water availability in the communities.

1. This number only includes beverage producing plants.
2. Water priority locations are defined based on our comprehensive risk assessment (i.e. access to WASH, water stress and other local risks).

Leadership positions in ESG benchmarks

We were again rated Europe's most sustainable beverage company in the 2020 Dow Jones Sustainability Index. In addtition we also received an 'A' score in the CDP ratings for climate change and water.

In 2020, we also retained our leadership positions and scores in various other ESG benchmarks, for example MSCI ESG,

FTSE4Good, ISS ESG and Vigeo Eiris.

48 COCA‑COLA HBC

Key performance indicators

Tracking our progress

We measure our performance against our strategic objectives using specific KPIs.

These KPIs allow us, and our stakeholders, to track our progress in delivering on our targets.

These are also the financial and operational milestones which we focus on in implementing our Growth Story 2025 strategy.

1 LEVERAGE OUR

GROWTH PILLAR

2 WIN IN THE

GROWTH PILLAR

UNIQUE 24/7 PORTFOLIO

MARKETPLACE

How we measure our progress

Volume growth (%)

Volume is measured in unit cases, where one unit case represents 5.678 litres. For Bambi volume, one unit case corresponds to 1 kilogram. We grow volume as we expand per-capita consumption of our products.

6 4.2

What happened in the year 2020 volume declines were contained at 5.7%, or 4.6% like-for-like, after a notable improvement in the second half with good recovery in Q3 and resilience in Q4.

Link to remuneration

Although revenue will continue to be a measure for MIP awards (and thus volume too as a key component of revenue), for 2020 it was not.

The only two KPIs for MIP awards in 2020 were Comparable EBIT and free cash flow.

-6

Read more on page 124.

How we measure our progress

We measure revenues on a currency-neutral basis to allow better focus on the underlying performance of the business. We grow FX-neutral revenue per case through pricing as well as driving positive category and package mix.

Currency‑neutral revenue per case growth (%)Currency‑neutral revenue growth (%)

5.9

6.0

What happened in the year Currency-neutral revenue per case declined by 4.1%, seeing a stabilisation of trends in the second half with the benefit of improved trends in package mix. Currency-neutral revenue declined by 9.6%, or by 8.5% on a like-for-like basis.

Link to remuneration

Although revenue will continue to be a measure for MIP awards, for 2020 it was not. The only two KPIs for MIP awards in 2020 were Comparable

EBIT and free cash flow.

Read more on page 124.

Performance, unless stated otherwise, is negatively impacted by the change in classification of our Russian juice business (Multon), from a joint operation to a joint venture, following its re-organisation, and positively impacted by the inclusion of H1 2020 performance of Bambi, the acquisition of which was cycled in H2 2020. In addition, profitability is positively impacted by the Group's election to classify share of results of integral equity method investments within operating profit. Like-for-like performance adjusts for all three impacts.

For a table of performance measures excluding these impacts, please refer to the 'Supplementary information' section.

3 FUEL GROWTH THROUGH

GROWTH PILLAR

COMPETITIVENESS & INVESTMENT

How we measure our progress

We measure this by Comparable OpEx as a percentage of NSR and by Comparable EBIT margin. We generate positive operational leverage as we grow revenues on our efficient cost base.

What happened in the year

Comparable OpEx as a percentage of NSR increased by 40bps, closing the year at 27.3%. Comparable EBIT margins declined 20bps on a like-for-like basis, a strong performance considering the de-leverage from revenue decline.

Link to remuneration

Comparable EBIT is a measure for MIP awards.

Read more on page 124.

2017

2018

2019

2020

2017

2018

2019

2020

How we measure our progress

CapEx as percentage of NSR (%)

ROIC (%)

We measure CapEx as a percentage of NSR, and ROIC, to ensure prudent capital allocation and efficient working capital management.

7.6

Disciplined investment supports our growth.

14.2

What happened in the year

CapEx as a percentage of NSR expanded to 7.6%, while CapEx declined by 3.9% year on year.

We reprioritised investments to focus on what mattered most in a year impacted by COVID-19.

ROIC declined to 11.1% due to lower operating profit and a higher level of net debt.

Link to remuneration

ROIC is a measure for PSP awards.

Read more on page 124.

0 Global Top

Decile normEmployee engagementRead more on page 124.

Sustainability performance

EARN OUR LICENCE TO OPERATE

Sustainability areasMaterial issues

UN's Sustainable Development Goals (SDGs) and their targets

Mission 2025 - our sustainability commitments

Climate and renewable energy

• Climate change
• Economic impact

7.29.4 7.3

11.6

12.213.1

Sustainability is integrated across every aspect of our business.

It is fundamental to our business strategy, which aims to create and share value with all of our stakeholders.

Our Mission 2025 approach is based on our stakeholder materiality matrix and is fully aligned with the United Nations Sustainable

Water reduction and stewardship

• Water stewardship
6.1
- 9.411.6
• Economic impact

6.4

6.5

6.6

12.1

15.117.17

12.2

Development Goals (SDGs) and their targets. Our six key focus areas reflect our value chain: reducing emissions; water use and stewardship; packaging (World Without Waste); ingredient sourcing; nutrition; and our people and communities.

12.4

World Without • Packaging and waste

8.4

9.411.6
Waste
management
- • Economic impact
12.112.2
14.117.17

We are on track to meet our

12.5

Mission 2025 commitments.

The table provides data on the progress of each of the six sustainability pillars.

Ingredient sourcing

• Product quality
8.3
9.4
12.1
• Human rights, diversity and inclusion
8.8
12.2
12.4
12.6
• Economic impact
13.1
12.7
• Sustainable sourcing

Nutrition

• Product quality
3.4
12.8
• Nutrition
• Responsible marketing

Our people and communities

• Human rights, diversity and inclusion
3.4 4.35.5 3.6 4.4
• Employee wellbeing and engagement
8.5 10.211.6
• Corporate citizenship
8.6 10.4
8.8
• Packaging and waste
management 12.216.7 17.16
• Economic impact

12.4 17.17

Note: The 17 Sustainable Development Goals (SDGs) are an urgent call for action by all countries - developed and developing - in a global partnership. Each of the 17 goals has very specific targets, referenced by the numbers shown above. You can read more about the SDGs and these targets here:https://sustainabledevelopment.un.org/sdgs.

20% water reduction in plants

located in water-risk areas

In 2020, we aligned the number of locations with

(water priority locations)

The Coca-Cola Company and the total number was increased from 16 to 19.

100%

help secure water availability for all our communities in water-risk

21%

See the text above.

areas (water priority locations)

Four projects out of 19 locations.

75% help collect the equivalent of 75% of our primary packaging

44%

COVID-19 pandemic impact on: pack mix (less RGB more PET), and collection/sorting.

35%

of total PET used from recycled PET and/or PET from renewable material

Move away from the use of bPET, COVID-19 pandemic- related changes in pack mix, channel mix, and lower volumes of packaged water.

100% 99.9%

of consumer packaging to be recyclable3

100% of our key agricultural ingredients agricultural principles

82%

sourced in line with sustainable

COVID-19 pandemic required to take alternative supply for sugar that was not certified.

25% 10%

reduce calories per 100ml of sparkling soft drinks

11%

(all CCH countries)4

Driven by the increase in sales of Coca-Cola Regular and introduction of Fanta PET 500ml in Nigeria.

community participants in first-time managers' development programmes

13%

We overachieved our 2025 target.

Key for performance status

1 MLN train one million young people through #YouthEmpowered

338,413Cumulative number 2017-2020, 2020-only number is 134,548.

engage in 20 zero waste partnerships (city and/or coast)

Each of the Mission 2025 commitments is broken down into a series of annual targets that need to be met in order to be fully on track with our 2025 goal. The colour coding below reflects the current status in relation to the desired position at this point in time on the trajectory towards 2025, i.e.

10%

of employees take part in volunteering initiatives

Due to the COVID-19 pandemic, no mass volunteering events were possible.

We are fully ahead or on track to meeting the target

ZER0 target zero fatalities among our workforce

ZER0

We are not fully on track, but we do not believe there is risk to meeting the target

50% reduced (lost time) accident rate per 100 FTE
43%
30% reduction vs. 2019.
The main causes for the accidents were road traffic accidents, manual handling and contact with machinery.
We are not on track, and without corrective action there is risk that we will miss the target
- 1. Baseline 2017.
50% of managers are women

38%

Turnover in the target population fell, while hiring decreased by over 50% over the same period.

2. Clean source means CHP using natural gas.
3. Technical recyclability by design.
4. Baseline 2015.
5. Supported by The Coca-Cola Foundation.

Managing risk and materiality

Material issues

At Coca-Cola HBC we are assessing our material issues annually to fully understand how to manage the risks and opportunities they present and address the challenges we are facing. We ensure that we prioritise issues that have the greatest impact on the economy, society and the environment.

This process also informs our disclosure, including the content of this report.

Our Integrated Annual Report is aligned with the principles and elements of the

International Integrated Reporting Council's (IIRC) framework and prepared in accordance with the Global Reporting Initiative standards, amongst others. Periodically, we adjust our approach as standards and best practice evolve.

For instance, to improve the transparency of our disclosure for investors and other stakeholders, we have added content this year based on the recommendations from the Sustainability Accounting Standards Board (SASB) for non-alcoholic beverage companies. Enhanced reporting against the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) has also contributed to our approach to this report. For the complete list of frameworks and standards used to prepare our reporting, please see page 240.

2020 Materiality matrix

In line with the Global Reporting Initiative, our material issues encompass those issues which have significant economic, environmental and social impacts or substantively influence the assessments and decisions of stakeholders.

In late 2020, we conducted our annual materiality survey amongst almost 900 internal and external stakeholders. For the first time, this survey was conducted together with The Coca-Cola Company. The outcome of the materiality survey is a ranking of material issues. By assessing the importance of these issues to our stakeholders and their decisions, combined with an assessment of the impact on society and the environment, we derive the relative materiality of each issue and prioritise them accordingly.

The Social Responsibility Committee of the Board subsequently endorses the prioritised list of issues resulting in the materiality matrix below.

The COVID-19 pandemic impacted how the Company and our stakeholders assessed and prioritised material issues. The resulting economic disruption increased the importance of our economic impact and sustainable sourcing.

Health and safety concerns increased significantly, pushing up the prioritisation of employee wellbeing and engagement.

Packaging and waste was again assessed as the number one topic, for the third year in a row, followed by climate change.

The Operating Committee (executive leadership of the Company) has responsibility for integrating our sustainability priorities into our business strategy and activities.

Management of the potential risks, opportunities and impacts of our material issues takes place across the Company and is disclosed throughout this report. Additional information about our material issues is included in our GRI Content Index.

We support the UN sustainability agenda and align our efforts with the UN Sustainable

Development Goals (SDGs). In 2018, when we published our Mission 2025 sustainability commitments, we linked all our material issues and 2025 targets with the UN SDGs and their underlying targets. You can find more about how our material issues and sustainability commitments link to the SDGs on pages 50-51 of this report and on our website.

Recommendations from stakeholder forums inform our plans

As a result of travel restrictions caused by the COVID-19 pandemic, our annual stakeholder forum was held online in 2020. Approximately 100 stakeholders from 20 countries participated, brought together to discuss the forum theme of 'Climate Action in the New Normal'. Participants included our customers, industry associations, academia, non-governmental organisations, policy makers, investors and peer companies.

of the business model of the Coca-Cola Company and its bottling partners.

• work with grassroots communities; and
• engage with younger generations
The consensus was that efforts should be targeted in two areas: partnerships and innovation, and leadership to move towards net zero emissions, including awareness-raising for relevant audiences.
(employees and beyond) and leverage their energy and passion.

Additional stakeholder recommendations included:

Climate-related topics discussed included:

• innovative solutions to accelerate emissions reduction;
- • increase use of recycled packaging and packaging alternatives to further reduce emissions;
  These outcomes and recommendations were subsequently discussed with the Social Responsibility Committee of the Board. They form the basis for detailed follow-up action, which will be shared with stakeholders in the first half of 2021.
• the 'triple bottom line' approach to people, planet and profit in the new environment; and
- • consider carbon footprint when promoting refillable packaging and package-free offerings;
• stakeholders' role in regard to development of a net zero culture within business and communities.

• explore technological solutions to further reduce waste;

Throughout 2020, we worked to implement recommendations from our 2019 stakeholder forum, which focused on water stewardship. We also engaged with our stakeholders, explaining the actions we are taking, in a webinar held during the year.

• inform consumers about alternative packaging and waste solutions;
During the forum, a special award was presented to the Nigerian recycle platform
• engage in power purchase agreements
RecyclePoints, recognising their outstanding activities for climate action during the COVID-19 pandemic.
(PPA) to support financing of renewable energy generation sources;
• set standards for partners in the supply chain and source from local suppliers;
Actions highlighted include the adoption of the new 2030 Water Strategy Framework of The Coca-Cola Company and the related impact on Coca-Cola HBC. In addition, we shared updates about our implementation of key stakeholder proposals received during the 2019 forum. Key implementation activities reported are shown in the graphic below.
The primary outcome of the forum was input from stakeholders that faster decarbonisation is needed, requiring bigger, bolder decisions which will involve adaptation
• engage in initiatives helping farmers use water more efficiently;
• offer customer awards and subsidies for renewable electricity use;

Implementation progress for 2019 forum recommendations

• Water use ratio: establish end-to-end monitoring
• Introduce context-based targets in high-risk areas
- • Showcase leadership through innovative technologies at local scale
  - • Take a 'brave & bold' stand
- • Expand existing partnerships
  - • Use power of brands, start campaigns through corporate and brand communications
• Apply true cost of water
• Use big data and new technologies to mitigate risks
- • Develop more flexible partnership approach
  - • Position awareness messages on primary packaging
• Alliance for Water Stewardship (AWS) dialogue: include water use reduction in standards for agricultural suppliers
- • Better communicate impact of joint projects, go beyond conventional
- • Influence local business, get governments on board
- • Use powerful partnerships across markets to raise awareness and amplify achievements such as water use reduction, AWS certifications, etc.
• Explore co-operation regarding
Asejire reservoir in Nigeria (long-term project)

Implemented

In progress

Parked

Supply chain/ agriculture

Partnerships

Mindset shift

Managing risk and materiality continued

Effective management of risk

Our risk management programme

Our SmartRisk programme, which reflects our approach to enterprise risk management

(ERM), drives cultural change by encouraging all employees to take informed risk to leverage opportunities for growth. By fully embedding risk discussions into existing monthly business routines, our leaders continue to boost their ability to identify risks and manage them in a timely manner.

The ERM programme is led by the Group

Chief Risk Officer (CRO), who works in close collaboration with the risk owners across our business units and Group functions in assessing and managing business risks. The CRO is tasked with maintaining a wide-angled view of all business streams and emergent risks and opportunities and, through regular reporting, ensures that risk visibility is provided to the Operating

Committee and our Board.

The Board retains overall accountability and responsibility for the Group's risk management and internal control systems, has defined the Group's risk appetite, and, through the Audit and Risk Committee, has reviewed the effectiveness of these systems. During the year, the Board considered the nature and extent of the principal risks that have the potential to impact the ability of the Group to achieve its strategic objectives.

It reviewed its risk appetite statement to ensure that it remained not only aligned to our objectives but remained supportive of our robust enterprise risk management programme and internal control systems.

Our system of enterprise risk management and internal control monitors operational, strategic, financial, legal and regulatory risk and the Board endorses our risk transference and insurance strategy. Overall, our programme is designed to manage risk and opportunities and encourages our people to embrace the concept of taking smart risks which drive innovation and growth, rather than eliminate the risk of failure in achieving business objectives.

The ERM programme incorporates a variety of processes including:

• alignment to our business strategies, objectives and principles;
• integration in our Group statements on strategic direction, ethics and values;
• integration into the business planning cycle;
• continual monitoring of our internal and external environment for factors that may change our risk profile and create opportunities;
• robust training to increase risk awareness across all business units and functions which are focused on embedding the Smart Risk concepts into our DNA, creating informed risk-taking leaders across all management levels; and
• an annual evaluation of the type and amount of insurance purchased from the market for Group-wide policies while leveraging our captive insurance entity.
In a hardening insurance market, our approach is influenced by the availability of insurance cover and cost, measured against the probability and magnitude of the relevant risks.

Programme review

Our internal audit department conducts an annual independent review of the ERM programme and its implementation.

The audit team evaluates, across business units and functions, the risk management and business resilience programmes, the specific processes and their application against business best practices and the

International Accounting Standards.

The Corporate Audit Director makes recommendations to improve the overall risk management programme, where required, with the findings submitted to the

Audit and Risk Committee. Building on the review of our ERM programme, the Board and its committees also conduct annual reviews of the effectiveness of our internal controls and further details of that review are set out in the Audit and Risk Committee report on pages 100-105. Based on its reviews and evaluation, the Board has concluded that our risk management and internal control systems are effective.

The risk management and internal control systems have been in place for the year under review and up to the date of approval of the annual report and accounts.

Aligning risk and materiality

Many of the issues that our stakeholders consider material are not just direct risks for our business but risks to the world that we share. As a result, we also share some collective responsibility for the management of those risks. That not only benefits our business over the longer term but contributes to resolving much broader problems for our communities.

As noted in the Materiality Index, packaging, recycling and waste management; and climate change featured as the top two material issues for our stakeholders.

These, along with a number of other material issues, also represent the most significant longer-term risks - and opportunities, for our business as outlined in our principal risks.

This alignment reflects our view that we are a part of the fabric of the communities in which we operate and we need always to act accordingly.

Risk management in a challenging environment

In 2020, our risk management programme was given even greater emphasis with regular discussions on emergent risks and opportunities associated with COVID-19 and the enhanced monitoring and assessment of our principal risks.

Restrictions on physical access to our workplaces brought challenges for the implementation of our risk management programme. With the support of our IT colleagues, we were able to quickly adapt our working arrangements to an online environment. This enabled us to maintain all of our risk management routines and ensure continuity of the programme.

These new working arrangements provided opportunities for broadening participation in a number of key areas.

In 2021, we will use these lessons to improve the level of engagement, and the insights that engagement provides, to improve our programme.

In response to the potential impact of

COVID-19 on our business, very early in 2020 we leveraged our robust organisation-wide

Incident Management and Crisis Resolution

(IMCR) programme to establish a COVID-19

Taskforce that set clear priorities focused on protecting our people, safeguarding our

product supply, responding to new patterns of customer and consumer demand, preserving cash and supporting the communities in which we operate.

In September 2020, the Company appointed a new CRO. Our new CRO has over 30 years' experience in risk and crisis management across a variety of organisations and industries, including The Coca-Cola Company.

We expect our new CRO will seamlessly build on and continue to enhance our risk management and business resilience function into the future.

The ERM framework and underpinning process was reviewed in the last quarter of the year. An outcome of that review was to more closely align the programme with Growth Story 2025 so that all managers have a more direct line of sight between managing risks they have some responsibility for and achieving our Company growth targets. In addition, we identified opportunities to enhance cross-functional discussion and share best practices in risk mitigation across the business.

