Coca-cola Euro. Regulatory News (CCEP)

COCA-COLA EUROPACIFIC PARTNERS

Results for the six months ended 30 June 2023

Strong first half, raising FY guidance

DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:

"Today, we are excited to announce the proposed joint acquisition of Coca-Cola Beverages Philippines, Inc. with Aboitiz Equity Ventures Inc., one of the leading conglomerates in the local market. This offers us a great opportunity to acquire an established, well-run business with attractive profitability and growth prospects. This would be a natural next step for CCEP, creating a more diverse footprint within our existing API business segment, support Indonesia's transformation journey and underpin our strategic mid-term objectives.

"We are also very pleased to have delivered a great first half, achieving strong top and bottom-line growth and generating impressive free cash flow. Our performance reflects great in-market execution, strong customer relationships allowing our consumers to continue to enjoy our portfolio of leading brands across a broad pack offering. This resulted in solid volume growth across our developed markets, whilst our volume in Indonesia reflected the execution of our long-term transformation strategy. Our focus on revenue and margin growth management, along with our price and promotion strategy, drove solid gains in revenue per unit case with transactions outpacing volume.

"Looking ahead, we remain confident in the resilience of our categories, despite the ongoing dynamic outlook. We have fantastic activation plans to build on our momentum, including the Women's World Cup, to engage customers and consumers. We also continue to actively manage our pricing and promotional spend to remain affordable and relevant to our consumers. Given our strong first half, we are raising revenue, operating profit and free cash flow guidance[1] for FY23. This demonstrates the strength of our business and ability to deliver continued shareholder value. This is all underpinned by our progress on sustainability, our talented and engaged colleagues, and our strong relationships with The Coca-Cola Company, our other brand partners, and our customers, who continue to share in our success."

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

Revenue

H1 Reported +8.5%; H1 Fx-neutral +10.5%[4]

• Delivered more revenue growth YTD for our retail customers than any of our FMCG peers in Europe & our NARTD peers in Australia & New Zealand (NZ)[5]

• NARTD YTD value share gains[5] across measured channels both in-store (+10bps) & online (+90bps)

• Comparable volume +1.0%[6] (Europe: +2.5%; API: -5.5%) driven by good underlying demand in developed markets & solid in-market execution offset by strategic SKU rationalisation as part of our long-term transformation in Indonesia

◦ Away from Home (AFH) channel comparable volume: +0.5%[6] (+0.5% vs 2019) with good underlying demand, ahead of pre-pandemic levels

◦ Home channel comparable volume: +1.0%[6] (+8.5% vs 2019) reflecting resilient growth as at-home occasion trends continue

• Transactions outpaced volume growth in Europe, Australia & NZ

• Revenue per unit case +10.0%[2],[4] (Europe: +9.0%; API: +13.0%) reflecting the annualisation of last year's headline price increases, & this year's headline price increases across most of our markets, alongside favourable pack & brand mix

Q2 Reported +5.5%; Q2 Fx-neutral +8.0%[4]

• Comparable volume -1.5%[6] (Europe: +0.5%; API: -11.0%) reflecting good underlying demand in developed markets & tough comparables (Q2 22 pro forma comparable volume: +10.5%) offset by the timing of Ramadan & the strategic SKU rationalisation in Indonesia

◦ AFH channel comparable volume: -3.0%[6] reflecting last year's rebound following the removal of restrictions & recovery of tourism, & favourable weather in Europe

◦ Home channel comparable volume: -1.0%[6]

• Revenue per unit case +10.0%[2],[4] (Europe: +9.5%; API: +13.0%) driven by positive headline price increases & promotional optimisation alongside favourable pack & brand mix

H1 Operating profit

Reported +21.0%; Fx-neutral +13.0%[4]

• Cost of sales per unit case +9.0%[2],[4] reflecting increased revenue per unit case driving higher concentrate costs, & inflation in commodities & manufacturing

• Comparable operating profit of €1,165m, +13.0%[4] reflecting strong top-line, our efficiency programmes & continuous efforts on discretionary spend optimisation

• Comparable diluted EPS of €1.85, +17.0%[4] (reported +27.5%)

Dividend

• First half interim dividend per share of €0.67[3] (declared at Q1 & paid in May), calculated as 40% of the FY22 dividend

• Reaffirming guidance for an annualised total dividend payout ratio of approximately 50%[7]

Proposal to jointly acquire Coca-Cola Beverages Philippines, Inc. with Aboitiz Equity Ventures Inc.

