Coca-cola Euro. Regulatory News (CCEP)

COCA-COLA EUROPACIFIC PARTNERS

Preliminary unaudited results for the full-year ended 31 December 2021

Extraordinary year, entering 2022 as a stronger business

DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:

"2021 was an extraordinary year for CCEP. We are a stronger more diverse business, built on great people, great service and great beverages - done sustainably. Solid top-line recovery, value share gains, operating margin expansion and remarkable free cash flow generation demonstrate our strong performance in a challenging environment. Our results also reflect the successful acquisition and integration of Coca-Cola Amatil, a fantastic business to have acquired at the right time, as we look forward to an even brighter future together.

"Together with The Coca-Cola Company and our other partners, our focus on core brands, in-market execution and smart revenue growth management initiatives solidified our FY21 position as the largest FMCG value creator[5], delivering revenue per unit case[2],[3] growth ahead of FY19[6],[11]. We also continued to make progress on our ambition to reach net zero emissions by 2040 and invest in making our packaging more sustainable.

"We are well placed as we look to FY22 and beyond. Our aim is to be smart and sustainable - through our people centric, data driven and digitally enabled approach. Disciplined investment in these areas, as well as in our portfolio, will support our long-term growth ambitions. In the near-term, we expect to see further volume and mix recovery whilst managing our key levers of pricing, promotional spend and driving efficiencies across our business, collectively with the aim of mitigating inflationary pressures.

"It is an outstanding time to be leading CCEP. We are making a difference and believe we have the right foundation to drive sustainable growth and, as evidenced by our FY21 dividend being greater than FY19 and FY20, deliver increased shareholder value."

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

Revenue

FY Reported +30.0%; FY Pro forma +7.5%[6]

• Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil (completed 10 May 2021)

• NARTD value share gains across measured channels both in store[7] (+40bps) including sparkling (+30bps) & online[8] (+120bps)

• Delivered more revenue growth for our retail customers than any of our FMCG peers[5]

• Pro forma:

◦ comparable volume +4.5%[9] (-5.5% vs FY19) driven by the reopening of Away from Home (AFH) & increased consumer mobility given the easing of restrictions across most of our markets

◦ comparable volume by channel: AFH +10.0% (-16.0% vs FY19) reflecting fewer restrictions & recovery of immediate consumption (IC) packs (+20.5%[10] vs FY20; -19.5%[10] vs FY19); Home +1.5% (+2.0% vs FY19) supported by growth of IC & sustained growth in key future consumption packs (e.g. multipack cans +3.5%[10] vs FY20; +18.5%[10] vs FY19)

◦ revenue per unit case +3.0%[2],[6] (+1.5%[11] vs FY19) reflecting positive pack & channel mix driven by the improvement in AFH volume & growth in IC packs, alongside favourable price & brand mix

Q4 Reported +50.5%; Q4 Pro forma +8.5%[6]

• Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil

• Pro forma:

◦ comparable volume +8.5%[9] (-1.5% vs FY19) driven by solid execution in the Home channel & cycling of soft comparables

◦ comparable volume by channel: AFH +23.0% (-9.5% vs FY19); Home +1.5% (+4.0% vs FY19)

◦ revenue per unit case +5.5%[2],[6] (+1.5%[11] vs FY19) primarily driven by favourable pack mix & promotional optimisation

• Recent trading impacted by Omicron however restrictions not as severe as PY (pro forma comparable volume Q1 2021 -8.5% vs FY20)

Operating profit

Reported +86.5%; Pro forma comparable +23.5%[6]

• Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil

• Pro forma cost of sales per unit case +1.5%[2],[6] reflecting increased revenue per unit case driving higher concentrate costs, commodity inflation & adverse mix, partially offset by the favourable recovery of fixed manufacturing costs given higher volumes

• Pro forma comparable operating profit of €1,886m, +23.5%[6] reflecting the increased revenue, the benefit of on-going efficiency programmes & our continuous efforts on discretionary spend optimisation

• Comparable diluted EPS of €2.83, +54.5%[6] (reported +97.0%)

Dividend

• FY21 dividend per share of €1.40 (paid December[4]), +64.5% vs last year & +13.0% vs FY19, maintaining annualised dividend payout ratio of approximately 50% (in line with our dividend policy)