Principal risks

The cyclic review of our principal risks involves an assessment of the likelihood of their occurrence and their potential consequences to confirm the level of exposure and evaluate the strategies to manage them. Our list of principal risks, presented on pages 58-61, involves a long-term view which evolves over time.

In 2020, the COVID-19 pandemic had a significant impact on our business and particularly on two of our principal risks - channel mix and health and safety.

As indicators of the broad impact that the

COVID-19 pandemic might have on our business and our people began to emerge in early 2020, our Group COVID-19

Operational Task Force worked closely with Company business units to identify additional actions to be taken to reduce the impact on our business.

Restrictions across our markets saw hotels, restaurants and cafés close down for extended periods of time. This had a significant impact on one of our primary channels for providing our products to consumers.

Despite this, our strong relationships with partners and customers, together with the resilience and adaptability of our people and our business, enabled us to adjust to meet changing demand.

Many of our smaller customers, smaller cafés and restaurants for example, have been severely impacted by the COVID-19 pandemic. While it increased short-term credit risks, the Company took a long-term view of the situation, using this time to support many of our smaller customers and invest in building relationships which will pay dividends over time.

As noted in our viability statement, while the longer-term changes to our markets are still uncertain, we are confident that with the widespread distribution of vaccines and the focus of governments in our markets on economic recovery, the impact of the COVID-19 pandemic is likely to dissipate in the short to medium term.

The health and safety risks to our people of acquiring and transmitting COVID-19 were considerable, and our Board moved to prioritise safety in early 2020. Additional measures were put in place across offices and production & distribution facilities to reduce the risk of transmission and advice was provided to our people to reduce the risk of acquiring the disease. Contingency plans to manage potential staffing shortfalls were established but not required.

We continue to carefully monitor COVID-19 cases in each market and investigate increases or unusual concentrations.

We have also learned from what has worked well in certain markets and shared best practices to safeguard the wellbeing of our employees, customers and communities.

The changing nature of the workplace, with a dramatic shift to working from home during 2020, also provided challenges as far as providing a safe workplace and ensuring additional support for family care and mental health concerns. The Company encouraged our employees to access our Employee Assistance Programme to help support our people through these trying times.

We saw an increase in political and social instability with hostilities in Armenia and protest activity in Belarus and Nigeria. This instability increased personal security risks to our people and had some short- term operational impacts on our business.

There is evidence of increasing social discontent and dissatisfaction with incumbent governments around the world, particularly amongst younger people who believe that political leaders are not listening to them or acting quickly enough on issues that are high on their agenda, including equality and climate change.

This dissatisfaction may be exacerbated by widening gaps between groups disproportionally impacted by COVID-19 and governments introducing additional measures to restore economies. This may lead to unrest and protest activity creating personal security risks for our people as well as disruptions to our business.

COVID-19 has led to higher levels of sovereign debt across our territories, that may slow economic growth and impact consumer spending. It may also lead to increased corporate taxes and additional discriminatory taxes such as sugar taxes and non-recyclable plastics and water levies as governments look to reduce debt, broaden the tax base and respond to consumer concerns around health and climate change.

The global geopolitical and macroeconomic environment remains volatile and complex, with the potential to adversely impact our business. It therefore remains a focus for our ERM programme.

Cyber security risks increased during the year and that was reflected in a number of well-publicised attacks against a variety of companies and industries. The increase in the number of people working from home increased opportunities for malicious acts. The Company continued to enhance its IT security programme to mitigate those risks by aligning with the NIST Cyber Security

Framework and continuously increasing our ability to respond to increasingly sophisticated cyber attacks by improving our people capabilities, processes and technology.

In 2020, we retained our focus on managing our key sustainability risks with continued management attention and investment in new technologies. Our aim is to reduce the longer-term impact of climate change on the business, to improve efficiencies and to reduce our impact on the environment.

This reflects our commitment to our long-term Mission 2025 strategy despite the shorter-term pressure on our financial resources resulting from the COVID-19 pandemic.

Managing risk and materiality continued

Access to water is fundamental for healthy communities and the environment as well as for our operations. Climate change is impacting the availability of water in some parts of the territories in which we operate. This may lead to increasing scarcity, production halts and generally higher costs associated with water. Failure to decrease our net use of water and contribute to resolving water challenges for our communities and the environment could lead to increasing regulatory attention and a decline in stakeholder trust.

Last year, we renewed our Water stewardship policy. We also continued to assess the potential impact of climate change on water availability in regions in which we operate.

We are using tools from recognised organisations, such as the World Wildlife Federation (WWF) and the World Resource Institute (WRI), to assess future water risks for different temperature scenarios.

The outcomes are the basis for our long-term management plans to assure supply and business continuity as well as making a contribution to water challenges facing our communities.

A broader discussion on our climate-related risks, their link to materiality, and our risk management approach is provided as part of our statement on implementing the recommendations of the Task Force on Climate-related Financial Disclosures located on page 62-63.

Our robust risk management programme is integrated into monthly business routines and evaluates risks against our business and strategic priorities, ensuring we remain vigilant to the uncertainty in our operating environment and can react with greater speed.

The programme enables us to proactively identify new risks and opportunities, which in turn allows us to understand threats to our business viability. This analysis is the key component of our qualitative review process in support of our viability statement.

Emerging risks

It should be noted that the list of principal risks does not include all risks that can ultimately affect our Company as there are risks that are not yet known to us, and risks currently evaluated to be immaterial that could ultimately have an impact on our business or financial performance. We also monitor emerging risks, which may not yet be having a measurable impact on us and around which a significant amount of uncertainty exists and are therefore difficult to assess quantitatively. We establish and monitor early warning indicators to provide insights into how these risks are evolving.

E‑commerce

COVID-19 has accelerated the acceptance and popularity of e-commerce and the development of new technologies that support that growth. We expect that growth to continue well after the current COVID-19 influenced environment.

Our products are already widely available on many e-commerce platforms. However, e-commerce is changing the path to purchase from traditional retailers to online platforms. This not only increases convenience for consumers, but also enables e-commerce platforms to build direct relationships with consumers and influence their purchasing decisions.

E-commerce provides significant opportunities for our business in direct to consumer as well as indirect to consumer delivery. It also creates new risks. Technology and business models supporting e-commerce are relatively new and changing rapidly. We expect some degree of obsolescence and potential failures as e-commerce continues to evolve.

Changes in technology

Changes in technology are contributing to disruption in many industries. Traditional barriers to entry that have provided our business with a competitive advantage - such as investment in research and development, manufacturing scale and capability, distribution networks, marketing capabilities, access to finance and retailer relationships - are still critical to our business but are increasingly less of a barrier to new, smaller entrants and existing competitors.

We mitigate this change by continually assessing and investing in new technologies to leverage the strength

of our portfolio, enhance the capabilities
of our people, improve the efficiency
of our manufacturing and distribution and innovate in our route to market.

Supply chain integrity

Consumers, investors and other stakeholders are increasingly interested in knowing the origin and sustainability of our products and all ingredients used. Natural resource management is critical for the environment and the long-term sustainability of our business. The growing expectation of transparency leads to greater scrutiny of the integrity of our entire value chain.

Our Company has a well-established supply chain management system and robust set of Supplier Guiding Principles that all suppliers are expected to comply with to meet our high-quality standards and our expectations for the ways they operate. This includes adherence to stringent human rights and sustainable agricultural practices. As we deepen the assessment of supply chain practices, we may uncover practices that need to change either gradually or at a faster pace. Such changes may generate costs to our business as well as generate reputation risks.

To assess and monitor changes in transparency expectations, we support and participate in a number of reporting frameworks. We will include additional consideration of this key area in our assessment of strategic risks in the first half of 2021.

Viability statement

Business model and prospects

Our business model and strategy, outlined on pages 14-17 of this report, documents the key factors that underpin the evaluation of our prospects. These factors include our:

• attractive geographic diversity;
• strong sales and execution capabilities;
• ability to innovate;
• market leadership;
• global brands; and
• diverse beverage portfolio.

Like most companies, COVID-19 has created a challenging environment for the Group. Despite significant changes to how consumers purchase and consume our products and the impact on our customers, our strong cash position and ability to innovate has shown the Group's business to be robust. It is not yet clear how long the current conditions will continue to impact our business and will be affected by the efficacy of vaccines, the degree of uptake and achievement of herd immunity, and the ability of governments to manage the economic recovery.

The Board considers that there will be changes to our markets over the longer term but continues to believe that our diverse geographic footprint, including exposure to emerging markets with low per capita consumption, and a proven strategy in combination with our leading market position, offer significant opportunities for future growth. Our Board has historically applied and continues to apply a prudent approach to the Group's decisions relating to major projects and investments. From 2016 to 2020, we generated free cash flow of €433 million per year on average.

Key assumptions of the business plan and related viability period

The Group maintains a well-established strategic business planning process which has formed the basis of the Board's quantitative assessment of the Group's viability, with the plan reflecting our current strategy over a rolling five-year period.

The financial projections in the plan are based on assumptions for the following:

• key macroeconomic data that could impact our consumers' disposable income and consequently our sales volume and revenues;

• various scenarios relating to the ability of governments in some key markets to manage economic recovery from the impact of COVID-19;
• key raw material costs, including availability and cost of water;
• foreign currency rates;
• spending for production overhead and operating expenses;
• working capital levels; and
• capital expenditure.

The Board has assessed that a viability period of five years remains the most appropriate. This is due to its alignment with the Group's strategic business planning cycle, consistency with the evaluated potential impacts of our principal risks as disclosed on pages 58-61 and our impairment review process, where goodwill and indefinite-lived intangible assets are tested based on our five-year forecasts.

Assessment of viability

Qualitatively, we analysed the output of our robust enterprise risk management and internal business planning and liquidity management processes, to ensure that the risks to the Group's viability are understood and are being effectively managed.

The Board has concluded that the Group's well-established processes across multiple streams continues to provide a comprehensive framework that effectively supports the operational and strategic objectives of the Group. It also provides a robust basis for assessment and confirmation of the Group's ability to continue operations and meet its obligations as they fall due over the period of assessment.

Supporting the qualitative assessment was a quantitative analysis performed as part of strategic business planning. This assessment included, but was not limited to, the Group's ability to generate cash.

In the shorter term, our assessment was based on the assumption that implementation of broader COVID-19 vaccination programmes across our markets would see permanent lifting of restrictions and general recovery of out-of-home channels in the latter half of 2021. However, we also considered the effect of longer than expected recovery due to complications in the effective roll-out of vaccination programmes, market specifics and the impact of COVID-19 variants across our markets. We also considered higher levels of defaults brought about by an extended period of return to pre-COVID-19 levels.

In the medium to longer term we considered the impact of high levels of sovereign debt and negative growth rates in some of our key markets and the general impact these may have on economies and consumer spending.

We have continued to stress test the plan against several severe but plausible downside scenarios linked to certain principal risks as follows:

Scenario 1: The impact of changes to foreign exchange rates was considered, particularly the depreciation of foreign currencies including the Russian rouble and Nigerian naira. Principal risk: foreign exchange and commodity costs.

Scenario 2: Lower estimates for sales volumes for various reasons including the longer term, ongoing changes brought on by COVID-19 and the ability of a range of stakeholders, including governments, in several of our key markets to manage economic recovery. Principal risk: geopolitical and macroeconomic.

Scenario 3: Lower estimates for sales revenue for various reasons including the longer term, ongoing changes brought on by COVID-19 on consumer demand and preferred channels. Principal risk: channel mix.

Scenario 4: Continued stakeholder focus on issues relating to sugar and packaging resulting in the potential for discriminatory taxation. Principal risks: sustainability: plastics and packaging waste and consumer health and wellbeing.

Scenario 5: The impact of higher raw material costs, including cost of water, was also considered. Principal risk: foreign exchange and commodity costs; sustainability: water availability and usage.

The above scenarios were tested both in isolation and in combination. The stress testing showed that due to the stable cash generation of our business, the Group would be able to withstand the impact of these scenarios occurring over the period of the financial forecasts. This could be conducted by making adjustments, if required, to our operating plans within the normal course of business, including but not limited to temporary reductions in discretionary spending.

Following a thorough and robust assessment of the Group's risks that could threaten our business model, future performance, solvency or liquidity, the Board has concluded that the Group is well positioned to effectively manage its financial, operational and strategic risks.

Viability Statement

Based on our assessment of the Group's prospects, business model and viability as outlined above, the Directors can confirm that they have a reasonable expectation that the Group will be able to continue operating and meet its liabilities as they fall due over the five-year period ending 31 December 2025.

Potential impact

Concerns related to packaging waste and plastic pollution.

• Decreased credibility in public discussions
• Long-term damage to our reputation and licence to operate
• Increased cost of doing business, including discriminatory taxes
• Loss of consumer baseThe risks associated with unpredictable and more volatile effects of weather. Failure to reduce carbon emissions along the value chain.

• Commodity availability
• Disruption of operations and distribution
• Long-term damage to our reputation and licence to operate
• Increased cost of doing business
The risks in our operations, sourcing areas of raw materials, communities and the environment related to water availability, water stress and water quality.
• Availability of water for the communities that we operate within and the environment

• Long-term damage to our reputation and licence to operate
• Water shortage for our operations may lead to production interruptions
• Increased cost of water sourcing and treatment

Failure to adapt to changing consumer health trends, misconceptions about the health impact of our products.

• Failure to achieve our growth plans
• Long-term damage to our reputation and licence to operate

• Loss of consumer base
• Potential imposition of discriminatory taxation

A cyber attack or data centre failure resulting in business disruption, or breach of corporate or personal data confidentiality.

• Financial loss
• Operational disruption
• Damage to corporate reputation
• Non-compliance with data protection legislation (e.g. GDPR)

The risk of health and safety and occupational workplace incidents involving our employees, contractors or third-party logistics providers.

• Death, injury or disease of employees, contractors or members of the public
• Employee engagement and motivation
• Attraction of talent/prospective employees

The immediate consumption channel remains under pressure and accelerated as consumers altered consumption habits and shifted occasions from out-of-home to at-home. A continued increase in the concentration of retailers and independent wholesalers on whom we depend to distribute our products.

• Reduced availability of our portfolio and overall profitability

• World Without Waste global vision
• Mission 2025 packaging related commitments
- • Packaging and waste management
• Partnerships with local communities, NGOs, start-ups and academia to manage packaging recovery and minimise environmental impacts

• Sustainable sourcing

• New science-based target for 2030
- • Climate change
• Energy management programmes and transition to renewable and clean energy
- • Sustainable sourcing
• Engagement and partnering with local and international stakeholders
• Focus on sustainable procurement
• Physical risk analysis including quantification and stress testing in line with TCFD recommendations
• Natural disaster plans in place across the operations
• Source vulnerability assessments (SVAs) to identify and mitigate water supply risks are performed at all plants

• Water stewardship
• Sustainable sourcing

• Alliance for water stewardship certification, to identify and mitigate shared water risks in the catchment areas are performed at all plants
• All key water-related risks are consolidated in the water-risk register and shared quarterly with Supply Chain Management
• Water usage reduction plans and wastewater discharge monitoring is implemented in all plants
• Water priority locations are identified, and context-based action plans are prepared
• Water stewardship initiatives and other forms of engagement and partnering with local and international stakeholders
• Focus on product innovation and expansion to a 24/7 beverage portfolio

• Nutrition
- • Expand our range of low- and no-calorie beverages
• Product quality
- • Introduce smaller packs
• Responsible marketing

• Reduce the calorie content of products in the portfolio
• Clearer labelling on packaging
• Promote active lifestyles through consumer engagement programmes focused on health and wellness
• Address misconceptions about the health impacts of our products
• Implement a NIST-aligned cyber security and privacy control framework and monitor compliance

• Economic impact

• Safeguard critical IT and operational assets
• Enhanced ability to detect, respond and recover from cyber incidents and attacks
• Foster a positive culture of cyber security
• Monitor threat landscape and remediate associated vulnerabilities
• Integration of Cyber Incident Response Plan into IMCR Framework

• COVID-19 prevention protocol in place across the organisation
• Monitoring system for internal COVID-19 cases and enhanced rapid response to reduce risk of transmission

• Employee wellbeing & engagement

• New Group-wide policy and supporting materials for improved mental health
• Behavioural-based Safety Programme in place at all our facilities
• Standardised programmes, policies and legislation applied locally
• Group oversight by the Health and Safety (H&S) Team
• H&S Board with mandate to accelerate the H&S step-change plan implementation

• Prioritisation of assortment per channel to drive higher margin packs
• Enhanced marketing campaigns to capture growing occasions of socialising at home accelerated by COVID-19 restrictions
• Refreshed and enhanced key account capabilities and tools to partner and grow profitable revenue with customers
• Work closely with our out-of-home channel customers to drive transactions and support them selling online to more effectively manage the impact of COVID-19 or in their re-opening as restrictions ease
• Accelerate Right Execution Daily (RED) to support our commitment to operational excellence
• Develop our digital and e-commerce capabilities to capture opportunities associated with existing and new distribution channels
• Localised management plans in specific countries dependent on channel impact and risk and including variance in the impact of COVID-19 restrictions

Key mitigations

Link to material issues

Managing risk and materiality continued

Principal risks

8. Foreign exchange and commodity costs

9. Geopolitical and Macroeconomic

10. People

11. Quality

Principal risks trend

Increasing

Stable

Decreasing

Risk included in viability assessment

Link to growth pillars

12. Ethics and compliance

Description

Foreign exchange and commodity exposure arises from changes in exchange rates and commodity prices.

Currency devaluation combined with capital controls restricts movement of funds and increases the risk of asset impairment.

Volatile and challenging macroeconomic, security and geopolitical conditions together with adverse global events including health-related issues can affect consumer demand and create security risks across our diverse markets.

Inability to attract, retain and engage sufficient numbers of qualified and experienced employees in highly competitive talent markets.

The occurrence of quality/food safety issues, or the contaminationof our products across our diverse •

brand portfolio.

The risk of fraud against the Company as well as risk of

Anti-Bribery and Corruption

(ABAC) fines or sanctions if our employees, or the third parties we engage to deal with governments, fail to comply with

ABAC requirements. The risk of inadvertent non-compliance with international sanctions in certain countries.

13. Strategic stakeholder We rely on our strategic

relationships

relationships and agreements with The Coca-Cola Company

(including Costa Coffee), Monster

Energy and our premium spirits partners.