• See separate release on Investors section of our website for more detail (https://ir.cocacolaep.com/financial-reports-and-results/financial-releases)

Other

• Free cash flow: Generated strong free cash flow of €850m reflecting strong performance (net cashflows from operating activities of €1,307m), supporting our journey to return to our target leverage range of Net debt:Adjusted EBITDA[1] of 2.5x-3x. At the end of 2022, Net debt:Adjusted EBITDA[1] was 3.5x

• Strategic portfolio choices:

◦ Australia & NZ Spirits & ARTD[8] category: CCEP plans to maximise its extensive knowledge in the attractive & fast growing ARTD category by launching new scalable offerings aligned with The Coca-Cola Company. In this context, CCEP & Beam Suntory will move forward independently. Effective from the date of contract expiry (30 June 2025 in Australia & 31 December 2025 in NZ)

◦ Capri Sun: Following a successful sales & distribution partnership in Europe, CCEP & Capri Sun will move forward independently, consistent with their respective strategies. Will come into effect during 2024 enabling an orderly transition

◦ Insignificant impact on CCEP volume, revenue & operating profit[4],[9] from the above

• Retained MSCI AAA rating, inclusion on Carbon Disclosure Project's A Lists for Climate & Water, & inclusion on the Bloomberg Gender Equality index

• Progressed our packaging initiatives

◦ Boosted recycled content in Indonesia by switching to 100% rPET bottles

◦ Installed a PET plastic grinder in Papua New Guinea to support the supply of rPET

◦ Transitioned Sprite from green to clear bottles across API, making them easier to recycle

• Introduced electric trucks in Luxembourg, Belgium & Spain to reduce carbon emissions from our logistics

• Partnered with The Coca-Cola Company, other bottlers & Greycroft, a seed-to-growth venture capital firm, to create a sustainability-focused venture capital fund

The outlook for FY23 reflects our current assessment of market conditions. Unless stated otherwise, guidance is on a comparable & FX-neutral basis. FX is expected to decrease FX-neutral guidance by approximately 200 basis points for the full year

Revenue: comparable growth of 8-9% (previously 6-8%)

• Headline pricing successfully implemented across most of our markets without disruption. Germany & the Netherlands to be implemented in the third quarter

• Continued focus on promotional optimisation & revenue growth management initiatives

Cost of sales per unit case: comparable growth of ~8% (unchanged)

• Higher concentrate costs reflecting increased revenue per unit case

• Commodity inflation expected to be ~8% (previously ~10%)

• FY23 hedge coverage at >95%

• Low overall FX transactional exposure (

Operating profit: comparable growth of 12-13% (previously 6-7%)

• Increased top-line performance

• Continued focus on delivering efficiency programmes & optimising discretionary spend

Comparable effective tax rate: ~24% (previously ~23%)

• Primarily due to change of geographic profit mix

Free cash flow: at least €1.7bn (previously at least €1.6bn)

Capital expenditure: 4-5% of revenue excluding leases (unchanged)

Dividend payout ratio: c.50%[7] (unchanged)

All values are unaudited, changes versus equivalent 2022 period

France

• Q2 volume growth reflects continued strong momentum across both channels supported by great execution.

• Coca-Cola Original Taste, Coca-Cola Zero Sugar, Monster & Flavours performed well. Fuze Tea outperformed, achieving significant volume growth in both Q2 (+74.0%) & H1 (+57.0%).

• H1 revenue/UC[14] growth driven by headline price increase implemented at the end of the first quarter.