• CCEP announces that it will revert to two interim dividends starting in FY22, the first declared with the Q1 trading update (paid in June), the second declared at the Q3 trading update (paid in December). The first interim dividend will be calculated as 40% of the prior year FY dividend, with the second interim dividend being paid with reference to the current year annualised total dividend payout ratio of approximately 50%

Other

• Generated strong free cash flow of €1,460m (net cash flows from operating activities of €2,117m), supporting our focus on returning to our target leverage range (Net debt:Adjusted EBITDA of 2.5x-3x) by FY24. Assuming the Coca-Cola Amatil acquisition occurred on 1 January 2021, FY21 pro forma free cash flow is estimated to be €85m lower

• Pro forma ROIC 8.0% (reported ROIC 9.2%)

• API integration progressing very well; reorienting the portfolio to maximise system value creation to enable greater focus on NARTD, RTD alcohol & Spirits:

◦ sale of NARTD own brands to The Coca-Cola Company for A$275m; annualised EBIT impact of ~A$25m

◦ progressing previously announced plans to exit production, sale & distribution of Australia beer & apple cider products; minimal EBIT impact

◦ these initiatives are expected to substantially complete by the end of the first half

Sustainability 

• Europe: closed 2021 at ~53%[12] recycled plastic (rPET) achieving 2023 target 2 years early

• API[13]: announced industry partnerships to build new PET recycling facilities in Australia & Indonesia

• 2 manufacturing sites in Spain & Sweden certified carbon neutral. Aiming for at least 8 sites by end of 2023

• Retained on Carbon Disclosures Project's A Lists for climate change & water security; in Dow Jones Sustainability Indices (Europe & World) for 6 years in a row & MSCI ESG Leaders index

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

Revenue: pro forma comparable growth of 6-8%

Volume

• Continued recovery as easing restrictions support AFH & tourism

Price

• Successful execution of pricing strategies to date across many of our markets, elevated given input cost pressures

Promotions

• Optimising our spend

• Continuing to leverage segmentation, analytics, customer & consumer insights

Mix

• Continued recovery of AFH & IC packs

• Driving positive mix through smart revenue growth management initiatives & scaling innovation

Cost of sales per unit case: pro forma comparable growth of ~5% (previously 4-5%)

• Volume recovery supporting favourable overhead absorption

• We expect commodity inflation to be in the high single-digit range

• FY22 hedge coverage at ~57%

 Operating profit: pro forma comparable growth of 6-9%

• Remain on track to deliver our previously announced efficiency savings & API combination benefits (multi-year programmes amounting to €350 to €395m in total (vs FY19))

• Continued focus on optimising our discretionary spend

Comparable effective tax rate: c.22-23%

Dividend payout ratio: c.50%[14]

All values are unaudited, changes versus equivalent 2020 period

API

• Q4 volumes reflect supply challenges & adverse weather in Australia, offset by fewer restrictions in Indonesia & a strong start to the summer selling period in New Zealand. FY volumes reflect the continued recovery of the AFH channel in all markets & solid performance in the Home channel.

• Coca-Cola No Sugar outperformed in Australia, gaining +380bps of Q4 value share. Monster continued to grow in all markets.

• FY revenue/UC[18] growth driven by positive pack & brand mix, lower promotions in Australia & underlying favourable price.

• API reported revenues for Q4 were €946m & for the FY21 were €2,179m

France

• FY & Q4 volumes reflect fewer restrictions & cycling soft comparables. Strong rebound in the AFH channel & continued growth in the Home channel led by IC.

• Coca-Cola Zero Sugar & Monster continued to outperform, with both FY & Q4 volumes ahead of FY19.

• FY revenue/UC[18] growth supported by positive customer & pack mix led by AFH rebound & increased mobility e.g. small PET +22.0%; small glass +14.5%.

Germany

• Q4 volumes reflect fewer restrictions in the AFH channel. FY volumes impacted by adverse weather in Q3 & restrictions within HoReCa[19] throughout the year slowing the overall recovery of the AFH channel. Continued growth in the Home channel.

• Coca-Cola Zero Sugar & Fuze Tea outperformed, with both FY & Q4 volumes above FY19 levels.

