FURTHER
TOGETHER
2021 INTEGRATED REPORT AND FORM 20-F
COCA-COLA EUROPACIFIC
PARTNERS – ONE OF THE
WORLD’S LEADING CONSUMER
GOODS COMPANIES.
MAKING, MOVING AND SELLING
SOME OF THE WORLD’S
MOST LOVED BRANDS.
None of the websites referred to in this Annual Report on Form 20-F for the year ended 31 December 2021
(the Form 20-F), including where a link is provided, nor any of the information contained on such websites,
are incorporated by reference in the Form 20-F.
Coca-Cola Europacific Partners plc Registered in England & Wales, Company number 0971735
Strategic Report
Performance indicators
Conversation with our Chairman and CEO
2
4
8 Our portfolio
9 What we do and how we do it
10 Our operations
12 Our stakeholders
15 Section 172(1) statement from the Directors
16 Our strategy
17
18
Succeeding in a changing landscape
Sustainability – Action on
20 Sustainability governance framework
21 Task Force on Climate-related
Financial Disclosures (TCFD)
37 Our people
40 Operating with integrity
42 Principal risks
48 Viability statement
49
50 Business and financial review
Non-financial information statement
Governance and Directors’ Report
65 Chairman’s introduction
66 Board of Directors
67 Directors’ biographies
72 Senior management
74 Corporate governance report
82
83 Nomination Committee report
86 Audit Committee Chairman’s letter
87 Audit Committee report
92 Directors’ remuneration report
Nomination Committee Chairman’s letter
92 Statement from the Remuneration Committee Chairman
94 Overview of remuneration policy
95 Remuneration at a glance
96 Annual report on remuneration
108 Directors’ report
111 Directors’ responsibilities statement
Financial Statements
113 Independent Auditor’s reports
129 Consolidated financial statements
134 Notes to the consolidated financial statements
184 Company financial statements
188 Notes to the Company financial statements
Other Information
195 Risk factors
203 Other Group information
218 Form 20-F table of cross references
220 Exhibits
222 Glossary
226 Useful addresses
227 Forward-looking statements
s
t
n
e
t
n
o
C
Our purpose
REFRESH EUROPE, THE PACIFIC
AND INDONESIA – GREAT BEVERAGES,
GREAT SERVICES, GREAT PEOPLE.
DONE SUSTAINABLY FOR A BETTER
SHARED FUTURE.
Solid track record of
delivery and execution
Great, value creating API acquisition
Leading portfolio of products and brands
within a large and growing category
Highly engaged, talented
& skilled workforce
Aspiring to be the world’s
most digitised bottler
Even stronger strategic relationship
with The Coca-Cola Company
Solid balance sheet, strong
free cash flow generation
Leading sustainability agenda
2
Strategic Report
Governance and Directors’ Report
Financial Statements
Other Information
Performance indicators
Financial
Data legend
Europe (€m)
2020
2021
API (€m)
2020
2021
*DuetothesignificanceoftheCoca-Cola
Amatil(CCL)acquisitionduringtheyear,
revenue,comparableoperatingprofitand
ROIChavebeenpresentedonaproforma
basistoprovideinvestorswithrelevant
informationaboutthecombinedGroup.
RefertoBusinessandFinancialReview
on pages 50–63forareconciliationofour
IFRSreportedresultstotheproforma
financialinformationandnon-GAAP
performancemeasures.
Key highlig
ht
+7.5%
pro forma comparable
Fx neutral revenue
Revenue on a pro forma
comparable basis*
€14.8bn
The revenue increase was
driven by a 4.5% increase in
pro forma comparable volume,
reflecting the reopening of the
away from home channel and
increased consumer mobility
given the easing of COVID-19
restrictions. Solid trading in
the home channel continued,
benefitting from increased at
home occasions as well as
continued growth in online
grocery.
Pro forma comparable
Fx neutral revenue per unit
case grew by 3.0%, reflecting
positive pack and channel mix
following the reopenings in
the away from home channel,
positive brand mix and
favourable underlying rate.
Europe (€m)
API (€m)
€10,606m
€11,584m
€2,929m
€3,235m
Operating profit on a pro
forma comparable basis*
€1.9bn
Pro forma comparable
operating profit increased by
26.0%, reflecting the increased
revenue. This increase in
topline growth was moderated
by an increase in variable
expenses given higher volumes,
as well as commodity inflation
and higher concentrate costs.
This was partially offset by
structural efficiencies from
Europe’s Accelerate
Competitiveness and API’s
Fighting Fit programmes, as
well as combination benefits
and our continuous efforts on
discretionary spend optimisation.
Europe (€m)
API (€m)
€1,194m
€1,500m
€301m
€386m
Diluted earnings per share
(EPS) on a comparable basis*
€2.83
Comparable diluted EPS
increased by 57% driven by
the increase in comparable
operating profit.
Pro forma return on invested
capital (ROIC)* (%)
8.0%
ROIC remains a high priority
for us and we will continue
to focus on driving profitable
revenue growth, capital
efficiencies and creating value
from the Acquisition of CCL.
Free cash flow*
€1.5bn
Despite the challenging
backdrop and continued
investments in our portfolio,
people, sustainability initiatives
and digital capabilities, we
generated nearly €1.5 billion
of free cash flow. This highlights
the strength of our free cash
flow generation, supported
by our disciplined capital
expenditure and working capital
improvement initiatives.
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Performance indicators
CONTINUED
Sustainability
Data legend
Safety
GHG emissions
Sugar reduction
Water
Europe
2020
API(A)
2020
2021
2021
Formoreaboutoursustainability
commitmentsandprogress,
see pages 18–36
Key
AU Australia
ID
Indonesia
NZ New Zealand
(A) The acquisition of API completed on
10 May 2021. The API sustainability
metrics are presented on a full year
basis for 2021 and 2020 to allow for
better period over period comparability.
(B) Our baseline year is 2019, following
the approval of our new science based
GHG emissions reduction target in
2020, in line with SBTi guidance. To
analyse progress over a longer period,
we also disclose a 2010 baseline year.
(C) 2020 data has been restated due to
more accurate data becoming available.
(D) This covers all products including
water, juice and dairy, excluding
products that contain alcohol.
(E) This excludes the amount of water
used for the production of products
that contain alcohol.
Total incident rate (number
per 100 full time equivalent
employees)
Europe
1.16
1.11
API
0.88
0.75
When it comes to our people,
suppliers, contractors and
visitors, safety is vitally
important. Tragically, we saw
four employee fatalities during
2021; one in Belgium and three
in Indonesia. The incidents
were investigated with the local
authorities and we continue to
improve our safety procedures
to prevent recurrence.
We are working towards world
class safety standards and
our Health, Safety and Mental
Wellbeing policy ensures we
are working to adopt best
practices. We aim to reduce
our total incident rate to below
1 by 2025.
% GHG emissions reduction
across our value chain(B)
% sugar reduction in our soft
drinks since 2015
Water use ratio (litres of water/
litre of product produced)
Europe(C)
Versus 2010
Versus 2019
11.4
12.4
38.1
38.9
We take seriously the
responsibility to reduce our
greenhouse gas (GHG)
emissions, to mitigate climate
change and to protect the
future of our planet.
In Europe, we have a clear
ambition to reduce our GHG
emissions across our entire
value chain by 30% by 2030
(versus 2019) and to reach net
zero GHG emissions by 2040.
Our GHG emissions reduction
target is approved by the
Science Based Targets initiative
(SBTi) as being in line with
a 1.5°C reduction pathway.
In 2022, we will set a new
science based emissions
reduction target, including
our API territories.
Europe
15.3
17.9
API(D)
11.2
14.9
17.2
20.9
9.3
13.4
AU
AU
ID
ID
NZ
NZ
Concern about the health
consequences of obesity,
particularly among young
people, is increasing. Health
authorities, such as the World
Health Organisation, and
international governments are
introducing regulations to
control sugar consumption.
Together with The Coca-Cola
Company (TCCC) and other
franchisors, we are committed
to meeting consumers’
demands for a greater variety
of drinks, including low and no
calorie options. We will do this
by reformulating our recipes
and by providing greater choice,
with and without sugar.
Europe
1.57
1.58
API(E)
1.84
1.75
Water is an essential resource
for our business. It is the main
ingredient in many of our
products and is also essential
for our manufacturing
processes, and for the
agricultural ingredients we
depend upon.
Climate change is altering
weather patterns around the
world, causing water shortages
and droughts in some areas
and floods in others.
We are committed to
addressing these challenges
by reducing our own water
consumption on a continual
basis and protecting local
water sources in partnership
with local communities.
Packaging – Recycled plastic
% of PET used that is rPET
Europe
API
41.3
52.9
58.2
59.8
39.2
42.3
AU
AU
NZ
NZ
Extreme waste and pollution,
particularly plastic and
packaging waste, is a global
issue. Packaging represents
approximately 40% of our total
value chain carbon footprint and
we are taking action to drive
down the carbon footprint of
packaging as part of our path
to achieving zero waste and
net zero GHG emissions.
We aim to achieve this through
the key pillars of our packaging
strategy: removing unnecessary
packaging; innovating in
refillable and dispensed
solutions; achieving 100%
collection so that packaging
can be recycled and reused;
and by increasing the recycled
content of our packaging.
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Other Information
Conversation with our Chairman and CEO
D
Damian Gammell
Chief Executive Officer
How did CCEP perform in 2021
and what are you most proud of
achieving in the year?
S We continued to demonstrate the resilience of our
business and our ability to operate with agility in such
a rapidly changing environment. I am proud of how our
colleagues have continued to support our customers,
consumers and communities. I’d like to extend my
sincere gratitude to everyone at CCEP for their
incredible commitment and hard work throughout the
ongoing pandemic.
Last year was also an exciting year for everyone
connected to the business. In May, Coca-Cola European
Partners completed the acquisition of Coca-Cola Amatil
and changed its name to Coca-Cola Europacific Partners.
This transaction solidifies our position as the largest
Coca-Cola bottler by revenue and creates a platform
for accelerated growth and returns.
This combination of two great Coca-Cola bottlers is
exciting and we can now grow together by combining
the talent, learning and best practices of two fantastic
companies, both with a strong shared sustainability focus.
A more diverse and inclusive culture will translate into
new thinking and new ideas and our people will have even
more opportunities to grow and develop.
D 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 CCL, a fantastic
business to have acquired, at the right time, and we look
forward to an even brighter future together.
Together with TCCC and our other partners, our focus
on core brands, in market execution and smart revenue
growth management initiatives solidified our position in
2021 as the largest fast moving consumer goods (FMCG)
value creator. In 2021, we created over €13 billion in retail
value(A) for our home channel customers, a year on year
increase of €600 million. Coca-Cola Zero Sugar,
Coca-Cola Original Taste, Monster and Fanta were all
top 10 non-alcoholic ready to drink (NARTD) brands for
absolute value growth.
We also continued to make progress on our ambition to
reach net zero emissions by 2040 and we are investing in
making our packaging more sustainable. We continue to
challenge our Sustainability commitments, bringing them
forward where possible as evidenced by us achieving our
50% rPET commitment in Europe two years early.
How is the integration of Coca-Cola
Amatil progressing?
D We are well underway with the integration and I am
extremely pleased with the progress we have made since
the Acquisition.
We now have a significantly bigger growth opportunity,
having acquired a strong business with momentum and
potential. We have a broader and more balanced footprint
and the number of consumers who can enjoy our drinks is
now over 600 million.
(A) Retail selling price (i.e. sales at end price to consumer) including retailer
mark ups and sales and excise taxes.
S
Sol Daurella
Chairman
FURTHER
TOGETHER
We want to build on the
best of both businesses, in key
areas like sustainability, digital
transformation and our people.
Sol Daurella, Chairman
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CONTINUED
S The Acquisition has allowed us to bring together two
great companies. In doing so, we’ll be able to go further
and faster in pursuing our shared vision for growth,
through our consumer led portfolio, collaborative
customer relationships and innovation to meet changing
consumer needs. I am excited by the prospect of what we
can learn from each other and the opportunities to grow
our business that this creates.
D Following the Acquisition we established a new
segment within our operating model named Australia,
Pacific and Indonesia (API). This structure ensures
we remain close to our customers, communities and
stakeholders. It allows us to make the most of our deep
local insight, experience and market understanding,
and meet the specific needs of our stakeholders.
We have key talent in place. Peter West leads the new
API segment. Peter was previously the Managing Director
of Coca-Cola Amatil, Australia. He has extensive
knowledge of the FMCG sector and a proven ability to
work with customers and partners to drive growth and
deliver results.
I am extremely pleased with the quick progress we were
able to make when integrating API into the wider business.
Our pre-existing organisational structure enabled us to
extend our combined central functions to support the new
segment. From a digital perspective, we have started on
the journey to bring our people, systems and processes
together to allow us to collaborate to enable us to go
further, together.
S We’ve developed a proven and successful playbook
in Europe. We have a track record of creating value in
developed markets – like Australia and New Zealand –
through strong revenue growth management, route
to market transformation and leading commercial
capabilities. Indonesia’s growth potential is particularly
exciting, with CCEP now working in one of the world’s
most populous and dynamic emerging markets.
We want to build on the best of both businesses with
our people – in key areas like sustainability, digital
transformation and outlet execution – to drive growth and
scale faster. We will also further strengthen our strategic
relationships with TCCC and our other franchise partners.
How are you developing your future ready
and entrepreneurial culture within CCEP?
S Our success is driven by our great people at CCEP.
I’m consistently impressed by their expert local
knowledge and passion for our brands and our business.
I’m grateful for all they do every day to serve our
customers and communities. I’d also like to thank Damian
and his leadership team who are helping to create a
winning and inclusive culture. I’m also grateful to my
fellow Directors for their contribution over the year. I’d like
to take this opportunity to thank Irial Finan who stepped
down from the Board during 2021, for his outstanding
contributions to our business. We welcomed Manolo
Arroyo as a new member of the Board in 2021. Manolo
brings a wealth of extensive experience working in the
Coca-Cola system and as the Chief Marketing Officer at
TCCC. His strategic marketing, commercial and bottling
expertise will be an asset to the Board.
We have introduced platforms across our geographies to
enable our people to share their questions and feedback,
and connect with our leadership on all topics relating to
our sustainable growth and innovation. This feedback
culture and ability to share ideas through various platforms
and surveys enables great ideas to rise to the top.
We continue to value and invest in our early career talent
and support initiatives that help young people gain
employability, skills and confidence. This includes offering
internships, apprenticeships and graduate programmes.
We have also launched three new inclusion, diversity and
equity (ID&E) learning modules on practising inclusive
leadership, starting an ID&E conversation and allyship.
We’ve been working hard to create a workplace where
everyone feels welcome to contribute and be at their best.
We want to create an environment that empowers
everyone to thrive, where everyone can contribute to the
growth of CCEP and where everyone feels respected and
able to share their ideas and perspectives.
D Our people strategy, Me@CCEP, sets out how we
are building a winning culture where a diverse range of
talents can grow and collaborate together. We encourage
an environment where different perspectives and insights
are valued at all levels of the organisation, and we have
put inclusion right at the heart of our working culture.
We have a focus on agile ways of working and creating
an ownership mindset, where people feel empowered
and confident to take appropriate risks and win together.
We have provided training to develop core capabilities in
leadership, commercial and customer service and supply
chain. We continue to progress plans for working flexibly
as we emerge from the pandemic.
How are you promoting the health, safety
and wellbeing of your colleagues?
S Our people’s physical, mental and social wellbeing
remain our priority and we continue to promote this in
our workplace.
Amid the stress and disruption caused by the COVID-19
pandemic, it’s more important than ever that we look after
our people’s wellbeing and mental health.
We have grown our Wellbeing First Aider initiative to build
an internal support network for mental health.
D Despite our focus and drive for continuous health and
safety improvement, tragically four colleagues lost their
lives in 2021 and one colleague lost their life in early 2022
while working for CCEP. Four fatal incidents occurred in
Indonesia and one in Belgium. My heart goes out to their
families, friends and colleagues.
The safety and wellbeing of our people is vitally
important. We have learned lessons from these terrible
tragedies. It is our aim that the health of our colleagues,
both physical and mental, is not detrimentally impacted
by working at CCEP. We aspire for all employees to feel
happy, healthy and to work with integrity and respect,
enabling us all to thrive at work and in our home lives.
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CONTINUED
Our journey to become the world’s most digitised bottler
will benefit all areas of our business. From the way we
procure, to platforms we use to drive sales, using digital
technology will unlock growth and new opportunities.
We will also be able to use data analytics to improve
our demand and supply chain planning, enabling us to
continue to make the drinks consumers want, when they
want them. To improve our demand planning, we are
combining machine learning and advanced analytics
to improve performance for case fill on time, forecast
accuracy and manufacturing adherence.
S Digital technology and innovation have always been
a key focus for CCEP, and we are continually looking for
ways to improve our service and making it even easier to
do business with us.
We’re turning data and analytics into a competitive
differentiator. This will be delivered by evolving our data
and analytics team and capabilities, harmonising our data
foundations so data can be managed as an asset, driving
a company wide awareness and interest in data, and
executing our multi year strategic roadmap to
incrementally derive business value from data.
We are also investing in our workplace tools to promote
collaboration across our teams.
D Over the past two years we’ve seen significant
behavioural shifts in society. Changes in how people live,
shop and work continue to inform how we serve our
customers and get our products to consumers. This gives
us an opportunity to leverage our digital capabilities and
grow our business, as well as create even more value for
our customers and retail partners.
Our customer portal My.CCEP.com is an important part of
our digital acceleration. It is helping us be the best online
partner to our customers and drive revenue growth for our
business. The platform is now live in all of our European
markets, following its successful launch in Germany at the
end of 2021. With 76,000 customers, we’ve doubled the
amount of customers on the platform since last year.
Changes in routines brought many new shoppers into
the online grocery channel. In many markets our online
share of soft drinks is higher than in store, reflecting our
dedicated efforts to drive e-commerce sales together
with our customers.
Through our innovation investment programme,
CCEP Ventures, we aim to identify and implement
transformative ways of doing business. Business to
business (B2B) e-commerce is just one exciting growth
area that is a focus for CCEP Ventures.
We also continued to grow through our first ever direct to
consumer platform Your Coca-Cola in GB. This platform
allows consumers to stock up on their favourite drinks
brands as well as popular, harder to find products like
Diet Coke Caffeine Free, often in slightly larger packs
than those currently available through traditional retail
channels. This move will help us tap into the rapid growth
of online shopping and offer consumers even more choice.
Digital solutions will help us continue to win with our
customers and grow our business. The COVID-19
pandemic has shown the important role digital platforms
play for customers and consumers, and we will continue
to harness this opportunity.
What progress has CCEP made with its
sustainability commitments?
D COP26 made clear the urgency for businesses to
deliver bold climate action. We took a significant step in
2020, by setting an ambition to reach net zero emissions
by 2040 and reduce our GHG emissions across our entire
value chain by 30% by 2030 (vs. 2019).
These are ambitious targets, and we are accelerating the
decarbonisation of our business. Our targets are aligned
with a 1.5˚C pathway and are approved by the SBTi.
This means that we have a credible goal that will require
meaningful and sustained action. This year we will update
our 2030 science based emission reduction target to
include API.
S Sustainability is absolutely fundamental to everything
we do as a business. We will continue to push ourselves
to go further, faster to decarbonise our business. Our
continued listing on the Dow Jones Sustainability Index
(DJSI) reinforces the ongoing progress we are making.
In 2021 CCEP was recognised for leadership in corporate
sustainability by global environmental non-profit CDP
for the sixth consecutive year, securing a place on its
prestigious ‘A List’ for climate, as well as water security.
CCEP is one of 53 companies globally to have achieved
an ‘A’ position for both climate and water, which
demonstrated the focus we place on sustainability.
In Australia and Indonesia, we are investing in new PET
recycling facilities. These collaborations are a step forward
towards creating a circular economy for PET and will
contribute to further accelerating our journey towards the
ultimate goal of using 100% recycled or renewable plastic.
In 2021, we completed a three year solar panel project at
our production facility Cibitung in Indonesia, the second
largest rooftop solar project in South East Asia and the
fourth largest in the world. As part of our path to net zero
we’ve already transitioned three production facilities to
become certified as carbon neutral as part of a pilot
programme that aims for at least eight sites to become
carbon neutral certified by the end of 2023.
We are closely connected to our local communities.
We are committed to protecting our environment and
support environmental programmes through investment
and volunteering.
Sustainability is a subject that I personally feel very
strongly about. I would like to thank all of our colleagues,
customers, partners, suppliers and stakeholders who
are working with us to take the action required to tackle
climate change. We still have a long way to go and we are
determined to work together to achieve our sustainability
ambitions.
Our customer portal
My.CCEP.com is an important
part of our digital acceleration.
Damian Gammell, Chief Executive Officer
How is CCEP developing its digital
capabilities?
D Technology is not only shaping the way that our
consumers and customers interact with us, but also how
we operate as a business. It is becoming increasingly
important to modernise the way that people connect and
communicate with each other in a more digital workplace.
Using technology will enable us to become more efficient,
and help us drive revenue and manage our costs.
At CCEP we are evolving into an ever increasingly data
driven organisation as we effectively and consistently
utilise data in our decision making process across all
levels of the organisation.
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CONTINUED
How is CCEP’s relationship with TCCC
developing?
D CCEP has always been closely aligned with TCCC
strategically and the relationship has grown even stronger
over the past year. TCCC’s support for the Acquisition
was a further endorsement of the strong alignment we
have built since the formation of CCEP.
The relationship has continued to develop and grow,
demonstrated through our agile collaboration and
decision making during the year against a challenging
backdrop. Together, we ensured the continuity of supply
of the products our consumers wanted to buy by prioritising
core brands and packs. We also continued to launch and
scale new brands into our markets such as Costa Coffee
and Topo Chico, which we look forward to developing
further in 2022.
S We worked closely with TCCC following the
completion of the Acquisition. We are partnering closely
with them to develop value creating plans across the API
region. Our strong platform and alignment with TCCC,
built on the success of operations in Europe, is an asset
that we’re clearly going to translate together into an even
better future for our API segment.
We have already started to work on reorienting our
portfolio in Australia and New Zealand. We have reviewed
our portfolio in these markets to assess the size and
future growth opportunities within the different NARTD
categories. We’ve established a future vision for our
portfolio, customer and consumer environment plans that
we will use with TCCC to execute and win in the market.
Our strong relationship with TCCC is also driving forward
our sustainability strategy, which works side by side with
TCCC’s World Without Waste strategy.
What’s next for CCEP?
D We continue to protect our business for the short term
and are confident in our ability to mitigate near term
inflationary pressures and navigate global supply chain
challenges. Key levers are pricing, mix, procurement
initiatives and our transformational efficiency programmes.
We’re combining these levers with disciplined investments
for long-term future growth, particularly in our portfolio,
our people, digital and sustainability.
The integration of API is well underway, and it is very much
now part of the CCEP family as our sixth geographical
business unit. We are very excited with the growth plans
we are developing with TCCC, both in applying our proven
playbook in developed markets as well as unlocking the
long-term transformation potential of Indonesia.
We will continue to expand our total beverage portfolio
while strengthening core capabilities that will drive
sustainable success. We will continue to invest in our
supply chain. Last year saw us invest €560 million.
I would like to thank our people for their extraordinary
efforts during the year and our customers, suppliers and
all of our stakeholders for their interest and partnership.
We are deeply concerned and saddened by the conflict
and suffering in Ukraine. CCEP has joined the Coca-Cola
system in providing support to the humanitarian relief
efforts in Ukraine and neighbouring countries. We are
contributing financial aid to the International Federation
of the Red Cross and local Red Cross branches, and
product donations to refugee centres.
We join others across the world in calling for peace
to return to Ukraine.
We also continued to launch
and scale new brands into our
markets such as Costa Coffee
and Topo Chico, which we look
forward to developing further
in 2022.
Damian Gammell, Chief Executive Officer
S We will continue to invest in our people and
developing an inclusive and safe environment for people
to be at their best.
Working with our franchise partners, we have exciting
plans for our portfolio, and we are focused on the
capabilities and technologies needed to offer our
customers a great experience. Above all, we are acutely
aware of the challenges facing society and we are
committed to building a better future – for our business,
for people and for the planet.
We are making a difference and believe we have the right
foundation to drive sustainable growth and, as evidenced
by our 2021 dividend being our largest ever, delivering
increased shareholder value.
We remain focused on the next stage of our journey
and I’d like to thank all our stakeholders and investors
for continuing to be a part of it.
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Our portfolio
We work with franchise partners
to offer consumers a wide range
of drinks for every taste and
occasion, with or without sugar,
to create value for our customers.
We are reducing the environmental impact of our
manufacturing, distribution and packaging while reducing
sugar across our portfolio and making it easier for people
to manage their sugar consumption.
Our focus is on growing our core brands and expanding
into categories like ready to drink (RTD) tea, coffee and
alcohol.
2021 Brand category volume of sales
8%
7.5%
25.5%
59%
Coca-Cola®
Our Coca-Cola brands come in a range
of variants that offer consumers a great
choice of flavours, with or without sugar.
2021 saw the launch of a new brand identity
for Coca-Cola Original Taste, Diet Coke/
Coca-Cola Light and Coca-Cola Zero
Sugar designed to stand out on shelf and
make it easier to navigate the different
Coca-Cola variants. Coca-Cola also
introduced a new marketing platform,
Real Magic, and a new “Hug” logo.
Coca-Cola Zero Sugar continued to
grow with volume up 8.5% from 2020.
We also marked UEFA EURO 2020
with limited edition pack designs and in
store displays across all channels and
customers. This activity focused on
attracting consumers at various touch
points in the path to purchase journey.
We ended the year with consumer
campaigns to make Coca-Cola a part
of festive meal occasions.
Flavours, mixers
and energy
In 2021, and in partnership with Monster
Energy, we continued to expand our
Monster range with the introduction of
four new Monster variants including
Monster Mule. With gaming an interest for
many Monster consumers, we supported
a partnership with Apex Legends and
launched Monster Ultra Watermelon.
We continue to build our presence in the
functional energy category with the
rollout of more Reign flavours, all of
which contain no sugar, no calories and
no artificial colours or flavours.
Fanta continued to grow, supported by a
marketing campaign and strong in store
execution during Halloween. The launch
of What The Fanta Launch Zero Sugar,
was supported by great on and off
shelf execution, driving sales above
expectations. Fanta also benefitted
from a strong period in Indonesia during
Ramadan.
Hydration
The hydration category is typically heavily
reliant on immediate consumption, with
consumers buying hydration products in
on the go stores, which continued to see
an impact from the pandemic in 2021.
The performance of our hydration
products continued to reflect this ongoing
impact of COVID-19 and changes in
consumer behaviour. However, the
category grew by 9.5% in the fourth
quarter of 2021, reflecting fewer restrictions
and increased mobility in the quarter.
RTD tea, RTD coffee,
juices and other
The rollout of Costa Coffee continued
across our European markets with
launches in Belgium, Norway and Spain.
More markets will be added in 2022.
Fuze Tea remains an important part of
our portfolio, growing by 9.5% compared
to 2019. We celebrated the festive winter
period with a Fuze Tea Winter edition.
As COVID-19 restrictions eased, the juice
category grew, particularly Capri-Sun,
which benefitted from increased on the
go consumption.
We continue to pursue opportunities in
alcohol, led by Topo Chico. To simplify
our alcohol portfolio, we announced
that we would exit the production, sale
and distribution of beer and apple cider
products in Australia.
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What we do and how we do it
Great people
– A great place to work, where people can grow, be happy
and be well
– A safe, open, diverse and inclusive workplace
– Winning capabilities, agility and a performance mindset
– Following our Code of Conduct (CoC)
Findoutmoreaboutwhereourpeopleworkonpages 10–11
Great service
– Decision making close to the customer, with the benefits
of scale
– Easy to do business with
– Known for world class execution
– Agile and flexible
Great beverages
– Category leadership with great-tasting drinks for every
occasion and brands people love
– Top quality and right every time
– Brought to life through powerful partnerships with
brand owners
Findoutmoreaboutourportfolioofdrinksonpage 8
Done sustainably
– Unwavering commitment to our sustainability action plan,
This is Forward
– Ambition to reach net zero emissions by 2040, lead the
way toward a circular economy and provide a great choice
of low and no calorie drinks
SeeourThisisForwardsustainabilityactionplanonpage 18
Powered by our people
We employ around 33,000 people across our
business. They make and sell our great beverages
and help our customers grow by providing great
service. They work with our communities as we
seek to work sustainably and help them thrive.
Distribute
to our
customers
We distribute
our products to
customers and
vending partners
directly and by
working closely
with logistics
partners.
Source raw materials
We use ingredients such as water, sugar, coffee,
juices and syrup to make our drinks. We also
rely on materials like glass, aluminium, PET, pulp
and paper to produce packaging. We require our
suppliers to meet strict targets around workplace
policies and practices, health and safety, ethics
and human rights, environmental protection and
business integrity.
Work with TCCC and other franchisors
TCCC and other franchisors make and sell
concentrates, beverage bases and syrups, own
the brands and are responsible for consumer brand
marketing. We operate under bottler agreements
with TCCC and other franchisors, and purchase the
concentrates, beverage bases and syrups to make,
sell and distribute packaged beverages to our
customers and vending partners.
Work closely with customers
who sell to consumers
Our nearly 12,900 strong commercial
team work with a huge range of
customers, ranging from small local
shops, supermarkets and wholesalers
to restaurants, bars and sports stadiums,
so consumers can enjoy our great products
wherever they are and whenever they want.
We also provide cold drink equipment
(CDE) and supply vending machines so
people can find our drinks on the go.
Make great tasting drinks
Our production facilities make and bottle
our wide range of drinks. We’re continually
improving our production facilities.
We produce safe, high quality products
for our customers and consumers. Over
90% of the drinks we sell are produced in
the country in which they are consumed.
For a
better
shared
future
─
Creating value for all
our customers, big
and small
─
Contributing to local
economies
─
Supporting our
communities
─
Trusted by
shareholders and
stakeholders
Work with partners, encouraging 100%
collection to reuse packaging
Although 98%(A) of our bottles and cans are recyclable,
they don’t always end up being recycled. That needs
to change. We’re determined to lead the way towards
a circular economy for our packaging where, working
with partners, we encourage the collection of all
packaging so that materials are recycled and reused.
(A) Europe only.
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Our operations – API
Following the Acquisition, we
established a new segment within
our operating model: Australia,
Pacific and Indonesia (API).
This structure ensures we
remain close to our customers,
communities and stakeholders.
In API, we employ around 11,000
people and service around
600,000 customers.
Much of our ability to create value
for our customers depends on the
quality of the service we provide
and how we execute in the market.
Readmoreabouthowwearesucceedinginachanging
landscapeonpage 17
Region
Revenue by
geography(A)
No. of
Production
employees(B)
facilities(C)
Australia
62.4%
3,539
New Zealand and
Pacific Islands
Indonesia and
Papua New Guinea 20.3%
17.3%
1,785
6,131
13
12
11
(A) Revenue shown is percentage of total reported revenue as at
31 December 2021.
(B) Number shown is number of employees as at 31 December 2021.
(C) Production facilities include NARTD, alcoholic beverage and other
manufacturing sites.
Map legend
Production facility
Where we operate
2x production facilities
Seeourinteractivemaponwww.cocacolaep.com/
about-us/places
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Our operations – Europe
In Europe, we have around
22,000 people serving 1.1 million
customers across 13 countries.
We invest, employ, manufacture
and distribute locally, maintaining
a strong commitment to the
wellbeing of our communities.
Our ambition is to be the
number one supplier in FMCG
for our customers.
Readmoreabouthowwearesucceedinginachanging
landscapeonpage 17
Region
Revenue by
geography(A)
No. of
employees(B)
Production
facilities
Iberia (Spain,
Portugal and
Andorra)
Germany
21.5%
3,922
20.2%
6,601
Great Britain
22.6%
3,277
France (France
and Monaco)
Belgium and
Luxembourg
Netherlands
Norway
Sweden
Iceland
Bulgaria
15.7%
2,506
8.0%
2,111
4.8%
3.4%
3.2%
0.7%
781
548
670
171
–
1,017
11
16
5
5
3
1
1
1
2
–
(A) Revenue shown is percentage of total reported revenue as at
31 December 2021.
(B) Number shown is number of employees as at 31 December 2021.
Map legend
Production facility
Shared service centre
2x production facilities
Where we operate
Seeourinteractivemaponwww.cocacolaep.com/
about-us/places
zo r e s
A
n d s
ary Isl a
n
a
C
i ra
e
a d
M
Bulgaria
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Other Information
Our stakeholders
Our stakeholders are part of our
business and play a vital role in
our success at every stage in our
value chain. From the suppliers
that provide our raw materials,
to the communities where we
operate and the people who make
and sell our products, we seek
to work together to refresh our
markets and make a difference.
Our people
We are driven by a passion for people and what we
do, fostering a diverse, inclusive and safe working
environment where everyone’s individuality is valued
and they are equipped with the training, tools and
opportunity to succeed. Greater diversity creates a
powerful platform, boosting creativity and innovation.
Our business depends on the great people who
make, sell and distribute our products every day.
How we engage
It’s key our people feel that they have a voice and we
provide the opportunity for two way engagement, as
teams and individuals, through a range of direct and
indirect measures.
To encourage engagement with leadership and to
ensure our people are kept informed about the
matters that affect them as employees, management
including the CEO, hold regular town hall meetings
and issue other forms of communications. These
How the Board engaged
Designated Directors
Two Non-executive Directors (NEDs), Chairmen
of the Remuneration and Nomination Committees,
are responsible for ensuring the concerns of the
workforce are taken into account by the Board and
for reporting to the Board on employee related
matters. During the year, the Nomination Committee
requested regular feedback from management in
relation to employee wellbeing and progress towards
our ID&E plan. The Remuneration Committee
considered employee incentives in light of the
Acquisition and the reward projects and integration
activities planned, including the need for a fair and
consistent approach across our workforce.
In addition, the Board received, as part of the regular
update from the CEO, insights into health and safety
of our people and the continued challenges
presented by COVID-19.
communications provide a regular cadence
of updates regarding CCEP’s results and other
developments within the business, including
informal drop in opportunities to meet colleagues,
such as ‘Share a Coke with…’ Regular market and
factory visits also take place. We issue regular pulse
surveys on vital topics to listen and act on the voice
of our people. These were enhanced during 2021 to
provide more opportunity for employees to feedback
on how they were feeling and covered topics on
wellbeing, engagement and culture, and Inclusion,
Diversity and Equity (ID&E). Our Speak Up line
enables our people to raise concerns anonymously,
free from retaliation. Employees have access to
employee portals, Redline in Europe and Workplace
in API, where news can be shared, in addition to
receiving email updates.
We engage and consult with social partners on
matters relating to labour relations. Our European
Works Council has two plenary and three select
committee meetings each year, attended by either
the CEO or members of the senior leadership team,
to give business updates and insights. In each of our
countries we have structural consultation with trade
unions. Local work environment committees have
been established as well as health and safety
committees. Topics arising are shared on a monthly
basis with the Group’s leadership team.
Employee town hall
In May 2021, a virtual town hall was held following
the Acquisition. Over 2,100 of our people were invited
to attend the online session and to submit questions
to a panel of Directors. The town hall was an
opportunity for insights into the first couple of weeks
of the combined CCEP, the reactions of various
stakeholders, the perceived impact on company
performance and next steps. The importance of
employee safety and wellbeing was emphasised.
Employees challenged the panel with tough questions
including on CCL’s integration and wellbeing.
Other employee interaction
The ongoing pandemic restricted travel in 2021.
In person meetings were limited to a session with
“One Young World” at the October Board meeting
where delegates were given an opportunity to
ask the Board questions and to discuss how to
accelerate positive social impact. The Board were
also unable to conduct any physical site visits but
a number were attended virtually.
Readmoreaboutourpeopleandcultureonpages 37–39
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Our stakeholders
CONTINUED
Our shareholders
Our shareholders provide the equity capital for
our business, holding management to account
on financial performance and discussing key
environmental, social and governance (ESG)
issues. We seek support from our shareholders
through voting at the AGM and continued
investment by long-term shareholders.
We maintained our dividend payout ratio of
c.50% in 2021, which, following our strong
performance during the year, resulted in
dividend payouts of €638 million.
Readmoreaboutoursourcesoffundingon
pages 56–58
How we engage
Led by Investor Relations (IR), our comprehensive
annual investor engagement plan covered:
a virtual Capital Markets Day following the
Acquisition explaining how the deal would create
significant value for shareholders and strengthen
our profile as an attractive and sustainable total
return investment opportunity; the AGM; investor
roadshows (including ESG specific conferences);
analyst meetings; proxy advisor engagement
and consulting major shareholders on executive
remuneration; half yearly earnings presentations
and webcast conference calls; trading updates
with webcast conference calls.
Our Company Secretary and IR team engage with
investors’ governance teams predominantly around
the AGM.
How the Board engaged
The CEO attends investor conferences,
participates in roadshows and is available to
shareholders. The Chairman of the Remuneration
Committee engages with shareholders on the
Remuneration Policy and its implementation.
Directors attended the AGM, which provides
an opportunity for shareholders to ask questions.
In 2021 it was a closed meeting, due to COVID-19.
IR provides quarterly updates to the Board
covering share price, analyst comments and city
reaction, IR activity and the shareholder register
and investor feedback. Periodic deep dives
are provided along with brokers and analysts
sessions, most recently in September 2021.
How the Board engaged
Our Board engages both directly and indirectly with
our franchisors. The Board receives regular updates
on franchisors through reports from the CEO and the
Chief Commercial Officer, as well as the Affiliated
Transaction Committee (ATC) updates including on
performance, relationships and key issues. The Board
also received an update from the Chairman and CEO
of TCCC and his leadership team at the September
Board meeting on growth opportunities and strategy.
ReadaboutourrelationshipwithTCCCandother
franchisorsonpage 201
Our Suppliers
In Europe we have a network of around 13,200 suppliers
and additional local suppliers across our API markets.
They supply a wide range of commodities and
services such as ingredients, packaging, utilities,
equipment, facilities management, fleet and logistics,
sales and marketing, information technology and
general administration. We rely on a process to ensure
we engage with suppliers, including in areas such as
business continuity. Partnering and collaboration with
suppliers on sustainability is helping to drive progress
on delivering our This is Forward commitments,
while sustainable sourcing ensures security of supply
of all the commodities and services needed to make,
sell and distribute our drinks.
How we engage
We encourage strategic relationships with our
suppliers, encouraging collaboration and fostering
investment to find innovative solutions to business
challenges. This partnership approach helps to ensure
suppliers provide high quality, safe and sustainable
products and services.
In 2021, we engaged with strategic suppliers across
Europe and API following the Acquisition, working
together under our Supplier Relationship Management
(SRM) programme. Due to COVID-19, face to face
Our Franchisors
We conduct business primarily under agreements with
TCCC and a limited number of franchisors. These
generally give us exclusive rights to make, distribute
and sell beverages in approved packaging in specified
territories. We drive sales to customers so that our
franchisor’s brands are available where and when
consumers want them.
How we engage
We prioritise regular management contact with all our
franchisors at different functional, sales and marketing
levels, including regular top level meetings with TCCC.
Our General Managers (GMs) have ongoing dialogue with
franchisors. Annually, from September to February, our
GMs present business plans to customers, and we often
ask franchisors to join us at these presentations. If an
incident or crises arises on product-related issues we will
proactively engage with franchisors to resolve the issue.
interaction was limited but we compensated with
virtual meetings held at the most senior levels,
focusing on supply security and progress on
sustainability.
We hold supplier days in Europe and API; the last
supplier day in Europe was virtual, pre Acquisition
in October 2020 with more than 200 unique suppliers
in attendance. Prior to the Acquisition, CCL held
a supplier day in early 2021.
How the Board engaged
As part of operating with integrity, we have guidelines
approved at Board level setting out expectations and
requirements of our suppliers in relation to expected
conduct, for example, in relation to human rights,
health and safety and other matters.
As well as attending our supplier days, the CEO and
CFO informs the Board on key supplier relationships
and payments. Supplier risk management is also a
topic of discussion at the Audit Committee generally
as part of the Enterprise Risk Management
discussions.
Further, due to COVID-19, and in addition to the
impacts of Brexit resulting in a shortage of lorry
drivers during the latter part of 2021, frequent
discussions were held by the Board in relation to
the responses of key suppliers, notably their ability
to continue to provide services at the required
standards within COVID-19 restrictions that may
have applied globally from time to time.
Readmoreaboutactionwe’retakingonoursupplychain
on pages 35–36
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Our stakeholders
CONTINUED
Our Customers
We strive to be our customers’ preferred partner.
We foster strong relationships with our customers
and aim to supply the drinks people want, where
and when they want them. Our customer centric
operating model is focused on delivering the
strongest execution to our frontline and reaching
a broad range of outlets, while making it easier
to do business with us.
How we engage
Thousands of our sales force call on our
customers every day across all our territories
(subject to COVID-19).
Our GMs own customer relationships and,
together with our sales teams, regularly engage
with customers. In 2021, our customer
engagement included a four day event with
Metro and a customer event in our Spain office.
We also engage with customers internationally
through TCCC’s Global Customer Governance
Board, where certain international customers
request this single point of contact within the
Coca-Cola system. This engagement is limited
to our markets under strict legal protocols.
During the COVID-19 pandemic, we continued to
focus on supporting our customers and keeping
retailers stocked. For example, we adjusted
production to ensure we were delivering the
products that people wanted in store.
How the Board engaged
The Board has limited direct engagement with
customers but receives periodic presentations
from select customer leaders. In 2021, the Board
invited Asda’s CEO to present. The discussion
centred on Asda’s commercial proposition
and how, in GB, it partners with suppliers
and customers.
The Board remains committed to understanding
our markets and customers. Virtual market visits
were arranged in 2021, to mitigate the COVID-19
health and safety risks of in person visits. The
Board received insights on matters including
field sales activation, marketing and adding
value for retailers.
The CEO provides regular updates to the Board
on customer relationships, development and
engagement including on home channel
customer satisfaction metrics and on AFH
equivalents when available. The Board is
updated regularly on key channel growth,
together with changes in coverage and
execution performance supporting growth
for our customers. Customers were also
discussed at the Board strategy session in
September 2021.
Our Consumers
Drinking motivations and occasions drive
demand for a range of drinks. We work with our
customers to ensure that the drinks reaching
consumers are high quality, safe and taste great.
Our franchisors generally own the relationship
with the consumers.
How we engage
Our teams partner with franchisors to understand
consumer needs. Customers also provide
feedback on consumers.
We have limited direct engagement with
consumers, although they buy and consume our
products. Our consumer care line provided on all
our packaging gives consumers the opportunity
to give feedback directly and our nutritional
labelling on products provides consumers
with the information they need to make an
informed choice.
How the Board engaged
The Board attends presentations on trends and
behavioural patterns that could affect consumers
and our interaction with them. The ATC oversees
CCEP’s relationships with franchise partners,
through which we are able to keep focus on
development and diversification of our portfolio.
An update from the Chairman of the ATC is
provided at each Board meeting and the CEO
also provides updates to the Board as necessary.
The Audit Committee receives updates on any
material incidents affecting consumers.
The Board has limited direct engagement with
consumers but is able to directly engage through
market visits. This was limited in 2021 due to
COVID-19.
Our Communities
We have a strong local heritage and presence.
We seek to make a positive difference,
addressing challenges our communities face by
supporting local partnerships and by tackling
key local sustainability issues such as litter,
health, water stress and youth unemployment.
We recognise the economic, social and
environmental interaction between our business
and our communities. Our people live in our
local communities and we use local resources,
such as water and transport systems, to make,
sell and distribute our products.
How we engage
We engage with our communities on many
different levels. Our local management and
Public Affairs, Communications and
Sustainability (PACS) team engages directly
and employees engage through volunteering.
Many of our local charitable and community
partnerships, such as local water replenishment
projects and youth development programmes,
are delivered in partnership with NGOs.
Our Group management and PACS team
engage more widely in communities on
important issues such as the environment,
ID&E, and empowering and supporting young
people. They also engage with TCCC on key
issues as part of a wider social framework,
partnering with pan-European and global NGOs.
How the Board engaged
Information and updates on CCEP’s community
partnerships are provided to the Corporate
Social Responsibility (CSR) Committee
(the Committee) who has reviewed reports on
local water stress and the health of watersheds.
Deep dives are provided on key topics of interest
to our Committees and the Chairman of the
Committee provides the Board with detailed
updates at each Board meeting following
Committee meetings.
Readmoreabouttheworkwedoinlocal
communitiesonpages 29–30
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Other Information
Section 172(1) statement from the Directors
During 2021, we acted in good
faith to promote the long-term
success of CCEP.
In accordance with the directors’ duties set out in
section 172 of the Companies Act, the Board supervises
the profitable operation and development of CCEP to
maximise its equity value over the long term, without
regard to the individual interests of any shareholder.
A minority of our Non-executive Directors (NEDs) were
appointed by major shareholders of CCEP. However,
each Director understands their responsibility under
the Companies Act to act in a way that would promote the
long-term success of the Company for all its stakeholders.
We recognise that to deliver our strategy in a sustainable
way, we need to consider the commercial, social and
environmental impacts of our business. During the year,
we have monitored, assessed and challenged CCEP’s
progress against our annual business plan and our
sustainability targets. When taking decisions of strategic
importance, we endeavour to balance the interests of all
our stakeholders in ways that are compatible with CCEP’s
long-term, sustainable growth. Throughout the year,
CCEP has engaged with stakeholders across all areas
of the business. The Board strives to gain stakeholder
perspectives to inform its decision making through direct
engagement, where feasible, as well as through regular
communication with senior management.
We identify our key stakeholder groups as those with
significant interactions with our business model and
that we impact in the course of our business operations.
We detail about how our business interacts with our
stakeholders, and the impacts of these interactions,
throughout this Integrated Report.
Ensuring our business operates responsibly is fundamental
to ensuring our long-term success. The Board oversees
a corporate governance framework that enables the right
people to take the right decisions at the right time. This
includes our CoC and system of delegated authorities.
The Board made several principal decisions during
2021, where the Directors had regard to the relevant
matters set out in section 172(1)(a)-(f) of the
UK Companies Act 2006 (the Companies Act) when
discharging their duties. Here we outline how we
approached the Acquisition as a principal decision.
Amatil
In May 2021, CCEP completed the Acquisition of CCL,
cementing our position as the world’s largest
Coca-Cola bottler by revenue and one of the leading
FMCG companies in the world. The proposed
Acquisition was announced in October 2020 and
was approved by the Board in April 2021.
The Board was supported in its decision making by
a panel including Board committees (Audit Committee,
ATC) and management committees (M&A Committee
and the Transaction Committee and Integration
Committee), spearheaded by the CEO to ensure
a successful integration.
The Board took into account numerous factors
including the impact of the Acquisition on the
stakeholder groups below.
Shareholders
The transaction was aligned with CCEP’s strategy
of pursuing inorganic expansion opportunities in
developed markets. Management conducted an
investment appraisal and financial analysis to support
the Board in its decision making, demonstrating that
the Acquisition would be consistent with CCEP’s
long-term growth ambitions. Management identified
that value enhancing opportunities could be achieved
through the implementation of CCEP’s proven
developed market growth strategies. Using valuation
modelling techniques, the analysis provided a range
of CCL acquisition values, and post acquisition
deleveraging projections demonstrated how the return
to target leverage in the short-term could be achieved.
Once completed, the transaction would be immediately
EPS accretive, leading to an increased dividend for
shareholders. Using these insights, the Board
concluded that the Acquisition would result in value
creation for shareholders.
Franchisors
Franchisors are a key stakeholder group, given the
importance of maintaining a strong relationship and
alignment with TCCC. Insights from CCEP’s growth
trajectory highlighted the importance of our relationship
with TCCC and our shared vision of growth. TCCC was
confident in the value accretion opportunity from the
transaction and agreed to sell their ownership interest
in CCL at a discount to the public shareholders.
Employees
Engaging and retaining our people is a key
consideration, ensuring that everyone has a voice and
feels valued. The Acquisition created a more diverse
workforce and inclusive culture at CCEP. This
translates into new thinking and new ideas, providing
more opportunities to grow and develop. The Board
reviewed day one readiness people plans across the
Group, to ensure we had the necessary collaboration
processes in place to enable CCL’s integration
and provide continuity. It was important to have
communication and engagement support available to
all employees, so that they felt involved and listened to,
and could raise any concerns.
Consumers
The Acquisition significantly enhances CCEP’s
consumer reach. It brings new brands and increasing
access to broader need states, such as alcohol and
coffee, as well as lessons and experimentation on
different pack types to share across geographies.
Community and customers
API and Europe run local community initiatives with
similar priorities, from supporting disadvantaged youth
to local environmental groups. It is important that we
continue to gain deep local insight in all our territories,
building experience and market understanding to meet
the specific needs of these stakeholders.
Environment
CCL’s strong sustainability profile was a key
consideration for the Board. With carbon reduction
at its core, CCL’s approach to sustainability was very
much in line with CCEP.
Together we can build a sustainable tomorrow for our
people, customers, communities and shareholders.
ReadhowourCorporategovernanceframeworkworksinpracticeon pages 74–81
HowtheDirectors,andCCEPmorewidely,haveengagedwithourkeystakeholdersthisyearissetoutonpages 12–14
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 16
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Governance and Directors’ Report
Financial Statements
Other Information
Our strategy
We’re a leader in a soft drinks
category that is worth nearly
€125 billion across our markets,
with brands that are so popular
and so widely consumed that
we serve millions of people,
businesses and communities
in our markets every day. Our
category is robust, resilient and
set to keep growing in the long
term. Our goal is to outperform
the market – growing faster and
building share.
Key highlig
ht
NARTD value share
+40bps
Growth platform
Supported by
We have a track
record of creating
value for our
customers,
helping them
become more
profitable
businesses
with world class
execution.
This strong
platform for growth
needs to be
supported by the
right choices
and a clear focus
on priorities to
enable us to win.
01
02
03
Grow the sparkling category
and our share where we lead
(e.g. Coca-Cola® and Fanta)
Build share where we
don’t lead (e.g. Sprite,
Fuze Tea and Tropico)
Double our energy
business through our
Monster portfolio
04
Build a platform for growth in
coffee (Costa and Grinders)
05
06
07
Smart revenue growth
management (RGM)
to drive mix and profit
Utilise digital, data and
analytics as a competitive
differentiator
Winning channel strategy
and outlet coverage to drive
unrivalled execution
Accelerate
competitiveness
– Manage our cash
– Targeted approach
to investment
– Competitive cost base
– Reduce complexity
Future ready culture
– Challenge status quo
– Inclusion, diversity
and equity
– Enhanced wellbeing
– Agility and performance
mindset
Digital future
– Advance digital and online
revenue
– Empower sales force
– Leverage analytics and
artificial intelligence
– Enable future workplace
Green future
– Accelerate This is Forward
– Science based and
measurable carbon
reduction targets
Ultimately
driving
sustainable
returns for all
stakeholders.
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 17
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Financial Statements
Other Information
Succeeding in a changing landscape
Digital commerce
Technology and data
Sustainability
Evolving consumer trends
Transparency
From rapid
acceleration
towards digital
platforms to
macroeconomic
impacts, our
business is
affected by
a range of
market trends.
We have a
business model
and culture that
enable us to
adapt and thrive
in this changing
environment.
Macro trend
– Changes to routines and behaviours
have accelerated the digital evolution
and adoption of new digital channels.
– More consumers are choosing to buy
groceries or order a takeaway online.
– Our customers and suppliers are also
moving more towards digital platforms
and other technologies.
Our response and some examples
– We’ve continued to invest in our
Business to Business (B2B) platform
(My.CCEP.com) and in 2021 online
ordering grew to over €1bn.
– e-grocery optimisation resulted in
value share gains of +120bps.
– We continue to develop our direct
to consumer (D2C) platform,
yourcoca-cola.co.uk.
– Through CCEP Ventures we’ve
formed new collaborations and
developed existing partnerships,
launching eB2B platforms e.g. Wabi
(PT), StarStock (GB) and Foodl (NL).
Findoutmoreonwww.cocacolaep.com/
ventures/
Macro trend
– It’s becoming increasingly important
to modernise the way that people
connect and communicate with each
other in a more digital workplace.
– Advances in technology mean that we
have a greater capacity to access and
analyse data.
Our response and some examples
– We continue to invest in technology
to enhance our employee experience,
drive efficiencies and become more
digitally enabled.
– We aim to develop richer insights
by managing data that is valuable
as an asset, to lay the foundations
for insightful analytics.
– In 2021 we launched Compass,
a portal which brings all of our digital
workplace services together, making
it easier for our colleagues to find the
tools they need.
– We created a new partnership with
SAP Ariba, a market leading provider
of source to pay solutions, and expect
to save more than 100,000 hours
from implementing this solution.
Macro trend
– Consumer interest in health and
wellness is increasing, with people
looking not only for organic offerings,
but also those with less sugar and
for functional products.
– Governments and regulators are
demanding increasing transparency
from companies, both through
packaging labelling and reporting.
Our response and some examples
– We publish information about CCEP
and our performance through regular
disclosures, including this report.
– We’re committed to providing
transparent product information on
our packaging and on our website.
Macro trend
– Consumers, customers and multiple
stakeholders expect more from
manufacturers and governments to
help reduce the impact that their
decisions and behaviours have on
the environment.
– Investors are increasingly using
environmental, social and governance
(ESG) criteria as a lens to inform their
investment and portfolio decisions.
– Regulatory changes and governmental
commitments continue to develop and
COP26 underlined the urgent need to
increase the pace of implementing the
Paris Climate Agreement.
Our response and some examples
– A green future is at the heart of
our vision for the business, as
demonstrated by our This is Forward
sustainability action plan and the
passion shown by our great people.
– In 2021 we accelerated our use of
rPET so that 53% of material used for
our bottles was rPET and announced
the first three carbon neutral
production facilities.
– Through CCEP Ventures we seek out
new technologies and solutions.
ReadmoreaboutourGHGemissions
targetsonpages 23–26
Macro trend
– Consumers want different drinks to
suit a range of moments, occasions
and broad need states.
– Some consumer occasions are
shifting towards at home
consumption, including socialising,
working or exercising.
– Many consumers are willing to spend
more to replicate Away From Home
(AFH) moments at home, requiring
brands to offer premium products.
– Economic disruption and an
inflationary environment is impacting
consumer sentiment, meaning
affordability is increasingly important
for some consumers.
Our response and some examples
– We have a great portfolio of the
world’s best brands and continue
to diversify our drinks portfolio and
packaging to suit the changing needs
of our consumers.
– We’re expanding our presence in
exciting new areas such as hard
seltzers, through the Topo Chico brand.
– We’re accelerating our coffee
ambition by readily expanding the
Costa Coffee brand across our
markets in Europe with different
coffee solutions in multiple channels.
Readmoreaboutportfolioofbrandson
page 8
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Governance and Directors’ Report
Financial Statements
Other Information
Sustainability
We are taking action on
sustainability by using our
business and brands to build
a better future. For people.
For the planet.
We are growing our business and brands as a force for
good, managing our social and environmental impact and
aiming to make our people and our stakeholders proud of
our actions.
Our focus on long-term value creation and innovation
positions sustainability at the heart of everything we do.
We are proud pioneers; we were one of the first companies
to set a science based emissions reduction target before
COP21 in 2015 and we actively participated in
discussions during COP26 in Glasgow in 2021.
We continue to set ambitious sustainability targets. We
are doing this through our sustainability action plan – This
is Forward – created with TCCC, and developed through
continuous consultation with our stakeholders in Europe.
Through This is Forward, we are taking action on six key
social and environmental areas where we know we can
have a significant impact, and which our stakeholders
want us to prioritise: climate action, consumer health
and wellbeing, sustainable packaging, water stewardship,
the wellbeing of our people and those across our value
chain and our contribution to our local communities.
We are making progress in these areas but we can’t
stand still. We will continue to challenge ourselves,
using our voice to drive action on sustainability and
leading by example, to create a better, greener future.
In May 2021, we acquired Coca-Cola Amatil and we are
focused on extending our sustainability action plan, This is
Forward, to include all of our territories in Europe and API.
As the world adjusts to a new normal, living with COVID-19,
we need to go further and act faster on tackling global
climate-related challenges. A mindset based on
sustainability is a strong basis. We believe partnerships
and collaboration are vital to accelerate decarbonisation
and build a sustainable tomorrow for our people,
customers, communities and shareholders.
Readmoreinourcorporategovernancereportpages 74–81
Findoutmoreatwww.cocacolaep.com/sustainability
A LIST
2021
CLIMATE WATER
* MSCI disclaimer: www.cocacolaep.com/sustainability/disclosures-and-recognition – see tab MSCI
Climate
We’ll aim to reach net zero by 2040 and
reduce our emissions by 30% by 2030.
Packaging
We’ll collect all of our packaging so that
none of it ends up as litter or in the oceans.
Drinks
We’ll be a total beverage company, offering
consumers an even greater choice of drinks
with reduced sugar.
Society
We’ll be a force for good by championing
inclusion and economic development in
society – with our employees and our
communities.
Water
We’ll handle water with the care it deserves
across our business and our value chain.
Supply chain
We’ll source our main ingredients and raw
materials sustainably and responsibly.
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 19
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Governance and Directors’ Report
Financial Statements
Other Information
Sustainability
CONTINUED
Our commitments
This is Forward, our sustainability action plan,
relates to our activities in Europe.
In 2022 we will extend our commitments
to include all of our territories in Europe and API.
Climate
Pages 23–26
Packaging
Pages 27–28
Society
Pages 29–30
Drinks
Pages 31–32
Water
Pages 33–34
Supply Chain
Pages 35–36
SDG commitments
SDG commitments
SDG commitments
SDG commitments
SDG commitments
SDG commitments
– We’ll aim to reach net zero GHG
emissions across our entire value
chain(A) by 2040.
– We’ll cut GHG emissions by 30%
across our entire value chain by
2030 versus 2019.(B)
– We’ll aim for 100% of our strategic
suppliers to set their own science
based targets and transition to 100%
renewable electricity by 2023.
– We’ll continue to purchase 100%
renewable electricity.
– We’ll make sure that 100% of our
primary packaging is recyclable
or reusable.
– We’ll work with local and national
partners to collect 100% of our
packaging in Western Europe,
including support for well designed
deposit return schemes where a
proven alternative does not exist.(C)
– We’ll remove all unnecessary or
hard to recycle packaging from
our portfolio.(C)
– We’ll make sure that at least 50%
of the material we use for our PET
bottles comes from recycled plastic
(rPET) by 2023 and we’ll aim to
reach 100% recycled or renewable
plastic by the end of the decade.(C)
– We’ll use the reach of our brands
to inspire everyone to recycle.
– We’ll innovate in refillable and
dispensed solutions and services
as a key strategic route to eliminate
packaging waste and reduce our
carbon footprint.
– We’ll protect the sustainability
of the water sources we use for
future generations.
– We’ll reduce the water we use
in manufacturing by 20% and
address water impacts in our
supply chain.(F)
– We’ll replenish 100% of the water
we use in areas of water stress.
– We’ll make sure 100% of our
main agricultural ingredients
and raw materials come from
sustainable sources.
– We’ll continue to embed
sustainability, ethics and human
rights into our supply chain.(G)
– We’ll foster a diverse and inclusive
culture in our business and make
sure that women hold at least 40%
of our management positions.
– We’ll expand the contribution we
make to society by increasing our
employee volunteering and
supporting local community
partnerships.
– We’ll support initiatives which help
young people gain the employability,
skills and confidence they need
to succeed.
– We’ll reduce the sugar in our soft
drinks by 10% between 2015 and
2020, and that’s in addition to the
5% reduction achieved in the
previous five years.(D)
– We’ll aim for 50% of our sales to
come from low or no calorie drinks.(E)
– We’ll continuously evolve our
recipes and portfolio to offer a
greater choice of drinks.
– We’ll make it easier for consumers
to cut down on sugar with
straightforward product information
and smaller pack sizes.
– We’ll make sure we don’t advertise
to children under 12 and that
our sales and marketing practices
evolve in line with external
expectations.
Baseline is 2010 and target date is 2025 unless otherwise stated
(A) Value chain covers Scope 1, 2 and 3 emissions.
(B) In addition to a 30.5% absolute reduction already achieved between 2010 and 2019.
(C) 2019 enhanced Action on Packaging commitments.
(D) Sparkling soft drinks and non-carbonated soft drinks only. Does not include water or juice. This commitment is for CCEP and TCCC Western European Business
Unit. Baseline is 2010 and includes historical, consolidated data for Coca-Cola Enterprises, Coca-Cola Iberian Partners, S.A. and Coca-Cola Erfrischungsgetränke
AG that was recalculated after the Merger. Target to be updated in 2022.
(E) Total CCEP sales. Does not include coffee, alcohol, beer or freestyle. Low-calorie beverages ≤ 20kcal/100ml. Zero calorie beverages <4kcal/100ml.
(F) Water use ratio, litres of water per litre of finished product produced.
(G) We’ll do this through our global Supplier Guiding Principles and Human Rights Policies.
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F
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Strategic Report
Governance and Directors’ Report
Financial Statements
Other Information
Sustainability governance framework
At CCEP our aim is to ensure we have strong governance over sustainability issues, including climate-related risks. The Board, each of its key Committees and management has a role to play as outlined below.
The roles and responsibilities of each will continue to remain under review during 2022 to ensure that all relevant matters continue to be addressed in line with changing stakeholder requirements.
The Board
The Board’s role is to ensure the long-term
sustainable success of CCEP by setting
our strategy through which we can deliver
sustainable growth, create value for all our
stakeholders and build a better future for our
business, our communities and the planet.
The Board, led by our Chairman Sol Daurella,
has ultimate responsibility for our sustainability
action plan This is Forward. Each of the Board
Committees plays a role in supporting the
Group's sustainability strategy including
the Corporate Social Responsibility (CSR)
Committee which has been delegated
responsibility by the Board for oversight
of This is Forward.
Sustainability is a key topic of discussion at
Board meetings and the Chairman of the CSR
Committee provides the Board with a detailed
update at every Board meeting. The Board
also receives out of cycle communications
and Directors attend training sessions on
sustainability-related matters including climate,
packaging and water.
Informing
Informing
Corporate Social Responsibility (CSR) Committee
Meeting frequency: At least five times per year.
Responsible for identifying, analysing, evaluating and monitoring the social, political,
environmental, sustainability and public policy trends, issues and concerns which could affect
our business or performance. Oversees Group performance against This is Forward strategy
and goals, including reviewing climate-related risks, targets and actions as well as packaging,
water and other environmental risks and opportunities.
Nomination Committee
Meeting frequency: At least five times per year.
Regularly reviews the structure, size, composition and skills of the Board to ensure it remains
effective. Sustainability is listed as a key Board skill and the majority of the Directors have good
or very good experience in this area. Expertise in this area will continue to be a consideration
in succession planning and recruitment going forward. The Committee considers inclusion,
diversity and equity across the broader workforce and assesses and monitors Group culture.
Remuneration Committee
Meeting frequency: At least six times per year.
Aligns the Group’s remuneration policy to reinforce the achievement of our sustainability aims.
To note, CCEP operates a Long-Term Incentive Plan (LTIP) for our most senior leaders which
includes a performance measure focused on the reduction of GHG emissions across our entire
value chain, which has a 15% weighting. In addition, part of every senior leader’s Individual
Performance Objectives continues to be based on leading the development of our “Future
ready culture” (e.g. talent, inclusion, diversity, equity and specific “Green Future” objectives).
Audit Committee
Meeting frequency: At least six times per year.
Ensures that risk is effectively managed across the Group, including climate-related risks
and opportunities. The Committee is responsible for overseeing the Group’s financial and
non-financial reporting obligations including ESG-related reporting. It also gives consideration
to climate-related risks as part of the overall Enterprise Risk Management Framework.
ReadmoreinourGovernanceandDirectors’Report pages 64–111
The Chief Executive and the CCEP leadership team
Ownership and governance for sustainability-related risk and sustainability strategy
and commitments are embedded within our business. Responsibility for climate-related
issues sits with our CEO, our Chief Customer Service and Supply Chain (CCSSC)
Officer and our Chief PACS Officer.
Reporting
The CCEP leadership team delegates certain climate-related risk
and opportunity oversight matters to its management committees.
In 2022 a new Sustainability SteerCo has been set up with members
of the Executive Leadership Team to discuss a range of issues and
will aim to form part of the reporting to the CCEP Board.
Sustainable Packaging Office
Our Sustainable Packaging Office (SPO) streamlines all the technical and exploratory
sustainable packaging work across our geographies, accelerates our innovation and
supports progress towards our enhanced packaging targets in order to reduce the carbon
impact of our packaging. This work is undertaken in partnership with TCCC.
Strategic Risk
There are a number of groups and forums led by the risk function that play different roles
in considering sustainability-related risks, including climate, packaging and water, related
to CCEP. There is an annual top down Enterprise Risk Assessment which encompasses
the reassessment of the current risks but also the identification of emerging risks and
opportunities. This is done with input from the Board and our Top 150 Executives. In addition
there are regular (approximately eight times per year) One Risk Office meetings where all
the risk function teams (13 teams across five departments) meet and discuss risks, including
emerging risks and ESG topics.
The Enterprise Risk Management Team is partnering on several ESG topics with key internal
stakeholders to mature our risk sensing and scenario planning capabilities.
Reporting
Read more on pages 42–47
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 21
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Governance and Directors’ Report
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Other Information
Task Force on Climate-related Financial Disclosures (TCFD)
CCEP is committed to implementing the recommendations
of the TCFD and, through the Group’s Enterprise Risk
Management (ERM) programme, takes a risk based
approach in responding to the physical and transitional risks
and opportunities that are associated with climate change.
The assessment and mitigation of climate-related risks is
an integral part of our annual Enterprise Risk Assessment
process. The following table provides a summary of the
key elements grouped into the four themes (strategy,
governance, risk management, metrics and targets) along
with a redirect to specific sections in this Integrated Report
and our 2021 CDP submission for further information.
In 2019, together with TCCC, we
completed a climate-related risk
assessment, in line with guidance from
the TCFD. The assessment identified
the physical and transition risks we
could face as a result of climate change.
In 2020, we voluntarily published our first
disclosure against the recommendations
of TCFD on our corporate website in order
to report transparently on climate-related
risks and opportunities. We will continue
to do this on an annual basis.
In 2021, we began work to assess how
our business may be impacted in the long
term from climate-related risks, with a
particular focus on production facilities
and the availability of key ingredients in
our value chain. This work was planned
for 2020 but the timetable was delayed
due to COVID-19.
2022 is the first year where we
disclose our alignment to the
TCFD recommendations in our
Integrated Report.
2019
2020
2021
2022
TCFD Key elements
Key elements of summarised disclosures / Key messages
STRATEGY
Disclose the actual
and potential impacts
of climate-related
risks and opportunities
on the organisation’s
businesses, strategy
and financial planning,
where such information
is material
1 Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term
Significant risks
– Increased severity and frequency of extreme weather events such as cyclones and floods may disrupt or limit our ability to produce or distribute our products.
– Water stress or water scarcity may cause disruption to our production or lead to us being unable to produce our products.
– Changing weather and precipitation patterns may impact the cost and/or availability of ingredients we use in our beverages.
– Regulation related to GHG emissions may increase costs across our value chain, including increased costs related to the packaging we use, our manufacturing and distribution of our CDE.
– Regulation related to water stress or water scarcity may disrupt or restrict our production capability.
Significant opportunities
– The adoption of energy and water efficiency measures across CCEP’s core business operations provides a significant opportunity for our business to reduce emissions and build long-term resilience.
– The use of renewable electricity provides a significant opportunity for our business to significantly reduce both our Scope 2 emissions, and our value chain carbon footprint.
Reference to chapters in our
2021 Integrated Report and
our 2021 CDP disclosure(A)
2021 Integrated Report
Read about our Principal risks
on pages 42–47 and our Risk
factors on pages 195–202
CDP questionnaire 2021
1 C2.3a, C2.4a
2 C2.3a, C2.4a
3 C3.2a
2 Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning
Whilst it is difficult to accurately estimate the financial impact of any climate-related disruption to our manufacturing and distribution operations, even a small percentage decline in our manufacturing
and/or distribution capabilities due to extreme weather events, could have a significant impact on our business in the future. Changes in precipitation patterns exacerbated by climate change could limit
the availability and therefore increase the cost of key ingredients, like sugar beet. In the future, this could result in supply restrictions and/or increased costs for our business. Increased water scarcity,
water shortages or restrictions on water consumption, particularly in water stressed areas could increase the cost of water or impact our ability to produce.