Germany

• Q2 volume growth reflects solid trading in the Home channel supported by great execution & evidence of consumers shifting to Hypermarkets & Discounters. AFH channel volume broadly flat.

• Continued strong growth in Coca-Cola Zero Sugar, whilst Monster, Fuze Tea & Powerade achieved double-digit volume growth in both Q2 & H1.

• H1 revenue/UC[14] growth driven by favourable price from the annualisation of the second headline price increase last year & positive brand mix (e.g. Monster volume +30.5%).

Great Britain

• Q2 volume growth reflects sustained trading momentum across both channels. Record temperatures in June supported strong volume growth towards the end of the quarter.

• Coca-Cola Zero Sugar & Monster realised double-digit volume growth in both Q2 & H1.

• H1 revenue/UC[14] growth driven by headline price increase implemented at the end of the second quarter.

Iberia

• Q2 volume decline reflects tough comparables, cycling the rebound of the AFH channel, favourable weather & buy-in ahead of second headline price increase last year & anticipated transportation disruption. H1 growth driven by the recovery of the AFH channel in the first quarter (cycling covid restrictions).

• Coca-Cola Original Taste, Coca-Cola Zero Sugar & Aquarius performed well in H1. Monster achieved double-digit volume growth in both Q2 & H1.

• H1 revenue/UC[14] growth driven by headline price, implemented in the first quarter, & positive channel & pack mix led by growth in the AFH channel e.g. small glass +6.5%.

Northern Europe

• Q2 volume decline reflects tough comparables, cycling double-digit volume growth last year following the late removal of restrictions. H1 growth driven by continued recovery of the AFH channel.

• Fuze Tea, Powerade & Aquarius outperformed achieving double-digit volume growth in H1.

• H1 revenue/UC[14] growth driven by headline price increase implemented during the first half & positive pack mix led by the recovery of the AFH channel e.g. small glass +7.0%.

API

• Q2 volume decline reflects phasing of Ramadan, & strategic SKU rationalisation in Indonesia, with industry-wide supply constraints early in the quarter in Australia.

• Coca-Cola Zero Sugar & Monster continued to outperform in both Q2 & H1.

• H1 revenue/UC[14] growth driven by headline price increase implemented across all markets during the first half & promotional optimisation in Australia.

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

Comparable volumes, changes versus equivalent 2022 period.

Coca-Cola®

Q2: -1.0%; H1: +1.5%

• Strong underlying demand with tough comparables in the second quarter, cycling the rebound of the AFH channel & tourism, & favourable weather in Europe last year.

• Coca-Cola Zero Sugar continued to grow (+5.5%) across all key markets in H1 supported by targeted campaigns & innovation.

• Coca-Cola Zero Sugar gained value share[5] of Total Cola +20bps.

Flavours, Mixers & Energy

Q2: -1.5%; H1: +1.5%

• Strong underlying demand with tough comparables in the second quarter, cycling the rebound of the AFH channel & tourism, & favourable weather in Europe last year.

• Fanta Q2: -2.0%; H1: +2.0%, reflecting the above with growth supported by flavour extensions.

• Energy Q2: +14.5%; H1: +15.0% led by Monster, continuing to gain share & drive distribution through exciting innovation.

Hydration

Q2: -8.0%; H1: -4.5%

• Water Q2: -14.5%; H1: -10.0% as a result of strategic portfolio choices, with SKU rationalisation in Indonesia, the exit of Vio large PET in Germany & Mount Franklin bulk pack in Australia.

• Sports Q2: +7.0%; H1: +10.5%, with growth in Aquarius & Powerade driven by continued consumer trends in this category.

RTD Tea, RTD Coffee, Juices & Other[15]

Q2: -1.5%; H1: -2.5%

• Juice drinks Q2: -5.5%; H1: -6.5% reflecting strategic SKU rationalisation in Indonesia.

• RTD Tea/Coffee Q2: +4.5%; H1: +3.5% driven by Costa RTD in GB (+21.5%) & Fuze Tea in Europe (+27.0%).