• FY revenue/UC[18] growth driven by positive brand mix from Monster & the delisting of some PET waters, as well as favourable underlying price & positive pack mix.

Great Britain

• Q4 volumes reflect rebound of AFH channel with few restrictions in place during the quarter. FY volumes reflected the continued recovery of the AFH channel, as well as increased domestic tourism & cycling soft comparables. Solid performance in the Home channel.

• FY & Q4 volumes for Coca-Cola® TM, Fanta & Monster were ahead of FY19.

• FY revenue/UC[18] growth supported by favourable underlying price, alongside positive pack mix led by IC e.g. small glass +39.5%; small PET +25.0%.

Iberia

• FY & Q4 volumes reflect fewer restrictions & cycling soft comparables. Strong rebound in the AFH channel, although Omicron slowed the recovery in Q4 as restrictions in HoReCa[19] were reintroduced. FY volumes impacted by lower international tourism & the increased Spanish VAT rate within the Home channel.

• Coca-Cola Zero Sugar & Monster volumes ahead of FY19 for FY & Q4.

• FY revenue/UC[18] growth driven by positive pack & channel mix led by the on-going recovery of the AFH channel & favourable underlying price.

Northern Europe

• Q4 volumes reflect fewer restrictions in the AFH channel, although Omicron slowed its recovery with restrictions reintroduced in some markets. FY volumes affected by adverse weather in Q3, including the impact of flooding in Belgium in July.

• Coca-Cola Zero Sugar, Monster & Capri-Sun all outperformed in both Q4 & FY, with volumes ahead of FY19.

• FY revenue/UC[18] (excluding soft drinks taxes[20]) growth supported by positive pack mix, alongside favourable brand mix & underlying price.

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

Comparable volumes, changes versus equivalent 2020 period.

Coca-ColaTM

• Q4 Original Taste +7.5%; Lights +7.5% driven by the continued rebound of the AFH channel & strong performance of the reformulated & rebranded Coca-Cola Zero Sugar (+9.5%)

• FY Coca-Cola Zero Sugar in growth vs both FY20 (+8.5%) & FY19 (+11.5%)

• Coca-Cola Zero Sugar gained FY value share[7] of Total Cola +90bps, supported by new look, new taste launch

Flavours, Mixers & Energy

• Q4 Fanta +15.5% driven by the continued rebound of the AFH channel

• Q4 Energy +11.0% with growth in both channels led by Monster. FY Energy +21.5% vs FY20 & +35.5% vs FY19 supported by solid distribution & innovation

• Schweppes Mixers growth vs FY19 (Q4: +1.0%; FY: +1.5%)

Hydration

• Q4 Water +7.0% reflecting its exposure to IC across both channels, with fewer restrictions & increased mobility during the quarter

• FY Sports category brands in API in growth vs both FY20 (+11.0%) & FY19 (+9.0%)

RTD Tea, RTD Coffee, Juices & Other[21]

• Q4 Juice drinks +8.5% reflecting the continued rebound of the AFH channel. Solid growth in Capri-Sun (Q4:+20.5%; FY:+16.5% vs FY19)

• Fuze Tea growth vs FY19 (Q4: +10.5%[10]; FY: +9.5%[10]) & continuing to grow value share in Europe[7]

• Alcohol delivered strong growth in Australia driven by Spirits & RTD (Q4: +9.5%; FY: +5.0% vs FY19)

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Note: All references to volumes are on a comparable basis 

• 16 February 2022 at 12:00 GMT, 13:00 CET & 7:00 a.m.EST; accessible via www.cocacolaep.com

• Replay & transcript will be available at www.cocacolaep.com as soon as possible

• First-quarter 2022 trading update: 27 April 2022

• Financial calendar available here: https://ir.cocacolaep.com/financial-calendar/

Investor Relations

Sarah Willett Joe Collins Claire Copps

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Media Relations

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Coca-Cola Europacific Partners is one of the world's leading consumer goods companies. We make, move and sell some of the world's most loved brands - serving 600 million consumers and helping 1.75 million customers across 29 countries grow.

We combine the strength and scale of a large, multi-national business with an expert, local knowledge of the customers we serve and communities we support.