Potential impact

• Financial loss
• Increased cost base
• Asset impairment
• Limitations on cash repatriation

• Eroded consumer confidence affecting discretionary spending
• Potential imposition of discriminatory taxation
• Inflationary pressures
• Social unrest
• Safety of people and assets
• Failure to achieve our growth plans

• Damage to brand and corporate reputation

Loss of consumer trust

• Reduction in volume and net sales revenue

• Damage to our corporate reputation
• Significant financial penalties
• Management time diverted to resolving legal issues

• Economic loss because of fraud and reputational damages, fines and penalties, in the event of non-compliance

• Termination of agreements or unfavourable renewal terms could adversely affect profitability

• Treasury policy requires, where possible, the hedging of 25% to 80% of rolling 12-month forecasted transactional foreign currency exposure
- • Economic impact
• Hedging beyond 12 months may occur in exceptional cases, subject to approval of Group CFO
• Treasury policy requires, where possible, the hedging of rolling three-year commodity exposures; different policy limits apply for each hedgeable commodity
• Derivative financial instruments are used, where available, to reduce net exposure to currency and commodity price fluctuations
• Seek to offer the right brand at the right price in the right package through the right channel

• Economic impact
- • Robust security practices and procedures to protect people and assets
• Corporate citizenship

• Crisis response and business continuity strategies that enable effective responses to adverse events

• Employee well-being & engagement

• Upgrade our Employer Value Proposition and Employer Brand
• Develop leaders and people for key positions internally, improve leaders' skills and commitment for talent development
- • Employee well-being & engagement
• Continuous employee listening to address culture and engagement effectively
- • Human rights, diversity & inclusion
• Promote an inclusive environment that allows all employees to achieve their full potential
- • Corporate citizenship
• Create shared value with the communities in which we work to ensure we are seen and considered as an ethical business with an attractive purpose

• Expand talent pool by hiring more diverse workforce
• Stringent quality/food safety processes in place to minimise the likelihood of occurrence

• Product quality

• Early warning systems that enable fast issue identification
• Robust response processes and systems that enable us to quickly and efficiently deal with quality/food safety issues, ensuring customers and consumers retain confidence in our products

• • Corporate governanceAnnual 'Tone from the Top' messaging
• Code of Business Conduct, ABAC and commercial compliance training and awareness campaigns for our entire workforce, training on international sanctions for our employees exposed to this risk
• All third parties that we engage must comply with our Supplier Guiding Principles, which include ABAC and international sanctions compliance
• All third parties that we engage to deal with governments on our behalf are subject to ABAC due diligence. Screening of third parties and transactions potentially exposed to international sanctions risk
• Cross-functional Joint Task Forces in Nigeria and Russia that proactively address risks in our key operations

• Risk-based internal control framework and assurance programme with local management accountability
• Periodic risk-based internal audits of ABAC compliance programme
• 'Speak Up Hotline'

• Management focus on effective day-to-day interaction with our strategic partners
• Working together as effective partners for growth
• Engagement in joint projects and business planning with a focus on strategic issues
• Participation in 'Top to Top' senior management forums

Key mitigations

Link to material issues

Managing risk and materiality continued

Managing climate change risk

Assessment and mitigation of climate-related risk is integrated into our enterprise risk management programme across our business units and Group functions. Using this framework, we take a robust risk-based approach in responding to the physical and transitional risks associated with climate change. We analyse our internal data points and work with recognised specialist agencies, our insurance brokers and insurers to obtain regional analysis of climate science which enables us to make informed decisions in respect to our business resilience and viability. This analysis also improves our understanding of the potential climate vulnerabilities in our operations and the communities in which we distribute our product portfolio.

This data is shared across our business units, enabling them to build climate resilience into their planning and operations.

The Financial Stability Board established the Task Force on Climate-related Financial

Disclosures (TCFD) with the aim of improving industry disclosure of climate-related risks and opportunities.

At Coca-Cola HBC we believe that the recommendations of the TCFD were an important step in the establishment of an accepted voluntary framework for reporting climate-related risks and their financial impacts. We support efforts to improve the quality and consistency of disclosures and have been a leader in the field having made our first carbon reduction commitments in 2006 and subsequently being one of the first companies in the world to introduce science-based targets.

Location of TCFD aligned disclosures

Our TCFD working party continued to focus on the implementation of the core elements of the four pillars of governance, strategy, risk management and metrics and targets.

The Board continued to have oversight of climate-related risks and opportunities through the activities of the Social

Responsibility Committee and the Audit and Risk Committee.

Moving forward, we will enhance our understanding of the quantitative impact of climate change by considering a variety of climate scenarios and timeframes and focusing on greater levels of detail on the financial impact.

Governance: Disclose the Company's governance around climate‑related risks and opportunities

a) Describe the Board's oversight of climate-related risks and opportunities
b) Describe management's role in identifying, assessing and managing climate-related risks and opportunities

Social Responsibility Committee, pages 108-109

Audit and Risk Committee, pages 100-105

Risk and materiality, pages 52, 54-56

Strategy: Disclose the actual and potential impacts of climate‑related risks and opportunities on the Company's business, strategy and financial planning where material

a) Describe the climate-related risks and opportunities that the organisation has identified over the short, medium and long term

b) Describe the impact of climate-related risk and opportunity on the Company's business, strategy and financial planning

c) Describe the resilience of the organisation's strategy considering different climate-related scenarios, including a 2-degree or lower scenario

Material issues, page 52; Principal risks, pages 58-59, 64-65

Principal risks, pages 58-59, 64-65

Earn our licence to operate, pages 42-47

Managing climate change risk, pages 62-63 2020 CDP Climate response

Risk management: Disclose how the Company identifies, assesses and manages climate‑related risks and opportunities

a) Describe the Company's process for identifying and assessing climate-related risks and opportunities

b) Describe the Company's process for managing climate-related risks and opportunities
Risk and materiality, pages, 52, 54-56
Principal risks, pages 58-59, 64-65
Key performance indicators, pages 45,47, 50-51 2020 GRI Content Index
c) Describe how these processes are integrated into the overall risk management programme Risk and materiality, pages 52, 54-56

Metrics and targets: Disclose the metrics and targets used to assess and manage climate‑related risks and opportunities

a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process

b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks

c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets

New targets to reduce emissions by 2030, page 45

Charts on page 45 with all Scopes

2020 GRI Content Index, Environmental table, pages 34-35

Given the complexity of this undertaking and the need for geographically specific data, some of which may not be available in sufficient detail, we have decided to take a staged approach, focusing first on one of the areas of highest priority to our business - the impact of climate change on water availability in key markets. For more aboutthis, please see the description of water availability as a principal risk on pages 58-59.

The response to climate change transcends all areas of our strategy and operations and, as a result, our TCFD disclosures can be found throughout this report. The table on the left documents how our disclosures

The impact of climate change risk

The Coca-Cola Company and its global bottling partners, including

Coca-Cola HBC, have identified eight material risks relating to the physical and transitional impact of climate change on our business and these are depicted in the following diagram. For more details on these eight risks, please see next page 64 and 65.

and discussions on climate change in this report align to the TCFD recommendations and where specific information can be found.

For additional information on our climate-related disclosures, see our

2020 CDP submission here: 2020 CDP Climate response.

Business impacts: Physical risks of climate change

Agriculture and ingredientsPackaging

ManufacturingDistribution

Cold drink equipment

Customers and communities

Estimated share of carbon emissions

22%

31%

11%

30%

Managing risk and materiality continued

Physical risks

Physical risks are those caused by higher concentrations of greenhouse gases in the atmosphere which in turn lead to higher average temperatures, more acidic oceans, changing weather patterns and rising sea levels.

Extreme weather and changing weather and precipitation patterns can impact our business in the following ways:

1. Disruption to manufacturing from extreme weather

Extreme weather events including floods and storms can disrupt and/or damage our manufacturing facilities leading to an inability to supply products to our customers and significant costs associated with repairs.

It can also lead to injuries to our people.

We currently mitigate the financial costs of extreme weather events through our property damage insurance programme. This includes annual surveys of our facilities by external risk engineers. We have also established a robust business continuity programme that includes management of extreme weather to protect our people and to minimise losses. During the year, we carried out additional assessments of plants and warehouses at risk due to extreme weather.

We recognise that much of the data we currently use in our assessments is based on historical information. Moving forward, we will increasingly include projected data using at least two different climate scenarios to enhance our understanding of the potential impact on our manufacturing.

2. Disruption to distribution caused by extreme weather

Extreme weather may impact key transport and logistics routes and reduce access to our fleets. This may impact our ability to distribute our products to markets as well as the safety of our employees and contractors.

We currently mitigate the financial costs through our insurance programme as well as use of third-party logistics providers. We have also established a robust business continuity programme that includes management of extreme weather to protect our people and to minimise losses.

We will increasingly include projected data using at least two different climate scenarios to enhance our understanding of the potential impact on our manufacturing.

3. Reduced ability to produce as result of water scarcity

Access to water is fundamental to our business and to the communities we operate in. Climate change is impacting the availability and quality of water in some of the areas where we need it and might have an impact on our communities and the environment.

We have assessed future water stress levels based on different global warming scenarios.

A number of our plants are located in areas that are or will be facing water challenges.

These plants are called water priority plants.

During the year, we assessed revenue at risk for water priority plants. We are reducing our water usage across our business and, as part of our Mission 2025 sustainability commitments, have committed to a 20% reduction for water priority plants.

In 2021, we will include a quantitative assessment of the impact of climate change on water availability in key markets under different climate scenarios.

4. Impact on the cost and availability of ingredients

The availability, quality and price of key ingredients are impacted by changes to weather and precipitation patterns.

During the year, we continued to assess the ability of our suppliers and alternates to continue to supply key ingredients at the quality, quantity and cost that we expect under different conditions.

Moving forward, we will undertake further work to assess how our suppliers may be impacted by changes in weather and precipitation patterns under different climate scenarios.

Transition risks

The physical effects of climate change will be limited if action is taken to force a transition to a low carbon economy. This will require regulatory, market and technological changes. The speed and severity of these changes will have an impact on our business. A faster and more aggressive approach by governments for example will have a more significant financial impact than a more gradual approach.

The transition to a low carbon economy also presents a number of opportunities for our business. Our investments in new technologies not only help us meet expectations of key stakeholders to do our part to reduce carbon emissions, but they also present opportunities for significant cost savings.

5. Increased costs across our value chain from

GHG regulations

Our business emits greenhouse gases (GHG) across our value chain. Actions to introduce carbon pricing could increase costs of packaging, manufacturing, distribution and cold drink equipment.

During the year, we assessed the operational costs of carbon taxes on direct emissions and capital expenditures needed to reduce our carbon emissions based on a 1.5ºC warming scenario. In December 2020, we received an approval of our carbon reduction targets by the

Science Based Targets initiative and we are committed to reduce our scope 1 and 2 emissions by 55% by 2030 vs. 2017 and our scope 3 emissions by 21% for the same period.

6. Increased cost of packaging

Our business uses various types of packaging materials and delivery methods with different carbon footprints. Regulations designed to decrease the use of packaging materials that contribute to GHG emissions could increase our costs.

During the year, we continued to introduce more innovative ways to reduce packaging such as our KeelClipTM launch. As part of our

World Without Waste initiative, we are making concerted efforts to increase the amount of recyclable packaging across our operations, use more recycled

PET and refillable packaging and help collect the packaging materials we place on the market.

7. Increased costs and disruptions due to water regulations As noted above, water is fundamental to our business.

Any changes to the cost of water or placement of restrictions on the availability of water may impact our ability to produce or increase the cost of production.

We are reducing our water usage across our business and, as part of our Mission 2025 sustainability commitments, have committed to a 20% reduction in water usage in our water priority plants. We are also closely monitoring for potential additional taxes, levies or restrictions in the availability of water.

In 2021, we will include a quantitative assessment of the impact of climate change on water availability in key markets under different climate scenarios.

We will also include potential shorter-term transitional costs in that assessment.

8. Damage to the reputation of the beverage sector

We are reliant on the brand value and positive reputation of Coca-Cola. Consumer perceptions of the beverage sector as a contributor to climate change may impact the reputation of our business and brands and ultimately demand for our products. In addition, being seen as part of the problem leads to the targeting of the beverage sector for new and/or increasing climate-related taxes.

Our Mission 2025 sustainability commitments and strong cultural commitment to being a contributor to the solutions to climate change are designed to take advantage of opportunities associated with those changes, protect our business and protect our reputation as a responsible company.

Financial review

"Despite the unprecedented impact on revenues, we delivered like‑for‑like1

EBIT margins just 20bps below the all‑time highs."

1. Performance, unless stated otherwise, is negatively impacted by the change in classification of our Russian juice business (Multon), from a joint operation to a joint venture, following its re-organisation, and positively impacted by the inclusion of H1 2020 performance of Bambi, the acquisition of which was cycled in H2 2020. In addition, profitability is positively impacted by the

Group's election to classify share of results of integral equity method investments within operating profit. Like-for-like performance adjusts for all three impacts. For a table of performance measures excluding these impacts, please refer to the 'Supplementary information' section.

Resilient financial performance

During 2020, our business adapted quickly to changing consumer behaviour resulting from COVID-19 restrictions, delivering resilient financial performance.

Volume and revenue both saw improved trends in the second half of the year, reflecting the strength of our brand portfolio and market execution, while the structural improvements made to our cost base over several years allowed agility on costs which protected profitability.

Performance highlights for 2020 included:

• Like-for-like1 volume decline was contained at 4.6%, while reported volumes declined by 5.7%, after a notable improvement in the second half with good recovery in Q3 and resilience in Q4;
• FX-neutral revenue per case declined by 4.1% for the year with signs of stabilisation in the second half due to improved trends in package mix;

• Early, decisive action allowed us to identify and deliver €120 million of cost savings in the year. Structural improvements made to the Group's cost base over several years drove efficiency and shifted fixed costs to variable, enabling outstanding cost control in 2020;
• Comparable EBIT margin on a like-for-like1 basis closed at 10.6%, just 20bps down from the Company's all-time high achieved in 2007 and 2019. Reported
EBIT margin expanded 60bps to 10.8%;

• Comparable EPS declined by 17.5% to €1.185, impacted by a higher effective tax rate and a small increase in financing costs.
Basic EPS declined by 14.9% to €1.140;
• Strong free cash flow generation of €497 million, up €54.4 million compared to the prior year.

While the outlook for the global economy in 2021 remains uncertain, we are encouraged by our resilient performance and share gains in 2020. We believe that the business can achieve a strong recovery in FX-neutral revenues in 2021, along with a small increase in EBIT margin.

We continue to find high potential in the beverages industry and to see many growth opportunities within our evolving brand portfolio and the markets we operate in.

Therefore, we believe that once the recovery is underway, the business can return to the growth trajectory we set out at our Capital Markets Day in 2019, which was for FX-neutral revenue growth of 5-6%, with 20-40 basis points of EBIT margin expansion annually, while maintaining strong cash flow generation and a robust and flexible balance sheet.

Income statement

Financial performance in 2020 was impacted by the restrictions put in place in response to the COVID-19 pandemic. The out-of-home channel, which typically accounts for slightly over 40% of our revenues, operated with severe restrictions during periods of lockdown, and below capacity even when operational. Consequently, as the degree of lockdown in place has varied across our markets and across the year, we have seen trade fluctuate in this channel.

As a result of lower volumes from the out-of-home channel, volume declined by 4.6% on a like-for-like basis. We saw improvements in trends in the second half due to growth in the at-home channel and resilience in the out-of-home channel. In terms of category performance, sparkling drinks (including energy) remained the most resilient and grew volumes by 0.7%, while still beverages declined by 21.2% or 17.3% on a like-for-like basis. Volume declined by 14.0% in the Established segment, by 4.4% in the Developing segment and grew by 0.3% in the Emerging segment on a like-for-like basis. Volume declined by 1.8% in the Emerging segment and by 5.7% for the Group, also impacted by the change in accounting treatment of our Russian juice business (Multon) following its reorganisation (detailed in Note 15 to the

Consolidated financial statements).

FX-neutral revenue per case declined by 4.1%, with stabilising trends in the second half. The main driver of the decline was negative package mix due to lower volumes sold in the out-of-home channel. While channel mix was also negative, we benefited from positive category mix due the strong relative performance of the sparkling category as well as price increases taken in several markets at the start of the year.

Key financial information

Volume (million unit cases)	2,136	2,265 -5.7
Net sales revenue (€ million)	6,132	7,026 -12.7
Net sales revenue per unit case (€)	2.87	3.10 -7.5
Currency-neutral net sales revenue (€ million)	6.132	6.782 -9.6
Currency-neutral net sales revenue per unit case (€)	2.87	2.99 -4.1
Operating profit (EBIT) (€ million)	661	715 -7.6
Comparable EBIT (€ million)	672	759 -11.4
EBIT margin (%)	10.8	10.2 60bps
Comparable EBIT margin (%)	11.0	10.8 20bps
Net profit (€ million)	415	488 -14.9
Comparable net profit (€ million)	431	522 -17.4
Comparable basic earnings per share (€)	1.185	1.436 -17.5

Percentage changes are calculated on precise numbers.

Balance sheet

2020

2019

2020 € million

Assets Total non-current assets Total current assets	5,046 2,527	5,138 3,076
Total assets	7,573	8,214
Liabilities Total current liabilities Total non-current liabilities	2,026 2,914	2,667 2,847
Total liabilities	4,940	5,514
Equity Owners of the parent Non-controlling interests	2,631 3	3,698 3
Total equity	2,633	2,700
Total equity and liabilities	7,573	8,214

% change

2019 € million

Figures are rounded.

FX-neutral net sales revenue declined by 8.5% on a like-for-like basis, reflecting an improved trend in the second half compared with a decline of 15.1% in the first half.

We gained 40 basis points of value share in non-alcoholic ready-to-drink beverages in 2020, showing that our performance was superior to our competition. Reported revenues declined by 12.7%, which also reflects the negative impact of the change in accounting treatment of our Russian juice business (Multon) and the weakening of the Russian rouble versus the euro.

Comparable operating expenses as a percentage of revenue increased by 40 basis points in the full year to 27.3%. A strong performance in light of the revenue decline.

Net financing costs increased to €70.1

million, up €3.0 million compared with the prior year due to the change in accounting treatment of our Russian juice business

(Multon) and lower deposit rates.

On a comparable basis, the effective tax rate was 28.7% for 2020 and 25.8% for 2019. On a reported basis, the effective tax rate was 30.1% compared with 26.2% in 2019. The significant growth year-on-year is attributable to the settlement of two multi-year tax audits in Nigeria and certain other non-recurring items. You can find more information on these Nigerian tax audits on page 233 of the Supplementary information section.

Comparable net profit decreased by 17.4% and net profit by 14.9% in 2020 compared to the prior year. The faster decline in net profit compared to EBIT was primarily due to the higher effective tax rate in the year.

Financial review continued

FX-NEUTRAL REVENUE GROWTH YEAR ON YEAR

-9.6 %

COMPARABLE EBIT

€672m

COMPARABLE EBIT MARGIN GROWTH YEAR ON YEAR

+20bps

Balance sheet

Despite difficult circumstances, our balance sheet strengthened in 2020, continuing to support investment in the business and allow for future inorganic expansion potential. At the balance sheet date, the Group had cash and cash equivalents and other financial assets of €1.3 billion.