• Encouraging start for Jack Daniel's & Coca-Cola now launched in GB, Spain & the Netherlands.

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

• 2 August 2023 at 10:30 BST, 11:30 CEST & 5:30 a.m. EDT; accessible via www.cocacolaep.com

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

• Third quarter 2023 trading update: 1 November 2023

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

Investor Relations

Sarah Willett Awais Khan Claire Copps

+44 7970 145 218 +44 7528 251 830 +44 7980 775 889

Media Relations

ccep@portland-communications.com

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 2 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 Alternative Performance Measures' for further details & to 'Supplementary Financial Information' for a reconciliation of reported to 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. 25 April 2023 declared first half interim dividend of €0.67 dividend per share, paid 25 May 2023

4. Comparable & FX-neutral

5. External data sources: Nielsen & IRI P6 YTD

6. No selling day shift in Q2 or H1; CCEP reported volume +1.0% in H1 & -1.5% in Q2

7. Dividends subject to Board approval

8. ARTD refers to alcohol ready to drink

9. The discontinuance of the relationship between CCEP & Beam Suntory will trigger a change in the assigned useful economic life of the intangible assets effective from the second half of 2023, shortening the amortization period. See Note 14 for further details

10. Includes France & Monaco

11. Includes Spain, Portugal & Andorra

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

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

14. Revenue per unit case

15. 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, guidance and outlook, dividends, consequences of mergers, acquisitions, joint ventures, and divestitures, including the proposed joint venture with Aboitiz Equity Ventures Inc. (AEV) and acquisition of Coca-Cola Beverages Philippines, Inc. (CCBPI), 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. 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 2022 Annual Report on Form 20-F filed with the SEC on 17 March 2023 and as updated and supplemented with the additional information set forth in the "Principal Risks and Risk Factors" section of this document;

2. risks and uncertainties relating to the global supply chain, including impact from war in Ukraine and increasing geopolitical tension including in the Asia Pacific region, such as the risk that the business will not be able to guarantee sufficient supply of raw materials, supplies, finished goods, natural gas and oil and increased state-sponsored cyber risks;

3. risks and uncertainties relating to the global economy and/or a potential recession in one or more countries, including risks from elevated inflation, price increases, price elasticity, disposable income of consumers and employees, pressure on and from suppliers, increased fraud, and the perception or manifestation of a global economic downturn;

4. risks and uncertainties relating to potential global energy crisis, with potential interruptions and shortages in the global energy supply, specifically the natural gas supply in our territories. Energy shortages at our sites, our suppliers and customers could cause interruptions to our supply chain and capability to meet our production and distribution targets;

5. risks and uncertainties relating to potential water use reductions due to regulations by national and regional authorities leading to a potential temporary decrease in production volume; and

6. risks and uncertainties relating to the proposed joint venture with AEV and acquisition of CCBPI, including the risk that the proposed transactions may not be consummated on the currently contemplated terms or at all, or that our integration of CCBPI's business and operations may not be successful or may be more difficult, time consuming or costly than expected.

Due to these risks, CCEP's actual future financial condition, results of operations, and business activities, including its results, dividend payments, capital and leverage ratios, growth, including growth in revenue, cost of sales per unit case and operating profit, free cash flow, market share, tax rate, efficiency savings, achievement of sustainability goals, including net zero emissions and recycling initiatives, capital expenditures, the results of the acquisition of the minority share of our Indonesian business, our agreements relating to and results of the proposed joint venture with AEV and acquisition of CCBPI, and ability to remain in compliance with existing and future regulatory compliance, may differ materially from the plans, goals, expectations and guidance set out in forward-looking statements. 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. Any or all of the forward-looking statements contained in this filing and in any other of CCEP's public statements may prove to be incorrect.

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.

"Comparable'' is defined as results excluding items impacting comparability, which include restructuring charges, income arising from the ownership of certain mineral rights in Australia, gain on sale of sub-strata and associated mineral rights in Australia, net impact related to European flooding and acquisition and integration related costs. Comparable volume is also adjusted for selling days.