3 Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios including a 2°C or lower scenario
CCEP uses both qualitative and quantitative scenario analysis to inform our strategy. In 2019, as part of work to identify climate-related risks to our business, we undertook some high level scenario analysis
to help us consider and predict what the world might look like in the future and to help us assess future impacts to our business. This included both a “business as usual” scenario, where global temperatures
continue to increase and a “2°C” scenario where the world does not exceed 2°C warming. In 2022 we will build on this work by completing a detailed assessment of the physical risks we could face across our
operations and owned assets as a result of climate change. This work will consider two climate scenarios: RCP 2.6 (where global temperature increase will be limited to between 1.5°C–2°C by 2100); and RCP 8.5
(where global temperatures will increase by up to 5°C by 2100). In addition, we will use a wider range of climate scenarios to explore further the physical and transition risks that we may face across our entire value chain.
(A) Our disclosures are set out in greater detail in a separate CDP questionnaire to make it easier for readers to find the relevant information.
Seewww.cocacolaep.com/assets/sustainability/documents/b2610a8278/CDP-climate-response-2021.pdf
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Other Information
Task Force on Climate-related Financial Disclosures (TCFD)
CONTINUED
TCFD Key elements
Key elements of summarised disclosures / Key messages
GOVERNANCE
Disclose the
organisation’s
governance around
climate-related risks
and opportunities
RISK MANAGEMENT
Disclose how the
organisation identifies,
assesses and manages
climate-related risks
1 Describe the Board’s oversight of climate-related risks and opportunities
CCEP has a strong governance framework with a Board of Directors overseeing the interests of all stakeholders. The Board is primarily responsible for CCEP’s strategic plan, risk appetite, systems of internal control and
corporate governance policies, to ensure the long-term success of CCEP, underpinned by sustainability. It retains control of key decisions and ensures there is a clear division of responsibilities. The Board also has
responsibility for CCEP’s sustainability action plan This is Forward, which includes forward-looking, science based carbon reduction targets. To demonstrate our commitment to sustainability, one of the five committees
that supports the Board is the CSR Committee. The Board has delegated responsibility for oversight of This is Forward to the CSR Committee.
2 Describe management’s role in assessing and managing climate-related risks and opportunities
Ownership and governance for sustainability-related risks and sustainability commitments are embedded within our business. At management level, responsibility for climate-related issues sits with our CEO, our CCSSC
Officer and our PACS Officer.
1 Describe the organisation’s processes for identifying and assessing climate-related risks
The process for identifying, assessing and responding to climate-related risks – including those to our direct operations, as well as upstream and downstream risks – is integrated into CCEP’s ERM processes and our
overarching governance processes. Through our ERM we identify, measure and manage risk, and embed a strong risk culture across our business. CCEP’s risk management framework looks at both risks and
opportunities. As well as supporting the management of risks, it also guides how we can capitalise on opportunities.
Reference to chapters in our
2021 Integrated Report and
our 2021 CDP disclosure(A)
2021 Integrated Report
Find out more in our Corporate
governance report pages 74–81
CDP questionnaire 2021
1 C1.1b
2 C1.2, C1.2a
2021 Integrated Report
Read about our Principal risks
on pages 42–47
2 Describe the organisation’s processes for managing climate-related risks
The responsibility for identifying and assessing individual risks, including climate-related risks, resides with the five Committees of CCEP’s Board. The Audit Committee has overall responsibility for risk management
at CCEP. Our ERM processes are overseen by our Chief Compliance Officer (CCO) who leads CCEP’s Compliance and Risk Department. The CCO chairs CCEP’s Compliance and Risk Committee, which is comprised
of a cross functional group of leaders and risk management experts. The Compliance and Risk Committee has overall responsibility for making decisions related to certain risk management activities, including the review
and approval of our risk management strategy, policies and frameworks. The Compliance and Risk Committee is responsible for overseeing and approving company wide enterprise risk practices, and ensuring that
management has identified and assessed all material risks faced by the organisation, and has established an infrastructure capable of addressing those risks.
CDP questionnaire 2021:
1 C2.2
2 C2.2
3 C2.2
3 Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management
The CCO presents at meetings of the Audit Committee, Compliance and Risk Committee and leadership team meetings on risk management and shares the results of the top down annual ERA and other bottom up risk
assessments. Our PACS Officer is the ELT member with overall management responsibility for CCEP’s CSR Committee. They have primary ownership of sustainability issues – including climate-related risks, GHG
emissions reporting, public disclosure of climate-related risks and other policy and sustainability-related topics. Our CEO, CCSSC Officer and PACS Officer are responsible for providing management updates on topics
related to climate change (including packaging and GHG emissions) and water stewardship to CCEP’s Board of Directors, and its CSR Committee. This includes sustainability-related issues of importance to our
stakeholders, legislative and regulatory issues affecting CCEP, and updates on progress and performance against CCEP’s publicly stated sustainability goals.
1 Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process
We use a variety of metrics to track our progress on climate action. Our comprehensive disclosure includes transparency on Scope 1, 2 and 3 emissions across all of our markets, including a breakdown of greenhouse
gases and CO2e by emissions source. We report Scope 2 emissions on a market and location based approach. In addition, we also report absolute and normalised emissions data.
2 Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions and the related risks
We disclose our Scope 1, 2 and 3 emissions within the framework of our annual carbon footprint reporting process.
3 Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets
Through our This is Forward sustainability strategy we measure, monitor and manage our sustainability targets. We launched a new climate strategy in December 2020, including an ambition to reach net zero emissions
by 2040 and to reduce our absolute GHG emissions across our value chain by 30% by 2030 (versus 2019). Our 2030 GHG reduction target has been approved by the SBTi as being in line with a 1.5˚C reduction pathway,
as recommended by the Intergovernmental Panel on Climate Change. Our targets were set for our business in Europe, and in 2022 we will set a new science based emissions reduction target, including our API territories.
2021 Integrated Report
Read more in the Action
on climate section on
pages 23–26
CDP questionnaire 2021
1 C4.2, C9.1
2 C6.1, C6.3, C6.5
3 C4.1, C4.1a, C4.2
METRICS AND
TARGETS
Disclose the metrics
and targets used to
assess and manage
relevant climate-related
risks and opportunities,
where such information
is material
(A) Our disclosures are set out in greater detail in a separate CDP questionnaire to make it easier for readers to find the relevant information.
Seewww.cocacolaep.com/assets/sustainability/documents/b2610a8278/CDP-climate-response-2021.pdf
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Other Information
Action on – Climate
COP26 has underlined that urgent
climate action is needed if we
are to limit global temperature
increase to 1.5°C. We’re committed
to decarbonising our business,
aiming to reach net zero emissions
by 2040 – 10 years ahead of the
Paris Climate agreement.
The world is at a critical point. The Intergovernmental
Panel on Climate Change (IPCC) has outlined the
urgency of reaching net zero emissions by 2050 at the
latest. Governments and businesses around the world
must take urgent action now.
That is why we launched a new climate strategy in
December 2020, including an ambition to reach net zero
emissions by 2040 and to reduce our absolute GHG
emissions across our value chain by 30% by 2030
(versus 2019). Our 2030 GHG reduction target has
been approved by the SBTi as being in line with a 1.5˚C
reduction pathway, as recommended by the IPCC. Our
targets were set for our business in Europe, and in 2022
we will set a new science based emissions reduction
target, including our API territories.
Over 90% of our value chain GHG emissions come from
our supply chain. So we have committed to supporting
our strategic suppliers to set their own science based
carbon reduction targets and to shift to 100% renewable
electricity by 2023.
To support our climate strategy and drive reductions in
GHG emissions across our business, we have included
a GHG emissions reduction target in our LTIP for senior
management. This metric has a 15% weighting and is
included alongside traditional financial metrics, including
EPS and ROIC.
Carbon reduction roadmaps
When we launched our net zero 2040 ambition, we
identified a series of initiatives to reduce our GHG
emissions over three years supported by a €250 million
investment.
In 2021, we began to develop carbon reduction roadmaps
for each of our European markets. These roadmaps will
help to prioritise initiatives to reduce our GHG emissions,
including programmes across our value chain in
packaging, operations, transportation and CDE.
We have also established an executive governance
structure, supported by work streams across our
business, to ensure that our climate strategy is embedded
throughout CCEP and that we have a framework in place
to evaluate our carbon reduction progress.
Transitioning to a low-carbon future
Using renewable electricity is a key element of our
sustainability journey. In Europe we have purchased
100% renewable electricity since 2018; we’re targeting
100% renewable electricity in Australia and New Zealand
by 2025 and in other API territories by 2030.
We continue to invest in renewable and low-carbon
energy projects at our production facilities, including
direct solar, wind, combined heat and power and
hydropower located at our own facilities.
Solar energy is a key part of our renewable electricity
strategy and eight production facilities across Belgium,
France and GB now source electricity from on-site solar
installations. In 2021, we also completed a three year
solar panel project at our Cibitung production facility in
Indonesia, the second largest rooftop solar project in
South East Asia and the fourth largest in the world.
We continue to invest in our production facilities to make
them energy efficient and reduce carbon emissions.
For example, our carbon neutral certified mineral water
production facility in Vilas de Turbón, Spain, has reduced
Case study
Carbon neutral
production facilities
As part of our net zero ambition, we are aiming
for at least eight of our production facilities to be
PAS2060 certified as carbon neutral by the end
of 2023.
In 2021, three of our production facilities, in
Belgium, Spain and Sweden, were certified as
carbon neutral. All three sites use 100% renewable
electricity and have changed their production
processes to significantly reduce their carbon
emissions.
To offset remaining carbon emissions at the sites,
we have purchased Gold Standard certified carbon
credits from a project in Colombia which will
support an area of savannah, that has been
damaged by agricultural activity, through
reforestation and the restoration of its ecosystem.
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Action on – Climate
CONTINUED
its total emissions over the past five years by 36% per
litre of product produced by installing energy efficient
LED lighting across the site, and by the installation of
a biomass boiler that uses sustainably sourced wood
pellets in place of fossil fuels. In the next five years,
we will be investing €13 million in switching from gas
to battery powered fork lift trucks across our GB
production facilities, which will reduce our GHG
emissions by 1,500 tonnes CO2 emissions every year.
We are working with our CDE suppliers to make our
equipment more energy efficient across our territories,
including by removing older, inefficient models from the
market and replacing them with newer, more efficient
equipment. This has enabled us to reduce the electricity
our customers use by 9.9% versus 2020.
Together with our customers, we are creating sustainable
solutions, such as supporting the hospitality industry
on its net zero journey. For example, our Net Zero Pubs,
Bars and Restaurants Initiative in GB enables businesses
to reduce carbon emissions across their value chain.
Pubs, bars and restaurants that follow the net zero
protocol can either be certified as net zero or have a net
zero target date endorsed.
CCEP committed to power
its entire operations across API
with 100% renewable electricity.
Setting this target in this region
sets a strong example for other
companies to follow.
Jon Dee, Australian Coordinator RE100
Cutting carbon in transport
We work hard to reduce the GHG emissions of our
transportation and distribution networks. In 2021, we
joined The Climate Group’s EV100 initiative, committing
to accelerate our transition to electric vehicles by 2030
in Europe. To support this goal, in Germany we have a
target to switch over 2,000 company cars in our sales
fleet to electric vehicles by 2025.
Using our voice for change
As an influential global business, we use our voice to
guide public policy and drive transition to a low-carbon
future. In 2020, with the launch of our new climate
ambition, we joined The Climate Pledge, which brings
together international businesses committed to reaching
net zero GHG emissions by 2040, 10 years ahead of the
Paris Agreement deadline.
Our other carbon reduction initiatives include shifting the
transportation of our products from road to rail freight. For
example, at 13 of our production facilities in Germany we
are working with freight provider, DB Cargo, to facilitate
the long distance transportation of our products via rail.
In 2021, we joined over 700 of the world’s largest
organisations in the We Mean Business Coalition to call
for G20 nations to step up their climate ambitions and
adopt stronger targets to mitigate the worst effects of
climate change.
Our progress(A)
ENERGY USE
Energy use ratio (MJ/litre of product produced)
0.309
0.318
Europe
2020
2021
API
2020
2021
0.53
0.52
RENEWABLE ELECTRICITY
Electricity purchased from renewable sources
In 2022, in the Netherlands, all of our third party logistics
providers will switch to using HVO100 (hydrotreated
vegetable oil), a biofuel, to transport our drinks. As biofuel
emits 90% less CO2 than fossil fuel, this change will
reduce the impact of the 7.5 million kilometres that
are driven annually transporting our products in the
Netherlands. We are the first soft drinks company in
the Netherlands to make this switch.
Carbon offsetting
We are taking a limited approach to the use of carbon
offsetting, in line with SBTi net zero best practice
guidance. We are focused on decarbonising our business
in line with a 1.5˚C reduction pathway, and when we
can no longer reduce our emissions, we will offset where
necessary to help us reach net zero.
In the short term, to offset the remaining emissions from
some areas of our business – such as our carbon neutral
sites – we will be using Gold Standard, or Verra/VCS
certified carbon credits from existing carbon removal
projects. Over the long term, we will look to work with
partners to develop nature based solutions that can
provide carbon removal, water replenishment and
biodiversity benefits.
We are a proud member of The Climate Group’s RE100
initiative across Europe and API, a group of organisations
committed to 100% renewable electricity. We are also
a member of the Corporate Leaders Group, supporting
European Union (EU) policymakers in their work to increase
the EU’s GHG emissions reduction targets for 2030, in
line with the EU’s goal to become carbon neutral by 2050.
Europe
2020
2021
API
2020
2021
8.6%
18.3%
100%
100%
Working with our suppliers
Together with TCCC, we are working with our suppliers
to reduce the carbon footprint of our ingredients and
packaging, the largest contributors to the carbon footprint
of our supply chain. See action on packaging pages
27–28 and action on supply chain pages 35–36 for more
information about the progress we are making in helping
our suppliers to reduce their emissions.
(A) The acquisition of API completed on 10 May 2021. The API
sustainability metrics are presented on a full year basis for 2021
and 2020 to allow for better period over period comparability.
Readmoreatwww.cocacolaep.com/sustainability/
this-is-forward/action-on-climate
Seeourwebsiteforourdisclosureagainstthe
recommendationsofTCFDwww.cocacolaep.com/
sustainability/download-centre
GHG emissions across our value chain in Europe
26%
43%
9%
8%
14%
Ingredients
Packaging
Operations and commercial sites
Transport
CDE
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Action on – Climate
CONTINUED
EUROPE
GHG emissions (Scope 1, 2 and 3)
Details of our Scope 1, 2 and 3 GHG emissions in tonnes
of CO2 equivalent (stated as CO2e) during 2021 are set
out in table 1. Our Scope 1 and 2 emissions are
independent of any GHG trades, and our Scope 2
emissions are reported using both a location based and a
market based approach.
Details about our Scope 3 GHG emissions in our value
chain (including emissions related to our ingredients,
packaging, CDE and third party transportation), are also
reported in the table. Additional Scope 3 figures will be
included in our 2021 CDP response.
Our carbon footprint is calculated in accordance with the
WRI/WBCSD GHG Protocol Corporate Standard, using
an operational control approach to determine
organisational boundaries.
Our total Scope 1, 2 and 3 GHG emissions (full value
chain) have reduced by 12.4% versus 2019 and by 38.9%
versus 2010.
Intensity ratios
CCEP – Europe
GHG emissions (Scope 1 and 2) per litre of product
produced (market based Scope 2 approach): 17.17g
CO2e/litre of product produced.
GHG emissions (Scope 1 and 2) per euro of revenue
(market based Scope 2 approach): 18.10g CO2e/euro
of revenue.
UK and UK offshore
GHG emissions (Scope 1 and 2) per euro of revenue
(market based Scope 2 approach): 14.35g CO2e/euro
of revenue.
Note on sources of data and calculation
methodologies
Under the WRI/WBCSD GHG Protocol, we measure our
emissions in three scopes, except for CO2e emissions
from biologically sequestered carbon, which we report
separately outside these scopes. Our baseline year has
been updated to 2019, following approval of our new
science based GHG emissions reduction target at the
end of 2020. Our baseline figures for 2019 and our 2020
data have been restated to include new emission sources
and more accurate data.
Data is consolidated from a number of sources across our
business and is analysed centrally. We use a variety of
methodologies to gather our emissions data and measure
each part of our carbon footprint, including packaging and
ingredients, natural gas and purchased electricity,
refrigerant gas losses, CO2 fugitive gas losses and
transport fuel, water supply, wastewater and waste
management and CDE. We use emission factors relevant
to the source data including UK Department for Business,
Environment and Industrial Strategy (BEIS) 2021 and
International Energy Agency (IEA) 2019 emission factors.
Scope 1 figures include direct sources of emissions such
as the fuel we use for manufacturing and our own
vehicles plus our fugitive emissions of CO2.
Scope 2 figures include indirect sources from the
generation of electricity we use at our sites. We report
against this on both a location based and a market based
approach. Commitments and key performance indicators
are tracked using the market based approach.
Scope 3 figures include emissions from purchased goods
and services (specifically the packaging we put on the
market and the ingredients we use in our products); fuel
and energy-related activities not already included in
Scope 1 and 2 (e.g. emissions from well-to-tank and
transmission and distribution); upstream transportation
and distribution; waste generated in operations; business
travel (including employee business travel by rail and air);
upstream leased assets (including the home charging of
company vehicles); use of sold products (including CO2
emissions released by consumers); end of life treatment
of sold products; and downstream leased assets
(including the electricity used by our hot and cold drink
equipment at our customers’ premises). This accounts for
over 90% of our Scope 3 emissions. Additional Scope 3
emissions, from capital goods, employee commuting
and the use of sold products, are not included in our
value chain figures below, and we will report on these
separately as part of our 2021 CDP response. All other
Scope 3 categories are not currently applicable to CCEP.
Emission factors used include industry and supplier data,
Defra/BEIS 2021 and IEA 2019 emission factors. 0.13%
of our value chain carbon footprint is based on estimated
emissions (e.g. leased offices where energy invoices or
the square metre footage size of the site is not available).
The figures for 2021 in table 1, along with selected
information on our website, are subject to independent
assurance by DNV GL in accordance with the ISAE 3000
standard. The full assurance statement with DNV GL’s
scope of work, and basis of conclusion, will be published
on our website in May 2022.
API
Over the course of 2021 and 2022, we are working to
develop a full GHG emissions inventory for API markets,
including Scope 1, 2 and 3 GHG emissions.
For 2021 our reporting is limited to Scope 1 and 2 GHG
emissions for our API markets. Our intention is to report
Scope 1, 2 and 3 GHG emissions for API markets in
future years.
GHG emissions (Scope 1 and 2)
Details of our Scope 1 and 2 GHG emissions in tonnes of
CO2 equivalent (stated as CO2e) during 2021 are set out
in table 2. Our Scope 1 and 2 emissions are independent
of any GHG trades, and our Scope 2 emissions are
reported using both a location based and a market based
approach.
Our scope of GHG reporting covers our bottling and
production facilities for alcoholic and non-alcoholic
beverages under our operational control, or where we
have significant financial control. This excludes
warehouses, packaging production sites and corporate
offices. It also excludes emissions from our own vehicles,
or fugitive emissions of CO2.
Intensity ratios
CCEP – API
We have not reported GHG intensity ratios for API, as the
different scope of GHG emissions reporting compared to
Europe would not allow a meaningful comparison.
Note on sources of data and calculation
methodologies
Data is consolidated from a number of sources across our
business and is analysed centrally. We use a variety of
methodologies to gather our emissions data and measure
each part of our operational carbon footprint, including
natural gas and purchased electricity data. We use
emission factors relevant to the source data including
Australia National Greenhouse Accounts factors.
Scope 1 figures include direct sources of emissions such
as the fuel we use for manufacturing.
Scope 2 figures include indirect sources from the
generation of electricity we use at our sites. We report
against this on both a location based and a market based
approach.
For 2021, we have not reported Scope 3 for API markets.
The figures for 2021 in table 2, along with selected
information on our website, are subject to independent
assurance by DNV GL in accordance with the ISAE 3000
standard. The full assurance statement with DNV GL’s
scope of work, and basis of conclusion, will be published
on our website in May 2022.
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Action on – Climate
CONTINUED
Table 1
CCEP – EUROPE
Tonnes of CO2e
Scope 1
Scope 2 (market
based approach)
Scope 2 (location
based approach)
Scope 3
Direct emissions (e.g. fuel used in manufacturing,
own vehicle fleet, as well as process and fugitive
emissions)
Indirect emissions (e.g. electricity)
Third party emissions, including those related
to our ingredients, packaging, CDE, third party
transportation and distribution, waste in our
operations and business travel
2021
2020
2019 Baseline
Tonnes of CO2e
205,244
196,926
229,748
Scope 1
Table 2
CCEP – API(A)
4,396
4,768
6,006
123,838
143,888
170,112
Scope 2 (market
based approach)
Scope 2 (location
based approach)
3,074,649
3,122,105
3,514,382
Direct emissions (e.g. fuel used in manufacturing, own vehicle
fleet, as well as process and fugitive emissions)
Indirect emissions (e.g. electricity)
2021
57,290
2020
54,215
111,044
131,237
125,644
131,237
GHG emissions Scope 1, 2(A) and 3 (full value chain)
3,284,289
3,323,799
3,750,136
GHG emissions Scope 1, 2(B)
168,334
185,452
Energy use
Direct energy consumption (Scope 1) (kWh)
Direct energy consumption (Scope 2) (kWh)
CCEP – UK and UK offshore
Tonnes of CO2e
Scope 1
Scope 2 (market
based approach)
Scope 2 (location
based approach)
Direct emissions (e.g. fuel used in manufacturing,
own vehicle fleet, as well as process and fugitive
emissions)
Indirect emissions (e.g. electricity)
GHG emissions Scope 1, 2(A)
Energy use
Direct energy consumption (Scope 1) (kWh)
Direct energy consumption (Scope 2) (kWh)
(A) Market based approach only.
747,192,658
703,792,425
590,521,094 576,193,660
Energy use
Direct energy consumption (Scope 1) (kWh)
Direct energy consumption (Scope 2) (kWh)
306,210,138
283,523,540
191,187,578
196,021,935
2021
37,494
2020
35,152
2
12
16,728
16,906
37,496
35,164
153,723,412 148,595,600
85,389,551
78,464,328
(A) The acquisition of API completed on 10 May 2021. The API sustainability metrics are presented
on a full year basis for 2021 and 2020 to allow for better period over period comparability.
(B) Market based approach only.
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Action on – Packaging
We are taking action to reduce
the impact of our packaging
and delivery solutions. We are
innovating to use less packaging
and driving packaging circularity,
with a focus on reducing our use
of fossil-fuel based plastic.
Packaging represents approximately 40% of our total
value chain carbon footprint. We are taking action to drive
down the footprint of our packaging as part of our path to
zero: zero waste and net zero GHG emissions.
We aim to achieve this through the key pillars of our
packaging strategy: removing unnecessary packaging;
innovating in refillable and dispensed solutions; achieving
100% collection so that packaging can be recycled
and reused; and increasing the recycled content of our
packaging.
Packaging collection is critical to achieving a circular
economy for packaging. While we have made good
progress in Europe, Australia and Indonesia, challenges
remain in markets which do not have deposit return
schemes (DRS) and in regions where formal waste
collection systems are not well established such as Fiji,
Papua New Guinea and Samoa.
We are committed to partnering with governments,
industry and civil society, and spearheading voluntary
action, where needed, to drive the acceleration of well
designed collection systems. This includes systems
such as DRS (also known as container deposit schemes
(CDS)) and directly funded models for packaging collection.
Our SPO streamlines all the technical and exploratory
sustainable packaging work across our geographies,
accelerates our innovation and supports progress
towards our goals.
Through our PET recycling facility,
Amandina, we can increase our use
of recycled plastic in Indonesia,
and reduce the negative impact of
plastic waste on the environment.
Emmeline Hambali, President Director at Amandina
Bumi Nusantara
Reduce and remove
We continue to innovate with our partners and suppliers
to reduce and remove packaging.
In 2021, we introduced a newly designed lighter weight
neck on our PET bottles for carbonated soft drinks in
Germany. Other European markets will convert to the
new neck finish in 2022. This move will save 15,000
tonnes of CO2e and 9,100 tonnes of plastic a year by 2024.
Implementation ran in parallel with the trial and roll out of
our solution for tethered closures, required by 2024
as provision of the EU’s Single Use Plastic Directive.
In 2021, we continued to shift our can portfolio from steel
to aluminium in Europe. As aluminium is lighter than steel,
this will contribute to a carbon footprint reduction of about
100,000 tonnes of CO2e by 2024.
We also continue to replace hard to recycle shrink wrap
with 100% sustainably sourced, recyclable cardboard for
multi pack cans in Europe. This includes Keel Clip,
an innovative, minimalist paperboard solution, introduced
in France in 2021. This new type of secondary packaging
not only replaces the plastic wrap but also minimises
the amount of paper and card required.
In 2021, we began the
trial and roll out of
tethered closures,
a provision of the EU’s
Single Use Plastic
Directive.
Case study
Partnership to progress
circularity in Indonesia
Our Indonesian PET recycling plant is a joint
venture with Dynapack Asia and construction
commenced in 2021.
The state of the art rPET facility, run by Amandina
Bumi Nusantara, will enable us to create a closed
loop plastic packaging supply chain by producing
food grade PET pellets made from post-consumer
plastic bottles collected locally. The recycling
plant is on track to enable us to start using rPET
in our 390ml carbonated soft drinks bottles in
2022 in Indonesia.
We also established Mahija Parahita Nusantara,
a non-profit foundation, working to improve the
lives and welfare of 3,500 waste pickers working
in the informal waste sector collecting high quality
feedstock for the recycling plant in Indonesia.
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Action on – Packaging
CONTINUED
In 2021, together with TCCC, we initiated a cross system
approach to drive innovation in refillable packaging and
dispensed delivery models, offering consumers new and
convenient ways to enjoy our drinks, while eliminating
packaging waste.
As part of this, we extended trials of new dispensed
equipment in Europe, offering smaller on the go and at
work locations the opportunity to provide consumers with
their favourite drinks on demand. This innovation can
have a lower carbon footprint compared to bottles or cans
and will help us to reduce GHG emissions in Europe by
30% by 2030.
In 2021, we introduced soda syrups in Germany,
a self-pour dispensed technology trial in Spain and
a dispensed and refillable vessel trial in Sweden.
In France and GB, we work in partnership with Loop™,
a ground-breaking zero waste shopping platform, which
provides an alternative to single use packaging. In 2021,
we extended an online trial into 10 stores with Tesco in
GB, using refillable packaging that customers return after
use, resulting in less plastic waste.
Driving circularity
In Europe, we continue to advocate for a well designed
DRS and have been instrumental in establishing
Circularity Scotland, which will help develop and
administer the DRS we expect to see established in 2023.
We are also supporting the introduction of DRS legislation
in England and Wales.
In Fiji, we operate Mission Pacific, a plastic bottle and can
recycling scheme, and we extended the scheme, in Samoa
in 2021. We are also supporting the establishment of a
container deposit scheme in New Zealand.
In Australia and Indonesia we are increasing onshore
recycling capacity by investing in joint venture PET
recycling plants. In Australia, two new plants will
build a combined annual capacity of 40,000 tonnes
of rPET by 2025. In Indonesia, an initial 15,000 tonnes
a year in 2022 is expected to rise to 25,000 tonnes
per year by 2023, with plans to expand to 50,000 tonnes
a year by 2024.
In 2021, we accelerated our use of rPET in our PET
bottles in both Europe and API, and announced further
transitions to 100% rPET in Belgium, France and
Germany. We moved to 100% rPET for single-serve
bottles across GB, Australia and New Zealand and
completed our transition to 100% rPET bottles in
the Netherlands.
We continue to use the power of our brands to encourage
recycling via on pack messages for Coca-Cola in
Australia and New Zealand. In Australia our popular
integrated marketing campaigns for Mount Franklin
continued in 2021.
+50,000
tonnes more rPET produced
in Indonesia a year by 2024
+40,000
tonnes more rPET
produced in Austraila
a year by 2025
Our progress(A)
PACKAGING RECYCLABILITY
Primary packaging that is recyclable or reusable(B)
Europe
2020
98.0%
2021
98.3%
RECYCLED PLASTIC
Percentage of PET used that is rPET
Europe
2020
2021
API
Australia
2020
2021
41.3%
52.9%
58.2%
59.8%
New Zealand
2020
2021
39.2%
42.3%
(A) The acquisition of API completed on 10 May 2021. The API
sustainability metrics are presented on a full year basis for 2021
and 2020 to allow for better period over period comparability.
(B) Data only available for Europe.
Readmoreatwww.cocacolaep.com/sustainability/
this-is-forward/action-on-packaging
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Action on – Society
We are closely connected to
our local communities, acting
as a force for good and making
a difference by supporting
young people, promoting
inclusion and diversity and
protecting the environment.
Many of our local communities face significant
challenges, from high levels of youth unemployment to
social exclusion.
We are committed to supporting grassroots community
partnerships, investing in initiatives that equip young
people from disadvantaged backgrounds with the skills,
confidence and employability to succeed in life. We also
invest in projects that protect the environment and
promote inclusion and diversity.
Our volunteering policy enables our people to support
community activities from litter clean up campaigns to
charity fundraising events and skills based volunteering.
We measure the social impact of our investments and
contribution to local communities through the Business for
Societal Impact Framework.
Thanks to Projekt: LokalLiebe’s
donation, we were able to help
people in need and provide clothing,
sleeping bags and mats, fleece
blankets, tents, food, drinks,
masks and hygiene items.
Petra Höh, Chairwoman Care 4 Cologne e.V.
Community investment
Our community partnerships cover wide-ranging issues
including youth development, diversity and inclusion and
disaster resilience. We support our partners by providing
financial investment, employee volunteering and product
donations.
Youth development
Across our territories we have many community
partnerships which support young people. In 2021, some
of our activities were impacted by COVID-19 but we
remain committed to our partnerships. This includes our
work with FIER.E.S in France, an initiative that helps to
build self-confidence and provides a pathway to
employment for young people. In Germany, we support
the German Foundation of Integration with Geh Deinen
Weg, a two year mentoring programme helping young
people with an immigrant background to integrate into
German society and find opportunities. In New Zealand,
we partner with Youthline, an organisation that supports
young people who are struggling (with their mental health
or other issues), as well as those who want to learn, grow
and give back to their community.
+58,000
people supported in 2021 through our
community programmes in Europe
Protecting our environment
We are committed to protecting our environment and
support environmental programmes through investment
and volunteering. These include our community based
water replenishment partnerships in Belgium, France,
GB, Portugal and Spain, and our land-based and marine
litter clean up programmes across our territories.
Social inclusion
From our refugees and newcomers programmes in
Belgium and the Netherlands, to supporting local
foodbanks and food distribution charities across Europe
and API, we help local communities and vulnerable
groups. With TCCC, we support Special Olympics, the
world’s largest sports organisation for people with
intellectual disabilities in Belgium, France, GB, Germany
and the Netherlands. In Spain, supported by our
Chairman, Sol Daurella, who acted as guest speaker at
the event, we organised the fifth edition of GIRA Mujeres,
a training programme for women who want to develop
a business idea through entrepreneurship.
Disaster response and resilience
In 2021, in Fiji and Indonesia, we assisted first responders
in times of environmental disaster and social upheaval by
donating bottled drinks for communities. In Germany,
many people and our production facility in Bad Neuenahr,
were impacted by severe floods in July 2021. Together
with TCCC we donated €400,000 to the Red Cross to
support disaster relief in the affected regions, and
distributed drinks to people in need.
Case study
Chaudfontaine for
Chaudfontaine
In July 2021, floods in the Walloon region of
Belgium caused enormous damage. Many homes,
schools and roads were destroyed by the
inexorable force of the water and our production
facility in Chaudfontaine was severely impacted.
Together with TCCC and The Coca-Cola
Foundation we donated €1 million to support the
local community. This included a €250,000
donation (via The Coca-Cola Foundation) to the
Belgian Red Cross to provide hot meals to flood
victims. Together with TCCC we ran an on pack
marketing campaign via our Chaudfontaine brand
which included a €750,000 donation to help rebuild
two schools in the local area.
In addition, more than 300 of our employees in
Belgium volunteered their time to help the
Chaudfontaine community response to the disaster.
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Other Information
Action on – Society
CONTINUED
Partnerships with our customers
In 2021, we worked with customers in remote indigenous
communities in Australia to establish recycling programmes.
In France, we partnered with social entrepreneurship
NGO Groupe SOS to support 1,000 cafés, an initiative
for rural communities to meet. In Germany, we continued
our Projekt: LokalLiebe to enable participating local
restaurants and bars to support charities and community
groups. Through the initiative we donated two cents for
every reusable glass bottle of ViO, Apollinaris and Honest
brands sold. In 2021, over €53,000 was donated to 60
charitable projects nominated by participating outlets.
Support for local communities
Our “Support my Cause” initiative enables our people to
nominate grassroots charitable and community causes
for CCEP to support. In 2021, we donated €220,000 to
44 local charities and community groups across our
European markets. In addition, we donated over €520,000
to support 158 grassroots charitable and community
partnerships located close to our sites and offices. In API,
we run many similar initiatives including our Employee
Connected Grants programme in Australia, which is a
partnership with the Coca-Cola Australia Foundation.
Volunteering in the community
We encourage our people to participate in volunteering
activities connected to our sustainability commitments,
such as litter clean up campaigns and charity fundraising
events. Our employees in Europe can spend up to two
paid working days each year volunteering for a charity or
cause of their choice.
While we currently operate different regional policies
related to employee volunteering, we will align our
approach in 2022.
We develop volunteering programmes in collaboration
with community investment partnerships and in 2021,
our people took part in several volunteering activities
across our territories. In GB, employees volunteered in
the Treasure Your River campaign and we have active
partnerships with Keep Britain Tidy, Keep Scotland
Beautiful, Keep Wales Tidy and Rivers Trust; Mares
Circulares in Portugal and Spain; River clean up and
Dokano in Belgium; and Nature Protection Trinkwasserwald
in Germany. In Indonesia, we support the Bali Beach
Clean Up programme and Coca-Cola Forests, a tree
planting and environmental education programme.
In Fiji, we operate Mission Pacific, for the collection and
recycling of our packaging, and support the Mamanuca
Environment Society.
In Spain, during the 2021 Christmas season, over 150
volunteers worked alongside local NGOs, foodbanks and
charities to distribute 16,000 meals to vulnerable people.
As part of this initiative we donated over €278,000 to
local charities.
Readmoreatwww.cocacolaep.com/sustainability/
this-is-forward/action-on-society-our-community
TOTAL COMMUNITY CONTRIBUTION(A)
€10.92 million
Europe €9.16 million
70%
16%
7%7%
7% 7%
API €1.76 million
68%
18%
1% 13%
Total cash
Total in kind
Total management costs (cash and time)
Total volunteer time
(A) The acquisition of API completed on 10 May 2021. The API
sustainability metrics are presented on a full year basis for 2021
and 2020 to allow for better period over period comparability.
Readaboutoursupportforourpeopleinourpeoplesection
on pages 37–39 and www.cocacolaep.com/sustainability/
this-is-forward/action-on-society-our-people
17,102
hours volunteered by our
employees in Europe to support
local community projects in 2021
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F Since 2010 we
have introduced
790
low and no calorie drinks
and changed the recipe for
235 products to reduce sugar
content in Europe
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Other Information
Action on – Drinks
From one iconic drink we’ve
evolved into a total beverage
company, offering consumers
a greater choice of drinks, with
and without sugar.
We support the current recommendation by several
leading health authorities, including the World Health
Organisation, that people should limit their intake of
added sugar to no more than 10% of their total calorie
consumption.
Working with TCCC and other franchisors, we are
evolving our portfolio across all our territories, introducing
new low and no calorie options, reformulating our recipes
and promoting our low and no calorie drinks to consumers.
We also offer drinks produced with organic, Fairtrade
and Rainforest certified ingredients in our portfolio –
never compromising on taste.
Our focus is on empowering consumers to make more
informed choices by providing transparent product
information, offering smaller pack sizes and championing
responsible marketing.
In addition, we are working to deliver the highest product
quality and safety to our consumers by incorporating
The Coca-Cola Operating Requirements (KORE), which
define operational controls and prioritise sustainable
sourcing of our ingredients.
Great taste, less sugar
Working with TCCC and other franchisors, in Europe we
have already made great progress in reducing the amount
of sugar used in our soft drinks by 17.9% between 2015
and 2021; representing a reduction of 22.2% since 2010,
equivalent to 232k tonnes of sugar removed.
We are a long standing member of the Union of European
Soft Drinks Associations (UNESDA) which represents
Europe’s soft drinks industry and we support its industry
led pledge to reduce average added sugars in soft drinks
by another 10% by 2025 versus 2019 across Europe.
In 2021, we introduced new low and no calorie drinks,
including Monster Ultra Fiesta in France and GB,
Chaudfontaine Bio in Belgium and Fuze Tea Peach
Elderflower in Germany, Norway and Sweden.
In Australia, Indonesia and New Zealand, we have
clear sugar reduction targets across our drinks portfolio.
In Australia we are committed to reducing average sugar
per 100ml by 20% by 2025 (versus 2015). In Indonesia
we are committed to reducing average sugar per 100ml
by 35% by 2025 (versus 2015); and by 20% by 2025
(versus 2015) in New Zealand.
In 2021, we introduced new reduced sugar drinks
including Fanta Raspberry in Fiji and Schweppes Ginger
Ale and Tonic Water in Indonesia.
In Europe, we are aiming for 50% of our sales to come
from low or no calorie drinks by 2025 and we actively
influence people to reduce their daily sugar intake by
raising awareness of our low-calorie drinks through our
point of sales communications. In API, we continue to
implement our wellbeing initiatives by introducing and
promoting low and no sugar drinks. This includes our
promotion of Coca-Cola No Sugar in remote Indigenous
communities in Australia in respectful collaboration with
our retail partners and their communities. Since 2015,
this work has delivered a 26.1% decrease in average
sugar per 100ml sold through our 134 partner stores.
Across our territories, we are also innovating to help
consumers control their calorie and sugar intake by
offering choice for every occasion. In Europe 4% of
our sparkling soft drinks by volume is now in packs
of 250ml or less.
Case study
Reformulation of
Coca-Cola Zero Sugar
Globally, our reformulation of Coca-Cola Zero
Sugar (or “Coca-Cola No Sugar” in some
countries) is the result of years of innovation to
deliver a new and improved taste as close as
possible to Coca-Cola Classic, with no sugar.
We launched this new Coca-Cola Zero Sugar in
2021 across many of our European and API
territories, and New Zealand will follow in 2022.
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Other Information
Action on – Drinks
CONTINUED
Clear, straightforward information
We are committed to providing clear and transparent
nutritional product information, including detailed sugar
and calorie content.
In 2009, we were one of the first companies to voluntarily
introduce Guideline Daily Amount labelling on all of our
packaging.
Since 2017, our bottles in Europe and Australia have
featured a servings per pack icon to show the amount
of 250ml portions in a multi serve pack.
We align with all global and local legislation and are
encouraged to see growing support for colour based
interpretive product labelling across the EU. We are
closely monitoring developments related to the EU-led
process for nutrition labelling.
In Australia, we adopted the voluntary front of pack Health
Star Rating on all our non-alcoholic drinks. The labelling
system rates the nutritional profile of our drinks and helps
consumers make healthier choices.
Responsible marketing
Our clear policies and guidelines ensure we market
our drinks responsibly. In Europe, through UNESDA
we commit not to advertise in printed media, online
or during broadcast programmes aimed specifically at
children. Across our territories, we do not advertise or
market any products to children under 12.
Through our Responsible Sales and Marketing Principles
we provide clear guidance to ensure that we are honest
and transparent in everything we do, that we aim to never
mislead consumers, and that we should take every
opportunity to help consumers make informed choices
about what they drink. In 2021, we updated these
principles and briefed all our sales and marketing teams.
Where we distribute drinks that contain alcohol, we
respect the local code of practice for responsible
marketing and promotion, including messaging on
responsible drinking and marketing products in channels
such as hospitality where consumers are adults over local
legal purchase age.
CCEP has been our partner
for many years in remote Australia,
and has ensured consistency of
supply as well as support for
strategic initiatives such as the
wellbeing strategy to address
community health, resulting in
economic and employment
benefits for local communities.
Enjoy choice, enjoy taste
To offer consumers more choice we have increased
our portfolio of drinks to include RTD teas, organic soft
drinks, beverages with nutritious benefits, coffee and
alcohol with TCCC and our franchisors.
In 2021, we launched Ocean Spray Pink in France, a
sparkling juice blend with the flavour of cranberries for a
light and refreshing taste. In Portugal, we also launched
Fanta Guaraná, the first zero sugar guaraná flavoured
beverage in the market.
The expansion of our coffee portfolio across Europe saw
the launch of Costa Coffee in Belgium, Norway and Spain
in 2021, following its launch in Germany in 2020.
Our coffee brand Grinders in Australia is now Rainforest
Alliance certified, supporting more sustainable practices
for about two million farmers in 63 communities.
Ian Copeland, CEO, Community Enterprise Queensland
New Zealand
2020
2021
Our progress(A)
SUGAR REDUCTION SINCE 2015
Reduction in average sugar per litre in our soft drinks
portfolio since 2015
Europe
2020
2020
15.3%
2021
2021
17.9%
API
Australia
2020
11.2%
2021
14.9%
Indonesia
2020
2021
17.2%
20.9%
New Zealand
2020
9.3%
2021
13.4%
SUGAR REDUCTION SINCE 2010
Reduction in average sugar per litre in our soft drinks
portfolio since 2010
Europe
2020
2021
19.8%
22.2%
LOW AND NO CALORIES
Products sold that are low or no calorie
Europe
2020
2020
2021
2021
API(A)
Australia
2020
2021
Indonesia
14.3%
2020
2021
47.7%
48.6%
41%
44%
31.8%
35.5%
37.4%
(A) The acquisition of API completed on 10 May 2021. The API
sustainability metrics are presented on a full year basis for 2021
and 2020 to allow for better period over period comparability.
Readmoreatwww.cocacolaep.com/sustainability/
this-is-forward/action-on-drinks
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F
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Other Information
Action on – Water
We are committed to responsible
water use: reducing our own water
consumption and sustainably
managing local water sources in
partnership with local communities.
Climate change impacts are continuing to exacerbate
water scarcity and water quality, which provide a
significant risk to the economy and wider society.
CCEP relies upon a sustainable and high quality water
supply. It is the main ingredient in our products, is
essential for our manufacturing processes and is critical
for our ingredients. A reduction in the availability or quality
of water where we produce our products or source our
ingredients could significantly impact our business.
To address these challenges and protect our water
resources, we have adopted a value chain approach to
water management. Our approach to water stewardship is
aligned with TCCC’s 2030 water strategy. This approach
to water security allows us to prioritise the areas of our
value chain – both operations and sourcing regions –
most at risk from water stress. We are developing water
reduction targets across our European and API
operational sites, reflecting the needs of our local sites
and sourcing regions.
We measure performance through our water use ratio,
which is the average amount of water we need to produce
a litre of product. In 2021, our water use ratio in Europe
was 1.58 litres of water per litre of product produced –
a reduction of 13% since 2010. In API our water use
ratio was 1.75 per litre of product produced. In 2022,
we will update our water use targets as part of our
This is Forward sustainability action plan.
We return 100% of our wastewater safely to nature and
our community based partnerships across our territories
replenish the water we use in areas of water stress.
Water approach
Our water risk mapping is based upon a series of risk
assessments. All our sites are assessed through a global
enterprise water risk assessment which uses the World
Resources Institute’s (WRI) global water risk mapping.
This is supported by local Facility Water Vulnerability
Assessments (FAWVAs).
Through the WRI Aqueduct Water Stress mapping tool,
we know that 22 of our 45 production facilities in Europe,
and three of our 24 production facilities in API are located
in areas of high baseline water stress(A). In 2021, these
sites used 10.7 million m³ of water in our production
volume in Europe, and 1.37 million m³ of water in API.
This represented 55.6% of our total production volume
in Europe, and 22.6% in API.
In 2020, all of our production facilities completed their
first annual FAWVA, allowing us to assess a wider range
of physical, regulatory and social risks. We used this
assessment to categorise our sites into “leadership”,
“advanced efficiency” and “contributing locations”
(based on the level of local water risk) and set local
context-based targets. Based upon the FAWVAs, eight
of our production facilities in Europe, and four in API have
been identified as “leadership locations”, representing
7.9 million m³ of our total water volume.
Sites in leadership locations are those which rely on
vulnerable water sources or have a high level of water
dependency. These sites have the highest water
reduction targets, and aim to achieve 100% regenerative
water use. This means finding a beneficial use for our
wastewater and replenishing any remaining water through
replenishment projects in the local watershed.
The FAWVAs are supported by source vulnerability
assessments (SVAs), which are undertaken at a local
level every five years and are aligned to the Alliance for
Water Stewardship Standard. The FAWVAs and SVAs
feed into our site water management plans (WMPs),
which support target management, climate resilience,
data sharing and reporting. In 2021, all our non-alcoholic
drinks production facilities had SVAs and WMPs in place.
Improving water security
Our manufacturing and cleaning processes are as water
efficient as possible and we continue to invest in our
equipment in order to reduce our water use.
In 2021, we reduced the rinsing time of our glass bottles
at our Jordbro production facility in Sweden and saved
1.2 million litres of water a year. In Belgium, we will save
up to six million litres of water using new vacuum pump
fillers for beverage filling processes that we introduced
in 2021. We are piloting a project in Spain to track
production line water usage through metering and online
live tracking, and we aim to roll this out across Europe
and API over 2022 and 2023.
Water replenishment
We aim to achieve 100% regenerative water use in the
areas where it matters most: leadership locations where
we have identified local water risks. This means we will
aim to reduce the water we use in these facilities as much
as possible, find a beneficial use for any wastewater and
replenish 100% of the water used in these locations.
We also aim to continue to replenish 100% of the water
that we use where it is sourced from areas of water stress.
(A) Soft drink production facilities only. In 2021, we closed two of our production
facilities in Europe, but the production volumes from these facilities are
included up until point of closure.
With the support of the
Coca-Cola Foundation, we will
be able to restore biotopes such
as fens and wet heath in order
to return unique plants and
animals to nature.
Filip Hebbrecht, Responsible Partnerships at Natuurpunt
Case study
Water replenishment
project Catalyst
Project Catalyst, a joint collaboration between
The Coca-Cola Foundation, sugar cane farmers
in Queensland, Australia, WWF Australia, natural
resource management bodies and the Federal
Government, aims to reduce the agricultural runoff
impacting the Great Barrier Reef.
The project supports sugar cane growers to adopt
beneficial and sustainable farming practice
changes, and improve the quality of waters
impacting the reef.
Since 2009, the initiative has grown to include
more than 130 farmers, improving the quality
of 150 billion litres of water flowing into the reef
and has reduced runoff by 180 tonnes per year.
In 2021, 8.1 billion litres of water have been
replenished through the project.
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Action on – Water
CONTINUED
In 2021, together with TCCC and The Coca-Cola
Foundation, we managed 22 water replenishment
projects in Europe and 6 in API. As a result, we
replenished 27 million m³ of water across our territories;
including 15.5 million m³ in Europe and 11.5 million m³
in API. This represents 226% of the water we sourced
to make our drinks in areas affected by water stress in
Europe, and 463% in API.
Our water replenishment programmes include a
programme with The Coca-Cola Foundation and
Natuurpunt in Belgium to replenish 247 million litres of
water per year over the next four years, through the
redesign of heath and fenlands located in the same river
basin as our production facility in Antwerp. In Spain, we
continue supporting Misión Posible: Desafío Guadalquivir
(Mission Possible: Guadalquivir Challenge) a project
based in Seville and Cádiz and run in partnership with
WWF and The Coca-Cola Foundation. The project aims
to improve the irrigation of agricultural crops in the area
and the biodiversity of the Guadalquivir river by restoring
a nearby marsh.
Water work with local government
We collaborate with NGOs, local authorities, businesses
and communities throughout our territories to improve
water efficiency and protect the health of our watersheds.
In 2021, we met the French government to discuss water
allowances at our production facility in Dunkirk and will
commence a water replenishment programme in 2022.
In 2021, we also met with local water supplier Brabant
Water in the Netherlands to discuss reduction, reuse
and replenishment opportunities at our production
facility in Dongen, and had our water extraction permit
extended, acknowledging our strong long-term water
management strategy.
Restoring nature
Preservation of natural ecosystems is key to our
long-term success and sustainability. We aim to leave
nature in a better state than how we found it, building
adaptation and resilience into our key operating and
sourcing regions.
We are committed to restoring and enhancing biodiversity
and nature by investing in nature based solutions that
remove GHG emissions, support our water stewardship
goals and eliminate deforestation across our value chain.
In 2022, we aim to develop clear commitments and set
measurable, time bound targets on biodiversity and
deforestation across our combined business. We will also
expand our existing understanding of biodiversity risks
within our own operations, by conducting a biodiversity
risk assessment.
Our progress(A)
WATER USE
Water use ratio (litres of water/litre of product
produced)
EUROPEAN WATER STEWARDSHIP
Already holding a gold European Water Stewardship certificate
since 2013, our mineral water bottling plant in Chaudfontaine,
Belgium, obtained a platinum certificate for sustainable water
management from the worldwide Alliance for Water Stewardship
in 2021, as did our production facility in Dongen – the first site to
receive this standard in the Netherlands.
Europe
2020
2021
API(B)
2020
2021
1.57
1.58
1.84
1.75
27
million m³ water
replenished across
our territories
28
community based water
replenishment projects
across our territories
WATER REPLENISHMENT
Amount of replenished water we used in our drinks,
sourced from areas of water stress
Europe(C)
2020
275%
226%
2021
API(D)
2020
2021
486% (B)
463%
(A) The acquisition of API completed on 10 May 2021. The API
sustainability metrics are presented on a full year basis for 2021
and 2020 to allow for better period over period comparability.
(B) Excludes the amount of water used for the production of products that
contain alcohol.
(C) Based upon production volumes from 22 sites assessed as being in
areas of baseline water stress (WRI).
(D) Based upon production volumes from three sites assessed as being in
areas of baseline water stress (WRI).
Readmoreatwww.cocacolaep.com/sustainability/
this-is-forward/action-on-water
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Other Information
Action on – Supply chain
The quality and integrity of our
products depends on sustainable
global supply chains with
successful and thriving farming
communities and ecosystems
where human rights are respected.
We rely on global supply chains to make, sell and
distribute our products, yet these supply chains are under
increasing pressure from population growth, increased
demand for food products and climate change.
We are committed to sustainably sourcing 100% of our
agricultural ingredients and raw materials. Together with
TCCC, we work collaboratively with our suppliers to
support biodiversity and ecosystems, to respect and
protect the human rights of everyone working across our
supply chain and create systemic and sustainable
change. We believe sustainable supply chains offer
solutions to major challenges including human rights,
water security, climate resilience, GHG emissions
reduction and women’s empowerment.
We ensure our suppliers respect our Code of Conduct
and make a positive impact on society, in line with the
United Nations’ Guiding Principles on Business and
Human Rights, the International Labour Organisation’s
Declaration on Fundamental Principles and Rights at
Work and the United Nations’ Global Compact.
Responsible sourcing
In Europe, we source products from around 13,200
suppliers and 83% of our spend (excluding concentrate
and juices purchased from TCCC and other franchisors)
is with suppliers based in our territories.
We are committed to sustainably sourcing ingredients
for our drinks, including water, sugar beet, sugar cane,
coffee, tea and fruit juices, and raw materials for our
packaging such as glass, aluminium, PET and paper.
While we currently operate different regional principles to
measure supplier compliance on sustainability and track
progress, we are aligning our activities in Europe and API
to create a single global responsible sourcing programme,
which we will launch in 2022.
In Europe, we operate TCCC’s Supplier Guiding
Principles (SGPs) and Principles for Sustainable
Agriculture (PSA). In API, we track compliance on
sustainability through Responsible Sourcing Guidelines
(RSGs), SGPs and PSA. The SGPs set minimum
requirements for labour conditions, health and safety, and
human rights. The PSAs apply to agricultural ingredients
and raw material suppliers, covering sustainable farm
management, including the protection of woodlands from
deforestation and minimising impacts on biodiversity.
Our RSGs cover supplier performance related to
business ethics, human and workplace rights, the
environment, and providing benefits to communities.
TCCC commissions independent audits to monitor how
our ingredients and packaging suppliers comply with
SGPs and RSGs. PSA compliance is verified through
adherence to global third party sustainable agriculture
standards approved by TCCC.
We work in partnership with EcoVadis, an independent
evaluation company to rate the sustainability performance
of our suppliers, including environment, carbon
management, human rights and fair business practices.
In Europe, we are aiming for our suppliers to achieve an
average overall score of 65 by 2025. In 2021, these
suppliers had an average overall score of 59 out of 100.
Case study
Reaching net zero
with our suppliers
Over 90% of our value chain GHG emissions come
from our supply chain and we are collaborating with
our suppliers, helping them to reduce their emissions.
A year after we launched our net zero 2040 ambition
and 2030 emissions reduction target in Europe, we
are making significant progress with our suppliers.
We have asked them to take action on three key areas
by 2023: set SBTi validated GHG emissions reduction
targets; commit to using 100% renewable electricity
across their own operations; and to share their carbon
footprint data with CCEP.
By the end of 2021, 47% of our “carbon strategic
suppliers” in Europe (i.e. those suppliers that account
for over 80% of our Scope 3 emissions) were engaging
directly with SBTi to set their own science based targets.
This represents a significant increase from 2020.
We are also working to understand supplier specific
emission factors for carbon strategic suppliers across
core aspects of our supply chain, such as packaging.
This will be critical in helping us to build a more
accurate picture of our Scope 3 emissions and reflect
the impact of our suppliers’ actions.
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Other Information
Action on – Supply chain
CONTINUED
Protecting inherent rights and freedoms
Human rights are fundamental to how we run our
business and the communities in which we operate.
We are committed to ensuring everyone who works at
CCEP and in our supply chain is treated with dignity and
respect. In 2021, we provided human rights training to
all procurement employees in Europe.
We continue to improve the validation and proactive
management of our suppliers in key areas such as human
rights and modern slavery. This includes our collaboration
with EcoVadis, via technology platform IQ, which allows
us to screen our entire supply base and understand
inherent risks by country and industry. In 2021, we started
using data gathered through IQ to proactively manage
sustainability risks across our supply base. In addition,
in partnership with Resilinc, we successfully piloted
an artificial intelligence tool for proactively identifying
potential risks that could impact our business through
our supply network beyond our direct suppliers. We will
roll out the tool across our territories in 2022.
In API, we drive positive social outcomes via specific
social procurement programmes, and focus on supporting
and upholding the human rights of vulnerable or
disadvantaged groups. In 2021, we spent approximately
€3 million with social enterprises that support employment
opportunities for disadvantaged groups in Australia.
Together with CCEP we are taking
action towards a low carbon future
by reducing our emissions through
a commitment to science based
targets. Sustainability is at the centre
of our recently published strategy.
Nordzucker is proud to work with
a company that shares our goals.
Alexander Godow, COO Nordzucker AG
Our progress(A)
SPEND COVERED BY GUIDING PRINCIPLES
Our spend with suppliers that are covered by the SGPs
Europe
2020
2021
97%
97%
Our spend with suppliers that are covered by
the RSGs
API(B)
2020
91.6%
2021
90.3%
SUSTAINABLY SOURCED SUGAR
Sugar sourced from suppliers that comply with
the PSA
Europe
2020
2021
API
2020
2021
100%
100%
92%
100%
SUSTAINABLY SOURCED PULP AND PAPER
Pulp and paper sourced from suppliers that comply
with the PSA
Europe
2020
2021
API(C)
2021
100%
100%
96%
(A) The acquisition of CCL completed on 10 May 2021. The API
sustainability metrics are presented on a full year basis for 2021
and 2020 to allow for better period over period comparability.
(B) Supplier spend in Australia, Indonesia and New Zealand only.
(C) 2021 is the first year we track PSA compliance for pulp and paper.
Readmoreatwww.cocacolaep.com/sustainability/
this-is-forward/action-on-supply-chain
In 2021, CCEP was
awarded platinum status
by EcoVadis, with a total
score of 81 out of 100.
This places CCEP in the
top 1% of companies in
our sector.
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Other Information
Our people
We are grateful for the passion,
talent and hard work our people
contribute to create our company
culture and deliver sustainable
growth. We provide a workplace
that promotes wellbeing, inclusion
and respect, where people at
every level can be heard, grow
and have a positive experience.
Being well
Our people’s physical and mental wellbeing remain our
priority and we promote this in our workplace. Throughout
the COVID-19 pandemic, we have taken measures to
ensure our people can continue to work safely and feel
supported. At a global level, physical safety ranked
number one and personal wellbeing scored positively in
our engagement and culture pulse survey in June 2021.
We continue to embed a strong health and safety culture,
systems, processes and programmes, including a target
to reduce our total incident rate to below 1 by 2025.
Tragically there were four employee fatalities during 2021;
one in Belgium and three in Indonesia. The incidents
were investigated with the local authorities and we
continue to improve our safety procedures to prevent a
reoccurrence. In Europe, our total incident rate was 1.11
per 100 full time equivalent employees, and in API this
was 0.75. Further information about our safety
performance and incident rates will be available on our
website from May 2022.
In cases where our people are injured or suffer any
mental or physical health issues while employed by
CCEP, we endeavour to make any reasonable
adjustments to their duties and working environment
to support their recovery and continued employment.
Over 2021, we’ve grown our Wellbeing First Aider
initiative to build an internal mental health support
network of over 600 trained employees globally. More
than 1,000 people have received support and benefitted
from our Employee Assistance Programme, a 24/7
independent service offering free professional care and
counselling, self-help programmes, interactive tools and
educational resources for our people and their family
members. In 2021, we’ve done more to promote these
initiatives, including our “Don’t bottle it up” campaign
featuring some of our colleagues’ experiences of
wellbeing support in our workplace.
Formoreinformationaboutourpeoplegoto
www.cocacolaep.com/sustainability/this-is-forward/
action-on-society-our-people/
Case study
Not all disabilities are visible
On the UN International Day of Persons with
Disabilities 2021, we worked with TCCC to produce
a new bottle label that voices our values on
disability inclusion. The label features purple,
the colour increasingly associated with disability
inclusion and sparking conversations worldwide.
It also features the statement that “Not all disabilities
are visible”, a reminder that some disabilities are not
immediately apparent. Currently for internal use, we
are gathering feedback from key stakeholders, so
we can further develop and improve this initiative.
ME@CCEP
Me@CCEP defines
the experience we want our
people to have at CCEP
It is about
01 Being
well
The safety and wellbeing of our people is vitally important.
We want everyone to feel happy and healthy and to work with
integrity and respect so we can all thrive at work and at home.
03 Being
valued
We are at our best when we can be ourselves at work,
when we can be heard, share our perspectives and
insights and build upon our strengths.
05 Being
recognised
All our people have a part to play in CCEP’s growth and
we recognise, reward and celebrate the great work they
do every day. We do this in ways that are simple,
transparent and consistent.
02 Being
connected
We’re powerful when we work as part of a winning
team – championing communication, connection
and collaboration.
04 Being
developed
Our experiences make us stronger and we support
our people in exploring opportunities to develop – providing
possibilities to continually learn, grow in their role and get
to where they want to be.
06 Being
inspired
We strive to be a force for good – for people and for
the planet. We‘re passionate about what we do and
what we stand for, and our people are empowered
to make a difference.
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 38
Strategic Report
Governance and Directors’ Report
Financial Statements
Other Information
Our people
CONTINUED
Being connected
Good communication is an essential part of building
a motivated, engaged workforce. Our people have access
to news and information about CCEP in local languages
through internal communication platforms, Redline in
Europe and Workplace in API. There is also direct
dialogue through business talks and all hands meetings.
CCEP management gives updates about CCEP’s overall,
and local, performance through these channels.
We’re committed to communicating clearly and
transparently with our people. We continue to invest to
improve our people’s access to information. In 2021, we
introduced Compass, a new online platform bringing
together all apps and digital services our people use
in one place. We have improved the interface and
experience of our people platform, Genie, in response
to employee feedback. Our people use platforms to
ask questions, provide feedback, and connect with our
leadership on all topics from sustainability to innovation.
CCEP meets regularly with European, national and local
works councils and trade unions that represent our
people. When required, we consult with our people and
their representatives to discuss proposed measures
before making decisions. We encourage constructive and
meaningful dialogue. During consultation, our employee
representatives have the opportunity to ask questions,
share views and propose alternatives to proposals before
management makes a final decision.
ReadmoreabouthowourDirectors,andCCEPengagewith
ourpeopleonpage 12
Our policies and procedures ensure consistency and
fairness across CCEP. Our policies are written in an
understandable way and are accessible in local languages.
Every year we review our policies to ensure they are up
to date with legal requirements and relevant for business
and social strategies. In 2021, we took the opportunity
to harmonise policies across Europe and API.
Being valued
Our philosophy is that “everyone’s welcome to be
themselves, be valued and belong” at CCEP. We are
committed to building a diverse workforce, with an
inclusive culture and equity at its core. We have created
an environment with opportunities for people of every
culture, faith, ethnicity, heritage, ability, gender, sexual
orientation and age. We believe this commitment will
enable us to take positive action for people, better
represent the society we serve and support our
sustainable business growth.
Led by our ID&E Centre of Expertise and sponsored
by our ELT members, we deliver our ID&E strategy by
listening to our people’s lived experiences, developing
action plans and tracking progress against our five pillars:
culture and heritage; disability; gender; LGBT+; and
multi generations.
We have dedicated groups of employees and ELT
sponsors catalysing action at scale to remove identified
barriers to inclusion. In 2021, we ran a year-long
campaign aimed at breaking barriers that stand in the
way of equality in the workplace. As part of this campaign,
we delivered a panel conversation with our Chairman,
CEO, sponsors and employee ambassadors about
gender based stereotypes. We ran ID&E workplace
audits on disability and LGBT+ matters to identify best
practices for implementation. We featured colleague
experiences of working successfully across generations
at CCEP. We shared videos featuring advice from our
employees on using culturally inclusive words and the
importance of allyship.
For the first time, we ran a voluntary, anonymous survey
focused on ID&E in the majority of our countries in 2021.
This provided our people with the opportunity to give
feedback on their inclusion experience at CCEP and
self-declare personal diversity information. Employees
participated in Europe, Australia and New Zealand. We
expect the outcomes to enable us to better understand
the diversity of our workforce at all levels, improve the
inclusivity of our people’s experience and ensure equity
is embedded in our infrastructure and people policies.
As part of our commitment to inclusive, diverse and
equitable workplace practices, we continue to partner
with organisations and bodies such as European Network
Against Racism, the Valuable 500, the Business Disability
Forum, LEAD Network, the United Nations Women’s
Empowerment Principles, Stonewall and the Social
Mobility Index.
ReadmoreaboutID&EatCCEPonpage 85
Workforce diversity in 2021
Male
Female
Total employees (including part time employees)(A)
23.8%
76.2%
Board of Directors
29.4%
70.6%
25,182
7,876
Total: 33,059
12
5
Total: 17
Leadership (senior management grade including ELT)(B)(C)
36.2%
63.8%
2,082
1,183
Total: 3,265
Directors of subsidiary companies(C)
24.2%
75.8%
91
29
Total: 120
(A) Includes one employee who identified as non-binary.
(B) The members of the ELT and their direct reports consists of 55 female
and 71 male employees.
(C) 20 female and 53 male directors of subsidiary companies are also included
in the workforce diversity statistic under leadership.
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 39
Strategic Report
Governance and Directors’ Report
Financial Statements
Other Information
Our people
CONTINUED
A key target of our sustainability action plan, This is
Forward, is to ensure that at least 40% of our management
positions (senior management and above) in Europe
are held by women by the end of 2025. In 2021, 37.3%
of leadership positions were held by women, up from
35.6% in 2020. We have been reaccredited recognition
for our continued commitment to gender balance in the
workplace, including the Gender Tick in New Zealand,
the Equal Pay Certificate in Iceland, +Fières en 2021
and 99 score on the Gender Index in France and via the
Global Bloomberg Gender Equality Index.
We are committed to being an equal opportunities
employer. We make decisions about recruitment,
promotion, training and other employment matters
solely on the grounds of individual ability, achievement,
expertise and conduct. We don’t discriminate on the basis
of gender, gender identity, race, religion, ethnicity, cultural
heritage, age, social background, mental or physical
ability or disability, national origin, sexual orientation
or any other reason not related to job performance or
prohibited by applicable law.
Being developed
We are committed to creating a workplace where our
people can be heard, grow and advance. We have
increased our cadence of confidential pulse surveys to
provide our people with more opportunities to share how
they’re feeling throughout the year and to gain insights to
strengthen our workplace culture, improve our people’s
experience at work and our business. In June 2021,
24,245 (79%) employees participated in our global
engagement and culture pulse survey. On a global level,
employee engagement scores are above benchmarks,
and our people recommend CCEP as a great place to
work. We continue to develop and deliver action plans in
each of our countries and corporate functions to act upon
the valued voice of our people.
We have refreshed our talent philosophy “everyone has
talent and everyone can grow” reflecting our commitment
to develop talent internally, winning capabilities for the
future and accelerate succession for targeted roles.
We have training programmes and platforms to develop
core capabilities in leadership, commercial, customer
service and supply chain at every level of our business.
We continue to deliver our wellbeing training modules
to our employees. Almost 7,000 managers have now
completed this training. We have also launched three new
ID&E learning modules on practising inclusive leadership,
starting an ID&E conversation and allyship. Underpinning
this formal learning is a series of resources, which
include conversation guides on LGBT+, allyship, inclusive
language, discussing disability and addressing age
stereotypes, as well an accessible communication toolkit.
We are progressing plans for working flexibly.
We continue to value and invest in our early career talent
and support initiatives that help young people gain
employability, skills and confidence. This includes offering
internships, apprenticeships and graduate programmes.
For the sixth year, we partnered with One Young World.
CCEP delegates attended the summit and an internal
post-development programme. They joined over 1,800
young leaders to engage, learn, challenge and discuss
important sustainability issues the world faces, covering
topics from climate change to poverty alleviation.
Being recognised
We pay salaries in line with appropriate market rates,
as well as providing our people with a range of other
benefits. These vary according to their country and level
in the organisation. Benefits include medical or dental
insurance, life insurance, eyecare vouchers, holiday
time and leave packages to cover sickness, post natal
childcare, bereavement or a long-term illness in the
family. Depending on the country, level and grade,
we also offer pension plans.
Employee ownership
In 2021, we announced the new global CCEP Employee
Share Purchase Plan, which will give our employees the
opportunity to buy shares in CCEP on a regular basis
from 2022. In recognition of this investment, for every
share an employee purchases, CCEP will provide a
matching share, up to an agreed limit.
Around three quarters of our employees participate in
annual variable remuneration plans. We offer a consistent
annual bonus plan to around 13,000 people across the
organisation.
In addition, sales incentive plans are in operation for
25% of our people and a further 24% participate in local
incentive plans.
ReadourDirectors’remunerationreportonpage 92–107
Being inspired
We are determined to draw on our people’s passion for
what we do and empower them to make a positive
difference in our local communities. In 2021, we ran
a series of sessions engaging our new colleagues in API
to ensure that everyone feels welcome at CCEP, that they
belong, can contribute to our shared purpose, strategy,
culture and ways of working.
Our people in Europe can spend up to two paid working
days each year volunteering for a charity or cause of their
choice. While we currently operate different regional
policies related to employee volunteering, we will align
our approach in 2022.