Total non-current assets decreased by €91.7 million in 2020, mainly due to currency translation and the elimination of the non-current deferred tax asset resulting from the Nigerian tax audit. Net current assets increased by €91.8 million in 2020 mainly as a result of the repayment of the remaining portion of our bond which matured in June 2020.

Cash flow

Due to an improvement in working capital, net cash from operating activities increased by 3.8% during the year. This strong performance on working capital reflects careful operational management of receivables, as well as the decision of some large customers to pay invoices not yet due early, which created a phasing benefit expected to partly reverse in H1 2021.

As the COVID-19 pandemic hit our markets, we had made plans to preserve cash by deferring some capital expenditure, but the strong working capital performance allowed us to limit these deferrals. During the year we prioritised our capital allocation towards the markets with the highest potential, allowing us to continue to invest in the business for the long term. Capital expenditure, net of receipts from the disposal of assets and including principal repayments of lease obligations, decreased by 3.9% year-on-year. Capital expenditure represented 7.6% of net sales revenue, at the upper end of our 6.5%-7.5% target range, compared to 6.9% in 2019.

We expect that capital expenditure as a percentage of sales will remain at the high end of the guided range in the next few years as we continue to invest in cooler placement, expansion into the coffee category, capacity expansion in high growth markets and meeting our sustainability commitments around packaging.

We generated €497.0 million of free cash flow in 2020, up 12.3% from the €442.6 million generated in 2019. This result reflects working capital improvements and lower capital expenditure, partially offset by lower operating profitability.

Borrowings

Our medium- to long-term aim is to maintain a ratio of net debt to comparable adjusted EBITDA in the range of 1.5 - 2.0

times. In 2020, we ended the year with a ratio of 1.51 times. The slight reduction in this ratio from 1.54 times in 2019 is notable in such a challenging year.

Our primary funding strategy in the debt capital markets involves raising financing through our wholly owned Dutch financing subsidiary, Coca-Cola HBC Finance B.V.

We use our €5 billion Euro Medium Term Note (EMTN) and our €1 billion Euro

Commercial Paper (ECP) programmes as the main basis for our financing.

During 2020 we made good use of the Commercial Paper Programme and finished 2020 with a €200 million outstanding balance. We did not issue any new notes under our Euro Medium Term Note programme but instead paid back the outstanding nominal value of bonds maturing in June 2020. Our next bond maturity is not due until November 2024.

The Group has €2.6 billion and €0.8 billion availabile under the EMTN and ECP programmes respectively and also €0.8

billion of undrawn revolving credit facilities

(RCF), with none of these credit facilities carrying any financial covenants which would restrict the Group's access to capital.

Dividend

In view of the Group's progressive dividend policy, the strength of its balance sheet and liquidity position, as well as confidence in the future opportunities for the business, the Board of Directors has proposed a dividend of €0.64 per share. This is a 3.2% increase from the €0.62 per share for 2019.

The dividend payment will be subject to shareholders' approval at our Annual

General Meeting. We are pleased to be able to continue growing dividends, even following such a challenging year.

Cash flow

Payments for purchases of property, plant and equipment Proceeds from sales of property, plant and equipment Principal repayments of lease obligations

Cash flow from operating activities

2020 € million

Free cash flow

Figures are rounded.

2019 € million

Economic value

Lower profits combined with an increase in average net borrowings in 2020 resulted in a decrease in return on invested capital

(ROIC) from 14.2% in 2019 to 11.1% in 2020. At the same time, our weighted average cost of capital (WACC) increased from 6.9% in 2019 to 7.8% in 2020. We continued to grow the positive economic value generated by our operations.

Financial risk management

COVID-19 introduced an unprecedented level of volatility in the financial markets during 2020, which significantly affected both foreign exchange rates and commodity prices. The value of implementing our financial risk management strategy was apparent in this period of heightened uncertainty since especially in foreign exchange our hedging efforts contributed to the absorption of a large part of the negative impact.

In terms of foreign exchange risk, the Group is exposed to exchange rate fluctuation of the euro versus the US dollar and the local currency of each country of our operations. Our risk management strategy involves hedging transactional exposures arising from currency fluctuations, with available financial instruments on a 12-month rolling basis.

The Russian rouble had a particularly weak performance in 2020 both against the euro and the US dollar caused by the COVID-19 pandemic and the resulting collapse in oil prices. Our relatively high transactional exposure coverage built at the beginning of 2020 proved to be particularly effective during this period. Translational exposures are not hedged according to the Group's Treasury Policy and given the weakness of the rouble resulted to a negative impact on reported revenues.

Low oil prices also affected the Nigerian naira, which experienced sizeable depreciation in a market characterised by increasing scarcity of foreign currency liquidity after March 2020.

While our foreign exchange hedging strategy helped in counterbalancing part of the negative impact, the lack of liquidity in the foreign exchange market continued pushing the naira to weaker levels.

On the commodities front, the lower prices incurred on the back of suppressed global economic activity allowed us to benefit on the unhedged part of 2020 exposures and at the same time gave us good entry points for hedging future commodity exposures at very attractive levels.

Our general policy is to retain a minimum amount of liquidity reserves in the form of cash and cash equivalents on our balance sheet. During 2020, we invested our excess cash primarily in short-term time deposits.

Looking ahead

While the outlook for the global economy in 2021 remains uncertain, we are encouraged by our resilient performance and share gains in 2020.

We expect to see a strong FX-neutral revenue recovery in 2021 on the back of gradual volume recovery against the COVID-19 impact in 2020, as well as price/ mix recovery led by improvements in package mix and price increases taken in relation to the Polish sugar tax. We plan to increase marketing investments in 2021, to fuel this top-line recovery.

We believe that the actions taken over several years to improve our cost base will continue to benefit our margin resilience. We expect to be able to have another year in which we achieve strong cost control, which we will be able to adjust depending on the trading environment, allowing us to manage our profitability.

We expect high-single digit input cost per unit case inflation, largely driven by increased contribution in our volume mix from the coffee and energy categories, which also carry offsetting higher revenue per unit case. We expect an increase in the negative impact of foreign currency movements on

EBIT in 2021 compared to 2020. With this in mind, we believe that we will be able to achieve a small expansion in our EBIT margin in 2021 versus 2020.

Looking further ahead, beverages continue to be a high-potential industry and we see many growth opportunities within our evolving brand portfolio and the markets we operate in. Therefore, we believe that once the recovery is underway, the business can return to the growth algorithm we set out at our Capital Markets Day in 2019, which was for FX-neutral revenue growth of 5-6%, with 20-40 basis points of EBIT margin expansion per year on average.

Michalis Imellos

Chief Financial Officer

Total tax by category in 2020 (%)

Corporate income tax: 49.5%

Withholding tax: 2.7%

Payroll taxes: 39.2%

VAT (cost): 1.9%

Environmental taxes: 0.2%

Other taxes: 6.6%

Taxes we contribute to our communities

When considering tax, Coca-Cola HBC gives due consideration to the importance of earning community trust. More specifically, we commit to continue paying taxes in the countries where value is created and ensure that we are fully compliant with tax laws across all relevant jurisdictions. In addition, we commit to being open and transparent with tax authorities about the Group's tax affairs and to disclose relevant information to enable tax authorities to carry out their reviews.

We support the communities in the countries where we operate directly, by creating economic wealth, and also indirectly, by paying taxes. These taxes include corporate income tax calculated on each country's taxable profit, employer taxes and social security contributions, net VAT cost and other taxes that are reflected as operating expenses. Excise taxes and taxes borne by employees are not included.

2020 Borrowing structure (€ m)

Bonds issued: 2,384m

Commercial paper: 200m

Leases: 184m

Other: 158m

70 COCA‑COLA HBC

Segment highlights

Established markets

Our Established markets have a higher relative exposure to the out-of-home channel, including tourism. As a result, our sales volumes in these markets were the most negatively impacted bylockdown restrictions, with volumes declining 14%. Despite this,price increases at the start of the year as well as the resilience of sparkling beverages, which had a positive impact on category mix,

allowed the segment to achieve stable FX-neutral revenue per case. This stability was achieved in spite of weaker package and channel mix, primarily caused by lower volumes from the out-of-home channel. Comparable EBIT declinedby 18.4% with comparable EBIT margins down by 60 basis points. The main driver of this was negative operating leverage given the revenue declines in the segment.

Developing markets

Our Developing segment volume performance reflects both exposure of these markets to the at-home channel as well as strong market share gains in some of the largest countries in the segment. FX-neutral revenue per case declined faster than volumes, reflecting the strategic decision taken prior to the outbreak of the COVID-19 pandemic to have less revenue growth from pricing in 2020 after several years of strong performance on this metric. Comparable EBIT declined by 30.3% and comparable EBIT margin was down by 210 basis points to 8.7%. The larger margin decline in the Developing segment compared with the

Established segment is due to the larger decline in price/mix, since this has a greater adverse impact on margins than volume declines.

Emerging markets

Emerging segment volume grew by 0.3% on a like-for-like basis. On a reported basis, volumes declined by 1.8% since they were also impacted by the accounting treatment of our Russian juice business (Multon) following its reorganisation. Three of the largest countries in the segment achieved volume growth on a like-for-like basis, driven by fewer lockdown restrictions as well as strong market sharegains. FX-neutral revenue per case declined by 3.6%,impacted by a decline in package andchannel mix as wellas the impact of better volume performance from countries with lower price/mix. Comparable EBIT increased by 1.4% and comparable EBIT margin expanded by 170 basis points to 13.0%. The Bambiacquisition, as well as the change in accounting treatment of our Russian Juice business and change in classification of our share of results of integral equity method investments account for 100 basis points of this growth. This was the result of strong top line leverage from Russia and Nigeria, as well as benefits from input costs and FX hedging.

Net sales revenue Operating profit (EBIT)

Comparable EBIT Total taxes Population GDP per capita Bottling plants Employees Water footprint Carbon emissions Safety rate>1 day per 100employees)

1. Total taxes include corporate income tax, withholding tax and deferred tax, as well as social security costs and other taxes that are reflected as operating expenses; as per IFRS accounts.
2. Population source: International Monetary Fund, World Economic Outlook Database, October 2020. Northern Ireland: NISRA (Northern Ireland Statistics and Research Agency), Office for National Statistics, UK, Northern Ireland Economic Outlook, 2020. Italian data: data from ISTAT (Italian National Institute of Statistics), excluding Sicilian population.

2020

2019

% change

Volume breakdown by country (%)

Poland: 47%

Hungary: 20%

Czech Republic: 12%

Baltics: 8%

Croatia: 6%

Population GDP per capita Bottling plants Employees Water footprint Carbon emissions Safety rate >1 day per 100 employees)

Slovakia: 5%

Slovenia: 2%

1. Total taxes include corporate income tax, withholding tax and deferred tax, as well as social security costs and other taxes that are reflected as operating expenses; as per IFRS accounts.
2. Population source: International Monetary Fund, World Economic Outlook Database, October 2020.

2019

% change

Volume breakdown by country (%)

Russian Federation: 26%

Operating profit (EBIT)

Nigeria: 26%

Romania: 15%

Comparable EBIT Total taxes Population GDP per capita Bottling plants Employees Water footprint Carbon emissions Safety rate >1 day per 100 employees)

Serbia and Montenegro: 11%

Ukraine: 10%

Bulgaria: 5%

Belarus: 3%

Bosnia and Herzegovina: 2%

Armenia: 1%

Moldova: 1%

1. Total taxes include corporate income tax, withholding tax and deferred tax, as well as social security costs and other taxes that are reflected as operating expenses; as per IFRS accounts.
2. Population source: International Monetary Fund, World Economic Outlook Database, October 2020. Polulation includes N. Macedonia.

Figures are rounded. Percentage changes are calculated on precise numbers.

Volume (million unit cases)	537	624 -14.0
Net sales revenue (€ million)	2,175	2,518 -13.6
Operating profit (EBIT) (€ million)	203	236 -13.9
Comparable EBIT (€ million)	209	256 -18.4
Total taxes1 (€ million)	111	135 -17.8
Population2 (million)	92	91 0.3
GDP per capita (US$)	38,394	40,285 -4.7
Bottling plants (number)	15	15 -
Employees (number)	6,407	6,624 -3.3
Water footprint (billion litres)	3.7	4.2 -10.9
Carbon emissions (tonnes)	67,450	80,919 -16.6
Safety rate (lost time accidents >1 day per 100employees)	0.55	0.86 -36%

Volume (million unit cases)	412	431 -4.4
Net sales revenue (€ million)	1,171	1,352 -13.4
Operating profit (EBIT) (€ million)	97	139 -30.2
Comparable EBIT (€ million)	102	146 -30.3
Total taxes1 (€ million)	63	65 -3.1
Population2 (million)	76	76 -
GDP per capita (US$)	17,132	17,675 -3.1%
Bottling plants (number)	9	9 -
Employees (number)	4,581	4,738 -3.3
Water footprint (billion litres)	3.2	3.5 -8.7
Carbon emissions (tonnes)	44,927	70,453 -36.2
Safety rate (lost time accidents >1 day per 100 employees)	0.33	0.30 9%

Volume (million unit cases)	1,187	1,209 -1.8
Net sales revenue (€ million)	2,786	3,156 -11.7
Operating profit (EBIT) (€ million)	360	340 5.9
Comparable EBIT (€ million)	361	356 1.4
Total taxes1 (€ million)	169	149 13.4
Population2 (million)	451	446 1.1
GDP per capita (US$)	5,645	6,304 -10.4
Bottling plants (number)	32	32 -
Employees (number)	16,734	17,027 -1.7
Water footprint (billion litres)	8.7	9.1 -5.1
Carbon emissions (tonnes)	319,544	330,118 -3.2
Safety rate (lost time accidents >1 day per 100 employees)	0.11	0.18 -39%

Non‑financial reporting directive

Delivering 24/7 takes an integrated approach

Our purpose

Policies and values

Effective oversight

Serving as our north star ambition to guide everything we do.

Underpinning our business and setting the direction for how we achieve our goals.

Our Board and senior management ensure we stay on course to achieve our vision.

Our purpose pages 24-25

Values pages 24-25

Senior leadership pages 96-98

• Winning with customers
• Nurturing our people
• Excellence
• Integrity
• Learning
• Performing as one

Policies (see our website)

Environmental matters

• Environmental policy
• Climate Change policy
• Packaging Waste & Recycling policy
• Sustainable Agricultural Guiding Principles
• Water Stewardship policy

Employees

• Code of Business Conduct
We are devoted to growing every customer and delighting every consumer 24/7 by nurturing passionate and empowered teams of people while enriching our communities and caring for the environment.
• Inclusion & Diversity policy
• Occupational Health & Safety policy
• Quality & Food Safety policy

Human rights

• Human Rights policy
How our Board considers stakeholders in decision‑making pages 92-94
• Supplier Guiding Principles
• Slavery & Human Trafficking statement

Social matters

Social Responsibility Committee pages 108-109

• Health & Wellness policy
• HIV/AIDS policy
• Code of Business Conduct
• Supplier Guiding Principles
• GMO position statement
• Community Contributions policy
• Premium spirits Responsible Marketing policy
• Public policy engagement
• Quality & Food Safety policy

Anti‑bribery & Corruption

• Code of Business Conduct
• Anti-bribery policy & compliance handbook
• Supplier Guiding Principles
• Community contributions policy

Principal risk

• Risk policy

This spread constitutes our non-financial information statement.

The below provides page references mapping out how our report complies with relevant regulation on non-financial information.

Positive influence

Executing our vision

Defining our success

Being conscious of stakeholders, risks, market changes and material issues, while responding through our business model in a positive way.

To fulfil our Growth Story 2025 we must consider all stakeholders at every step of our journey.

Operating in a sustainable way to ensure our remuneration and sustainability commitments are interlinked.

Business model pages 16-17

Strategic pillars pages 24-25

Remuneration report pages 110-131

1 2 3

LEVERAGE OUR UNIQUE 24/7 PORTFOLIOWIN IN THE MARKETPLACE

Stakeholder engagement pages 20-21

CULTIVATE THE POTENTIAL OF OUR PEOPLE

Market review pages 22-23

• Regulatory environment
5
• Sustainability

EARN OUR LICENCE TO OPERATE

Principal risks pages 58-61 Material issues page 52

Maintaining our leadership of the beverage industry in the DJSI was previously a part of the CEO's individual performance metrics. However, as a result of COVID‑19 individual performance metrics were not possible for our employees including the CEO and as such, this was not the case. We are introducing a sustainability KBI in the PSP awards from 2021 onwards.

See page 127

GRI Content Indexhttps://www.coca-colahellenic.com/ content/dam/cch/us/documents/ oar/Coca-Cola-HBC-2020-GRI-Content-Index.pdf

CEO pay ratio

See page 127

2025 Sustainability commitments pages 50-51

• Emissions reduction
• Water reduction and stewardship
• World Without Waste
• Ingredient sourcing
• Nutrition
• Our people and communities

Corporate Governance

Contents

Corporate Governance

76 Chairman's introduction to corporate governance
80 Board of Directors
84 Corporate Governance Report
110 Directors' Remuneration Report
131 Statement of Directors' Responsibilities

Chairman's introduction to corporate governance

Governing adaptation and change

Letter from the Chairman of the Board

Dear Shareholder

As Chairman, I am pleased to introduce our Corporate Governance Report for 2020. The results of our work this year overseeing implementation of our Growth Story 2025 strategy in the volatile environment of a COVID-19 pandemic are testament to the effectiveness of the Board. Our Board's independence and diverse range of skills helps keep us focused on long-term competitiveness. I believe the Board continues to demonstrate that it is working well together.

Protecting our people and our business

The COVID-19 pandemic created unprecedented change in the retail landscape and considerable challenges to our people and our business. This required agility and adaptation across the Group to face a wealth of challenges.

The Board quickly identified its first priority: ensuring the safety of our people, customers, partners and communities. In early 2020, the Board also supported management in establishing a Group

COVID-19 Operational Task Force, as discussed in more detail in the section on Board oversight of COVID-19 response on pages 87-89. Initially, a crisis management team met daily to monitor the development of the COVID-19 pandemic. Weekly meetings of the Task Force were later established to oversee the Company's response to both health and safety needs and adaptations made in response to the dramatic changes in our operating environment.

A number of steps were taken to support the physical and mental wellbeing and health of our people as they worked to maintain product supply and continue to serve our customers. These are discussed in detail in the cultivate the potential of our people section of this report on pages 38-41.

Closures of hotels, restaurants, cafés, bars, entertainment venues and in some cases, public spaces were implemented across our markets in 2020. In response to these restrictions and the sudden, dramatic change to the retail landscape, our priorities, spending and investment shifted. Changes were made regarding capital expenditures and new product launches. Adjustments were made to our route to market with the redeployment of salespeople from out-of-home to at-home selling. To support the increase in e-commerce activities, we rapidly shifted investment in new and enhanced business-to-business and direct-to-consumer platforms.