''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.

''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 of the items impacting comparability for the first six months ended 30 June 2023 and 1 July 2022:

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

[2] Amounts represent royalty income arising from the ownership of certain mineral rights in Australia. The royalty income is recognised as "Other income" in our condensed consolidated interim income statement as of the six months ended 30 June 2023.

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

[4] Amounts represent the incremental expense incurred offset by the insurance recoveries collected as a result of the July 2021 flooding events, which impacted the operations of our production facilities in Chaudfontaine and Bad Neuenahr.

[5] Amounts represent the considerations received relating to the sale of the sub-strata and associated mineral rights in Australia. The transaction completed in April 2023 and the proceeds were recognised as "Other income" in our condensed consolidated interim income statement as of the six months ended 30 June 2023.

Revenue

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

[2] France refers to continental France & Monaco.

Volume

Cost of Sales

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

[2] Amounts represent the incremental expense incurred offset by the insurance recoveries collected as a result of the July 2021 flooding events, which impacted the operations of our production facilities in Chaudfontaine and Bad Neuenahr.

For the six months ending 30 June 2023, reported cost of sales were €5,707 million, up 8.0% versus 2022.

Comparable cost of sales for the same period were €5,701 million, up 7.5% versus 2022. Cost of sales per unit case increased by 9.0% on a comparable and fx-neutral basis, reflecting increased revenue per unit case driving higher concentrate costs, and inflation in commodities and manufacturing.

Operating expenses

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

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

For the six months ending 30 June 2023, reported operating expenses were €2,153 million, up 6.5% versus 2022.

Comparable operating expenses were €2,111 million for the same period, up 9.5% versus 2022, reflecting the impact of inflation and higher volumes, partially offset by the benefit of ongoing efficiency programmes and our continuous efforts on discretionary spend optimisation.

Restructuring charges in operating expenses of €42 million related to various productivity initiatives were recognised in the six month period ending 30 June 2023.This compares to restructuring charges of €95 million incurred in the six month period ending 1 July 2022, primarily attributable to €81 million of expense recognised in connection with the transformation of the full service vending operations and related initiatives in Germany.

Operating profit

The effective tax rate was 22% and 25% for the six months ended 30 June 2023 and 1 July 2022, respectively, and 22% for the years ended 31 December 2022.

For the six months ending 30 June 2023, the effective tax rate reflects the impact of having operations outside the UK which are taxed at rates other than the statutory UK rate of 23.5%, and adjustments made in respect of prior periods.

We expect our full year 2023 comparable effective tax rate to be approximately 24%.

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[1] Amounts represent the tax impact of restructuring charges related to business transformation activities.

[2] Amounts represent the tax impact of the incremental expense incurred offset by the insurance recoveries collected as a result of the July 2021 flooding events, which impacted the operations of our production facilities in Chaudfontaine and Bad Neuenahr.

[3] Amounts represent the tax impact of royalty income arising from the ownership of certain mineral rights in Australia. The royalty income is recognised as "Other income" in our condensed consolidated interim income statement as of the six months ended 30 June 2023.

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[1] Net debt includes adjustments for the fair value of derivative instruments used to hedge both currency and interest rate risk on the Group's borrowings. In addition, net debt also includes other financial assets/liabilities relating to cash collateral pledged by/to external parties on hedging instruments related to borrowings.

[2] Cash and cash equivalents as at 30 June 2023 and 31 December 2022 include €37 million and €102 million of cash in Papua New Guinea Kina respectively. Presently, there are government-imposed currency controls which impact the extent to which the cash held in Papua New Guinea can be converted into foreign currency and remitted for use elsewhere in the Group.

[3] Short term investments are term cash deposits held in API and Europe with maturity dates when acquired of greater than three months and less than one year. These short term investments are held with counterparties that are continually assessed with a focus on preservation of capital and liquidity. Short term investments as at 30 June 2023 and 31 December 2022 include €61 million and €49 million of assets in Papua New Guinea Kina respectively, subject to the same currency controls outlined above.