The Company is currently listed on Euronext Amsterdam, the NASDAQ Global Select Market, London Stock Exchange and on the Spanish Stock Exchanges, trading under the symbol CCEP.

For more information about CCEP, please visit www.cocacolaep.com & follow CCEP on Twitter at @CocaColaEP

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1. Refer to 'Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures' for further details and to 'Supplementary Financial Information' for a reconciliation of reported to comparable and reported to pro forma comparable results; Change percentages against prior year equivalent period unless stated otherwise

2. A unit case equals approximately 5.678 litres or 24 8-ounce servings

3. Pro forma figures as if the acquisition of Coca-Cola Amatil Limited occurred at the beginning of the period presented for illustrative purposes only, it is not intended to estimate or predict future financial performance or what actual results would have been. Acquisition completed on 10 May 2021. Prepared on a basis consistent with CCEP accounting policies and include transaction accounting adjustments for the period 1 January to 10 May. Refer to 'Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures' for further details

4. 9 November 2021 declared €1.40 dividend per share, paid 6 December 2021

5. NielsenIQ Strategic Planner FY21 Data to 02.Jan.22 Countries included are ES, DE, GB, FR, BE, NL, SE, PT & NO

6. Comparable & FX-neutral

7. Combined NARTD (non-alcoholic ready to drink) NielsenIQ Global Track MAT data for ES, PT, DE, FR, BE, NL, NZ, NO, SE to 02.Jan.22; GB to 01.Jan.22; IND to 31.Dec.21; NARTD IRI data for AUS to 02.Jan.22

8. Online Data is for available markets MAT GB to 01.Jan.22 (Retailer data+NielsenIQ), ES, FR, NL & SE to 02.Jan.22 (NielsenIQ), AUS to 02.Jan.22 (Retailer Data)

9. Adjusted for 4 fewer selling days in Q4; 1 less selling day in FY21; CCEP pro forma volume Q4 +3.0% vs FY20; CCEP pro forma volume FY21 +4.5% vs FY20

10. Europe only

11. Management's best estimate

12. Unassured & provisional

13. Includes Australia, New Zealand & the Pacific Islands, Indonesia & Papua New Guinea

14. Dividends subject to Board approval

15. Includes France & Monaco

16. Includes Spain, Portugal & Andorra

17. Includes Belgium, Luxembourg, the Netherlands, Norway, Sweden & Iceland

18. Revenue per unit case

19. HoReCa = Hotels, Restaurants & Cafes

20. Northern Europe revenue per unit case declined in FY21 as a result of changes to Norwegian Soft Drink Taxes

21. RTD refers to Ready to Drink; Other includes Alcohol & Coffee

This document contains statements, estimates or projections that constitute "forward-looking statements" concerning the financial condition, performance, results, strategy and objectives of Coca-Cola Europacific Partners plc and its subsidiaries (together "CCEP" or the "Group"). Generally, the words "ambition," "target," "aim," "believe," "expect," "intend," "estimate," "anticipate," "project," "plan," "seek," "may," "could," "would," "should," "might," "will," "forecast," "outlook," "guidance," "possible," "potential," "predict," "objective" and similar expressions identify forward-looking statements, which generally are not historical in nature.

Forward-looking statements are subject to certain risks that could cause actual results to differ materially from CCEP's historical experience and present expectations or projections, including with respect to the acquisition of Coca-Cola Amatil Limited and its subsidiaries (together "CCL" or "API") completed on 10 May 2021 (the "Acquisition"). As a result, undue reliance should not be placed on forward-looking statements, which speak only as of the date on which they are made. These risks include but are not limited to:

1. those set forth in the "Risk Factors" section of CCEP's 2020 Annual Report on Form 20-F filed with the SEC on 12 March 2021,as updated and supplemented with the additional information set forth in the "Principal Risks and Risk Factors" section of the H1 2021 Half-year Report Filed with the SEC on 2 September 2021;

2. those set forth in the "Business and Sustainability Risks" section of CCL's 2020 Financial and Statutory Reports; and

3. risks and uncertainties relating to the Acquisition, including the risk that the businesses will not be integrated successfully or such integration may be more difficult, time consuming or costly than expected, which could result in additional demands on CCEP's resources, systems, procedures and controls, disruption of its ongoing business and diversion of management's attention from other business concerns; the possibility that certain assumptions with respect to API or the Acquisition could prove to be inaccurate; burdensome conditions imposed in connection with any regulatory approvals; ability to raise financing; the potential that the Acquisition may involve unexpected liabilities for which there is no indemnity; the potential failure to retain key employees as a result of the Acquisition or during integration of the businesses and disruptions resulting from the Acquisition, making it more difficult to maintain business relationships; the potential for (i) negative reaction from financial markets, customers, regulators, employees and other stakeholders, (ii) litigation related to the Acquisition.