ReadmoreaboutourActiononsocietyonpages 29–30
Case study
Being a Wellbeing
First Aider
“We all experience highs and lows so when we
are feeling low, we need to take care of mental
health just like we would take care of ourselves
if we had the cold or flu. Sometimes, it’s hard to
prioritise our mental health but that’s why I became
a Wellbeing First Aider, to help colleagues better
understand the importance of maintaining mental
wellbeing. Being a Wellbeing First Aider is
something that I am proud of because I feel that
I can make a difference by supporting someone
who may be struggling.”
Justin McKenzie, Sales Manager for On Premise
in the Victorian Licensed Team, Australia
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 40
Strategic Report
Governance and Directors’ Report
Financial Statements
Other Information
Operating with integrity
We live up to our responsibilities
as a business by being
accountable, ethical and aware
of the risks in everything we do.
Corporate governance
At CCEP we hold ourselves accountable to the highest
standards of corporate governance and aim to provide
transparent and timely information in respect of our
activities to our stakeholders. CCEP has a strong corporate
governance framework with a Board overseeing the
interests of all stakeholders.
Management has a Compliance and Risk Committee
chaired by CCO which advises the ethics and compliance
(E&C) function and provides management input regarding
the E&C programme.
Readmoreaboutourcorporategovernanceonpages 64–81
Ethics and compliance
Our E&C programme ensures we are conducting
our operations in a lawful and ethical manner. The
programme is applicable to our people, officers and
Directors. It also supports how we work with our
customers, suppliers and third parties.
Code of Conduct
Our Code of Conduct (CoC) seeks to ensure that we
act with integrity and accountability in all our business
dealings and relationships, in compliance with all
applicable laws, regulations and policies.
We expect everyone working at CCEP to adhere to the
CoC, which was updated in 2021. We also expect all third
parties who work on our behalf to act in an ethical manner
consistent with our CoC and to comply with our SGPs.
The CoC has been formally adopted in all our territories,
as well as our shared service centres in Bulgaria. All
employees are required to undergo CoC training, which
is part of the induction process for new employees.
Training on specific topics related to their roles is also
provided where needed. Our CoC specifically calls out
manager responsibilities and includes a matrix to help
with decision making and guidance on situations such
as bullying and harassment.
Preventing bribery and corruption
We aim to prevent all forms of bribery and corruption in
our business dealings. Our CoC sets out our principles
and standards to prevent bribery and corruption, including
conflicts of interest and the exchange of gifts and
entertainment.
Our Anti-bribery, Gifts and Entertainment Policy and our
Conflicts of Interest Policy apply to all employees. They
are required mandatory training for a targeted audience.
Raising concerns
Any employee who wishes to raise concerns about
wrongdoing at CCEP is encouraged to speak to a line
manager and/or raise a report through our Code
Resources which include our dedicated Speak Up
channels. When any employee raises a concern
through our Code Resources in relation to the CoC,
CCEP will act promptly and appropriately.
Code of Conduct reports by type
Ask a question
Avoiding conflicts of interest
Creating an inclusive and respectful workplace
Dealing fairly with customers, business partners
and suppliers
Delivering high quality products
Getting involved in political activities
Integrity with business records(B)
Integrity with our financial records
Other concerns – financial
Other concerns – non-financial
Preventing bribery and corruption
Protecting information
Respecting global and local laws and customs
Responsible communications
Using company assets responsibly – non-financial
Working in a safe and healthy environment
Grand total
Number of employees resigned or dismissed
Number of disciplined employees still
employed(C)
January – June 2021
July – December 2021
Europe
API
CCEP consolidated
Number
%(A)
Number
%(A)
Number
%(A)
–
6
36
2
5
–
9
–
–
2
–
6
6
2
13
13
100
–
3
17
1
2
–
4
–
–
1
–
3
3
1
6
6
47
18
20
–
5
9
–
–
–
–
–
–
–
36
–
–
–
23
27
100
–
1
2
–
–
–
–
–
–
–
8
–
–
–
5
6
22
–(D)
–(D)
1
2
25
3
–
1
1
1
16
2
–
1
60
40
–
–
2
1
1
1
1
21
12
100
–
–
3
1
1
1
2
32
18
150
50
92
(A) % versus overall reports.
(B) Not limited to our financial records. Business records include records such as payroll, timecards, travel and expense reports, job applications, quality reports,
field sales measures, customer agreements, and inventory and sales reports.
(C) Some cases involve more than one employee.
(D) No data available for API.
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 41
Strategic Report
Governance and Directors’ Report
Financial Statements
Other Information
Operating with integrity
CONTINUED
Respect for human rights
We consider human and workplace rights to be inviolable
and fundamental to our sustainability as a business.
We are committed to ensuring that everyone working
throughout our operations and within our supply chain
is treated with dignity and respect.
Our principles regarding human rights are set out in
CCEP’s Human Rights Policy, which is aligned with
accepted international standards such as the UN Guiding
Principles on Business and Human Rights. Further
information is provided in the SGPs and the PSA in
Europe and within the RSGs and SGPs in API. RSGs set
out the expectations towards our suppliers’ performance
related to business ethics, human and workplace rights,
the environment, and providing benefits to communities.
In API, 90% of our spend in 2021 was with suppliers
which comply with our RSGs.
We have a zero tolerance approach to modern slavery of
any kind, including forced labour, and any form of human
trafficking within our operations and supply chain. In 2017,
CCEP published our first Modern Slavery Statement and
continue to update this annually. Prior to the Acquisition,
CCL published its first Modern Slavery Statement in 2020.
In 2019, CCEP conducted its first human rights risk
assessment and identified nine key areas posing the
greatest risk to our people at work and across our value
chain. In 2019, CCL also conducted its first human rights
risk assessment and identified twelve key areas
comprising the same nine key areas identified by CCEP
in its human rights risk assessment plus three additional
key areas: (i) freedom from bribery and corruption; (ii)
cultural rights of minorities; and (iii) children and young
people’s protection from exploitation. These key areas are
our priority issues for Europe and API summarised in the
Human rights risk assessment table below.
In Europe, we initially prioritised compliance and action
on four of the key areas (i) health, safety and security;
(ii) equality and non-discrimination; (iii) working hours;
and (iv) migrant and temporary workers. In 2020, we also
developed action plans for: (i) freedom of association;
right to privacy; and data protection. We prioritised
additional measures to ensure the health and safety of
everyone working for CCEP during COVID-19 which
delayed us taking action on forced labour and wages.
We started a deep dive on these priority issues in 2021.
We manage our human rights obligations, risks, and the
actions required to mitigate those risks, by implementing
a strong governance framework. We recognise that all
our employees and supply partners have a role in
identifying and mitigating the risks of human rights across
our business. Employees and managers are empowered
to recognise and address human rights risks and issues
as they conduct their work and this extends to the
arrangements we agree with worker and trade unions,
membership of which we always foster.
Our human rights training was refreshed in 2021 to focus
on the process of human rights case management for
all procurement managers who interact with suppliers.
Following the Acquisition, we rolled out compliance
training packages across API on several key areas such
as CoC, human rights, anti-competitive practices,
preventing bribery and corruption, data protection,
whistle blower protection and human rights training
targeted at all employees.
Formoreinformationaboutourapproachtohumanrightsgoto
www.cocacolaep.com/sustainability/human-rights
Seeourmodernslaverystatementat
www.cocacolaep.com/sustainability/download-centre
Human rights risk assessment: priority issues for Europe and API
Specific to API
Migrant and
temporary
workers
Data protection
Right to privacy
Wages
Equality and
non-
discrimination
Freedom from
bribery and
corruption
Cultural rights
of minorities
Forced labour
Health, safety
and security
Freedom of
association
Working hours
Children and young
peoples protection
from exploitation
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 42
Strategic Report
Governance and Directors’ Report
Financial Statements
Other Information
Principal risks
Our Enterprise Risk Management
framework addresses the
principal risks we face as a
business and how we identify,
assess and manage them.
Our approach to risk
The Board has overall responsibility for risk management
at CCEP. The Board is closely involved in identifying risks
and the strategic response to them, and monitoring
management actions to achieve its strategic objectives.
To support this, risk management is firmly embedded
within our everyday business activities and culture. We
identify and assess risk with appropriate risk management
strategies, implemented at various levels of our business.
CCEP’s enterprise risk management (ERM) framework
looks at risks we face and how we can capitalise on
opportunities.
Since the creation of CCEP and more recently the
Acquisition, we have continually evolved our risk
management capabilities through seamless collaboration
across the business. We review and adapt our risk and
internal control systems to address the changing risk
environment and to adopt best practice.
Through our One Risk Office (a forum to exchange
information between all second and third line of defence
teams) we discuss and manage risks, responding
swiftly through established processes including incident
management, business continuity planning (BCP) and
risk transfer mechanisms (e.g. insurance).
During the ongoing COVID-19 pandemic, the risk
framework has allowed us to respond rapidly to a
continuously changing environment. We leverage our
learnings to strengthen our risk management framework
and better prepare for future challenges.
Assessing risk
To gain an understanding of the risks CCEP faces,
we assess risks top down and bottom up.
Our annual enterprise risk assessment (ERA) gives us
a top down strategic view of risk at the enterprise level.
During this assessment we carry out a risk survey with
our top business leaders, followed by interviews with the
Board, Audit Committee, and our Executive Leadership
Team (ELT) to identify current and emerging risks.
We periodically review and update our assessment
processes. In 2021, we received feedback from over
120 of our top leaders, including all Board members.
In 2021, we started to group our enterprise risks into
six themes to facilitate focused discussions among the
Board and respective risk owners: revenue; supply chain;
business continuity, IT and finance; license to operate
including ESG; economic and political; and the
franchise model.
To gain a bottom up view of risk, from an operational
perspective, we carry out risk assessments at a business
unit (BU), functional and project level. Each BU has
established local compliance and risk review processes,
undertaken by its local leadership team. The local
leadership teams review and update risk assessments,
ensuring that risk management is incorporated into daily
business routines. In 2021, we introduced a BU business
partner model, giving dedicated support to the BU from
a ERM team member, which is shown on page 43.
The day to day work is overseen by the management
committee, (Compliance and Risk Committee, chaired
by the Chief Compliance Officer). Every quarter, the
committee invites risk owners to share updates on key
risks and how they are being managed. In 2021, these
included updates on: COVID-19 and business continuity
management; API specific risks; key suppliers; training;
packaging; human rights; policy changes; data privacy;
cyber security; and sharing and discussing results of
targeted risk exercises such as assessments, scenarios
and simulations.
In 2021, following the Acquisition we started to integrate
API’s risk management into our existing risk management
framework by updating our enterprise risks and
performing API country risk assessments. We continued
to include important key areas such as employee health
and safety, food safety, fraud, legal and tax. These
functional risk assessments are integrated into our annual
business planning routine. We also completed deep dives
into new legislation and water scarcity.
Targeted risk assessment and management projects
for topical issues within each BU, such as Brexit and
COVID-19, were also completed through risk deep dives.
Measuring and managing risk
Once risks are identified, we analyse them to understand
the likelihood of the risk happening and its potential
impact. We consider how we manage risks, putting action
plans in place and reviewing impact scales annually.
In 2021, we reassessed these with a focus on financial
impact following the Acquisition, giving each BU local
financial impact scales to assess local risks. In addition to
likelihood and impact, our risk assessment methodology
considers velocity, to understand the speed at which a
materialising risk may impact our business.
Since the implementation of risk appetite statements in
2020, we have used this tool to support business decision
making aligned with our strategic objectives. We compare
the as-is risk profile (outcome of ERA) during quarter one
with our current risk appetite statements and to-be risk
profile. Risk appetite statements are reviewed annually
by the Compliance and Risk Committee and the Audit
Committee with actions defined as necessary.
We will adapt the risk appetite statements for operations
by defining key risk indicators for each statement with the
risk owners. The management of the key risk indicators
will be done via our risk and compliance governance tool,
Riskonnect. Adverse trends and breaches of thresholds
will be reported to the Compliance and Risk Committee
following a defined escalation protocol.
In 2021, we conducted further operational scenario
analysis and planning to understand how key risks
such as water scarcity impact us (for example exercises
in Belgium and Spain).
We are exploring opportunities to improve our strategic
scenario planning capabilities to support strategic decision
making, such as for climate and cyber risk scenarios.
We are looking to partner with external providers to apply
state of the art scenario planning tools and methodologies.
To improve our capability to identify emerging risks earlier,
we have partnered with an external provider to use an
artificial intelligence supported risk sensing tool to extract
relevant information and trends from all available external
and internal sources.
We manage risk through the framework, our processes
and policies. Our annual policy review ensures the
policies and related policy guidance within CCEP
are valid. Changes within the documents have been
approved by the Compliance and Risk Committee.
New policies, for example, the Travel Security Policy,
the Data Management and Retention Policy and the
Anti-facilitation of Tax Evasion Policy, have been
approved by the Board and the Compliance and Risk
Committee. In 2021, an analysis of the CCEP landscape
showed that all CCEP policies are related to a risk.
The following pages set out a summary of our principal
risks based on the findings of our most recent ERA.
The Board has carried out a robust assessment of these
principal risks. This summary is not intended to include
all risks that could impact our business and the risks
are presented in no particular order. In this year’s report,
we have showed how each principal risk links to and
underpins the relevant aspect of our strategy.
Beyond principal risks, CCEP faces other operational
risks which are managed as part of our daily routines,
such as employee health, safety and wellbeing, fraud
and human rights.
Readaboutourriskfactorsonpages 195–202
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 43
Strategic Report
Governance and Directors’ Report
Financial Statements
Other Information
Principal risks
CONTINUED
How we embed Enterprise Risk Management (ERM) within our business
(Business Unit Risk Model)
Principal risk map(A)
MoreinformationonOuroperationscanbefoundonpages 10–11
Risk
assessment
Deep dives
Scenario
planning
Annual
Business Plan/
Long Range Plan
integration
Business Unit (BU)
comparisons
Risk
governance
and culture
Risk identification,
assessment and
understanding
Risk informed decision making
and best practice sharing
Local risk profiles
BU VP legal team risk
champions
Dedicated ERM
support via Single
Point of Contact
(SPOC)
One Risk Office
platform support
BU Leadership
Team meeting
8
9
2
6
4
5
10
1
7
3
Major
Significant
Moderate
Minor
)
t
fi
o
r
p
g
n
i
t
a
r
e
p
o
(
t
c
a
p
m
I
11
12
Likelihood (over next 5 years)
Unlikely
Possible
Likely
Highly
likely
Principal risks
1 Geodemographic
2 Packaging
3
Cyber and social engineering attacks
and IT infrastructure
4 Economic and political conditions
5 Market
6 Legal, regulatory and tax
7 Climate change and water
8 Perceived health impact of our
beverages and ingredients, and
changing consumer buying trends
9 Competitiveness, business
transformation and integration
10 People and wellbeing
11 Relationships with TCCC
and other franchisors
12 Product quality
Velocity scale: (speed to impact)
Very rapid (Less than one month)
Rapid (Less than one year)
Moderate (One to three years)
Slow (Greater than three years)
External
External opportunities and risks, such
as macroeconomic, socio/political and
competition risks, that could fundamentally
impact business strategy. Typically
managed by teams that respond to
significant shifts in government relations,
consumer or supplier behaviour.
Strategic
Internal opportunities and risks that
could impede the achievement of strategic
objectives and targets, such as poor
resource allocation or decision making.
Typically managed by senior leaders
responsible for delivering strategic
initiatives set by the Board.
Operational
Opportunities and risks that could impact
day to day operations in areas such as
production, logistics or sales. Managed
across all business areas through controls
embedded in processes and procedures.
Extreme events
Opportunities and risks that would have an
extreme impact on the business (such as
war, cyber attack, global financial crisis,
natural disasters, etc.). These can
materialise in any part of the business and
may coincide with other risks in particular
scenarios. Note: extreme events could
occur in any principal risk and are,
therefore, not allocated to any single
specific category.
(A) Changes in risk are as against the Principal
risks section of CCEP’s Integrated Report/
Annual Report on Form 20-F for the year
ended 31 December 2020, as updated
and supplemented in CCEP’s Results for
the six months ended 2 July 2021 and
COVID-19 update.
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Principal risks
CONTINUED
Table 1(A)
The table below shows our principal risks
Principal risk
Definition and impact
1
Geodemographic
Our business is vulnerable to a range of risks that may materialise and cause disruption. These include threats
and risks such as impacts of war, physical attacks (e.g. terrorism), cyber terrorism and attacks on third parties, and
supplier failure as well as natural hazards such as fire, flood, severe weather and pandemics. Working with teams
across the business, we develop business continuity plans and resilience arrangements to ensure the delivery of
our products and services no matter what the cause of disruption. This is to protect our people, our environment,
our reputation and our overall financial condition. In some cases, such as the current COVID-19 pandemic, health,
economic and legal effects could have a direct or indirect impact on our ability to operate.
2
Packaging
Due to our concerns, and those of our stakeholders, about the environmental impacts of litter and GHG emissions,
our packaging (especially single use plastic packaging) is under increasing scrutiny from regulators, consumers,
customers, and NGOs. As a result, we may have to change our packaging strategy and mix over both the short
and long term. This could result in a reduction in the use of single use plastic packaging and the introduction of
new pack formats such as dispensed and reusable packaging, and we may be liable for increased costs related
to the design, collection, recycling and littering of our packaging. We may be unable to respond in a cost effective
manner and our reputation may be adversely impacted.
(A) Changes in risk are as against the Principal risks section of CCEP’s Integrated Report/Annual Report on Form 20-F for the year ended 31 December 2020,
as updated and supplemented in CCEP’s Results for the six months ended 2 July 2021 and COVID-19 update.
Link to strategy:
Accelerate competitiveness
Future ready culture
Digital future
Green future
Key mitigation
Change Link to
strategy
– Continually updating our response to the situation and our people’s needs
– Customers: working closely with suppliers, partners and TCCC to ensure we best serve our customers and
respond to their needs
– Communities: working closely with TCCC to support our communities
– Governance: strong frameworks, business continuity plans, incident management teams, strategic business
continuity scenario testing, risk reassessments used in business planning, increased frequency of reviews
with country leadership teams, Board and TCCC incorporating learnings from the Coca-Cola system
– Effective management of liquidity, costs and discretionary spend
– Operational, technology and strategic resilience towers developed as part of our newly created business
continuity and resilience strategy to enable further resilience and risk mitigation for CCEP
– Training and awareness to build BCR capabilities throughout CCEP to improve buy in and skills when it comes
to preparing for and responding to incidents
– Business impact analysis (BIA) to analyse and identify critical people (roles), property, technology, equipment
and suppliers (value chain) across CCEP and their associated maximum acceptable outages, recovery time
objectives and recovery point objectives
– Scenario planning exercise with stakeholders across facilities and functions to determine scenarios that could
lead to the unavailability of critical dependencies identified in the BIA and the associated impacts if the
scenarios were to occur
– BCP development with colleagues across the business to mitigate risks identified during the BIA, scenario
planning and risk assessment and having them available to use in following waves
– Risk assessments to identify the likelihood and impact of identified scenarios occurring, enabling BCPs to be
developed in a targeted, meaningful way
– Testing and exercising to validate BCPs are effective, giving teams capabilities to respond to incidents that may
occur, through table top and live simulated exercises with stakeholders across CCEP, within sites and functions
– Continued sustainability action plan focused on packaging, including our commitments to:
– Ensure that 100% of our primary packaging is recyclable or reusable
– Drive higher collection rates, aiming to ensure that 100% of our packaging is collected for reuse or recycling
– Ensure that by 2025 at least half of the material we use for our PET bottles comes from recycled plastic,
aspiring to achieve 100% by 2030
– Invest in rPET infrastructure to help secure access to recycled material where needed
– Work with TCCC to explore alternative sources of rPET and innovative new packaging materials
– Work with TCCC to encourage consumers to recycle their packaging using existing collection infrastructure
– Cross functional SPO with a dedicated focus on packaging collection and to ensure all sustainable packaging
strategies are implemented on time
– Support for well designed DRS across our markets as a route to 100% collection and increased availability of rPET
– Support the establishment and management of Packaging Recovery Organisations (PROs) to deliver 100%
collection in countries where no formal legislated collection structure exists for beverage packaging
– Work to expand delivery mechanisms that do not rely on single use packaging, for example reusable packaging
and dispensed delivery
– Investment in depolymerisation recycling technology
– We continue to develop the business models for packageless solutions (such as Freestyle) to provide an
alternative offering for customers who do not want to use packaging
– We also continue to develop the business models for reusable packaging to provide an alternative offering for
customers who want fully circular alternatives to single use packaging
– Increase use of recycled content in films
– Moving from hard to recycle plastic shrink to sustainable board for multi packs
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Principal risks
CONTINUED
Principal risk
Definition and impact
Key mitigation
Change Link to
strategy
3
Cyber and social
engineering
attacks and IT
infrastructure
4
Economic and
political conditions
5
Market
6
Legal, regulatory
and tax
We rely on a complex IT landscape, using both internal and external systems, including some systems that
are outside our direct control where employees work from home. These systems are potentially vulnerable to
adversarial and accidental security and cyber threats, and user behaviour. This threat profile is dynamically
changing, including as a result of the COVID-19 pandemic, as potential attackers’ skills and tools advance. This
exposes us to the risk of unauthorised data access, compromised data accuracy and confidentiality, the loss of
system operation or fraud. As a result, we could experience disruption to operations, financial loss, regulatory
intervention, or damage to our reputation.
Our industry is sensitive to economic conditions such as commodity and currency price volatility, short-term
interest rate volatility and inflation changes and expectations, political instability, low consumer confidence,
lack of liquidity and funding resources, widening of credit risk premiums, unemployment and the impact of war,
the widespread outbreak of infectious disease such as COVID-19. This exposes us to the risk of an adverse
impact on CCEP and our consumers, driving a reduction of spend within our category or a change in consumption
channels and packs. As a result, we could experience reduced demand for our products, fail to meet our growth
priorities and our reputation could be adversely impacted. Adverse economic conditions could also lead to
increased volatility, inflation, energy and commodity cost, customer and supplier delinquencies and bankruptcies,
while restrictions on the movement of goods in response to economic, political or other conditions, such as
COVID-19, could affect our supply chain.
Our success in the market depends on a number of factors. These include actions taken by our competitors, route
to market, our ability to build strong customer relationships and create value together (which could be affected by
customer consolidation, buying groups, and the changing customer landscape) and government actions, including
those introduced as a result of COVID-19 such as social distancing, the forced closure of some of our customer
channels, restricted tourism and restrictions on large gatherings. This exposes us to the risk that market forces
may limit our ability to execute our business plans effectively. As a result, it may be more challenging to expand
margins, increase market share, or negotiate with customers effectively, and COVID-19 may also further
adversely impact the market in previously unforeseen ways.
Our daily operations are subject to a broad range of regulations at EU and national level. These include
regulations covering manufacturing, the use of certain ingredients, packaging, labelling requirements, and the
distribution and sale of our products. This exposes us to the risk of legal, regulatory or tax changes that may
adversely impact our business. As a result, we could face new or higher taxes, higher labour and other costs,
stricter sales and marketing controls, or punitive or other actions from regulators or legislative bodies that
negatively impact our financial results, business performance or licence to operate. COVID-19 has resulted in
both short-term and long-term changes to legislation and regulation. It may also lead to future increases in taxes
to finance the cost of government responses to COVID-19. In addition to the changes that took immediate effect
from 11pm GMT on 31 December 2020, we expect Brexit could, over time, lead to increased diversity of regulation
and consequent costs of compliance including inability to or difficulties in standardising product and process
between the UK and CCEP’s other markets.
– Proactive monitoring of cyber threats and implementing preventive measures
– Business awareness and training on information security and data privacy
– Business continuity and disaster recovery programmes
– A programme to identify and resolve vulnerabilities
– Third party risk assessments
– Corporate security business intelligence
– Appropriate investment in updating systems
– Hardware lifecycle process in place
– Regular internal and external testing of our security controls (red teaming, pentesting)
– Global Security Operations Centre, operated 24/7
– Executive Team and Board of Directors are actively engaged in the cyber strategy process
– Diversified product portfolio and the geographic diversity of our operations assist in mitigating our exposure to
any localised economic risk
– Our flexible business model allows us to adapt our portfolio to suit our customers’ changing needs during
economic downturns
– We regularly review our business results and cash flows and, where necessary, rebalance capital investments
– Macro economic and political developments continue to be closely monitored to ensure that business is
prepared to manage emerging situations
– Monitoring of societal developments
– We have a very robust and forward-looking hedging policy for managing the financial risks like Fx, commodity
and interest rate risks
– Shopper insights and price elasticity assessments
– Pack and product innovation
– Promotional strategy
– Commercial policy
– Collaborative category planning with customers
– Growth centric customer investment policies
– Business development plans aligned with our customers
– Diversification of portfolio and customer base
– Realistic budgeting routines and targets
– Investment in key account development and category planning
– Continuous evaluation and updating of mitigation plans
– Responded to COVID-19 by developing and investing in routes to market, for example, online channel, so our
products remain available to consumers
– Continuous monitoring of new or changing regulations and appropriate implementation
– Dialogue with government representatives and input to public consultations on new or changing regulations
– Effective compliance programmes and training for employees
– Measures set out elsewhere in this table in relation to legal, regulatory and tax changes with respect to any of
the other principal risks, and in particular in relation to packaging, perceived health impact of our beverages and
ingredients, and changing consumer preferences
– Increasing recycled content level in specific countries to mitigate tax impact
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Principal risks
CONTINUED
Principal risk
Definition and impact
Key mitigation
Change Link to
strategy
7
Climate change
and water
Political and scientific consensus indicates that increased concentrations of carbon dioxide and other GHGs are
causing climate change and exacerbating water scarcity. Such GHG emissions occur across our entire value
chain including our production facilities, cold drink equipment and transportation. GHG emissions also occur as
a result of the packaging we use and ingredients we rely on. Our ingredients and production facilities also rely
heavily on the availability of water. This exposes us to the risk of negative impacts related to our ability to produce
or distribute our products, or the availability and price of agricultural ingredients and raw materials as a result of
increased water scarcity. Failure to address these risks may cause damage to our corporate reputation or investor
confidence, a reduction in consumer acceptance of our products and potential disruption to our operations.
We make and distribute products containing sugar and alternative sweeteners. Healthy lifestyle campaigns,
increased media scrutiny and social media have led to an increasingly negative perception of these ingredients
among consumers. This exposes us to the risk that we will be unable to evolve our product and packaging
choices quickly enough to satisfy changes in consumer preferences. We will also face new pressure from the
EU Commission with the Farm to Fork Strategy, at the heart of the European Green Deal, aiming to make food
systems fair, healthy and environmentally friendly. As a result, we could experience sustained decline in sales
volume, which could impact our financial results and business performance.
8
Perceived health
impact of our
beverages and
ingredients, and
changing consumer
buying trends
– Set science based carbon reduction targets for our core business operations and our value chain
– Carbon reduction plans for our production facilities, distribution and CDE
– Supplier carbon footprint reduction programme launched in support of CCEP’s 2040 net zero ambition with
focus on suppliers setting SBTi targets and using 100% renewable electricity by 2023
– Transition to 100% renewable electricity across our own operation
– External policy leadership and advocacy to support a transition to a low-carbon economy
– Life cycle analysis to assess carbon footprint of packaging formats
– Use of recycled materials for our packaging, which have a lower carbon footprint
– SVAs to protect future sustainability of local water sources and FAWVA and water management plans
– Supplier engagement on carbon reduction and sustainable water use
– Assessment on climate-related risks and future climate scenario planning
– Comprehensive disclosure of GHG emissions across our value chain in line with GHG Protocol
– Water scarcity simulation test and exercise of IMTs to ensure an appropriate response to water related incidents
– Reducing the sugar content of our soft drinks, through product and pack innovation and reformulation managing
our product mix to increase low and no calorie products
– Making it easier for consumers to cut down on sugar by providing straightforward product information and
smaller pack sizes
– EU wide soft drink industry calorie reduction commitment with the Union of European Soft Drinks Associations
(UNESDA)
– Adopting calorie and sugar reduction commitments at country level
– Dialogue with government representatives, NGOs, local communities and customers
– Employee communication and education
– Responsible sales and marketing codes
– Proactive introduction of colour coded front of pack guideline daily amount labelling as a fact based and
non-discriminatory way of informing consumers in an understandable way
– Encourage the European Commission to evaluate and develop EU harmonised guidance for nutritional labelling,
to address potential unfair targeting of the sparkling soft drinks industry
– Work with International Sweeteners Association to promote and protect the reputation of alternative sweeteners
and, through UNESDA, working with the European food safety authority on their opinions that will inform EU and
national government action
9
Competitiveness,
business transformation
and integration
We are continuing our strategy of continuous improvement, which should enable us to remain competitive in the
future. This includes technology transformation, supporting home working, improvements in our supply chain and
in the way we work with our partners and franchisors, and our Acquisition of CCL and subsequent integration
activities. This exposes us to the risk of ineffective coordination between BUs and central functions, change fatigue
among our people and social unrest. As a result, we may not create the expected value from these initiatives or
execute our business plans effectively. We may also experience damage to our reputation, a decline in our share
price, industrial action and disruption of operations.
– Regular competitiveness reviews ensuring effective steering, high visibility and quick decision making
– Dedicated programme management office and effective project management methodology
– Continuation of strong governance routines
– Regular ELT and Board reviews and approvals of progress and issue resolution
– Analysis and review of acquisition related activities such as integration and business performance risk
indicators and capital allocation risk reviews
– Building a performant and resilient workforce with priority focus on health and safety and mental wellbeing
initiatives especially in the front lines roles
SeePeopleandwellbeingprincipalriskforfurtherdetailsonpages 200–201
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Principal risks
CONTINUED
Principal risk
Definition and impact
Key mitigation
Change Link to
strategy
10
People and
wellbeing
The advent of the COVID-19 pandemic is likely to result in a higher degree of mental health issues and higher
absence rates for employees. There is growing awareness of stress related illness due to more demand and
responsibility on employees, especially where restructuring takes place, which exposes us to the risk of long-term
absence and a loss of production.
Our response to these topics, the change in working conditions and the upcoming importance of “future of work”
and “working flexibly” will affect the perception of CCEP as an employer and our ability to attract, retain and
motivate existing and future employees. This exposes us to the risk of not having the right talent with the required
technical skillset. As a result, we could fail to achieve our strategic objectives and could experience a decline in
employee engagement, industrial action, suffer from reputational damage or litigation.
11
Relationships
with TCCC and
other franchisors
12
Product quality
We conduct our business primarily under agreements with TCCC and other franchisors. This exposes us to the
risk of misaligned incentives or strategy, particularly during periods of low category growth or crisis, such as
COVID-19. As a result, TCCC or other franchisors could act adversely to our interests with respect to our business
relationship.
We produce a wide range of products, all of which must adhere to strict food safety requirements. This exposes us
to the risk of failing to meet, or being perceived as failing to meet, the necessary standards, which could lead to
compromised product quality. As a result, our brand reputation could be damaged and our products could become
less popular with consumers.
– CCEP CoC
– CCEP wide wellbeing network
– Regular communication
– External EAP support and internal wellbeing (mental health) first aiders
– Flexible working
– Working from home
– Safety measures
– Appropriate incentivisation
– Talent reviews
– Tools for employees to take ownership of careers
– People related training and reskilling, risk assessments, action plans and compliance
– Manager and employee wellbeing training
– Wellbeing material available to managers and employees via CCEP platforms to support our employees
– Human Rights Policy
– Clear agreements govern the relationships
– Incidence pricing agreement with TCCC
– Aligned long range planning and annual business planning processes
– Ongoing pan-European and local routines between CCEP and franchise partners
– Increased frequency of meetings and maintenance of positive relationships at all levels
– Regular contact and best practice sharing across the Coca-Cola system
– Improve visibility and ways of working with TCCC
– TCCC standards and audits
– Hygiene regimes at production facilities
– Total quality management programme
– Robust management systems
– ISO certification
– Internal governance audits
– Quality monitoring programme
– Customer and consumer monitoring and feedback
– Incident management and crisis resolution
– Every CCEP production facility has:
Internal control procedures and risk management
CCEP’s internal controls are designed to manage rather than eliminate risk, and aim to provide good but not absolute
assurance against misstatement.
The Board has overall responsibility for the Company’s system of internal controls and for reviewing its adequacy
and effectiveness. To discharge its responsibility in a manner that complies with law and regulation and promotes
effective and efficient operation, the Board has established clear operating procedures, lines of responsibility and
delegated authority.
The Audit Committee has specific responsibility for reviewing the internal control policies and procedures associated
with the identification, assessment and reporting of risks to check they are adequate and effective.
– a hazard analysis critical control points assessment and mitigation plan in place
– a quality monitoring plan based on risk and requirements
– a food fraud vulnerability assessment and mitigation plan based on risk and requirements
– a food defense threat assessment and mitigation plan based on risk and requirements
Our internal control processes include:
– Board approval for significant projects, transaction and corporate actions
– Either senior management or Board approval for all major expenditure at the appropriate stages of each transaction
– Regular reporting covering both technical progress and our financial affairs
– Board review, identification, evaluation and management of significant risks
Readmoreaboutourapproachtointernalcontrol andriskmanagementintheauditcommitteereport on pages 86–91
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Viability statement
In accordance with provision
31 of the 2018 UK Corporate
Governance Code (the UKCGC),
the Directors have assessed
the prospects for the Group.
The Directors have made this
assessment over a period of
three years, which corresponds
to the Group’s planning cycle.
The assessment considered the Group’s prospects
related to revenue, operating profit, EBITDA and free
cash flow. The Directors considered the maturity dates
for the Group’s debt obligations and its access to public
and private debt markets, including its committed multi
currency credit facility. The Directors also carried out a
robust review and analysis of the principal risks facing
the Group, including those risks that could materially
and adversely affect the Group’s business model, future
performance, solvency and liquidity.
Stress testing was performed on a number of scenarios,
including different estimates for operating income and
free cash flow. Among other considerations, these
scenarios incorporated the potential downside impact
of the Group’s principal risks, including those related to:
– Continued or new COVID-19 related restrictions and
the impact on the AFH channel
– Legal and regulatory intervention, including in relation
to plastic packaging
– Risk of cyber and social engineering attacks
– Adverse changes in relationships with large customers
– Severe weather events
Based on the Group’s current financial position, stable
cash generation and access to liquidity, the Directors
concluded that the Group is well positioned to manage
principal risks and potential downside impacts of such
risks materialising, to ensure solvency and liquidity over
the assessment period.
From a qualitative perspective, the Directors also took
into consideration the Group’s past experience of
managing through adverse conditions and the Group’s
strong relationship and position within the Coca-Cola
system. The Directors considered the extreme measures
the Group could take in the event of a crisis, including
decreasing or stopping non-essential capital investment,
decreasing or stopping shareholder dividends,
renegotiating commercial terms with customers and
suppliers or selling non-essential assets.
Based upon the assessment performed, the Directors
confirm that they have a reasonable expectation the
Group will be able to continue in operation and meet
all liabilities as they fall due over the three year period
covered by this assessment.
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Other Information
Non-financial information statement
This Integrated Report contains a combination of financial and
non-financial reporting throughout. As required by sections 414CA
and 414CB of the Companies Act 2006 (the Companies Act), the
following non-financial information can be found in the pages of
this Strategic Report stated in the table below. These pages contain,
where appropriate, details of our policies and approach to each matter.
Non-financial information
Page(s)
Environmental matters
Employee matters
Social matters
Human rights
Action on climate on pages 23–26, Action on packaging on pages 27–28
and Action on water on pages 33–34
Our stakeholders on pages 12–14 and Our people on pages 37–39
Action on society on pages 29–30
Operating with integrity on page 41
Anti-corruption and anti-bribery matters
Operating with integrity on pages 40–41
Our business model
Risk and principal risks
What we do and how we do it on page 9
Principal risks on pages 42–47 and Risk factors on pages 195–202
Non-financial performance indicators
Performance indicators on page 3
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Business and financial review
Our business
CCEP is a leading consumer goods group in Western Europe and the Asia Pacific region, making, selling and distributing
an extensive range of primarily non-alcoholic ready to drink beverages. 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.
On 10 May 2021, Coca-Cola European Partners plc (Legacy CCEP) acquired Coca-Cola Amatil Limited (referred to as
CCL pre acquisition, and API post acquisition), and subsequently changed its name to Coca-Cola Europacific Partners
plc (the Company, or Parent Company). CCL was one of the largest bottlers and distributors of ready to drink non-
alcoholic and alcoholic beverages and coffee in the Asia Pacific region and was the authorised bottler and distributor
of The Coca-Cola Company’s (TCCC) beverage brands in Australia, New Zealand and Pacific Islands, Indonesia
and Papua New Guinea. In November 2020, CCEP and CCL entered into a binding Scheme Implementation Deed
(the Scheme) for the acquisition of 69.2% of the entire existing issued share capital of CCL, which was held by
shareholders other than TCCC. CCEP also entered into a Co-operation and Sale Deed with TCCC with respect to the
acquisition of TCCC’s 30.8% interest in CCL (the Co-operation agreement), conditional upon the implementation of the
Scheme. During the first half of 2021, the Company acquired 100% of the issued and outstanding shares of CCL.
Shareholders other than TCCC received A$13.32 per share in cash, totalling cash consideration paid of A$6,673 million.
TCCC received A$9.39 and A$10.57 per share for 10.8% and 20%, respectively, of the remaining CCL shares held by
TCCC. Cash consideration paid to TCCC was A$893 million and USD1,046 million. The fair value of the consideration
transferred at the acquisition date was €5,752 million.
The Acquisition has allowed us to bring together two great companies. In doing so, we’ll be able to go further and faster
in pursuing our shared vision for growth, through our consumer led portfolio, collaborative customer relationships and
innovation to meet changing consumer needs.
Note regarding the presentation of pro forma financial information and alternative
performance measures
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 consolidated 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.
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CONTINUED
‘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.
Unless otherwise stated, percent amounts are rounded to the nearest 0.5%.
Key financial measures(A)
Reported to Pro forma comparable
Unaudited, Fx impact calculated by
recasting current year results at prior
year rates
Revenue
Cost of sales
Operating expenses
Operating profit
Profit after taxes
Year ended 31 December 2021
€ millions
% change vs prior year
As
reported
Pro forma
comparable
13,763
14,819
8,677
3,570
1,516
988
9,222
3,711
1,886
1,369
Pro
forma Fx
impact
As
reported
Pro forma
comparable
Pro
forma Fx
impact
Pro forma
comparable
Fx neutral
240
149
54
37
27
30%
26.5%
22.0%
86.5%
98.5%
9.5%
8.0%
6.0%
26.0%
36.0%
2.0%
2.0%
1.5%
2.5%
2.5%
7.5%
6.0%
4.5%
23.5%
33.5%
(A) See Supplementary financial information – Income Statement section for reconciliation of reported to comparable and reported to pro forma comparable results.
Financial highlights
During 2021, we successfully acquired Coca-Cola Amatil, while delivering our growth objectives for revenue, profit, and
diluted earnings per share. As we worked to integrate our business in 2021, solid top line recovery, value share gains,
operating margin expansion and strong free cash flow generation demonstrated the resilience of our business in a
challenging environment. These results were driven by our focus on core brands, in-market execution and effective
revenue growth management initiatives. Additionally, 2021 was marked by a strong recovery following the impact of
the pandemic on our business in 2020. We grew volume and revenue per unit case, benefitted from ongoing efficiency
programmes and continued to focus efforts on discretionary spend optimisation, successfully offsetting higher
concentrate costs, commodity inflation and adverse cost of sales mix. This enabled us to continue to return cash to
shareholders, as demonstrated by the dividend paid in December. The net impact of the Acquisition on our key financial
measures can be summarised as follows:
– Reported revenue totalled €13.8 billion, up 30.0% on a reported basis and 7.5% on a pro forma comparable and
Fx neutral basis
– Volume increased 23.0% on a reported basis. Pro forma comparable volume increased 4.5% and pro forma
comparable and Fx neutral revenue per unit case increased 3.0%
– Reported operating profit was €1.5 billion, up 86.5%. Pro forma comparable operating profit was €1.9 billion,
up 26.0%, or up 23.5% on a pro forma comparable and Fx neutral basis
– Reported diluted earnings per share were €2.15 or €2.83, up 57%, on a comparable basis(A)
– Net cash flows from operating activities were €2.1 billion. Full year free cash flow(B) was €1.5 billion
(A) See Supplementary financial information – Income Statement section for reconciliation of reported to comparable results.
(B) See Liquidity and capital management section for a reconciliation between net cash flows from operating activities and free cash flow.
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Operational review
Revenue
Revenue totalled €13.8 billion, up 30% versus prior year on a reported basis, and 28.0% on an Fx neutral basis, driven by
the inclusion of API in 2021. Pro forma comparable revenue was €14.8 billion, up 9.5% vs prior year, or up 7.5% on a pro
forma comparable and Fx neutral basis. Revenue per unit case increased by 3.0% in 2021, on a pro forma comparable
and Fx neutral basis. Volume increased 4.5% on a pro forma comparable basis.
Revenue(A)
In millions of €
Revenue
API
Total CCEP
Year ended 31 December 2021
As
reported
Pro forma
comparable
Reported %
change
Fx neutral
% change
Pro forma
comparable
% change
Pro forma
Fx neutral
% change
11,584
2,179
13,763
11,584
3,235
14,819
9.0%
n/a
8.0%
n/a
30.0%
28.0%
9.0%
10.5%
9.5%
8.0%
7.0%
7.5%
(A) See Supplementary financial information – Income Statement section for reconciliation of reported to comparable and reported to pro forma comparable results.
Comparable volume – selling day shift
In millions of unit cases, prior period volume recast using current
year selling days(A)
Year ended
31 December 2021
31 December 2020
% change
Pro forma comparable volume by category
Sparkling
Coca-Cola™
Flavours, mixers and energy
Stills
Hydration
RTD tea, RTD coffee, juices and other(A)
Year ended
31 December 2021
% of total
31 December 2020
% of total
% change
84.5%
59.0%
25.5%
15.5%
7.5%
8.0%
84.5%
60.0%
24.5%
15.5%
8.0%
7.5%
4.5%
3.5%
7.0%
5.0%
–
10.0%
4.5%
Total
100.0%
100.0%
(A) RTD refers to Ready to Drink; Other includes Alcohol and Coffee.
On a brand category basis in 2021, Coca-Cola trademark volume increased by 3.5% versus 2020 on a pro forma
comparable basis. This increase reflected the growth in Coca-Cola Original Taste and Lights driven by the continued
rebound of the away from home channel and strong performance of Coca-Cola Zero Sugar, with volumes ahead of both
2020 (up 8.5%) and 2019 (up 11.5%) supported by our new look, new taste launch.
Volume
Impact of selling day shift
Comparable volume – selling day shift adjusted
Pro forma impact API
Pro forma comparable volume
2,804
n/a
2,804
215
3,019
2,277
(7)
2,270
616
2,886
23%
n/a
23.5%
n/a
4.5%
Flavours, mixers and energy volume increased by 7.0% versus 2020 on a pro forma comparable basis. Energy volumes
were up 21.5% versus 2020, or 35.5% versus 2019, reflecting solid distribution in both channels and strong innovation.
Schweppes Mixers volume increased by 1.5% versus 2019. Fanta grew volume driven by the continued rebound of the
away from home channel.
Hydration volume was flat versus 2020 on a pro forma comparable basis. This reflects the delisting of some PET waters
in Germany, offset by the growth of Sports category brands in API.
(A) A unit case equals approximately 5.678 litres or 24 eight ounce servings, a typical volume measure used in our industry.
Volumes were up 23.0% on a reported basis and 23.5% on a comparable basis, driven by the inclusion of API in 2021.
Pro forma comparable volume was up 4.5% versus 2020. This reflects the reopening of the away from home channel
and increased consumer mobility given the easing of restrictions across most of our markets. The most significant impact
was in the away from home channel where pro forma comparable volumes increased by 10.0% compared to 2020. We
experienced improvement in volumes reflecting fewer restrictions and the recovery of immediate consumption packages,
although the Omicron variant slowed the recovery during the fourth quarter of 2021 with restrictions reintroduced in some
markets. Trading in the home channel was stable throughout the year with full year pro forma comparable volume growth
of 1.5%, driven by growth in the online channel as well our continued revenue growth management initiatives. From a
package perspective, immediate consumption grew across both channels in Europe with volumes up 17.0%. The volume
of future consumption packs such as large PET and multipack cans grew during the year, particularly in the home channel.
RTD teas, RTD coffees, juices and other drinks volume increased by 10.0% versus 2020 on a pro forma comparable
basis. Juice drinks grew volume reflecting the continued rebound of the away from home channel. Capri-Sun volume
increased by 16.5% versus 2019, reflecting solid growth in France and Great Britain. Fuze Tea volumes were up 9.5%
versus 2019 and the brand continues to grow value share in Europe. Alcohol delivered strong growth in Australia driven
by spirits and ready to drink beverages, with volumes up 5.0% versus 2019.
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Revenue by segment: Europe
Revenue Europe
In millions of €, except per case data which is calculated prior to
rounding. Fx impact calculated by recasting current year results at
prior year rates
As reported
Adjust: Impact of Fx charges
Fx neutral
Revenue per unit case
Year ended
31 December 2021
31 December 2020
% change
11,584
(132)
11,452
4.81
10,606
n/a
10,606
4.66
9.0%
–
8.0%
3.5%
Revenue in Europe totalled €11.6 billion, up 9.0% versus prior year on a reported basis, and 8.0% on an Fx neutral basis.
Revenue per unit case in Europe increased by 3.5% in 2021, on a comparable and Fx neutral basis, reflecting positive
package and channel mix driven by the improvement in away from home volume and growth in immediate consumptions
packages, alongside favourable price and brand mix.
Revenue by geography
In millions of €
Great Britain
Germany
Iberia(A)
France(B)
Belgium/Luxembourg
Netherlands
Norway
Sweden
Iceland
Total Europe
(A) Iberia refers to Spain, Portugal and Andorra.
(B) France refers to continental France and Monaco.
Year ended 31 December 2021
As reported
Reported
% change
Fx neutral
% change
2,613
2,335
2,495
1,813
926
557
391
375
79
11,584
18.5%
3.0%
15.0%
6.0%
4.0%
5.5%
(7.5)%
11.5%
13.0%
9.0%
14.0%
3.0%
15.0%
6.0%
4.0%
5.5%
(12.5)%
7.5%
10.0%
8.0%
Reported revenue in Great Britain was up 18.5% versus 2020. Foreign exchange translation positively impacted
revenue growth by 4.5%. The additional increase in revenue was mainly driven by the continued recovery of the away
from home channel, as well as increased domestic tourism and cycling soft comparables. The home channel showed
solid performance versus 2020. Coca-Cola trademark, Fanta and Monster grew volumes ahead of 2019. Additionally,
revenue per case growth was driven by favorable underlying price, alongside positive mix led by the growth in immediate
consumption packages, including growth of 39.5% in small glass and 25.0% small PET.
Reported revenue in Germany was up 3.0% versus 2020. Volume was impacted mainly by adverse weather in the third
quarter and varying levels of restrictions within HoReCa(A) throughout the year, slowing the overall recovery of the away
from home channel. The home channel saw continued growth versus prior year. Coca-Cola Zero Sugar and Fuze Tea
grew volume, both above 2019 levels. Additionally, revenue per case growth was driven by positive brand mix from
Monster and the delisting of some PET waters, as well as favourable underlying price and positive package mix.
On a territory basis in 2021, reported revenue in Iberia was up 15.0% versus 2020. This was mainly driven by an increase
in volume due to fewer restrictions and the cycling of soft comparables. Performance saw a strong rebound in the away
from home channel, although the Omicron variant slowed the recovery in the fourth quarter as restrictions in HoReCa(A)
were reintroduced. This volume increase was partly offset by lower international tourism and an increase of the
Spanish VAT rate within the home channel. Coca-Cola Zero Sugar and Monster grew volume, both above 2019 levels.
Additionally, revenue per case growth was positively impacted by package and channel mix given the ongoing recovery
of the away from home channel in addition to favourable underlying price.
Reported revenue in France was up 6.0% versus 2020. This was mainly driven by an increase in volume due to fewer
restrictions and the cycling of soft comparables. The away from home channel recorded a strong rebound, and the home
channel showed a continued volume increase led by the growth in immediate consumption packages. Coca-Cola Zero
Sugar and Monster continued to grow volume, both above 2019 levels. Additionally, revenue per case growth was
supported by positive customer and package mix led by the recovery of the away from home channel as well as
increased consumer mobility, including growth of 14.5% in small glass and 22.0% small PET.
Reported revenue in the Northern European territories (Belgium, Luxembourg, the Netherlands, Norway, Sweden and
Iceland) was up 3.5% versus 2020. Foreign exchange translation positively impacted revenue growth by 1.5%. The
additional increase in revenue was mainly driven by fewer restrictions in the away from home channel in the fourth
quarter, partially offset by adverse weather in the third quarter, including the impact of flooding in Belgium in July.
Coca-Cola Zero Sugar, Monster and Capri-Sun grew volume above 2019 levels. Additionally, revenue per case declined
as a result of changes to Norwegian soft drink taxes, offsetting positive package and brand mix, alongside favourable
underlying price.
(A) HoReCa = hotels, restaurants and cafes.
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Revenue by segment: API
Pro forma revenue API(A)
In millions of €, except per case data which is calculated prior
to rounding. Fx impact calculated by recasting current year
results at prior year rates
As reported and comparable
Ads: Pro forma adjustments API
Pro forma comparable
Adjust: Impact of Fx changes
Pro forma comparable and Fx neutral
Pro forma revenue per unit case
Year ended
31 December 2021
31 December 2020
% change
2,179
1,056
3,235
(108)
3,127
4.88
–
2,929
2,929
n/a
2,929
4.74
n/a
–
10.5%
–
7.0%
3.0%
(A) See Supplementary financial information – Income Statement section for reconciliation of reported to comparable and reported to pro forma comparable results.
Revenue in API totalled €2.2 billion on a reported basis. Pro forma comparable revenue was €3.2 billion, up 10.5% vs
prior year, or up 7.0% on a pro forma comparable and Fx neutral basis. Revenue per unit case increased by 3.0% in 2021,
on a pro forma comparable and Fx neutral basis. Volume increased 4.0% on a pro forma comparable basis driven by the
reopening of the away from home channel and increased consumer mobility given the easing of restrictions across most
of our API markets.
Pro forma revenue by geography(A)
In millions of €
Australia
New Zealand and Pacific Islands
Indonesia and Papua New Guinea
Total API
Full year ended 31 December 2021
Pro forma
comparable
Pro forma
comparable
% change
2,028
555
652
3,235
11.0%
12.5%
7.5%
10.5%
Reported
1,359
377
443
2,179
Pro forma
Fx neutral
% change
5.5%
7.5%
10.0%
7.0%
(A) See Supplementary financial information – Income Statement section for reconciliation of reported to comparable and reported to pro forma comparable results.
Revenue in the Australia, Pacific and Indonesian territories (Australia, New Zealand and Pacific Islands, Indonesia and
Papua New Guinea) was up 10.5% versus 2020 on a pro forma comparable basis. Foreign exchange translation
positively impacted revenue growth by 3.5%. The additional increase in revenue was mainly driven by the continued
recovery of the away from home channel in all markets and solid performance in the home channel. Coca-Cola No Sugar
grew volume in Australia. Monster continued to grow in all markets. Additionally, revenue per case increased on a pro
forma comparable and Fx neutral basis, as a result of positive package and brand mix, lower promotions in Australia and
underlying favourable price.
Cost of sales
Reported cost of sales totalled €8.7 billion, up 26.5% versus prior year on a reported basis, and 24.5% on a comparable
Fx neutral basis, driven by the inclusion of API in 2021. Pro forma comparable cost of sales was €9.2 billion, up 8.0% vs
prior year, or up 6.0% on a pro forma comparable and Fx neutral basis driven in part by volume growth. Cost of sales per
unit case increased by 1.5% on a pro forma comparable and Fx neutral basis.
Pro forma Cost of sales(A)
In millions of €, except per case data which is calculated
prior to rounding. Fx impact calculated by recasting current
year results at prior year rates
Year ended
31 December 2021
31 December 2020
As reported
Add: Pro forma adjustments API
Adjust: Transaction accounting adjustments
Adjust: Total items impacting comparability
Pro forma comparable
Adjust: Impact of Fx changes
Pro forma comparable and Fx neutral
Cost of sales per unit case
8,677
616
–
(71)
9,222
(149)
9,073
3.00
6,871
1,737
57
(118)
8,547
n/a
8,547
2.95
% change
26.5%
n/a
8.0%
n/a
6.0%
1.5%
(A) See Supplementary financial information – Income Statement section for reconciliation of reported to comparable and reported to pro forma comparable results.
Cost of sales in Europe increased in part due to higher volume, which grew 5.0% versus 2020 on a comparable basis.
Cost of sales per unit case increased as well, reflecting increased revenue per unit case driving higher concentrate costs.
Commodities have been adverse driven by higher aluminium and PET prices, though solid hedge coverage throughout
the year provided protection from some of the market volatility. Mix was adverse driven mainly by strong volume growth
in energy and cans, partially offset by the favourable recovery of fixed manufacturing costs given higher volumes.
Cost of sales in API also increased reflecting higher volume, which grew 4.0% versus 2020 on a pro forma comparable
basis. Operating leverage as well as continued efforts in managing production and logistics costs, offsetting increased
labour and fuel costs, resulted in a cost per unit case improvement vs 2020. Throughout the year, efforts were made to
navigate significant global supply chain disruptions, which resulted in shipping delays, pallet shortages and upward
pressure on freight costs.
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Operating expenses
Reported operating expenses totalled €3.6 billion, up 22.0% versus prior year on a reported basis, and 28.5% on a
comparable and Fx neutral basis, driven by the inclusion of API in 2021. Pro forma comparable operating expenses
were €3.7 billion, up 6.0% vs prior year, or up 4.5% on a pro forma comparable and Fx neutral basis.
Pro forma Operating expenses(A)
In millions of €. Fx impact calculated by recasting current year
results at prior year rates
Year ended
31 December 2021
31 December 2020
As reported
Add: Pro forma adjustments API
Adjust: Transaction accounting adjustments
Adjust: Total items impacting comparability
Pro forma comparable
Adjust: Impact of Fx changes
Pro forma comparable and Fx neutral
3,570
323
68
(250)
3,711
(54)
3,657
2,922
1,022
130
(581)
3,493
n/a
3,493
% change
22.0%
n/a
6.0%
n/a
4.5%
(A) See Supplementary financial information – Income Statement section for reconciliation of reported to comparable and reported to pro forma comparable results.
Approximately one third of operating expenses are variable in nature. Comparable operating expenses in Europe
increased as volumes grew, reflecting the reopening of the away from home channel and increased consumer mobility
given the easing of restrictions. To support our customers and the pandemic recovery, we made focused investments
in trade marketing expenses (TME). Our business also experienced upward inflationary pressures in areas such as
labour and haulage.
Continuing efforts on discretionary spend optimisation and progressing our previously announced efficiency programme
helped to protect operating profit.
Pro forma comparable operating expenses in API reflected higher volumes, partially offset by the benefit of ongoing
efficiency programmes and combination benefits. Continuing efforts on discretionary spend optimisation in areas such
as trade marketing, travel and meetings as well as labour cost management further contributed to mitigating the increase
in our cost base.
Restructuring and Acquisition related costs
Restructuring charges of €17 million and €136 million were recognised within reported cost of sales and reported
operating expenses, respectively, for the year ended 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 €62 million and €306 million were recognised within reported cost of sales and reported
operating expenses for the year ended 31 December 2020, the majority of which also relate to 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 the commercial organisation in Germany.
Acquisition and integration related costs of €49 million and €4 million were recognised within reported operating
expenses and finance costs, respectively, for the year ended 31 December 2021 associated with the acquisition of CCL.
This compares to €14 million of total acquisition related costs recognised during the year ended 31 December 2020.
Effective tax rate
The reported effective tax rate was 29% and 28% for the years ended 31 December 2021 and 31 December 2020,
respectively.
For the year ended 31 December 2021, the effective tax rate included a €127 million impact related to the revaluation of
deferred taxes due to enacted increases in the UK statutory income tax rate from 19% to 25% effective from 1 April 2023,
the Netherlands statutory income tax rate from 25% to 25.8% effective from 1 January 2022 and an enacted law change
in Indonesia which held its statutory income tax rate at 22% from 1 January 2022, reversing the previously enacted
reduction from 22% to 20%.
The comparable effective tax rate was 21% and 24% for the years ended 31 December 2021 and 31 December 2020,
respectively.
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Return on invested capital
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. For the year ended 31 December 2021, reported ROIC increased by 160
basis points, to 9.2%, due to the inclusion of API comparable operating profit from the acquisition date. On a pro forma
basis, which adjusts both invested capital and comparable operating profit to reflect the acquisition date as at 1 January
2021, ROIC increased by 40 basis points, to 8.0%, versus prior year.
ROIC
In millions of €
Comparable operating profit(A)
Taxes(B)
Non-controlling interest
Comparable operating profit after tax attributable
to shareholders
Opening borrowings less cash and cash equivalents
and short term investments(C)
Opening equity attributable to shareholders(C)
Opening invested capital
Closing borrowings less cash and cash equivalents
and short term investments
Closing equity attributable to shareholders
Closing invested capital
Average invested capital
ROIC
31 December 2021
31 December 2021
31 December 2020
Year ended
Pro forma(c)
1,886
(399)
(12)
1,475
12,498
5,911
18,409
11,675
7,033
18,708
18,559
8.0%
1,772
(367)
(8)
1,397
5,664
6,025
11,689
11,675
7,033
18,708
15,199
9.2%
1,194
(286)
–
908
6,105
6,156
12,261
5,664
6,025
11,689
11,975
7.6%
(A) Reconciliation from reported operating profit to comparable operating profit and to pro forma comparable operating profit is included in the Supplementary
Financial Information – Income Statement section.
(B) Tax rate used is the comparable effective tax rate for the year (2021 pro forma: 21%; 2021: 21%; 2020: 24%).
(C) In light of the CCL acquisition and in order to provide investors with a more meaningful measure of capital efficiency for 2021, a pro forma ROIC measure has been
presented. To derive this pro forma measure, opening borrowings, cash and cash equivalents, short term investments, and equity attributable to shareholders
have been extracted from the unaudited pro forma condensed combined statement of financial position as of 31 December 2020 prepared in connection with
proposed financing of the CCL acquisition and furnished on Form 6-K on 20 April 2021, and adjusted for any associated acquisition accounting fair value
adjustments in the period through to 31 December 2021. These adjustments include an increase in borrowings of €38 million and a decrease in equity attributable
to shareholders of €18 million.
Liquidity and capital management
Liquidity
Liquidity risk is actively managed to ensure we have sufficient funds to satisfy our commitments as they fall due. Our
sources of capital include, but are not limited to, cash flows from operating activities, public and private issuances of
debt securities and bank borrowings. We believe our operating cash flow, cash on hand and available short-term and
long-term capital resources are sufficient to fund our working capital requirements, scheduled borrowing payments,
interest payments, capital expenditures, benefit plan contributions, income tax obligations and dividends to shareholders.
Counterparties and instruments used to hold cash and cash equivalents are continuously assessed, with a focus on
preservation of capital and liquidity.
During 2021, subsequent to the Acquisition, the amount available under the Group’s committed multi currency credit
facility was increased from €1.5 billion to €1.95 billion. This amount is available for borrowing with a syndicate of 13 banks.
This credit facility matures in 2025 and is for general corporate purposes and supporting the Group’s working capital
needs. Based on information currently available, there is no indication that the financial institutions participating in this
facility would be unable to fulfil their commitments to the Group as at the date of this report. The Group’s current credit
facility contains no financial covenants that would impact its liquidity or access to capital. As at 31 December 2021, the
Group had no amounts drawn under this credit facility.
Net cash flows from operating activities were €2,117 million in 2021, an increase of 42.0%, or €627 million, from
€1,490 million in 2020, reflecting the inclusion of API and continued recovery from COVID-19. These cash flows were
primarily generated from our operations and included restructuring cash outflows of €205 million.
In 2021, we continued to monitor our investment in capital expenditure programmes, given continued uncertainty. Our
2021 capital spend, which includes API from the date of the acquisition, on property, plant and equipment and capitalised
software as part of our business capability programme was €446 million, compared to €408 million in 2020.
Free cash flow generation for the year was strong totalling €1,460 million, a significant increase relative to our 2020 total
of €924 million following strong recovery from the impact of COVID-19 in 2020 and the inclusion of API.
Free cash flow
In millions of €
Net cash flows from operating activities
Less: Purchases of property, plant and equipment
Less: Purchases of capitalised software
Add: Proceeds from sales of property, plant and equipment
Less: Payments of principal on lease obligations
Less: Interest paid, net
Free cash flow
Year ended
31 December 2021
31 December 2020
2,117
(349)
(97)
25
(139)
(97)
1,460
1,490
(348)
(60)
49
(116)
(91)
924
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In 2021, total borrowings increased by €6 billion. This was driven by new issue proceeds of €4,877 million in connection
with the Acquisition, API borrowings of €1,632 million assumed as part of the Acquisition and changes in short-term
borrowings of €276 million. This was partially offset by repayments on third party borrowings of €950 million and
payments on principal and interest lease obligations of €149 million.
New issue proceeds include the following bonds: €800 million 0% Notes due 2025; €700 million 0.5% Notes due 2029;
€1,000 million 0.875% Notes due 2033; €750 million 1.5% Notes due 2041; $850 million 0.5% Notes due 2023;
$650 million 0.8% Notes due 2024 and $500 million 1.5% Notes due 2027, all issued in May 2021.
Repayments of bonds include repayments prior to maturity in June 2021 of $300 million 4.5% Notes due September 2021
and $250 million 3.25% Notes due August 2021. The following bonds were also repaid on maturity during the year:
€350 million Floating Rate Notes; A$100 million 4.63% Notes; A$45 million 6.65% Notes; JPY3 billion 2.54% Notes;
A$100 million 4.25% Notes and A$30 million 5.95% Notes.
Capital management
The primary objective of our capital management strategy is to ensure strong ratings and to maintain appropriate capital
ratios to support our business and maximise shareholder value. Our credit ratings are periodically reviewed by rating
agencies. We regularly assess debt and equity capital levels against our stated policy for capital structure. Our capital
structure is managed and, as appropriate, adjusted in light of changes in economic conditions and our financial policy.
CCEP paid net cash consideration of €5.4 billion to CCL shareholders and funded the Acquisition through a combination
of new external borrowings and existing cash increasing our net debt to €11.6 billion as at 31 December 2021, versus
€5.7 billion as at December 2020. Refer to Note 4 of the consolidated financial statements for further information
regarding the Acquisition. We do not expect this change in net debt to have a material negative impact on our liquidity
or capital resources. Liquidity risk is actively managed to ensure we have sufficient funds to satisfy our commitments
as they fall due. Our sources of capital include, but are not limited to, cash flows from operations, public and private
issuances of debt securities and bank borrowings. We believe our operating cash flow, cash on hand and available
short-term and long-term capital resources are sufficient to fund our working capital requirements, scheduled borrowing
payments, interest payments, capital expenditures, benefit plan contributions, income tax obligations and dividends
to shareholders. Counterparties and instruments used to hold cash and cash equivalents are continuously assessed,
with a focus on preservation of capital and liquidity.
We also have amounts available for borrowing under a €1.95 billion multi-currency credit facility with a syndicate of
13 banks. This credit facility matures in 2025 and is for general corporate purposes and supporting our working capital
needs. Our current credit facility contains no financial covenants that would impact our liquidity or access to capital.
As at 31 December 2021, we had no amounts drawn under this credit facility.
Net debt
In millions of €
Total borrowings
Fair value of hedges
related to borrowings(A)
Other financial assets/
liabilities(A)
Adjusted total
borrowings(A)
Less: cash and cash
equivalents(B)
Less: short term
investments(C)
Net debt
As at
Credit ratings
31 December 2021
31 December 2020
As of 14 March 2022
Moody’s
Fitch Ratings
13,140
(110)
7,187
Long-term rating
36
Outlook
Baa1
Stable
BBB+
Stable
42
–
13,072
7,223
(1,407)
(1,523)
(58)
–
11,607
5,700
Note: Our credit ratings can be materially influenced
by a number of factors including, but not limited to,
acquisitions, investment decisions and working capital
management activities of TCCC and/or changes in
the credit rating of TCCC. A credit rating is not a
recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time.
(A) Following the acquisition of CCL, 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. As at 31 December 2020, the Group did not hold interest rate hedging instruments and adjusted Net Debt only for currency impacts. 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.
(B) Cash and cash equivalents as at 31 December 2021 includes €45 million of cash in Papua New Guinea Kina. 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.
(C) Short term investments are term cash deposits held in API 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 term
investments as at 31 December 2021 includes €44 million of assets in Papua New Guinea Kina, subject to the same currency controls outlined above.
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, and so we provide a reconciliation of this measure.
Net debt enables investors to see the economic effect of total borrowings, fair value impact of related hedges and other
financial assets/liabilities, cash and cash equivalents and short-term investments in total. Adjusted EBITDA is calculated
as EBITDA after adding back items impacting the comparability of year over year financial performance.
Adjusted EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual
commitments. Further, adjusted EBITDA does not reflect changes in, or cash requirements for, our 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 to adjusted EBITDA
For 2021, we have provided a pro forma calculation for our net debt to adjusted EBITDA ratio as if the Acquisition had
occurred at the beginning of 2021. We believe this calculation allows for a better understanding of our capital position in
the context of CCEP. Pro forma adjusted EBITDA has increased in 2021 relative to the adjusted EBITDA in 2020 by
€888 million, primarily driven by the inclusion of API. The ratio of net debt to pro forma adjusted EBITDA is 4.3 versus the
net debt to adjusted EBITDA ratio of 3.2 in 2020, reflecting the increase in net debt due to acquisition financing, offset by
the increase in pro forma adjusted EBITDA.
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-FCoca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F Dividends
In line with our commitments to deliver long-term value to shareholders, in December we paid a full year dividend of €1.40
per share, maintaining a payout ratio of approximately 50%, based on comparable diluted earnings per share, in line with
our dividend policy. For the year ended 31 December 2021, dividend payments totalled €638 million (2020: €386 million).
Share buyback
In connection with the Company’s share buyback programmes, we returned approximately €130 million to shareholders
in 2020. No Shares were repurchased under the programme in 2021.
58
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CONTINUED
In millions of €
Reported profit after tax
Taxes
Finance costs, net
Non-operating items
Reported operating profit
Pro forma adjustments API(B)
Transaction accounting adjustments(C)
Pro forma operating profit
Depreciation and amortisation(D)
Reported EBITDA
Items impacting comparability:
Mark-to-market effects(E)
Restructuring charges(F)
Defined benefit plan closure(G)
Acquisition and integration related costs(H)
Inventory step up costs(I)
European flooding(J)
Other(K)
Adjusted EBITDA
Net debt to EBITDA
Net debt to adjusted EBITDA
Year ended
31 December 2021
31 December 2021
31 December 2020
Pro forma(A)
988
394
129
5
1,516
117
(68)
1,565
858
2,423
–
97
(9)
110
48
15
4
2,688
4.8
4.3
988
394
129
5
1,516
782
2,298
–
97
(9)
49
48
15
–
2,498
5.1
4.7
498
197
111
7
813
727
1,540
2
247
–
11
–
–
–
1,800
3.7
3.2
(A) Reconciliation from reported operating profit to comparable operating profit and to pro forma comparable operating profit is included in the Supplementary
Financial Information – Income Statement section.
(B) 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.
(C) Amounts represent transaction accounting adjustments for the period 1 January to 10 May as if the Acquisition had occurred on 1 January 2021.
(D) Includes the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment. On a pro forma basis,
it includes the depreciation and amortisation as if the Acquisition had occurred on 1 January 2021.
(E) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.
(F) Amounts represent restructuring charges related to business transformation activities, excluding accelerated depreciation included in the depreciation and amortisation line.
(G) Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.
(H) Amounts represent costs associated with the acquisition and integration of CCL.
(I) Amounts represent the non-recurring impact of the fair value step-up of API finished goods.
(J) Amounts represent the incremental net costs incurred as a result of the July 2021 flooding events, which impacted the operations of our production facilities
in Chaudfontaine and Bad Neuenahr.