[4] Both borrowings and cash and cash equivalents as at 30 June 2023 include €188 million in relation to a notional pooling agreement for which an offsetting agreement is in place which does not meet the criteria for net presentation on the statement of financial position.

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[1] Amounts represent restructuring charges related to business transformation activities, excluding accelerated depreciation included in the depreciation and amortisation line.

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

[3] Amounts represent the incremental expense incurred offset by the insurance recoveries collected as a result of the July 2021 flooding events, which impacted the operations of our manufacturing facilities in Chaudfontaine and Bad Neuenahr.

[4] Amounts represent royalty income arising from the ownership of certain mineral rights in Australia. The royalty income is recognised as "Other income" in our condensed consolidated interim income statement as of the six months ended 30 June 2023.

[5] Amounts represent the considerations received relating to the sale of the sub-strata and associated mineral rights in Australia. The transaction completed in April 2023 and the proceeds were recognised as "Other income" in our condensed consolidated interim income statement as of the six months ended 30 June 2023.

The Group faces a number of risks and uncertainties that may have an adverse effect on its operations, performance and future prospects and has a robust risk management programme to assess these and evaluate strategies to manage them. The principal risks and risk factors in our 2022 Integrated Report on Form 20-F for the year ended 31 December 2022 ('2022 Integrated Report') (pages 64 to 71 and 223 to 229 respectively) continue to represent our risks.

Since the publication of the Integrated Report in March, the macro risk environment remains similar and the reported key control mitigations continue to be appropriate and effective. Although we don't foresee in the near term an escalation of current geopolitical tensions, freight disruptions, shortages and sanctions would be the consequences and have a significant impact on global trade. CCEP is working to de-risk its supply chain and put in place plans to secure commodities in particular with our Asian Pacific suppliers. We will continue to monitor the developments of the situation and any other potential impacts.

Economic conditions in our markets remain challenging with increases in inflation and interest rates expected to continue through the remainder of 2023. This may lead to affordability issues for consumers and pricing pressure from retail customers. We continue to focus on the wellbeing and security of our people and we are carefully considering the situation and maintaining an open dialogue and good relations with our social partners. We have not experienced material impacts on our business from labour issues.

We continue to monitor the developments of the war in Ukraine, which has impacted the supply of raw materials, supplies, finished goods, gas/oil/energy and increased cyber risks.

As part of our risk management governance and routines we continuously monitor the risk landscape and discuss with business leaders risk trends every quarter, velocity and actions to be taken, as well as scanning for future risks. Based on that exercise we do not intend to change the principal risk ratings included in our 2022 Integrated Report, but we have identified some trends in this first half of 2023.

Water scarcity has been an issue in this first half of the year, in particular in France and Spain, where authorities have issued contingency plans. In addition to strong water management routines, a cross functional team has been using scenario planning to assess the potential impact. As of today we consider the risk low. We maintain good relations with the local authorities based on the credibility of our water management strategy and the strict discipline our demand planning teams apply for SKU prioritisation and rationalisation.

We have noticed an increase of cyber-attacks to other bottlers within the Coca-Cola system and suppliers during the first half of the year. CCEP has responded with increased training and awareness of phishing and social engineering attacks, increased focus on remediating technical vulnerabilities as well as increasing the level of testing and exercising.

We continue to be under pressure from customers and authorities to keep prices low despite the increase in costs. Our commercial teams continue to work positively with customers to mitigate this risk.

When it comes to our products, discussions on potential taxes to soft drinks and plastic continue in different countries across our territories including Spain, the Netherlands, Indonesia and Sweden. Based on our experience we engage in open and collaborative discussions with authorities and other stakeholders. We are also evaluating and responding appropriately to recent reports in relation to sweeteners, considering the risk of regulation, litigation and reputational damage.

Accordingly, the information provided about our principal risks and risk factors in the table below and in the Principal Risks and Risk Factors in our 2022 Integrated Report, and any or all of the Principal Risks and Risk Factors contained therein may be exacerbated by developments in the factors identified above and in our Forward-Looking Statements set out on page 7 of this interim management report.