The full extent to which the COVID-19 pandemic will negatively affect CCEP and the results of its operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

Due to these risks, CCEP's actual future results, dividend payments, capital and leverage ratios, growth, market share, tax rate, efficiency savings, the results of the integration of the businesses following the Acquisition, including expected efficiency and combination savings, and achievement of sustainability goals, may differ materially from the plans, goals, expectations and guidance set out in forward-looking statements (including those issued by CCL prior to the Acquisition). These risks may also adversely affect CCEP's share price. Additional risks that may impact CCEP's future financial condition and performance are identified in filings with the SEC which are available on the SEC's website at www.sec.gov. CCEP does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable rules, laws and regulations. Furthermore, CCEP assumes no responsibility for the accuracy and completeness of any forward-looking statements. Any or all of the forward-looking statements contained in this filing and in any other of CCEP's or CCL's public statements (whether prior or subsequent to the Acquisition) may prove to be incorrect. 

Pro forma financial information

Pro forma financial information has been provided in order to illustrate the effects of the acquisition of Coca-Cola Amatil Limited (referred to as CCL pre acquisition, API post acquisition) on the results of operations of CCEP and allow for greater comparability of the results of the combined group between periods. The pro forma financial information has been prepared for illustrative purposes only and because of its nature, addresses a hypothetical situation. It is based on information and assumptions that CCEP believes are reasonable, including assumptions as at 1 January 2021 and 1 January 2020 relating to acquisition accounting provisional fair values of API assets and liabilities which are assumed to be equivalent to those that have been provisionally determined as of the acquisition date and included in the financial statements for the year ended 31 December 2021, on a constant currency basis. The pro forma information also assumes the interest impact of additional debt financing reflecting the actual weighted average interest rate for acquisition financing of c.0.40% for all periods presented. Acquisition costs included in 2020 pro forma financial information are assumed to be equivalent to those incurred in 2021.

The pro forma financial information does not intend to represent what CCEP's results of operations actually would have been if the acquisition had been completed on the dates indicated, nor does it intend to represent, predict or estimate the results of operations for any future period or financial position at any future date. In addition, it does not reflect ongoing cost savings that CCEP expects to achieve as a result of the acquisition or the costs necessary to achieve these cost savings or synergies. As pro forma information is prepared to illustrate retrospectively the effects of future transactions, there are limitations that are inherent to the nature of pro forma information. As such, had the acquisition taken place on the dates assumed, the actual effects would not necessarily have been the same as those presented in the Pro Forma financial information contained herein.

Alternative Performance Measures

We use certain alternative performance measures (non-GAAP performance measures) to make financial, operating and planning decisions and to evaluate and report performance. We believe these measures provide useful information to investors and as such, where clearly identified, we have included certain alternative performance measures in this document to allow investors to better analyse our business performance and allow for greater comparability. To do so, we have excluded items affecting the comparability of period-over-period financial performance as described below. The alternative performance measures included herein should be read in conjunction with and do not replace the directly reconcilable GAAP measures.

For purposes of this document, the following terms are defined:

''As reported'' are results extracted from our condensed consolidated interim financial statements.

''Pro forma'' includes the results of CCEP and API as if the Acquisition had occurred at the beginning of the period presented, including acquisition accounting adjustments relating to provisional fair values. Pro forma also includes impact of the additional debt financing costs incurred by CCEP in connection with the Acquisition for all periods presented.

"Comparable'' is defined as results excluding items impacting comparability, which include restructuring charges, acquisition and integration related costs, inventory fair value step up related to acquisition accounting, the impact of the closure of the GB defined benefit pension scheme, net costs related to European flooding and net tax items relating to rate and law changes. Comparable volume is also adjusted for selling days.