The wider community was also a priority and we partnered with

NGOs including the Red Cross, food banks and charities as well as local governments to help people in need. We contributed cash funds and accessed additional cash funds via The Coca-Cola

Foundation to enable the provision of free products to healthcare workers, the purchase of respirators for hospitals and the provision of personal protective equipment. Many of our own people supported this work in the community by volunteering to work for customers in their warehouses, on shop floors and with deliveries; and volunteering for NGOs (to help the elderly) and local government institutions in a number of countries.

Disruptions caused by the COVID-19 pandemic led the Board to devote more time and resources to short-term considerations in

2020. While the COVID-19 pandemic is ongoing as at the start of 2021, with the extraordinary efforts of our dedicated people we have thus far largely succeeded in protecting our employees and our business. We have also positioned the Company to take advantage of new, emerging opportunities in the post-pandemic recovery period.

Adapting to win

The long-term success of our business remains connected to the success of our customers and partners, and our ability to delight consumers with the beverages and brands they love. The theme of this year's report, "Adapt to Win" highlights our focus on continuing to provide better, faster service to our customers during a period of dramatic upheaval. We were able to accomplish this due to our well-embedded values-based culture, which highlights agility, empowerment and continual learning.

As a Board, we aimed to ensure the highest standards of corporate governance at the same time that we committed to doing the right thing, and putting safety first.

Importance of good governance

Our internal policies and procedures, which have been consistently effective since the Group was formed, are properly documented and communicated against the framework applicable to premium listed companies in the UK. As a Board, our aim is to ensure the highest standards of corporate governance, accountability and risk management and this was just as important during the challenges posed by the COVID-19 pandemic.

The Board and its committees conducted an annual review of the effectiveness of our risk management system and internal controls, further details of which are set out in the Audit and Risk Committee report on page 104. The Board confirms that it has concluded that our risk management and internal control systems are effective.

We are subject to the UK Corporate Governance Code 2018. It sets out the principles of good practice in relation to: board leadership and company purpose; division of responsibilities; composition, success and evaluation; audit, risk and internal controls; and remuneration.

Further information on our application of the UK Corporate

Governance Code 2018 for the year ended 31 December 2020 can be found in this report on page 78.

Board meetings normally take place in Zug, Switzerland, but also in selected markets across our territory. These were moved online in 2020 as a result of travel restrictions and safety concerns. The Board and its committees were therefore able to meet as often as planned. Due to care being taken to ensure that Board members are not over committed, it was also possible to have a few additional updates in 2020 when this was warranted.

An engaged Board

Our strong corporate culture is fundamental to our business continuity and success, and the Board plays a critical role in shaping the culture of the Company by promoting a growth-focused and values-based conduct. As our business evolved faster than ever in 2020 in response to disruptions in our business environment, our enduring core values of excellence and customer service served us well while our increased focus on continued learning and smart risk taking supported the Company's adaptation.

We monitor our progress in integrating our values through various indicators, including our Employee Engagement Index, diversity indicators, and health and safety indicators. We understand the importance of the Board's role in establishing the Company's 'tone from the top' in terms of its culture and values, and our Directors lead by example as ambassadors of our values in order to cascade good behaviour throughout the organisation.

In 2020 it was even more critical to continually engage with our people to ensure we understood their needs and challenges.

In addition to the annual survey for the Employee Engagement Index, two additional all-employee surveys were conducted in May and

July 2020. While Charlotte Boyle is our designated non-Executive Director responsible for engaging with our people to provide feedback to the Board, feedback from our people through these surveys was brought to the full Board in 2020 to facilitate understanding and rapid response.

Board evaluation

In line with our commitment to adhere to best corporate governance practices, an externally facilitated Board effectiveness evaluation was conducted in the second half of 2020. We will do this once again in 2021 to build upon the learnings of the 2020 evaluation. Further details are disclosed in the Nomination Committee report on page 106.

Board composition and diversity

The composition and size of the Board will continue to be under review. We believe that our Board is well-balanced and diverse, with the right mix of international skills, experience, background, independence and knowledge in order to discharge its duties and responsibilities effectively. The Board is mindful of the overall length of service of the Board as a whole and is committed to recruiting Directors with diverse backgrounds, personalities, skills and experience.

We continue to attach great importance to all aspects of diversity in our nomination processes at Board and senior management levels, while appointing candidates with the credentials that are necessary for the continuing growth of our operations within a highly competitive and specialised industry. We believe that having a diverse Board is another factor in our resilience and are proud of our track record of female representation. As of the date of this report, female

Directors comprise more than 30% of our Board.

At the 2020 Annual General Meeting, Anna Diamantopoulou was appointed to the Board as non-Executive Director and John Sechi retired on the same date. The skills and expertise each member brings to our Board can be found on pages 80-82.

Anastassis G. David

Chairman of the Board

How the Board oversaw strategy implementation during the COVID‑19 pandemic

In spite of considerable upheaval in retail and changing consumer needs and preferences across our markets in 2020, we remain convinced that pursuing our vision to become the leading 24/7 beverage partner is the right long-term strategy for our Company. Safety was our first priority in 2020, followed by ensuring business continuity and positioning the Company to take advantage of emerging opportunities to achieve growth and success over the long term.

Decisions taken by the Board this year to support our long-term strategy while navigating short-term concerns included prioritising investments in technology, reducing CapEx spending, temporarily cutting production of niche products to streamline supply and distribution and adjusting new product launches. Our roll out of our Costa Coffee business, for example, continued largely as planned although some adjustments were made to prioritise at-home channels. Details about our Costa Coffee launch are reported on page 29. To maintain alignment between the Company's culture, values and strategy during the COVID-19 pandemic, the

Remuneration Committee oversaw adjustments to our incentive arrangements. Details are reported in the Remuneration Committee report on pages 110-111.

See page 87 for more information.

The UK Corporate

Governance Code 2018

As a Swiss corporation listed on the London Stock Exchange (LSE) with a secondary listing on the Athens Exchange, we aim to ensure that our corporate governance systems remain in line with international best practices. Our corporate governance standards and procedures are continuously reviewed in light of current developments and rulemaking processes in the UK, Switzerland and also the EU. Further details are available on our website.

In respect of the year ended 31 December 2020, the Company was subject to the UK Corporate Governance Code 2018 (a copy is available from:www.frc.org.uk).

Our Board confirms that the Company applied the principles and complied with the provisions of the UK Corporate Governance Code throughout the financial year ended December 2020, except for the following provisions: (1) the Chairman was not independent on appointment (provision 9) and has been a Board member for more than nine years (provision 19), and a full explanation for this departure is provided on page

84. On appointment the Board unanimously supported and continues to support Anastassis David's appointment as Chairman; (2) provision 38 requires alignment of executive director pension contributions with the wider workforce. As this is a new requirement of the UK Corporate Governance Code, it was difficult for us to comply with this provision due to existing contractual obligations. However, as explained on page 114 of the Directors' Remuneration Report, our timeline for compliance is that on the appointment of any new Executive Director their pension contributions will be aligned with the pension scheme for the wider workforce. Pursuant to our obligations under the Listing Rules, we intend to apply the principles and continually comply with the provisions of the UK Corporate Governance Code or to explain any instances of non-compliance in our Annual Report. The Company has applied the principles as far as possible and in accordance with and as permitted by Swiss law. Further information on appointment of Directors and compliance with the UK Corporate Governance Code can be found as follows:

Section 1: Board leadership and company purpose

See page

Section 3: Composition, succession and evaluation

See page

A. Effective and entrepreneurial board to promote the long-term sustainable success of the company, generating value for shareholders and contributing to wider society

J. Board appointments and succession plans for board and senior management and promotion of diversity
K. Skills, experience and knowledge of Board and length of service of board as a whole
- B. Purpose, values and strategy with alignment to culture
- C. Resources for the company to meet its objectives and measure performance. Controls framework for management and assessment of risks
L. Annual evaluation of board and directors and demonstration of whether each director continues to contribute effectively

• Board composition

D. Effective engagement with shareholders and stakeholders
- • Diversity, tenure and experience
E. Consistency of workforce policies and practices to support long-term sustainable success

• Board, committee and director performance evaluation

• Nomination Committee report

83-84 82-83 94 106-107

• Chairman's letter

• Strategic report

• Board engagement with key stakeholders

• Shareholder engagement

10-12 10-72 83-93 94

Section 4: Audit, risk and internal controls

See page

M. Independence and effectiveness of internal and external audit functions and integrity of financial and narrative statements
- • Audit and Risk Committee report
- • Conflicts of interest
100-105 95
N. Fair, balanced and understandable assessment of the company's position and prospects
O. Risk management and internal control framework
Section 2: Division of responsibilities
See page
and principal risks company is willing to take to achieve
its long-term objectives

F. Leadership of board by chair

• Audit and Risk Committee report

G. Board composition and responsibilities
H. Role of non-executive directors
- • Strategic Report
100-105 10-72
I. Company secretary, policies, processes, information, time and resources

• Fair, balanced and understandable Annual Report

102, 105, 131

• Board composition

• Key roles and responsibilities

• General qualifications required of all Directors

• Information and training

84-85 85-86 83 94

• Going concern basis of accounting

• Viability statement

103, 131 57

Section 5: Remuneration

See page

• Board appointments and succession planning

P. Remuneration policies and practices to support strategy and promote long-term sustainable success with executive remuneration aligned to company purpose and values

Q. Procedure for executive, director and senior management remuneration
R. Authorisation of remuneration outcomes

• Remuneration Committee report

110-130

Certain differences between the Company's corporate governance practices and the UK Corporate Governance Code

Amending the Articles of Association

The Swiss Ordinance against Excessive Compensation in Listed

The Articles of Association may only be amended by a resolution of the shareholders passed by a majority of at least two-thirds of the voting rights represented and an absolute majority of the nominal value of the shares represented.

Companies further limits the authority of the Remuneration Committee and the Board to determine compensation. The effective limitations include requiring that the Annual General Meeting approve the maximum total compensation of each of the Board and the Operating Committee, requiring that certain compensation elements be authorised in the Articles of Association and prohibiting certain forms of compensation, such as severance payments and financial or monetary incentives for the acquisition or disposal of firms. We are in compliance with the requirements of the Swiss Ordinance against Excessive Compensation in Listed Companies and have amended our Articles of Association to that effect.

Share capital structure

The Company has ordinary shares in issue with a nominal value of CHF 6.7 each. Rights attaching to each share are identical and each share carries one vote. The Company's Articles of Association also allow, subject to shareholder approval, for the conversion of registered shares into bearer shares and bearer shares into registered shares.

Details of the movement in ordinary share capital during the year can be found on page 196. There are no persons holding shares that carry special rights with regard to the control of the Company.

Anastassis G. David was originally appointed as non-Executive

Powers of Directors to issue and buy back shares

Director in 2006 at the request of Kar-Tess Holding and was not, at the time of his appointment as Chairman, in 2016, independent as defined by the UK Corporate Governance Code. In view of

Anastassis David's strong identification with the Company and its shareholder interests, combined with his deep knowledge and experience of The Coca-Cola System, the Board deemed it to be in the best interests of the Group and its shareholders for him to be appointed as Chairman, to continue to promote an effective and appropriately balanced leadership of the Group. In accordance with the established policy of appointing all Directors for one year at a time, the Board intends to continue to keep all positions under regular review and subject to annual election by shareholders at the

Subject to the provisions of the relevant laws and the Articles of Association, the Board acting collectively has the ultimate responsibility for running the Company and the supervision and control of its executive management. The Directors may take decisions on all matters which are not expressly reserved to the shareholders or by the Articles of Association. Pursuant to the provisions of the Articles of Association, the Directors require shareholder authority to issue and repurchase shares. At the Annual

General Meeting on 16 June 2020, the shareholders authorised the

Annual General Meeting. The Board is cognisant of the length of tenure of the Chairman and when he was first appointed to the

Directors to repurchase ordinary shares of CHF 6.70 each in the capital of the Company up to a maximum aggregate number of 10,000,000 representing less than 10% of the Company's issued share capital as at 6 May 2020. The authority will expire at the conclusion of the 2021 Annual General Meeting on 22 June 2021.

Board. However, the Board continues to believe that the proven leadership of our Chairman in combination with his deep knowledge of The Coca-Cola System position him as unique to steer the Group at the current challenging time.

Total shares held in treasury are 6,189,415 of which 2,759,280 shares are held by Coca-Cola HBC AG and 3,430,135 shares are held by its subsidiary, Coca-Cola HBC Services MEPE.

Application of governance codes

Other corporate governance codes

There is no mandatory corporate governance code under Swiss law applicable to the Company. The main source of law for Swiss governance rules is the company law contained in article 620 ff.

of the Swiss Code of Obligations, as well as the Ordinance against Excessive Compensation in Listed Companies.

In addition, the UK's City Code on Takeovers and Mergers

(the 'City Code') does not apply to the Company by operation of law, as the Company is not incorporated under English law. The Articles of Association include specific provisions designed to prevent any person acquiring shares carrying 30% or more of the voting rights (taken together with any interest in shares held or acquired by the acquirer or persons acting in concert with the acquirer) except if (subject to certain exceptions) such acquisition would not have been prohibited by the City Code or if such acquisition is made through an offer conducted in accordance with the City Code. For further details, please refer to the Company's Articles of Association, which are available on our website.

Board of Directors

Anastassis G. David Non-Executive Chairman

Appointed: January 2016. He joined the Board of Coca-Cola HBC as a non-Executive Director in 2006 and was appointed Vice Chairman in 2014.

Skills and experience: Anastassis brings to his role more than 20 years' experience as an investor and non-executive director in the beverage industry. Anastassis is also a former Chairman of Navios Corporation. He holds a BA in History from Tufts University.

External appointments: Anastassis is active in the international community. He serves as vice-chairman of Aegean Airlines S.A., vice-chairman of the Cyprus Union of Shipowners and chairman of the Board of Sea Trade Holdings Inc, a shipowning company of dry cargo vessels. He is also a member of the Board of Trustees of College Year in Athens.

Nationality: British

Zoran Bogdanovic

Chief Executive Officer, Executive Director

Appointed: June 2018.

Skills and experience: Zoran was previously the Company's Region Director responsible for operations in 12 countries, and has been a member of the Operating Committee since 2013. He joined the Company in 1996 and has held a number of senior leadership positions, including as General

Manager of the Company's operations in Croatia,

Switzerland and Greece. Zoran has a track record of delivering results across our territories and demonstrating the values that are the foundation of our Company culture.

External appointments: None Nationality: Croatian

Charlotte J. Boyle

Independent non-Executive Director

Appointed: June 2017.

Skills and experience: After 14 years with

The Zygos Partnership, an international executive search and board advisory firm, including nine years as a partner, she retired from her position in July 2017. Prior to that, Charlotte worked at

Goldman Sachs International, and at Egon Zehnder International, an international executive search and management assessment firm. Charlotte obtained an MBA from the London Business

School and an MA from Oxford University, and was a Bahrain British Foundation Scholar.

External appointments: Charlotte serves as an independent non-executive director and chair of the Environment, Sustainability and Community

Committee and the Remuneration Committee of Capco plc, a non-executive adviser to the Group Executive Board of Knight Frank LLP and as member of the board and chair of the finance committee of Alfanar, the venture philanthropy organization.

Nationality: British

Olusola (Sola) David‑Borha

Independent non-Executive Director

Appointed: June 2015.

Skills and experience: Sola has more than 30 years' experience in financial services and held several senior roles within the Stanbic Group, including the position of Chief Executive of Stanbic IBTC Bank from May 2011 to November 2012. She also served as Deputy Chief Executive Officer of Stanbic IBTC Bank and Head of Investment

Banking Coverage Africa (excluding South Africa).

Stanbic IBTC Holdings is listed on the Nigerian Stock Exchange and is a member of Standard Bank group.

Sola holds a first degree in Economics, and obtained an MBA degree from Manchester Business School. Her executive education experience includes the Advanced Management Programme of the Harvard

Business School and the Global CEO Programme of CEIBS, Wharton and IESE.

External appointments: Since January 2017, Sola has been the Chief Executive of the Africa

Regions (excluding South Africa) for Standard

Bank Group, Africa's largest bank by assets with operations in 20 countries across the continent,

Sola serves also as non-executive director on the boards of Stanbic IBTC Holdings Plc and Stanbic Uganda Holdings Limited, listed entities that are members of the Standard Bank Group.

Nationality: Nigerian

Anna Diamantopoulou

Independent non-Executive Director

Appointed: June 2020.

Skills and experience: Anna, as a former European Commissioner, brings to the Group a unique expertise on matters of employment and equal opportunity together with deep knowledge of European CSR agenda. Anna was an elected

Member of the Greek Parliament for over a decade and during that time she served as Deputy Minister for Industries, Minister of Education, Lifelong Learning and Religious Affairs and Minister of Development, Competitiveness and Shipping of the Hellenic Republic. Anna served as a member of the European Commission in charge of Employment, Social Affairs and Equal

Opportunities (1999-2004).

External appointments: Founder and President of DIKTIO-Network for Reform in Greece and Europe, a leading Athens-based independent, non-partisan policy institute. A Council Member of the European Council on Foreign Relations, an Advisory Board Member of Delphi Economic Forum and a member of the Honorary Board of the Bussola Institute, a foundation aiming to strengthen cooperation between the EU and the GCC.

Nationality: Greek

William W. (Bill) Douglas III

Independent non-Executive Director

Appointed: June 2016.

Skills and experience: Bill is a former Vice President of Coca-Cola Enterprises, a position in which he served from July 2004 until his retirement in June 2016. From 2000 until 2004, Bill served as Chief Financial Officer of Coca-Cola

HBC. Bill has held various positions within the Coca-Cola System since 1985, including positions with responsibility for the IT function. Before joining the Coca-Cola System, Bill was associated with Ernst & Whinney, an international accounting firm. He received his undergraduate degree from the J.M. Tull School of Accounting at the University of Georgia.

External appointments: Bill is the Lead Director and Chairman of the Audit Committee of SiteOne

Landscape Supply, Inc. He is also a member of the Board of Directors and Chair of the Audit Committee for The North Highland company.

Finally, he is on the Board and past Chair of the University of Georgia Trustees.

Nationality: American

Reto Francioni

Senior Independent non-Executive Director

Appointed: June 2016.

Skills and experience: Reto has been Professor of Applied Capital Markets Theory at the University of Basel since 2006 and is the author of several highly respected books on capital market issues.

From 2005 until 2015, Reto was Chief Executive Officer of Deutsche Börse AG and from 2002 until 2005, he served as Chairman of the Supervisory

Board and President of the SWX Group, which owns the Swiss Stock Exchange and has holdings in other exchanges. Between 2000 and 2002, Reto was Co-Chief Executive Officer and Spokesman for the Board of Directors of Consors AG. Between 1993 and 2000, he held various management positions at Deutsche Börse AG, including that of Deputy Chief Executive Officer. He earned his Doctorate of Law at the University of Zurich.