(K) Amounts represent charges incurred prior to Acquisition classified as non-trading items by CCL which are not expected to recur.
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-FCoca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F 59
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Other Information
Business and financial review
CONTINUED
Supplementary financial information – Income Statement – reported to comparable
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:
Items impacting comparability
Comparable
Full year 2021
Unaudited, in millions
of € except per
share data which
is calculated prior
to rounding
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Total finance costs,
net
As
reported
CCEP
13,763
8,677
5,086
3,570
1,516
129
Non-operating items
5
Profit before taxes
1,382
Taxes
Profit after taxes
Attributable to:
Shareholders
Non-controlling
interest
Profit after taxes
Diluted earnings
per share (€)
394
988
982
6
988
2.15
Restructuring
charges(A)
Defined
benefit
plan
closure(B)
Acquisition
and
integration
related
Inventory
step up
European
costs(C)
costs(D)
flooding(E) Net Tax(F)
–
(17)
17
(136)
153
–
–
153
43
110
109
1
–
3
(3)
6
(9)
–
–
(9)
4
(13)
(13)
–
110
0.24
(13)
(0.03)
–
–
–
(49)
49
(4)
–
53
10
43
43
–
43
0.09
–
(48)
48
–
48
–
–
48
13
35
34
1
35
0.07
–
(9)
9
(6)
15
–
–
15
3
12
12
–
12
0.03
–
–
–
–
–
–
–
–
(127)
127
127
–
127
0.28
Full year 2020
Unaudited, in millions
of € except per
share data which
is calculated prior
to rounding
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Total finance costs,
net
CCEP
13,763
8,606
5,157
3,385
1,772
125
5
Non-operating items
1,642
340
1,302
Profit before taxes
Taxes
Profit after taxes
Attributable to:
1,294
Shareholders
8
1,302
2.83
Non-controlling
interest
Profit after taxes
Diluted earnings
per share (€)
(A) Amounts represent restructuring charges related to business transformation activities.
(B) Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.
(C) Amounts represent cost associated with the acquisition and integration of CCL.
(D) Amounts represent the non-recurring impact of the fair value step-up of API finished goods.
(E) Amounts represent the incremental net costs incurred as a result of the July 2021 flooding events, which impacted the operations of our production facilities
in Chaudfontaine and Bad Neuenahr.
(F) Amounts include the deferred tax impact related to income tax rate and law changes.
(G) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.
As reported
Items impacting comparability
Comparable
Mark-to-
market
effects(G)
Restructing
charges(A)
Total
Acquisition
Related
Costs(C)
Net Tax(F)
–
–
–
(2)
2
–
–
2
–
2
2
–
2
–
–
(62)
62
(306)
368
–
–
368
103
265
265
–
265
0.58
–
–
–
(11)
11
(3)
–
14
3
11
11
–
11
0.03
–
–
–
–
–
–
–
–
(45)
45
45
–
45
0.10
CCEP
10,606
6,809
3,797
2,603
1,194
108
7
1,079
258
821
821
–
821
1.80
CCEP
10,606
6,871
3,735
2,922
813
111
7
695
197
498
498
–
498
1.09
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CONTINUED
Supplementary financial information – Income Statement – reported to pro forma
comparable
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:
Full year 2021
Unaudited, in millions of € except per
share data which is calculated prior
to rounding
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Total finance costs, net
Non-operating items
Profit before taxes
Taxes
Profit after taxes
Attributable to:
Shareholders
Non-controlling interest
Profit after taxes
Diluted earnings per share (€)
As reported
CCEP
13,763
8,677
5,086
3,570
1,516
129
5
1,382
394
988
982
6
988
2.15
Pro forma
adjustments
CCL(A)
Transaction
accounting
adjustments(B)
1,056
616
440
323
117
12
(1)
106
29
77
74
3
77
–
–
–
68
(68)
9
–
(77)
(20)
(57)
(58)
1
(57)
0.16
(0.13)
Pro forma
combined
CCEP
14,819
9,293
5,526
3,961
1,565
150
4
1,411
403
1,008
998
10
1,008
2.18
Items
impacting
com-
parability(E)
Pro forma
comparable
CCEP
14,819
9,222
5,597
3,711
1,886
146
4
1,736
367
1,369
Full year 2020
Unaudited, in millions of € except per
share data which is calculated prior
to rounding
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Total finance costs, net
Non-operating items
Profit before taxes
Taxes
Profit after taxes
Attributable to:
1,357
Shareholders
12
Non-controlling interest
1,369
2.97
Profit after taxes
Diluted earnings per share (€)
Historical
adjusted
CCL(C)
Transaction
accounting
adjustments(D)
Pro forma
combined
Items
impacting
com-
parability(E)
2,929
1,737
1,192
1,022
170
37
2
131
44
87
109
(22)
87
0.24
–
57
(57)
130
(187)
19
–
(206)
(57)
(149)
(152)
3
(149)
(0.33)
CCEP
13,535
8,665
4,870
4,074
796
167
9
620
184
436
455
(19)
436
1.00
–
(118)
118
(581)
699
(7)
(4)
710
142
568
542
26
568
1.19
Pro forma
comparable
CCEP
13,535
8,547
4,988
3,493
1,495
160
5
1,330
326
1,004
997
7
1,004
2.19
As reported
CCEP
10,606
6,871
3,735
2,922
813
111
7
695
197
498
498
–
498
1.09
–
(71)
71
(250)
321
(4)
–
325
(36)
361
359
2
361
0.79
(A) Amounts represent adjustments to include CCL financial results prepared on a basis consistent with CCEP accounting policies, as if the Acquisition had occurred
(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
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.
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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Business and financial review
CONTINUED
Full year 2021
Unaudited, in millions of € except share data which is calculated prior to rounding
Restructuring
Defined benefit
charges(A)
plan closure(B)
Acquisition and
integration
related
costs(C)
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Total finance costs, net
Non-operating items
Profit before taxes
Taxes
Profit after taxes
Attributable to:
Shareholders
Non-controlling interest
Profit after taxes
Diluted earnings per share (€)
–
(17)
17
(136)
153
–
–
153
43
110
109
1
110
0.24
–
3
(3)
6
(9)
–
–
(9)
4
(13)
(13)
–
(13)
(0.03)
–
–
–
(110)
110
(4)
–
114
27
87
87
–
87
0.19
Items impacting comparability
European
flooding(E)
Net tax(F)
Other(G)
Total items
impacting
comparability
Inventory
step up
costs(D)
–
(48)
48
–
48
–
–
48
13
35
34
1
35
–
(9)
9
(6)
15
–
–
15
3
12
12
–
12
–
–
–
–
–
–
–
–
(127)
127
127
–
127
0.28
–
–
–
(4)
4
–
–
4
1
3
3
–
3
0.01
–
(71)
71
(250)
321
(4)
–
325
(36)
361
359
2
361
0.79
0.07
0.03
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CONTINUED
Full year 2020
Unaudited, in millions of € except share data which is calculated prior to rounding
Restructuring
charges(A)
Acquisition and
integration related
Inventory step up
Mark-to-market
Items impacting comparability
costs(C)
costs(D)
effects(H)
Net tax(F)
Impairment(I)
Other(G)
Total items
impacting
comparability
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Total finance costs, net
Non-operating items
Profit before taxes
Taxes
Profit after taxes
Attributable to:
Shareholders
Non-controlling interest
Profit after taxes
Diluted earnings per share (€)
–
(70)
70
(325)
395
–
–
395
111
284
284
–
284
0.62
–
–
–
(125)
125
(7)
–
132
30
102
102
–
102
0.23
–
(48)
48
–
48
–
–
48
13
35
34
1
35
0.07
–
–
–
(2)
2
–
–
2
–
2
2
–
2
–
–
–
–
–
–
–
–
–
(45)
45
45
–
45
0.10
–
–
–
(116)
116
–
–
116
29
87
62
25
87
0.14
–
–
–
(13)
13
–
(4)
17
4
13
13
–
13
0.03
–
(118)
118
(581)
699
(7)
(4)
710
142
568
542
26
568
1.19
(A) Amounts represent restructuring charges related to business transformation activities.
(B) Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.
(C) Amounts represent cost associated with the acquisition and integration of CCL.
(D) 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.
(E) Amounts represent the incremental net costs incurred as a result of the July 2021 flooding events, which impacted the operations of our production facilities in Chaudfontaine and Bad Neuenahr.
(F) Amounts include the deferred tax impact related to income tax rate and law changes.
(G) Amounts represent charges incurred prior to Acquisition classified as non-trading items by CCL which are not expected to recur.
(H) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.
(I) Amounts represent the charges recognised by CCL relating to the impairment of Indonesia and Fiji during H1 2020.
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CONTINUED
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.
Full year 2020
Unaudited, in millions of €
Revenue
Trading revenue
Cost of sales
Cost of goods sold
Delivery
Gross profit
Other revenues
Operating expenses
Operating profit
Finance income
Finance costs
Total finance costs, net
Non-operating items
Profit before taxes
Taxes
Income tax expense
Profit after taxes
Attributable to:
Shareholders
Non-controlling interest
Profit after taxes
Historical
CCL(A) Reclassifications(B)
Adjusted CCL
AUD (A$)
AUD (A$)
AUD (A$)
–
4,762
–
(2,862)
(221)
1,679
39
(1,438)
280
33
(95)
(62)
–
218
–
(73)
145
180
(35)
145
4,853
(4,762)
(2,877)
2,862
221
297
(39)
(255)
3
–
–
–
(3)
–
(73)
73
–
–
–
–
4,853
–
(2,877)
–
–
1,976
–
(1,693)
283
33
(95)
(62)
(3)
218
(73)
–
145
180
(35)
145
Historical
adjusted CCL(C)
EUR (€)
2,929
–
(1,737)
–
–
1,192
–
(1,022)
170
20
(57)
(37)
(2)
131
(44)
–
87
109
(22)
87
(A) Historical income statement previously published by CCL for the period 1 January 2020 to 31 December 2020.
(B) Accounting policy and classification adjustments made to CCL’s income statement in order to present on a basis consistent with CCEP.
(C) CCL income statement has been translated from Australian Dollars to Euros using the average exchange rate for the period of 0.6036.
Operating Profit by segment
Operating profit Europe
In millions of €. Fx impact calculated by recasting current year
results at prior year rate
As reported
Adjust: Total items impacting comparability
Comparable
Adjust: Impact of Fx changes
Comparable and Fx neutral
31 December 2021
31 December 2020
% Change
Year Ended
1,298
202
1,500
(22)
1,478
813
381
1,194
n/a
1,194
59.5%
n/a
25.5%
n/a
24.0%
Pro forma operating profit API
In millions of €. Fx impact calculated by recasting current year
results at prior year rates
31 December 2021
31 December 2020
% Change
Year Ended
As reported
Add: Pro forma adjustments API
Adjust: Transaction accounting adjustments
Adjust: Total items impacting comparability
Pro forma comparable
Adjust: Impact of Fx changes
Pro forma comparable and Fx neutral
218
117
(68)
119
386
(15)
371
–
170
(187)
318
301
n/a
301
n/a
n/a
28.0%
n/a
23.5%
The Company’s Strategic Report is set out on pages 2–63. The Strategic Report was approved by the Board on
15 March 2022 and signed on its behalf by
Damian Gammell, Chief Executive Officer
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Other Information
Governance and Directors’ Report
In this section
Governance and Directors’ Report
65 Chairman’s introduction
66 Board of Directors
67 Directors’ biographies
72 Senior management
74 Corporate governance report
82
83 Nomination Committee report
86 Audit Committee Chairman’s letter
87 Audit Committee report
92 Directors’ remuneration report
Nomination Committee Chairman’s letter
92 Statement from the Remuneration Committee Chairman
94 Overview of Remuneration Policy
95 Remuneration at a glance
96 Annual report on remuneration
108 Directors’ report
111 Directors’ responsibilities statement
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Chairman’s introduction
Good governance is aligned to
a positive corporate culture and we
will embed our strong governance
processes across API.
Sol Daurella, Chairman
Dear Shareholder
I’m delighted to present to you the corporate governance
report for 2021.
This year has been an exciting year. We became
Coca-Cola Europacific Partners (CCEP) following the
acquisition of Coca-Cola Amatil (CCL) and welcomed the
newly created Asia, Pacific and Indonesia (API) business
unit to CCEP (the Acquisition).
Good governance is aligned to a positive corporate
culture and we will embed our strong governance
processes across API.
The COVID-19 pandemic has been a catalyst for bringing
environmental, social and governance (ESG) matters to
the forefront of business. Our return to growth has been
reinforced by sustainability and digital, helped by our
people and our communities and underpinned by robust
governance.
Board activities
There is a brief summary of the Board’s activities during
2021 in table 1 on page 77, with some more detail on
specific activities elsewhere in this report. This year, as
well as our normal agenda we focused on:
– API integration and growth strategy
– Supporting our colleagues, customers and communities
through the ongoing pandemic
– Driving a safe, open and diverse workplace that is fully
inclusive for our people, customers and communities
– Transferring our US listing from New York Stock
Exchange (NYSE) to Nasdaq Stock Market (Nasdaq)
– Deepening the Board’s knowledge of the business and
the context in which we operate, particularly API
– An externally facilitated Board evaluation
Our governance framework
The 2018 UK Corporate Governance Code (the UKCGC)
applies to accounting periods beginning on or after
1 January 2019. We continued to apply the UKCGC
voluntarily on a comply or explain basis during 2021.
We promote good corporate governance throughout CCEP
embodied by our governance framework on page 74.
Looking to the future
Our responsibility as the Board is to lead CCEP and
oversee its governance. We set the culture, values and
standards, always keeping our stakeholders’ interests
front of mind. Along with its regular schedule of topics,
the Board has the following activities planned for 2022:
ESG
How we respond to climate change and the risks that
it poses are at the forefront of the minds of all our
stakeholders. We will refine our This is Forward
sustainability commitments and improve our governance
and reporting of climate-related risks and opportunities as
we continue our journey to best practice in ESG as set out
in our Sustainability governance framework on page 20.
Digital
Our ambition is to become a technology and digitally
enabled company. We recognise the importance of
fostering a risk appetite culture where people can work
effectively in a workplace which prioritises cyber security
and we appointed John Bryant as our designated
Independent Non-executive Director (INED) to engage
in the cyber security strategy process.
Customers
Building on feedback that the Board heard from customers
throughout the year, we will oversee investments in key
areas of the business, like technology and customer
service to create value for our customers and help them
grow, backed by data.
Sol Daurella, Chairman
15 March 2022
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Other Information
Board of Directors
Our Board of Directors is diverse,
experienced and knowledgeable,
bringing together the skills needed
for our long-term success in line
with our skills matrix.
Ethnicity/nationality of Directors on the Board(A)
Number
15
White
European
01
White
American
01
White
Australian
American
Australian
Austrian
British
Bulgarian
French
Irish
Dutch
Spanish
2
1
1
3
1
1
1
1
6
%
12
6
6
18
6
6
6
6
35
Women on the Board(A)
Independent Directors on the Board(A)
(excluding the Chairman)
5
9
0
17
0
16
(A) Numbers shown are number of Directors.
ReadmoreaboutourapproachtoBoarddiversityonpage 83
Directors’ skills and experience(A)
Coca-Cola system
Bottling industry
People
11 11 13
Customer/retail
Marketing/PR/consumer
Sustainability
14 14 14
Digital technology
Strategy
Audit/risk/finance
04 16 09
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Other Information
Directors’ biographies
AT
A
C
N
R
Sol Daurella
Chairman
Date appointed to the Board: May 2016
Independent: No
Key strengths/experience
– Experienced director of public companies operating in
an international environment
– A deep understanding of fast moving consumer goods
(FMCG) and our markets
– Extensive experience at Coca-Cola bottling companies
– Strong international strategic and commercial skills
Key external commitments
Co-Chairman and member of the Executive Committee
of Cobega, S.A., Executive Chairman of
Olive Partners, S.A., director of Equatorial Coca-Cola
Bottling Company, S.L., non-executive director and a
member of the Appointments, Remuneration and
Responsible Banking, Sustainability and Culture
Committees of Banco Santander
Previous roles
Various roles at the Daurella family’s Coca-Cola bottling
business, director of Banco de Sabadell, Ebro Foods,
Acciona and Co-Chairman of Grupo Cacaolat
AT
A
C
N
R
Damian Gammell
Chief Executive Officer (CEO)
Date appointed to the Board: December 2016
Independent: No
Key strengths/experience
– Strategy, risk management, development and execution
experience
– Vision, customer focus and transformational leadership
– Developing people and teams and promoting
sustainability
– Over 25 years of leadership experience and in depth
understanding of the non-alcoholic ready to drink
(NARTD) industry and within the Coca-Cola system
Key external commitments
N/A
Previous roles
A number of senior executive roles in the Coca-Cola
system including in Russia, Australia and Germany,
also Managing Director and Group President of Efes Soft
Drinks, and President and CEO of Anadolu Efes S.K
y
e
K
AT Affiliated Transaction Committee
A Audit Committee
C Corporate Social Responsibility Committee
N Nomination Committee
R Remuneration Committee
Committee Chairman
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Other Information
Directors’ biographies
CONTINUED
C
AT
N
A
R
C
AT
N
A
R
C
AT
N
A
R
C
AT
N
A
R
Manolo Arroyo
Non-executive Director
Jan Bennink
Non-executive Director(A)
John Bryant
Non-executive Director
José Ignacio Comenge
Non-executive Director
Date appointed to the Board: May 2021
Independent: No
Date appointed to the Board: May 2016
Independent: Yes
Date appointed to the Board: January 2021
Independent: Yes
Date appointed to the Board: May 2016
Independent: No
Key strengths/experience
– Extensive experience working in the Coca-Cola system
– Strong operational leadership experience in international
Key strengths/experience
– Chairman/CEO of multinational public companies
– Extensive experience in FMCG, including the food
consumer goods groups, lived and worked in four
continents, both developed and emerging markets
– Strategic marketing, commercial and bottling expertise
– Served as CEO of publicly listed FMCG company
– In depth understanding of brands in the Coca-Cola system
and beverage industry
– Thorough understanding of global and Western
European markets
– Strong strategic, marketing and sales experience
relevant to the beverage industry
Key external commitments
Chief Marketing Officer at The Coca-Cola Company
(TCCC) and non-executive director of Effie Worldwide
Previous roles
President of the Asia Pacific Group, Bottling Investments
Group, and Mexico business unit of TCCC, CEO of
Deoleo, Sw.A., Senior Vice President and President,
Asia Pacific of S.C. Johnson & Son, Inc., President of
the ASEAN and SEWA business units of TCCC,
General Manager of the Spain business unit of TCCC;
Vice-Chairman of Coca-Cola COFCO Bottling China,
non-executive Director of ThaiNamThip Limited and
Coca-Cola Andina
Key external commitments
Chairman of the Bennink Foundation, Board member
of Wonderflow B.V., Executive Partner at Xn, and Advisor
to Artisan Partners
Previous roles
Executive Chairman of Sara Lee Corporation, Chairman
and interim CEO of DE Masterblenders 1753 N.V., CEO
of Royal Numico N.V., director of Kraft Foods Inc., Boots
Company plc, Dalli-Werke GmbH & Co KG and EFIC1
and a member of the Advisory Board of ABN Amro Bank
(A) Jan was succeeded by Dagmar Kollmann as Chairman of the Affiliated
Transaction Committee in March 2022, Jan will continue to serve as a
member of the committee.
Key strengths/experience
– Chairman/CEO of a multinational public company
– Expert in strategy, mergers and acquisitions,
restructuring and portfolio transformation
– 30 years’ experience in consumer goods
– Strong track record of finance and operational
leadership, experience in overseeing information
technology
– Engaged in the cyber security strategy process
Key external commitments
Non-executive director of Ball Corporation, Compass
Group plc and Macy’s Inc.
Previous roles
Executive Chairman and CEO of Kellogg Company and
other senior roles in the Kellogg Company including
Chief Financial Officer (CFO), Chief Operating Officer
(COO), President, America and President, International,
and strategy advisor at A.T. Kearney and Marakon
Associates
Key strengths/experience
– Extensive experience of the Coca-Cola system
– Broad board experience across industries and sectors
– Knowledgeable about the industry in our key market
of Iberia
– Insights in formulating strategy drawn from leadership
roles in varied sectors
Key external commitments
Director of Olive Partners, S.A., ENCE Energía y
Celulosa, S.A., Companía Vinícola del Norte de Espana,
S.A., Ebro Foods S.A., Barbosa & Almeida SGPS,
S.A. and Ball Beverage Can Iberica, S.L.
Previous roles
Senior roles in the Coca-Cola system, AXA, S.A., Aguila
and Heineken Spain, Vice-Chairman and CEO of MMA
Insurance
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Other Information
Directors’ biographies
CONTINUED
C
AT
N
A
R
C
AT
N
A
R
C
AT
N
A
R
C
AT
N
A
R
Christine Cross
Non-executive Director
Nathalie Gaveau
Non-executive Director
Álvaro Gómez-Trénor Aguilar
Non-executive Director
Thomas H. Johnson
Non-executive Director
and Senior Independent Director (SID)
Date appointed to the Board: May 2016
Independent: Yes
Date appointed to the Board: January 2019
Independent: Yes
Date appointed to the Board: March 2018
Independent: No
Date appointed to the Board: May 2016
Independent: Yes
Key strengths/experience
– In depth experience working in the food and
beverage industry
– Consults on international business strategy,
marketing and sustainable business development
– Global perspective on CCEP’s activities
– Experience of chairing remuneration committees
Key external commitments
Director of Christine Cross Ltd, non-executive director
of Hilton Food Group plc, Clipper Logistics plc,
Pollen Estate and Chairman of Oddbox Delivery Ltd
Previous roles
Director of Brambles Limited, Fenwick Limited,
Kathmandu Holdings Limited, Next plc,
Woolworths (Au) plc, Sobeys (Ca) plc, Plantasgen,
Fairmont Hotels Group plc, Sonae – SGPS, S.A.,
Premier Foods plc, Taylor Wimpey plc and member
of the Supervisory Board of Zooplus AG
Key strengths/experience
– Successful tech entrepreneur and investor
– Expert in e-commerce and digital transformation,
innovation, mobile, data and social marketing
– International consumer goods experience
Key external commitments
Non-executive director of Calida Group and Lightspeed
Commerce Inc., Senior Advisor to BCG Digital Ventures,
and President of Tailwind International Corp, a Special
Purpose Acquisition Company
Previous roles
Founder and CEO of Shopcade, Interactive Business
director of the TBWA Tequila Group, Asia Pacific
E-business and CRM Manager for Club Med, co-founder
and Managing Director of Priceminister, Financial Analyst
for Lazard and non-executive director of HEC Paris
Key strengths/experience
– Broad knowledge of working in the food and
beverage industry
– Extensive understanding of the Coca-Cola system,
particularly in Iberia
– Expertise in finance and investment banking
– Strategic and investment advisor to businesses
in varied sectors
Key external commitments
Director of Olive Partners, S.A. and Sinensis Seed
Capital SCR de RC, S.A.
Previous roles
Various board appointments in the Coca-Cola system,
including as President of Begano, S.A., director and
Chairman of the Audit Committee of Coca-Cola Iberian
Partners, S.A., as well as key executive roles in Grupo
Pas and Garcon Vallvé & Contreras and director of
Global Omnium (Aguas de Valencia, S.A.)
Key strengths/experience
– Chairman/CEO of international public companies
– Manufacturing and distribution expertise
– Extensive international management experience
in Europe
– Investment and finance experience
Key external commitments
CEO of The Taffrail Group, LLC and non-executive
director of Universal Corporation
Previous roles
Chairman and CEO of Chesapeake Corporation,
President and CEO of Riverwood International
Corporation, director of Coca-Cola Enterprises, Inc.,
GenOn Corporation, Mirant Corporation, ModusLink
Global Solutions, Inc., Superior Essex Inc. and Tumi, Inc.
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Other Information
Directors’ biographies
CONTINUED
C
AT
N
A
R
C
AT
N
A
R
C
AT
N
A
R
C
AT
N
A
R
Dagmar Kollmann
Non-executive Director(A)
Alfonso Líbano Daurella
Non-executive Director
Mark Price
Non-executive Director
Mario Rotllant Solá
Non-executive Director
Date appointed to the Board: May 2019
Independent: Yes
Date appointed to the Board: May 2016
Independent: No
Date appointed to the Board: May 2019
Independent: Yes
Date appointed to the Board: May 2016
Independent: No
Key strengths/experience
– Expert in finance and international listed groups
– Thorough understanding of capital markets and
mergers and acquisitions
– Extensive commercial and investor relations experience
– Strong executive and senior leadership experience in
global businesses
– Risk oversight and corporate governance expertise
Key external commitments
Chairman of the Supervisory Board of Citigroup Global
Markets Europe AG, non-executive director of
Unibail-Rodamco-Westfield SE, Deutsche Telekom AG
and Paysafe Group Limited, and Commissioner in the
German Monopolies Commission
Previous roles
CEO and Country Head in Germany and Austria for
Morgan Stanley, member of the board of Morgan Stanley
International Ltd in London, Associate Director of UBS in
London, non-executive director of KfW IPEX-Bank and
Deputy Chairman of the Supervisory Board of Deutsche
Pfandbriefbank AG
(A) Dagmar succeeded Jan Bennink as Chairman of the Affiliated
Transaction Committee in March 2022, Jan will continue to serve
as a member of the committee.
Key strengths/experience
– Developed the Daurella family’s association with the
Coca-Cola system
– Detailed knowledge of the Coca-Cola system
– Insight to CCEP’s impact on communities from
experience as trustee or director of charitable and
public organisations
– Experienced corporate social responsibility (CSR)
committee chair
Key external commitments
Vice Chairman and Member of the Executive Committee
of Cobega, S.A., director of Olive Partners, S.A., Chairman
of Equatorial Coca-Cola Bottling Company, S.L., Vice-
Chairman of MECC Soft Drinks JLT, Co-chair of the Polaris
Committee at United Nations and FBN, and Ambassador
of the Family Business Network and member of the board
of the American Chamber of Commerce in Spain
Previous roles
Various roles at the Daurella family’s Coca-Cola bottling
business, director and Chairman of the Quality & CRS
Committee of Coca-Cola Iberian Partners, S.A, director
of Grupo Cacaolat, S.L. and director of The Coca-Cola
Bottling Company of Egypt, S.A.E, member of the board
of Banco Espanol de Credito Banesto, and Chair of
Family Business Europe
Key strengths/experience
– Extensive experience in the retail industry
– A deep understanding of international trade
– Strong strategic and sustainable development skills
Key external commitments
Member of the House of Lords, Founder of WorkL, Chair
of Trustees of the Fairtrade Foundation UK and President
and Chairman of the Chartered Management Institute
Previous roles
Managing Director of Waitrose and Deputy Chairman
of John Lewis Partnership, non-executive director and
Deputy Chairman of Channel 4 TV and Minister of State
for Trade and Investment and Trade Policy, Chair of
Business in the Community, The Prince’s Countryside
Fund and Member of Council at Lancaster University
Key strengths/experience
– Deep understanding of the Coca-Cola system
– Extensive international experience in the food and
beverage industry
– Experience of chairing a remuneration committee
Key external commitments
Vice-Chairman of Olive Partners, S.A., Co-Chairman
and member of the Executive Committee of Cobega,
S.A., Chairman of the North Africa Bottling Company,
Chairman of the Advisory Board of Banco Santander,
S.A. in Catalonia and a director of Equatorial Coca-Cola
Bottling Company, S.L.
Previous roles
Second Vice-Chairman and member of the Executive
Committee and Chairman of the Appointment &
Remuneration Committee of Coca-Cola Iberian
Partners, S.A.
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Other Information
Directors’ biographies
CONTINUED
C
AT
N
A
R
C
AT
N
A
R
C
AT
N
A
R
Brian Smith
Non-executive Director
Dessi Temperley
Non-executive Director
Garry Watts
Non-executive Director
Date appointed to the Board: July 2020
Independent: No
Date appointed to the Board: May 2020
Independent: Yes
Date appointed to the Board: April 2016
Independent: Yes
Key strengths/experience
– Extensive experience of working in the Coca-Cola system
– Deep understanding of in market executional leadership
– Strong talent development and deployment skills
– Broad knowledge of global field operations at TCCC
Key external commitments
President and COO at TCCC and non-executive
director and member of the Compensation Committee
of Evertec, Inc.
Previous roles
President of TCCC’s Europe, Middle East and Africa
group, President of TCCC’s Latin America group,
Executive Assistant to TCCC’s CEO and Vice Chairman,
President of Brazil division, President of the Mexico
division and also Latin America group manager for
mergers and acquisitions at TCCC
Key strengths/experience
– Financial and technical accounting expertise
– Strong commercial insights and knowledge of
European markets
– International consumer brands experience
– Skilled in technology
Key external commitments
Non-executive director and Chairman of the
Audit Committee of Cimpress plc, non-executive director
of Philip Morris International Inc. and member of the
Supervisory Board of Corbion N.V.
Previous roles
Group CFO of Beiersdorf AG, member of the Supervisory
Board of tesa SE, Head of Investor Relations at Nestlé,
CFO of Nestlé Purina EMENA and CFO of Nestlé South
East Europe, and finance roles at Cable & Wireless
and Shell
Key strengths/experience
– Extensive business experience in Western Europe
and the UK, including as CEO of a global consumer
goods business
– Served as executive and non-executive director in
a broad variety of sectors and previously chaired the
Audit Committee of a sizeable company
– Financial expertise, experience and skills
– Formerly an auditor
Key external commitments
Senior Independent Director of Circassia
Pharmaceuticals plc
Previous roles
Audit partner at KPMG LLP, CFO of Medeva plc, CEO of
SSL International, director of Coca-Cola Enterprises, Inc.,
Deputy Chairman and Audit Committee Chairman of
Stagecoach Group plc and Protherics plc and Chairman
of BTG plc, Foxtons Group plc and Spire Healthcare
Group plc
Board and Committee membership
changes during the year
– Irial Finan resigned from the Board effective
26 May 2021
– Garry Watts was appointed as a member of the
Affiliated Transaction Committee and resigned
as a member of the Remuneration Committee
effective 20 October 2021
– John Bryant was appointed as a member of the
Remuneration Committee and resigned as a
member of the Affiliated Transaction Committee
effective 20 October 2021
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Other Information
Senior management
The senior management and
Damian Gammell together
constitute the members of the
Executive Leadership Team (ELT).
Nik Jhangiani
Chief Financial Officer
Appointed May 2016
Nik has more than 25 years of finance experience,
including 20 years within the Coca Cola system,
previously as Senior Vice President and CFO for
Coca-Cola Enterprises, Inc. Nik started his career
in New York at accountancy firm Deloitte & Touche
before spending two years at Bristol-Myers Squibb as
International Senior Internal Auditor. He then joined the
Colgate-Palmolive Company in New York where he
was appointed Group Financial Director for the Nigerian
operations, before moving to TCCC in Atlanta. He is
a Certified Public Accountant.
José Antonio Echeverría
Chief Customer Service and
Supply Chain Officer
Appointed September 2019
José Antonio leads CCEP’s end to end supply chain and
customer service. He is focused on creating a superior
experience for our customers, while delivering an
expanded and sustainable portfolio of drinks and
packaging. He has been a part of the Coca-Cola system
since 2005, serving as Vice President of Strategy and
Transformational Projects for the Iberia Business Unit,
and Vice President, Strategy and Coordination for Supply
Chain across CCEP.
Stephen Lusk
Chief Commercial Officer
Appointed March 2021
Stephen is responsible for advancing and shaping our
commercial strategy, capabilities and driving our
performance in the market and with customers. He works
closely with our franchise partners to bring their brands
and products to life. Stephen has spent the last 30 years
in the Coca-Cola system, holding senior positions in
supply chain, sales and marketing and general
management in Europe. Most recently, he led the
Coca-Cola bottler in Singapore, Malaysia and Brunei.
Clare Wardle
General Counsel and Company Secretary
Appointed July 2016
Peter Brickley
Chief Information Officer (CIO)
Appointed November 2016
Clare leads legal, risk, compliance, security and company
secretariat. Prior to joining CCEP, she was Group
General Counsel at Kingfisher plc, Commercial Director,
General Counsel and Company Secretary at Tube Lines
and held senior roles at the Royal Mail Group. She began
her career as a barrister before moving to Hogan Lovells.
Clare is the Senior Independent Director of The City of
London Investment Trust plc and Modern Pentathlon GB.
Peter leads the business process and technology function
at CCEP, including steering CCEP’s investments in
technology solutions. Peter has over 20 years’ experience
leading technology for global businesses including
Heineken, Centrica and BAT. More recently, he was
Global CIO and Managing Director of Global Business
Services at SABMiller. Peter is also a trustee of the
Brain and Spine Foundation.
Ana Callol
Chief Public Affairs, Communications
and Sustainability Officer
Appointed January 2022
Ana leads CCEP’s sustainability strategy, effective
communication with stakeholders and employees, and
engagement with media, policymakers and communities.
Ana has worked within the Coca-Cola System for over
20 years in roles across the spectrum of marketing,
sustainability, communications and public affairs. Her
consumer and customer orientation and leadership
experience helps CCEP accelerate its sustainability plan,
This is Forward, and strengthen the development and
growth of PACS capabilities.
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Senior management
CONTINUED
Victor Rufart
Chief Integration Officer
Appointed October 2016
Victor leads business strategy and business
transformation. Prior to joining CCEP, he was CEO of
Coca-Cola Iberian Partners, S.A. and spent 25 years
at Cobega, S.A. Whilst with Cobega, S.A., he held
a number of senior roles including Director of New
Business, Head of Finance, advisor in the formation
of the Equatorial Coca Cola Bottling Company and
Head of Tax Planning.
Leendert den Hollander,
General Manager, Northern Europe
Business Unit
Appointed September 2020
Leendert is responsible for CCEP’s business unit in
Northern Europe, including Belgium, Luxembourg, the
Netherlands, Sweden, Norway and Iceland. Previously,
he was General Manager of Great Britain. Prior to CCEP,
Leendert was CEO of Young’s Seafood and Managing
Director at Findus Group Ltd. Earlier in his career,
Leendert spent 15 years at Procter & Gamble in senior
marketing positions.
Francesc Cosano
General Manager, Iberia Business Unit
Appointed May 2016
Francesc leads CCEP’s business unit in Spain, Portugal
and Andorra. He was previously the Operations Director
then Managing Director of Coca-Cola Iberian Partners,
S.A. Francesc has been part of the Coca-Cola system
for over 30 years, and involved in a number of sales
management positions, ultimately as Sales Director
then Deputy General Manager. He has also worked as
Regional Director for the Leche Pascual, S.A. Group,
in Anglo Española de Distribución, S.A.
Stephen Moorhouse
General Manager, Great Britain Business Unit
Appointed September 2020
Stephen is responsible for CCEP’s business unit in
Great Britain. He has over 25 years’ experience in the
Coca-Cola system, leading business operations and
supply chain. Stephen has held a number of other senior
executive roles throughout Europe, most recently as
General Manager of Northern Europe. Prior to joining, he
worked overseas for the Swire Group in the US and Asian
Pacific region. Stephen is a member of the British Soft
Drinks Association.
Véronique Vuillod
Chief People and Culture Officer
Appointed November 2020
Frank Molthan,
General Manager, Germany Business Unit
Appointed May 2016
François Gay-Bellile
General Manager, France Business Unit
Appointed July 2020
Véronique heads CCEP’s People and Culture function.
Having joined the Coca-Cola bottling system more than
20 years ago, she has worked in many human resources
(HR) positions across business units, commercial and
supply chain functions overseeing HR strategy and
partnering with business leaders. Most recently,
Veronique was Vice President, People and Culture in
France. She began her career as a management
consultant with PricewaterhouseCoopers. She supports
the promotion of inclusion and diversity, HR best practices
in leadership and workplace, and innovations networks.
Frank leads CCEP’s Business Unit in Germany and has
over 30 years’ experience in Germany’s Coca-Cola
system. He started his career at Coca-Cola bottling
operations in Schleswig-Holstein and North Rhine-
Westphalia. He has held a range of regional and
commercial leadership roles, latterly as HR Director for
Coca-Cola Germany. He was also Managing Director of
Coca-Cola Deutschland Verkauf GmbH and Co. KG.
François is responsible for CCEP’s business unit in
France. His career began at Pernod-Ricard as a brand
manager. He joined TCCC in France in 1996. Over
his 24 years at TCCC he held roles of increasing
responsibility in marketing, commercial and general
management in the US, Asia and Europe. Before joining
CCEP, François was General Manager for TCCC in
France. He is a director of the French Soft Drinks
Association (Boissons Rafraîchissantes de France),
the French Food & Beverage Association (Association
Nationale de l’Industrie Alimentaire) and ILEC (Institut de
Liaisons des Enterprises de Consommation).
Peter West
General Manager, Australia, Pacific and
Indonesia Business Unit
Appointed May 2021
Peter was appointed Vice President and General
Manager of the API business unit in May 2021, following
the Acquisition. Peter originally joined CCL as
Managing Director, Australian Beverages in April 2018.
Prior to this role, Peter was Managing Director of
Lion’s Dairy and Drinks business in Australia and has
held several senior roles at Arnott’s Biscuits Ltd and
Mars Confectionery, including Regional President for
Continental Europe for Mars Chocolate.
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Governance framework
Our corporate governance framework is summarised below with further detail provided on the following pages
Stakeholders
Including our people, customers,
suppliers, franchisors, investors,
consumers and communities
Board of Directors
Provides overall leadership, independent
oversight of performance and is
accountable to shareholders for the
Group’s long-term success
Delegation
Affiliated Transaction Committee (ATC)
Has oversight of transactions with affiliates and makes recommendations to the Board (affiliates are holders of 5% or more
of the securities or other ownership interests of CCEP).
Audit Committee
Monitors the integrity of the Group’s financial statements and results announcements, the effectiveness of internal controls
and risk management, as well as managing the external auditor relationship.
ReadmoreaboutourAuditCommitteeonpages 86–91
Corporate Social Responsibility (CSR) Committee
Oversees performance against CCEP’s strategy and goals for CSR, reviews CSR risks facing CCEP, including health and
safety and climate change risks, and the practices by which these risks are managed and mitigated, approves sustainability
commitments and targets, and monitors and reviews public policy issues that could affect CCEP.
Readmoreaboutsustainabilityonpages 18–36
SeeourSustainabilitygovernanceframeworkonpage 20
Full sustainability performance data for 2021 will be published on our website in May 2022.
Nomination Committee
Sets selection criteria and recommends candidates for appointment as INEDs, reviews Directors’ suitability for
election/re-election by shareholders, considers Directors’ potential conflicts of interest, oversees development of a diverse
pipeline for senior management and Director succession, and oversees wider people matters for the Group, including culture,
diversity, succession, talent and leadership.
ReadmoreaboutourNominationCommitteeonpages 82–85
Remuneration Committee
Recommends remuneration policy and framework to the Board and shareholders, recommends remuneration packages
for members of the Board to the Board, approves remuneration packages for senior management, reviews workforce
remuneration and related policies and principles, and governs employee share schemes.
ReadmoreaboutourRemunerationCommitteeonpages 92–107
Ad hoc Committees
– Disclosure Committee
– Results and Dividend sub committee
Accountability
Values
Included in our Code of Conduct,
ways of working and our culture
Our Strategy
Guided by our growth platform
to ensure we generate sustainable
shareholder returns
CEO
Empowered by authority
of the Board to put agreed strategy
into effect and run CCEP
on a day to day basis
ELT
Team members with defined
areas of responsibility support
and report to the CEO
Our people
33,000 employees making, selling
and distributing great beverages
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Statement of compliance
The governance framework of the Company is set out
in its Articles of Association (the Articles) and the
Shareholders’ Agreement. These provide a high level
framework for the Company’s affairs, governance and
relationship with its stakeholders and its shareholders.
The Articles and frequently asked questions about the
governance framework are available on the Company’s
website at www.cocacolaep.com/about-us/governance.
Statement of compliance with the
UK Corporate Governance Code
We follow the UKCGC on a comply or explain basis.
CCEP is not subject to the UKCGC as it has a standard
listing of ordinary shares on the Official List. However, we
have chosen to comply with the UKCGC where possible
and explain areas of non-compliance to demonstrate our
commitment to good governance as an integral part of
our culture. Save as set out below, CCEP complied with
the UKCGC during the year ended 31 December 2021.
A copy of the UKCGC is available on the Financial
Reporting Council’s (FRC) website: www.frc.org.uk/
directors/corporate-governance-and-stewardship/
uk-corporate-governance-code.
Chairman
UKCGC provision 9
The Chairman, Sol Daurella, was not considered
independent on either her appointment or election, within
the meaning of the UKCGC. However, we benefit from her
vast knowledge of, and long-term commitment to, the
Coca-Cola system and her extensive experience and
leadership skills, gained from her roles as director and
CEO of large public and private institutions across many
different sectors.
Annual re-election
UKCGC provision 18
Sol Daurella, the Chairman, will not be subject to
re-election during her nine year tenure following the
completion of the Merger. This recognises the importance
of her extensive experience and knowledge of the
beverage industry, and the significant shareholding of
Olive Partners, S.A. (Olive Partners) in the Company.
To provide stability, none of the INEDs were put up for
election at an Annual General Meeting (AGM) before the
AGM in 2019 when three INEDs were put up for election.
At the AGM in 2020, three INEDs were put up for election
and three INEDs were put up for re-election. At the AGM
in 2021, three additional INEDs were put up for election
so that, in total, all nine INEDs were put up for election or
re-election (Jan Bennink, John Bryant, Christine Cross,
Nathalie Gaveau, Thomas H. Johnson, Dagmar
Kollmann, Mark Price, Dessi Temperley and Garry Watts).
This arrangement was in place to ensure effective
representation of public shareholders and to retain
INEDs’ influence over the Company’s strategic direction
and operation, following the completion of the Merger.
From the 2022 AGM, all INEDs will be subject to annual
re-election from the point of their first election at an AGM.
Remuneration
UKCGC provision 32
The Remuneration Committee is not comprised solely
of INEDs, although it is comprised of a majority of INEDs.
The Shareholders’ Agreement requires that the
Remuneration Committee comprises at least one
Director nominated by:
– Olive Partners, for as long as it owns at least 15%
of the Company
– European Refreshments Unlimited Company (ER),
a subsidiary of TCCC, for as long as it owns at least
10% of the Company
The Remuneration Committee, and its independent
Chairman, benefit from the nominated Directors’
extensive understanding of the Group’s market.
Remuneration
UKCGC provision 33
The Remuneration Committee is not solely responsible
for setting the remuneration of the Chairman and CEO.
Instead, the Board (excluding any Director whose
remuneration is linked to the decision) determines their
remuneration, including the Non-executive Directors
(NEDs), on the recommendation of the Remuneration
Committee and following rigorous analysis and debate.
To date, the Board has followed all of the Remuneration
Committee’s recommendations.
Differences between the UKCGC and the
Nasdaq corporate governance rules (the
Nasdaq Rules)
In 2021, CCEP transferred its US stock exchange listing
to Nasdaq from the NYSE. The Company is classed as
a Foreign Private Issuer (FPI). It is therefore exempt
from most of the Nasdaq Rules that apply to domestic
US listed companies, because of its voluntary compliance
with the UKCGC. However, under the Nasdaq Rules,
the Company is required to disclose differences between
its corporate governance practices and those followed
by domestic US companies listed on Nasdaq. The
differences are summarised below.
Director independence
The Nasdaq Rules require a majority of the Board to be
independent. The UKCGC requires at least half of the
Board (excluding the Chairman) to be independent. The
Nasdaq Rules contain different tests from the UKCGC
for determining whether a director is independent. The
independence of CCEP’s NEDs is reviewed by the Board
on an annual basis, taking into account the guidance
contained in the UKCGC and criteria established by the
Board. It has determined that a majority of the Board is
independent, without explicitly taking into consideration
the independence requirements outlined in the
Nasdaq Rules.
Board Committees
CCEP has a number of committees whose purpose and
composition are broadly comparable to the requirements
of the Nasdaq Rules for domestic US companies.
However, other than the Audit Committee, committee
members are not all INEDs, although in all cases the
majority are. Each committee has its own terms of
reference (broadly equivalent to a charter document)
which are reviewed annually and can be found on our
website at www.cocacolaep.com/about-us/ governance/
committees. A summary of the terms of reference, roles
and activities of the Audit Committee, Nomination
Committee and the Remuneration Committee can
be found in the Committees’ respective reports. The
Remuneration Committee’s terms of reference include
responsibility for matters relating to remuneration policy,
share-based incentive plans, employee benefit plans and
implementation of remuneration policy.
Audit Committee
More information about the Audit Committee is set out
in its report, including compliance with the requirements
of Rule 10A-3 under the US Securities Exchange Act
of 1934, as amended, and Rule 5605(c)(2)(A) of the
Nasdaq Rules. The Audit Committee is comprised only
of INEDs (complying with the Nasdaq Rules). However,
the responsibilities of the Audit Committee (except for
applicable mandatory responsibilities under the
Sarbanes-Oxley Act) follow the UKCGC’s
recommendations rather than the Nasdaq Rules,
although they are broadly comparable. One of the
Nasdaq’s similar requirements for the Audit Committee
states that at least one member of the Audit Committee
should have accounting or related financial management
expertise. The Board has determined that John Bryant,
Dagmar Kollmann, Dessi Temperley and Garry Watts
possess such expertise and are therefore deemed the
audit committee financial experts as defined in Item 16A
of Form 20-F. It was further determined that none of the
Audit Committee members had participated in the
preparation of the financial statements of the Company
or any of its subsidiaries.
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Shareholder approval of equity
compensation plans
The Nasdaq Rules for domestic US companies require
that shareholders must be given the opportunity to vote
on all equity compensation plans and material revisions
to those plans. CCEP complies with UK requirements
that are similar to those of the Nasdaq Rules. However,
the Board does not explicitly take into consideration
Nasdaq’s detailed definition of “material amendments”.
NED meetings
The Nasdaq Rules require INEDs to meet at regularly
scheduled executive sessions at which only independent
directors are present at least twice a year. The UKCGC
requires NEDs to meet without the Chairman present
at least once annually to appraise the Chairman’s
performance. The NEDs have regular meetings without
management present and in 2021, there were two
separate meetings of INEDs.
Code of Conduct
The Nasdaq Rules require relevant domestic US
companies to adopt and disclose a code of conduct
applicable to all directors, officers and employees. CCEP
has a Code of Conduct (CoC) that applies to all Directors
and the senior financial officers of the Group. If the Board
amends or waives the provisions of the CoC, details of the
amendment or waiver will appear on the website. No such
waiver or amendment has been made or given to date.
Seewww.ccepcoke.online/code-of-conduct-policy
Our CoC applies to all our people. We also expect all
third parties who work on our behalf, such as suppliers,
vendors, contractors, consultants, distributors and agents,
to act in an ethical manner consistent with our CoC and in
compliance with our Supplier Guiding Principles.
The CoC covers issues such as share dealing,
anti-bribery, data protection, environmental regulation,
human rights, health, safety, wellbeing and respect for
others. It aligns with the UN Global Compact, the US
Foreign Corrupt Practices Act, the UK Bribery Act, the
UKCGC, the EU General Data Protection Regulation, the
Spanish and Portuguese Criminal Codes and Sapin II.
CCEP considers that the CoC and related policies
address the Nasdaq Rules on the codes of conduct for
relevant domestic US companies. We received no fines
for CoC violations in 2021.
SeedetailsofCoCReportingonpage 40
Board leadership and company purpose
Role of the Board
The Board is primarily responsible for the Group’s
strategic plan, risk appetite, systems of internal control
and corporate governance policies, to ensure the
long-term success of the Group, underpinned by
sustainability. To retain control of key decisions and
ensure there is a clear division of responsibilities, there is
a formal schedule of matters reserved to the Board, which
sets out the structure under which the Board manages
its responsibilities, and provides guidance on how it
discharges its authority and manages its activities.
Reserved matters include strategic decisions, approval
of annual and long-term business plans, suspension,
cessation or abandonment of any material activity of the
Group and material acquisitions and disposals.
The Board, through the Nomination Committee, assesses
and monitors the Group’s culture to ensure it aligns with
the Group’s purpose, values and strategy set by the Board.
Readmoreaboutourstrategyonpage 16
SeeourNominationCommittee’sreportonpages 82–85
Stakeholders
Stakeholders are important to CCEP and this is
recognised by the Board. We use a matrix to help ensure
Directors have the right engagement and information to
understand stakeholders’ input to our business and our
impact on them. This enables the Board to consider
stakeholders’ interests in their decision making.
Regular engagement with both existing and potential
shareholders is important to the Board. On behalf of the
Board, our CEO, CFO and the Investor Relations team
engage with investors and analysts throughout the year.
The Board receives regular updates on the views of
shareholders and the Investor Relations programme.
Seeasummaryofourstakeholderengagement
on pages 12–15
The terms of reference and remit of the Remuneration
Committee include remuneration policy at all levels
across the Group aligned with the Company’s long-term
strategic goals. The Nomination Committee’s terms of
reference and remit include key people issues such as
culture, succession planning and diversity. The Chairmen
of those committees are responsible for championing,
and reporting back to the Board on, these matters and sit
on each other’s Committee to ensure seamless coverage
of the full range of people matters. The Board also takes
the opportunity to engage with our people directly.
ReadmoreintheNominationCommitteereport
on pages 82–85
Our people are able to raise any concerns they have,
online or by telephone in confidence through Speak Up,
CCEP’s whistleblowing hotline. The Audit Committee
updates the Board on whistleblowing arrangements,
reports and investigations.
ReadmoreintheAuditCommitteereportonpages 87–91
Board activities during the year
The Chairman sets the Board agenda, which consists of
the following discussion matters:
– Updates from the CEO, the CFO and other key senior
executives on the business performance and key
business initiatives
– Governance matters
– Strategy
– Diversity
– Sustainability
– Material expenditure and other Group matters
The key areas of focus for the Board’s activities and
topics discussed during the year are set out in table 1
on page 77.
Strategy remained a key focus for the Board. During
the year, the Board considered and debated our future
strategy focusing on ESG, retail in a post COVID-19
world and growth. The Board also received briefings from
management on API integration, digital and sustainability.
Training and development
Training and development opportunities are regularly
provided to Directors to ensure they provide constructive
challenge to management. There are regular virtual
training sessions for Directors on a wide range of topical
areas. The programme for 2021 is set out in table 2 on
page 78.
Conflicts of interest
The UK Companies Act 2006 (the Companies Act), the
Articles and the Shareholders’ Agreement allow the
Directors to manage situational conflicts (situations where
a Director has an interest that conflicts, or may conflict,
with our interests). The Nomination Committee considers
issues involving potential situational conflicts of interest
of Directors. Each Director is required to declare any
interests that may give rise to a situational conflict of
interest with CCEP on appointment and subsequently as
they arise. Directors are required to review and confirm
their interests annually. The Board is satisfied that the
systems for the reporting of situational conflicts are
operating effectively.
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Table 1
Board activities in 2021
Area of focus
Discussion topics
Area of focus
Discussion topics
Growth platform
– COVID-19: protecting our people, serving our customers, supporting our communities and
Our people
– People strategy including performance acceleration, employee engagement, talent,
Accelerate
competitiveness
Future ready culture
preserving the long-term future of the business
– Increasing consumer choice by innovating on flavours and growing our portfolio of
products and monitoring performance of innovations
– Route to market development
– Front line sales strategy
– Retail environment and customer challenges
– Collaborative customer growth
– Pricing challenges and opportunities
– Assessing acquisition opportunities, including CCL
– The 2021 and 2022 annual business plans, including strategic priorities
– Long-range planning
– Transformation and competitiveness initiatives
– Capital allocation and expenditure
– Treasury matters including delegations of authority to management
– Competitor review and market analysis
– API integration and growth strategy
– Enterprise risk management, including risk appetite and risk assessment
– Safety and oversight of management’s response to fatalities
– CCEP Ventures, our innovation investment fund
– Engagement with CCEP’s key and other stakeholders
– Approval of 2020 Modern Slavery Statement, published in May 2021
– Approval of tax strategy
– Investor engagement
– Relationship with TCCC and other franchisors
Digital future
Green future
– Digital transformation programme
– Digital commercial capabilities
– Approach to cyber security and risk
– Sustainability performance and climate strategy
– Sustainable packaging strategy
– Climate strategy and carbon reduction commitments
– Deposit return schemes
learning and development, future ready leadership
– Culture and its role in supporting the strategy
– Inclusion, diversity and equity (ID&E)
– Employee wellbeing
– Wider workforce remuneration
– Attendance at virtual employee town hall
Corporate governance
– Public policy and regulatory developments affecting CCEP, particularly in relation to ESG
– Approval of financial results and associated viability and going concern statements
– Approval of trading updates
– Approval of interim dividend payment
– Approval of Integrated Report and Form 20-F for 2020, subject to final sign off by
a sub committee
– Approval of Notice of AGM, subject to final sign off by a sub committee
– Move from NYSE to Nasdaq
– Board evaluation feedback and action plan
– Succession planning for the Board and improving Board diversity
– Succession planning for Committee membership and chairmanship
– Approval of revised and new policies
– Approval of new Director appointment: Manolo Arroyo
– Approval of the updated global chart of authority
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Table 2
Director training and development programme
Form of training
Purpose
Subject or speaker
Briefings
To focus on matters of interest to CCEP
as well as on relevant commercial, legal
and regulatory developments
– API markets induction
– API audit induction
– Costa Coffee
– ESG
– Indonesia
– New Zealand
– TCCC Technical, Innovation and Supply Chain
– Brokers and shareholder activism
– Data and analytics
– Sustainable packaging
To address requests from Directors
Development
sessions
Site visits
Visits to Group businesses, factories and
commercial outlets to enhance knowledge
of CCEP operations and meet employees,
suppliers and customers
– Virtual site tour in Dongen, Netherlands and
Mannheim, Germany
– Virtual market tours
– Opportunity to attend annual kick off meetings
in business units and functions
External
speakers
To receive insights from experts and
engage with stakeholders
– Our franchisors, e.g. TCCC
– Our customers
– Our brokers
– Industry representatives
Division of responsibilities
Governance structure
The Board, led by the Chairman, is responsible for the
leadership of the Group. While both the Executive
Director and NEDs have the same duties and constraints,
they have different roles on the Board (see table 3).
There is a clear, written division of responsibilities
between the Chairman and the CEO. The Board has
approved a framework of delegated authority to ensure
an appropriate level of Board contribution to, and
oversight of, key decisions and the management of daily
business that support its long-term sustainable success.
This framework has been designed to enable the delivery
of the Company’s strategy and is outlined in our
governance framework on page 74.
The Board delegates certain matters to its Committees.
Each of the five Committees has its own written terms
of reference, which are reviewed annually. These are
available at www.cocacolaep.com/about-us/governance/
committees.
The CEO with the ELT manages the day to day business.
All decisions are made in accordance with our chart
of authority, which defines our decision approval
requirements and ensures that all relevant parties are
notified of decisions impacting their area of responsibility.
The chart of authority was reviewed and updated during
the year to ensure that it was fit for purpose and
covered API.
Board and Committee meetings
The Board held six formal meetings during 2021, with
additional ad hoc meetings with Board and Committee
members held in line with business needs. Directors are
expected to attend every meeting. If a Director is unable
to attend, the relevant papers are provided to that Director
in advance so that comments can be given to the
Chairman or Committee Chairman, as applicable, who
relays them at the meeting. Afterwards, the Chairman or
Committee Chairman, as applicable, also briefs the
Director on the matters discussed.
Attendance during 2021 is set out in table 4 on page 80.
The Chairman attends most Committee meetings. There
is cross membership between the Audit Committee
and Remuneration Committee. This helps ensure
remuneration outcomes align with the underlying
performance of CCEP. The Chairman of the Nomination
Committee sits on the Remuneration Committee and the
Chairman of the Remuneration Committee sits on the
Nomination Committee. This reflects CCEP’s joined
up approach to investing in and rewarding our people.
Cross membership between Committees enables active
collaboration and liaison across Committees.
At the end of most Board meetings, two sessions are
held: one that all Directors attend, without management
present, and the other that all NEDs attend, without
management or the CEO present. In 2021, there were
also two separate meetings of INEDs. Directors may raise
any matter they wish for discussion at these sessions.
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Board support
Board meetings are scheduled at least one year in
advance, with ad hoc meetings arranged to suit business
needs. Prior to COVID-19, meetings were held in a variety
of locations, reflecting our engagement with all aspects of
our international business. COVID-19 restrictions meant
the Directors were only able to meet in person once.
The remaining Board and Committee meetings were
held virtually.
The agenda of Board meetings follow our annual Board
programme. This sets out the standing items at each
meeting, such as periodic activities (including results and
AGM documentation), business plan and the assessment
of Board evaluation results.
Before the Board meeting, the Chairman, CEO and
Company Secretary agree the final agenda. This covers
discussion items such as the status of ongoing projects
and stakeholder considerations. Comprehensive briefing
papers are circulated electronically to all Directors, to
allow time to review the matters which are to be discussed.
Throughout the year Directors have access to the advice
and services of the Company Secretary and independent
professional advice, at the Company’s expense.
Board paper review
In 2021, Independent Audit (IA) carried out an externally
facilitated Board paper review. IA does not have any
connection with the Board or any individual Director.
The Board paper review involved a detailed review of the
materials presented to Board and Committee meetings
combined with interviewing preparers of papers and
the Company Secretarial team. The review produced a
detailed proposal with suggestions to improve the format
and content of Board papers, along with the Board paper
preparation process.
Overall, the review confirmed that Board papers work in
communicating the core information needed for effective
Board oversight but opportunities to strengthen their
effectiveness were identified. IA also supported the
development of our board papers through a series of
advice sessions for the preparers of papers. In 2022,
actions will be taken to implement these improvements.
Independence of Non-executive Directors
The Board reviewed the independence of all the
NEDs against the UKCGC and also considered the
requirements of SEC Rule 10A-3 in relation to the Audit
Committee. It determined that Jan Bennink, John Bryant,
Christine Cross, Nathalie Gaveau, Thomas H. Johnson,
Dagmar Kollmann, Mark Price, Dessi Temperley and
Garry Watts are independent and continue to make
effective contributions. The Board recognises that seven
of CCEP’s NEDs, including the Chairman, cannot be
considered independent. However, they continue to
demonstrate effective judgement when carrying out
their roles and are clear on their obligations as Directors,
including under section 172 of the Companies Act.
Our CEO, Damian Gammell, is not considered
independent because of his executive responsibilities
to the Group.
Consequently, the majority of the Board are independent.
Composition, succession and evaluation
Board diversity and composition
The composition of the Board and its Committees is set
out in table 4 on page 80. This includes details of
appointments and resignations during 2021. As their
biographies on pages 66–71 show, our Board members
have a range of backgrounds, skills, experiences and
nationalities, demonstrating a rich cognitive diversity
beyond gender.
SeeanoverviewofourDirectors’skillsandexperience
on page 66
ReadmoreabouttheGroup’sapproachtoID&E
on pages 37–39
Our commitment to diversity begins at the top, with clear
leadership from our Board, and is embedded at every
level of our business through our Inclusion and Diversity
Policy, This is Forward and the CoC. We are committed
to reaching 33% female Board membership by 2023
and aim to appoint at least one Director from an ethnic
minority to the Board. Furthermore, the Board considers
that it would be appropriate to have 40% female
representation overall and will, with its stakeholders,
work towards that as a longer term aim. The Nomination
Committee is committed to overseeing a diverse pipeline
for senior management and Director positions.
ReadmoreaboutBoardsuccessionanddiversityonpage 83
SeetheBoard’sdiversitypolicyintheCriteriaforselectionof
INEDsatwww.cocacolaep.com/about-us/governance
Table 3
Roles on the Board
Role
Responsibilities
Chairman
– Operating, leading and governing the Board
– Setting meeting agendas, managing meeting timetables
– Promoting a culture of open debate between Directors and encouraging effective communication
during meetings
– Creating the conditions for overall Board and individual Director effectiveness
CEO
– Leading the business
– Implementing strategy approved by the Board
– Overseeing the operation of the internal control framework
SID
– Advising and supporting the Chairman by acting as an alternative contact for shareholders and
as an intermediary to NEDs
NEDs
– Providing constructive challenge, strategic guidance, external insight and specialist advice to the
Company
Secretary
Board and its Committees
– Hold management to account
– Offering their extensive experience and business knowledge from other sectors and industries
– Assisting the Chairman by ensuring that all Directors have full and timely access to relevant
information
– Advising the Board on legal, compliance and corporate governance matters
– Organising the induction and ongoing training of Directors
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Re-election of Directors
The Board has determined that the Directors, subject
to continued satisfactory performance, shall stand for
re-election at each AGM with the exception of the
Chairman as explained on page 75. All Directors
appointed by Olive Partners (other than the Chairman),
ER nominated Directors Manolo Arroyo and Brian Smith,
plus Jan Bennink, John Bryant, Christine Cross,
Damian Gammell, Nathalie Gaveau, Thomas H. Johnson,
Dagmar Kollmann, Mark Price, Dessi Temperley and
Garry Watts will submit themselves for re-election at the
2022 AGM. The Board is confident that each Director will
carry on performing their duties effectively and remain
committed to CCEP.
The NED terms of appointment are available for inspection
at the Company’s registered office and at each AGM.
Among other matters, these set out the time commitment
expected of NEDs. On appointment, the Board took into
account the other demands on the time of John Bryant
and Manolo Arroyo. The Board is satisfied that the other
commitments of all Directors do not interfere with their
ability to perform their duties effectively.
SeethesignificantcommitmentsofourDirectorsintheir
biographiesonpages 67–71
Table 4
Meeting attendance by Board and Committee members(A)
Independent or nominated
by Olive Partners or ER(B)
Board of
Directors
Affiliated
Transaction
Committee
Audit
Committee
CSR
Committee
Nomination
Committee
Remuneration
Committee
Chairman
Sol Daurella
Executive Director
Damian Gammell
Non-executive Directors
Manolo Arroyo(C)
Jan Bennink(D)
John Bryant(E)
Nominated by Olive Partners
CEO
Nominated by ER
Independent
Independent
José Ignacio Comenge
Nominated by Olive Partners
Christine Cross
Irial Finan(C)(F)
Nathalie Gaveau
Independent
Nominated by ER
Independent
Álvaro Gómez-Trénor Aguilar
Nominated by Olive Partners
Thomas H. Johnson(F)
SID
Dagmar Kollmann(D)(G)
Independent
Alfonso Líbano Daurella
Nominated by Olive Partners
Mark Price
Independent
Mario Rotllant Solà
Nominated by Olive Partners
Brian Smith
Dessi Temperley
Garry Watts(H)
Nominated by ER
Independent
Independent
6 (6)
6 (6)
4 (4)
6 (6)
6 (6)
6 (6)
6 (6)
2 (2)
6 (6)
6 (6)
6 (6)
5 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
5 (5)
5 (5)
4 (4)
5 (5)
9 (9)
5 (5)(I)
8 (9)
1 (1)
9 (9)
9 (9)(I)
5 (5)
5 (5)
5 (5)(I)
4 (5)
5 (5)
5 (5)
3 (3)
5 (5)
2 (2)
3 (3)
1 (1)
6 (6)(I)
2 (3)
5 (5)(I)
5 (6)
5 (5)
6 (6)
5 (5)
(A) The maximum number of scheduled meetings in the period during which the individual was a Board or Committee
(F) Irial Finan and Thomas H. Johnson were both unable to attend the May 2021 Remuneration Committee and
member is shown in brackets.
Christine Cross consented to act as their alternates.
(B) Nominated pursuant to the Articles of Association and terms of the Shareholders’ Agreement.
(C) Manolo Arroyo was appointed as a Director by ER when Irial Finan stepped down on 26 May 2021.
(D) Dagmar Kollman succeeded Jan Bennink as Chairman of the Affiliated Transaction Committee effective 9 March
2022, Jan Bennink will continue to serve as a member.
(G) Dagmar Kollman was unable to attend: the March 2021 CSR Committee meeting and appointed Christine Cross as
her alternate; the September 2021 Audit Committee; and one day of the December 2021 Board meeting and appointed
Nathalie Gaveau as her alternate.
(H) Effective 20 October 2021, Garry Watts resigned as a member of the Remuneration Committee and was appointed
(E) Effective 20 October 2021, John Bryant resigned as a member of the Affiliated Transaction Committee and
as a member of the Affiliated Transaction Committee.
was appointed as a member of the Remuneration Committee.
(I) Chairman of the Committee
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Corporate governance report
CONTINUED
Table 5
2021 Board evaluation findings and actions
Strategy
Succession
Decision making
2021 findings
Renew Board focus on
long-term business strategy
and risk
Improve Board oversight of
succession planning for key
senior management positions
Enhance information flows to
facilitate more effective
decision making
Actions
undertaken
in 2021
– Focused on long range plan,
– Session on Executive
future challenges and
opportunities in the
September 2021 strategy
meeting
– Reviewed the forward agenda
with the Board to ensure key
topics were covered in the
annual cycle
– Board involvement in risk
review process evolved and
risk session to be included
annually at the Board, as well
as the Audit Committee
succession to be included
annually at the Board, as well
as the Nomination Committee
– Arrangements made for the
Board to meet high potential
pipeline candidates
– A broader range of senior
team presented in the Board
and at training sessions
– Committee decisions and
actions provided ahead of
Board meeting
– Committee Chairmen to focus
on key strategic issues in the
report back
– Independent Audit engaged
to review board papers to
improve reporting
Table 6
Disclosure of compliance with provisions of the Audit, risk and internal control
and Remuneration sections of the UKCGC
Items located elsewhere in the 2021 Integrated Report
Directors’ responsibilities statement
Directors’ statement that they consider the Integrated Report and financial statements,
taken as a whole, to be fair, balanced and understandable
Going concern statement
Assessment of the Group’s principal risks
Viability statement
Risk management and internal control systems and the Board’s review of their effectiveness
Audit Committee report
Directors’ remuneration report
Page(s)
111
111
110
42–47
48
47
86–91
92–107
Annual General Meeting
The AGM continues to be a key date in our annual
shareholder engagement programme. Due to certain
restrictions placed on indoor public gatherings by the
UK Government, and in the interests of health and safety
during the COVID-19 pandemic, CCEP’s 2021 AGM
was conducted as a closed meeting.
We were pleased that all resolutions were passed by
more than 80% of those voting.
The 2022 AGM of the Company will be held in May at
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ,
United Kingdom. The Notice of AGM will set out a full
description of the business to be conducted at the
meeting. This will be available on our website from the
time of its posting to shareholders in April 2022.
The Chairman, SID and Committee Chairmen are
available to shareholders for discussion throughout
the year to discuss any matters under their areas of
responsibility, by contacting the Company Secretary.
Readmoreaboutourengagementwithinvestorsonpage 13
Sol Daurella, Chairman
15 March 2022
Board evaluation
In 2021, Ffion Hague of Independent Board Evaluation
(IBE) carried out an externally facilitated Board
effectiveness review. Neither Ffion nor IBE has any
connection with the Board or any individual Director.
The Board effectiveness review involved interviewing each
Director, obtaining feedback from non-Board contributors
and observing Board and Committee meetings. The review
produced comprehensive reports on the Board, each
Committee and the Directors, and the Board discussed
them in detail. Based on the feedback, a tangible action
plan was developed and agreed by the Board.
Overall, the Board confirmed that it continued to perform
effectively. Board culture, its relationship with senior
management and Board support were highly rated but
some areas for further improvement were identified.
These are set out in table 5.
Given the depth and breadth of the 2021 effectiveness
review, it was determined that an internal Board
evaluation process was appropriate for 2022. This has
been recommended to the Board by the Nomination
Committee for 2022.
Audit, risk and internal
control and Remuneration
Disclosures of compliance with provisions of the Audit,
risk and internal control and Remuneration sections of the
UKCGC are located elsewhere in this Integrated Report.
These disclosures include descriptions of the main
features of CCEP’s internal control and risk management
systems as required by rule 7 of the Disclosure Guidance
and Transparency Rules (DTRs). Table 6 sets out where
each respective disclosure can be found.
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Nomination Committee
Chairman’s letter
Dear Shareholder
I am pleased to report on the work of the Nomination
Committee during 2021. As our Chairman explains in her
introduction to the Governance and Directors’ Report, it
has been an exciting year for CCEP as we welcome API.