''Pro forma Comparable'' is defined as the pro forma results excluding items impacting comparability, as described above.

''Fx-neutral'' is defined as period results excluding the impact of foreign exchange rate changes. Foreign exchange impact is calculated by recasting current year results at prior year exchange rates.

''Capex'' or "Capital expenditures'' is defined as purchases of property, plant and equipment and capitalised software, plus payments of principal on lease obligations, less proceeds from disposals of property, plant and equipment. Capex is used as a measure to ensure that cash spending on capital investment is in line with the Group's overall strategy for the use of cash.

''Free cash flow'' is defined as net cash flows from operating activities less capital expenditures (as defined above) and interest paid. Free cash flow is used as a measure of the Group's cash generation from operating activities, taking into account investments in property, plant and equipment and non-discretionary lease and interest payments. Free cash flow is not intended to represent residual cash flow available for discretionary expenditures.

''Adjusted EBITDA'' is calculated as Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), after adding back items impacting the comparability of period over period financial performance. Adjusted EBITDA does not reflect cash expenditures, or future requirements for capital expenditures or contractual commitments. Further, adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs, and although depreciation and amortisation are non-cash charges, the assets being depreciated and amortised are likely to be replaced in the future and adjusted EBITDA does not reflect cash requirements for such replacements.

''Net Debt'' is defined as the net of cash and cash equivalents and short term investments less borrowings and adjusted for the fair value of hedging instruments related to borrowings and other financial assets/liabilities related to borrowings. We believe that reporting net debt is useful as it reflects a metric used by the Group to assess cash management and leverage. In addition, the ratio of net debt to adjusted EBITDA is used by investors, analysts and credit rating agencies to analyse our operating performance in the context of targeted financial leverage.

''ROIC" or "Return on invested capital" is defined as comparable operating profit after tax attributable to shareholders divided by the average of opening and closing invested capital for the year. Invested capital is calculated as the addition of borrowings and equity attributable to shareholders less cash and cash equivalents and short term investments. ROIC is used as a measure of capital efficiency and reflects how well the Group generates comparable operating profit relative to the capital invested in the business.

''Dividend payout ratio'' is defined as dividends as a proportion of comparable profit after tax.

Additionally, within this document, we provide certain forward-looking non-GAAP financial Information, which management uses for planning and measuring performance. We are not able to reconcile forward-looking non-GAAP measures to reported measures without unreasonable efforts because it is not possible to predict with a reasonable degree of certainty the actual impact or exact timing of items that may impact comparability throughout year.

Unless otherwise stated, percent amounts are rounded to the nearest 0.5%. 

The following provides a summary reconciliation of CCEP's reported and comparable results for the full-year ended 31 December 2021 and 31 December 2020:

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[1] Amounts represent restructuring charges related to business transformation activities.

[2] Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.

[3] Amounts represent cost associated with the acquisition and integration of CCL.

[4] Amounts represent the non-recurring impact of the fair value step-up of API finished goods.

[5] Amounts represent the incremental net costs incurred as a result of the July 2021 flooding events, which impacted the operations of our manufacturing facilities in Chaudfontaine and Bad Neuenahr.

[6] Amounts include the deferred tax impact related to income tax rate and law changes.

[7] Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.

The following provides a summary reconciliation of CCEP's reported and pro forma comparable results for the full-year ended 31 December 2021 and 31 December 2020:

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[A] Amounts represent adjustments to include CCL financial results prepared on a basis consistent with CCEP accounting policies, as if the Acquisition had occurred on 1 January 2021 and excludes CCL acquisition and integration related costs.

[B] Amounts represent transaction accounting adjustments for the period 1 January to 10 May as if the Acquisition had occurred on 1 January 2021. These include the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment, the interest impact of additional debt financing reflecting the actual weighted average interest rate for Acquisition financing of c.0.40% and the inclusion of acquisition and integration related costs incurred by CCL prior to the Acquisition.

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[C] Amounts represent adjustments to reflect CCL financial results as if the Acquisition had occurred on 1 January 2020. The impact of adjustments made to CCL's historical financial statements in order to present them on a basis consistent with CCEP's accounting policies is provided in Note 1.