External appointments: Reto serves as a member of the Board of Directors of UBS Group and also as the Chairman of the Supervisory Board of Swiss International Airlines. Reto is also a Vice Chairman at the Board of Directors of Medtech Innovation Partners AG, Basel.

Nationality: Swiss

Anastasios I. Leventis Non-Executive Director

Appointed: June 2014.

Skills and experience: Anastasios began his career as a banking analyst at Credit Suisse and then American Express Bank. He has previously served on the boards of the Cyprus Development

Bank and Papoutsanis SA. He holds a BA in Classics from the University of Exeter and an MBA from

New York University's Leonard Stern School of Business.

External appointments: Anastasios is a board member of A.G. Leventis (Nigeria) Ltd. He is also a director of Alpheus Administration, a private company that administers assets for private clients and charitable foundations. In addition, he serves as a trustee of the A.G. Leventis Foundation, a member of the Board of Overseers of the Gennadius Library in Athens and a member of the Campaign board of the University of Exeter. He is a co-founder of the Cyclades Preservation Fund.

Nationality: British

Christo Leventis Non-Executive Director

Appointed: June 2014.

Skills and experience: Christo worked as an Investment Analyst with Credit Suisse Asset Management from 1994 to 1999. In 2001, he joined J.P. Morgan Securities as an Equity Research Analyst focusing on European beverage companies. From 2003 until March 2014, Christo was a member of the Board of Directors of Frigoglass S.A.I.C., a leading global manufacturerof commercial refrigeration products for the beverage industry. Christo holds a BA in Classics from University College London and an MBA from the Kellogg School of Management in Chicago.

External appointments: Christo is the Chairman of Alpheus Capital, a single family private equity investment office.

Nationality: British

Alexandra Papalexopoulou

Independent non-Executive Director

Appointed: June 2015.

Skills and experience: Alexandra worked previously for the OECD and the consultancy firm

Booz, Allen & Hamilton, in Paris. From 2003 until February 2015, she served as a member of the board of directors of Frigoglass S.A.I.C. From 2010 to 2015, she served as a member of the board of directors of National Bank of Greece and from 2007 to 2009, she served as a member of the board of directors of Emporiki Bank. Alexandra holds a BA in Economics and Mathematics from Swarthmore College, USA, and an MBA from

INSEAD, France.

External appointments: Alexandra is the Strategic Planning Director at Titan Cement Company S.A., where she has been employed since 1992 and has served as Executive Director since 1995. Alexandra is treasurer and a member of the board of directors of the Paul and Alexandra Canellopoulos Foundation, a member of the board of directors of the INSEAD business school and a member of the board of trustees of the American

College of Greece.

Nationality: Greek

Board committees

Audit and Risk Committee page 100

Nomination Committee page 106

Social Responsibility Committee page 108

Remuneration Committee page 110Committee Chair

Board of Directors continued

José Octavio Reyes Non-Executive Director

Appointed: June 2014.

Skills and experience: José is the former Vice

Chairman of The Coca-Cola Export Corporation, a position in which he served from January 2013 until his retirement in March 2014.

He was president of the Latin America Group of The Coca-Cola Company from December 2002 to December 2012. Following various managerial positions in Mexico, Brazil and in

The Coca-Cola Company headquarters in Atlanta, José was named President of the North Latin

America Division of Coca-Cola in 2002. Prior to joining Coca-Cola, José spent five years with Grupo IRSA, a Monsanto Company joint venture. José holds a BSc in Chemical Engineering from the Universidad Nacional Autónoma de México and an MBA from the Instituto Tecnológico de

Estudios Superiores de Monterrey.

External appointments: José has been a member of the board of directors of MasterCard WorldWide since January 2008. He has been a Director of Coca-Cola FEMSA S.A.B. de C.V. since 2016.

Nationality: Mexican

Alfredo Rivera Non-Executive Director

Appointed: June 2019.

Skills and experience: From 2013 to 2016,

Alfredo was President of the Latin Center Business Unit for The Coca-Cola Company. Before joining the Latin Center, from September 2006 to December 2012, Alfredo was Sparkling Beverages

General Manager for the Mexico Business Unit of The Coca-Cola Company. Alfredo joined

The Coca-Cola Company in the Central America and Caribbean Division in 1997 as District Manager for Guatemala and El Salvador. From 1999 to 2003 he was appointed Southeast Region Manager in the Brazil Division and from 2004 to 2006, he served as General Manager of the Ecuador business, leading the turnaround of the business under challenging circumstances. Prior to joining

The Coca-Cola Company, Alfredo worked for two independent Coca-Cola bottlers in Honduras and El Salvador for 13 years. Alfredo holds a BA in History and an MBA from the University of Mississippi.

External appointments: Alfredo is president of North America for The Coca-Cola Company, helping lead the company's transformation to emerge stronger as a total beverage company, enabled by a globally-networked organization.

Prior to his current role, Alfredo served as president of TCCC's Latin America group, where he oversaw the operations of four business units across nearly 40 Latin and Caribbean countries.

A veteran of the global Coca-Cola system for more than 35 years, Alfredo is a seasoned operator with proven ability to develop winning strategies and inspire teams to achieve sustainable growth.

Nationality: Honduran

Diversity, tenure and experience of the Board

Board gender diversity

Board tenure

Men: 9

Women: 4

0-1 years 1

1-2 years 1

2-3 years 1

3-4 years 1

4-5 years 3

5-6 years 2

6-7 years 3

13-14 years 1

Ryan Rudolph Non-Executive Director

Appointed: June 2016.

Skills and experience: From 2006 until 2019 Ryan was an attorney and partner at the law firm Oesch & Rudolph. From 1993 until 2006, he worked as an attorney at the business law firm Lenz & Staehelin in Zurich. Prior to that, he worked as a public relations consultant at the public relations agency Huber & Partner in Zurich, as marketing assistant and subsequently as manager at Winterthur Life Insurance as well as part-time with D&S, the Institute for Marketing and Communications Research in Zurich. Ryan obtained an LLM from the University of Zurich and is admitted to the Zurich bar. Ryan also studied at the Faculté des Lettres of the University of Geneva, as well as the Ecole Polytechnique in Lausanne.

External appointments: Ryan is an attorney and partner at the Zurich-based law firm RCS Trust & Legal A.G. In addition, he serves as a member of the Foundation Board of the A.G. Leventis Foundation and as a member of the board of various privately-held companies and charitable foundations.

Nationality: Swiss

Board committees

Audit and Risk Committee page 100

Nomination Committee page 106

Social Responsibility Committee page 108

Remuneration Committee page 110

Committee Chair

Board experience

Finance, investments and accounting

International exposure

FMCG knowledge/ experience

Risk oversight and management Sustainability and community engagement

Corporate governance

12 13

General qualifications required of all Directors

Coca-Cola HBC's Board Nomination Policy requires that each Director is recognised as a person of the highest integrity and standing, both personally and professionally. Each Director must be ready to devote the time necessary to fulfil his or her responsibilities to the Company according to the terms and conditions of his or her letter of appointment. Each Director should have demonstrable experience, skills and knowledge which enhance Board effectiveness and will complement those of the other members of the Board to ensure an overall balance of experience, skills and knowledge on the Board. In addition, each Director must demonstrate familiarity with and respect for good corporate governance practices, sustainability and responsible approaches to social issues.

Business characteristics

Our business is extensive and involves complex financial transactions in the various jurisdictions where we operate

Our business is truly international with operations in 28 countries, at different stages of development, on three continents

Our business involves the preparation, packaging, sale and distribution of the world's leading non-alcoholic beverage brandsOur Board's responsibilities include the understanding and oversight of the key risks we are facing, establishing our risk appetite and ensuring that appropriate policies and procedures are in place to effectively manage and mitigate risks

Building community trust through the responsible and sustainable management of our business is an indispensable part of our culture

Our business involves compliance with many different regulatory and corporate governance requirements across a number of countries, as well as relationships with national governments and local authorities

Director

Anastassis G. David4 Zoran Bogdanovic Charlotte J. Boyle Anna Diamantopoulou1 Olusola (Sola) David-Borha William W. (Bill) Douglas III

Appointed

January 2016

June 2018

June 2017

June 2020

June 2015

June 2016

Reto Francioni Anastasios I. Leventis Christo Leventis Alexandra Papalexopoulou2 José Octavio Reyes Alfredo Rivera Ryan Rudolph John P. Sechi3

June 2016

June 2014

June 2015

June 2014

June 2019

June 2016

June 2014

Board

Attended/ Total meetings

6/6

4/4

6/6

Qualifications, skills and experience

Experience in finance, investments and accounting

Directors 12

Broad international exposure, and emerging and developing markets experience

Extensive knowledge of our business and the fast-moving consumer goods industry, as well as experience with manufacturing, route to market and customer relationships

Risk oversight and management expertise

Expertise in sustainability and experience in stakeholder engagement

Expertise in corporate governance and/or government relations

Audit and Risk

Attended/ Total meetings

8/8 8/8

Remuneration

Attended/ Total meetings

4/4 2/3

4/4

Nomination

Attended/ Total meetings

4/4

Social Responsibility

Attended/

Total meetings

2/3 3/3

4/4

6/6 4/4 6/6

6/6

5/5

1/1

1/1 1/1

6/6 4/4 6/6 6/6

2/2

3/3

1. Anna Diamantopoulou was appointed to the Board at the Annual General Meeting on 16 June 2020. She was unable to attend the Remuneration and Nomination Committees meetings in December due to a long-standing prior engagement.
2. Alexandra Papalexopoulou became a member of the Audit and Risk Committee at the Annual General Meeting on 16 June 2020.
3. John Sechi retired from the Board and from the Audit and Risk Committee at the Annual General Meeting on 16 June 2020.
4. Anastassis David was appointed as Chairman in 2016.

Corporate governance report

Board composition

Membership of the Board

On 31 December 2020, our Board comprised 13 Directors: the

Chairman, one Senior Independent Director, 10 non-Executive

Directors and one Executive Director. The biographies of each member of the Board are set out on pages 80 to 82.

The non-Executive Directors, of whom six (representing half of the members excluding the Chairman) are determined by the Board to be independent, are experienced individuals from a range of backgrounds, countries and industries. The composition of the Board complies with the UK Corporate Governance Code's recommendation that at least half of the Board, excluding the Chairman, comprise independent Directors. At the Annual General Meeting held on 16

June 2020, Anna Diamantopoulou was appointed as a non-Executive Director and became a member of the Nomination Committee, the Remuneration Committee and the Social Responsibility Committee. John Sechi retired as a non-Executive Director and as a member of the Audit and Risk Committee on the same date. There were no other changes to the Board during 2020. The changes to committee membership are set out in each committee report.

Outside appointments

The Articles of Association of the Company (article 36) set limits on the maximum number of external appointments that members of our Board and executive management may hold. In addition, if a Board member wishes to take up an external appointment he or she must obtain prior Board approval. The Board will assess all requests on a case-by-case basis, including whether the appointment in question could negatively impact the Company or the performance of the Director's duties to the Group.

The nature of the appointment and the expected time commitment are also assessed to ensure that the effectiveness of the Board would not be compromised.

Details of the external appointments of our non-Executive Directors are contained in their respective biographies set out on pages 80-82.

Our Chairman serves as vice-chairman of Aegean Airlines S.A., vice-chairman of the Cyprus Union of Shipowners and chairman

of the Board of Sea Trade Holdings Inc., a shipowning company
of dry cargo vessels. He is also a member of the Board of Trustees
of College Year in Athens. In this context, the Board considers that fewer than four of the positions held by the Chairman are considered to be significant.

A number of our other Directors also have other external roles but having considered the scope of the external appointments of all Directors, including the Chairman, our Board is satisfied that they do not compromise the effectiveness of the Board as each Director has sufficient time to devote to his or her role on the Board as the Board requires. According to the terms of appointment the Directors are expected to devote such time as necessary for the performance of their duties. This will include attendance at approximately 10 Board meetings, Annual General Meetings and other ad hoc meetings.

As can be seen in the table of attendance of Board and Board Committee meetings on page 83, the Directors were able to devote the time required of them to their role on the Board. In 2020 the Board was able to adjust schedules to participate in several additional updates regarding the pandemic and its impact. The Board has determined that each member of the Board commits sufficient time and energy to the role and continues to make a valuable contribution to the Board and its committees.

Independence

Our Board has concluded that Charlotte J. Boyle, Olusola (Sola) David-Borha, Anna Diamantopoulou, William W. (Bill) Douglas III, Reto Francioni and Alexandra Papalexopoulou are deemed to be independent in accordance with the criteria set out in the UK

Corporate Governance Code, with such individuals being independent in both character and judgement.

The other non-Executive Directors, Anastassis G. David (Chairman),

Anastasios I. Leventis, Christo Leventis, José Octavio Reyes, Alfredo Rivera and Ryan Rudolph, were appointed at the request of shareholders of the Company: Kar-Tess Holding and The Coca-Cola

Company. They are therefore not considered, by the Board, to be independent as defined by the UK Corporate Governance Code.

Anastassis G. David was appointed as Chairman on 27 January 2016. The Board firmly believes that Anastassis David embodies the

Company's core values, heritage and culture and that these attributes, together with his strong identification with the Company and its shareholders' interests, and his deep knowledge and experience of The Coca-Cola System, ensure an effective and appropriately balanced leadership of the Board and the Company. Anastassis David was first appointed as a member of the Board in 2006 before being appointed Chairman in 2016. Prior to his appointment as Chairman, major shareholders were consulted and an external search consultancy engaged to find suitable candidates.

The consensus and recommendation was that Anastassis David was the appropriate candidate to become Chairman and that he continues to be effective in his leadership of the Board. Anastassis David has the continuing support of the Board and major shareholders to remain as Chairman.

Shareholders' nominees

As described under the heading 'Major shareholders' on page 237, since the main listing of the Company on the Official List of the London Stock Exchange in 2013, Kar-Tess Holding, The Coca-Cola

Company and their respective affiliates have no special rights in relation to the appointment or re-election of nominee Directors, and those Directors of the Company who were originally nominated at the request of The Coca-Cola Company or Kar-Tess Holding will be required to stand for re-election on an annual basis in the same way as the other Directors. The Nomination Committee is responsible for identifying and recommending persons for subsequent nomination by the Board for election as Directors by the shareholders on an annual basis.

As our Board currently comprises 13 Directors, neither Kar-Tess Holding nor The Coca-Cola Company is in a position to control

(positively or negatively) decisions of the Board that are subject to simple majority approval. However, decisions of the Board that are subject to the special quorum provisions and supermajority requirements contained in the Articles of Association, in practice, require the support of Directors nominated at the request of at least one of either The Coca-Cola Company or Kar-Tess Holding in order to be approved. In addition, based on their current shareholdings, neither Kar-Tess Holding nor The Coca-Cola Company is in a position to control a decision of the shareholders (positively or negatively),

except to block a resolution to wind up or dissolve the Company or to amend the supermajority voting requirements. The latter requires the approval of 80% of shareholders where all shareholders are represented and voting. Depending on the attendance levels at Annual General Meetings, Kar-Tess Holding or The Coca-Cola

Company may also be in a position to control other matters requiring supermajority shareholder approval.

Anastassis G. David, Anastasios I. Leventis, Christo Leventis and Ryan Rudolph were all originally appointed at the request of Kar-Tess Holding. José Octavio Reyes and Alfredo Rivera have been appointed at the request of The Coca-Cola Company.

Separation of roles

There is a clear separation of the roles of the Chairman and the Chief Executive Officer. The Chairman is responsible for the operation of the Board and for ensuring that all Directors are properly informed and consulted on all relevant matters. The Chairman, in the context of the Board meetings and as a matter of practice, also meets separately with the non-Executive Directors without the presence of the Chief Executive Officer and promotes the culture of openness and debate within the Board sessions as well as outside the formal sessions.

The Chairman is also actively involved in the work of the Nomination Committee concerning succession planning and the selection of key people. The Chief Executive Officer, Zoran Bogdanovic, is responsible for the day-to-day management and performance of the Company and for the implementation of the strategy approved by the Board.

Key roles and responsibilities

Board of Directors

Our Board has ultimate responsibility for our long-term success and for delivering sustainable shareholder value as well as contributing to wider society. The Board is responsible for setting the Company's purpose, values and strategy and ensures the alignment with its culture; this includes ensuring that workforce policies and practices are consistent with the Company's values and support its long-term sustainable vision. Further details are set out on pages 86-90. This is achieved by approving the corporate strategy, monitoring performance toward strategic objectives, overseeing implementation of the strategy by the Operating Committee and approving matters reserved by the Articles of Association for decision by the Board. Specific tasks are delegated by the Board to its committees for audit and risk, nomination, remuneration and social responsibility.

The governance process of the Board is set out in our Articles of Association and the Organisational Regulations. These regulations define the role and responsibilities of the Board and its committees, and can be found athttps://coca-colahellenic.com/en/about-us/corporate-governance/corporate-governance-overview/. In addition, the Swiss Ordinance against Excessive Compensation in Listed Companies imposes certain obligations on the Board, including a requirement to prepare and make available a remuneration report pursuant to Swiss law.

Chairman

• leads the Board, sets the agenda and promotes a culture of openness and debate;
• is responsible for overall effectiveness in leading the Company and setting the culture;
• ensures the highest standards of corporate governance;
• is the main point of contact between the
Board and management; and
• ensures effective communication with shareholders and stakeholders.

Board committees

Our Board has delegated specific tasks to its committees as set out in the Organisational Regulations and reports from these committees are set out in this Corporate Governance Report. Biographies of the Chairs of the Board committees and the other members of the Board, the Audit and Risk Committee, the Nomination Committee, the Remuneration Committee and the Social Responsibility Committee are set out on pages 80-82.

Audit and Risk Committee

Responsibilities

• Oversight of the accounting policies, financial reporting and disclosure controls; the Group's approach to internal controls and risk management; and the quality, adequacy and scope of internal and external audit functions.
• Oversight of the Company's compliance with legal, regulatory and financial reporting requirements, and the work programme of the internal audit function.
• External auditor reports directly to the Committee.

Operating Committee

Remuneration Committee

Responsibilities

• Establishment of the remuneration strategy for the Group; determines and agrees with the Board the remuneration of Group Executives and approves remuneration for the Chairman and the Chief Executive Officer.
• Makes recommendations to the Board regarding remuneration matters to be approved at the
Annual General Meeting.
• Implementation or modification of any employee benefit plan resulting in an increased annual cost of €5 million or more.

Nomination Committee

Responsibilities

• Identification and nomination of new Board members, including recommending Directors to be members of each Board committee.
• Ensuring adequate Board training; supporting the Board and each committee in conducting a self-assessment.
• Oversight of the establishment of a talent development framework for the Group.
• Oversees effective succession planning for the Chief Executive Officer, in consultation with the Chairman, and for the Operating Committee, in consultation with the Chief Executive Officer.