API
We have supported management to integrate API and
promote the values and behaviours across the region that
support CCEP’s desired culture.
Our people
As we learn to operate in a world with COVID-19, we also
continue to monitor and drive our people strategy,
promote ID&E and support the actions by management
to protect the wellbeing of our people.
Readmoreaboutthewellbeingofourpeopleonpage 37
Board succession and diversity
To secure the best people to lead CCEP, we also
continued our focus on Board and senior management
succession during the year. We recognise the importance
of maintaining a strong pipeline for Board succession and
actively continue on our search for diverse candidates
aligned with our updated INED selection criteria and our
restated diversity targets.
ReadmoreaboutBoardsuccessionanddiversityonpage 83
A brief summary of the Nomination Committee’s activities
during 2021 is provided in table 1 on page 84. We give
more details about some of these activities throughout
the rest of the Nomination Committee report.
Looking forward to 2022
Along with its regular schedule of topics, the Committee
has the following activities planned for 2022:
– Focus succession planning on securing diverse INED
candidates (with experience and understanding of API)
– Oversee the orderly succession of Committee
Chairman and membership rotation
– Assess and monitor the actions to enhance the
employee experience through, among other things,
strengthening the voice of our people
– Provide input to ensure leadership and our people have
future ready skills and retain winning talent
– Promote actions that support CCEP as a sustainable
and high-performing organisation
– Ensure an inclusive and purpose led culture is further
embedded throughout CCEP on behalf of the Board
– Advocate practices that support our commitment to
ESG matters, particularly those related to social and
governance
Availability to shareholders
I am available to shareholders for discussion throughout
the year to answer any questions about the work of the
Committee.
Thomas H. Johnson, Chairman of the
Nomination Committee
15 March 2022
We have supported
management to integrate API
and promote the values and
behaviours across CCEP that
support our desired culture.
Thomas H. Johnson, Chairman of the
Nomination Committee
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Other Information
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Nomination Committee role
The key duties and responsibilities of the Nomination
Committee are set out in its terms of reference.
These are available at www.cocacolaep.com/about-us/
governance/committees. They cover the following areas:
– Corporate governance
– Director selection, re-election and review
– Potential conflicts of interest
– Evaluations of the Board and succession planning
– Culture and workforce
Membership
Thomas H. Johnson (Chairman) May 2019
Member since
Manolo Arroyo
Christine Cross
Sol Daurella
Mark Price
May 2021
May 2019
May 2016
May 2019
Activities of the Nomination Committee
during the year
The Nomination Committee has a process for planning
its future meeting agendas and topics to be considered.
Table 1 on page 84 sets out the matters considered by
the Committee during 2021. Further detail is provided in
this report. The Committee met five times during the year.
Seedetailsofattendanceatmeetingsonpage 80
Board succession and diversity
To oversee and guide the delivery of the Group’s strategy,
we continue to focus on maintaining a well balanced
Board with the right mix of individuals who bring their
wide business knowledge and experience. To support
this, we use a matrix of skills required on the Board to
support the Group’s future plans, which we review
annually. Also, our INED selection criteria, which we keep
under review, reflect the importance of selecting
candidates who can give voice to stakeholder interests
effectively, particularly to help discharge the Board’s
duties under section 172 of the Companies Act 2006.
SeeourCriteriafortheselectionofINEDsat
www.cocacolaep.com/about-us/governance
Diversity on the Board
Developing a diverse Board is a key focus. Cognitive
diversity is important to good decision making, and we
pay particular attention to this in our succession planning.
This is driven by diversity of background, including gender
and ethnic diversity. It is part of the INED selection criteria
and diversity is a key consideration in considering
potential INED candidates.
In 2021, female representation on the Board remained at
29.4% which was the same level as in 2020. Regrettably,
we have not reached the 33% female Board membership
target as previously set by the Board and our INED
selection criteria. In addition, our INED selection criteria
states our ambition to appoint at least one Director from an
ethnic minority to the Board, which we have not reached.
We take meeting these targets seriously and the Board
reviewed the INED selection criteria and targets through
the year. We are committed to reaching 33% female
Board membership by 2023 and aim to appoint at least
one Director from an ethnic minority to the Board.
Furthermore, the Board considers that it would be
appropriate to have 40% female representation overall
and will, with its stakeholders, work towards that as a
longer term aim.
We know we have more work to do and are committed to
reporting on our progress transparently and making our
Board more representative, in particular by paying
attention to gender and ethnic diversity in our succession
planning and pipeline.
Our Board level diversity statistics are disclosed in
accordance with the Nasdaq Rules in table 2 on page 85.
SeeanoverviewofourDirectors’diversity,skillsand
experienceonpage 66
Independent Non-executive Director
succession
We continue to plan for the managed succession of
INEDs so we maintain the right balance of skills and
experience on the Board and Committees. We have
drawn up INED candidate specifications based on our
updated INED selection criteria, our restated diversity
targets and the gaps identified through our skills matrix.
In 2021, the skills matrix was also updated to reflect
Board members’ API business experience and market
knowledge. Through our review of the skills matrix, we
were able to identify the likely skills that could be lost
through Board refreshment.
We engaged two external recruitment consultant firms,
MWM Consulting and Russell Reynolds Associates,
to identify potential INED candidates with the skill set
identified while also having in mind the desirability of
increasing API territory experience and increasing
diversity. From the initial list of potential candidates,
a shortlist was identified for interview by members of the
Committee, the Chairman and other Board members in
2022. MWM Consulting has no connection with the Board
or any individual Director. Russell Reynolds Associates
supported some of CCEP’s recruitment activities in the
UK and Germany in 2021. It has no other connection to
CCEP and has no connection to any individual Director.
Appointments during the year
John Bryant was appointed to succeed Javier Ferrán with
effect from 1 January 2021. John has a finance background
and a strong track record of operational leadership and
brings over 30 years’ experience in consumer goods to the
Board. Further he has extensive experience in information
technology and will serve as CCEP’s designated INED
engaged in the cyber security strategy process.
ReadmoreintheAuditCommitteereportonpages 86–91
In May 2021, in accordance with the Company’s Articles
and the Shareholders’ Agreement, ER nominated
Manolo Arroyo to replace Irial Finan.
Induction
All new Directors receive a suite of induction materials
explaining:
– Their role and responsibilities
– Attributes of an effective board
– Their legal duties and responsibilities, including in
relation to section 172 of the Companies Act
– The calendar of Board and Committee meetings
– Governance documents, policies and procedures
– Committee terms of reference
– Our CoC
– Our share dealing code
– Background information about the Group
Established Directors mentor new Directors. Meetings
with members of the Board and the ELT and site visits
in a number of our markets are also arranged. John and
Manolo each undertook a comprehensive induction
programme with some meetings and site visits taking
place virtually due to COVID-19. This was tailored to their
individual requirements and phased to allow feedback
and further customisation of meetings and other
development activities. For instance, John Bryant
received a briefing on CCEP’s cyber preparedness
as our designated INED engaged in the cyber security
strategy process.
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CONTINUED
Table 1
Matters considered by the Nomination Committee during 2021
Executive Leadership Team
During 2022 we considered succession plans for the
Group’s ELT.
– Stephen Lusk was promoted from the role of
Vice President Commercial Development to the newly
created role of Chief Commercial Officer in March 2021
– Peter West, previously Managing Director of CCL,
became Vice President and General Manager of the
API Business Unit in May 2021, following the
Acquisition
– Lauren Sayeski departed as Chief Public Affairs,
Communications and Sustainability Officer at the end of
December 2021. Ana Callol was appointed to succeed
her with effect from 1 January 2022
Meeting date
March 2021
May 2021
Evaluation
At the end of each year, we recommend the process to
be used to evaluate the performance of the Board and its
Committees at the start of the following year.
July 2021
We recommended to the Board that an internal Board
evaluation process be undertaken in early 2022 similar
to that undertaken in 2020. The Board accepted our
recommendation and appointed Lintstock to support
a questionnaire based exercise, alongside interviews
of all Directors by the SID.
Readmoreaboutthe2021Boardevaluationexerciseon
page 81
October 2021
December 2021
Key agenda items
– Wellbeing strategy and listening to the voice of our employees
– Developing future ready leaders
– Succession planning for ELT and senior management
– Succession planning for Committee membership and chairmanship
– Director succession, particularly INEDs
– Integration of API colleagues
– Culture development and people strategy
– ID&E: focusing on culture and heritage
– Succession planning for Committee membership and chairmanship
– Review of the Board’s governance guidelines
– Review of the Board’s diversity targets and INED selection criteria
– Succession planning for ELT and senior management
– Culture and ways of working journey
– ID&E: focusing on LGBT+
– Director succession, particularly INEDs
– Succession planning for Committee membership and chairmanship
– Director skills matrix
– Committee evaluation
– Engagement and culture pulse survey
– Strategic talent management
– Succession planning for Committee membership and chairmanship
– Director succession, particularly INEDs
– ESG
– Succession planning for ELT and senior management
– People strategy: 2021 conclusion and 2022 plans
– Purpose led ID&E agenda focusing on ESG, particularly social
– Director succession, particularly INEDs
– Board evaluation process
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CONTINUED
Our people
We oversee the approach to culture, succession
planning and talent management, including diversity,
for the whole Group.
For Europe, we regularly receive data and actionable
insights about our people through the people and culture
reporting dashboard. Metrics include female leadership
headcount, annual voluntary turnover, engagement
scores, safety performance and promotion rate. The
metrics were chosen based on external benchmarks,
best practice, business relevance and availability of
accurate data. We are working with management to
develop the reporting needed to provide a consistent
people and culture reporting dashboard for API.
Inclusion, diversity and equity (ID&E)
We are committed to fostering an inclusive environment
where our people feel they can be themselves, be valued
and belong as set out in our policy on ID&E.
We regularly receive updates on ID&E initiatives and
provide challenge and feedback on those actions and
initiatives. In 2021, we received updates across CCEP’s
five diversity pillars including gender and multi
generations with focused briefings from management
on culture and heritage, LGBT+ and disability.
In October 2021, we conducted a voluntary, anonymous
survey focused on ID&E across the majority of our
countries to better understand our people’s experience
at CCEP.
Table 2
Nasdaq Board diversity disclosure(A)
Board Diversity Matrix (As of 31 December 2021)
Country of principal executive offices:
Foreign private issuer
Disclosure prohibited under home country law
Total number of directors
Part I: Gender identity
Directors
Part II: Demographic background
Underrepresented individual in home country jurisdiction
LGBTQ+
Did not disclose demographic background
(A) Disclosure permitted with Director consent.
United Kingdom
Yes
No
17
Female
Male
Non-Binary
Did not
Disclose
Gender
5
12
0
N/A
0
0
14
We continue to monitor progress towards ID&E objectives
in the business, in particular the target to have 40% of our
management positions held by women by 2025.
Talent and capability
We believe that our people are the key to delivering our
growth strategy and future ready culture.
ReadmoreaboutourapproachtoID&Eandworkforcediversity
statisticsonpages 37–39
Engagement
In January 2021, we conducted a pulse engagement
survey and in June 2021, following the Acquisition, we
conducted a global pulse engagement survey across
Europe and API. We considered the results and action
plans with management.
We were pleased that the results showed strong
engagement scores. Our people feel safe at work, excited
about the future of CCEP and would recommend CCEP
as a great place to work. Results also identified some
areas for improvement. We are reassured that
management are committed to take action on and
improve scores in employee communications, personal
growth opportunities and decision making.
We operationalise our approach to talent and succession
by regularly reviewing employee potential, identifying
critical roles, updating succession plans and nurturing
emerging leaders.
We received updates on the progress of learning and
development initiatives and the actions being taken to
accelerate our philosophy that “everyone has talent and
everyone can grow”. We provided challenge and
feedback on those actions and initiatives.
We continue to believe that building our leadership
capability is a key differentiator for performance.
During 2021, we continued to deliver our leadership
development programme and training to accelerate
performance in API. We also we formed our new global
senior leadership group and refreshed our leadership
competency framework.
Readmoreabouthowweengagewithourpeopleonpage 12
Readmoreaboutourapproachtodevelopmentonpage 39
Independence
SeethelistofNon-executiveDirectorsdeterminedtobe
independentonpage 79
Thomas H. Johnson, Chairman of the
Nomination Committee
15 March 2022
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Audit Committee
Chairman’s letter
The Committee dedicated
significant time overseeing
the smooth integration of API.
Garry Watts, Chairman of the Audit Committee
Dear Shareholder
I am pleased to present the Audit Committee report
for 2021.
Areas of responsibility
The Committee is a key part of CCEP’s governance
framework, to which the Board has delegated oversight
for key responsibilities. We provide support and advice
to the Board on matters set out in our terms of reference,
and on other matters at the request of the Board.
We’ve detailed our role and responsibilities in our report
over the following pages. We carry out our responsibilities
in accordance with the UKCGC.
CCL integration
During 2021, we’ve dedicated significant time to
overseeing the smooth integration of API. The Committee
has enhanced oversight over this process. We prioritised
ensuring day one business continuity and capturing
critical functional areas. Since then, the scope of our
focus has also included:
– progressing purchase price accounting
– ensuring readiness for Sarbanes Oxley section 404
(SOX) compliance for the year ending 31 December
2022
– overseeing acquisition accounting matters including
impacts to CCEP’s risk profile and on financial
reporting
– integrating the finance and internal audit functions
– revisiting our audit plan to include proposed audits for
API’s territories
Risk management
Our responsibilities include overseeing the Group’s
internal control and risk management framework and,
supported by our external audit team, monitoring and
reviewing the integrity of the Group’s financial statements.
COVID-19 continues to present a unique set of
challenges. Throughout the pandemic, we’ve worked
closely with management and the Board to ensure our
internal controls continue to operate effectively and our
risk profile remains at an appropriate level.
We receive regular reports from the Head of Internal
Audit on the progress of our audit plan and from our Chief
Compliance Officer who oversees risks.
IT and cyber security risk
We also oversee CCEP’s business capability and
cyber security programme from a risk control perspective.
In 2021, John Bryant, who has a finance background and
strong track record of operational leadership as well as
experience in overseeing information technology, was
appointed to the Audit Committee. John will serve as
CCEP’s designated INED, engaged in the cyber security
strategy process.
ESG
We have also reviewed the sustainability metrics for
capital expenditure proposals, reviewed climate risks as
part of the risk management framework discussions,
reviewed outputs from sustainability audits conducted
and have engaged in learnings to understand the future
obligations of reporting and disclosure of ESG matters.
New lead audit partner
We have a new lead audit partner at EY, our external
auditor. Sarah Kokot has replaced Karl Havers and
undertook EY’s sixth audit for CCEP in 2021. EY provides
robust challenge to management and sound independent
assurance on specific financial reporting judgements and
the control environment.
Outlook
Looking forward to 2022, CCEP continues to embrace
new digital capabilities and technology. I’ve no doubt
cyber security will feature high on our agenda as part of
our oversight of business continuity and enterprise risk
management (ERM). We will also continue our enhanced
supervision over the CCL integration, including SOX
compliance, and to give due consideration to climate-risk
and ESG-related reporting matters including any relevant
consideration with respect to the Group’s financial
statements.
Committee effectiveness
An external evaluation concluded that the Committee
continued to operate effectively in 2021 and made certain
recommendations for continuous improvement.
Moreinformationcanbefound on page 81
Availability to shareholders
I am available to shareholders throughout the year to
answer any questions on the work of the Committee.
Garry Watts, Chairman of the Audit Committee
15 March 2022
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Membership
Garry Watts (Chairman)
April 2016
Member since
John Bryant
Dagmar Kollman
Dessi Temperley
January 2021
May 2019
May 2020
Seedetailsofmeetingattendancein2021 on page 80 andread
moreabouttheAuditCommitteemembersonpages 66– 71
Key responsibilities
The role and responsibilities of the Audit Committee are
set out in the terms of reference, which are available at
www.cocacolaep.com/about-us/governance/committees
and are reviewed annually by the Committee.
Key responsibilities include:
Accounting and financial reporting
– Monitoring the integrity of the Group’s annual
audited financial statements and other periodic
financial statements
– Reviewing any key judgements contained in them
relating to financial performance
Systems of internal control and risk
management
– Reviewing the adequacy and effectiveness of the
Group’s internal control processes
– Overseeing the Group’s compliance, operational
and financial risk assessments as part of the broader
ERM programme
– Overseeing the Group’s business capability and
cyber security programmes
– Overseeing climate risks as part of the ERM
programme
– Reviewing and assessing the scope, operation and
effectiveness of the internal audit function
Relationship with external auditors
– Reviewing and assessing the relationship
– Reviewing their independence
– Agreeing terms of engagement and remuneration
– Assessing the effectiveness of the external audit
process
– Reviewing reports from the external auditors and
management relating to the financial statements and
internal control systems
– Making recommendations to the Board in respect
of the external auditors’ appointment, re-appointment
or removal
Other
– Supporting the Board in relation to specific matters
including oversight of the annual and long-term
business plans, dividend and capital structure and
capital expenditure
In accordance with SEC Rules, as applicable to FPIs, the
Group’s Audit Committee must fulfil the independence
requirements set out in SEC Rule 10-3A. The Board has
determined that the Audit Committee satisfies these
requirements and that all members may each be
regarded as an Audit Committee financial expert, as
defined in Item 16A of Form 20-F. It was further
determined that no Audit Committee member had
participated in the preparation of the financial statements
of the Company or any of its subsidiaries.
Matters considered by the Audit
Committee during 2021
The Committee met nine times during the year. Reports
from the internal and external auditors were presented as
standing agenda items, along with reports from senior
management on the following topics in the Committee’s
remit:
Financial reporting, significant financial
issues and material judgements
As a result of the acquisition of CCL and COVID-19,
the Committee met regularly with management to
understand and assess the key accounting impacts and
considerations for the Group.
The Committee met with management prior to each
market announcement to consider the significant
accounting judgements and estimates made, and their
appropriateness. Details regarding the significant
reporting matters identified and the related Committee
considerations, is set out in table 2 on page 89.
For the remaining matters, the Committee agreed with
management that the appropriate accounting
considerations had been given and the impact of each
item was not material to the Group’s financial statements.
SeeourViabilitystatementonpage 48
The Committee Chairman reports back at each Board
meeting on matters of particular relevance and the Board
receives copies of the Committee papers and minutes
of meetings.
– Accounting and reporting matters
– Legal matters
– Ethics and compliance matters, including
whistleblowing and CoC breaches
Committee governance
The Committee keeps the Board informed and advised
on matters concerning the Group’s financial reporting
requirements to ensure that the Board has exercised
oversight of the work carried out by management, internal
audit and the external auditor.
The Group follows UK corporate governance practices,
as allowed by the Nasdaq Rules for FPIs. In accordance
with the UKCGC, the Committee is comprised of four
NEDs in 2021, each of whom the Board has deemed to be
independent. The Board is satisfied that each member of
the Committee has competence relevant to the fast moving
consumer goods sector, in which the Group operates.
– Business continuity management and cyber security
– ERM
– Capital projects, including review of sustainability
metrics
– Tax and Treasury matters
– Climate risk disclosures
The Committee’s interactions with the internal audit
function and the external auditor during the year are
discussed in more detail later in this report. A summary of
key matters considered by the Audit Committee in 2021,
in addition to standing items, is set out in table 1 on
page 88.
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Table 1
Matters considered by the Audit Committee during 2021
Meeting date
February 2021
March 2021
Key matters considered in addition to standing agenda items(A)
Meeting date
Key matters considered in addition to standing agenda items(A)
– 2020 preliminary Q4 and full year results, including significant estimates and judgements
– COVID-19 Accounting considerations (ECL’s, Inventory Loss Provisions, Share-Based
September 2021
– 2021 Half year report including going concern
– Disclosure controls and procedures
– Pay for performance
– Restructuring activities
– Segmental reporting
– Tax matters
Payments Awards)
– Pay for performance
– IAS 36 impairment review
– Tax matters
– 2020 Integrated Report, including viability and going concern statements, accounting policies
and related significant judgements and estimates, segmental reporting, hedging activities,
post-employment benefits
– Preparation activities for proposed acquisition of CCL
– Re-appointment of the external auditor
– Sarbanes-Oxley Act (SOX) section 404 (s404) compliance and impact of COVID-19 on
internal control environment
– 2021 Internal audit plan
– Treasury matters
May 2021
(two meetings)
– 2021 Q1 Trading update and capital markets day
– CCL acquisition
– COVID-19 impact
– Q1 Treasury update
– Chart of Authority impacts as a result of CCL acquisition
– Accounting considerations in advance of year-end audit including acquisition of CCL
– Business capability and cyber security update
– Capital allocation and expenditure
– 2021 Internal audit plan
– Tax matters
– External audit process and procedures
July 2021
– Purchase Price Accounting in relation to API
– API SOX readiness
– 2021 combined internal audit and resource plan including API
– API people integration
– Proposal to transfer listing from NYSE to Nasdaq
– Insurance and Risk
– Update to treasury investment policy
– Committee Evaluation
October 2021
– API Integration including updates on SOX Gap Assessment and integration of internal
audit team
– Cyber ransomware handbook
– Group risk appetite framework
– Half year COC report
November 2021
– Q3 Trading update and FY21 Dividend declaration
December 2021
– Purchase Price Accounting in relation to API
– IAS 36 impairment review
– Overview of FY21 Sustainability reporting and assurance
– Operational technology and cyber security
– Preliminary 2022 internal audit plan and budget
(A) During February and March 2022, the Committee discussed matters regarding the year ended 31 December 2021, which included:
– Reviewing the 2021 preliminary Q4 and full year results and the 2021 Integrated Report, including its significant estimates and judgements,
accounting policies, viability and going concern statements
– Advising the Board on whether, in the Committee’s opinion, the 2021 Integrated Report is fair, balanced and understandable
– Independent auditor’s report on the 2021 full year results
– Approval of this Audit Committee report
Audit Committee assessment of the 2021 Integrated Report
The Committee undertook a review of a developed draft of the 2021 Integrated Report and provided its feedback,
which was applied.
The Committee considered whether the Group’s position, strategic approach and performance during the year were
accurately and consistently portrayed throughout the 2021 Integrated Report. As part of its review, the Committee
referred to the management reports it had received and considered during the year, together with the findings and
judgements of the internal and external auditors.
The estimates and judgements made on the significant financial reporting matters regarding financial statements are
summarised in table 2 on page 89. The Committee reviewed these in depth, along with management’s assessment of the
Group as a going concern and the statement of long-term viability contained in the Strategic Report. The Committee
concluded that they are appropriate and acceptable in light of the risks facing the business and all significant matters
brought to the Committee’s attention during the year. The 2021 Integrated Report is, in the opinion of the Committee, fair,
balanced and understandable and provides the information necessary for shareholders to assess CCEP’s performance,
business model and strategy.
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Table 2
Significant reporting matters in relation to financial statements considered by the Audit Committee during 2021
Accounting area
Key financial impacts
Audit Committee considerations
Accounting area
Key financial impacts
Audit Committee considerations
Business
combination
Total consideration:
€5.8 billion
Intangible assets:
€4.3 billion
Goodwill: €2.1 billion
Deductions from
revenue and sales
incentives
Total cost of customer
marketing programmes
in 2021: €4.1 billion
Accrual at 31 December
2021: €1.2 billion
Tax accounting
and reporting
2021 book tax expense:
€394 million
2021 cash taxes:
€306 million
2021 effective tax rate:
28.5%
The Group completed the acquisition of Coca-Cola Amatil (CCL) on
10 May 2021. The Group has engaged a third party specialist firm to
support the required valuation work and significant judgments and
estimates have been used to allocate the correct values to the
acquired assets and liabilities. The valuation effort has been a large
undertaking and the Committee has received and reviewed regular
progress updates from management throughout the year. The
Committee noted that amounts recorded as at 31 December 2021
are still provisional and will be finalised no later than 9 May 2022.
The Group participates in various programmes and arrangements
with customers designed to increase the sale of products. Among
the programmes are arrangements under which allowances can
be earned by customers for attaining agreed upon sales levels or
for participating in specific marketing programmes. For customer
incentives that must be earned, management must make estimates
related to the contractual terms, customer performance and sales
volume to determine the total amounts earned. Under IFRS 15,
these types of variable consideration are deducted from revenue.
There are significant estimates used at each reporting date to ensure
an accurate deduction from revenue has been recorded. Actual
amounts ultimately paid may be different from these estimates. At
each reporting date, the Committee received information regarding
the amount of customer marketing spend of the Group along with
period end accruals. The Committee also discussed and challenged
management on key judgements and estimates applied during the
period with a specific focus on the impact of COVID-19 on customer
activities and performance.
The Group evaluated a number of tax matters during the year,
including legislative developments across tax jurisdictions, tax
accounting related to the acquisition of CCL, risks related to direct
and indirect tax provisions in all jurisdictions, the deferred tax
inventory and potential transfer pricing exposure. Throughout the
year, the Committee received information from management on the
critical aspects of tax matters affecting the Group, considered the
information received, and gained an understanding of the level of risk
involved with each significant conclusion.
The Committee also considered and provided input on the Group’s
disclosures regarding tax matters.
Asset impairment
analysis
Franchise intangible
assets with indefinite lives:
€12 billion
Goodwill: €4.6 billion
Restructuring
accounting
Restructuring cost
recorded in 2021:
€153 million
Restructuring provision
at 31 December 2021:
€103 million
The Group performs an annual impairment test of goodwill and
intangible assets with indefinite lives, or more frequently if impairment
indicators are present. The testing is performed at a cash generating
unit (CGU) level, which for the Group are based on geography and
generally represent the individual territories in which the Group
operates.
The Committee received information from management on the
impairment tests performed, focusing on the most critical
assumptions such as the terminal growth rate, the discount rate and
operating margin, as well as changes from the prior year. The
Committee reviewed and challenged sensitivity analyses provided by
management to understand the impact of changes in these critical
assumptions.
The Committee was satisfied with the assumptions utilised by the
Group and also considered and reviewed the Group’s disclosures
about its impairment testing.
During 2020 the Group commenced new restructuring initiatives,
including the Accelerate Competitiveness programme aimed at
reshaping CCEP using technology to improve productivity. These
programmes include the closure of a number of sites across
Germany and Iberia. The Committee was regularly updated by
management on the nature of such initiatives and key assumptions
underpinning the related provision in the financial statements.
The Committee reviewed the Group’s restructuring provision balance
as at 31 December 2021 and continued to agree that it does not
contain significant uncertainty.
The Committee was satisfied with the appropriateness of the
restructuring accounting during the year and the disclosures included
in the financial statements.
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External audit
Effectiveness of the external audit process
The Committee has responsibility and oversight of the
Group’s relationship with its external auditor, Ernst &
Young LLP (EY), and for assessing the effectiveness
of the external audit process. EY was appointed as the
external auditor in 2016 and the lead audit partner is
Sarah Kokot who was appointed following completion
of the 2020 Audit. The Committee acknowledges the
provisions contained in the UKCGC and the Statutory
Audit Services for Large Companies Market Investigation
(Mandatory Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order 2014 in respect
of audit tendering. In light of the factors the Committee
considers when making recommendations to the Board
and based on their performance and knowledge of the
business, the Committee believes that it is in the best
interests of shareholders to continue to recommend
EY as the external auditor and that a competitive tender
process should be conducted no later than 2025.
In 2021, the Committee agreed the approach and scope
of the audit work to be undertaken by EY for the financial
year. It also reviewed EY’s terms of engagement and
agreed the appropriate level of fees payable in respect
of audit and non-audit services.
Seedetailsoftheamountspaidtotheexternalauditorin
note 18totheconsolidatedfinancialstatementsonpage 163
EY provided the Committee with regular reports on the
status of the audit, its assessment of the agreed areas
of audit focus and findings, and conclusions to date.
In response to the Acquisition and COVID-19, EY had
regular discussions with management to identify the
potential business and financial risks for CCEP and
ensure that correct accounting treatment was adopted
in response.
The Committee reviewed the experience and expertise of
the audit team, the fulfilment of the agreed audit plan and
any variations to it, feedback from the Group’s businesses
and the contents of the external audit report. The Committee
confirmed its satisfaction with the effectiveness of the
external auditor.
External auditor independence
The continued independence of the external auditor is
important for an effective audit. The Committee has
developed and implemented policies that govern the use
of the external audit firm for non-audit services and limit
the nature of the non-audit work that may be undertaken.
The external auditor may, only with pre-approval from the
Committee, undertake specific work for which its expertise
and knowledge of CCEP are important. It is precluded
from undertaking any work that may compromise its
independence or is otherwise prohibited by any law
or regulation.
The Committee received a statement of independence
from EY in March 2022 confirming that, in its professional
judgement, it is independent and has complied with the
relevant ethical requirements regarding independence in
the provision of its services. The report described EY’s
arrangements to identify, manage and safeguard against
conflicts of interest.
The Committee reviewed the scope of the non-audit
services proposed by EY during the year, to ensure
there was no impairment of judgement or objectivity, and
subsequently monitored the non-audit work performed to
ensure it remained within the agreed policy guidelines. It
also considered the extent of non-audit services provided
to the Group. The Committee determined, based on its
evaluation, that the external auditor was independent.
Reappointment of the external auditor
The Committee has responsibility for making a
recommendation to the Board regarding the
reappointment of the external auditor. Based on its
continued satisfaction with the audit work performed
to date and EY’s continued independence, the Committee
has recommended to the Board, and the Board has
approved, that EY be proposed for reappointment by
shareholders as the Group’s external auditor at CCEP’s
2022 AGM.
Internal audit
The internal audit function provides an independent and
objective assessment of the adequacy and effectiveness
of the Group’s integrated internal control framework,
which combines risk management, governance and
compliance systems. The internal audit function reports
directly to the Audit Committee and comprises
approximately 30 full time, professional audit staff based
in London, Berlin, Madrid, Sofia and Sydney, with a range
of business expertise working across multiple disciplines.
The resourcing strategy for the internal audit function was
a key focus in the latter part of 2021 driven by the
Acquisition and a desire to create an aligned operating
model across the Group.
Effectiveness of the internal audit function
At the start of the year, the Committee reviewed the
internal audit plan for 2021 and agreed its scope, budget
and resource requirements for the year.
Through regular management reports containing key
internal audit observations, proposed improvement
measures and related timeframes agreed with
management, the Committee monitored the effectiveness
of the internal audit function against the approved internal
audit plan. As the year progressed, amendments were
made to incorporate the impact of the Acquisition and
also to ensure compatibility of internal audits with
prevailing public health guidance in relation to COVID-19
and the continuation from 2020 of remotely conducted
audits. The Chief Audit Executive attended the scheduled
meetings of the Committee during 2021 to raise any key
matters with the Directors.
Internal control and risk management
The Group depends on robust internal controls and an
effective risk management framework to successfully
deliver its strategy. The Audit Committee is responsible
for monitoring the adequacy and effectiveness of the
Group’s internal control systems, which includes its
compliance with relevant sections of the UKCGC and the
requirements of SOX, specifically sections 302 and 404,
as it applies to US FPIs.
Effectiveness of the internal control and risk
management systems
Regular reports were presented to the Committee on the
Group’s internal audit assessments of the adequacy and
effectiveness of CCEP’s integrated internal control
framework, risk management, governance and compliance
functions. The Committee was asked to consider the
internal control framework and the remediation of any
identified control deficiencies during the year.
The Committee noted the Group excluded CCL from its
evaluation of internal control over financial reporting as of
31 December 2021 under the guidelines established by
the US Securities & Exchange Commission.
In 2021, management undertook a top down enterprise
risk assessment including business units and functions.
This included an assessment of the Group’s risk appetite
across identified enterprise risks, to gauge and promote
alignment of risk appetite with CCEP’s long range plan.
The Committee reviewed the findings, approved changes
to the enterprise risk management rankings and concluded
that management’s approach to risk and to risk appetite
was satisfactory.
The Group’s material controls were deemed to be
designed and operating effectively during the year.
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As required under the Spanish Criminal Code, the Iberia
BU has an Ethics Committee formed of members of the
Iberia BU leadership team. It is responsible for any ethics
and compliance activities, including overseeing the local
crime prevention model. It reports to the board of the
Iberia BU and the Chief Compliance Officer.
There were no whistleblowing matters that required
Committee or Board attention in 2021.
Garry Watts, Chairman of the Audit Committee
15 March 2022
Raising concerns
In each of our territories, we have established ways for
our people to raise concerns in relation to possible
wrongdoing in financial reporting, suspected misconduct,
or other potential breaches of our CoC. These include
options to contact a line manager, or people and culture
representative, in confidence, or to share information
through our dedicated, independent and confidential
“Speak Up” channels. The Committee is responsible
for reviewing the adequacy and security of these
arrangements and ensuring they allow appropriate follow
up action. In accordance with our CoC, retaliation against
anyone for making a genuine report, or for cooperating in
an investigation, is prohibited.
The Committee receives and considers reports from
management regarding concerns raised by our people
and provides the Board with key information for its
consideration as appropriate.
Investigations into potential breaches of our CoC are
overseen in each BU by the BU’s CoC committee, chaired
by the BU’s Vice President, Legal. All potential CoC
breaches and corrective actions are overseen by the
Group CoC committee, which is a sub committee of
the Group compliance and risk committee and is chaired
by the Chief Compliance Officer. The Group CoC
committee also:
– Ensures that all reported breaches have been
recorded, investigated in a timely manner and a
conclusion reached
– Evaluates trends
– Ensures consistent application of the CoC across
CCEP
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Statement from the Remuneration Committee Chairman
Remuneration decisions
during 2021 recognise the strong
underlying performance of the
business in the context of the
successful acquisition of CCL
and ongoing impact of COVID-19.
Christine Cross, Chairman of the Remuneration Committee
Dear Shareholder
On behalf of the Board, I am pleased to present the
Directors’ Remuneration Report for CCEP (the Group)
for the year ended 31 December 2021. This includes
a summary of our remuneration policy (page 94) which
was approved by over 99% of our shareholders at the
2020 AGM and our Annual report on remuneration (ARR),
which sets out how we implemented the policy during
2021 and how we intend to do so in 2022. This will be
subject to an advisory vote at our 2022 AGM.
Continued resilience in the face of
COVID-19 and the ongoing successful
integration of Coca-Cola Amatil (CCL)
2021 has again been a remarkable year for CCEP. While
continuing to navigate the COVID-19 pandemic, our
business has demonstrated great resilience and an ability
to operate with agility in a rapidly changing environment,
while also completing in May 2021 the acquisition of
CCL and becoming Coca-Cola Europacific Partners –
solidify our position as the largest Coca-Cola bottler by
revenue and creating a platform for accelerated growth
and returns.
Throughout this we have continued to prioritise the
wellbeing and safety of our people and the continuity of
service to our customers. To build on the engagement
of our people, we have introduced platforms across
our geographies to enable them to connect with our
leadership. We again implemented salary increases for
the vast majority of our employees in 2021. Incentive
schemes for front line workers remained in place and
continued to pay out.
In addition, to recognise the continued engagement and
commitment of our people during these challenging times,
in December 2021 we made a one-off extraordinary
COVID-19 recognition payment to three quarters of our
employees across the business. In our developed markets,
the value of this payment was c.€500 per employee.
Senior levels of management did not receive this
payment, but continued to be recognised through the
strong performance of the 2021 Annual Bonus plan.
In respect of business performance, despite the ongoing
impact of COVID-19 we delivered resilient and strong
performance, which is reflected in our financial and
sustainability performance indicators.
SeeourPerformanceindicatorsonpages 2–3
As highlighted by our CEO in this report, CCEP’s
performance in 2021 demonstrated solid top line
recovery, value share gains, operating margin expansion
and remarkable free cash flow generation, solidifying
our FY21 position as the largest FMCG value creator.
In 2021, we created over €13 billion in value for our retail
customers, while continuing to make progress on our
ambition to reach net zero emissions by 2040, reinforced
by the sustainability metric introduced into our Long-term
Incentive Plan in 2020.
Remuneration outcomes for 2021
Annual Bonus
Following the completion of the acquisition of CCL in May,
the Committee considered it appropriate that the incentive
targets for the annual bonus should be reflective of the
ambitions of the combined business. This ensured that
management were incentivised on delivering performance
for the overall Group for the remainder of the year. The
annual performance targets were therefore adjusted
to reflect the annual business plan of the combined
business and were set in a manner so that the revised
targets were no easier or harder to achieve than the
original targets set.
The strong overall business performance outlined
above has been reflected through the annual bonus
with performance against all three financial metrics
being above target. Comparable operating profit and
revenue increased year on year by 49% and 30%
respectively and the maximum target for Operating Free
Cash flow was exceeded. This has resulted in an overall
Business Performance Factor (BPF) of 168% of target
being achieved. The strong business performance
is also a reflection of the exceptional leadership of
Damian Gammell throughout 2021 which resulted in
a maximum Individual Performance Factor (IPF) of
1.2x being awarded to him. The final bonus payment
to the CEO was 84% of maximum. Further details are
provided on pages 96–97 of the ARR.
2019 Long-Term Incentive Plan
The 2019 LTIP award, granted in March 2019, was
subject to EPS and ROIC performance targets over the
three year period to 31 December 2021. Around 240
senior executives and management participated in the
scheme, including the CEO.
Based on the performance delivered by the business in
2019 prior to the impact of COVID-19 in 2020, the award
was on track to vest. However, due to the effects of the
global pandemic the original stretching performance
targets could no longer be met over the full three year
period and the formulaic result was zero vesting.
For the Remuneration Committee, a critical objective
continues to be to ensure that remuneration outcomes
for our people continue to reflect our underlying
philosophy of delivering outcomes which align with
business performance (in the context of COVID-19)
and appropriately reflect the experiences of shareholders
and wider stakeholders, while also continuing to act
as an incentive to engage our people to deliver the best
possible results.
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All of our incentive schemes utilise stretching performance
targets, set at the start of the relevant period and are
designed to drive performance in the context of prevailing
expectations for the business. At the same time, in line
with best practice, our schemes all include discretionary
provisions which allow the Committee to adjust the
formulaic result to ensure that the outcome delivered
to participants is a fair and appropriate reflection of
performance over the period.
price performance and the delivery of a record dividend
over the period, the Committee exercised discretion to
determine a final vesting level below target of 45% of
maximum. The Committee concluded that this fairly
reflected overall performance over the three year period
and recognised the challenges to performance presented
by the global pandemic in 2020. This outcome was
applied consistently to all 240 participants, including
the CEO.
The Committee has used these discretionary provisions
to reduce incentive outcomes below the formulaic result
in two of the four financial years since CCEP’s listing, and
to increase incentive outcomes only once (under the 2018
LTIP, as reported last year, to fairly reward performance
through the global pandemic).
In respect of the 2019 LTIP, the Committee has again
exercised discretion to ensure the outcome provided a
fairer reflection of performance delivered. This required
an upward adjustment to the formulaic outcomes. Given
the strong overall performance during the performance
period and the unanticipated impact of the pandemic
being largely outside management’s control, and
following a consistent approach to assessing
performance in the prior LTIP performance period, the
Committee decided to undertake a holistic assessment
of overall performance over the three year period to
determine an appropriate vesting level for all participants.
The Committee took into account a wide range of
performance reference points including financial
performance, returns to shareholders, the stakeholder
experience, and our sustainability achievements (as
disclosed in detail on page 99 of the ARR). Taking into
account the overall performance of the business over
the three year performance period, and the growth and
delivery of the business as we enter 2022 including share
While the Committee believes this is the right thing to do
in respect of the participants of these incentive programmes,
we recognise it is relatively unusual and have therefore
set out our thinking in detail on pages 98–99 of the ARR.
This fulsome disclosure also reflects the feedback we
received from shareholders and proxy advisors we
consulted in 2021 on the principle of applying discretion
to these incentive outcomes.
Amatil acquisition
As a result of the acquisition of CCL, during 2021 the
Committee made a number of adjustments to our
incentive awards:
2020-22 Long-Term Incentive Plan (LTIP): revised
financial targets were set following the acquisition of CCL
to be aligned with the long-term business plan for the
combined business and to take into account external
forecasts and changes to the wider macroeconomic
environment since the targets were set. Further details
are provided on page 100 of the ARR.
2021-23 LTIP: awards were delayed from March until
September 2021 to enable targets to be set for the
combined business. Targets were set at stretching levels
and on the same basis as in prior years, taking into
account both our long-term plan and external forecasts.
Implementation of remuneration policy
in 2022
Despite the continuing challenges of COVID-19 we
consider that our overall remuneration framework remains
fit for purpose and will implement our remuneration policy
broadly unchanged for 2022 (see page 105 for further
details), with appropriate integration for our colleagues
across our Australia, Pacific and Indonesia (API) business.
The Committee has approved a 3.25% salary increase
for Damian Gammell, effective 1 April 2022, in line with
the merit increase for the wider UK workforce.
The structure of the 2022 annual bonus will be
unchanged from last year, with the business performance
element being based on stretching performance targets
for operating profit, revenue, and operating cash flow. For
Damian Gammell, his individual element will be assessed
against a number of areas of focus which are aligned to
the key longer-term objectives of the business, which
include: Platform for Growth; Future-ready Culture; Green
and Stakeholder Focused Future; and API Integration.
See page 105 of the ARR for further detail.
The 2022 LTIP award will continue to be based on a mix
of EPS, ROIC, and CO2 reduction, unchanged from last
year. Given the significant market uncertainty caused
by the current geopolitical situation, the Committee
determined that it would be appropriate to delay setting
the targets for this award until later in the year. It is the
current intention that the targets will be confirmed within
the next six months and disclosed at that point (as well as
in next year’s remuneration report).
Looking ahead
At our 2023 AGM we will be seeking shareholder support
for our next Remuneration Policy. I look forward to
engaging with our major shareholders on our proposals
during the course of this year.
We recognise that the circumstances of the CCL
acquisition and the global pandemic has again resulted
in a number of important decisions in respect of our
incentives this year and we therefore again will proactively
engage with major shareholders in advance of the AGM.
We believe the decisions are fair and the right ones for
both management and shareholders but always welcome
feedback and hope we can rely on your support at our
forthcoming AGM.
Christine Cross, Chairman of the Remuneration Committee
15 March 2022
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Overview of remuneration policy
Governance framework
Our remuneration policy was approved by over 99% of our shareholders and is based on the following principles:
Summary of remuneration policy table
Key principle
Application to policy
Current implementation
Fixed pay
Annual bonus
LTIP
Focused on delivering
our business strategy
Annual bonus and LTIP measures
aligned to the KPIs of the business
Simple, transparent and aligning
the interests of management
and shareholders
– Only two simple incentive plans operated
– Strong focus on pay for performance
– Majority of remuneration package
delivered in shares
– Significant shareholding requirement
of three times salary
– CEO pension aligned to wider workforce
Annual bonus
metrics
LTIP metrics
Key features
Key features
Key features
Operating profit
EPS
50%
Revenue
30%
42.5%
ROIC
42.5%
Operating free cash flow
CO2e
20%
15%%
See ARR for definitions
CEO pay mix linked to performance
at target
22%
Fixed
pay
29%
Annual
bonus
49%
LTIP
Base salary
Annual increases will normally take
into account business performance
and increases awarded to the
general workforce
Benefits
A range of benefits may be provided in
line with market practice
Pension
– Can participate in the UK pension
plan or receive a cash allowance
on the same basis as all other
employees
– Maximum employer contribution
is £30k
– Target bonus opportunity is 150%
of salary
– Bonus calculated by multiplying the
target bonus by a Business
Performance Factor (BPF)
(0-200%) and an Individual
Performance Factor (IPF) (0-120%)
– Business and individual
performance targets are set in the
context of the strategic plan
– Malus and clawback provisions
may apply to awards
– Discretion to adjust the formulaic
outcome up or down taking into
account all relevant factors
– Based on performance measures
aligned to the strategic plan and
measured over at least three
financial years
– Target LTIP award is 250% of
salary (500% of salary maximum)
– Malus and clawback provisions
may apply to awards
– Two year holding period applied
after vesting
– Discretion to adjust the formulaic
vesting outcome up or down taking
into account all relevant factors
Able to be cascaded through
the organisation and applicable
to the wider workforce
The same remuneration framework
is applied to all members of the ELT
(but with lower incentive levels)
Fixed
pay
Annual
bonus
LTIP
Link to strategy
Link to strategy
Link to strategy
Supports recruitment and retention
of Executive Directors of the calibre
required for the long-term success
of the business
– Incentivises delivery of the
business plan on an annual basis
– Rewards performance against key
indicators which are critical to the
delivery of the strategy
– Focused on delivery of Group
performance over the long term
– Delivered in shares to provide
alignment with shareholders’
interests
Variable remuneration should
be performance related
against stretching targets
Targets are set at stretching levels in
the context of the business plan and
external forecasts
– Target performance linked
to business plan
– Maximum payout requires
performance significantly above plan
AfullcopyoftheRemunerationpolicycanbefoundonpages 89–96ofthe2019integratedreport,
inthereports&resultssectionoftheinvestorsectionofourwebsiteatwww.cocacolaep.com/investors
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Financial Statements
Other Information
Remuneration at a glance
Overview of 2021 remuneration performance
Overview of 2022 CEO remuneration framework
CCEP share price (US$)
Annual bonus KPIs
Reported long-term KPIs
70
65
60
55
50
45
40
Operating profit
1.68x
Operating free
cash flow
2.00x
Revenue
1.47x
31 DEC 2020
31 DEC 2021
Bonus pay out = 84% of maximum
(including IPF of 1.20x)
Comparable EPS
2019
2019
2020
2020
2021
2021
ROIC
2019
2020
2021
2.53
1.80
2.83
10.3%
7.6%
9.2%
2021 CEO single figure
CEO shareholding
£1.3m
(17%)
£3.6m
(47%)
£2.8m
(36%)
As at 31/12/2021
1,113% of salary
Fixed pay
Annual bonus
LTIP
Base salary
3.25% increase for 2022
£1.22m
20%
30%
50%
15%
42.5%
42.5%
Benefits
– Car allowance
– Private medical
– School fees
– Financial planning
Pension
Revenue
Operating profit
Operating free cash flow
0x–1.2x
Individual multiplier
ROIC
EPS
Reduction in CO2e
Target 300% of salary
Cash in lieu aligned to wider workforce
150%
360%
250%
500%
Fixed pay
Annual bonus
LTIP
2021 Total value
£7.7m
Current shareholding
Shareholding requirement by 31/12/2022
ReadmoreintheAnnualreportonremunerationfrompage 96
£26k
Target
Maximum
Target
Maximum
ReadmoreintheAnnualreportonremunerationfrompage 105
Allreferencestorevenue,operatingprofit,operatingfreecashflow,EPSandROIC
targetsrefertothosemeasuresthataredefinedwithintheARR
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Annual report on remuneration
Remuneration outcomes for 2021
The following pages set out details of the remuneration received by Directors for the financial year ending 31 December
2021. Prior year figures have also been shown. Audited sections of the report have been identified.
The Directors’ remuneration in 2021 was awarded in line with the Remuneration Policy which was approved by
shareholders at the AGM in May 2020.
Single figure table for Executive Directors (audited)
Individual
Damian
Gammell
Year
2021
2020
Salary
(£000)
1,179
1,174
Taxable
benefits
(£000)
Pension
(£000)
134
134
26
26
Fixed
pay
(£000)
1,339
1,334
Annual
bonus
(£000)
Long-term
incentives
(£000)
Variable
remuneration
(£000)
Total
remuneration
(£000)
3,567
1,490
2,766(A)
2,689(B)
6,333
4,179
7,672
5,513(C)
(A) Value based on share price and exchange rate on vest date of 1 March 2022 of $48.47 (£36.39) and includes £211,000 cash payment in respect of dividend
equivalents to be paid on the vested Shares. Around €43,000 of the vest value is attributable to share price appreciation.
(B) Restated from £2,242,000 in last year’s single figure table to reflect actual share price on vesting date of $54.31 (£39.01) on 12 March 2021 (as 13 March 2021
was a non-trading day) applied to 64,970 vested Shares and £155,000 cash payment in respect of dividend equivalents paid on the vested Shares.
(C) Restated in line with the actual vest date value of long-term incentives, as explained in (B) above.
Notes to the single figure table for Executive Directors (audited)
Base salary
Damian Gammell did not receive a salary increase in 2021 and his base salary remained at £1,178,787. The average
increase provided to the wider UK workforce was 3.2%.
Taxable benefits
During the year, Damian Gammell received the following main benefits: car allowance (£14,000), financial planning
allowance (£10,000), schooling allowance (£75,000 net) and family private medical coverage (£8,000).
Pension
The pension provisions that apply to Damian Gammell are aligned to all other GB employees. Damian Gammell elected
to receive a cash allowance in lieu of participation in the pension scheme. This equates to a payment of £30,000 from
CCEP inclusive of employer National Insurance contributions (i.e. the actual benefit received by Damian is less than
£30,000 per year).
Annual bonus
Overview of CCEP’s annual bonus design
The 2021 CCEP annual bonus plan was designed to incentivise the delivery of the business strategy and comprised the
following elements:
Business Performance Factor (BPF) – provides alignment with our core objectives to deliver strong financial
performance against our main financial performance indicators of operating profit (50%), revenue (30%) and operating
free cash flow (20%).
The 2021 annual bonus targets were adjusted after the acquisition of CCL to reflect the annual business plan of the
combined business. The Committee is satisfied that the revised targets were no easier or harder to achieve than the
original targets set.
Refertopage 105fordefinitions
Individual Performance Factor (IPF) – individual objectives were also set for Damian Gammell focused on a number of
areas which are aligned to key longer-term strategic objectives of the business.
In line with the remuneration policy, Damian Gammell had a target bonus opportunity of 150% of salary. Actual payments
range from zero to a maximum of 360% of salary depending on the extent to which business and individual performance
measures were achieved.
Target bonus
(150% of base salary)
X
BPF
(0x to 2.0x)
X
IPF
(0x to 1.2x)
=
Final bonus outcome
(0% to 360% of base salary)
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Annual report on remuneration
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2021 annual bonus outcome – BPF
Financial performance in 2021 has been strong, with performance for all three financial measures being above target.
Further details of some of the specific objectives achieved are included in the table below:
Area of focus
Performance delivered
Measure
Weighting
Operating profit
Revenue
Operating free
cash flow
Total
50%
30%
20%
100%
Performance targets
Performance outcomes
Threshold
(0.25x
multiplier)
Target
(1x
multiplier)
Maximum
(2x
multiplier)
€1,567m
€1,803m
€1,983m
€13,913m
€14,685m
€15,200m
€1,386m
€1,595m
€1,754m
Actual
outcome
€1,926m
€14,924m
€1,953m
Multiplier
achieved
1.68x
1.47x
2.00x
1.68x
Continue to
build a Platform
for growth for
CCEP
Continue to
develop our
Future-ready
culture
2021 annual bonus outcome – IPF
To determine an appropriate IPF, the Chairman of the Board assesses Damian Gammell’s performance against the
individual performance objectives that were set at the start of the year. The outcome is then discussed with and
recommended by the Committee for final approval by the Board.
Stakeholders and
Green future
Damian once again provided exceptional leadership of the business during 2021 within a very challenging external
environment. He delivered strongly against his individual objectives, outlined below, and the Board determined that his
IPF should be set at 1.2x for the year.
– Acquisition of CCL completed in line with expectations, with day one readiness plan and second half
business plan
– Three year strategic plan for the combined business developed and implemented
– NARTD value share growth to ahead of FY 2019 levels
– Topo Chico launched in six markets, with top two value share for hard seltzer brands in Europe
– Implementation of hot beverages strategy and long-range plan for Costa Coffee, active in four markets
– Engagement and well-being of workforce protected with improved engagement and wellbeing
scores delivered above benchmark
– Achieved senior management gender ratio for 2021 ahead of target to reach 2025 goal
– Operating framework amended to incorporate our API markets, country operating units and
alignment of functions
– New COVID-19 hybrid framework established in each country in line with recommendations of local
authorities. Clear decisions and guidelines communicated CCEP-wide for travel and ways of
working, including flexible working transition plans
– Improvement in customer engagement across externally benchmarked overall, sustainability and
e-commerce measures
– Delivered 53% rPET content, significantly outperforming the 50% target
– 38.9% GHG reduction across our value chain since 2010 and 12.4% since 2019
Our Digital future
– Roll out of our customer portal, My.CCEP.com completed across Europe, with a record year
delivering €1.1 billion in revenue, around 20% of our away from home business
– Roll out of BPT plans to replace legacy systems completed
– New digital platforms trialled though CCEP Ventures. Our partner StarStock launched an online
marketplace in GB, and we launched Wabi, a B2B eco-system platform in Portugal, in partnership
with The Coca-Cola Company
Accelerate
Competitiveness
– Multi year efficiency savings and combination benefits programme equating to €350 to €395 million
in total and remain on track. We have so far delivered approximately 65% of these commitments in
line with previously guided timings and values
2021 annual bonus outcome – calculation
Based on the level of performance achieved, as set out above this resulted in a bonus payment to Damian Gammell
as follows:
Target bonus
(150% of base salary)
X
BPF
(1.68x)
X
IPF
(1.20x)
=
Final bonus outcome
(303% of salary)
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Long-term incentives
Awards vesting for performance in respect of 2021
The 2019 LTIP award was subject to EPS and ROIC performance targets measured over the three year performance
period from 1 January 2019 to 31 December 2021.
Measure
EPS
ROIC
Performance targets
Weighting
50%
50%
Threshold
(25% vesting)
Target
(100% vesting)
Maximum
(200% vesting)
5.7% p.a.
11.0% p.a.
15.5% p.a.
10.9%
12.4%
13.9%
Despite solid performance in 2019 and a strong recovery during 2020 and 2021, the significant impact of COVID-19 has
resulted in the threshold targets for the LTIP not being met. In line with good practice, however, the Committee undertook
a holistic assessment of performance over the full three year performance period to consider the extent to which any
discretion should be exercised in respect of the final vesting level for all LTIP participants, including the CEO.
The factors considered included:
– Overall business performance
– The shareholder experience of the performance period
– The successful acquisition and integration of CCL
– The wider workforce and other stakeholders experience over the performance period
– The continued focus and delivery of our sustainability agenda
Based on this analysis, which is set out in detail below, the Committee considered it appropriate to exercise discretion in
respect of the LTIP vesting level to recognise the strong overall performance of the management team over the period,
despite the significant challenges being faced as a result of the COVID-19 pandemic which were outside management’s
control. Taking all these factors into account a below target vesting level of 45% of maximum was determined, which will
apply to all participants, including the CEO.
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The Committee took into account a wide range of factors of performance across the full performance period, which included:
Overall business performance
Shareholder experience
Successful acquisition and integration of CCL
Wider Workforce and other stakeholder experiences
– Solid EPS and ROIC performance in 2019: pay out
– Strong returns for shareholders: 42% TSR growth over
the three year period, which was between median
and upper quartile performance vs FMCG peers and
out-performed both the FTSE 100 (10%) and Euronext
100 (32%)
– Share price performance: Highest share price in history
of company of $62.64 achieved during the last year of
the performance period
– Continuity and growth of dividends: FY21 dividend
per share of €1.40 (+13.0% vs 2019), and cumulative
dividends of €3.49 over the period, maintaining an
annualised dividend pay out ratio of approximately 50%
– Significant value delivered to shareholders: Total of over
$2.7 billion of value being delivered to shareholders
during the three year performance period (€1.6 billion
in dividends and €1.1 billion in share buybacks)
tracking at 79% of target vs the original performance
targets
– NARTD value share continued to grow over the
performance period:
2019 =
+110 bps
2020 =
+40 bps
2021 =
+40 bps
– Largest FMCG value creator in Europe(A) – created
over €490 million of value in 2021 for our customers
(€606 million including in our API markets, and over
€1,524 million across the three year performance
period), by focusing on core brands, in-market
execution and revenue growth management initiatives
– We committed to rebasing our cost base vs prepandemic
levels. As a percent of revenue, our comparable
operating expenses are lower now (FY21; 25%), not only
compared to last year (FY20; 26%), but more importantly
compared to 2019 (FY19; 26%)
– Strong free cash flow generation over the period
of €3.5 billion ahead of our annual medium term
objective of €1 billion per year pre transaction, and
€1.25 billion post transaction
(A) NielsenIQ Strategic Planner FY21 Data to 2 January 2022
(based on ES, DE, GB, FR, BE, NL SE, PT & NO).
– Completed acquisition of CCL in May 2021 to
become a truly global bottler and solidify our
position as the largest Coca-Cola bottler in
the world
– Value creating: provides platform for accelerated
growth and returns and is immediately EPS
accretive
– Higher free cash flow generation, increasing
mid-term annual objective to €1.25 billion per annum
(previous target €1 billion)
– Further strengthens our relationship with TCCC and
enhances our position for continued future expansion
– API integration progressing very well; reorienting
the portfolio to maximise system value creation
to enable greater focus on NARTD, RTD alcohol
& Spirits
CCEP’s focus on long-term value creation and
innovation positions sustainability at the heart
of everything we do
Over the 2019 LTIP performance period we delivered:
Safety and wellbeing of all our employees:
Throughout the pandemic to date, which covers two-thirds
of the performance period, our primary focus was on the
safety and wellbeing of our colleagues. We provided
extensive emotional and mental wellbeing support
including a Coronavirus support hub, an expanded
Employee Assistance Programme, and a significant
mental health first aider programme to provide ongoing
support to all employees.
Limited financial impact on all employees:
– Incentive schemes for front line workers continued to
operate and pay out during the pandemic
– Revised annual bonus plan for all eligible employees in
2020 to reward for strong recovery from initial impact of
COVID-19 in H2 of 2020
– Limited use of Government support schemes
– Salary increases for employees in 2020 and for over
75% of employees in 2021. All LTIP participants
received a salary freeze in 2021
– One-off extraordinary COVID-19 recognition payment
to around three quarters of our employees
– All-employee share plan developed for launch across
– Reduction in lost time incident rate:
our markets in H1 2022
2018 = 1.14
2021 = 1.11
– 38.9% GHG reduction across our value chain since
2010 and 12.4% since 2019
– Reduction in water used ratio 2018-2021 from
1.61 to 1.58 (Europe)
– 53% of the PET used to make our PET bottles in
2021 was rPET (vs 27.6% in 2018), achieving 2023
target two years early
Focus on our communities: In our communities in 2021,
more than 58,000 people benefitted in Europe from our
community partnerships and programmes across our
territories, with 17,102 staff volunteered hours (in Europe)
and a total of €10.92 million in community investment
(Europe and API). In respect of Chaudfontaine, together
with The Coca-Cola Foundation we donated €1 million to
support the local community, including €250,000 to the
Belgian Red Cross to provide hot meals to flood victims
and together with TCCC we ran an on pack marketing
campaign via our Chaudfontaine brand which included
a €750,000 donation to help rebuild two schools.
Focus on our customers: We have continued to provide
support related to COVID-19 across our territories, and
we have an unrivalled customer coverage with whom we
jointly create value, with more than €1.5 billion added to
the FMCG industry since 2019(A).
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CONTINUED
Awards granted in 2021
A conditional award of performance share units (PSUs) was granted under the CCEP LTIP to Damian Gammell on
29 September 2021, with a target value of 250% of salary in line with the Remuneration Policy. The performance
measures were unchanged from the prior year and continued to align with the long-term strategy – EPS, ROIC and CO2e
reduction. As explained in last year’s report, the grant of the 2021 LTIP award was delayed from March until September
2021 to enable long-term EPS/ROIC targets to be set for the combined business, including CCL. Targets were set at
stretching levels and on the same basis as in prior years, taking into account both our long-term plan and external forecasts.
Further details are set out below:
Maximum
number of
Shares
under award
Target
number of
Shares under
award(A)
Closing
Share price
at date
of award
Date of
award
Performance
Face value
period
Normal
vesting
date
29/09/2021
149,406
74,703
$55.31
$8,263,646
1 Jan 2021 –
31 Dec 2023
15/03/2024
Individual
Damian
Gammell
(A) Number of Shares awarded calculated using 10-day average share price to the normal grant date (15 March 2021) of $52.83.
The vesting of awards is subject to the achievement of the following performance targets:
Measure
EPS(A)
ROIC(B)
Definition
EPS achieved in the final year of the
performance period (FY 2023)
ROIC achieved in the final year of the
performance period (FY 2023)
Vesting level(D) (% of target)
Weighting
42.5%
25%
€3.04
100%
€3.41
200%
€3.67
42.5%
8.3%
9.2%
9.9%
CO2e reduction(C)
Relative reduction in total value chain
GHG emissions since 2020 (gCO2e/litre)
15%
6.0%
per litre
8.0%
per litre
10.0%
per litre
(A) Comparable and on a tax and currency neutral basis, adjusted for brand sales and material non-cash equity accounting adjustments. Should there be share
repurchases during the performance period, an adjustment will be made to neutralise for the impact of share repurchases and will be fully disclosed at the time
of vesting.
(B) ROIC calculated as comparable operating profit after tax attributable to shareholders, on a tax and currency neutral basis, divided by the average of opening and
closing invested capital for the year, adjusted for brand sales and material non-cash equity accounting adjustments. Invested capital is calculated as the addition
of borrowings and equity attributable to shareholders less cash and cash equivalents and short-term investments.
(C) Target based on entire value chain in Europe. The target will be adjusted to include our API markets once work is completed to amalgamate our calculations of
GHG emissions across the entire business.
(D) Straight-line vesting between each vesting level (shown).
Any award vesting for the CEO will be subject to a two year holding period.
2020 LTIP award targets
The 2020 LTIP award was granted in March 2020 and has a performance period which covers the three financial years
to 31 December 2022. As explained in last year’s report, following the acquisition of CCL during 2021, the Committee
reviewed the financial targets for this award in the context of the updated long-term business plan for the combined
business and to take into account external forecasts and changes to the wider macroeconomic environment since the
targets were set. The revised targets for this award are as follows:
Measure
EPS(A)
ROIC(B)
Definition
EPS achieved in the final year of the
performance period (FY 2022)
ROIC achieved in the final year of the
performance period (FY 2022)
Vesting level(D) (% of target)
Weighting
42.5%
25%
€2.96
100%
€3.15
200%
€3.34
42.5%
8.2%
8.6%
9.1%
CO2e reduction(C)
Relative reduction in total value chain
GHG emissions since 2019 (gCO2e/litre)
15%
6.0%
per litre
8.0%
per litre
10.0%
per litre
(A) Comparable and on a tax and currency neutral basis, adjusted for brand sales and material non-cash equity accounting adjustments. Should there be share
repurchases during the performance period, an adjustment will be made to neutralise for the impact of share repurchases and will be fully disclosed at the time
of vesting.
(B) ROIC calculated as comparable operating profit after tax attributable to shareholders, on a tax and currency neutral basis, divided by the average of opening and
closing invested capital for the year, adjusted for brand sales and material non-cash equity accounting adjustments. Invested capital is calculated as the addition
of borrowings and equity attributable to shareholders less cash and cash equivalents and short term investments.
(C) Target based on entire value chain in Europe.
(D) Straight-line vesting between each vesting level (shown).
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CONTINUED
Historical TSR performance and CEO remuneration outcomes
The chart below compares the TSR performance of CCEP from Admission up until 31 December 2021 with the TSR of
the Euronext 100, the FTSE 100 and the S&P 500. These indices have been chosen as recognised equity market indices
of companies of a similar size, complexity and global reach as CCEP.
30 trading day average data: against S&P 500, Euronext 100 and FTSE 100
CCEP
S&P 500
Euronext 100
FTSE 100
250
200
150
100
50
May 2016
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
The following table summarises the historical CEO’s single figure of total remuneration and annual bonus pay out as a
percentage of the maximum opportunity over this period:
2016(A)
John Brock
2016(A)
Damian
Gammell
2017
Damian
Gammell
2018
Damian
Gammell
2019
Damian
Gammell
2020
Damian
Gammell
2021
Damian
Gammell
$3,890
£27
£3,716
£3,821
£7,839
£5,513(B)
£7,672
31.23%
40.6%
60.7%
63.1%
43.7%
35.3%
84.1%
N/A
N/A
N/A
N/A
59.0%
36.5%
45.0%
CEO single figure of
remuneration (‘000)
Annual bonus pay out (as a
% of maximum opportunity)
LTI vesting (as a % of
maximum opportunity)
(A) The figures for 2016 are in respect of the period for which each individual served as CEO during the year. John Brock served as CEO from 29 May to
28 December 2016. Damian Gammell served as CEO from 29 December to 31 December 2016.
(B) Restated from last year’s single figure to reflect the actual share price on vesting date for the 2018 LTIP.
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Percentage change in CEO and Director remuneration
The table below shows the percentage change in CEO and Director remuneration from 2020 to 2021 compared to
the average percentage change in remuneration for all employees of the Parent Company, in line with the revised
reporting regulations.
Comparator
CEO
All employees
Other Directors
Sol Daurella
Manolo Arroyo(A)
Jan Bennink
John Bryant(B)
José Ignacio Comenge Sánchez-Real
Christine Cross
Irial Finan(C)
Nathalie Gaveau
Álvaro Gómez-Trénor Aguilar
Thomas H. Johnson
Dagmar Kollmann
Alfonso Líbano Daurella
Mark Price
Mario Rotllant Solá
Brian Smith(D)
Dessi Temperley(E)
Garry Watts
Base
salary/fee
Taxable
benefits(F)
Annual
bonus
Base
salary/fee
Taxable
benefits(F)
2021
0.4%(G)
1.7%
0.0%
n/a
0.0%
1.1%
0.0%
n/a
0.0%
100.0%
n/a
0.0%
0.0%
n/a
300.0%
400.0%
(60.2%)
(100.0%)
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
109.1%
69.0%
0.0%
0.0%
100.0%
n/a
300.0%
n/a
0.0%
300.0%
n/a
n/a
n/a
139.4%
139.9%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2.0%
2.7%
0.5%
n/a
5.5%
0.2%
0.0%
n/a
0.0%
(66.7%)
n/a
n/a
1.0%
(80.0%)
(1.5%)
(75.0%)
0.0%
0.0%
0.0%
3.5%
(62.5%)
(66.7%)
(71.4%)
(100.0%)
71.2%
(83.3%)
1.0%
(100.0%)
71.7%
(50.0%)
1.0%
(80.0%)
n/a
n/a
n/a
n/a
0.8%
(100.0%)
2020
Annual
bonus
(17.5)%
(21.9)%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
(A) Appointed to the Board on 26 May 2021.
(B) Appointed to the Board on 1 January 2021.
(C) Resigned from the Board on 26 May 2021.
(D) Appointed to the Board on 9 July 2020.
(E) Appointed to the Board on 27 May 2020.
(F) Reduction and increase in taxable benefits in 2020 and 2021, respectively, reflect the impact of travel restrictions.
(G) No increase was applied for 2021, but small increase reflects the 2020 salary increase applying only from 1 April 2020.
Relative importance of spend on pay
The table below shows a summary of distributions to shareholders by way of dividends and share buyback as well as
total employee expenditure for 2020 and 2021, along with the percentage change of each.
Total employee expenditure
Dividends
Share buybacks(A)
2021
€2,016m
€638m
–
2020
% change
€1,655m
€386m
€129m
21.8%
65.3%
(100%)
(A) Decrease in share buybacks reflects suspension of programme in March 2020 to keep CCEP well positioned and preserve maximum flexibility during the
COVID-19 pandemic.
CEO pay ratio
The table below shows the ratio of the CEO’s single figure of remuneration for 2021 to the 25th percentile, median and
75th percentile total remuneration of full time equivalent GB employees. The ratio is heavily influenced by the fact that the
CEO participates in the LTIP. If the LTIP is excluded from the calculation then the median ratio would be 103:1. The main
reason for the increase in the ratio from 2020 to 2021 is the CEO’s higher bonus and LTIP value in 2021, and conversely
for the change from 2019 to 2020.
Year
2021
2020(D)
2019
25th percentile
Median
75th percentile
Method
ratio(A)
ratio(B)
ratio(C)
Option B
221:1
175:1
250:1
162:1
105:1
169:1
92:1
83:1
111:1
(A) The individual used in this calculation received total pay and benefits of £35,000 (of which £31,000 was salary).
(B) The individual used in this calculation received total pay and benefits of £47,000 (of which £37,000 was salary).