[D] Amounts represent transaction accounting adjustments for the period 1 January to 31 December as if the Acquisition had occurred on 1 January 2020. These include the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment, the non-recurring impact of the provisional fair value step-up of API finished goods, the interest impact of additional debt financing reflecting the actual weighted average interest rate for Acquisition financing of c.0.40% and the inclusion of acquisition related costs.

[E] Items impacting comparability represents amounts included within pro forma Combined CCEP affecting the comparability of CCEP's year-over-year financial performance and are set out in the following table:

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[1] Amounts represent restructuring charges related to business transformation activities.

[2] Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.

[3] Amounts represent cost associated with the acquisition and integration of CCL.

[4] Amounts represent the non-recurring impact of the provisional fair value step-up of API finished goods. For 2021, these charges are included within the As Reported results. For 2020, these charges are included within Transaction accounting adjustments.

[5] Amounts represent the incremental net costs incurred as a result of the July 2021 flooding events, which impacted the operations of our manufacturing facilities in Chaudfontaine and Bad Neuenahr.

[6] Amounts include the deferred tax impact related to income tax rate and law changes.

[7] Amounts represent charges incurred prior to Acquisition classified as non-trading items by CCL which are not expected to recur.

[8] Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.

[9] Amounts represent the charges recognised by CCL relating to the impairment of Indonesia and Fiji during H1 2020.

Note 1: Adjustments to API's financial statements

The financial statements below illustrate the impact of adjustments made to the historical financial statements of CCL in order to present them on a basis consistent with CCEP's accounting policies.

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[1] Historical income statement previously published by CCL for the period 1 January 2020 to 31 December 2020.

[2] Accounting policy and classification adjustments made to CCL's income statement in order to present on a basis consistent with CCEP.

[3] CCL income statement has been translated from Australian Dollars to Euros using the average exchange rate for the period of 0.6036.

Revenue

[1] Iberia refers to Spain, Portugal & Andorra.

[2] France refers to continental France & Monaco.

Volume

Cost of Sales

For the year ending 31 December 2021, reported cost of sales were €8,677 million, up 26.5% versus 2020, and include the impact of a €48 million acquisition accounting fair value step up to API finished goods at the time of the Acquisition that were sold during May and June.

Comparable cost of sales for the same period were €8,606 million, up 26.5% versus 2020. Cost of sales per unit case increased by 1.0% on a comparable and fx-neutral basis, reflecting the impact of the newly acquired API operations, increased revenue per unit case driving higher concentrate costs, commodity inflation & adverse mix, partially offset by the favourable recovery of fixed manufacturing costs given higher volumes.

Operating expenses

For the year ending 31 December 2021, reported operating expenses were €3,570 million, up 22.0% versus 2020.

Comparable operating expenses were €3,385 million for the same period, up 30.0% versus 2020, reflecting the impact of the newly acquired API operations and higher volumes, partially offset by the benefit of ongoing efficiency programmes and our continuous efforts on discretionary spend optimisation.

Restructuring charges of €136 million were recognised within reported operating expenses for the year ending 31 December 2021 related principally to the continuation of the Accelerate Competitiveness programme announced in October 2020. This programme relates to initiatives across Europe aimed at improving productivity through the use of technology enabled solutions. Restructuring charges in 2021 include €51 million of severance costs related to productivity initiatives within the commercial organisation in Iberia.

Restructuring charges of €306 million were recognised within operating expenses for the year ending 31 December 2020, the majority of which also relate to the severance and accelerated depreciation in connection with the Accelerate Competitiveness programme. Charges included costs associated with closure of production sites in Germany and Iberia as well as the closure of five distribution centres and changes in commercial organisation in Germany.

Acquisition and integration related costs of €49 million were recognised within reported operating expenses the year ending 31 December 2021 associated with the acquisition of CCL, primarily brokerage and advisory fees. This compares to €11 million of acquisition related costs recognised during the year ending 31 December 2020.

Operating profit

Revenue

Volume

[1] Pro forma API volume for the year ended 31 December 2020 is 618 million unit cases. Including the impact of the Q1 and Q4 selling day shift (2 million unit cases), pro forma comparable API volume is 616 million unit cases.