Social Responsibility Committee

Responsibilities

• Supports the Board in its responsibilities to safeguard the Group's reputation for responsible and sustainable operations.
• Oversight of the Group's engagement with stakeholders to assess their expectations, and the possible consequences of these expectations for the Group.
• Establishes principles governing social and environmental management, and oversees development of performance management to achieve social and environmental goals.

The Operating Committee, led by the Chief Executive Officer, meets 12 times each year and provides the Group with executive leadership.

The Committee has responsibility for: the development of long-term strategies and the implementation of strategies approved by the Board; providing adequate head-office support for each of the Group's countries; working closely with the country General Managers, as set out in our operating framework; and the setting of annual targets and approval of annual business plans which form the basis of the Group's performance management.

Corporate governance report continued

Applied governance

Summary of key Board activities for 2020 and priorities for 2021

Topic Strategy

2020 activity

2021 priority

• Monitoring progress towards our Growth Story 2025 • Review the progress towards becoming the leading

• Ongoing support on product innovation and new product and package launches
24/7 beverage partner and leveraging the unique 24/7 portfolio
• Continued close alignment with The Coca-Cola Company
- • Close monitoring of plans to address packaging challenges and reduce one-way plastic packaging
• Monitoring progress towards our 2025 sustainability commitments
- • Continued alignment with key stakeholders
Performance
• Regular performance reviews with focus on the
Group's key business indicators

• Deep dive reviews of regions and key functions
- • Periodic reviews of the business performance in specific markets and monitoring the launch of the coffee business
• Review of the performance of the Company's innovation initiatives

• Considering the outcome of the Group's Innovation for Growth competition and follow-up plans
• Acceleration of the sales capabilities across the organisation based on the insights from the Group's big data and advanced analytics work

Risk management • and internal

Continued review of emerging principal risks and mitigation programmes

• Ongoing review of key principal risks, including risks relating to the COVID-19 pandemic
control
- • Reviewing mitigation plans for COVID-19 pandemic
- • Monitoring the performance of the Group's COVID-19 Operational Task Force
• Reviewing the liquidity and financing status of the Group
- • Reviewing information technology plans, including cyber security
• Implementing the Group's COVID-19 response plans and execution initiatives in modern trade, e-commerce and management reporting systems
• Enhancing the cyber security programme in order to meet the needs for the accelerated digitalisation of the business

Operational

• Ongoing review of the Group's cost optimisation and investment programmes
- • Implementation of cost optimisation programmes and CapEx investments
• Consolidation of new acquisitions
• Review of material capital expenditure projects

• Continued focus on projects involving the in-house production of PET from recycled PET flakes and production of CO2 collected from the airCulture and values • Monitoring the engagement surveys and people plans •

Discussing talent and people capability plans

• • Ongoing review of the Performance for Growth, theContinuing working with the designated non-Executive Director on issues that are identified through the employee engagement process

Group's new performance management process

Succession planning and diversity

• Reviewing the succession planning work for Board and senior management, including the on-boarding plan for the Group's new Chief Financial Officer
- • Ongoing succession planning work and preparing succession planning and bench strength initiatives for senior management and Board vacancies
• Reviewing the Company's talent development plans

• Discussing Board effectiveness and succession pipeline

APPLIED GOVERNANCE

Board oversight of COVID‑19 response

The COVID-19 pandemic which impacted our markets beginning in the first quarter of 2020 had a profound impact on all our stakeholders and on the way people around the world live their lives. The Board and Operating Committee were required to make significant decisions and adjustments, sometimes on a daily basis. The Company had to adapt to an uncertain situation that was constantly changing. The Company's COVID-19 pandemic response to date focuses on: our people, customers, partners and communities; business continuity and financial resilience.

These were shared with the broader Coca-Cola System and partners, particularly for markets impacted slightly later in 2020.

Workforce safety was key. Whenever it was possible, the Operating

Committee actively supported those who continued to have their lives changed or impacted by the COVID-19 pandemic, and those across the Coca-Cola System who tirelessly and selflessly supported the affected.

The Board

The Board led the Company's COVID-19 pandemic response and helped direct and guide the senior management team to consider all potential scenarios associated with the COVID-19 pandemic. The Board identified a number of key priorities and, in early 2020, announced that its primary focus was to support our people, our customers, partners and the communities where the Group operates. It also authorised the implementation of contingency plans to mitigate the impact on our people as far as possible.

To assist the senior management team with its operational tasks and ensure actions were decisive, timely and effective, a new committee was established at the start of the COVID-19 pandemic: the Crisis Management Committee.

Crisis Management Committee

This committee was established at the start of the COVID-19 pandemic to assist the Operating Committee with a focus on business operations. It is a team comprising some members of the Operating Committee but also other senior leaders including the head of risk and representatives from a number of functions. In its operational role, it has been responsible for monitoring the

In a number of market updates, the Board set out its key priorities:

• Ensure the safety of our people, customers, partners, consumers and products including actively supporting those who continue to have their lives changed and impacted by the COVID-19 pandemic, and those who tirelessly and selflessly care and serve the affected;
• Ensure business continuity and continued and uninterrupted product supply to customers by decisive, timely and effective actions;
• Implementation of appropriate contingency and business continuity plans in order to safeguard production plants and enable our supply chain to remain fully operational;
COVID-19 pandemic throughout the countries where the Group operates to ensure the business is reacting to the COVID-19 pandemic in a timely manner and to ensure the safety of all of our people, customers, partners and communities. To ensure continuity of supply chain operations and in keeping all production facilities open, this committee has overseen the implementation of global best-practice precautionary and hygiene measures at all locations, including even stricter sanitisation protocols, social distancing, travel restrictions and, where possible, working from home. It met daily at the start of the COVID-19 pandemic, reporting to the Operating Committee. Subsequently, the Group COVID-19 Operational Task
• Financial resilience; and
Force was formed to react to pandemic-related developments.
• Through our established community networks and partnerships to support those in need, those fighting the COVID-19 pandemic on the front line and our customers that continue to serve our shared communities.

Group COVID‑19 Operational Task Force

The Group COVID-19 Operational Task Force was established to assist the Operating Committee by focusing on developing and co-ordinating in a more structured manner the Company's

During the crisis the Board was mindful of ensuring the long-term resilience and strength of the business, and positioning the business to capitalise on opportunities emerging from the turmoil of the COVID-19 pandemic.

COVID-19 response across three pillars: "Now", "Rest of the Year" and "Tomorrow". In its operational role, it has been responsible for monitoring the pandemic throughout the countries where the

Operating Committee

As the Company's senior management team with responsibility for the day-to-day operation of the Group's business, the Operating Committee has overseen the business's COVID-19 pandemic response under the guidance of, and directed by, the Board.

Company operates to ensure that the local business operations are reacting to the COVID-19 pandemic in a timely manner and prioritising the safety of our people, customers, partners and the surrounding communities. It has met weekly and reports to the Operating Committee.

The Operating Committee continued to make operational decisions in line with the Board's key priorities to enable the Board to focus on the long-term strategic issues and decisions associated with the

COVID-19 pandemic.

Timely and effective business decisions, and insights, were enabled and assisted by a strong collaboration with the Company's partners and network across the Coca-Cola System. Senior management benefited from insights from our Coca-Cola System colleagues in China as well as early learnings from our Italian operations.

Corporate governance report continued

APPLIED GOVERNANCE

Taking action to ensure resilience

Actions to support identified priorities

With oversight and guidance from the Board and regular reports to the Operating Committee, the Group COVID-19 Operational Task

Force was the "nerve centre" for implementing timely and decisive actions to ensure not only the business and financial resilience of the Group across the markets in which it operates, but also in providing appropriate support by financial and other means to the wider communities.

As the COVID-19 pandemic began, we took decisive and early action to reduce discretionary operating costs and capital expenditure. This cost control helped support profitability as we faced lower revenues, but also required us to make certain trade-offs.

Business and finance resilience

The Board reviewed and approved proposals from the Operating Committee and Group COVID-19 Operational Task Force and, where required, updated the market on changes to business and finance resilience covering cash, EBIT and competitiveness:

• Capital expenditure - initially a significant reduction of €100 million compared to plan was approved, however, given stronger than expected cash generation, this level of reduction was not required and some projects, initially postponed, were brought forward to 2020;
During the year, we prioritised spending on digital sales channels and tools to support remote working, and we shifted capital allocation towards the highest potential channels, brands and markets balancing short term performance while continuing to invest in long-term growth. We also continued to invest in our sustainability commitments, investing for instance in in-house capacity to produce recycled PET.
• 2020 discretionary expenditure reduced by over €120 million compared to our original plans for the year;
• Maximisation of revenue by ensuring supply chain continuity and, where necessary, redeploying business development ambassadors to assist with immediate customer needs;
• Accelerating roll-out of our e-commerce platform, a web shop for wholesalers and distributors to drive business-to-consumer growth and to ensure operational capacity where local travel restrictions and lockdowns were imposed. It also accelerated online sales offerings with the Company's own online direct-to- consumer platform (Q-Well Switzerland);
The trade-off was less investment in product launches. Roughly 75-80% of the discretionary cost savings in 2020 came from reduced direct marketing expenses as we reprioritised promotional activities and, working together and in alignment with The Coca-Cola Company, delayed or adjusted new product launches. We progressed with Costa Coffee and Topo Chico but adjusted our plans for other less strategic launches. Meanwhile the prioritisation of focus on Sparkling can be seen in the relative performance of Sparkling compared to still beverages.
• No salary increases were paid to members of the Operating Committee; also travel restrictions imposed and hiring freeze of personnel;
• Review of spending on shop floor displays and ordering to ensure no over-supply and ease cash flow to assist customers when re-opening businesses following closed period due to lockdown, including approval of updated trade investment guidelines;
• Enhancing the Group's cyber security program in order to meet the accelerated digitalization of the business and protection from increased sophistication of cyber-attacks;
• Promotional shift to growing high priority channels, including e-commerce and convenience; and
• Revised innovation plan.

The Audit and Risk Committee received regular briefings from the Chief Risk Officer on business resilience and, where required, approved changes to budgets and plans due to the impact of the COVID-19 pandemic. Further detail around financial business resilience is set out in the Audit and Risk Committee report on pages 100-103.

Reprioritising investments

Responsibility and commitment to society

Community

In considering its actions to support the Group's commitment to society, the Board, the Operating Committee and the Group COVID-19 Operational Task Force focused on: employees, customers and the wider community.

Employees

The Chief Executive Officer ("CEO") led regular communications to our people to ensure the appropriate 'tone' was set in responding to the constantly changing and challenging COVID-19 pandemic. Communications included CEO letters and video messages, virtual townhall meetings and weekly functional calls as well as other newsletters and information material. The Crisis Management Committee and the Group COVID-19 Operational Task Force were proactive and efficient in the implementation of global best practice on precautionary and hygiene measures across all locations.

Across all markets, we took our commitment to engaging with wider society seriously and encouraged various community initiatives. These resulted in a mixture of cash donations, free products, purchase of equipment, assisting with delivery of products and volunteering to support our customers, the vulnerable, hospitals, front line medical staff, care workers, emergency services, patients, school children, consumers and many others.

This included the provision of face masks, gloves and sanitisation equipment as well as guidance on social distancing measures and other restrictions to keep people safe. An Employee Assistance Programme was introduced, as well as online training, to support the physical and mental health and wellbeing of our people.

The Board was fully supportive of proposals to significantly increase support provided to our communities. The Operating Committee and Group COVID-19 Operational Task Force worked with The Coca-Cola Company and The Coca-Cola Foundation and all other bottling partners in providing a $120 million support package focused on people and organisations engaged in the frontline fight against the COVID-19 pandemic. As a result each of the Company's markets was able to make a significant donation to support our communities, which was primarily achieved through partnering with the Red Cross and other NGOs and in making product donations. The Company, with help from The Coca-Cola Foundation, provided funding to all 28 markets in which the Company operates with the funding used to support front line work or to purchase medical equipment.

Customers

Connectivity with our customers was key and the Group COVID-19

Operational Task Force provided guidance around business continuity to our customers to assure them that business would operate as normal even with our employees working remotely. It was important to keep regular contact with customers to understand their concerns and the issues they faced. Customer service and flexibility were of paramount importance with employees being advised to "never leave a day without calling a client". The main concerns and issues for customers resulted in: the supply chain being flexed to allow for a shift to store delivery rather than central warehouse delivery when needed; helping to minimise the strain on customer operations; and flexing our commercial policy, including the provision of extended credit for solvent customers.

The Company donated its beverages and other products to support hospitals, quarantine centres, food banks, emergency services, NGOs and vulnerable people in need of this support. For example, in Nigeria the Company donated over 130,000 litres of beverages to COVID-19 response teams, emergency medical facilities and quarantine centres; and in Italy, delivered over 600,000 beverages to the Italian foodbank Banco Alimentare Civil Protection, NGOs and hospitals. The Board was supportive of these types of activities being replicated across all 28 markets and the Company has worked towards providing this support.

The Company leveraged the capabilities in its own supply chain to support the provision of protective and medical equipment to communities around the world, for example using 3D printing capability to produce protective face masks in Russia, producing 10,000 bottles for hand sanitiser to be dispensed in Ireland and lending a microbiological detector to support laboratory testing for COVID-19 in Romania. We worked with local governments and NGOs throughout our markets to identify and help provide essential equipment and supplies.

Corporate governance report continued

APPLIED GOVERNANCE

Oversight of the Company's culture

How the Board measures and assesses culture

The Board is responsible for monitoring and assessing our culture.

The Chairman ensures that the Board is operating appropriately and sets the Board's culture which in turn forms the culture of the Company. The Chief Executive Officer supported by members of the Operating Committee is responsible for ensuring culture is embedded throughout the business and its operations and in all our dealings with our stakeholders.

The Board measures the culture of the Group using internal and external metrics which also enable it to identify further actions to ensure culture remains appropriate. The Board also monitors the Group's performance against its peer group within the same sector. The Board considers the following:

• Health and safety - an area of paramount importance to our people, customers, partners, and consumers of our products.
We actively supported those who continued to have their lives impacted by the COVID-19 pandemic. We adapted business operations to ensure all were kept safe while continuing to perform their roles. We closely monitored the developing situation and challenges to ensure we provided the appropriate requirements and support.
• Employee retention - our employees are our greatest asset and it is important that we do everything we can to retain them. We conduct an annual employee engagement survey of the workforce, although during 2020 a total of three all-employee

surveys were conducted to provide feedback to senior management to identify whether further actions were required. The answers were reviewed by the Operating Committee with the findings reported to the Board.

• Customer retention - assessments of customer satisfaction and ongoing conversations with regulators and non-governmental organisations. Our regular customer surveys to more than 15,000 customers to assess satisfaction and identify areas for improvement were suspended in 2020. We made extraordinary efforts to stand by and support our customers as they adapted to changing conditions. However, we did not wish to burden customers in 2020 with survey requests, we worked more closely with them than ever before, helping them solve problems and address challenges most had never experienced before. Many of our customers were severely impacted by lockdowns and restrictions on their ability to operate. The Coca-Cola System launched the inspirational 'Open Like Never Before' campaign to celebrate re-openings and drive support for local businesses.

We continue to work with our customers, consumers, suppliers, local community representatives and other business partners across the value chain every day. Their input, cooperation and trust factors in to Board decision-making and the success of the business. Examples of governance in action are on pages 92-93.

Culture in action

Doing the right thing

The Company is a well-positioned and a resilient business prepared to adapt and emerge to take on new opportunities. We entered the COVID-19 pandemic from a position of strength in terms of our portfolio, market execution focus and our relationships, including our relations with customers and our partnerships with

The Coca-Cola Company and others. Our culture of adaptability, which embraces change and challenge, has been and will continue to be a crucial factor, as can be seen in the speed and innovation of the Company's response to the COVID-19 pandemic with the tireless dedication of our workforce.

Throughout, our actions have been guided by our values. Below are some examples of culture in action during 2020:

• A Coca-Cola System-wide partnership with the Red Cross
• For those on the front lines fighting the COVID-19 virus we provided beverages as well as grants through
The Coca-Cola Foundation
• In Romania, 40 volunteers helped build a medical facility
• In Russia and Nigeria, we used our 3D-printing capabilities to produce protective face shields
• All employees were offered support to maintain physical and mental wellbeing

Customer care

• Offered and provided extensions to credit facilities
• Collaborated to assist with re-opening businesses, including understanding customer priorities and requirements

• Supported customers with product placement and marketing
• Delivered direct to customers' stores rather than to customers' warehouses
• Helped customers fill supply gaps when needed

Resilience, adaptability and agility

• Efficiently and effectively moved employees to remote working arrangements at the onset of the COVID-19 pandemic
• Maintained supply chain operations with no disruptions at production facilities
• Fast, agile adaptation to new protocols and enhanced safety procedures which allowed us to maintain production with no interruptions, ensuring business continuity
• Upgraded connectivity and provided the digital collaboration tools needed to continue to be productive and successful
• Expanded communication channels to ensure that our people remained well informed
• Increased e-commerce activities and partnerships, including on our own business-to-business sales platform, partnering with food delivery platforms and working with our wholesale customers to develop direct-to-consumer offerings

Sustainability

• Moved #YouthEmpowered programmes online in certain markets to continue to support youth employability
• Installed technology to produce our own supply of recycled PET in the face of disruptions in recycling collection and sorting

APPLIED GOVERNANCE

Workforce engagement

Engagement with key stakeholder groups strengthens our relationships and is an ongoing part of the operational management of the Group. This includes employee surveys, assessing customer satisfaction and ongoing conversations with regulators and non-governmental organisations. The challenges of the COVID-19 pandemic resulted in a change to the form of engagement with some of our stakeholder groups. The Board receives regular updates from senior management on insights and feedback from stakeholders, which allows the Board to understand and consider the perspectives of key stakeholders in decision-making. This is a standing agenda item for Board meetings.

The Board closely monitors and reviews the results of the

Company's Employee Engagement, Values and Ambassadorship surveys. During 2020, engagement surveys were run more frequently to provide direct feedback from our people to enable the Company to meet and resolve the challenges across its markets.

In addition, the Board reviews talent development initiatives designed to support long-term success. For further details please see below and growth pillar 4.

Our employees are one of our most important stakeholder groups and the Company's success largely depends on the passion of our people and our ability to attract, retain and develop the best talent.

The Board therefore understands the importance of engaging with its workforce. To meet the ongoing challenges for the business during 2020 was of paramount importance. Thus we focused first to ensure the safety of our workforce and provide the appropriate means to continue in their roles and that we are supporting a healthy working environment. Our workforce remained core to the Company's strategy, but we also ensured that we are making appropriate business decisions. Our workforce went to extraordinary efforts to support and aid our customers and consumers during uncertain times.