(C) The individual used in this calculation received total pay and benefits of £83,000 (of which £49,000 was salary).
(D) Figures updated to reflect final LTIP vesting value as disclosed in the single figure table.
The Committee has chosen Option B (hourly gender pay gap information as at 5 April 2021) to determine the ratios,
as that data was already available and provides a clear methodology to calculate full time equivalent earnings.
No component of pay and benefits has been omitted for the purposes of the calculations.
The Committee is satisfied that the individuals whose remuneration is used in the above calculations are reasonably
representative of employees at the three percentile points, having also reviewed the remuneration for individuals
immediately above and below each of these points and noted that the spread of ratios was acceptable. No adjustments
were made to the three reference points selected.
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The Committee believes the median ratio is consistent with the pay and reward policies for CCEP’s GB employees.
CCEP is committed to offering an attractive package for all our employees. Salaries are set with reference to factors such
as skills, experience and performance of the individual, as well as market competitiveness. All employees receive a wide
range of employee benefits and a large number are eligible for an annual bonus. Our LTIP is designed to link
remuneration to the delivery of long-term strategic objectives and therefore participation is typically offered to senior
employees who have the ability to influence these outcomes. The 25th percentile, median and 75th percentile employees
identified in the above calculation do not participate in the LTIP. As the CEO participates in the LTIP, the ratio will be
influenced by vesting outcomes and will likely vary year on year.
Statement of Directors’ share ownership and share interests (audited)
Interests of the CEO
The CEO is required to hold 300% of his base salary in Shares. The guideline is expected to be met within five years of
appointment. Until the guideline is met, 50% of any vested Shares from incentive awards (after tax) must be retained. The
guideline continues to apply for one year following termination of employment.
Share ownership requirements and the number of Shares held by Damian Gammell are set out in the table below.
Payments to past Directors (audited)
There were no payments to past Directors during the year.
Payments for loss of office (audited)
There were no payments for loss of office during the year.
Interests in share
incentive schemes
subject to
performance
conditions at
31 December 2021(A)(B)(C)
Interests in
Shares at
31 December
2021
Share
ownership
as a % of
salary
achieved at
31 December
Share
ownership
requirement
as a %
Interests in
share option
schemes(A)(B)
of salary
2021(D)
Shareholding
guideline
met
Damian Gammell(E)
317,346
461,678
324,643
300%
1,113%
(A) For further details of these interests, please refer to footnote (C) of the outstanding awards table below.
(B) Do not count towards achievement of the share ownership guideline.
(C) The CEO has no interests in share incentive schemes not subject to performance conditions at 31 December 2021.
(D) The Remuneration Committee has simplified our share ownership policy to calculate shareholdings based on the prevailing share price and salary at
31 December 2021.
(E) Damian Gammell acquired a further 20,000 shares on 24 February 2022, and 70,204 shares vested under the 2019 LTIP on 1 March 2022.
Details of the CEO’s share awards are set out in the table below.
Director and grant date
Form of award
Exercise price
Number of Shares
subject to awards at
31 December 2020
Granted during
Vested during
Exercised during
Lapsed during
the year
the year
the year
the year
Number of Shares
subject to awards at
31 December 2021
End of
performance
period
Vesting date
Damian Gammell(A)
12.03.18
01.03.19
17.03.20
29.09.21
PSU(B)
PSU(C)(D)
PSU(C)
PSU(C)
N/A
N/A
N/A
N/A
178,000
156,008
156,264
–
–
–
–
149,406
64,970
–
–
–
N/A
N/A
N/A
N/A
113,030
–
–
–
–
156,008
156,264
149,406
31.12.20
31.12.21
31.12.22
31.12.23
13.03.21
01.03.22
17.03.23
15.03.24
(A) In addition, the CEO has 324,643 vested but unexercised options with an expiry date of 5 November 2025 and an exercise price of $39.00. No options were exercised by the CEO during the year.
(B) The performance condition was satisfied at 37% of maximum on 31 December 2020. Award vested on 13 March 2021.
(C) The number of Shares shown is the maximum number of Shares that may vest if the performance targets are met in full.
(D) The 2019 PSU awards vested at 45% of maximum (70,204 shares) on 1 March 2022.
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Interests of other Directors
The table below gives details of the Share interests of each NED either through direct ownership or connected persons.
Sol Daurella(A)(B)
Manolo Arroyo
Jan Bennink(D)
John Bryant
José Ignacio Comenge Sánchez-Real(A)
Christine Cross
Irial Finan(C)
Nathalie Gaveau
Álvaro Gómez-Trénor Aguilar(A)
Thomas H. Johnson(E)
Dagmar Kollmann
Alfonso Líbano Daurella(A)
Mark Price
Mario Rotllant Solá
Brian Smith
Dessi Temperley
Garry Watts
Single figure table for NEDs (audited)
The following table sets out the total fees and taxable benefits received by the Chairman and NEDs for the year ended
31 December 2021. Prior year figures are also shown.
2021 (£’000)
2020 (£’000)
Chairman/
Committee
Base fee
fees
Taxable
benefits(A)
Total
fees
Chairman/
Committee
Base fee
fees
Taxable
benefits(A)
Total
fees
Interests in Shares at
31 December 2021
32,746,437
–
43,850
3,340
7,834,271
–
–
–
Individual
Sol Daurella
Manolo Arroyo(B)
Jan Bennink
John Bryant(C)
José Ignacio Comenge
Sánchez-Real
3,140,591
10,000
Christine Cross
Irial Finan(D)
–
Nathalie Gaveau
6,573,282
–
–
–
–
Álvaro Gómez-Trénor
Aguilar
Thomas H. Johnson
113
Dagmar Kollmann
Alfonso Líbano Daurella
10,000
Mark Price
564
49
82
82
82
82
33
82
82
82
82
82
82
82
82
82
26
15
46
31
16
46
10
10
–
36
31
21
21
16
10
16
52
1
0
4
4
4
5
0
1
4
2
4
0
2
4
2
4
4
591
64
132
117
102
133
43
93
86
151
117
103
105
102
94
102
138
564
–
82
–
82
82
82
82
82
113
82
82
82
82
39
49
82
26
–
46
–
16
46
26
10
–
36
31
21
21
16
5
9
52
1
–
2
–
1
1
3
1
2
–
1
–
2
1
–
–
–
591
–
130
–
99
129
111
93
84
149
114
103
105
99
44
58
134
(A) Shares held indirectly through Olive Partners. The number of Shares increased slightly during the year as a result of a reduction in Olive Partners’ share capital.
(B) For the purposes of Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended), Sol Daurella
(and her connected persons within the meaning of section 252 of the Companies Act) are deemed to be interested in the shares held by Olive by virtue of their
indirect minority interest in Cobega S.A, which indirectly owns 56.373% of Olive.
(C) Resigned from the Board on 26 May 2021. Share interests stated are as at the date of resignation.
(D) Jan Bennink acquired a further 5,940 shares on 2 March 2022.
(E) Thomas H. Johnson acquired 2,000 shares on 10 March 2022, and a further 2,000 shares on 11 March 2022.
Mario Rotllant Solá
Brian Smith(E)
Dessi Temperley(F)
Garry Watts
Dilution levels
The terms of the Company’s share plans set limits on the number of newly issued Shares that may be issued to satisfy
awards. In accordance with guidance from the Investment Association, these limits restrict overall dilution under all plans
to under 10% of the Company’s issued share capital over a 10 year period in relation to the Company’s issued share
capital, with a further limitation of 5% in any 10 year period on discretionary plans.
(A) Taxable benefits mainly relate to travel and accommodation costs in respect of attendance at Board meetings with fx rates used as at the date of the transaction.
(B) Appointed to the Board on 26 May 2021.
(C) Appointed to the Board on 1 January 2021.
(D) Resigned from the Board on 26 May 2021.
(E) Appointed to the Board on 9 July 2020.
(F) Appointed to the Board on 27 May 2020.
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Implementation of remuneration policy for 2022
Base salary
Damian Gammell will receive a 3.25% salary increase effective 1 April 2022. This is in line with the merit increase
provided to the wider UK workforce of 3.25%.
Individual
Damian Gammell
2021 salary
£1,178,787
2022 salary
(effective from 1 April)
% increase
£1,217,098
3.25%
Taxable benefits
No significant changes to the provision of benefits are proposed for 2022. The main benefits for Damian Gammell will
continue to include allowances in respect of: a car, financial planning, schooling and private healthcare.
Pension
No changes are proposed in respect of the pension provision for Damian Gammell. He will continue to receive a cash
allowance of £30,000 (inclusive of employer National Insurance contributions) in lieu of participation in the pension scheme.
Annual bonus
No changes have been made to the structure of the annual bonus plan for 2022 and the opportunity for Damian Gammell
will remain unchanged at 150% of salary for target performance and 360% for maximum performance.
Performance will continue to be assessed against financial and individual performance measures on a multiplicative
basis as set out on page 96. The financial measures and relative weightings will also remain unchanged.
Measure
Definition
Operating profit
Comparable operating profit on a currency neutral basis
Revenue
Revenue on a currency neutral basis
Operating free cash flow
Comparable operating profit before depreciation and amortisation and
adjusting for capital expenditures, restructuring cash expenditures and
changes in operating working capital, on a currency neutral basis
Weighting
50%
30%
20%
In determining the IPF for Damian Gammell for 2022 he will be assessed against a number of areas of focus which are
aligned to the key longer-term strategic objectives of the business, which include: Platform for Growth; Future-ready
Culture; Green and Stakeholder Focused Future; and API Integration:
Objectives include
– Development of new operating structure for CCEP
– Grow share in sparkling
– Leadership for achievement of our inclusion and diversity goals
– Health & Safety
– Progress on our plan for plastics
– Further development of API integration plans
The actual financial targets are not disclosed prospectively as they are deemed commercially sensitive. We intend to
disclose them in next year’s ARR. A description of individual performance including specific quantitative measures
(where appropriate) will also be disclosed in next year’s ARR.
Long-term incentive
Damian Gammell’s long-term incentive opportunity for 2022 will be aligned with the limits set out in the remuneration
policy. He was granted a target award of 250% of salary on 10 March 2022 and may receive up to two times this target
award (163,776 shares) if the maximum performance targets are achieved.
The 2022 LTIP award will continue to be based on a mix of EPS, ROIC, and CO2 reduction, unchanged from last year.
Given the significant market of uncertainty caused by the current geopolitical situation, the committee determined that
it would be appropriate to delay setting the targets for this award until later in the year. It is the current intention that the
targets will be confirmed within the next six months and disclosed at that point (as well as in next year’s renumeration report).
Following the end of the performance period, awards will be subject to an additional two year holding period.
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CONTINUED
Chairman and NED fees
The NED base fee and Chairman fee were increased by 3.25% with effect from 1 April 2022, as outlined below, alongside
increases to selected Committee Chairman and membership fees. Fees were last set on 1 April 2019.
Role
Chairman
NED basic fee
Additional fee for Senior Independent
Director
Additional fee for Committee Chairman
Audit and Remuneration Committees
Affiliated Transaction Committee
CSR Committee
Nomination Committee
Additional fee for Committee membership Audit and Remuneration Committees
Affiliated Transaction Committee
CSR Committee
Nomination and Committee
Current fees
£564,250
£82,000
£30,750
Fees effective
1 April 2022
£582,000
£85,000
£31,750
£36,000
£36,000
£20,500
£20,500
£15,500
£15,500
£10,250
£10,250
£37,250
£36,000
£36,000
£21,250
£16,000
£15,500
£15,500
£10,500
The Remuneration Committee
The entire Board determines the terms of the compensation of the CEO and fees for the NEDs and Chairman as well
as approving the remuneration policy, all on the Committee’s recommendation. The Committee is also responsible for
setting the remuneration for each member of the ELT reporting to the CEO.
Support for the Remuneration Committee
Deloitte was appointed by the Remuneration Committee in 2016 following a selection process. During the year, Deloitte
provided the Committee with external advice on executive remuneration. Deloitte is a member of the Remuneration
Consultants Group and has voluntarily signed up to the Remuneration Consultants’ Code of Conduct relating to executive
remuneration consulting in the UK. The Committee is satisfied that the engagement partner and team that provide advice
to the Committee do not have connections with CCEP or individual Directors that may impair their independence. During
2021, the wider Deloitte firm also provided CCEP with unrelated tax (including employment tax), digital transformation,
access security and consultancy services.
Total fees received by Deloitte in relation to the remuneration advice provided to the Committee during the year
amounted to £74,150 based on the required time commitment.
Remuneration Committee key activities
The table below gives an overview of the key agenda items discussed at each meeting of the Committee during 2021:
Meeting date
Key agenda items
February 2021
– Approval of 2020 annual bonus outcome for the ELT – Approval of final vesting outcome for
March 2021
– Approval of ELT 2021 annual bonus targets,
May 2021
July 2021
individual objectives and opportunities
– Approval of ELT 2021 LTIP opportunities
– Approved principles for 2021 LTIP awards
– Review of market remuneration trends
– Advisor review
– Wider workforce review
– Review of executive shareholding guidelines
– Review of Committee performance evaluation
2018 LTIP
– Approval of ELT pension arrangements
– Review of 2020 Remuneration Report
– Annual base salary review for the ELT
– AGM voting update
– Review of remuneration arrangements in
respect of the CCL acquisition
– Approval of adjustments to 2021 annual
bonus targets in respect of CCL acquisition
– Approved changes to 2020 LTIP targets in
respect of CCL acquisition and COVID-19
TheTermsofReferencecanbefoundonourwebsiteatwww.cocacolaep.com/about-us/governance/committees
September 2021
– Approved ELT 2021 LTIP awards and targets
Remuneration Committee members and attendance
In line with the Shareholders’ Agreement, the Committee has five members, as set out on pages 67–71. They are three
independent NEDs, one Director nominated by Olive Partners and one Director nominated by ER. The Committee
formally met six times during the year, with one additional ad hoc meeting in line with business needs. Attendance is set
out in the table on page 80 of the Corporate governance report.
As described in the remuneration policy, the Committee receives an annual report in respect of wider workforce
remuneration including pay and reward policies, which informs its decisions on executive pay. The Committee does not
engage directly with employees on the issue of executive pay, however, within CCEP, employee groups are regularly
consulted about matters affecting employees including our strategy, Company performance, culture and approach to
reward, and this feedback informs decisions on people matters and other activities.
October 2021
– Performance update for 2021 annual bonus
– Review of ESG remit of the Committee
– Review of outstanding LTIP awards
– Approach to shareholder consultation
December 2021
– Review of first draft of the 2021 Remuneration
Report
– Performance update for 2021 annual bonus
– Base pay design for 2022
– Incentive design for 2022
The Chairman, CEO, CFO, and the Chief People and Culture Officer attended meetings by invitation of the Committee
to provide it with additional context or information, except where their own remuneration was discussed.
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Summary of voting outcomes
The table below shows how shareholders voted in respect of the ARR at the AGM held on 26 May 2021 and the
remuneration policy at the AGM held on 27 May 2020:
Resolution
Approval of the ARR
Approval of the remuneration policy
Votes
For (%)
84.96%
99.48%
Votes
Against (%)
Number of votes
Withheld
15.04%
0.52%
1,197,127
56,633
This Directors’ Remuneration Report is approved by the Board and signed on its behalf by
Christine Cross, Chairman of the Remuneration Committee
15 March 2022
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Directors’ report
The Directors present their report, together with the audited
consolidated financial statements of the Group, and of the Company,
for the year ended 31 December 2021.
This Directors’ Report has been prepared in accordance with the applicable disclosure requirements of the following:
– Companies Act
– Listing Rules (LRs) and DTRs
– Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014, as published by the UK Competition and Markets
Authority (with which the Company complies voluntarily)
– Rules promulgated by the US Securities and Exchange Commission
Additional information and disclosures, as required by the Companies Act, LRs and DTRs, are included elsewhere
in this Integrated Report and are incorporated into this Directors’ Report by reference in table 1.
This Directors’ Report, together with the Strategic Report on pages 2-63, represents the management report for the
purpose of compliance with DTR 4.1.5R(2) and 4.1.8R.
Directors
Appointment and replacement of Directors
The Articles set out certain rules that govern the appointment and replacement of the Company’s Directors.
These are summarised as follows:
– A Director may be appointed by either an ordinary resolution of shareholders or by the Board
– Olive Partners and ER may each appoint a specified number of Directors, up to a set maximum, in accordance
with their respective equity holding proportions in the Company
– Replacement INEDs must be recommended to the Board by the Nomination Committee
– The Board shall consist of a majority of INEDs
– Directors (other than the initial Chairman, CEO and INEDs) must retire at each AGM, and may, if eligible,
offer themselves for re-election
– The minimum number of Directors (disregarding alternate directors) is two
Readmoreaboutthere-electionofDirectorsintheCorporategovernancereportonpage 80
Table 1
Information and disclosures included elsewhere in this report
Disclosure
Section of report
Names of Directors during the year
Board of Directors
Review of performance, financial
position and likely future developments
Strategic Report
Dividends
Business and financial review and Note 17 to the
consolidated financial statements
Principal risks
Principal risks section of the Strategic Report
Information on share capital relating to
share classes, rights and obligations
Note 17 to the consolidated financial statements, and
the Share capital section in Other Group information
Financial instruments and financial
risk management
Notes 13 and 26 to the consolidated financial
statements
Cash balances and borrowings
Significant events after the
reporting period
Information on employment of
disabled persons
Notes 11 and 14 to the consolidated financial
statement
Note 27 to the consolidated financial statements
Our people
Page(s)
67–71
2–63
58 and
161–162
42–47
161 and
204–206
149–152 and
175–176
148 and
152–155
177
37–39
Workforce engagement
Our stakeholders and Our people
Business relationships with suppliers,
customers and others
Our stakeholders, Operating with integrity and
Action on supply chain
Greenhouse gas emissions
Action on climate
Responsibility statement
Directors’ responsibilities statement
12–14 and 37–39
12–14, 40–41
and 35–36
23–26
111
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Powers of Directors
The Directors may exercise all powers of the Company, in accordance with, and subject to, the Company’s Articles
and any applicable legislation.
ReadmoreabouttherolesandresponsibilitiesoftheboardandthemaincommitteesoftheBoardinthefollowingsections:
Corporategovernancereport(pages 74–81),NominationCommitteereport(pages 82–85), AuditCommitteereport(pages 86–91),
and Directors’remunerationreport(pages 92–107)
Directors’ indemnity arrangements
Qualifying third party indemnities were in place throughout 2021, and remain in place as at the date of this Integrated
Report. Under these indemnities, the Company has agreed to indemnify the Directors of the Company, to the extent
permitted by law, against losses and liabilities that may be incurred in executing the powers and duties of their office.
Amendment of Articles
The Articles may only be amended by a special resolution of the Company’s shareholders in accordance with the
Companies Act. Certain provisions of the Articles are entrenched and may only be amended or repealed with the
prior consent of Olive Partners, ER or a majority of the INEDs (as applicable). In particular, the requirement under
the Articles that the Board shall, at all times, contain a majority of INEDs may only be amended or repealed with the
prior consent of a majority of the INEDs. The Articles are available at www.cocacolaep.com/about-us/governance.
Political donations
The Group made no political donations or contributions during 2021 (2020: nil). It is our policy not to make political
donations or incur political expenditure. However, there may be uncertainty as to whether some normal business
activities fall under the wide definitions of political donations, organisations and expenditure used in the Companies Act.
We will therefore continue to seek shareholder approval to make political donations or incur expenditure as a precaution
to avoid any inadvertent breach of the Companies Act.
Shares
Rights and obligations
The rights and obligations relating to the Company’s Shares (in addition to those set out by law) are contained in
the Articles.
Restrictions on transfer of securities
Olive Partners and TCCC are both subject to certain restrictions relating to the acquisition or disposal of Shares under
the terms of the Shareholders’ Agreement. Other than those set out in the Shareholders’ Agreement, we are not aware
of any agreements between shareholders that may result in a restriction of the transfer of securities or voting rights in
the Company.
Employee share schemes
Shares issued under the Company’s employee share schemes rank pari passu with the existing Shares of the Company.
Voting rights attached to Shares held on trust on behalf of participants in the GB Employee Share Plan are exercised by
the trustee as directed by the participants.
Significant shareholdings
In accordance with DTR 5.8, table 2 shows the significant interests in Shares of which the Company has been notified as
at 31 December 2021, and the date of this report. The shareholders identified have the same voting rights as all other
shareholders.
Share buyback programme
The Company announced a share buyback programme on 13 February 2020, under which it proposed to reduce share
capital by up to €1 billion through the purchase and cancellation of its own Shares (the Buyback Programme). Share
purchases for the Buyback Programme were undertaken pursuant to shareholder authority granted at the 2019 AGM.
In light of the significant and unprecedented macroeconomic uncertainty brought about by the outbreak of COVID-19,
on 23 March 2020, the Company announced a suspension of the Buyback Programme. To maintain flexibility, the
shareholder authority to purchase Shares was renewed at the 2021 AGM, under which the Company may purchase
up to 45,528,556 Shares, representing 10% of the Company’s issued share capital at 12 April 2021, reduced by the
number of Shares purchased or agreed to be purchased between 12 April and 26 May 2021. No Shares were purchased
under this authority in 2021.
We intend to seek to renew the authority to purchase Shares at the 2022 AGM.
Formoredetails,seetheSharebuybackprogrammesectioninOtherGroupinformationonpage 205
Table 2
Interests in Shares of which the Company has been notified
Percentage of total
voting rights notified
to the Company as at
Number of voting
rights notified
to the Company as at
the year end(C)
36.1%
19.01%
the year end
166,128,987
87,950,640
Percentage of total
voting rights notified
to the Company as at
the date of this report(C)
Number of voting
rights notified
to the Company as at
the date of this report
36.1%
19.01%
166,128,987
87,950,640
Shareholder
Cobega, S.A.(A)
TCCC(B)
(A) Held indirectly through its 56.03% owned subsidiary, Olive Partners.
(B) Held indirectly through European Refreshments Unlimited Company.
(C) Percentage interests disclosed calculated as at the date on which the relevant disclosure was made. These have not been updated to reflect changes in the total
voting rights since notification and so may not represent the percentage interest as at 31 December 2021 or the date of this report.
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Change of control
There are no agreements in place which provide compensation for loss of office or employment to any Director in the
event of a takeover, except for certain provisions under the employee share plans, which may provide that certain
outstanding awards may vest early in such an event.
The Board considers that a change of control might have an impact on the following significant agreements:
– Bottling agreements between the Group and TCCC
– A bank credit facility agreement, under which the maximum amount available at 31 December 2021 was €1.95 billion
Research and development
The Company invests in and undertakes certain activities for the development of innovative solutions, digital capabilities
and advanced analytics to drive the simplification of applications and platforms, and to support and grow its business in
both its manufacturing and non-manufacturing operations.
Independent auditor
Disclosure of information to auditors
Each of the Directors in office as at the date of this Integrated Report, confirms that:
– so far as he or she is aware, there is no relevant audit information (as defined by section 418 of the Companies Act)
of which the Company’s auditor is unaware; and
– he or she has taken all the reasonable steps that he or she ought to have taken as a Director to make himself or herself
aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.
Auditor reappointment
EY has expressed willingness to continue in its capacity as independent auditor of the Company. The Directors plan
to recommend a resolution to reappoint EY at the next AGM.
Going concern
As part of the Directors’ consideration of the appropriateness of adopting the going concern basis in preparing the
consolidated financial statements, the Directors have taken into account the Group’s current cash position and its access
to a €1.95 billion undrawn committed credit facility. The Directors have also considered the stress testing performed as
part of the assessment of viability set out on page 48.
On this basis, the Directors have a reasonable expectation that the Company has adequate resources to continue in
operational existence for a period of 12 months from the date of signing these accounts.
This Directors’ Report has been approved by the Board and signed on its behalf by
Clare Wardle, Company Secretary
15 March 2022
Coca-Cola Europacific Partners plc
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Other Information
Directors’ responsibilities statement
Responsibility for preparing financial
statements
The Directors are responsible for preparing the
Integrated Report and the financial statements in
accordance with applicable United Kingdom (UK)
law and regulations.
UK company law requires the Directors to prepare
financial statements for each financial year. Under
that law, the Directors have prepared Group and
Parent Company financial statements in accordance
with UK-adopted International Accounting Standards.
In preparing the consolidated Group financial
statements the Directors have also elected to comply
with 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).
Under section 393 of the Companies Act, the Directors
must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Company and of the Group and of the profit
or loss of the Company and of the Group for that period.
In preparing the Company financial statements, the
Directors are required to:
– Select suitable accounting policies and apply them
consistently
– Make judgements and accounting estimates that are
reasonable and prudent
– Follow UK-adopted International Accounting Standards,
International Financial Reporting Standards as adopted
by the European Union and International Financial
Reporting Standards as issued by the IASB
– Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business
In preparing the Group financial statements the Directors
are required to:
– Select suitable accounting policies and apply them
consistently
– State whether UK-adopted International Accounting
Standards, International Financial Reporting Standards
as adopted by the European Union and International
Financial Reporting Standards as issued by the IASB
have been followed, subject to any material departures
disclosed and explained in the financial statements
– Present information, including accounting policies, in
a manner that provides relevant, reliable, comparable
and understandable information
– Provide additional disclosures when compliance with
the specific requirements in IFRS are insufficient to
enable users to understand the impact of particular
transactions, other events and conditions on the entity’s
financial performance
– Make an assessment of the Group’s ability to continue
as a going concern
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that the financial
statements comply with the Companies Act. They are
responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
They are also responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website.
Legislation, regulation and practice in the UK governing
the preparation and dissemination of financial statements
may differ from legislation, regulation and practice in
other jurisdictions.
Responsibility statement
The Directors, whose names and functions are set out on
pages 67–71, confirm that to the best of their knowledge:
– The consolidated financial statements, prepared in
accordance with UK-adopted International Accounting
Standards, International Financial Reporting Standards
as adopted by the European Union and International
Financial Reporting Standards as issued by the IASB,
give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company
and the undertakings included in the consolidation
taken as a whole
– The management report includes a fair review of the
development and performance of the business and
the position of the Company and the undertakings
included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties
they face
– The Integrated Report and financial statements, taken
as a whole, are fair, balanced and understandable
and provide the information necessary for shareholders
to assess the Company’s position and performance,
business model and strategy
By order of the Board
Clare Wardle, Company Secretary
15 March 2022
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Financial Statements
Other Information
Financial Statements
In this section
Financial Statements
113 Independent Auditor’s reports
129 Consolidated financial statements
134 Notes to the consolidated financial statements
184 Company financial statements
188 Notes to the Company financial statements
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Independent auditor’s report to the members of Coca-Cola Europacific Partners plc
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and Parent in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent
Company and we remain independent of the Group and the Parent Company in conducting the audit.
Opinion
In our opinion:
• Coca-Cola Europacific Partners plc’s Group financial statements and Parent Company financial statements (the
“financial statements”) give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 December 2021, of the Group’s profit and the Parent Company’s loss for the year then ended;
• The Group and Parent Company financial statements have been properly 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’); and
• The financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Coca-Cola Europacific Partners plc (the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the year ended 31 December 2021 which comprise:
Group
Consolidated statement of financial position as at
31 December 2021
Consolidated income statement for the year then ended
Consolidated statement of comprehensive income for the
year then ended
Consolidated statement of changes in equity for the year
then ended
Parent Company
Statement of financial position as at 31 December 2021
Statement of comprehensive income for the year then
ended
Statement of changes in equity for the year then ended
Statement of cash flows for the year then ended
Consolidated statement of cash flows for the year
then ended
Related notes 1 to 12 to the financial statements including
a summary of significant accounting policies
Related notes 1 to 28 to the financial statements,
including a summary of significant accounting policies
The financial reporting framework that has been applied in their preparation is applicable law, 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 IASB.
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CONTINUED
Overview of our audit approach
Audit scope
•We performed an audit of the complete financial information of seven components and audit
procedures on specific balances for a further five components
•The components where we performed full or specific scope audit procedures accounted for 97%
of adjusted profit before tax (measure used to calculate materiality), 87% of revenue and 93% of
total assets
Key audit matters •Accrued customer marketing costs
•Valuation of the distribution rights and property, plant and equipment acquired with Coca-Cola
Amatil Limited
•Accounting for uncertain tax positions
•Carrying value of goodwill and indefinite lived intangibles allocated to the Iberia cash generating
unit
Materiality
•Overall Group materiality of €67 million which represents 4.7% of adjusted profit before tax
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group
and Parent Company’s ability to continue to adopt the going concern basis of accounting included:
• In conjunction with our walkthrough of the Group’s financial close process, we confirmed our understanding of
management’s going concern assessment process.
• We obtained management’s going concern assessment, including the cash forecast for the going concern period
which covers a year from the date of signing this audit opinion, and considered significant events falling due shortly
after. The Group has modelled downside scenarios in their liquidity forecasts in order to incorporate unexpected
changes to the forecasted liquidity of the Group. We understood the factors and assumptions included in each
modelled downside scenario and assessed the plausibility of these in the context of our understanding of the Group
and its principal risks.
• We tested the clerical accuracy of the model used to prepare the Group’s going concern assessment.
• We considered the appropriateness of the methods used to calculate the cash forecasts and determined through
inspection and testing of the methodology and calculations that the methods utilised were appropriate.
• We confirmed the cash and cash equivalents balance of €1.4 billion as at 31 December 2021 and verified the
cashflows from operating activities of €2.1 billion in the year. We obtained evidence of the Group’s €1.95 billion
revolving credit facility which is available through to August 2025, noting no associated covenants. The facility is
undrawn as at 15 March 2022.
• We reviewed the debt maturity ladder and concluded that all debt repayments were included in the forecasts. We also
checked that the Group is forecast to have sufficient liquidity to repay debt which matures in the 12 months after the
going concern period.
• We considered whether the Group’s forecasts used in the going concern assessment were consistent with other
forecasts used by the Group in its accounting estimates, including those used in the annual impairment test.
• We reviewed the Group’s going concern disclosures included in the Directors’ Report on page 110 and Note 1 to the
consolidated financial statements on page 134 in order to assess that the disclosures were appropriate and in
conformity with the reporting standards.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group and Parent Company’s ability to continue as a
going concern for a period of 12 months from when the financial statements are authorised for issue.
In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial
statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report. However, because not all future events or conditions can be predicted, this statement is not a
guarantee as to the Group’s ability to continue as a going concern.
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2021 as filed with the SEC.
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CONTINUED
An overview of the scope of the Parent Company and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our
audit scope for each reporting component within the Group. Taken together, this enables us to form an opinion on the
consolidated financial statements. We take into account size, risk profile, the organisation of the Group and
effectiveness of group-wide controls, changes in the business environment and other factors such as recent internal
audit results when assessing the level of work to be performed at each company.
The table below illustrates the coverage obtained from the work performed by our audit teams.
Full scope
Specific scope
Specified procedures
Coverage
Remaining components
Total Reporting components
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate
quantitative coverage of significant accounts in the financial statements, of the 63 reporting components of the Group
(17 of which are trading components), we selected 22 components covering 7 corporate components and 15 trading
components, which represent the principal business units within the Group.
Of the 22 components selected, we performed an audit of the complete financial information of seven components (“full
scope components”) which were selected based on their size or risk characteristics. For the remaining five specific
scope components and ten specified procedures components, we performed audit procedures on specific accounts
within that component that we considered had the potential for the greatest impact on the significant accounts in the
financial statements either because of the size of these accounts or their risk profile.
Number
2021
2020
7
5
10
22
41
63
6
3
5
14
40
54
% Group adjusted
profit before tax
% Group revenue
% Total assets
2021
101%
(4) %
8%
105%
(5) %
100%
2020
103%
(7%)
5%
101%
(1) %
100%
2021
76%
11%
6%
93%
7%
2020
78%
13%
7%
98%
2%
2021
89%
4%
3%
96%
4%
See Notes
2020
87% (A) (B) (C) (D)
5% (A) (D) (E) (F)
6% (D) (F)
98%
2% (G)
100%
100%
100%
100%
Notes
(A) The Group audit risk in relation to tax was subject to audit procedures performed by both the component teams and the Group team.
(B) The Group audit risk in relation to purchase price accounting was subject to audit procedures performed by the Group audit team.
(C) The Group audit risk in relation to carrying value of goodwill and intangible assets was subject to audit procedures across the Group performed by the Group audit team.
(D) The Group audit risk in relation to accrued customer marketing costs was subject to audit procedures in six full scope components, three specific scope components and specified procedures at two components.
(E) The specific scope components relate to three trading components.
(F) The audit scope of these components may not have included testing of all significant accounts of the component but will have contributed to the coverage of significant accounts tested for the Group. Significant accounts that were not subject to the specific or specified procedures scope
audit were subjected to testing of Group-wide controls and analytical review.
(G) Of the remaining 41 components that together represent (5)% of the Group’s adjusted profit before tax, none are individually greater than 3% of the Group’s adjusted profit before tax. These components primarily record administrative expenses across the Group, thus there is an
aggregated (5)% impact on adjusted profit before tax. For the remaining components in this category, we performed other procedures, including testing of Group-wide controls, analytical review procedures, testing of consolidation journals, and intercompany eliminations to respond to any
potential risks of material misstatement to the Group financial statements.
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2021 as filed with the SEC.
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CONTINUED
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies. The Group has
determined that the most significant future impacts from climate change on its operations will be from the increased
severity of extreme weather events, regulations related to greenhouse gas emissions, water stress or scarcity and the
impact these events could have on the cost or availability of ingredients and future regulations. These are explained on
pages 21 to 22 in the Task Force for Climate related Financial Disclosures and on pages 42 to 47 in the principal risks,
which form part of the “Other information,” rather than the audited financial statements. Our procedures on these
disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated.
Our audit effort in considering climate change was focused on the adequacy of the Group’s disclosures in the financial
statements and conclusion that no issues were identified that would impact the carrying values of assets with indefinite
and long lives or have any other impact on the financial statements for Coca-Cola Europacific Partners plc. We also
challenged the Directors’ considerations of climate change in their assessment of going concern and viability and
associated disclosures.
Changes from the prior year
The change in the total number of reporting components from 54 to 63 primarily represents the entities acquired as part
of the acquisition of Coca-Cola Amatil Limited during 2021.
For our 2021 audit, we have included one full scope and two specific scope components acquired in 2021. We have not
changed the remaining full or specific scope components from the prior year as these components remain the most
significant to the Group, by size and risk, and the coverage remains consistent with the prior year.
Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken at
each of the components by us, as the Group audit engagement team, or by component auditors from other EY global
network firms operating under our instruction. Of the seven full scope components, audit procedures were performed on
six of these directly by the component audit teams. For the 15 specific scope and specified procedures components,
eight represented work performed directly by component auditors. Where the work was performed by component
auditors, we determined the appropriate level of involvement to enable us to determine that sufficient audit evidence
had been obtained as a basis for our opinion on the Group as a whole.
Sarah Kokot has become senior statutory auditor in the current year, following Karl Havers completing his 5 year
rotation. As part of the transition, Sarah had several induction meetings during the planning phase with key members of
the Group executive team and the Audit Committee members. The Group audit team continued to follow a programme
of planned visits that has been designed to ensure that the Senior Statutory Auditor visited all full scope audit locations
at least once in the year, meeting with both EY component teams and local management. During the current year’s
audit cycle, visits were scheduled by the Group audit team to the full scope component teams in Great Britain, Australia,
France, Belgium, Spain and Germany. For Great Britain and Germany, we were able to complete some of these visits in
person, whereas for all other locations our visits were entirely virtual due to the ongoing travel restrictions arising from
the COVID-19 pandemic. We were unable to complete these visits in person due to a combination of factors including
the direct impact of travel restrictions preventing entry into certain countries and vaccination, testing and quarantine
requirements imposed upon arrival or departure. We also virtually visited the team in Bulgaria, which is the shared
service centre location, which contributed to the audits of a number of components.
Our virtual site visits involved using video technology and our global audit software to meet with our component teams
to discuss and direct their audit approach, reviewing relevant working papers and understanding the significant audit
findings in response to the risk areas including accrued customer marketing costs and taxation, holding meetings with
local management, and obtaining updates on local regulatory matters including tax, pensions, restructuring and legal.
The Group audit team virtually attended all component audit closing meetings. The Group audit team interacted
regularly with the component teams where appropriate during various stages of the audit, reviewed relevant working
papers and were responsible for the scope and direction of the audit process. This, together with the additional
procedures performed at Group level, gave us appropriate evidence for our opinion on the Group financial statements.
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CONTINUED
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Risk
Accrued customer marketing costs
Refer to the Audit Committee Report (page 89); Accounting policies (page 136).
The Group participates in various programmes and arrangements with customers referred to as
“promotional programmes”, which are recorded as deductions from revenue. These totalled
€4.1 billion for the year ended 31 December 2021 (2020: €3.2 billion), with €1,160 million of
accrued customer marketing costs as of 31 December 2021 (2020: €775 million). The types of
promotional programmes are more fully described in Note 3 to the consolidated financial
statements with details about accrued customer marketing costs disclosed in Note 15 to the
consolidated financial statements.
Auditing the completeness and measurement of the accrued customer marketing costs, is complex
and judgemental, particularly in relation to promotional programmes where there is estimation
uncertainty related to estimated sales volumes or expected customer performance.
Key observations communicated to the
Audit Committee
Accrued customer marketing costs in the
consolidated statement of financial position
represent a reasonable estimate of the
associated liability and the related disclosures
included in the financial statements are
appropriate.
Our response to the risk
We performed audit procedures over this matter at eleven reporting components which covered
91% of the Group balance.
We obtained an understanding of the Group’s revenue recognition policies and processes and
how they are applied, and evaluated the design of controls, including IT controls, that address the
risks of material misstatement relating to the completeness and measurement of the promotional
programmes. In Europe we also tested the operating effectiveness of these controls. For example,
we tested controls over management’s determination of the total estimated sales volumes used in
the assessment of the accrued customer marketing costs. In Australia, New Zealand and
Indonesia, we performed fully substantive audit procedures.
To evaluate the specific estimations that are inherent in the calculation of the accrued customer
marketing costs:
•We tested the completeness and accuracy of the underlying data by agreeing key terms of the
promotional programmes to the executed sales agreements on a sample basis. We also
compared accrued customer marketing costs to subsequent cash settlements on a sample basis.
•We performed analytical procedures around per unit case rates to identify any potential outliers
and tested material unusual or unexpected journal entries.
•We analysed the historical reversals and ageing of the accrued customer marketing costs, to
identify potential management bias in the estimate of the year-end accrual and considered any
changes in the business environment that would warrant changes in the methodology.
•We also evaluated the disclosures provided in the consolidated financial statements related to
these promotional programmes.
The audit procedures performed to address this risk were performed by both the component teams
and the Primary team.
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CONTINUED
Risk
Valuation of the distribution rights and property, plant and equipment acquired from Coca-
Cola Amatil Limited
Refer to the Audit Committee Report (page 89); Accounting policies (page 136).
As described in Notes 3 and 4 of the consolidated financial statements, the Group completed the
acquisition of Coca-Cola Amatil Limited on 10 May 2021 for total consideration of €5.8 billion. As a
result of the acquisition, the Group measured the assets acquired and liabilities assumed at their
fair values at the acquisition date. The assets acquired included distribution rights intangibles in
Australia, New Zealand and Pacific Islands valued using a multi-period excess earnings approach
(which primarily contributed to the €4.3 billion of acquired intangible assets); and property, plant
and equipment valued using a depreciated replacement cost approach (forming part of the
€1.6 billion acquired).
Auditing the valuation of the acquired assets and liabilities was complex and judgemental with
regards to Australia, New Zealand and Pacific Islands distribution rights and items of property,
plant and equipment, due to a higher degree of subjectivity in management’s evaluation of certain
assumptions required to estimate the fair value of these assets, being primarily prospective
financial information, discount rates and useful economic lives.
Our response to the risk
We evaluated and tested the design and operating effectiveness of the Group’s internal controls
over the valuation of the acquired assets. For example, we tested controls over management's
review of the valuation methodologies and the significant assumptions used to develop the fair
value estimates, including prospective financial information, discount rates and useful economic
lives.
Key observations communicated to the
Audit Committee
We consider management’s estimates of the
fair value of the distribution rights and
property, plant and equipment assumed upon
acquisition of Coca-Cola Amatil Limited to be
within an acceptable range.
To test the estimated fair values of the distribution rights and property, plant and equipment at the
date of the acquisition, we performed sensitivity analyses to determine which assumptions had the
greatest impact on the overall determination of value and therefore presented a higher audit risk.
We concluded that the disclosures related to
the acquisition of Coca-Cola Amatil Limited
are appropriate.
We performed additional procedures to test those assumptions. Among other procedures, we:
•Involved valuation specialists to assist in our assessment of management’s valuation
methodologies and models, and to determine an independent range for the discount rate and
useful economic life assumptions.
•Assessed the revenue growth rates and operating profit margin within the prospective financial
information by comparing management’s assumptions to external sources and historical
performance.
•Evaluated the competence, capabilities and objectivity of specialists engaged by management to
assist in valuing these assets and read their valuation reports to identify corroborating or
contradictory evidence to the fair value estimates.
We also evaluated the adequacy of the disclosures related to the acquisition and the purchase
price allocation.
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Risk
Accounting for uncertain tax positions
Refer to the Audit Committee Report (page 89); Accounting policies (page 136).
At 31 December 2021, the Group recorded provisions for uncertain tax positions.
€138 million (31 December 2020: €136 million) are included in current tax liabilities, the
remainder being classified as non-current tax liabilities.
The Group is subject to income tax in numerous jurisdictions and is routinely under audit
by taxing authorities in the ordinary course of business as described in Note 21 and Note
23 of the consolidated financial statements.
Management applies judgement in assessing tax exposures in each jurisdiction, which
requires interpretation of local tax laws and specific facts and circumstances.
Auditing the uncertain tax positions was judgemental, because of the inherent uncertainty
related to tax exposures, which may result in materially different outcomes. Specifically,
each tax position involves the evaluation of unique and evolving facts and circumstances.
Our response to the risk
We performed audit procedures over this matter at four full scope components and one
specific scope component.
We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls, including IT controls, in place over the Group’s process to
evaluate and account for uncertain tax positions. For example, we tested the Group’s
controls around evaluation of the facts and circumstances supporting the conclusions on
the Group’s tax positions.
We evaluated the tax positions taken by management in each significant jurisdiction in the
context of local tax laws, considering correspondence with tax authorities, the status of
any tax audits and third-party advice obtained by the Group. Our work involved tax
professionals with local knowledge to assess the tax positions taken in each significant
jurisdiction in the context of local tax law and significant tax assessments.
In evaluating management’s tax provisions, we developed our independent range of tax
exposures by jurisdiction, which we compared to the Group’s provisions. We also
considered outcomes for similar fact patterns in different jurisdictions with equivalent tax
rules and regulations.
We evaluated the adequacy of the related disclosures provided in the Group financial
statements.
The audit procedures performed to address this risk were performed by both the
component teams and the Group team.
Key observations communicated to the Audit Committee
We have evaluated the Group’s tax provisions and challenged
the judgements applied. We concluded that the amounts
provided for uncertain tax positions are within an acceptable
range considering the latest developments in each jurisdiction
and the Group’s overall tax exposures and that the related
disclosures are appropriate.
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Risk
Our response to the risk
Carrying value of goodwill and indefinite lived intangibles allocated to the Iberia
cash generating unit
Refer to the Audit Committee Report (page 89); Accounting policies (page 136).
At 31 December 2021, the carrying value of the goodwill and indefinite lived intangibles
allocated to the Iberia Cash Generating Unit (CGU) was €5,564 million
(2020: €5,564 million).
As discussed in Note 7 of the consolidated financial statements, goodwill and indefinite
lived intangibles are tested for impairment at the CGU level at least annually, in the fourth
quarter, or whenever there is an indication of impairment.
Auditing management’s annual impairment test for the Iberia CGU was judgemental as the
calculation of the value in use of the CGU involved estimating the future earnings and
cash flows of the CGU, including the expected recovery from COVID-19 during the
forecast period. In addition, there is lower headroom between the VIU and the carrying
value of the Iberia CGU compared to other CGUs in the Group.
Management’s impairment model used to calculate the value in use for the Iberia CGU
was most sensitive to the assumptions around discount rate and the prospective financial
information, in particular revenue growth rates, operating profit margin and long-term
growth rates.
We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls, including IT controls, in place within the impairment review
process. This included evaluating controls over the Group’s budgetary and forecasting
process used to develop the estimated future earnings and cash flows used in estimating
the value in use of the Iberia CGU. We also tested controls over management’s data
included in the value in use model and their determination of the significant assumptions
such as estimation of discount rate, revenue growth rates and operating profit margin.
We performed additional procedures to assess and corroborate the key inputs to the
valuation, including:
•We reviewed the methodology applied by management in performing the impairment test,
tested the completeness and accuracy of the data included in the impairment model,
reconciled the carrying value to the financial records and agreed the prospective financial
information to Board approved business plans. We also involved our internal valuation
specialists to assist with the evaluation of the discount rate and long-term growth rate
used in the value in use model, by developing an independent range.
•We assessed the historical accuracy of management’s estimates and forecasts against
actual results for indications of management bias and compared the performance since
the testing date with the forecasts used in the value in use model.
•We compared the revenue growth and operating profit margin included in the five-year
cash flow period within the value in use model to external sources of information.
•We reperformed management’s sensitivity analysis, determining the breakeven point by
evaluating a combination of changes to the revenue and long-term growth rates, the
operating profit margin, and discount rate. We also developed our own independent
stress test for a delayed recovery from COVID-19. We evaluated the likelihood of the
occurrence of those scenarios.
We assessed the adequacy of the related disclosures provided in the consolidated
financial statements on changes in certain variables that could eliminate existing
headroom.
The audit procedures to address this risk were mainly performed by the Primary audit
team.
Key observations communicated to the Audit Committee
We consider management’s estimate of Iberia recoverable
value to be within an acceptable range and agree with
management’s conclusion that there is no impairment at
31 December 2021.
The additional sensitivity disclosures in note 7 of the Group
financial statements in relation to the Iberia CGU adequately
reflect that a reasonably possible change in certain key
assumptions in Iberia could lead to a different conclusion in
respect of the recoverability of goodwill and indefinite lived
intangible assets.
In the current year, we have identified a new key audit matter in relation to Purchase price accounting: Valuation of the distribution rights and property, plant and equipment acquired with Coca-Cola Amatil Limited. This risk arises in the current year
following the acquisition of Coca-Cola Amatil Limited.
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Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could
reasonably be expected to influence the economic decisions of the users of the financial
statements. Materiality provides a basis for determining the nature and extent of our audit
procedures.
We determined materiality for the Group to be €67 million (2020: €56 million), which is 4.7% (2020: 5%) of adjusted
profit before tax (2020: normalised profit before taxation). We believe that adjusted profit before taxation provides us
with the most relevant performance measure to the stakeholders of Coca-Cola Europacific Partners plc. We believe that
using an adjusted metric provided us with the most relevant profit basis as the non-recurring items were not related to
the ongoing trading of the Group. The increase in Group materiality since 2020 reflects the increase in profit before
taxation, driven by the inclusion of the results of the Coca-Cola Amatil Limited Group and also the recovery from
COVID-19. In the year ended 31 December 2020, we used a normalised measure (by averaging the previous three
years of profit), to reflect the volatility in the Group arising from the impact of COVID-19. Given trading has started to
return to more normal levels in 2021, we concluded a normalised measure was no longer required.
We determined materiality for the Parent Company to be €144.9 million (2020: €151.9 million), which is 1% (2020: 1%)
of shareholder’s equity.
During the course of our audit, we reassessed initial materiality and the actual adjusted profit before tax was higher than
the Group’s initial estimates used at planning. However, due to the status of our procedures we did not change our
materiality assessment to reflect this.
Starting basis
• €1,382 million (profit before tax)
Adjustments
• €53 million on acquisition related costs
Adjusted
basis
Materiality
• €1,435 million (adjusted profit before tax)
• Materiality maintained at planning level of €67 million (versus €72 million based on final reported)
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to
reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our
judgement was that performance materiality was 75% (2020: 75%) of our planning materiality, namely €50 million (2020:
€42 million). We reviewed any misstatements identified in our 2020 Group audit to assess their potential recurrence in
2021 (which would affect the percentage of Group performance materiality we utilised to determine the extent of our
audit procedures). Based on the nature of the adjustments identified last year, including those previously identified as
part of the Coca-Cola Amatil Limited audit, and the stabilised structure of the finance environment within the Group, we
concluded the likelihood of material misstatements would remain low in the current year and, hence, we set
performance materiality at 75%.
Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement
accounts is undertaken based on a percentage of total performance materiality. The performance materiality set for
each component is based on the relative scale and risk of the component to the Group as a whole and our assessment
of the risk of misstatement at that component. In the current year, the range of performance materiality allocated to
components was €10.1 million to €25.2 million (2020: €8.6 million to €21.5 million).
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of
€3.3 million (2020: €2.8 million), which is set at 5% of planning materiality, as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and
in light of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the annual report including the Strategic Report set out on
pages 2 to 63, Governance and Directors’ report set out on pages 64 to 111, Other Group Information set out on
pages 203 to 217, other than the financial statements and our auditor’s report thereon. The Directors are responsible for
the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of the other information, we are required to
report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
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Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in
the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Corporate governance statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Group and Company’s voluntary compliance with the provisions of the
UK Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained
during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 110;
• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why
the period is appropriate set out on page 48;
• Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation
and meets its liabilities set out on page 110;
• Directors’ statement on fair, balanced and understandable set out on page 111;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on
pages 42-47;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems set out on page 90; and
• The section describing the work of the Audit Committee set out on pages 86-91.
Responsibilities of directors
As explained more fully in the Directors’ responsibilities statement set out on page 111, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and Parent 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 Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
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Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with
governance of the company and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and
determined that the most significant are:
– those that relate to the reporting framework: UK adopted International Accounting Standards, International
Financial Reporting Standards (IFRS) as adopted by the European Union, International Financial Reporting
Standards as issued by the IASB, the UK Companies Act 2006 and the UK Corporate Governance Code.
– those that relate to the accrual or recognition of expenses for taxation such as various country specific tax codes
in which the Group has operations.
– those that relate to the accrual or recognition of expenses for pension costs, as well as the treatment of its
employees, such as labour agreements in countries where the Group operates.
– In addition, we concluded that there are certain significant laws and regulations which may have an effect on the
determination of the amounts and disclosures in the financial statements, primarily being The US Securities Act
and Exchange Act and the Listing Rules of the UK Listing Authority.
• We understood how Coca-Cola Europacific Partners plc is complying with those frameworks by making enquiries of
management, internal audit, those responsible for legal and compliance procedures and the company secretary. We
corroborated our enquiries through our review of board minutes and papers provided to the Audit Committee and
attendance at all meetings of the Audit Committee, as well as consideration of the results of our audit procedures
across the Group.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and
regulations, including specific instructions to full and specific scope component audit teams. At a Group level, our
procedures involved: enquiries of Group management and those charged with governance, legal counsel and internal
audit. At a component level, our full and specific scope component audit team’s procedures included enquiries of
component management; journal entry testing; and focused testing over areas we considered more susceptible to
management override, including as referred to in the “Accrued customer marketing costs” key audit matters section
above.
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud
might occur. We did this by meeting with management from various parts of the business to understand where they
considered there to be susceptibility to fraud; and by assessing whistleblowing incidences for those with a potential
financial reporting impact. We understood the Group’s bonus scheme and long-term incentive plan performance
targets and their propensity to influence on efforts made by management to manage revenue and earnings. We also
considered the controls framework that the Group has established to address risks identified and how management
monitors these controls.
Where the risk was considered to be higher, we performed audit procedures to address identified risks of material
misstatement. These procedures included those referred to in the “Accrued customer marketing costs” key audit
matters section above. In addition, we used data analytics at our full and specific scope components to correlate
revenue with trade receivables and cash received, as well as promotional programmes expense with promotional
programmes accruals and settlements. We also performed journal entry testing, focusing on manual and
consolidation journals, and inspected documentation for any material unusual or unexpected journals.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters we are required to address
• Following the recommendation from the Audit Committee we were appointed by the Company on 22 June 2016 to
audit the financial statements for the year ending 31 December 2016 and subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments is six years, covering
the years ending 31 December 2016 to 31 December 2021.
• The audit opinion is consistent with the additional report to the Audit Committee.
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Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Sarah Kokot (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
15 March 2022
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Critical audit matters
The critical audit matters communicated below are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgements. The communication of critical audit matters does not alter in any way our opinion on
the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
To the Shareholders and the Board of Directors
of Coca-Cola Europacific Partners plc
Opinion on the financial statements
We have audited the accompanying consolidated statements of financial position of Coca-Cola Europacific Partners plc
(the “Group”) as of 31 December 2021 and 2020, the related consolidated statements of income, comprehensive
income, statement of changes in equity and cash flows for each of the three years in the period ended 31 December
2021 and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Group at 31
December 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period
ended 31 December 2021, in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Group’s internal control over financial reporting as of 31 December 2021, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) and our report dated 15 March 2022 expressed an unqualified opinion
thereon.
Basis for opinion
These financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion
on the Group’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our
audits provide a reasonable basis for our opinion.
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Accrued customer marketing costs
Description of the matter
The Group participates in various programmes and arrangements with customers referred to as
“promotional programmes”, which are recorded as deductions from revenue. These totalled €4.1
billion for the year ended 31 December 2021, with €1,160 million of accrued customer marketing
costs as of 31 December 2021. The types of promotional programmes are more fully described in
Note 3 to the consolidated financial statements with details about accrued customer marketing
costs disclosed in Note 15 to the consolidated financial statements.
Auditing the completeness and measurement of the accrued customer marketing costs, is complex
and judgemental, particularly in relation to promotional programmes where there is estimation
uncertainty related to estimated sales volumes or expected customer performance.
Valuation of the distribution rights and
property, plant and equipment acquired
with Coca-Cola Amatil Limited
As described in Notes 3 and 4 of the consolidated financial statements, the Group completed the
acquisition of Coca-Cola Amatil Limited on 10 May 2021 for total consideration of €5.8 billion. As a
result of the acquisition, the Group measured the assets acquired and liabilities assumed at their
fair values at the acquisition date. The assets acquired included distribution rights intangibles in
Australia, New Zealand and Pacific Islands valued using a multi-period excess earnings approach
(which primarily contributed to the €4.3 billion of acquired intangible assets); and property, plant and
equipment valued using a depreciated replacement cost approach (forming part of the €1.6 billion
acquired).
Auditing the valuation of the acquired assets and liabilities was complex and judgemental with
regards to Australia, New Zealand and Pacific Islands distribution rights and items of property, plant
and equipment, due to a higher degree of subjectivity in management’s evaluation of certain
assumptions required to estimate the fair value of these assets, being primarily prospective
financial information, discount rates and useful economic lives.
How we addressed the matter in our audit
We obtained an understanding of the Group’s revenue recognition policies and processes and how
they are applied, evaluated the design and tested the operating effectiveness of controls that
address the risks of material misstatement relating to the completeness and measurement of the
promotional programmes. For example, we tested controls over management’s determination of the
total estimated sales volumes used in the assessment of the accrued customer marketing costs.
To evaluate the specific estimations that are inherent in the calculation of the accrued customer
marketing costs, our audit procedures included, among others, testing the completeness and
accuracy of the underlying data, by agreeing key terms of the promotional programmes to the
executed sales agreements on a sample basis. We also compared accrued customer marketing
costs to subsequent cash settlements on a sample basis.
We performed analytical procedures around per unit case rates to identify any potential outliers and
tested material unusual or unexpected journal entries. We also analysed the historical reversals
and ageing of the accrued customer marketing costs, to identify potential management bias in the
estimate of the year-end accrual and considered any changes in the business environment that
would warrant changes in the methodology.
We evaluated and tested the design and operating effectiveness of the Group’s internal controls
over the valuation of the acquired assets. For example, we tested controls over management's
review of the valuation methodologies and the significant assumptions used to develop the fair
value estimates, including prospective financial information, discount rates and useful economic
lives.
To test the estimated fair values of the distribution rights and property, plant and equipment at the
date of the acquisition, we performed sensitivity analyses to determine which assumptions had the
greatest impact on the overall determination of value and therefore presented a higher audit risk.
We performed additional procedures to test those assumptions. Among other procedures, we
involved valuation specialists to assist in our assessment of management’s valuation
methodologies and models and to determine an independent range for the discount rate and useful
economic life assumptions. We assessed the revenue growth rates and operating profit margin
within the prospective financial information by comparing management’s assumptions to external
sources and historical performance.
We also evaluated the adequacy of the disclosures related to the acquisition and the purchase
price allocation.
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Accounting for uncertain tax positions
Carrying value of goodwill and indefinite
lived intangibles allocated to the Iberia
cash generating unit
Description of the matter
At 31 December 2021, the Group recorded provisions for uncertain tax positions. €138 million are
included in current tax liabilities, the remainder being classified as non-current tax liabilities.
The Group is subject to income tax in numerous jurisdictions and is routinely under audit by taxing
authorities in the ordinary course of business as described in Note 21 and Note 23 of the
consolidated financial statements. Management applies judgement in assessing tax exposures in
each jurisdiction, which requires interpretation of local tax laws and specific facts and
circumstances.
Auditing the uncertain tax positions was judgemental, because of the inherent uncertainty related to
tax exposures, which may result in materially different outcomes. Specifically, each tax position
involves the evaluation of unique and evolving facts and circumstances.
At 31 December 2021, the carrying value of the goodwill and indefinite lived intangibles allocated to
the Iberia Cash Generating Unit (CGU) was €5,564 million.
As discussed in Note 7 of the consolidated financial statements, goodwill and indefinite lived
intangibles are tested for impairment at the CGU level, at least annually, in the fourth quarter, or
whenever there is an indication of impairment.
Auditing management’s annual impairment test for the Iberia CGU was judgmental, as the
calculation of the ‘value in use’ (VIU) of the CGU involved estimating the future earnings and cash
flows of the CGU, including the expected recovery from COVID-19 during the forecast period. In
addition, there is lower headroom between the VIU and the carrying value of the Iberia CGU
compared to other CGUs in the Group.
Management’s impairment model used to calculate the VIU for the Iberia CGU was most sensitive
to the assumptions around discount rate and the prospective financial information, in particular
revenue growth rates, operating profit margin and long-term growth rates.
How we addressed the matter in our audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of
controls in place over the Group’s process to evaluate and account for uncertain tax positions. For
example, we tested the Group’s controls around evaluation of the facts and circumstances
supporting the conclusions on the Group’s tax positions.
We evaluated the tax positions taken by management in each significant jurisdiction in the context
of local tax laws, considering correspondence with tax authorities, the status of any tax audits and
third-party advice obtained by the Group. Our work involved tax professionals with local knowledge
to assess the tax positions taken in each significant jurisdiction in the context of local tax law and
significant tax assessments.
In evaluating management’s tax provisions, we developed our independent range of tax exposures
by jurisdiction, which we compared to the Group’s provisions. We also considered outcomes for
similar fact patterns in different jurisdictions with equivalent tax rules and regulations.
We evaluated the adequacy of the related disclosures provided in the Group financial statements.
We obtained an understanding, evaluated the design and tested the operating effectiveness of
controls in place within the impairment review process. This included evaluating controls over the
Group’s budgetary and forecasting process used to develop the estimated future earnings and cash
flows used in estimating the VIU of the Iberia CGU. We also tested controls over management’s
data included in the VIU model and their determination of the significant assumptions described
above.
We involved our internal valuation specialists to assist with the evaluation of the discount rate and
long-term growth rate used in the VIU model, by developing an independent range.
We assessed the historical accuracy of management’s estimates and forecasts against actual
results for indications of management bias and compared the CGU’s performance since the testing
date with the forecasts used in the VIU model.
We compared the revenue growth and operating profit margin included in the five-year cash flow
period within the VIU model to external sources of information.
We reperformed management’s sensitivity analysis, determining the breakeven point by evaluating
a combination of changes to the revenue and long-term growth rates, the operating profit margin,
and discount rate. We also developed our own independent stress test for a delayed recovery from
COVID-19 and evaluated the likelihood of the occurrence of those scenarios.
We assessed the adequacy of the related disclosures provided in the consolidated financial
statements on changes in certain variables that could eliminate existing headroom.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2016.
London, United Kingdom
15 March 2022
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Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Report of independent registered public accounting firm
To the Shareholders and the Board of Directors
of Coca-Cola Europacific Partners plc
Opinion on internal control over financial reporting
We have audited Coca-Cola Europacific Partners plc’s internal control over financial reporting as of 31 December 2021,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework), (the COSO criteria). As indicated in the accompanying
Management’s report on internal control over financial reporting, management’s assessment of and conclusion on the
effectiveness of internal control over financial reporting did not include the internal controls of Coca-Cola Amatil Ltd,
which is included in the 2021 consolidated financial statements of Coca-Cola Europacific Partners plc and constituted
33.8% and 6.4% of total assets and net assets, respectively, as of 31 December 2021 and 15.8% and 14.2% of
revenues and net income, respectively, for the year then ended. Our audit of internal control over financial reporting of
Coca-Cola Europacific Partners plc also did not include an evaluation of the internal control over financial reporting of
Coca-Cola Amatil Ltd. In our opinion, Coca-Cola Europacific Partners plc (the “Group”) maintained, in all material
respects, effective internal control over financial reporting as of 31 December 2021, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated statement of financial position of the Group as of 31 December 2021 and
2020, the related consolidated statements of income, comprehensive income, statement of changes in equity and cash
flows for each of the three years in the period ended 31 December 2021 and the related notes and our report dated 15
March 2022 expressed an unqualified opinion thereon.
Basis for opinion
The Group’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
report on internal control over financial reporting. Our responsibility is to express an opinion on the Group’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Ernst & Young LLP
London, United Kingdom
15 March 2022
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Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Consolidated income statement
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative expenses
Operating profit
Finance income
Finance costs
Total finance costs, net
Non-operating items
Profit before taxes
Taxes
Profit after taxes
Profit attributable to shareholders
Profit attributable to non-controlling interests
Profit after taxes
Basic earnings per share (€)
Diluted earnings per share (€)
The accompanying notes are an integral part of these consolidated financial statements.
31 December 2021
31 December 2020
31 December 2019
Year ended
Note
5
18
18
18
19
19
21
6
6
€ million
13,763
(8,677)
5,086
(2,496)
(1,074)
1,516
43
(172)
(129)
(5)
1,382
(394)
988
982
6
988
2.15
2.15
€ million
10,606
(6,871)
3,735
(1,939)
(983)
813
33
(144)
(111)
(7)
695
(197)
498
498
—
498
1.09
1.09
€ million
12,017
(7,424)
4,593
(2,258)
(787)
1,548
49
(145)
(96)
2
1,454
(364)
1,090
1,090
—
1,090
2.34
2.32
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Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Consolidated statement of comprehensive income
Profit after taxes
Components of other comprehensive income/(loss):
Items that may be subsequently reclassified to the income statement:
Foreign currency translations:
Pretax activity, net
Tax effect
Foreign currency translation, net of tax
Cash flow hedges:
Pretax activity, net
Tax effect
Cash flow hedges, net of tax
Other reserves:
Pretax activity, net
Tax effect
Other reserves, net of tax
Items that will not be subsequently reclassified to the income statement:
Pension plan remeasurements:
Pretax activity, net
Tax effect
Pension plan remeasurements, net of tax
Other comprehensive income/(loss) for the period, net of tax
Comprehensive income for the period
Comprehensive income attributable to shareholders
Comprehensive income attributable to non-controlling interests
Comprehensive income for the period
The accompanying notes are an integral part of these consolidated financial statements.
31 December 2021
31 December 2020
31 December 2019
Year ended
Note
€ million
21
13
21
16
21
988
260
—
260
277
(63)
214
7
(1)
6
480
301
(63)
238
238
718
1,706
1,684
22
1,706
€ million
498
€ million
1,090
(125)
—
(125)
33
4
37
—
—
—
(88)
(71)
16
(55)
(55)
(143)
355
355
—
355
94
—
94
11
(2)
9
—
—
—
103
(79)
12
(67)
(67)
36
1,126
1,126
—
1,126
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Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Consolidated statement of financial position
31 December 2021
31 December 2020
Note
€ million
€ million
31 December 2021
31 December 2020
Note
€ million
€ million
ASSETS
Non-current:
Intangible assets
Goodwill
Property, plant and equipment
Non-current derivative assets
Deferred tax assets
Other non-current assets
Total non-current assets
Current:
Current derivative assets
Current tax assets
Inventories
Amounts receivable from related parties
Trade accounts receivable
Other current assets
Assets held for sale
Short term investments
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES
Non-current:
Borrowings, less current portion
Employee benefit liabilities
Non-current provisions
Non-current derivative liabilities
Deferred tax liabilities
Non-current tax liabilities
Other non-current liabilities
Total non-current liabilities
7
7
8
13
21
25
13
21
9
20
10
24
24
11
11
14
16
23
13
21
21
12,639
4,623
5,248
226
60
534
8,414
2,517
3,860
6
27
337
Current:
Current portion of borrowings
Current portion of employee benefit liabilities
Current provisions
Current derivative liabilities
Current tax liabilities
Amounts payable to related parties
Trade and other payables
23,330
15,161
Total current liabilities
Total liabilities
EQUITY
Share capital
Share premium
Merger reserves
Other reserves
Retained earnings
Equity attributable to shareholders
Non-controlling interest
Total equity
Total equity and liabilities
150
46
1,157
143
2,305
271
223
58
1,407
5,760
29,090
11,790
138
48
47
3,617
110
37
15,787
40
19
681
150
1,439
204
20
—
1,523
4,076
19,237
6,382
283
83
15
2,134
131
44
9,072
The accompanying notes are an integral part of these consolidated financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 15 March 2022.
They were signed on its behalf by:
Damian Gammell,
Chief Executive Officer
15 March 2022
14
16
23
13
21
20
15
17
17
17
17
17
1,350
10
86
19
181
210
4,237
6,093
21,880
5
220
287
(156)
6,677
7,033
177
7,210
29,090
805
13
154
62
171
181
2,754
4,140
13,212
5
192
287
(537)
6,078
6,025
—
6,025
19,237
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Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Consolidated statement of cash flows
Cash flows from operating activities:
Profit before taxes
Adjustments to reconcile profit before tax to net cash flows from
operating activities:
Depreciation
Amortisation of intangible assets
Share-based payment expense
Finance costs, net
Income taxes paid
Changes in assets and liabilities, net of acquisition amounts:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
Increase/(decrease) in trade and other payables
Increase/(decrease) in net payable receivable from related parties
(Decrease)/increase in provisions
Change in other operating assets and liabilities
Net cash flows from operating activities
Cash flows from investing activities:
Year ended
31 December
2021
31 December
2020
31 December
2019
Note
€ million
€ million
€ million
1,382
695
1,454
Proceeds from borrowings, net
Cash flows from financing activities:
8
7
22
19
693
89
16
129
665
62
14
111
587
52
15
96
(306)
(273)
(270)
(242)
(1)
507
8
(116)
(42)
208
34
53
(112)
43
(10)
5
(25)
(63)
59
(57)
51
Changes in short-term borrowings
Repayments on third party borrowings
Payments of principal on lease obligations
Interest paid, net
Dividends paid
Purchase of own shares under share buyback programme
Exercise of employee share options
Transactions with non-controlling interests
Other financing activities, net
Net cash flows from / (used in) financing activities
Net change in cash and cash equivalents
Net effect of currency exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at beginning of period
2,117
1,490
1,904
Cash and cash equivalents at end of period
Year ended
31 December
2021
31 December
2020
31 December
2019
Note
€ million
€ million
€ million
14
14
14
14
17
17
17
17
4,877
276
(950)
(139)
(97)
(638)
—
28
(73)
5
1,598
(221)
(569)
(116)
(91)
(386)
(129)
14
—
—
3,289
(199)
100
1,220
11
11
83
1,523
1,407
(13)
316
1,523
987
101
(625)
(128)
(86)
(574)
(1,005)
26
—
2
(1,302)
3
4
309
316
The accompanying notes are an integral part of these consolidated financial statements.