The risks described in this report and in our 2022 Integrated Report are not the only risks facing the Group. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also adversely affect our business, financial condition or future results.

SUMMARY OF OUR PRINCIPAL RISKS

The table below shows our Principal Risks:

Risk change legend: ↑ Increased ↓ Decreased → Stayed the same

*Change vs 2022 Integrated Report may be as a result of a change in likelihood or impact.

Related party disclosures are presented in Note 10 of the Notes to the condensed consolidated interim financial statements contained in this interim management report.

As part of the Directors' consideration of the appropriateness of adopting the going concern basis in preparing the condensed consolidated interim financial statements, the Directors have considered the Group's financial performance in the period and have taken into account its current cash position and its access to a €1.95 billion undrawn committed credit facility. Further, the Directors have considered the current cash flow forecast, including a downside stress test, which supports the Group's ability to continue to generate cash flows during the next 12 months. 

In addition, the Group expects to complete the acquisition of 60% of Coca-Cola Beverages Philippines, Inc. around the end of 2023 subject to the finalisation of due diligence, signing definitive agreements and obtaining regulatory approval. The acquisition is expected to be funded by a combination of existing liquidity and 3rd party borrowing. In making their going concern assessment, the Directors have considered scenarios for the combined Group.

On this basis, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of 12 months from the date of signing these financial statements. Accordingly, the condensed consolidated interim financial statements have been prepared on a going concern basis and the Directors do not believe there are any material uncertainties to disclose in relation to the Group's ability to continue as a going concern.

The Directors of the Company confirm that to the best of their knowledge:

• The condensed consolidated interim financial statements for the six months ended 30 June 2023 have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union, International Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board, UK adopted International Accounting Standard 34 "Interim Financial Reporting" and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority (DTR).

• The interim management report includes a fair review of the information required by the DTR 4.2.7 R and DTR 4.2.8 R as follows:

• DTR 4.2.7 R: (1) an indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements, and (2) a description of the principal risks and uncertainties for the remaining six months of the financial year; and

• DTR 4.2.8 R: (1) related parties transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period, and (2) any changes in the related parties transactions described in the last annual report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year.

A list of current directors is maintained on CCEP's website: www.cocacolaep.com/about-us/governance/board-of-directors/.

On behalf of the Board

 2 August 2023

INDEPENDENT REVIEW REPORT TO COCA-COLA EUROPACIFIC PARTNERS PLC

Conclusion

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2023 which comprises the Condensed Consolidated Interim Income Statement, Condensed Consolidated Interim Statement of Comprehensive Income, Condensed Consolidated Interim Statement of Financial Position, Condensed Consolidated Interim Statement of Cash Flows, Condensed Consolidated Interim Statement of Changes in Equity and the related explanatory notes 1 - 14. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2023 is not prepared, in all material respects, in accordance with International Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board, International Accounting Standard 34, "Interim Financial Reporting" as issued by the European Union, U.K. adopted International Accounting Standard 34, "Interim Financial Reporting" and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with U.K. adopted International Accounting Standards, International Financial Reporting Standards ("IFRS") as adopted by the European Union and International Financial Reporting Standards as issued by the International Accounting Standards Board ("IASB"). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board, International Accounting Standard 34, "Interim Financial Reporting" as issued by the European Union, and U.K. adopted International Accounting Standard 34, "Interim Financial Reporting".

Conclusions Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Ernst & Young LLP

London

2 August 2023

Coca-Cola Europacific Partners plc

Condensed Consolidated Interim Income Statement (Unaudited)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Coca-Cola Europacific Partners plc

Condensed Consolidated Interim Statement of Comprehensive Income (Unaudited)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Coca-Cola Europacific Partners plc

Condensed Consolidated Interim Statement of Financial Position (Unaudited)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Coca-Cola Europacific Partners plc 

Condensed Consolidated Interim Statement of Cash Flows (Unaudited)