Charlotte Boyle, our designated non-Executive Director for workforce engagement, attended a number of virtual meetings with our European Works Council (EWC). Despite, not being able to meet physically in 2020, meetings continued with the EWC virtually, including meetings in June, September and December 2020. Senior leadership present key information on business and other changes at these meetings and hear feedback directly from employee representatives. All meetings are attended by selected members of the senior leadership team, depending on subjects covered, and our annual plenary meeting, with the full Council, is attended by the CEO. For more information about this engagement, see the cultivate the potential of our people section on pages 39-41.

Workforce engagement mechanism

Charlotte Boyle, our designated non-Executive Director for workforce engagement, attended a number of virtual meetings during the year with our European Works

Council. During the course of these meetings Charlotte met with elected employee representatives from our businesses in EU countries. These meetings allow employee representatives to hear from senior leaders - including the CEO - about significant matters affecting our people, and to ask questions and give feedback. Charlotte was able to hear from employee representatives about topics raised by employees and their experience of the Company's approach to the workforce, particularly during the COVID-19 pandemic. During 2020, this was of great importance, ensuring the appropriate support and resources for our people, not only for their own safety but to aid them in their roles in helping our customers and consumers.

Charlotte also frequently interacted with our Group Employee Relations Director, who has responsibility for diversity and inclusion, to better understand the steps that the Company is taking to become more diverse and inclusive (see page 41 for activities in this area). To embed these attributes within the Company's culture, initiatives including a communication campaign and training have been launched to increase awareness and understanding. The Company is also promoting employee affinity groups, such as women's networks.

The Board takes the lead by recognising good practices and driving accountability.

Charlotte reported back to the Board on her observations and matters raised by employees, ensuring Board deliberations and decision-making are fully informed.

Corporate governance report continued

Engaging with our stakeholders

Listening to our stakeholders, and making a meaningful response, is crucial for continued success

DescriptionHow the Board is kept informed Read more

Our people

To understand what our people needed to work in rapidly changing circumstances, the Company conducted special pandemic-related employee surveys in May and July 2020.

Pages 20, 39-41, 89, 90

There is a designated non-Executive Director for engagement with our people, but the COVID-19 pandemic response was considered so critical that survey results were presented to the full Board. The CEO also held engagement sessions with employees during the year, as well as several calls with Q&A sessions.

Our communities Plant visits, community meetings, partnerships on common issues, sponsorship activities, lectures at universities, training opportunities and support to young people currently not in education, training or employment.

Page 20, 43-44

Our consumers

Consumer hotlines, local websites, plant tours, research, surveys, focus groups.

Page 21

GOVERNANCE IN ACTION

Customer engagement

Our customers

Regular visits, dedicated account teams, joint business planning, joint value-creation initiatives, customer care centres, customer satisfaction surveys.

Page 30

Partners in efficiency

Engagement with our suppliers, consultants and counterparts in related industries.

Pages 20, 34

The COVID-19 pandemic created many issues and it was apparent from regular contact with a number of our customers that having products in the right location was logistically problematic. Therefore, in some markets, our teams helped our customers with their supply chain issues. In order to reduce the pressure on some supermarket customers' supply chains we delivered direct to store rather than to the customers' central warehouses.

NGOs

Dialogue, policy work, partnerships on common issues, membership of business and industry associations.

Pages 21, 43-44, 52

In many of our markets, some customers remained closed for significant periods in 2020. Once lockdown measures were eased, the priority was for our teams to connect with these customers to offer support and assistance to enable re-opening of their businesses. Our business development ambassadors engaged with customers to understand their key priorities and requirements as they prepared to re-open after a period of perhaps three to four months' closure.

Shareholders

Annual General Meetings, investor roadshows and results briefings, webcasts, ongoing dialogue with analysts and investors.

Pages 21, 94

Governments

Recycling and recovery initiatives,

EU Platform for Action on Diet, Physical

Activity and Health, foreign investment advisory councils, chambers of commerce.

Pages 21, 28-29, 45-47

We offered and, in many cases, provided extended credit; helped with product placement and marketing; and staggered ordering to ensure no over-supply and to ease cash flow. By understanding our customers' needs and taking a collaborative approach, we could plan and adjust accordingly. Together, we adapted our strategy to aide customers' business recovery and viability rather than focusing solely on our own financial targets.

The Coca‑Cola Company

Day-to-day interaction as business partners, joint projects, joint business planning, functional groups on strategic issues, 'top-to-top' senior management meetings.

Pages 16, 21

GOVERNANCE IN ACTION

How the Board put our people first

Since the start of the COVID-19 pandemic the Board's top priority has been the safety and wellbeing of our people, customers, partners and communities. Keeping our colleagues safe and healthy lies at the heart of our ability to continue serving our customers and operating the business for the shared benefit of our stakeholders.

How the Board prioritised innovation, growth and the interests of shareholders

Therefore, wherever they are working, our teams have the right protocols and equipment to keep themselves and others safe. Whilst it was an important and necessary decision to make, putting people first and implementing new protocols did result in a reduction in the number of employees working on the ground with customers. This in turn had an effect on business development opportunities and opportunities to strengthen customer relationships. However, the Board and management looked at other ways for sales people to engage and communicate effectively with customers. A number of sales people from the out-of-home channel were also redeployed to the at-home channel, concentrating focus where it was needed most.

The roll out of Costa Coffee across our markets is an important priority, and an area of strategic alignment with The Coca-Cola Company. Despite the challenging environment in 2020, the Board decided to continue with the planned introduction of Costa Coffee at the scale and speed that was originally set out. Given the circumstances, the Board also recognised that not everything could be done at once and smaller opportunities were therefore not captured during the year.

Investors and shareholders were considered as part of this decision, particularly the short term versus long term interests of shareholders. The Board decided that the roll out was strategically important for the long term. The roll out of Costa in 2020 allowed us to maintain and build a presence in the coffee category, one the

Board views as important to achieve the Company's 24/7 vision.

Corporate governance report continued

Shareholder engagement

The Chairman, the Senior Independent Director and the Chair of the Audit and Risk Committee will be available at the Annual General Meeting of the Company to answer questions from shareholders.

The Board encourages shareholders to attend as it provides an opportunity to engage with the Board. However, the 2020 Annual General Meeting was not held in the usual format with no shareholders were permitted to attend due the COVID-19 pandemic and restrictions in place under Swiss law. The Chief Executive Officer chaired the meeting with a number of other Directors, including the Chairman, as well as members of the Operating Committee and the statutory auditors participating remotely.

Pursuant to Swiss law and the Articles of Association, shareholders annually elect an independent proxy and we have adopted an electronic proxy voting system for our Annual General Meetings.

The Company has a dedicated investor relations function which reports to the Chief Financial Officer. Through the investor relations team, the Company and Board maintain a dialogue with institutional investors and financial analysts on operational financial performance and strategic direction items. We engaged with the investment community and our shareholders throughout the year, as outlined in the diagram below. The feedback from shareholders has been regularly considered by the Board and, where necessary, appropriate action to further engage with shareholders was taken.

Key investor relations activities in 2020

February

June

September

• Management Roadshow
Europe & UK

• Annual General Meeting in Zug
- • Barclays Global Consumer Staples Conference
  - • Berenberg West Coast Consumer & E-Commerce
    Conference
• Deutsche Bank Access
- • Annual Greek Roadshow
April
- • Management Virtual Roadshow
Global Consumer conference
- • Management Virtual Roadshow
November
May
• Exane BNP Paribas 22nd European CEO Conference
- • J.P. Morgan Global Consumer & Retail
  December
  - • IR Virtual Roadshow
• Goldman Sachs Global Consumer ESG Conference

Conference
- • Citi's Global Consumer Conference
• Jefferies Virtual West Coast Consumer Conference

• Morgan Stanley Virtual
Global Consumer & Retail
Conference

Board, committee and Director performance evaluation

At least annually, on the basis of an assessment conducted by the Nomination Committee, the Board reviews its own performance as well as the performance of each of the Board committees. This review seeks to determine whether the Board and its committees function effectively and efficiently. During the year, the Chairman meets with the Directors to receive feedback on the functioning of the Board and its committees, the boardroom dynamics, and the Group's strategy.

Particular focus is given to areas where a Director believes the performance of the Board and its committees could be improved. A report is prepared for the Board on its effectiveness and that of its committees.

For the past five years, the evaluation of the Board's effectiveness has been facilitated by Lintstock, and details of the 2020 Lintstock report are set out on page 95. A summary of the Board evaluation findings for 2019, the actions taken in response to improve Board effectiveness in 2020, the Board evaluation findings for 2020, and the resulting priorities for 2021 is as follows:

2019 Board evaluation findings	2020 actions
• Focus on strategy	• Leveraging the Company's unique
• Broaden exposure to	24/7 portfolio
colleagues throughout	• Continued alignment with
the Company	key stakeholders
• Continued focus on	• Considering implications
risk oversight	of COVID-19
2020 Board evaluation findings	2021 priorities
• Oversight of talent	• Undertaking site visits
• Understanding	• Close alignment with key
of technological	stakeholders
developments	• Oversight of our 2025
• Considering implications	growth strategy
of COVID-19

The independent Directors meet separately at every regular Board meeting to discuss a variety of issues, including the effectiveness of the Board. An evaluation of each Director, other than the Chairman, is conducted by the Chairman and the Senior Independent Director.

The Senior Independent Director leads the evaluation of the Chairman in conjunction with the non-Executive Directors, taking into account the views of the Chief Executive Officer, and, as a matter of practice, meets with the other independent non-Executive Directors when each Board meeting is held to discuss issues together, without the Chief Executive Officer or other non-Executive Directors present.

Information and training

The practices and procedures adopted by our Board ensure that the Directors are supplied on a timely basis with comprehensive information on the business development and financial position of the Company, the form and content of which is expected to enable the Directors to discharge their duties and carry out their responsibilities. All Directors have access to our General Counsel, as well as independent professional advice at the expense of the

Company. All Directors have full access to the Chief Executive Officer and senior management, as well as the external auditor and internal audit team.

The Board has in place an induction programme for new Directors.

Generally, it involves meeting with the Chairman, members of the Operating Committee and other senior executives, as well as receiving orientation training in relation to the Group and its corporate governance practices. The induction programme also includes meetings with representatives of our sales force, customers and major shareholders, and visits to our production plants. Anna Diamantopoulou participated in the induction programme during 2020 as part of her onboarding process, although much of this was by virtual means.

All Directors are given the opportunity to attend training to ensure that they are kept up to date on relevant legal, accounting and corporate governance developments. The Directors individually attend seminars, forums, conferences and working groups on relevant topics. The Nomination Committee reviews our Director training activities regularly. Finally, as part of the continuing development of the Directors, the Company Secretary ensures that our Board is kept up to date with key corporate governance developments. The Board appoints the Company Secretary, who acts as secretary to the Board.

Board appointments and succession planning

Our Board has in place plans to ensure the progressive renewal of the Board and appropriate succession planning for senior management and these are regularly reviewed. Appointments and succession plans are based on merit and objective criteria to ensure the Company is promoting diversity (including gender), social and ethnic backgrounds, cognitive and personal strengths.

Pursuant to our Articles of Association, the Board consists of a minimum of seven and a maximum of 15 members, and the Directors are elected annually for a term of one year by the Company's shareholders, which is also in accordance with the UK Corporate

Governance Code. In case of resignation or death of any member of the Board, the Board may elect a permanent guest, whom the Board will propose for election by the shareholders at the next

Annual General Meeting. In accordance with the Organisational Regulations, the Board proposes for election at the shareholders'

meeting new Directors who have been recommended by the Nomination Committee after consultation with the Chairman.

In making such recommendations, the Nomination Committee and the Board must consider objective criteria including the overall balance of skills, experience, independence and knowledge of the Board member, as well as diversity considerations including gender but also social and ethnic backgrounds. Consideration is also given to the overall length of service of the Board as a whole when refreshing its membership. See the Nomination Committee report on page 106 for further information on the role and work of the

Nomination Committee, including the Board Diversity Policy.

Through this process, the Board is satisfied that the Board and its committees have the appropriate balance of experience and skills, diversity, independence and knowledge of the Company to enable them to discharge their duties and responsibilities effectively, including sufficient time commitment.

Conflicts of interest

In accordance with the Organisational Regulations, Directors are required to arrange their personal and business affairs so as to avoid a conflict of interest with the Group.

Each Director must disclose to the Chairman the nature and extent of any conflict of interest arising generally or in relation to any matter to be discussed at a Board meeting, as soon as the Director becomes aware of its existence. In the event that the Chairman becomes aware of a Director's conflict of interest, the Chairman is required to contact that Director promptly and discuss with him or her the nature and extent of such a conflict of interest. Subject to exceptional circumstances in which the best interests of the Company dictate otherwise, the Director affected by a conflict of interest is not permitted to participate in discussions and decision-making involving the interest at stake.

Lintstock report

In 2020, we once again engaged the advisory firm Lintstock to facilitate an evaluation of the performance of the Board. Lintstock specialises in Board performance reviews and has no other connection with Coca-Cola HBC.

The first stage of the review involved Lintstock engaging with the

Company Secretary to set the context for the evaluation, and to tailor survey content to the specific circumstances of Coca-Cola HBC.

The surveys were designed to follow up on and further explore key themes identified in last year's evaluation, so that year-on-year progress can be tracked.

The surveys commenced with a case study, which considered the

Board's response to the COVID-19 pandemic, including the adequacy of the updates provided by management as the COVID-19 pandemic developed, the effectiveness of Board meetings conducted using video-conferencing technology, and the long-term implications of the COVID-19 pandemic on the Company's operations and markets.

The surveys also addressed core aspects of the Board's performance, and had a particular focus on the following areas:

• The appropriateness of the Board's composition in the context of the Company's strategic ambitions, including the skills represented and the diversity among members
• The Board's engagement with key stakeholders (including shareholders, customers and suppliers), and the effectiveness of the Board's workforce engagement mechanisms
• The relationships and atmosphere in the boardroom, and the extent to which the Board provides effective support and constructive challenge to management
• The effectiveness with which the Board makes decisions, and subsequently follows up on the implementation of decisions
• The Board's focus, including the extent to which meeting agendas strike the right balance between strategic and financial / operational items

• The Board's contribution to the development of the 'Growth Story 2025' strategy, as well as the progress made with regard to each of the Company's growth pillars
• The Board's understanding of the competitive landscape and relevant technological developments, in terms of the opportunities and threats they represent for the business
• The Board's visibility of potential successors to key positions from within the business, and oversight of the Company's processes for talent management and succession

The performance of the committees of the Board was also evaluated, as was the performance of the Chairman. The anonymity of all responses was guaranteed throughout the process to promote open and honest feedback.

Lintstock subsequently analysed the results and delivered reports on the performance of the Board, the committees and the Chairman, which were considered at a subsequent Board meeting.

The results of the review were positive overall, with improvements identified in a number of key areas compared to 2019. While the COVID‑19 pandemic has clearly presented challenges to the Board's oversight, there was broad satisfaction with the frequency and quality of management updates as the COVID‑19 pandemic developed.

As in previous years, there is a strong desire on the part of the Board to maintain its focus on forward‑looking and strategic matters, including: the Company's processes for developing and retaining senior talent; technological developments, and their implications for the business; growth and acquisitions; and the company's sustainability agenda.

96 COCA‑COLA HBC

Corporate governance report continued

From left to right

Row one

Zoran Bogdanovic, Michalis Imellos,

Naya Kalogeraki

Row two

Marcel Martin, Minas Angelidis,

Sean O'Neill

Row three

Jan Gustavsson, Sanda Parezanovic,

Mourad Ajarti

Row four

Nikos Kalaitzidakis, Vitaliy Novikov

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Coca-Cola HBC AG published this content on 18 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 March 2021 14:35:04 UTC.

Real-time Estimate Cboe Europe Other stock markets 03:09:13 2024-04-26 am EDT			5-day change	1st Jan Change
2,559 ^GBX	+0.20%		+5.98%	+10.80%

Apr. 19	Coca-Cola HBC AG Announces Board Retirements	CI
Apr. 02	Bank of America Raises Coca-Cola HBC PT, Maintains at Buy	MT

Coca-Cola HBC AG Announces Board Retirements	Apr. 19	CI
Bank of America Raises Coca-Cola HBC PT, Maintains at Buy	Apr. 02	MT
Bernstein starts AstraZeneca at 'outperform'	Apr. 02	AN
Coca-Cola HBC CEO sells GBP375,000 in shares	Mar. 26	AN
Philip Morris: appoints future head of External Affairs	Mar. 26	CF
Coca-Cola HBC directors sell GBP800,000 in shares	Feb. 29	AN
Coca-Cola HBC buys Irish vendor BDS Vending Solutions	Feb. 22	AN
Coca-Cola HBC to Buy Vending Services Business in Ireland	Feb. 22	MT
The fate of the market depends on this	Feb. 21
ANALYST RECOMMENDATIONS : Airbnb, Conagra Brands, Berkshire Hathaway, Meta Platforms, Unilever....	Feb. 21
Coca-Cola HBC Prices EUR600 Million Offering of Notes	Feb. 20	MT
Coca-Cola HBC Finance Plans Fixed-Rate Notes Issuance	Feb. 20	MT
Global markets live: Airbnb, Sony, Uber, Lyft, Nvidia...	Feb. 14
FTSE 100 Index Jumps as UK Inflation Defies Expected Rise	Feb. 14	MT
Investors celebrate steady UK inflation	Feb. 14	AN
UBS Lifts Coca-Cola HBC PT, Maintains Buy Rating	Feb. 14	MT
FTSE 100 outperforms as UK inflation undershoots	Feb. 14	AN
Coca-Cola HBC AG Reports Earnings Results for the Full Year Ended December 31, 2023	Feb. 14	CI
This time it's good news on inflation	Feb. 14
Panmure likes Nichols; Jefferies cuts Bytes	Feb. 14	AN
European shares rise as soft UK inflation boosts sentiment	Feb. 14	RE
Transcript : Coca-Cola HBC AG, 2023 Earnings Call, Feb 14, 2024	Feb. 14
US Futures Rise, European Stocks Mostly Flat After Hotter-Than-Expected U.S. Inflation Data	Feb. 14	DJ
Stocks up on tamer than forecast UK inflation data	Feb. 14	AN
London stocks rise on softer inflation data	Feb. 14	RE

	1st Jan change	Capi.
COCA-COLA HELLENIC	+10.80%	11.66B
THE COCA-COLA COMPANY	+4.77%	266B
VARUN BEVERAGES LIMITED	+17.45%	22.49B
ARCA CONTINENTAL, S.A.B. DE C.V.	-10.57%	16.91B
CELSIUS HOLDINGS, INC.	+31.40%	16.7B
SWIRE PACIFIC LIMITED	-1.89%	10.59B
SUNTORY BEVERAGE & FOOD LIMITED	+8.37%	10.11B
COCA-COLA CONSOLIDATED, INC.	-10.49%	7.79B
COCA-COLA IÇECEK ANONIM SIRKETI	+31.11%	5.39B
NATIONAL BEVERAGE CORP.	-12.49%	4.07B

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