Acquisition of bottling operations, net of cash acquired
4
(5,401)
Purchases of property, plant and equipment
Purchases of capitalised software
Proceeds from sales of property, plant and equipment
Net proceeds/(payments) of short term investments
Investments in equity instruments
Proceeds from sale of equity instruments
Other investing activity, net
(349)
(97)
25
198
(4)
25
(2)
—
(348)
(60)
49
—
(11)
—
—
—
(506)
(96)
11
—
(8)
—
—
Net cash flows used in investing activities
(5,605)
(370)
(599)
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Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Consolidated statement of changes in equity
As at 1 January 2019
Profit after taxes
Other comprehensive (expense)/income
Total comprehensive income
Issue of shares during the year
Equity-settled share-based payment expense
Share-based payment tax effects
Dividends
Own shares purchased under share buyback programme
As at 31 December 2019
Profit after taxes
Other comprehensive expense
Total comprehensive income
Issue of shares during the year
Equity-settled share-based payment expense
Share-based payment tax effects
Dividends
Own shares purchased under share buyback programme
As at 31 December 2020
Profit after taxes
Other comprehensive income
Total comprehensive income
Non-controlling interests recognised relating to business combination
Transactions with non-controlling interests
Cash flow hedge gains transferred to goodwill relating to business combination
Issue of shares during the year
Equity-settled share-based payment expense
Share-based payment tax effects
Dividends
As at 31 December 2021
The accompanying notes are an integral part of these consolidated financial statements.
Share capital
Share
premium
Merger
reserves
Other
reserves
Retained
earnings
Non-controlling
interest
Total
Total equity
Note
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
5
—
—
—
—
—
—
—
—
5
—
—
—
—
—
—
—
—
5
—
—
—
—
—
—
—
—
—
—
5
152
287
—
—
—
26
—
—
—
—
—
—
—
—
—
—
—
—
(552)
—
103
103
—
—
—
—
—
6,672
1,090
(67)
6,564
1,090
36
1,023
1,126
—
13
6
26
13
6
(574)
(574)
(1,005)
(1,005)
178
287
(449)
6,135
6,156
—
—
—
14
—
—
—
—
—
—
—
—
—
—
—
—
—
(88)
(88)
—
—
—
—
—
498
(55)
443
—
14
2
(387)
(129)
498
(143)
355
14
14
2
(387)
(129)
192
287
(537)
6,078
6,025
—
—
—
—
—
—
28
—
—
—
—
—
—
—
—
—
—
—
—
—
—
465
465
—
—
(84)
—
—
—
—
220
287
(156)
982
237
982
702
1,219
1,684
—
—
—
—
16
3
—
—
(84)
28
16
3
(639)
6,677
(639)
7,033
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6
16
22
228
(73)
—
—
—
—
—
177
6,564
1,090
36
1,126
26
13
6
(574)
(1,005)
6,156
498
(143)
355
14
14
2
(387)
(129)
6,025
988
718
1,706
228
(73)
(84)
28
16
3
(639)
7,210
17
22
21
17
17
22
21
17
17
17
4
17
22
21
17
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Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Notes to the consolidated financial statements
Note 1
General information and basis of preparation
On 10 May 2021, Coca-Cola European Partners plc (Legacy CCEP) acquired Coca-Cola Amatil Limited (referred to as
CCL pre acquisition, and API post acquisition), and subsequently changed its name to Coca-Cola Europacific Partners
plc (the Company, or Parent Company). The Company and its subsidiaries (together CCEP, or the Group) are a leading
consumer goods group in Western Europe and the Asia Pacific region, making, selling and distributing an extensive
range of primarily non-alcoholic ready to drink beverages.
Refer to Note 4 for further details about the acquisition of CCL (the Acquisition).
The Company has ordinary shares with a nominal value of €0.01 per share (Shares). CCEP is a public company limited
by shares, incorporated under the laws of England and Wales with the registered number in England of 9717350. The
Group’s Shares are listed and traded on Euronext Amsterdam, the NASDAQ Global Select Market, London Stock
Exchange and on the Spanish Stock Exchanges. The address of the Company’s registered office is Pemberton House,
Bakers Road, Uxbridge, UB8 1EZ, United Kingdom.
The consolidated financial statements of the Group for the year ended 31 December 2021 were approved and signed
by Damian Gammell, Chief Executive Officer on 15 March 2022 having been duly authorised to do so by the Board
of Directors.
Impact of COVID-19
The COVID-19 pandemic and related response measures have had and may continue to have an adverse effect on
global economic conditions, as well as our business, results of operations, cash flows and financial condition. At this
time, we cannot predict the degree to which, or the time period over which, our business will continue to be affected by
COVID-19 and the related response measures. These impacts limit the comparability of these consolidated financial
statements with prior periods.
In addition, as part of the preparation of these consolidated financial statements, we have considered the impact of
COVID-19 on our accounting policies and judgements and estimates. The key accounting impacts and considerations
for the Group are included in the relevant notes herein.
Impact of climate change
As part of the preparation of these consolidated financial statements, we have considered the relevant disclosures in the
Strategic Report with respect to the recommendations of the Taskforce on Climate-related Financial Disclosures. Our
considerations focused on the valuation of long-term assets. Based on currently known information, there were no
issues identified that could have a material impact on the carrying values of assets and liabilities in these consolidated
financial statements.
Basis of preparation
These consolidated financial statements of the Group reflect the following:
• They have been 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).
• They have been prepared under the historical cost convention, except for certain items measured at fair value. Those
accounting policies have been applied consistently in all periods, except for the adoption of new standards and
amendments as of 1 January 2021, as described below under accounting policies.
• They are presented in euros, which is also the Parent Company’s functional currency and all values are rounded
to the nearest € million except where otherwise indicated.
• They have been prepared on a going concern basis (refer to page 110).
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries. All
subsidiaries have accounting years ended 31 December and apply consistent accounting policies for the purpose of the
consolidated financial statements.
Subsidiary undertakings are consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through the Group’s power to direct the activities of the entity. All intercompany accounts and transactions are
eliminated on consolidation.
Associates are all entities over which the Group has significant influence but not control, generally accompanying a
shareholding of between 20% to 50% of voting rights. Investments in associates are accounted for using the equity
method of accounting, after initially being recognised at cost.
The Group treats transactions with non-controlling interests that do not result in a loss of control as equity transactions.
When the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities,
non-controlling interest and any other components of equity, while any resulting gain or loss is recognized in profit or
loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
The financial results presented herein for the years ended 31 December 2019 and 2020 and for the period from
1 January 2021 through to the Acquisition refer to Legacy CCEP and its consolidated subsidiaries, and the period from
the Acquisition to 31 December 2021 refer to the combined financial results of CCEP.
Foreign currency
The individual financial statements of each subsidiary are presented in the currency of the primary economic
environment in which the subsidiary operates (its functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each subsidiary are expressed in euros.
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Notes to the consolidated financial statements
CONTINUED
Reporting periods
In these consolidated financial statements, the Group is reporting the financial results for the years ended
31 December 2021, 31 December 2020 and 31 December 2019.
Typically, sales of the Group’s products are seasonal. In Europe, the second and third quarters typically account for
higher unit sales of the Group’s products than the first and fourth quarters. In our API territories, the fourth quarter
typically reflects the highest unit sales volumes each year. The seasonality of the Group’s sales volume, combined with
the accounting for fixed costs such as depreciation, amortisation, rent and interest expense, impacts the Group’s
reported results for the first and second halves of the year. Additionally, year over year shifts in holidays, selling days
and weather patterns can impact the Group’s results on an annual or half yearly basis.
The following table summarises the number of selling days for the years ended 31 December 2021, 31 December 2020
and 31 December 2019 (based on a standard five day selling week):
2021
2020
2019
First Half
Second Half
Full Year
131
128
129
130
134
132
261
262
261
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are remeasured to the
functional currency of the entity at the rate of exchange in effect at the statement of financial position date with the
resulting gain or loss recorded in the consolidated income statement. The consolidated income statement includes
non-operating items which are primarily made up of remeasurement gains and losses related to currency exchange rate
fluctuations on financing transactions denominated in a currency other than the subsidiary’s functional currency.
Non-operating items are shown on a net basis and reflect the impact of any derivative instruments utilised to hedge the
foreign currency movements of the underlying financing transactions.
The assets and liabilities of the Group's foreign operations are translated from local currencies to the euro reporting
currency at currency exchange rates in effect at the end of each reporting period. Revenues and expenses are
translated at average monthly currency exchange rates, with average rates being a reasonable approximation of the
rates prevailing on the transaction dates. Gains and losses from translation are included in other comprehensive
income. On disposal of a foreign operation, accumulated exchange differences are recognised as a component of the
gain or loss on disposal.
The principal exchange rates used for translation purposes in respect of one Euro were:
Average for the year ended(A)
Closing as at
31 December 2021
31 December 2020
31 December 2019
31 December 2021
31 December 2020
UK Sterling
US Dollar
Norwegian Krone
Swedish Krone
Icelandic Krone
Australian Dollar
Indonesian
Rupiah(B)
New Zealand
Dollar
Papua New
Guinean Kina
1.16
0.85
0.10
0.10
0.01
0.63
0.06
0.60
0.24
1.13
0.88
0.09
0.10
0.01
n/a
n/a
n/a
n/a
1.14
0.89
0.10
0.09
0.01
n/a
n/a
n/a
n/a
1.19
0.88
0.10
0.10
0.01
0.64
0.06
0.60
0.25
1.11
0.81
0.10
0.10
0.01
n/a
n/a
n/a
n/a
(A) For current year period European rates and US dollar are calculated as average for the period 1 January 2021 to 31 December 2021.
Asia Pacific rates are calculated as average for the period from 10 May 2021 to 31 December 2021.
(B) Indonesian Rupiah is shown as 1000 IDR versus 1 EUR.
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Notes to the consolidated financial statements
CONTINUED
Note 2
Note 3
Accounting policies
IFRS 15 “Revenue recognition and deductions from revenue”
The Group derives its revenues by making, selling and distributing ready to drink beverages. The revenue from the sale
of products is recognised at the point in time at which control passes to a customer, typically when products are
delivered to a customer. A receivable is recognised by the Group at the point in time at which the right to consideration
becomes unconditional.
Significant judgements and estimates
In preparing these consolidated financial statements, management has made judgements and estimates that affect the
application of the Group’s accounting policies and the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognised prospectively. The significant judgements made in applying the Group’s
accounting policies were applied consistently across the annual periods.
The Group uses various promotional programmes under which rebates, refunds, price concessions or similar items can
be earned by customers for attaining agreed upon sales levels or for participating in specific marketing programmes.
Those promotional programmes do not give rise to a separate performance obligation. Where the consideration the
Group is entitled to varies because of such programmes, it is deemed to be variable consideration. The related accruals
are recognised as a deduction from revenue and are not considered distinct from the sale of products to the customer.
Variable consideration is only included to the extent that it is highly probable that the inclusion will not result in a
significant revenue reversal in the future normal commercial terms.
Financing elements are not deemed present in our contracts with customers as the sales are made with credit terms not
exceeding normal commercial terms. Taxes on sugared soft drinks, excise taxes and taxes on packaging are recorded
on a gross basis (i.e. included in revenue) where the Group is the principal in the arrangement. Value added taxes are
recorded on a net basis (i.e. excluded from revenue). The Group assesses these taxes and duties on a jurisdiction by
jurisdiction basis to conclude on the appropriate accounting treatment.
The rest of the accounting policies applied by the Group are included in the relevant notes herein.
New and amended standards and interpretation
The Group has applied the following amendments for the first time in the year ended 31 December 2021.
Interest Rate Benchmark Reform – Phase 2 – amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate
(IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following
practical expedients:
• A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform,
to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest;
• Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the
hedging relationship being discontinued; and
• Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR
instrument is designated as a hedge of a risk component.
These amendments had no impact on the consolidated financial statements of the Group. The Group intends to use the
practical expedients in future periods if they become applicable.
The Group has not early adopted any other standards, interpretations or amendments that have been issued but are not
yet effective. These standards, interpretations or amendments are not expected to have a material impact to the Group
in the current or future periods and on foreseeable future transactions.
The significant judgements and key sources of estimation uncertainty that have a significant effect on the amounts
recognised in these financial statements are outlined below.
Significant judgements
Intangible assets and goodwill
The Group has assigned indefinite lives to its bottling agreements with TCCC. This judgement has been made after
evaluating the contractual provisions of the bottling agreements, the Group’s mutually beneficial relationship with TCCC
and the history of renewals for bottling agreements.
Refer to Note 7 for further details on the judgement regarding the lives of bottling agreements.
Significant estimates
Acquisition of Coca-Cola Amatil Limited – fair value measurements
A determination of the fair value of the assets acquired and liabilities assumed in the Acquisition, and the useful lives of
intangible assets and property, plant and equipment acquired is required. This exercise is a substantial undertaking
which requires the use of various valuation techniques. Future events could cause underlying assumptions to change
which could have a significant impact on the Group’s financial results.
Refer to Note 4 for further details regarding the Acquisition, including estimations used in determining the provisional fair
values for the acquired assets and liabilities assumed.
Impairment of indefinite lived intangible assets and goodwill
Determining whether goodwill and intangible assets with indefinite lives are impaired requires an estimation of the value
in use or the fair value less costs to sell of the cash generating unit (CGU) to which the goodwill or intangible asset has
been allocated. The value in use calculation requires management’s estimation of the future cash flows expected to
arise from the CGU, including the impact of COVID-19. Refer to Note 7 for the sensitivity analysis of the assumptions
used in the impairment analysis of goodwill and intangible assets with indefinite lives.
Deductions from revenue and sales incentives
The Group participates in various promotional programmes with customers designed to increase the sale of products.
Among the programmes are arrangements under which rebates, refunds, price concessions or similar items can be
earned by customers for attaining agreed upon sales levels, or for participating in specific marketing programmes.
Those promotional programmes do not give rise to a separate performance obligation. Where the consideration the
Group is entitled to varies because of such programmes, the amount payable is deemed to be variable consideration.
Management makes estimates on an ongoing basis for each individual promotion to assess the value of the variable
consideration based upon historical customer experience, expected customer performance and/or estimated sales
volumes. The related accruals are recognised as a deduction from revenue and are not considered distinct from the
sale of products to the customer. Refer to Note 15 for further details.
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Notes to the consolidated financial statements
CONTINUED
Income tax
The Group is subject to income taxes in numerous jurisdictions and there are many transactions for which the ultimate
tax determination cannot be assessed with certainty in the ordinary course of business. The Group recognises a
provision for situations that might arise in the foreseeable future based on an assessment of the probabilities as to
whether additional taxes will be due. In addition, the Group is involved in various legal proceedings and tax matters.
Where an outflow of funds is believed to be probable and a reliable estimate of the outcome of the dispute can be
made, management provides for its best estimate of the liability. Where the final outcome on these matters is different
from the amounts that were initially recorded, such differences impact the tax provision in the period in which such
determination is made. These estimates are subject to potential change over time as new facts emerge and each
circumstance progresses. The evaluation of deferred tax asset recoverability requires estimates to be made regarding
the availability of future taxable income in the jurisdiction giving rise to the deferred tax asset. Refer to Note 21 for
further details regarding income taxes.
Defined benefit plans
The determination of pension benefit costs and obligations are estimated based on assumptions determined with the
assistance of external actuarial advice. The key assumptions impacting the valuations are the discount rate, salary rate
of inflation and mortality rates. Refer to Note 16 for further details about the Group’s defined benefit pension plan costs
and obligations.
Note 4
Business combinations
CCL was one of the largest bottlers and distributors of ready to drink non-alcoholic and alcoholic beverages and coffee
in the Asia Pacific region and was the authorised bottler and distributor of The Coca-Cola Company’s (TCCC) beverage
brands in Australia, New Zealand and Pacific Islands, Indonesia and Papua New Guinea. In November 2020, CCEP
and CCL entered into a binding Scheme Implementation Deed (the Scheme) for the acquisition of 69.2% of the entire
existing issued share capital of CCL, which was held by shareholders other than TCCC. CCEP also entered into a Co-
operation and Sale Deed with TCCC with respect to the acquisition of TCCC's 30.8% interest in CCL (the Co-operation
agreement), conditional upon the implementation of the Scheme. During the first half of 2021, the required shareholder,
regulatory and court approvals were obtained and on 10 May 2021 the Company acquired 100% of the issued and
outstanding shares of CCL.
Shareholders other than TCCC received A$13.32 per share in cash, totalling cash consideration paid of A$6,673 million.
TCCC received A$9.39 and A$10.57 per share for 10.8% and 20%, respectively, of the remaining CCL shares held by
TCCC. Cash consideration paid to TCCC was A$893 million and USD1,046 million. The fair value of the consideration
transferred at the acquisition date was €5,752 million.
The business combination is being accounted for under IFRS 3, “Business Combinations”, using the acquisition method
of accounting, with CCEP considered as the accounting acquirer. The operations of the acquired businesses are
extensive and complex and the Group is in the process of finalising the fair values for certain acquired assets and
assumed liabilities which include intangible assets, property, plant and equipment, current and deferred tax assets and
liabilities based on facts that existed as at the date of the Acquisition. Accordingly, the Group has recognised provisional
amounts for these items. During the measurement period, which will not extend beyond 9 May 2022, the Group will
adjust the provisional amounts recognised at the acquisition date to reflect new information obtained about facts and
circumstances that existed as at the acquisition date that, if known, would have affected the measurement of the
amounts recognised as at that date.
The following table details the Euro equivalent consideration and provisional fair values of assets and liabilities as
acquired:
Intangible assets
Property, plant and equipment
Non-current derivative assets
Deferred tax assets
Other non-current assets
Current derivative assets
Current tax assets
Inventories
Amounts receivable from related parties
Trade accounts receivable
Other current assets
Short term investments(A)
Cash and cash equivalents(A)
Borrowings, less current portion
Employee benefit liabilities
Non-current provisions
Non-current derivative liabilities
Deferred tax liabilities
Non-current tax liabilities
Current portion of borrowings
Current portion of employee benefit liabilities
Current provisions
Current derivative liabilities
Current tax liabilities
Amounts payable to related parties
Trade and other payables
Net identifiable assets acquired
Non-controlling interest
Cash flow hedge gains transferred to goodwill relating to business combination
Goodwill
Fair value of consideration
€ million
4,285
1,568
69
9
61
24
19
455
45
603
54
256
267
(1,251)
(37)
(3)
(72)
(1,185)
(6)
(381)
(1)
(9)
(35)
(18)
(77)
(841)
3,799
(228)
84
2,097
5,752
(A) To align accounting policies, short term time deposits and treasury bills with maturities of greater than three months and less than one
year have been reclassified and presented as short term investments.
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Notes to the consolidated financial statements
CONTINUED
Intangible assets include both indefinite life and definite life intangible assets. Indefinite life intangible assets mainly
include bottling agreements with TCCC, which provide the Group with the exclusive rights to prepare, package,
distribute and sell TCCC branded products in the territories in which it operates. Definite life intangible assets include
distribution agreements with other brand partners, customer relationships and capitalised software.
Bottling agreements with TCCC, distribution agreements with other brand partners and customer relationships have
been valued using a multi-period excess earnings model, whereby the value of a specific intangible asset is estimated
from the excess earnings after fair returns on all other assets employed have been deducted from the business’s after-
tax operating earnings. Brand assets have been valued based on a payment relief method, estimating the value of
future foregone payments to a brand owner over the life of the asset by virtue of owning the asset. Capitalised software
has been valued using a replacement cost approach, representing the current cost to replace the existing asset in its
current state.
Whilst the bottling agreements with TCCC contain no automatic right of renewal, the Group believes that the
interdependent relationship with TCCC and the substantial cost and disruption to TCCC that would be caused by non-
renewals ensures that these agreements will continue to be renewed and, therefore, are essentially perpetual. After
evaluating the contractual provisions of the bottling agreements, the mutually beneficial relationship with TCCC and
history of renewals, the Group has assigned indefinite lives to all such intangible assets. Refer to Note 7 for further
details about the Group’s intangible assets and goodwill.
Goodwill of €2,097 million has been recognised in connection with the Acquisition, representing the excess of
consideration transferred over the provisional fair values of the net identifiable assets acquired and non-controlling
interests, less the cash flow hedge gains of €84 million. The cash flow hedge gains relate to the deal contingent foreign
currency forwards which were reclassified from the cash flow hedge reserves and included in goodwill upon settlement.
The goodwill is attributable to new growth opportunities, workforce and synergies of the combined business operations,
and it is not expected to be deductible for tax purposes.
Property, plant and equipment has been valued using a variety of valuation techniques depending on the local market
and the highest and best use of each asset. These techniques include capitalisation of comparable net market income,
depreciated replacement cost and sales comparison approach. Included within Property, plant and equipment are right
of use assets which have been valued at €307 million. A corresponding lease liability of €302 million is included within
Borrowings.
Inventory has been valued based on estimated sales value less cost of disposal. The Group recorded a fair value
adjustment to increase the carrying value of finished goods on hand at the time of the Acquisition by €48 million. This
adjustment is included within cost of sales in the consolidated income statement for the year ended 31 December 2021
as the inventory was sold during the year.
The fair value of acquired trade accounts receivable is €603 million. The gross contractual amount related to these
receivables is €618 million, of which €15 million is expected to be uncollectible.
At the acquisition date, the Group has elected to measure components of non-controlling interests in CCL at fair value.
The fair value of non-controlling interests represents the fair value of TCCC’s 29.4% ownership interest in PT Coca-Cola
Bottling Indonesia, plus non-controlling interests with respect to Paradise Beverages (Fiji) Group and Samoa Breweries
Limited. Fair value has been derived primarily using applicable enterprise value based on discounted future cash flow
projections.
API contributed revenue of €2.2 billion and profit before tax of €207 million to the Group from acquisition date through to
31 December 2021. If the Acquisition had taken place at the beginning of the year, pro forma revenue and profit before
tax for CCEP for the year ended 31 December 2021 would have been €14.8 billion and €1.4 billion, respectively.
Acquisition and integration related costs of €49 million and €4 million are included in administrative expenses and
finance costs, respectively, in the consolidated income statement for the year ended 31 December 2021. Cash
payments for acquisition-related costs are included in cash flows from operating activities in the consolidated statement
of cash flows.
Note 5
Segment information
Description of segment and principal activities
Following the Acquisition, the Group performed a review of its segment reporting under IFRS 8, “Operating Segments”.
The Group continues to derive its revenues through a single business activity, which is making, moving and selling
ready to drink beverages, primarily non-alcoholic beverages. The Acquisition has broadened the Group’s geographic
footprint which now includes Australia, New Zealand and Pacific Islands, Indonesia and Papua New Guinea. These
territories collectively make up the Australia, Pacific and Indonesia (API) segment. Based on the governance structure
of the Group, including decision making authority and oversight, the Group’s Board continues to be its Chief Operating
Decision Maker (CODM), and the Group now has two operating segments, Europe, representing the pre-acquisition
territories of CCEP, and API. The Board, as the CODM, allocates resources and evaluates performance of its operating
segments based on volume, revenue and comparable operating profit. Comparable operating profit excludes items
impacting the comparability of period over period financial performance.
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Notes to the consolidated financial statements
CONTINUED
The following table provides a reconciliation between reportable segment operating profit and consolidated profit before
tax:
Revenue by geography
The following table summarises revenue from external customers by geography, which is based on the origin of the
sale:
Revenue(A)
Comparable operating profit(A)(B)
Items impacting comparability(C)
Reported operating profit
Total finance costs, net
Non-operating items
Reported profit before tax
Year Ended 31 December 2021
Year Ended 31 December 2020
Europe
API
Total
Europe
API
Total
€ million
€ million
€ million
€ million
€ million
€ million
11,584
2,179
13,763
10,606
1,500
272
1,772
1,194
—
—
10,606
1,194
(256)
1,516
(129)
(5)
1,382
(381)
813
(111)
(7)
695
(A) If the acquisition had taken place at the beginning of the year, pro forma revenue and pro forma comparable operating profit for API for
the year ended 31 December 2021 would have been €3,235 million and €386 million, respectively.
(B) Comparable operating profit includes comparable depreciation and amortisation of €564 million and €162 million for Europe and API
respectively, for the year ended 31 December 2021. Comparable depreciation and amortisation charges for the year ended
31 December 2020 totalled €606 million.
(C) Items affecting the comparability of period-over-period financial performance for 2021 include restructuring charges of €153 million
(refer to Note 18), acquisition and integration related costs of €49 million (refer to Note 4), and the inventory fair value step up related to
acquisition accounting of €48 million (refer to Note 4). Items affecting the comparability for 2020 include restructuring charges of
€368 million (refer to Note 18).
No single customer accounted for more than 10% of the Group’s revenue during the years ended 31 December 2021,
31 December 2020 and 31 December 2019.
Revenue:
Iberia(A)
Germany
Great Britain
France(B)
Belgium/Luxembourg
Netherlands
Norway
Sweden
Iceland
Total Europe
Australia
New Zealand and Pacific Islands
Indonesia and Papua New Guinea
Total API
Total CCEP
(A) Iberia refers to Spain, Portugal and Andorra.
(B) France refers to continental France and Monaco.
Year ended
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
2,495
2,335
2,613
1,813
926
557
391
375
79
11,584
1,359
377
443
2,179
13,763
2,173
2,270
2,203
1,709
892
529
423
337
70
2,784
2,432
2,412
1,897
1,002
602
437
366
85
10,606
12,017
—
—
—
—
—
—
—
—
10,606
12,017
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Notes to the consolidated financial statements
CONTINUED
Assets by geography
Assets are allocated based on operations and physical location. The following table summarises non-current assets,
other than financial instruments and deferred tax assets, by geography:
31 December 2021
31 December 2020
Assets:
Iberia(A)
Germany
Great Britain
France(B)
Belgium/Luxembourg
Netherlands
Sweden
Norway
Iceland
Other unallocated
Total Europe
Australia
New Zealand and Pacific Islands
Indonesia and Papua New Guinea
Total API
Total CCEP
(A) Iberia refers to Spain, Portugal and Andorra.
(B) France refers to continental France and Monaco.
€ million
6,644
3,077
2,680
887
600
432
379
247
34
245
€ million
6,696
3,138
2,432
920
621
441
396
233
31
220
15,225
15,128
5,356
1,751
712
7,819
—
—
—
—
23,044
15,128
Note 6
Earnings per share
Basic earnings per share is calculated by dividing profit after taxes by the weighted average number of Shares in issue
and outstanding during the period. Diluted earnings per share is calculated in a similar manner, but includes the effect of
dilutive securities, principally share options, restricted stock units and performance share units. Share‑based payment
awards that are contingently issuable upon the achievement of specified market and/or performance conditions are
included in the diluted earnings per share calculation based on the number of Shares that would be issuable if the end
of the period was the end of the contingency period.
The following table summarises basic and diluted earnings per share calculations for the years presented:
Profit after taxes attributable to equity shareholders
(€ million)
Basic weighted average number of Shares in issue(A)
(million)
Effect of dilutive potential Shares(B) (million)
Diluted weighted average number of Shares in issue(A)
(million)
Basic earnings per share (€)
Diluted earnings per share (€)
31 December 2021
31 December 2020
31 December 2019
Year ended
982
456
1
457
2.15
2.15
498
455
1
456
1.09
1.09
1,090
466
3
469
2.34
2.32
(A) As at 31 December 2021, 31 December 2020 and 31 December 2019 the Group had 456,235,032, 454,645,510 and 456,399,877
Shares, respectively, in issue and outstanding.
(B) For the year ended 31 December 2021, 31 December 2020 and 31 December 2019 no options to purchase Shares were excluded from
the diluted earnings per share calculation. The dilutive impact of all outstanding options, unvested restricted stock units and unvested
performance share units was included in the effect of dilutive securities.
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Notes to the consolidated financial statements
CONTINUED
Note 7
Intangible assets and goodwill
Intangible assets with indefinite lives
Intangible assets with indefinite lives acquired through business combination transactions are measured at fair value at
the date of acquisition. These assets are not subject to amortisation but are tested for impairment annually at the CGU
level or more frequently if facts and circumstances indicate an impairment may exist. In addition to the annual
impairment test, the assessment of indefinite lives is also reviewed annually.
TCCC franchise intangible assets
The Group’s bottling agreements contain performance requirements and convey the rights to distribute and sell
products within specified territories. The Group’s agreements with TCCC in each territory are for terms of 10 years and
each contain the right for the Group to request a 10 years renewal. The existing bottling agreements expire no earlier
than 1 September 2025. While these agreements contain no automatic right of renewal beyond that date, the Group
believes that its interdependent relationship with TCCC and the substantial cost and disruption to TCCC that would be
caused by non-renewal ensure that these agreements will continue to be renewed and, therefore, are essentially
perpetual. The Group has never had a bottling agreement with TCCC terminated due to non-performance of the terms
of the agreement or due to a decision by TCCC to terminate an agreement at the expiration of a term. After evaluating
the contractual provisions of bottling agreements, the Group’s mutually beneficial relationship with TCCC and history of
renewals, indefinite lives have been assigned to all of the Group’s TCCC bottling agreements.
Brands
In connection with the Acquisition, the Group acquired a portfolio of brands, predominantly comprised of certain non-
alcoholic ready to drink beverages distributed and sold in Australia and New Zealand. These are considered to have an
indefinite life, given the strength and durability of the brands.
Goodwill
Goodwill is initially measured as the excess of the total consideration transferred over the amount recognised for net
identifiable assets acquired and liabilities assumed in a business combination. If the fair value of the net assets acquired
is in excess of the aggregate consideration transferred, the gain is recognised in the consolidated income statement as
a bargain purchase. Goodwill is not subject to amortisation. It is tested annually for impairment at the CGU level or more
frequently if events or changes in circumstances indicate that it might be impaired. Goodwill acquired in a business
combination is allocated to the CGU that is expected to benefit from the synergies of the combination irrespective of
whether a CGU is part of the business combination.
Intangible assets with finite lives
Intangible assets with finite lives are measured at cost of acquisition or production and are amortised using the straight-
line method over their respective estimated useful lives. Finite lived intangible assets are assessed for impairment
whenever there is an indication that they may be impaired. The amortisation period and method are reviewed annually.
Internally generated software
The Group capitalises certain development costs associated with internally developed software, including external direct
costs of materials and services and payroll costs for employees devoting time to a software project and any such
software acquired as part of a business combination. Development expenditure is recognised as an intangible asset
only after its technical feasibility and commercial viability can be demonstrated. When capitalised software is not integral
to related hardware it is treated as an intangible asset; otherwise it is included within property, plant and equipment.
The estimated useful life of capitalised software is between five and seven years. Amortisation expense for capitalised
software is included within administrative expenses and was €75 million, €54 million and €44 million for the years ended
31 December 2021, 31 December 2020 and 31 December 2019, respectively.
Customer relationships
The Group has acquired certain customer relationships in connection with business combinations. These customer
relationships are recorded at fair value on the date of acquisition, and amortised over an estimated economic useful life
of 20 years. Amortisation expense for these assets is included within administrative expenses and was €9 million, €8
million and €8 million for the years ended 31 December 2021, 31 December 2020 and 31 December 2019, respectively.
Non-TCCC franchise intangible
In connection with the Acquisition, the Group acquired certain bottling agreements with Non-TCCC distribution partners
which contain performance requirements and convey the rights to distribute and sell products within specified API
territories. The provisional fair value of these Non-TCCC franchise intangible assets is estimated to be €149 million,
which is being amortised over an expected economic useful life of 20 years. Amortisation expense for these assets is
recognised within administrative expenses and totalled €5 million for the year ending 31 December 2021.
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Notes to the consolidated financial statements
CONTINUED
Balances and movements in intangible assets and goodwill
The following table summarises the movements in the carrying amounts of intangible assets and goodwill for the periods presented:
Cost:
As at 31 December 2019
Additions
Disposals
Transfers and reclassifications
Currency translation adjustments
As at 31 December 2020
Acquisition of CCL
Additions
Disposals
Transfers and reclassifications
Assets held for sale
Currency translation adjustments
As at 31 December 2021
Accumulated amortisation:
As at 31 December 2019
Amortisation expense
Disposals
Currency translation adjustments
As at 31 December 2020
Amortisation expense
Disposals
Currency translation adjustments
As at 31 December 2021
Net book value:
As at 31 December 2019
As at 31 December 2020
As at 31 December 2021
TCCC franchise
intangible
€ million
Brands
€ million
Software
€ million
Customer
relationships
€ million
Non-TCCC
franchise
intangible
€ million
Assets under
construction
Total intangibles
€ million
€ million
Goodwill
€ million
8,165
—
—
—
(87)
8,078
3,822
—
—
—
—
108
12,008
—
—
—
—
—
—
—
—
—
8,165
8,078
12,008
—
—
—
—
—
—
211
—
—
—
(189)
—
22
—
—
—
—
—
—
—
—
—
—
—
22
333
34
(34)
61
(12)
382
55
65
(23)
74
—
18
571
(222)
(54)
34
9
(233)
(75)
20
(9)
(297)
111
149
274
161
—
—
—
—
161
37
—
—
—
—
(1)
—
—
—
—
—
—
149
—
—
—
—
—
197
149
(35)
(8)
—
—
(43)
(9)
—
(1)
(53)
126
118
144
—
—
—
—
—
(5)
—
(5)
—
—
144
104
26
—
(61)
—
69
11
40
—
(74)
—
1
47
—
—
—
—
—
—
—
—
—
104
69
47
8,763
2,520
60
(34)
—
(99)
8,690
4,285
105
(23)
—
(189)
126
—
—
—
(3)
2,517
2,097
—
—
—
—
9
12,994
4,623
(257)
(62)
34
9
(276)
(89)
20
(10)
(355)
—
—
—
—
—
—
—
—
—
8,506
8,414
12,639
2,520
2,517
4,623
Refer to Note 24 for further details regarding the reclassification of certain brands to assets held for sale as at 31 December 2021.
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Notes to the consolidated financial statements
CONTINUED
Impairment of indefinite lived intangible assets and goodwill
Each CGU is tested for impairment annually in the fourth quarter or whenever there is an indication of impairment. The
recoverable amount of each CGU is normally determined through a value in use calculation. To determine value in use
for a CGU, estimated future cash flows are discounted to their present values using a pre-tax discount rate reflective of
the current market conditions and risks specific to each CGU. If the carrying value of a CGU exceeds its recoverable
amount, the carrying value of the CGU is reduced to its recoverable amount and impairment charges are recognised
immediately within the consolidated income statement. Impairment charges other than those related to goodwill may be
reversed in future periods if a subsequent test indicates that the recoverable amount has increased. Such recoveries
may not exceed a CGU’s original carrying value less any depreciation that would have been recognised if no
impairment charges were previously recorded.
The Group’s CGUs are based on geography and generally represent the individual territories in which the Group
operates. For the purposes of allocating intangibles, each indefinite-lived intangible asset is allocated to the geographic
region to which the agreement relates and goodwill is allocated to each of the CGUs expected to benefit from a
business combination, irrespective of whether other assets and liabilities of the acquired businesses are assigned to the
CGUs.
The Group has recognised provisional fair values for the indefinite-lived intangible assets and goodwill related to the
recently acquired territories representing the Group’s API CGUs. Should operating results or macroeconmic
assumptions deteriorate versus those utilised in calculating the provisional fair values of these assets as of the
acquisition date, an impairment of the acquired assets could result in the future.
The following table identifies the carrying value of goodwill and indefinite-lived intangible assets attributable to each
significant CGU of the Group. In addition to the significant CGUs of the Group, as at 31 December 2021 the Group had
other CGUs with total indefinite-lived intangible assets of €2,243 million and goodwill of €941 million.
Cash generating unit
Iberia
Australia
Great Britain
Germany
31 December 2021
31 December 2020
Indefinite lived
intangible assets
€ million
4,289
2,698
1,740
1,060
Goodwill
€ million
1,275
1,459
200
748
TCCC Franchise
€ million
4,289
—
1,624
1,060
Goodwill
€ million
1,275
—
200
748
The recoverable amounts of each of the Group’s API CGUs were determined based on fair value less costs of disposal
due to the relative proximity to the acquisition date.
The recoverable amounts of each of the Group’s Europe CGUs were determined through a value in use calculation,
which uses cash flow projections for a five year period. The key assumptions used in projecting these cash flows were
as follows:
• Growth rate and operating margins: Cash flows were projected over four years based on the Group’s strategic
business plan. Cash flows for the fifth year and beyond were projected using a long-term terminal growth rate of 2%.
• Discount rate: A weighted average cost of capital was applied specific to each CGU as a hurdle rate to discount cash
flows. The discount rates represent the current market assessment of the risks specific to each CGU, taking into
consideration the time value of money and individual risks of the underlying assets that have not been incorporated in
the cash flow estimates. The following table summarises the pre-tax discount rate attributable to each significant
CGU.
Cash generating unit
Iberia
Great Britain
Germany
2021
Pre-tax
discount rate
2020
Pre-tax
discount rate
%
9
10
9
%
9
9
9
The Group did not record any impairment charges as a result of the tests conducted in 2021 and 2020.
The Group’s Great Britain and Germany CGUs continue to have substantial headroom when comparing the value in use
calculation of the CGU versus the CGU’s carrying value.
For the Group’s Iberia CGU, the headroom in the 2021 impairment analysis was approximately 32% (2020: 25%) of
carrying value.
The Group estimates that a 2.0% reduction in the terminal growth rate or a 1.6% increase in the discount rate, each in
isolation, would eliminate existing headroom in Iberia.
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Notes to the consolidated financial statements
CONTINUED
The Group leases land, office and warehouse property, computer hardware, machinery and equipment and vehicles
under non-cancellable lease agreements, most of which expire at various dates through to 2030. Since the adoption of
IFRS 16, “Leases”, effective 1 January 2019, the Group includes right of use assets within property, plant and
equipment. Right of use assets are initially measured at cost, comprising the initial measurement of the lease liability,
plus any direct costs and an estimate of asset retirement obligations, less lease incentives. Subsequently, right of use
assets are measured at cost, less accumulated depreciation and any accumulated impairment losses. Depreciation is
calculated on a straight-line basis over the term of the lease.
The Group does not separate lease from non-lease components for each of its lease categories, except for property
leases. All low value leases with total minimum lease payments under €5,000 and leases with a term less than 12
months are expensed on a straight-line basis.
Extension and termination options are included in a number of property and equipment leases across the Group and are
used to maximise operational flexibility in terms of managing contracts. Extension options (or periods after termination
options) are only included in the lease term if the Group has an enforceable right to extend or terminate the lease and is
reasonably certain to do so.
Note 8
Property, plant and equipment
Property, plant and equipment is recorded at cost, net of accumulated depreciation and accumulated impairment losses,
where cost is the amount of cash or cash equivalents paid to acquire an asset at the time of its acquisition
or construction. Major property additions, replacements and improvements are capitalised, while maintenance and
repairs that do not extend the useful life of an asset or add new functionality are expensed as incurred. Land is not
depreciated, as it is considered to have an indefinite life. For all property, plant and equipment, other than land,
depreciation is recorded using the straight-line method over the respective estimated useful lives as follows:
Category
Buildings and improvements
Machinery, equipment and containers
Cold drink equipment
Vehicle fleet
Furniture and office equipment
Useful life (years)
Low
10
3
4
3
4
High
40
20
12
12
10
Gains or losses arising on the disposal or retirement of an asset are determined as the difference between the carrying
amount of the asset and any proceeds from its sale. Leasehold improvements are amortised using the straight-line
method over the shorter of the remaining lease term or the estimated useful life of the improvement.
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, an impairment test is performed to estimate the potential loss of value that may reduce the recoverable
amount of the asset to below its carrying amount. Any impairment loss is recognised within the consolidated income
statement by the amount which the carrying amount exceeds the recoverable amount. Useful lives and residual
amounts are reviewed annually and adjustments are made prospectively as required.
For property, plant and equipment, the Group assesses annually whether there is an indication that previously
recognised impairment losses no longer exist or have decreased. If such indication exists, a previously recognised
impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment loss was recognised and only up to the recoverable amount or the
original carrying amount net of depreciation that would have been incurred had no impairment losses been recognised.
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Notes to the consolidated financial statements
CONTINUED
The following table summarises the movement in net book value for property, plant and equipment for the periods presented:
Cost:
As at 31 December 2019
Additions
Disposals
Transfers and reclassifications
Currency translation adjustments
As at 31 December 2020
Acquisition of CCL
Additions
Disposals
Transfers and reclassifications(A)
Currency translation adjustments
As at 31 December 2021
Accumulated depreciation:
As at 31 December 2019
Depreciation expense
Disposals
Currency translation adjustments
As at 31 December 2020
Depreciation expense
Disposals
Currency translation adjustments
As at 31 December 2021
Net book value:
As at 31 December 2019
As at 31 December 2020
As at 31 December 2021
(A) Includes €4 million related to assets held for sale for the year ended 31 December 2021.
Land
€ million
Buildings and
improvements
Machinery,
equipment and
containers
€ million
€ million
Cold drink
equipment
€ million
Vehicle fleet
€ million
Furniture
and office
equipment
€ million
Assets under
construction
€ million
Total
€ million
316
18
(12)
1
(6)
317
339
2
(3)
—
8
1,755
2,805
1,210
89
(32)
49
(15)
112
(81)
173
(34)
1,846
2,975
492
41
(28)
47
31
529
119
(218)
129
44
46
(86)
—
(15)
1,155
108
50
(319)
11
21
663
2,429
3,578
1,026
—
—
—
—
—
—
—
—
—
316
317
663
(557)
(117)
15
8
(651)
(123)
17
(9)
(766)
1,198
1,195
1,663
(1,135)
(297)
79
16
(1,337)
(326)
208
(18)
(1,473)
1,670
1,638
2,105
(709)
(159)
86
10
(772)
(163)
319
(15)
(631)
501
383
395
291
64
(69)
—
(3)
283
7
62
(54)
1
(1)
298
(143)
(62)
63
1
(141)
(61)
51
—
(151)
148
142
147
234
16
(107)
4
(3)
144
15
10
(16)
5
2
160
(141)
(30)
84
3
(84)
(20)
15
(2)
(91)
93
60
69
279
77
(1)
(227)
(3)
125
78
195
1
(197)
4
206
—
—
—
—
—
—
—
—
—
279
125
206
6,890
422
(388)
—
(79)
6,845
1,568
479
(637)
(4)
109
8,360
(2,685)
(665)
327
38
(2,985)
(693)
610
(44)
(3,112)
4,205
3,860
5,248
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Notes to the consolidated financial statements
CONTINUED
Right of use assets
The following table summarises the net book value of right of use assets included within property, plant and equipment:
Note 9
31 December 2021
31 December 2020
€ million
€ million
438
135
71
5
649
202
137
19
6
364
Inventories
Inventories are valued at the lower of cost or net realisable value and cost is determined using the first-in, first-out
(FIFO) method. Inventories consist of raw materials, supplies (primarily including concentrate, other ingredients
and packaging) and finished goods, which also include direct labour, indirect production and overhead costs. Cost
includes all costs incurred to bring inventories to their present location and condition. Spare parts are recorded
as assets at the time of purchase and are expensed as utilised. Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs necessary to complete and sell the inventory.
The following table summarises the inventory outstanding in the consolidated statement of financial position as at the
dates presented:
Buildings and improvements
Vehicle fleet
Machinery, equipment and containers
Furniture and office equipment
Total(A)
(A) €307 million was acquired as part of the Acquisition.
Total additions to right of use assets during 2021 were €120 million (2020: €134 million).
The following table summarises depreciation charges relating to right of use assets for the periods presented:
Finished goods
Raw materials and supplies
Spare parts and other
31 December 2021
31 December 2020
Total inventories
€ million
€ million
Buildings and improvements
Vehicle fleet
Machinery, equipment and containers
Furniture and office equipment
Total
56
59
22
2
139
37
61
8
11
117
During the years ended 31 December 2021 and 31 December 2020, the total expense relating to low value and short-
term leases was €16 million and €18 million, respectively, which is primarily included in administrative expenses. The
Group does not have any residual value guarantees in relation to its leases. As at 31 December 2021 the total value of
lease extension and termination options included within right of use assets was €16 million.
Write downs of inventories to net realisable value totalled €41 million and €29 million for the years ended
31 December 2021 and 31 December 2020, respectively. These write downs were included in cost of sales on the
consolidated income statement. None of these write downs for inventory were subsequently reversed.
31 December 2021
31 December 2020
€ million
€ million
635
375
147
1,157
389
210
82
681
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Notes to the consolidated financial statements
CONTINUED
Note 10
Trade accounts receivable
The Group sells its products to retailers, wholesalers and other customers and extends credit, generally without
requiring collateral, based on an evaluation of the customer’s financial condition. While the Group has a concentration of
credit risk in the retail sector, this risk is mitigated due to the diverse nature of the customers the Group serves,
including, but not limited to, their type, geographic location, size and beverage channel.
Trade accounts receivable are initially recognised at fair value and subsequently measured at amortised cost less
provision for impairment. Typically, accounts receivable have terms of 30 to 60 days and do not bear interest. The
Group applies an expected credit loss reserve methodology to assess possible impairments. Balances are considered
for impairment on an individual basis rather than by reference to the extent that they become overdue. The Group
considers factors such as delinquency in payment, financial difficulties, payment history of the debtor as well as certain
forward-looking macroeconomic indicators. The carrying amount of trade accounts receivable is reduced through the
use of an allowance account and the amount of the loss is recognised in the consolidated income statement. Credit
insurance on a portion of the accounts receivable balance is also carried. Refer to Note 26 for further details on credit
risk management.
As a result of COVID-19, the Group supplemented its existing credit loss reserve methodology to include an incremental
loss allowance for those receivable balances that were deemed to be higher risk in the current environment. The
incremental allowance is included within allowance for doubtful accounts below, as at 31 December 2021.
The following table summarises the trade accounts receivable outstanding in the consolidated statement of financial
position as at the dates presented:
The following table summarises the ageing of trade accounts receivable, net of allowance for doubtful accounts, in the
consolidated statement of financial position as at the dates presented:
Not past due
Past due 1 - 30 days
Past due 31 - 60 days
Past due 61 - 90 days
Past due 91 - 120 days
Past due 121+ days
Total
31 December 2021
31 December 2020
€ million
2,172
€ million
1,389
88
18
9
3
15
23
3
4
1
19
2,305
1,439
The following table summarises the change in the allowance for doubtful accounts for the periods presented:
Trade accounts receivable, gross
Allowance for doubtful accounts
Total trade accounts receivable
31 December 2021
31 December 2020
Receivables written off during the year as uncollectible
€ million
2,354
(49)
2,305
€ million
1,478
(39)
1,439
As at 31 December 2020
Provision for impairment recognised during the year
Receivables written off during the year as uncollectible
As at 31 December 2021
As at 31 December 2019
Provision for impairment recognised during the year
Allowance for
doubtful accounts
€ million
(18)
(25)
4
(39)
(13)
3
(49)
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Notes to the consolidated financial statements
CONTINUED
Note 11
Cash and cash equivalents and short term investments
Cash and cash equivalents
Cash and cash equivalents include cash and short term, highly liquid financial instruments with maturity dates of less
than three months when acquired that are readily convertible to cash and which are subject to an insignificant risk of
changes in value. Counterparties and instruments used to hold the Group’s cash and cash equivalents are continually
assessed, with a focus on preservation of capital and liquidity.
The following table summarises the cash and cash equivalents outstanding in the consolidated statement of financial
position as at the dates presented:
Cash at banks and on hand
Short term deposits and securities
Total cash and cash equivalents
31 December 2021
31 December 2020
€ million
708
699
1,407
€ million
643
880
1,523
Cash and cash equivalents are held in the following currencies as at the dates presented:
Euro
British Pound
US Dollar
Norwegian Krone
Swedish Krona
Australian Dollar
Indonesian Rupiah
Papua New Guinean Kina
Other
Total cash and cash equivalents
31 December 2021
31 December 2020
€ million
€ million
524
337
74
64
31
234
41
45
57
950
424
32
70
33
—
—
—
14
1,407
1,523
Included within Cash and cash equivalents as at 31 December 2021 are Papua New Guinea cash assets of €45 million
denominated in local currency (Kina). Government-imposed currency controls 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. There are no
other material restrictions on the Group’s cash and cash equivalents.
Short term investments
Short term investments are financial assets that are initially recognised at fair value and subsequently measured at
amortised cost. The Group classifies its financial assets as at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect the contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments for principal and interest.
The short term investment balance is comprised of time deposits and treasury bills, with maturity dates of greater than
three months and less than one year when acquired, which do not meet the definition of cash and cash equivalents, and
are expected to be held until maturity. These are highly liquid investments and due to their short term nature, their
carrying amount is not significantly different from the fair values.
Short term investments were €58 million as at 31 December 2021 (2020: nil), which include €44 million denominated in
Papua New Guinea Kina that are subject to government-imposed currency controls which impact the extent to which
these investments, upon maturity, can be converted into foreign currency and remitted for use elsewhere in the Group.
Note 12
Fair values
Fair value measurements
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within
the fair value hierarchy. This is described as one of the following, based on the lowest level input that is significant to the
fair value measurement as a whole:
• Level 1 – Quoted prices in active markets for identical assets or liabilities.
• Level 2 – Observable inputs other than quoted prices included in Level 1. The Group values assets and liabilities
included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar
assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable
market data.
• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar
techniques that use significant unobservable inputs.
The fair values of the Group’s cash and cash equivalents, trade accounts receivable, amounts receivable from related
parties, trade and other payables and amounts payable to related parties approximate their carrying amounts due to
their short term nature.
The fair values of the Group’s borrowings are estimated based on borrowings with similar maturities and credit quality
and current market interest rates. These are categorised within Level 2 of the fair value hierarchy as the Group uses
certain pricing models and quoted prices for similar liabilities in active markets in assessing their fair values. Refer to
Note 14 for further details regarding the Group’s borrowings.
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Notes to the consolidated financial statements
CONTINUED
The following table summarises the book value and fair value of the Group’s borrowings as at the dates presented:
Note 13
Fair value of borrowings
Book value of borrowings (Note 14)
31 December 2021
31 December 2020
€ million
13,316
13,140
€ million
7,585
7,187
Hedging activities
Derivative financial instruments
The Group utilises derivative financial instruments to mitigate its exposure to certain market risks associated with its
ongoing operations. The primary risks that it seeks to manage through the use of derivative financial instruments include
currency exchange risk, commodity price risk and interest rate risk.
The Group’s derivative assets and liabilities are carried at fair value, which is determined using a variety of valuation
techniques, depending on the specific characteristics of the hedging instrument, taking into account credit risk. The fair
value of its derivative contracts (including forwards, options, futures, cross currency swaps and interest rate swaps) is
determined using standard valuation models. The significant inputs used in these models are readily available in public
markets or can be derived from observable market transactions and, therefore, the derivative contracts have been
classified as Level 2. Inputs used in these standard valuation models include the applicable spot, forward and discount
rates. The standard valuation model for the option contracts also includes implied volatility, which is specific to individual
options and is based on rates quoted from a widely used third party resource. Refer to Note 13 for further details about
the Group’s derivatives.
The following table summarises the fair value of the derivative assets and liabilities as at the dates presented:
31 December 2021
31 December 2020
€ million
€ million
All derivative financial instrument assets and liabilities are recorded at fair value on the consolidated statement of
financial position. The Group does not use derivative financial instruments for trading or speculative purposes and all
hedge ratios are on a 1:1 basis. At the inception of a hedge transaction, the Group documents the relationship between
the hedging instrument and the hedged item, as well as its risk management objective and strategy for undertaking the
hedge transaction. This process includes linking the derivative financial instrument designated as a hedging instrument
to the specific asset, liability, firm commitment or forecasted transaction. Refer to Note 26 for further details about the
Group’s risk management strategy and objective. Both at the hedge inception and on an ongoing basis, the Group
assesses and documents whether the derivative financial instrument used in the hedging transaction is highly effective
in maintaining the risk management objectives. Where critical terms match, the Group uses a qualitative assessment to
ensure initial and ongoing effectiveness criteria. Hedge accounting is discontinued when the hedging instrument expires
or is sold, terminated, exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss
on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs. If the
hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to
the income statement.
Assets at fair value:
Derivatives (Note 13)
Liabilities at fair value:
Derivatives (Note 13)
376
66
46
77
While certain derivative financial instruments are designated as hedging instruments, the Group may also enter into
derivative financial instruments that are designed to hedge a risk but are not designated as hedging instruments
(referred to as an economic hedge or a non-designated hedge). The decision regarding whether or not to designate a
hedge for hedge accounting is made by management considering the size, purpose and tenure of the hedge, as well as
the anticipated ability to achieve and maintain the Group’s risk management objective.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by reassessing categorisation at the end of each
reporting period. There have been no transfers between levels during the periods presented.
The Group is exposed to counterparty credit risk on all of its derivative financial instruments. It has established and
maintained strict counterparty credit guidelines and enters into hedges only with financial institutions that are investment
grade or better. It continuously monitors counterparty credit risk and utilises numerous counterparties to minimise its
exposure to potential defaults.
As part of the Acquisition, the Group acquired derivative financial instruments which had previously been designated as
hedging instruments in CCL. These instruments are used to manage currency exchange risk, commodity price risk and
interest rate risk of CCL and included FX swaps, commodity swaps, interest rate swaps and cross currency swaps. As
at the acquisition date, the Group evaluated each of the acquired derivative financial instruments and assessed whether
the designation as a hedging instrument was appropriate under IFRS 9. The Group subsequently designated the
acquired derivative financial instruments as either cash flow hedges or fair value hedges and continues to assess and
document whether the derivative financial instruments used in the hedging transaction are highly effective in maintaining
the risk management objective.
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Notes to the consolidated financial statements
CONTINUED
Cash flow hedges
The Group uses cash flow hedges to mitigate its exposure to changes in cash flows attributable to currency fluctuations
and commodity price fluctuations associated with certain forecasted transactions, including purchases of raw materials,
finished goods and services denominated in non-functional currencies, the receipt of interest and principal on
intercompany loans denominated in non-functional currencies and the payment of interest and principal on debt
issuances in non-functional currencies. Effective changes in the fair value of these cash flow hedging instruments are
recognised as a component of other reserves on the consolidated statement of financial position. The effective changes
are then recognised within the line item on the consolidated income statement that is consistent with the nature of the
underlying hedged item in the period that the forecasted purchases or payments impact earnings. Any changes in the
fair value of these cash flow hedges that are the result of ineffectiveness are recognised immediately in the line item on
the consolidated income statement that is consistent with the nature of the underlying hedged item. Historically, the
Group has not experienced, nor does it expect to experience, material hedge ineffectiveness with the value of the
hedged instrument equalling that of the hedged item.
In connection with the Acquisition, the Group entered into deal contingent foreign currency forwards with a total notional
amount of €5.6 billion in order to mitigate the foreign currency risk arising from the Acquisition. These instruments were
recorded as cash flow hedges, and on completion of the Acquisition, gains of €84 million were reclassified to Goodwill.
The net notional amount of outstanding interest rate and cross currency swaps used to hedge interest rate risk and
currency fluctuations of non-functional currency borrowings was €2.2 billion at 31 December 2021 and €0.4 billion
at 31 December 2020. The net notional amount of the other outstanding currency related cash flow hedges was
€1.1 billion as at 31 December 2021 and €0.3 billion as at 31 December 2020. The net notional amount of outstanding
commodity related cash flow hedges was €0.9 billion as at 31 December 2021 and €0.7 billion as at 31 December 2020.
Outstanding cash flow hedges as at 31 December 2021 are expected to settle and affect profit or loss between
2022 and 2036.
The following table summarises the fair value of the assets and liabilities related to derivative financial instruments and
the respective line items in which they were recorded in the consolidated statement of financial position as at the dates
presented. All derivative instruments are classified as Level 2 within the fair value hierarchy.
Discussion of the Group’s other financial assets and liabilities is contained elsewhere in these financial statements.
Refer to Note 10 for trade accounts receivable, Note 15 for trade and other payables, Note 14 for borrowings and Note
20 for amounts receivable and payable with related parties.
Location – statement of financial
position
€ million
€ million
31 December 2021
31 December 2020
Hedging instrument
Assets:
Derivatives designated as hedging
instruments:
Commodity contracts
Non-current derivative assets
Foreign currency contracts
Non-current derivative assets
Interest rate and cross currency swaps Non-current derivative assets
Commodity contracts
Deal contingent forwards
Current derivative assets
Current derivative assets
Foreign currency contracts
Current derivative assets
Interest rate and cross currency swaps Current derivative assets
Total
Total assets
Liabilities:
Derivatives designated as hedging
instruments:
Commodity contracts
Non-current derivative liabilities
Foreign currency contracts
Non-current derivative liabilities
Interest rate and cross currency swaps Non-current derivative liabilities
Commodity contracts
Current derivative liabilities
Foreign currency contracts
Current derivative liabilities
Interest rate and cross currency swaps Current derivative liabilities
Total liabilities
Total
75
3
148
128
—
16
6
376
376
3
—
44
5
14
—
66
66
6
—
—
13
24
3
—
46
46
9
6
—
24
4
34
77
77
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Notes to the consolidated financial statements
CONTINUED
The following table summarises the Group’s outstanding cash flow hedges by risk category as at the dates presented
(all contracts denominated in a foreign currency have been converted into euros using the respective year end spot
rate):
Cash flow hedges
Foreign currency contracts
Interest rate and cross currency swaps
Commodity contracts
As at 31 December 2019
Deal contingent foreign currency forwards
Foreign currency contracts
Interest rate and cross currency swaps
Commodity contracts
As at 31 December 2020
Interest rate and cross currency swaps
Foreign currency contracts
Commodity contracts
As at 31 December 2021
Notional maturity profile
Total Less than 1 year
1 to 3 years
3 to 5 years
Over 5
years
€ million
€ million
€ million
€ million
€ million
475
736
459
1,670
3,000
310
396
677
4,383
2,225
1,074
922
4,221
303
340
246
889
3,000
174
396
403
3,973
144
912
566
172
396
213
781
—
136
—
274
410
1,365
162
356
1,622
1,883
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
716
—
—
716
The Group recognised within other comprehensive income net gains of €125 million, €25 million and €10 million for the
years ended 31 December 2021, 31 December 2020 and 31 December 2019, respectively, related to changes in the fair
values of outstanding cash flow hedges. The amount of ineffectiveness associated with these cash flow hedges was not
material during any year presented within these financial statements.
The following table summarises the net of tax effect for cash flow hedges for the periods presented within the
consolidated income statement:
Amount of gain/(loss) reclassified
from the hedging reserve into profit
31 December 2021
31 December 2020
31 December 2019
Cash flow hedging instruments
Location – income statement
€ million
€ million
€ million
Foreign currency contracts
Cost of sales
Commodity contracts
Cost of sales
Commodity contracts
Interest rate and cross
currency swaps(A)
Total
Selling and distribution
expenses
Finance costs
(3)
74
2
(78)
(5)
1
(33)
(3)
23
(12)
—
(17)
—
18
1
(A) The gain/(loss) recognised on these currency contracts is offset by the gain/(loss) recognised on the remeasurement of the underlying
debt instruments; therefore, there is a minimal consolidated net effect in non-operating items on the consolidated income statement.
Fair value hedges
The Group has designated certain cross currency swaps used to mitigate FX risk and interest rate risk on foreign
currency borrowings as fair value hedges. There is an economic relationship between the hedged item and the hedging
instrument as the terms of the cross currency swap contracts match the terms of the fixed-rate borrowings. The Group
has established a hedge ratio of 1:1 for the hedging relationship.
The following table summarises the Group’s outstanding fair value hedges by risk category as at the dates presented
(all contracts denominated in a foreign currency have been converted into euros using the respective year end spot
rate):
Fair value hedges
As at 31 December 2019
As at 31 December 2020
Interest rate and cross currency swaps
As at 31 December 2021
Total
Less than 1 year
€ million
1 to 3 years
€ million
3 to 5 years
€ million
Over 5 years
€ million
—
—
166
166
—
—
—
—
—
—
—
—
—
—
—
—
—
—
166
166
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Notes to the consolidated financial statements
CONTINUED
Note 14
Borrowings and leases
Borrowings
Borrowings are initially recognised at fair value, net of issuance costs incurred. Borrowings acquired by the Group as
part of the Acquisition have been recognised at fair value at the acquisition date. After initial recognition, borrowings are
subsequently measured at amortised cost using the effective interest rate method. Amortisation of transaction costs, fair
value adjustments made on acquisition, premiums and discounts are recognised as part of finance costs within the
consolidated income statement.
Leases
Since the adoption of IFRS 16, “Leases”, effective 1 January 2019, lease liabilities are included within Borrowings in our
consolidated statement of financial position.
The lease liability is measured at the present value of lease payments, discounted using the Group’s incremental
borrowing rate (IBR). The lease term comprises the non-cancellable period of the contract, together with periods
covered by an option to extend the lease whenever the Group is reasonably certain to exercise that option and has an
enforceable right to do so. Subsequently, the lease liability is measured by increasing the carrying amount to reflect
interest on the lease liability and reducing it by lease payments made.
The following table summarises the gains/(losses) recognised from fair value hedges that settled for the periods
presented within the consolidated income statement:
Fair value hedges
Location - Income
statement
31 Dec 2021
€ million
31 Dec 2020
€ million
31 Dec 2019
€ million
Foreign currency contracts
Finance costs
Total
(2)
(2)
—
—
—
—
The carrying value of the hedged item recognised in borrowings is €173 million (2020: nil), which includes accumulated
amounts of fair value adjustments of €15 million (2020: nil).
Non-designated hedges
The Group periodically enters into derivative instruments that are designed to hedge various risks but are not
designated as hedging instruments. These hedged risks include those related to commodity price fluctuations
associated with forecasted purchases of aluminium, sugar, components of PET (plastic) and vehicle fuel.
At times, it also enters into other short-term non-designated hedges to mitigate its exposure to changes in cash flows
attributable to currency fluctuations associated with short-term intercompany loans and certain cash equivalents
denominated in non-functional currencies. Changes in the fair value of outstanding non-designated hedges are
recognised each reporting period in the line item on the consolidated income statement that is consistent with the nature
of the hedged risk.
There were €59 million outstanding non-designated foreign currency hedges, hedging intercompany loans as at
31 December 2021. There were no outstanding non-designated hedges as at 31 December 2020.
The following table summarises the gains/(losses) recognised from non-designated derivative financial instruments in
the consolidated income statement for the years presented.
31 December 2021
31 December 2020
31 December 2019
Non-designated
hedging instruments
Location – income statement
€ million
€ million
€ million
Commodity contracts Selling and distribution expenses
Foreign currency
contracts(A)
Total
Non-operating items
—
—
—
(12)
(4)
(16)
5
(2)
3
(A) The gain/(loss) recognised on these currency contracts is offset by the gain/(loss) recognised on the remeasurement of the underlying
hedged items; therefore, there is a minimal consolidated net effect in non-operating items on the consolidated income statement.
Net investment hedges
The Group had no net investment hedges in place as at 31 December 2021 or 31 December 2020, however it continues
to monitor its exposure to currency exchange rates and may enter into future net investment hedges as a result of
volatility in the functional currencies of certain of its subsidiaries.
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Notes to the consolidated financial statements
CONTINUED
Borrowings outstanding
The following table summarises the carrying value of the Group’s borrowings as at the dates presented:
Non-current:
Euro denominated bonds:
€700 million 0.75% Notes 2022
€350 million 2.625% Notes 2023
€500 million 1.125% Notes 2024
€350 million 2.375% Notes 2025
€250 million 2.750% Notes 2026
€600 million 1.75% Notes 2026
€400 million 1.50% Notes 2027
€250 million 1.50% Notes 2027
€500 million 1.75% Notes 2028
€750 million 0.20% Notes 2028
€500 million 1.125% Notes 2029
€500 million 1.875% Notes 2030
€500 million 0.70% Notes 2031
€800 million —% Notes due 2025(C)
€700 million 0.50% Notes due 2029(C)
€1,000 million 0.875% Notes due 2033(C)
€750 million million 1.50% Notes due 2041(C)
Foreign currency bonds (swapped into Euro)(D):
$850 million 0.50% Notes due 2023(C)
$650 million 0.80% Notes due 2024(C)
$500 million 1.50% Notes due 2027(C)
31 December 2021
31 December 2020
€ million
€ million
31 December 2021
31 December 2020
€ million
€ million
—
349
497
348
249
594
397
261
495
743
494
496
496
797
694
990
746
747
571
439
Australian dollar denominated bonds(E):
A$100 million 3.50% Notes2024
A$30 million 4.166% Notes 2025
A$20 million 4.25% Notes 2025
A$30 million 4.125% Notes 2026
A$50 million 4.155% Notes 2028
A$133 million 2.45% Notes 2029
A$50 million 4.20% Notes 2031
A$187 million 4.20% Notes 2031
A$13 million 4.20% Notes 2031
Foreign currency bonds (swapped into Australian
Dollar or New Zealand Dollar)(D) (E):
US$25 million 4.34% Notes 2023
US$25 million 4.34% Notes 2023
NOK1 billion 3.04% Notes 2028
NOK750 million 2.75% Notes 2030
US$50 million 2.653% Notes 2030
JPY10 billion 4.15% Notes 2036
JPY12.3 billion billion 1.06% Notes 2037
Lease obligations
Total non-current borrowings
699
349
497
347
248
592
396
263
494
742
494
496
496
—
—
—
—
—
—
—
68
21
14
21
36
87
37
138
10
23
23
105
77
45
90
83
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
509
11,790
269
6,382
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Notes to the consolidated financial statements
CONTINUED
Current:
Euro denominated bonds:
€700 million 0.75% Notes 2022
€350 million Floating Rate Note 2021(A)
Foreign currency bonds (swapped into Euro)(D):
US$250 million 3.25% Notes 2021(B)
US$300 million 4.50% Notes 2021(B)
Australian dollar denominated bonds(D) (E):
A$200 million 3.34% Notes 2022
A$30 million 5.06% Notes 2022
A$125 million 3.13% Notes 2022
EUR commercial paper
Bank overdraft
Lease obligations
Total current borrowings
31 December 2021
31 December 2020
€ million
€ million
700
—
—
—
129
20
81
285
1
134
1,350
—
350
156
203
—
—
—
—
—
96
805
(A) In November 2021, the Group repaid at maturity €350 million Floating Rate Notes. Interest rate was 3 months EURIBOR plus 18 basis
points with a minimum 0%.
(B) In June 2021, the Group repaid prior to maturity the outstanding amount related to the $300 million 4.5% Notes due September 2021
and $250 million 3.25% Notes due August 2021.
(C) In May 2021, and in connection with the Acquisition, the Group received net proceeds from new borrowings in the period of
€4,877 million issuing the following bonds: €800 million 0% Notes due 2025, €700 million 0.5% Notes due 2029, €1,000 million 0.875%
Notes due 2033, €750 million 1.5% Notes due 2041 and $850 million 0.5% Notes due 2023, $650 million 0.8% Notes due 2024,
$500 million 1.5% Notes due 2027.
(D) Cross currency swaps are used by the Group to swap foreign currency bonds into the required local currency.
(E) Included within the Group's borrowings as at 31 December 2021 are the bonds acquired as part of the Acquisition. These bonds are
either denominated in A$ or swapped back to A$ or NZ$ using cross currency swaps.
Note: During the period, the Group repaid A$100 million 4.63% Notes, A$45 million 6.65% Notes, JPY3 billion 2.54% Notes,
A$100 million 4.25% Notes and A$30 million 5.95% Notes. These were acquired as part of the API acquisition and were repaid after the
acquisition date but before year end.
Borrowings are stated net of unamortised financing fees of €42 million and €26 million, as at 31 December 2021 and
31 December 2020, respectively.
As at 31 December 2021, the total interest expense recognised on lease liabilities was €10 million.
Credit facilities
During 2021, the amount available under the Group’s multi currency credit facility was increased from €1.5 billion to
€1.95 billion. This amount is available for borrowing with a syndicate of 13 banks. This credit facility matures in 2025
and is for general corporate purposes and supporting the Group’s working capital needs. Based on information currently
available, there is no indication that the financial institutions participating in this facility would be unable to fulfill their
commitments to the Group as at the date of these consolidated financial statements. The Group’s current credit facility
contains no financial covenants that would impact its liquidity or access to capital. As at 31 December 2021, the Group
had no amounts drawn under this credit facility.
Cash flows from financing activities
The following table provides a reconciliation of movements of liabilities to cash flows arising from financing activities:
As at 31 December 2019
Changes from financing cash flows
Proceeds from third party borrowings, net
Changes in short-term borrowings
Repayments on third party borrowings(A)
Payment of principal and interest on lease obligations
Other non-cash changes
Amortisation of discount, premium and issue costs
Lease additions
Currency translation
Reclassifications
Total changes
Current portion of
borrowings
Borrowings, less
current portion
€ million
€ million
799
5,622
Total
€ million
6,421
—
(221)
(467)
(120)
—
(7)
—
821
6
1,598
—
(102)
—
8
108
(31)
(821)
760
1,598
(221)
(569)
(120)
8
101
(31)
—
766
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Notes to the consolidated financial statements
CONTINUED
Current portion of
borrowings
Borrowings, less
current portion
Total
Note 15
As at 31 December 2020
Acquisition of API
Changes from financing cash flows
Proceeds from third party borrowings, net
Changes in short-term borrowings
Repayments on third party borrowings(A)
Payment of principal and interest on lease obligations
Other non-cash changes
Amortisation of discounts, premium, issue costs and
fair value adjustments
Lease additions and other non-cash movements
Movement as a result of fair value hedges
Currency translation
Reclassifications
Total changes
As at 31 December 2021
€ million
€ million
€ million
805
381
—
276
(950)
(149)
—
39
6
33
909
545
1,350
6,382
1,251
4,877
—
—
—
(3)
83
9
100
(909)
5,408
11,790
7,187
1,632
4,877
276
(950)
(149)
(3)
122
15
133
—
5,953
13,140
(A) This line item includes the impact of the cross currency swap hedge from USD to EUR.
Cash flows from financing activities includes €27 million, €24 million and €36 million of cash received related to income
on a cross currency swap for 2021, 2020 and 2019, respectively.
Total cash outflows for leases were €149 million, €120 million and €132 million for the years ended 31 December 2021,
31 December 2020 and 31 December 2019 respectively.
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the
reporting period, which are unpaid. Trade and other payables are presented as current liabilities unless payment is not
due within 12 months after the reporting period. Trade and other payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest rate method. Trade payables are non-interest
bearing and are normally settled between 30 to 60 days.
The Group participates in various programmes and arrangements with customers designed to increase the sale of our
products. The costs of these programmes are recorded as deductions from revenue. Among the programmes are
arrangements under which allowances can be earned by customers for attaining agreed upon sales levels or for
participating in specific marketing programmes. When these allowances are paid in arrears, the Group accrues the
estimated amount to be paid based upon historical customer experience, the programme’s contractual terms, expected
customer performance and/or estimated sales volume. The costs of these off-invoice customer marketing costs totalled
€4.1 billion, €3.2 billion and €3.2 billion for 2021, 2020 and 2019, respectively.
The following table summarises trade and other payables as at the dates presented:
Trade accounts payable(A)
Accrued customer marketing costs
Accrued deposits
Accrued compensation and benefits
Accrued taxes
Other accrued expenses
Total trade and other payables
31 December 2021
31 December 2020
€ million
1,691
1,160
264
482
220
420
€ million
1,124
775
246
217
193
199
4,237
2,754
(A) Includes amounts of €266 million (2020: €219 million) which are part of a supply chain finance programme facilitated by the Group. The
programme permits suppliers to elect on an invoice-by-invoice basis to receive a discounted payment from the partner bank earlier than
the agreed payment terms with the Group. If a supplier makes this election, the value and the due date of the invoice payable by the
Group remains unchanged.
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Notes to the consolidated financial statements
CONTINUED
Note 16
Post-employment benefits
The cost of providing benefits is determined using the projected unit credit method with actuarial valuations being
carried out at the end of each annual reporting period. All remeasurements of the defined benefit obligation, such as
actuarial gains and losses and return on plan assets, are recognised directly in other comprehensive income.
Remeasurements recognised in other comprehensive income are reflected immediately in retained earnings and are not
reclassified to profit or loss. Service cost is presented within cost of sales, selling and distribution expenses and
administrative expenses in the consolidated income statement. Past service cost is recognised immediately within cost
of sales, selling and distribution expenses and administrative expenses in the consolidated income statement. The net
interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair
value of plan assets. Net interest cost is presented within finance costs or finance income, as applicable, in the
consolidated income statement. The defined benefit obligation recognised in the consolidated statement of financial
position represents the present value of the estimated future cash outflows, using interest rates of high quality corporate
bonds which have terms to maturity approximating the terms of the related liability.
The Group recognises termination benefits at the earlier of the following dates: (1) when the Group can no longer
withdraw the offer of those benefits and (2) when the Group recognises costs for a restructuring that is within the scope
of IAS 37, “Provisions, Contingent Liabilities and Contingent Assets” and involves the payment of termination benefits.
In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the
number of employees expected to accept the offer. Termination benefits are payable whenever an employee’s
employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in
exchange for those benefits.
The following table summarises our non-current employee benefit liabilities as at the dates presented:
Retirement benefit obligation
Other employee benefit liabilities
Total non-current employee benefit liabilities
31 December 2021
31 December 2020
€ million
€ million
103
35
138
251
32
283
Defined benefit plans
The Group sponsors a number of defined benefit pension plans in Belgium, France, Germany, Great Britain,
Luxembourg and Norway. In connection with the Acquisition, the Group assumed the liabilities related to two defined
benefit plans, Coca-Cola Amatil Superannuation Plan (CCASP), which is predominantly Australia-based, and the CCBI
Superannuation Plan (CCBISP), which is Indonesia-based. The Group’s Great Britain plan (GB Scheme) and Germany
plans (Pension Plan 1 and Pension Plan 2) are the most significant.
The GB Scheme’s defined benefit obligation includes benefits for current employees, former employees and current
pensioners. The level of benefits provided (funded final salary pension) depends on the member’s length of service and
salary at retirement age. Part of the pension may be exchanged for a tax free cash lump sum. The GB Scheme was
closed to new members with effect from 1 October 2005 and is administered by a separate board of trustees, which is
legally separate from the Group. The board of trustees is composed of representatives of both the employer and
employees. The board of trustees is required by law to act in the interest of all relevant beneficiaries and is responsible
for the investment policy with regard to the assets plus the day to day administration of the benefits.
A full actuarial valuation of the GB Scheme occurs on a triennial basis by a qualified external actuary, which is used as
the basis of determining the Group’s future contributions to the plan. The latest triennial valuation was carried out as at
5 April 2019 and has been updated to 31 December 2021 to reflect our defined benefit obligation, for known events and
changes in market conditions as allowed under IAS 19, “Employee Benefits”.
On 8 October 2020, the Group announced a proposal to close the GB Scheme to future accrual, which was
implemented on 31 March 2021. The affected employees were offered to enrol in the Group’s defined contribution
scheme (DC scheme), resulting in €19 million of expenses incurred for the year ending 31 December 2021 related to
discrete payments to the affected employees in the form of cash or a contribution to their pension (DC Scheme).
Subsequent to the implementation of the closure of the GB Scheme, the members moved from active to deferred status,
with future indexation of deferred pensions before retirement measured by reference to the consumer price index (CPI).
As a result, a gain of €28 million was recognised as a past service cost credit.
Germany’s defined benefit pension plans are open to existing members but closed to new entrants. The defined benefit
includes benefits for current employees, former employees and current pensioners. Pension Plan 1 has elements of a
final salary pension for past service and a career average formula for new accruals. It is funded through a support fund
administered by an insurance company. Pension Plan 2 is administered by the Group with the plan being covered by a
contractual trust arrangement (CTA) and a single reinsurance contract. The Group is responsible for paying obligations.
There is no external board of trustees. The insurer shares some responsibility for plan assets, investment policy and
administration. The latest annual valuation for Plan 1 was 31 December 2019 updated to the balance sheet date of
these consolidated financial statements and for Plan 2 it was 31 December 2021.
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Notes to the consolidated financial statements
CONTINUED
Other comprehensive income
The following table summarises the changes in other comprehensive income related to our pension plans for the years
presented:
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
Actuarial (gain)/loss on defined benefit obligation arising
during the period
Return on plan assets (greater)/less than discount rate
Net charge to other comprehensive income
(66)
(235)
(301)
160
(89)
71
282
(203)
79
Risks
The Group’s defined benefit pension schemes expose the Group to a number of risks, including:
• Asset volatility – the plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if
assets underperform this yield, a deficit would occur. Some of our plans hold a significant proportion of growth assets
(equities and property) which, though expected to outperform corporate bonds in the long term, create volatility and
risk in the short term. The allocation to growth assets is monitored to ensure it remains appropriate given each
scheme’s long-term objectives.
• Changes in bond yields – a decrease in corporate bond yields will increase the defined benefit liability, although this
will be partially offset by an increase in the value of the plan’s bond holdings.
• Inflation risk – a significant proportion of our benefit obligations are linked to inflation and higher inflation will lead to
higher liabilities (although, in most cases, caps on the level of inflationary increases are in place to protect against
extreme inflation). The majority of the assets are either unaffected by or only loosely correlated with inflation,
meaning that an increase in inflation will also increase the deficit.
• Life expectancy – the majority of our plans have an obligation to provide benefits for the life of the member, so
increases in life expectancy will result in an increase in the defined benefit liabilities.
Benefit costs
The following table summarises the expense related to pension plans recognised in the consolidated income statement
for the years presented:
Service cost
Past service (credit)/cost(A)
Net interest cost
Administrative expenses
Total cost
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
26
(23)
2
2
7
52
—
2
2
56
46
3
1
2
52
(A) Predominantly comprised of the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March
2021.
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Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Notes to the consolidated financial statements
CONTINUED
Benefit obligation and fair value of plan assets
The following table summarises the changes in the pension plan benefit obligation and the fair value of plan assets for
the periods presented:
Retirement benefit status
The following table summarises the retirement benefit status of pension plans as at the dates presented:
Reconciliation of benefit obligation:
Benefit obligation at beginning of plan year
Service cost
Past service cost
Interest costs on defined benefit obligation
Plan participants contribution
Actuarial loss/(gain) - experience
Actuarial loss/(gain) - demographic assumptions
Actuarial loss/(gain) - financial assumptions
Benefit payments
Administrative expenses
Acquisition of CCL
Currency translation adjustments
Benefit obligation at end of plan year
Reconciliation of fair value of plan assets:
31 December 2021
31 December 2020
€ million
€ million
2,340
2,236
26
(23)
36
59
2
(2)
(66)
(150)
2
66
123
52
—
34
71
(7)
—
169
(121)
2
—
(96)
2,413
2,340
Net benefit status:
Present value of obligation
Fair value of assets
Net benefit status:
Retirement benefit surplus (Note 25)
Retirement benefit obligation
31 December 2021
31 December 2020
€ million
€ million
(2,413)
2,504
91
194
(103)
(2,340)
2,132
(208)
43
(251)
The GB Scheme and Germany plans represented approximately 72.0% and 15.7% of the present value of the obligation
and 73.5% and 16.5% of the fair value of assets as at 31 December 2021, respectively.
The surplus for 2021 and 2020, which is primarily related to the GB Scheme and Germany Pension Plan 2, is
recognised on the balance sheet on the basis that the Group is entitled to a refund of any remaining assets once all
members have left the plan.
Actuarial assumptions
The following tables summarise the weighted average actuarial assumptions used to determine the benefit obligations
of pension plans as at the dates presented:
Fair value of plan assets at beginning of plan year
2,132
2,096
Interest income on plan assets
Return on plan assets greater/(less) than discount rate
Plan participants contributions
Employer contributions
Benefit payments
Acquisition of CCL
Currency translation adjustment
Fair value of plan assets at end of plan year
34
235
59
39
(150)
40
115
2,504
32
89
71
52
(121)
—
(87)
2,132
Financial assumptions
Discount rate
Rate of compensation increase
Rate of price inflation
Demographic assumptions (weighted average)(A)
Retiring at the end of the reporting period
Male
Female
Retiring 15 years after the end of the reporting period
Timing of benefit payments
The weighted average duration of the defined benefit plan obligation as at 31 December 2021 is 20 years, including 22
years for the GB Scheme and 15 years for Germany plans.
Male
Female
31 December 2021
31 December 2020
%
1.8
3.2
3.1
%
1.3
2.7
2.6
31 December 2021
31 December 2020
22.4
25.0
23.3
26.1
21.3
24.0
22.4
25.1
(A) These assumptions translate into an average life expectancy in years, post-retirement, for an employee retiring at age 65.
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Notes to the consolidated financial statements
CONTINUED
The following table summarises the sensitivity of the defined benefit obligation to changes in the weighted average
principal assumptions for the periods presented:
The following tables summarise pension plan assets measured at fair value as at the dates presented:
Principal assumptions
Discount rate
Rate of compensation
increase
Rate of price inflation
Mortality rates
Change in
assumption
0.5%
0.5%
0.5%
1 year
Impact on defined benefit obligation (%)
Increase in assumption
Decrease in assumption
2021
(8.5)
0.5
6.7
3.5
2020
(9.1)
2.3
7.3
3.4
2021
9.7
(0.4)
(5.9)
(3.4)
2020
10.4
(2.1)
(7.9)
(3.5)
The sensitivity analyses have been determined based on a method that extrapolates the impact on the defined benefit
obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The
sensitivity analyses are based on a change in a significant assumption, keeping all other assumptions constant. The
sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that
changes in assumptions would occur in isolation of one another.
Pension plan assets
There are formal investment policies for the assets associated with our pension plans. Policy objectives include (1)
maximising long-term return at acceptable risk levels; (2) diversifying among asset classes, if appropriate, and among
investment managers; and (3) establishing relevant risk parameters within each asset class. Investment policies reflect
the unique circumstances of the respective plans and include requirements designed to mitigate risk, including quality
and diversification standards. Asset allocation targets are based on periodic asset liability and/or risk budgeting study
results, which help determine the appropriate investment strategies for acceptable risk levels. The investment policies
permit variances from the targets within certain parameters.
Equity securities(A)
Fixed-income securities:(B)
Corporate bonds and notes
Government bonds
Cash and other short-term investments(C)
Other investments:
Real estate funds(D)
Insurance contracts(E)
Investment funds(F)
Derivatives(G)
Total
Total
31 December 2021
Investments quoted
in active markets
€ million
221
€ million
221
54
1,506
6
346
240
73
58
2,504
54
1,506
6
39
—
—
—
1,826
Unquoted
investments
€ million
—
—
—
—
307
240
73
58
678
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Notes to the consolidated financial statements
CONTINUED
Equity securities(A)
Fixed-income securities:(B)
Corporate bonds and notes
Government bonds
Cash and other short-term investments(C)
Other investments:
Real estate funds(D)
Insurance contracts(E)
Derivatives(G)
Total
31 December 2020
Investments quoted in
active markets
€ million
186
80
1,196
114
312
230
14
€ million
186
51
1,196
112
31
—
—
Total
2,132
1,576
Unquoted
investments
€ million
—
29
—
2
281
230
14
556
(A) Equity securities are comprised of ordinary shares and investments in equity funds. Investments in ordinary shares are valued using
quoted market prices multiplied by the number of shares owned. Investments in equity funds are valued at the net asset value per
share, which is calculated predominantly based on the underlying quoted investments market price, multiplied by the number of shares
held as of the measurement date.
(B) The fair values of the fixed-income securities are determined based on quoted market prices in active markets. Bonds are held mainly in
the currency of the geography of the plan.
(C) Cash and other short-term investments are valued at €1.00/unit, which approximates fair value. Amounts are generally invested in cash
or interest bearing accounts.
(D) The valuation of unquoted real estate funds is based on net assets value per share multiplied by the number of shares owned. For
quoted real estate funds, the calculation is based on the underlying quoted investments market price, multiplied by the number of
shares held as of the measurement date.
(E) Insurance contracts exactly match the amount and timing of certain benefits, therefore the fair value of these insurance policies is
deemed to be the present value of the related obligations.
(F) Primarily includes investments in equity securities, fixed income securities and combinations of both. Fair values are sourced from
broker quotes.
(G) Derivatives are comprised of futures and return swaps the fair values of which are not based on quoted market prices in active markets.
Contributions
To support a long-term funding arrangement, during 2019 the Group entered into a partnership agreement with the GB
Scheme, the CCEP Scottish Limited Partnership (the Partnership). Certain property assets in Great Britain, with a
market value of £171 million were transferred into the Partnership and subsequently leased back to the Group’s
operating subsidiary in Great Britain. The GB Scheme receives semi-annual distributions from the Partnership,
increasing each year at a fixed cumulative rate of 3% through to 2034. The Group exercises control over the
Partnership and as such it is fully consolidated in these consolidated financial statements. Under IAS 19, the investment
held by the GB Scheme in the Partnership does not represent a plan asset for the purposes of these consolidated
financial statements. Similarly, the associated liability is not included in the consolidated statement of financial position,
rather the distributions are recognised when paid as a contribution to the plan assets of the scheme.
Contributions to pension plans totalled €39 million, €52 million and €61 million during the years ended
31 December 2021, 31 December 2020 and 31 December 2019, respectively. Included within the 2021 contribution
is €10 million relating to the Partnership agreement. The Group expects to make contributions of €22 million for the full
year ending 31 December 2022.
Other employee benefit liabilities
In certain territories, the Group has an early retirement programme designed to create an incentive for employees,
within a certain age group, to transition from (full or part time) employment into retirement before their legal retirement
age. Furthermore, the Group also sponsors deferred compensation plans in other territories. The current portion of
these liabilities totalled €10 million and €13 million as at 31 December 2021 and 31 December 2020, respectively, and is
included within the current portion of employee benefit liabilities. The non-current portion of these liabilities totalled €35
million and €32 million as at 31 December 2021 and 31 December 2020, respectively, and is included within employee
benefit liabilities.
Defined contribution plans
The Group sponsors a number of defined contribution plans across its territories. Contributions payable for the period
are charged to the consolidated income statement as an operating expense for defined contribution plans. Contributions
to these plans totalled €62 million for the year ending 31 December 2021, and €34 million for both years ended
31 December 2020 and 31 December 2019.
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Notes to the consolidated financial statements
CONTINUED
Note 17
Equity
Share capital
As at 31 December 2021, the Company has issued and fully paid 456,235,032 Shares. Shares in issue have one voting
right each and no restrictions related to dividends or return of capital.
As at 1 January 2019
Issuances of Shares
Cancellation of Shares
As at 31 December 2019
Issuance of Shares
Cancellation of Shares
As at 31 December 2020
Issuance of Shares
Cancellation of Shares
As at 31 December 2021
Number of
Shares
Share capital
millions
€ million
475
2
(21)
456
2
(3)
455
1
—
456
5
—
—
5
—
—
5
—
—
5
The number of Shares increased in 2021, 2020 and 2019 from the issue of 1,589,522, 1,310,833 and 2,092,404
Shares, respectively, following the exercise of share-based payment awards.
In connection with the Company’s share buyback programmes 3,065,200 and 20,612,593 shares were cancelled in
2020 and 2019, respectively. No shares were repurchased in 2021.
Other reserves
The following table summarises the balances in other reserves (net of tax) as at the dates presented:
Cash flow hedge reserve
Net investment hedge reserve
Foreign currency translation adjustment reserve
Other reserves
Total other reserves
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
151
197
(509)
5
(156)
20
197
(754)
—
(537)
(17)
197
(629)
—
(449)
Other reserves relates to cost of hedging which represents forward point on spot designations, time value of options and
currency basis.
Movements, including the tax effects, in these accounts through to 31 December 2021 are included in the consolidated
statement of comprehensive income.
Dividends
Dividends are recorded within the Group’s consolidated financial statements in the period in which they are paid.
On 6 December 2021, the Group paid a full year dividend of €1.40 per Share. A full year dividend of €0.85 per Share
was paid in 2020.
First half dividend(A)
Second half dividend(B)
Total dividend on ordinary shares paid
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
—
638
638
—
386
386
290
284
574
Share premium
The share premium account increased by cash received for the exercise of options by €28 million in 2021, €14 million in
2020 and €26 million in 2019.
(A) Dividend of €0.62 per Share was paid in first half of 2019.
(B) Dividend of €0.62 per Share was paid in second half of 2019.
Merger reserves
The consideration transferred to acquire CCIP and CCEG qualified for merger relief under the Companies Act. As such,
the excess consideration transferred over nominal value of €287 million was required to be excluded from the share
premium account and recorded to merger reserves.
Dividends attributable to restricted stock units and performance share units that are unvested at the period end date are
accrued accordingly. During 2021, an incremental dividend accrual of €1 million has been recognised (2020: €1 million,
2019: nil).
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Notes to the consolidated financial statements
CONTINUED
Non-controlling interest
In connection with the Acquisition, non-controlling interests (NCI) of €228 million were recognised at fair value at the
acquisition date with respect to PT Coca-Cola Bottling Indonesia, Paradise Beverages (Fiji) Group and Samoa
Breweries Limited, of which €216 million relates to TCCC’s 29.4% ownership interest in PT Coca-Cola Bottling
Indonesia. The Group recognises changes in NCI based upon post-Acquisition results for the year and movements in
reserves.
Subsequent to the Acquisition, transactions with non-controlling interests totalled €73 million and included €62 million
related to the return of capital to TCCC and €11 million related to the acquisition of the remaining non-controlling interest
relating to Paradise Beverages.
As at 31 December 2021, equity attributable to non-controlling interest was €177 million representing 29.4% of PT
Coca-Cola Bottling Indonesia held by TCCC and 6.1% of Samoa Breweries Limited held by numerous investors.
Note 18
Total operating costs
The following tables summarise the significant cost items by nature within operating costs for the years presented:
Cost of inventory recognised as an expense
Write down of inventories (Note 9)
Logistics costs(A)
Depreciation of property, plant and equipment, excluding
restructuring
Amortisation of intangible assets (Note 7)
Acquisition related costs
Out of period mark-to-market effects on undesignated
derivatives
Restructuring charges, including accelerated
depreciation(B)
31 December 2021
31 December 2020
31 December 2019
€ million
6,156
41
1,012
637
89
53
—
153
€ million
4,626
€ million
5,147
29
763
544
62
14
2
368
25
900
549
52
—
(2)
130
(A) Logistics costs include warehousing and delivery costs to the final customer destination. They exclude depreciation and amortisation.
(B) Restructuring
Increase in provision for restructuring programmes
(Note 23)
Amount of provision unused (Note 23)
Accelerated depreciation and non-cash costs
Other cash costs(A)
Total restructuring costs
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
93
(13)
60
13
153
242
(7)
121
12
368
80
(15)
39
26
130
(A) Other cash costs primarily relate to professional fees, which include consultancy costs, legal fees and other costs directly associated
with restructuring.
Restructuring costs charged in arriving at operating profit for the years presented include restructuring costs arising
under the following programmes and initiatives:
Accelerate Competitiveness
In October 2020, the Group announced a number of proposals aimed at improving productivity through the use of
technology enabled solutions. Included in these proposals was the closure of certain production facilities, including
Liederbach and Sodenthaler in Germany and Malaga in Iberia. These proposals continue the focus on network
optimisation and site rationalisation of the Group, with the majority of the impacted activities to be transferred within our
network of facilities in each respective territory.
The proposals are also expected to impact a number of functions across the Group, including business process
technology, customer service, sales and marketing, and finance as the Group seeks to reduce complexity, improve
efficiency and increase the use of technology.
In 2021, as part of the continuation of this programme, the Group has announced additional restructuring proposals,
including in Iberia relating to productivity initiatives across the sales organisation, which resulted in €51 million of
severance costs. During the year ended 31 December 2021, the Group has incurred total restructuring charges related
to this programme of €92 million, primarily made up of expected severance costs and accelerated depreciation.
The total expenditure over the life of the programme is expected to be approximately €380 million. It is expected to be
substantially complete by 31 December 2022.
Transformation of cold drink operations
During 2019, the Group commenced a transformation project relating to our cold drink operations aimed at delivering a
modern, differentiated and versatile equipment fleet to optimise net cooler placements throughout our markets. As part
of this strategy, capital expenditure on cold drink equipment will focus on the introduction of a new, more cost effective
cooler, whilst reducing maintenance and refurbishment support spending on our older equipment. As a result of the
operational impact of the strategic changes, a restructuring charge was recognised for the year ended
31 December 2021 of €44 million (2020: €44 million), primarily relating to the accelerated depreciation of aged cold
drink equipment assets. This programme is now substantially complete.
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Notes to the consolidated financial statements
CONTINUED
Site closures in Germany
In January 2020, the Group announced proposals in Germany to close five distribution centres during the course
of 2020 and a new commercial restructuring initiative relating to vending operations and sales functions. During the year
ended 31 December 2020, restructuring charges of €78 million were recognised in connection with these proposals,
primarily relating to severance costs and accelerated depreciation. No further expenses were recognised in 2021 and
the programme is substantially complete.
Staff costs
Staff costs included within the income statement were as follows:
Employee costs
Wages and salaries
Social security costs
Pension and other employee benefits
Total employee costs
31 December 2021
31 December 2020
31 December 2019
€ million
1,544
302
170
2,016
€ million
1,253
283
119
1,655
€ million
1,370
289
112
1,771
Directors’ remuneration information is disclosed in the Directors’ Remuneration Report.
The average number of persons employed by the Group (including Directors) for the periods presented were as follows:
Commercial
Supply chain
Support functions
Total average staff employed
2021
2020
2019
No. in thousands
No. in thousands
No. in thousands
10.9
14.9
3.9
29.7
7.3
12.4
2.5
22.2
7.6
13.1
2.6
23.3
Auditor’s remuneration
Audit and other fees charged in the income statement concerning the statutory auditor of the consolidated financial
statements, Ernst & Young LLP, were as follows:
Audit of Parent Company and consolidated financial
statements(A)
Audit of the Company’s subsidiaries
Total audit
Audit-related assurance services(B)
Other assurance services
Total audit and audit-related assurance services
All other services(C)
Total non-audit or non-audit-related assurance
services
Total audit and all other fees
31 December 2021
31 December 2020
31 December 2019
€ thousand
€ thousand
€ thousand
4,751
5,493
10,244
1,234
313
11,791
35
35
11,826
3,149
3,046
6,195
909
279
7,383
30
30
7,413
2,737
3,430
6,167
1,106
236
7,509
123
123
7,632
(A) Fees in respect of the audit of the accounts of the Company, including the Group's consolidated financial statements.
(B) Includes professional fees for interim reviews, reporting on internal financial controls, services related to the transactions entered into
with TCCC, issuance of comfort letters for debt issuances, regulatory inspections, certain accounting consultations and other attest
engagements.
(C) Represents fees for all other allowable services.
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Notes to the consolidated financial statements
CONTINUED
Note 19
Note 20
Finance costs
Finance costs are recognised in the consolidated income statement in the period in which they are incurred, with the
exception of general and specific borrowing costs directly attributable to the Acquisition, construction or production of
qualifying assets. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their
intended use or sale. Borrowing costs are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. All other borrowing costs are recognised within the consolidated
income statement in the period in which they are incurred based upon the effective interest rate method. Interest income
is recognised using the effective interest rate method.
The following table summarises net finance costs for the years presented:
Interest income(A)
Interest expense on external debt(A)
Other finance costs(B)
Total finance costs, net
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
43
(153)
(19)
(129)
33
(132)
(12)
(111)
49
(137)
(8)
(96)
(A)
Includes interest income and expense amounts, as applicable, on cross currency swaps and interest rate swaps. Cross currency swap
and interest rate swap income totalled €27 million, €24 million and €36 million in 2021, 2020 and 2019, respectively. Refer to Note 13 for
further details.
(B) Other finance costs principally includes amortisation of the discount on external debt and interest on leases.
Related party transactions
For the purpose of these consolidated financial statements, transactions with related parties mainly comprise
transactions between subsidiaries of the Group and the related parties of the Group.
Transactions with entities with significant influence over the group
Transactions with TCCC
TCCC exerts significant influence over the Group, as defined by IAS 24, “Related Party Disclosures”. As at
31 December 2021, 19.3% of the total outstanding Shares in the Group were owned by European Refreshments,
a wholly owned subsidiary of TCCC. The Group is a key bottler of TCCC products and has entered into bottling
agreements with TCCC to make, sell and distribute products of TCCC within the Group’s territories. The Group
purchases concentrate from TCCC and also receives marketing funding to help promote the sale of TCCC products.
The Group’s agreements with TCCC in each territory are for 10 years terms and each contains the right for the Group
to request a 10 years renewal. The existing bottling agreements expire no earlier than 1 September 2025. Additionally,
two of the Group’s 17 Directors are nominated by TCCC.
The Group and TCCC engage in a variety of marketing programmes to promote the sale of TCCC products in territories
in which the Group operates. The Group and TCCC operate under an incidence based concentrate pricing model and
funding programme across most territories, the terms of which are tied to the bottling agreements. In certain API
territories, the Group operates under a fixed price model with marketing rebates and support.
TCCC makes discretionary marketing contributions under shared marketing agreements to CCEP’s operating
subsidiaries. Amounts to be paid to the Group by TCCC under the programmes are generally determined annually and
are periodically reassessed as the programmes progress. Under the bottling agreements, TCCC is under no obligation
to participate in the programmes or continue past levels of funding in the future. The amounts paid and terms of similar
programmes with other franchises may differ.
Marketing support funding programmes granted to the Group provide financial support principally based on product
sales or on the completion of stated requirements and are intended to offset a portion of the costs of the programmes.
Payments from TCCC for marketing programmes to promote the sale of products are classified as a reduction in cost of
sales, unless the presumption that the payment is a reduction in the price of the franchisors’ products can be overcome.
Payments for marketing programmes are recognised as product is sold.
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Notes to the consolidated financial statements
CONTINUED
The following table summarises the transactions with TCCC that directly impacted the consolidated income statement
for the years presented:
Amounts affecting revenue(A)
Amounts affecting cost of sales(B)
Amounts affecting operating expenses(C)
Total net amount affecting the consolidated
income statement
31 December 2021
31 December 2020
31 December 2019
€ million
50
(3,056)
9
€ million
50
(2,555)
8
€ million
66
(2,962)
(22)
(2,997)
(2,497)
(2,918)
Transactions with Cobega companies
Cobega, S.A. (Cobega) exhibits significant influence over the Group, as defined by IAS 24, “Related Party Disclosures”.
As at 31 December 2021, 20.5% of the total outstanding Shares in the Group were indirectly owned by Cobega through
its ownership interest in Olive Partners, S.A. Additionally, five of the Group’s 17 Directors, including the Chairman, are
nominated by Olive Partners, three of whom are affiliated with Cobega.
The principal transactions with Cobega are for the purchase of packaging materials, and maintenance services for
vending machines. The following table summarises the transactions with Cobega that directly impacted the
consolidated income statement for the years presented:
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
1
(49)
(11)
(59)
1
(43)
(8)
(50)
1
(68)
(10)
(77)
(A) Amounts principally relate to fountain syrup and packaged product sales.
(B) Amounts principally relate to the purchase of concentrate, syrup, mineral water and juice, as well as funding for marketing programmes.
(C) Amounts principally relate to certain costs associated with new product development initiatives. In 2021 and 2020, amounts also include
the reimbursement of certain marketing expenses.
The following table summarises the transactions with TCCC that impacted the consolidated statement of financial
position for the periods presented:
Amounts affecting revenue(A)
Amounts affecting cost of sales(B)
Amounts affecting operating expenses(C)
Total net amount affecting the consolidated
income statement
Amounts due from TCCC
Amounts payable to TCCC
31 December 2021
31 December 2020
€ million
€ million
135
189
146
167
(A) Amounts principally relate to packaged product sales.
(B) Amounts principally relate to the purchase of packaging materials and concentrate.
(C) Amounts principally relate to certain costs associated with maintenance and repair services.
The following table summarises the transactions with Cobega that impacted the consolidated statement of financial
position for the periods presented:
Acquisition of Coca-Cola Amatil Limited
In May 2021, CCEP acquired the 30.8% interest held by TCCC in Coca-Cola Amatil Limited pursuant to a Co-operation
and Sale Deed with TCCC. Cash consideration paid to TCCC was A$893 million and USD1,046 million. Refer to Note 4
for further detail regarding the Acquisition.
Following the Acquisition of Coca-Cola Amatil Limited, TCCC continued to hold a 29.4% ownership interest in
PT Coca-Cola Bottling Indonesia. Subsequent to the Acquisition, CCEP and TCCC completed a return of capital in
PT Coca-Cola Bottling Indonesia, which resulted in a payment of €62 million to TCCC.
As at 31 December 2021 the Group is in a process of selling to TCCC certain non-alcoholic ready to drink brands that
were acquired as part of the Acquisition. These brands are classified as assets held for sale in our consolidated
statement of financial position as of the year ended 31 December 2021. We expect the sale to be consummated during
the first half of 2022. Refer to Note 27 for further details.
Terms and conditions of transactions with TCCC
Outstanding balances on transactions with TCCC are unsecured, interest free and generally settled in cash.
Receivables from TCCC are considered to be fully recoverable.
Amounts due from Cobega
Amounts payable to Cobega
31 December 2021
31 December 2020
€ million
€ million
2
19
4
14
Terms and conditions of transactions with Cobega
Outstanding balances on transactions with Cobega are unsecured, interest free and generally settled in cash.
Receivables from Cobega are considered to be fully recoverable.
Other related parties
Transactions with associates, joint ventures and other related parties
Joint venture investments relate to interests in a manufacturer of alcoholic beverages, a service provider supporting the
operation of container refund schemes in certain Australian states and a PET recycling plant in Indonesia.
Associate investments relate to interests in deposit scheme coordinators and a holding company of container deposit
schemes in certain Australian states and territories. Associate investments also include the Group’s equity interests in
early stage development companies as part of CCEP Ventures.
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CONTINUED
Other related parties include coordinators of container deposit schemes in certain Australian states over which
significant influence is held.
In addition, a 45% ownership interest in each of Made (Aust) Pty Ltd, Made Manufacturing Pty Ltd and Made Brands Pty
Ltd, included as part of the Acquisition, was sold subsequent the Acquisition to the controlling shareholders for total
cash consideration of €21 million. No gain or loss was recorded on the transaction.
The following table summarises the transactions with associates, joint ventures and other related parties:
Net amounts affecting consolidated income statement -
Associates(A)
Net amounts affecting consolidated income statement –
Joint Ventures(B)
Net amounts affecting consolidated income statement –
Other related parties(A)
Total net amount affecting the consolidated income
statement
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
(49)
(9)
(52)
(110)
—
—
—
—
—
—
—
—
(A) Amounts principally relate to container deposit scheme charges in Australia.
(B) Amounts principally relate to the purchase of finished products.
The following table summarises the balances with associates, joint ventures and other related parties:
Net amounts receivable / (payable) – Associates
Net amounts receivable / (payable) – Joint Ventures
31 December 2021
31 December 2020
€ million
€ million
6
(2)
—
—
Terms and conditions of transactions with associates, joint ventures and other related parties
Outstanding balances on transactions are unsecured, interest free and generally settled in cash. Receivables are
considered to be fully recoverable.
Refer to Note 28 for a listing of associates, joint ventures and other related parties.
Transactions with key management personnel
Key management personnel are the members of the Board of Directors and the members of the Executive Leadership
Team. The following table summarises the total remuneration paid or accrued during the reporting period related to key
management personnel:
Salaries and other short-term employee benefits(A)
Post-employment benefits
Share-based payments
Termination benefits
Total
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
22
—
7
—
29
20
1
6
5
32
35
1
9
—
45
(A) Short-term employee benefits include wages, salaries and social security contributions, paid annual leave and paid sick leave, paid
bonuses and non-monetary benefits.
The Group did not have any loans with key management personnel and was not party to any other transactions with key
management personnel during the periods presented.
Note 21
Income taxes
Current tax
Current tax for the period includes amounts expected to be payable on taxable income in the period together with any
adjustments to taxes payable in respect of previous periods, and is determined based on the tax laws enacted or
substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions, where appropriate, on the basis of amounts
expected to be paid to the tax authorities.
Deferred tax
Deferred tax is determined by identifying the temporary differences between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes at the reporting date. Deferred tax for the period includes
origination and reversal of temporary differences, remeasurements of deferred tax balances and adjustments in respect
of prior periods.
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CONTINUED
Deferred tax liabilities are recognised for all taxable temporary differences, except:
• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that
is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; or
• In respect of taxable temporary differences associated with investments in subsidiaries, branches and associates and
interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled by the
Group and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised, except:
• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; or
• In respect of deductible temporary differences associated with investments in subsidiaries, branches and associates
and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which the
temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the reporting date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current income tax liabilities and the deferred taxes relate to the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Income tax is recognised in the consolidated income statement. Income tax is recognised in other comprehensive
income or directly in equity to the extent that it relates to items recognised in other comprehensive income or in equity.
2021, 2020 and 2019 results
The following table summarises the major components of income tax expense for the periods presented:
Current tax:
Current tax charge
Adjustment in respect of current tax from prior periods
Total current tax
Deferred tax:
Relating to the origination and reversal of
temporary differences
Adjustment in respect of deferred income tax from
prior periods
Relating to changes in tax rates or the imposition of
new taxes
Total deferred tax
Income tax charge per the consolidated
income statement
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
323
(53)
270
6
(9)
127
124
394
230
3
233
(73)
(6)
43
(36)
330
(20)
310
45
6
3
54
197
364
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CONTINUED
The following table summarises the taxes on items recognised in other comprehensive income (OCI) and directly within
equity for the periods presented:
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
Accounting profit before tax from continuing
operations
Taxes charged/(credited) to OCI:
Deferred tax on net gain/loss on revaluation of
cash flow hedges
Deferred tax on net gain/loss on pension
plan remeasurements
Current tax on net gain/loss on pension plan
remeasurements
Total taxes charged/(credited) to OCI
Taxes charged/(credited) to equity:
Deferred tax charge/(credit): share-based
compensation
Current tax charge/(credit): share-based
compensation
Total taxes charged/(credited) to equity
63
63
1
127
(3)
—
(3)
(4)
(16)
—
(20)
1
(3)
(2)
2
(12)
—
(10)
(2)
(4)
(6)
The effective tax rate was 28.5%, 28.3% and 25.0% for the years ended 31 December 2021, 31 December 2020 and
31 December 2019, respectively. The parent company of the Group is a UK company. Accordingly, the following tables
provide reconciliations of the Group’s income tax expense at the UK statutory tax rate to the actual income tax expense
for the periods presented:
Tax expense at the UK statutory rate
Taxation of foreign operations, net(A)
Non-deductible expense items for tax purposes
Rate and law change impact, net(B)(C)(D)
Deferred taxes not recognised
Adjustment in respect of prior periods(E)
Total provision for income taxes
31 December 2021
31 December 2020
31 December 2019
€ million
€ million
€ million
1,382
695
1,454
262
72
2
127
(7)
(62)
394
132
23
6
43
(4)
(3)
197
276
89
4
3
6
(14)
364
(A) This reflects the impact, net of income tax contingencies, of having operations outside the UK, which are taxed at rates other than the
statutory UK rate of 19% (2020: 19%, 2019: 19%). In prior periods, this included the benefit of some income being fully or partially
exempt from income taxes due to various operating and financing activities.
(B) In 2021, the UK enacted a law change that increased its tax rate to 25% with effect from 1 April 2023. The Group recognised a deferred
tax expense of €123 million to reflect the impact of this change.
(C) In 2021, the Netherlands enacted a law change that increased its tax rate to 25,8% with effect from 1 January 2022. The Group
recognised a deferred tax expense of €2 million to reflect the impact of this change.
(D) In 2021, Indonesia enacted a law change that retained its tax rate of 22% with effect from 1 January 2022, reversing a previously
enacted decrease to 20%. The Group recognised a deferred tax expense of €2 million to reflect the impact of this change.
(E) In 2021, the prior year adjustment is principally due to the reassessment of our uncertain tax positions and release of tax reserves that
are no longer required primarily due to expiration of statute of limitations.
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CONTINUED
Deferred income taxes
The following table summarises the movements in the carrying amounts of deferred tax liabilities and assets by
significant component during the periods presented:
As at 31 December 2019
Amount charged/(credited) to income statement (excluding effect of tax rate
changes)
Effect of tax rate changes on income statement
Amounts charged/(credited) directly to OCI
Amount charged/(credited) to equity
Effect of movements in foreign exchange
As at 31 December 2020
Amount charged/(credited) to income statement (excluding effect of tax rate
changes)
Effect of tax rate changes on income statement
Amounts charged/(credited) directly to OCI
Amount charged/(credited) to equity
Acquired through business combinations
Effect of movements in foreign exchange
As at 31 December 2021
Franchise and other
intangible assets
Property, plant and
equipment
Financial assets
and liabilities
€ million
1,966
(9)
39
—
—
(14)
1,982
1
106
—
—
1,174
22
3,285
€ million
€ million
224
(40)
4
—
—
(1)
187
2
8
—
—
51
3
251
7
(8)
—
(4)
—
(1)
(6)
(1)
1
63
—
(19)
(2)
36
Tax losses
€ million
Employee and
retiree benefit
accruals
€ million
Tax credits
€ million
Other, net
€ million
(4)
(2)
—
—
—
—
(6)
(4)
—
—
—
(4)
—
(14)
(59)
(14)
(1)
(16)
1
—
(89)
8
12
63
(3)
(6)
1
(14)
(3)
(7)
—
—
—
—
(10)
(2)
—
—
—
—
—
(12)
45
1
1
—
—
2
49
(7)
—
—
—
(20)
3
25
Total, net
€ million
2,176
(79)
43
(20)
1
(14)
2,107
(3)
127
126
(3)
1,176
27
3,557
The total net deferred tax liability of €3,557 million at 31 December 2021 is presented in the consolidated statement of
financial position as deferred tax assets of €60 million and deferred tax liabilities of €3,617 million. This includes net
deferred tax liabilities of €1,176 million related to the Acquisition. Other net deferred tax liabilities as at
31 December 2021 include a €33 million liability arising on assets capitalised under IFRS but expensed for tax, and a
€22 million liability related to purchase accounting on earlier transactions in an acquired entity.
Unrecognised tax items
The utilisation of tax losses and temporary differences carried forward, for which no deferred tax asset is currently
recognised, is subject to the resolution of tax authority enquiries and the achievement of positive income in periods
which are beyond the Group’s current business plan, and therefore this utilisation is uncertain. In respect of unused tax
losses and other attributes carried forward, deferred tax assets of €466 million, €463 million and €493 million have not
been recognised as at 31 December 2021, 31 December 2020 and 31 December 2019, respectively. As at
31 December 2021, the net recognised tax losses carried forward totalled €14 million. Of these, €2 million expire
between 2026 and 2029. As at 31 December 2021, the Group recognised tax credits carried forward totalling
€12 million, which expire between 2043 and 2051.
As at 31 December 2021, no deferred tax liability has been recognised in respect of €207 million of unremitted earnings
in subsidiaries, associates and joint ventures.
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CONTINUED
Tax provisions
The Group is routinely under audit by tax authorities in the ordinary course of business. Due to their nature, such
proceedings and tax matters involve inherent uncertainties including, but not limited to, court rulings, settlements
between affected parties and/or governmental actions. The probability of outcome is assessed and accrued as a liability
and/or disclosed, as appropriate. The Group maintains provisions for uncertainty relating to these tax matters that it
believes appropriately reflect its risk. As at 31 December 2021, €138 million of these provisions is included in current
tax liabilities and the remainder is included in non-current tax liabilities.
Share options
Share options (1) are granted with exercise prices equal to or greater than the fair value of the Group’s stock on
the date of grant, (2) generally vest in three annual tranches over a period of 36 months and (3) expire 10 years
from the date of grant. Generally, when options are exercised, new Shares will be issued rather than issuing treasury
Shares, if available. No options were granted during the years ended 31 December 2021, 31 December 2020 and
31 December 2019. All options outstanding as at 31 December 2021, 31 December 2020 and 31 December 2019
were valued and had exercise prices in US dollars.
The Group reviews the adequacy of these provisions at the end of each reporting period and adjusts them based on
changing facts and circumstances. Due to the uncertainty associated with tax matters, it is possible that at some
future date, liabilities resulting from audits or litigation could vary significantly from the Group’s provisions.
The Group has received tax assessments in certain jurisdictions for potential tax related to the Group’s purchases of
concentrate. The value of the Group’s concentrate purchases is significant, and therefore, the tax assessments are
substantial. The Group strongly believes the application of tax has no technical merit based on applicable tax law, and
its tax position would be sustained. Accordingly, the Group has not recorded a tax liability for these assessments, and is
vigorously defending its position against these assessments.
Note 22
Share-based payment plans
The Group has established share-based payment plans that provide for the granting of share options and restricted
stock units, some with performance and/or market conditions, to certain executive and management level employees.
These awards are designed to align the interests of its employees with the interests of its shareholders.
The Group recognises compensation expense equal to the grant date fair value for all share-based payment awards
that are expected to vest. Expense is generally recorded on a straight-line basis over the requisite service period for
each separately vesting portion of the award.
The following table summarises our share option activity for the periods presented:
2021
2020
2019
Shares
thousands
Average
exercise price
Shares
Average
exercise price
Shares
Average
exercise price
US$
thousands
US$
thousands
US$
4,051
—
(1,290)
31.68
—
26.33
4,815
—
(761)
29.8
—
19.79
6,542
—
(1,722)
26.51
—
17.33
(3)
19.68
(3)
31.97
(5)
19.23
2,758
34.19
4,051
31.68
4,815
2,758
34.19
4,051
31.68
4,815
29.8
29.8
Outstanding at
beginning of year
Granted
Exercised
Forfeited, expired or
cancelled
Outstanding at end of
year
Options exercisable at
end of year
During the years ended 31 December 2021, 31 December 2020 and 31 December 2019, compensation expense
related to our share-based payment plans totalled €17 million, €14 million and €15 million, respectively.
The weighted average Share price during the years ended 31 December 2021, 31 December 2020 and
31 December 2019 was US$55.68, US$42.71 and US$52.73, respectively.
The following table summarises the weighted average remaining life of options outstanding for the periods presented:
Range of exercise prices
US$
15.01 to 25.00
25.01 to 40.00
Total
2021
2020
2019
Options
outstanding
thousands
151
2,607
2,758
Weighted
average
remaining life
years
0.85
3.04
2.92
Options
outstanding
thousands
931
3,120
4,051
Weighted
average
remaining life
years
1.75
3.85
3.37
Options
outstanding
thousands
1,681
3,134
4,815
Weighted
average
remaining life
years
2.31
4.59
3.79
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CONTINUED
Note 23
Provisions, contingencies and commitments
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. When some or all of a provision is expected to be
reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain.
The expense relating to a provision is presented in the consolidated income statement, net of any reimbursement.
Asset retirement obligations are estimated at the inception of a lease or contract, for which a liability is recognised. A
corresponding asset is also created and depreciated.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.
Restricted Stock Units (RSUs) and Performance Share Units (PSUs)
RSU awards entitle the participant to accrue dividends, which are paid in cash only if the RSUs vest. They do not
have voting rights. Upon vesting, the participant is granted one Share for each RSU. They generally vest subject
to continued employment for a period of 36 months. Unvested RSUs are restricted as to disposition and subject to
forfeiture.
There were 0.1 million, 0.2 million and 0.3 million unvested RSUs outstanding with a weighted average grant date
fair value of US$43.29, US$41.77 and US$42.06 as at 31 December 2021, 31 December 2020 and 31 December 2019,
respectively.
PSU awards entitle the participant to the same benefits as RSUs. They generally vest subject to continued employment
for a period of 36 months and the attainment of certain performance targets. There were 1.3 million, 1.1 million and
1.2 million of unvested PSUs with weighted average grant date fair values of US$43.07, US$40.45 and US$42.53
outstanding as at 31 December 2021, 31 December 2020 and 31 December 2019, respectively.
The PSUs granted in 2019 are subject to two equally weighted performance conditions: compound annual growth rate
of earnings per share (EPS), and return on invested capital (ROIC), both measured over a three year period. The PSUs
granted in 2020 and 2021 are subject to performance condition of absolute EPS and ROIC, each with a 42.5%
weighting. An additional sustainability metric, focused on the reduction of greenhouse gas emissions (CO2e) across our
entire value chain, was included for PSUs 2020 and 2021, with a 15% weighting.
As a result of COVID-19 and the Acquisition, the performance conditions of 2020 PSUs in respect of EPS and ROIC
were modified during the year. All other terms and conditions remain unchanged. The modification did not result in any
change of fair value of the awards. For the 2019 PSUs, subsequent to year end, the Remuneration Committee
considered a holistic assessment of performance over the three year performance period and elected to exercise
discretion for the final vesting level.
Key assumptions for grant date fair value
The following table summarises the weighted average grant date fair values per unit:
Restricted Stock Units and Performance Share Units
Grant date fair value - service conditions (US$)
Grant date fair value - service and performance conditions (US$)
2021
47.77
47.68
2020
34.45
33.46
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CONTINUED
Provisions
The following table summarises the movement in each class of provision for the periods presented:
Restructuring
provision
Decommissioning
provision
Other
provisions(A)
€ million
€ million
€ million
As at 31 December 2019
Charged/(credited) to profit or loss:
Additional provisions recognised
Unused amounts reversed
Utilised during the period
Translation
As at 31 December 2020
Acquisition of CCL
Charged/(credited) to profit or loss:
Additional provisions recognised
Unused amounts reversed
Utilised during the period
Translation
As at 31 December 2021
Non-current
Current
As at 31 December 2021
168
242
(7)
(193)
(2)
208
9
93
(13)
(192)
(2)
103
22
81
103
17
—
—
—
(2)
15
—
6
—
(1)
—
20
20
—
20
11
4
—
(1)
—
14
—
5
(2)
(6)
—
11
6
5
11
Total
€ million
196
246
(7)
(194)
(4)
237
9
104
(15)
(199)
(2)
134
48
86
134
(A) Other provisions primarily relate to property tax assessment provisions and legal reserves and are not considered material to the
consolidated financial statements.
Restructuring provision
Restructuring provisions are recognised only when the Group has a constructive obligation, which is when a detailed
formal plan identifies the business or part of the business concerned, the location and number of employees affected, a
detailed estimate of the associated costs and an appropriate timeline, and the employees affected have been notified of
the plan’s main features. These provisions are expected to be resolved by the time the related programme is
substantively complete.
Refer to Note 18 for further details regarding our restructuring programmes, including expected completion date, total
costs incurred and expected costs to be incurred.
Decommissioning provisions
Decommissioning liabilities relate to contractual or legal obligations to pay for asset retirement costs. The liabilities
represent both the reinstatement obligations when the Group is contractually obligated to pay for the cost of retiring
leased buildings and the costs for collection, treatment, reuse, recovery and environmentally sound disposal of cold
drink equipment. Specific to cold drink equipment obligations, the Group is subject to, and operates in accordance with,
the EU Directive on Waste Electrical and Electronic Equipment (WEEE). Under the WEEE, companies that put electrical
and electronic equipment (such as cold drink equipment) on the EU market are responsible for the costs of collection,
treatment, recovery and disposal of their own products. Where applicable, the WEEE provision estimate is calculated
using assumptions including disposal cost per unit, average equipment age and the inflation rate, to determine the
appropriate accrual amount.
The period over which the decommissioning liabilities on leased buildings and cold drink equipment will be settled
ranges from 1 to 30 years and 2 to 9 years, respectively.
Contingencies
Legal proceedings and tax matters
The Group is involved in various legal proceedings and tax matters and is routinely under audit by tax authorities in the
ordinary course of business. Due to their nature, such legal proceedings and tax matters involve inherent uncertainties
including, but not limited to, court rulings, settlements between affected parties and/or governmental actions. The
probability of loss for such contingencies is assessed and accrued as a liability and/or disclosed, as appropriate.
On 24 July 2020, a CCL subsidiary Associated Products & Distribution Proprietary Limited (APD), was joined to
proceedings in the Supreme Court of Queensland between a Glencore joint venture and the State of Queensland,
whereby APD’s entitlement to royalties, from its sub-surface strata and associated mineral rights, has been challenged
by the State of Queensland. Since 2014, the Group has received approximately €50 million in royalties. Since the
proceedings commenced in 2020, royalty payments have been paid directly to court. The proceedings remain ongoing
and the Group intends to defend the matter robustly.
Guarantees
In connection with ongoing litigation in certain territories, guarantees of approximately €340 million have been issued.
The Group was required to issue these guarantees to satisfy potential obligations arising from such litigation. In
addition, we have approximately €35 million of guarantees issued to third parties through the normal course of business.
The guarantees have various terms, and the amounts represent the maximum potential future payments that we could
be required to make under the guarantees. No significant additional liabilities in the accompanying consolidated
financial statements are expected to arise from guarantees issued.
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Notes to the consolidated financial statements
CONTINUED
Commitments
Commitments beyond 31 December 2021 are disclosed herein but not accrued for within the consolidated statement of
financial position.
Purchase agreements
Total purchase commitments were €0.2 billion as at 31 December 2021. This amount represents non-cancellable
purchase agreements with various suppliers that are enforceable and legally binding, and that specify a fixed or
minimum quantity that we must purchase. All purchases made under these agreements have standard quality and
performance criteria. In addition to these amounts, the Group has outstanding capital expenditure purchase orders of
approximately €95 million as at 31 December 2021. The Group also has other purchase orders raised in the ordinary
course of business which are settled in a reasonably short period of time.
Lease agreements
As at 31 December 2021, the Group had committed to a number of lease agreements that have not yet commenced.
The minimum lease payments for these lease agreements totalled €40 million.
Note 24
Other current assets and assets held for sale
Other current assets
The following table summarises the Group’s other current assets as at the dates presented:
Other current assets
Prepayments
VAT receivables
Miscellaneous receivables
Total other current assets
31 December 2021
31 December 2020
€ million
€ million
101
16
154
271
61
34
109
204
Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is highly
probable that they would be recovered through sale rather than continuous use. In order for a sale to be considered
highly probable, all of the following criteria needs to be met: management is committed to a plan to sell the assets, an
active programme to locate a buyer and complete the plan has been initiated, the assets are actively marketed at
reasonable price, and the sale is expected to be completed within one year from the date of classification.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less cost to
sale.
Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised or
depreciated, and any equity accounted investee is no longer equity accounted.
Assets classified as held for sale as at 31 December 2021 totalled €223 million and are predominantly comprised of
certain non-alcoholic ready to drink brands that were acquired as part of the Acquisition (See Note 4 for further details).
As at 31 December 2021, the Group is in the process of selling these brands to TCCC. The sale price is expected to
approximate the provisional fair value assessed at the acquisition date. We expect the sale to be consummated during
the first half of 2022. Refer to Note 27 for further details.
Note 25
Other non-current assets
The following table summarises the Group’s other non-current assets as at the dates presented:
Other non-current assets
VAT receivables
Retirement benefit surplus (Note 16)
Investments
Other
Total other non-current assets
31 December 2021
31 December 2020
€ million
€ million
214
194
40
86
534
208
43
26
60
337
VAT receivables
As at 31 December 2021, included within other non-current assets, the Group has a VAT receivable of €214 million,
relating to the dispute that began in 2014 between the Spanish tax authorities and the regional tax authorities of Bizkaia
(Basque Region) as to the responsibility for refunding the VAT to CCEP.
Under relevant tax laws in Spain, conflicts between jurisdictions are ruled by a special Arbitration Board and the refund
of the VAT is mandated following the resolution of the issue at the Arbitration Board. However, to date, the Arbitration
Board has not ruled on the issue and Spanish legislation offers limited mechanisms for a taxpayer to force the
expedition of matters before the Arbitration Board. The outstanding VAT receivable as at 31 December 2021 remains
classified as non-current due to the continued delay in the resolution of the matter by the Arbitration Board. We believe it
remains a certainty that the amount due plus interest will be refunded to CCEP once the Arbitration Board rules.
Investments
Joint ventures are undertakings in which the Group has an interest and which are jointly controlled by the Group and
one or more other parties. Associates are undertakings where the Group has an investment in which it does not have
control or joint control but can exercise significant influence. Interests in joint ventures and associates are accounted for
using the equity method and are stated in the consolidated balance sheet at cost, adjusted for the movement in the
Group’s share of their net assets and liabilities. The Group’s share of the profit or loss after tax of joint ventures and
associates is included in the Group’s consolidated income statement as non-operating items. Where the Group’s share
of losses exceeds its interest in the equity accounted investee, the carrying amount of the investment is reduced to zero
and the recognition of further losses is discontinued, except to the extent that the Group has an obligation to make
payments on behalf of the investee.
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Notes to the consolidated financial statements
CONTINUED
Financial assets at fair value through Other Comprehensive Income relate to equity investments. These investments are
not held by for trading purposes and hence the Group has opted to recognise fair value movements through other
comprehensive income. There have been no changes in fair value of these investments during the period.
The following table summarises the Group’s carrying value of investments as at the dates presented:
Investments
Investments accounted using equity method
Financial assets at fair value through Other Comprehensive Income
Total investments
31 December 2021
31 December 2020
€ million
€ million
35
5
40
26
—
26
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Notes to the consolidated financial statements
CONTINUED
Note 26
Financial risk management
Financial risk factors, objectives and policies
The Group’s activities expose it to several financial risks including market risk, credit risk and liquidity risk. Financial risk
activities are governed by appropriate policies and procedures to minimise the uncertainties these risks create on the
Group’s future cash flows. Such policies are developed and approved by the Group’s treasury and commodities risk
committee, through the authority delegated to it by the Board.
Market risk
Market risk represents the risk that the fair value of future cash flows of a financial instrument will fluctuate due to
changes in market prices and includes interest rate risk, currency risk and other price risk such as commodity price risk.
Market risk affects outstanding borrowings, as well as derivative financial instruments.
Interest rates
The Group is subject to interest rate risk for its outstanding borrowings. To manage interest rate risk, the Group
maintains a significant proportion of its borrowings at fixed rates. Approximately 95% and 95% of the Group’s interest
bearing borrowings were comprised of fixed rate borrowings at 31 December 2021 and 31 December 2020,
respectively. As part of the Acquisition, the Group acquired interest rate swaps used to hedge its interest rate risk
associated with CCL related borrowings. As at 31 December 2021, the notional value of the Group’s interest rate swaps
was €291 million.
If interest rates on the Group’s floating rate debt were adjusted by 1% for the years ended 31 December 2021,
31 December 2020 and 31 December 2019, the Group’s finance costs and pre-tax equity would change on an annual
basis by approximately €7 million, €2 million and €4 million, respectively. This amount is determined by calculating the
effect of a hypothetical interest rate change on the Group’s floating rate debt. This estimate does not include the effects
of other actions to mitigate this risk or changes in the Group’s financial structure.
Currency exchange rates
The Group’s exposure to the risk of changes in currency exchange rates relates primarily to its operating activities
denominated in currencies other than the functional currency, Euro. To manage currency exchange risk arising from
future commercial transactions and recognised monetary assets and liabilities, foreign currency forward and option
contracts with external third parties are used. Typically, up to 80% of anticipated cash flow exposures in each major
foreign currency for the next calendar year are hedged using a combination of forward and option contracts with third
parties.
The Group is also exposed to the risk of changes in currency exchange rates between US dollar and Euro relating to its
US denominated borrowings. The following table demonstrates the sensitivity of the Group’s profit before income taxes
and pre-tax equity as a result of changes in the value of outstanding debt instruments due to reasonable movements in
the US dollar against the Euro, with all other variables held constant. This does not take into account the effects of
derivative instruments used to manage exposure to this risk. Movements in foreign currencies related to the Group’s
other financial instruments do not have a material impact on profit before income taxes or pre-tax equity.
As part of the Acquisition, the Group acquired borrowings denominated in Australian dollars, and borrowings
denominated in other currencies swapped into Australian dollars using cross currency swaps. These Australian
borrowings are not currently swapped into Euro and are translated as part of the currency translation of the net assets
of the API business units.
Effect on profit before tax and pre-tax equity
Year ended 31 December 2021
Year ended 31 December 2020
Year ended 31 December 2019
Change in
currency rate
€ strengthens
against US$
€ weakens
against US$
%
10
10
10
€ million
€ million
176
33
87
(176)
(36)
(95)
Commodity price risk
The competitive marketplace in which the Group operates may limit its ability to recover increased costs through higher
prices. As such, the Group is subject to market risk with respect to commodity price fluctuations, principally related to its
purchases of aluminium, PET (plastic, including recycled PET, LDPE), ethylene, sugar and vehicle fuel. When possible,
exposure to this risk is managed primarily through the use of supplier pricing agreements, which enable the Group to
establish the purchase price for certain commodities. Certain suppliers restrict the Group’s ability to hedge prices
through supplier agreements. As a result, commodity hedging programmes are entered into and generally designated
as hedging instruments. Refer to Note 13 for more information. Typically, up to 80% of the anticipated commodity
transaction exposures for the next calendar year are hedged using a combination of forward and option contracts
executed with third parties. The Group estimates that a 10% change in the market price of these commodities over the
current market prices would affect operating profit during the next 12 months by approximately €116 million. This does
not take into account the effects of derivative instruments used to manage exposure to this risk or pricing agreements in
place.
Credit risk
The Group is exposed to counterparty credit risk on all of its derivative financial instruments. Strict counterparty credit
guidelines are maintained and only financial institutions that are investment grade or better are acceptable
counterparties. Counterparty credit risk is continuously monitored and numerous counterparties are used to minimise
exposure to potential defaults. Where required collateral is paid between the counterparties to minimise counterparty
risk. The maximum credit risk exposure for each derivative financial instrument is the carrying amount of the derivative.
Included in trade and other payables is €46 million (2020: nil) related to collateral received from counterparties and
included in other current assets is €4 million (2020: nil) related to collateral paid to counterparties.
Credit is extended in the form of payment terms for trade to customers of the Group, consisting of retailers, wholesalers
and other customers, generally without requiring collateral, based on an evaluation of the customer’s financial condition.
While the Group has a concentration of credit risk in the retail sector, this risk is mitigated due to the diverse nature of
the customers the Group serves, including, but not limited to, their type, geographic location, size and beverage
channel. Depending on the risk profile of certain customers, we may also seek bank guarantees. Collections of
receivables are dependent on each individual customer’s financial condition and sales adjustments granted. Trade
accounts receivable are carried at net realisable value. Typically, accounts receivable have terms of 30 to 60 days and
do not bear interest. Exposure to losses on receivables is monitored, and balances are adjusted for expected credit
losses. Expected credit losses are determined by: (1) evaluating the ageing of receivables; (2) analysing the history of
adjustments; and (3) reviewing high risk customers. Credit insurance on a portion of the accounts receivable balance is
also carried.
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Notes to the consolidated financial statements
CONTINUED
Liquidity risk
Liquidity risk is actively managed to ensure that the Group has sufficient funds to satisfy its commitments. The Group’s
sources of capital include, but are not limited to, cash flows from operations, public and private issuances of debt and
equity securities and bank borrowings. The Group believes its operating cash flow, cash on hand and available short-
term and long-term capital resources are sufficient to fund its working capital requirements, scheduled borrowing
payments, interest payments, capital expenditures, benefit plan contributions, income tax obligations and dividends to
its shareholders. Counterparties and instruments used to hold cash and cash equivalents are continuously assessed,
with a focus on preservation of capital and liquidity. Based on information currently available, the Group does not
believe it is at significant risk of default by its counterparties.
Capital management
The primary objective of the Group’s capital management is to ensure a strong credit rating and appropriate capital
ratios are maintained to support the Group’s business and maximise shareholder value. The Group’s credit ratings are
periodically reviewed by rating agencies. Currently, the Group’s long-term ratings from Moody’s and Fitch are Baa1 and
BBB+, respectively. Changes in the operating results, cash flows or financial position could impact the ratings assigned
by the various rating agencies. The credit rating can be materially influenced by a number of factors including, but not
limited to, acquisitions, investment decisions, capital management activities of TCCC and/or changes in the credit rating
of TCCC. Should the credit ratings be adjusted downward, the Group may incur higher costs to borrow, which could
have a material impact on the financial condition and results of operations.
The capital structure is managed and, as appropriate, adjustments are made in light of changes in economic conditions
and the Group’s financial policy. The Group monitors its operating performance in the context of targeted financial
leverage by comparing the ratio of net debt with adjusted EBITDA. Net debt is calculated as being the net of cash and
cash equivalents, short term investments, borrowings, fair value of hedging instruments related to borrowings and
financial assets/liabilities related to borrowings. Adjusted EBITDA is calculated as EBITDA and adjusting for items
impacting comparability.
Refer to Note 12 for the presentation of fair values for each class of financial assets and financial liabilities and Note 13
for an outline of how the Group utilises derivative financial instruments to mitigate its exposure to certain market risks
associated with its ongoing operations.
Refer to the Strategic Report included within this Integrated Report for disclosure of strategic, commercial and
operational risk relevant to the Group.
The Group has amounts available for borrowing under a €1.95 billion multi currency credit facility (2020: €1.50 billion)
with a syndicate of 13 banks. This credit facility matures in 2025 and is for general corporate purposes, including
serving as a backstop to its commercial paper programme and supporting the Group’s working capital needs. Based on
information currently available, the Group has no indication that the financial institutions participating in this facility
would be unable to fulfil their commitments as at the date of these financial statements. The current credit facility
contains no financial covenants that would impact the Group’s liquidity or access to capital. As at 31 December 2021,
the Group had no amounts drawn under this credit facility.
The following table analyses the Group’s non-derivative financial liabilities and net settled derivative financial liabilities
into relevant maturity groupings based on the remaining period at the statement of financial position date to the
contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:
Financial liabilities
31 December 2021
Trade and other payables
Amounts payable to related parties
Borrowings
Derivatives
Lease liabilities
Total financial liabilities
31 December 2020
Trade and other payables
Amounts payable to related parties
Borrowings
Derivatives
Lease liabilities
Total
Less than
1 year
1 to 3 years
3 to 5 years
More than
5 years
€ million
€ million
€ million
€ million
€ million
3,933
210
13,599
66
714
3,933
210
1,369
19
145
—
—
—
—
—
—
2,551
2,274
7,405
4
208
15
111
28
250
18,522
5,676
2,763
2,400
7,683
2,356
181
7,323
77
383
2,356
181
798
62
100
—
—
1,207
15
128
—
—
970
—
56
—
—
4,348
—
99
Total financial liabilities
10,320
3,497
1,350
1,026
4,447
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Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Notes to the consolidated financial statements
CONTINUED
Note 26
Note 27
Significant events after the reporting period
Financial risk management
In January 2022, the Group repaid prior to maturity €700 million of outstanding euro denominated borrowings
Financial risk factors, objectives and policies
(€700 million 0.75% Notes 2022) due in February 2022.
The Group’s activities expose it to several financial risks including market risk, credit risk and liquidity risk. Financial risk
activities are governed by appropriate policies and procedures to minimise the uncertainties these risks create on the
In February 2022, the Group entered into asset sale arrangements with TCCC pursuant to which, the Group agreed to
Group’s future cash flows. Such policies are developed and approved by the Group’s treasury and commodities risk
sell certain non-alcoholic ready to drink brands predominantly available in Australia and New Zealand, that were
committee, through the authority delegated to it by the Board.
acquired as part of the Acquisition, for a total consideration approximating A$275 million. These brands are classified as
assets held for sale in our consolidated statement of financial position as at 31 December 2021 (Refer to Note 24). We
Market risk
expect to substantially complete the transaction during the first half of 2022. The Group is also in a process of executing
Market risk represents the risk that the fair value of future cash flows of a financial instrument will fluctuate due to
commercial agreements with TCCC to facilitate ongoing manufacturing, distributing and/or selling activities pertaining to
changes in market prices and includes interest rate risk, currency risk and other price risk such as commodity price risk.
these brands.
Market risk affects outstanding borrowings, as well as derivative financial instruments.
Subsequent to the balance sheet date, we have seen significant macro-economic uncertainty as a result of the conflict
Interest rates
in Ukraine. The scale and duration remains uncertain and could impact our earnings and cash flow.
The Group is subject to interest rate risk for its outstanding borrowings. To manage interest rate risk, the Group
maintains a significant proportion of its borrowings at fixed rates. Approximately 95% and 95% of the Group’s interest
bearing borrowings were comprised of fixed rate borrowings at 31 December 2021 and 31 December 2020,
respectively. As part of the Acquisition, the Group acquired interest rate swaps used to hedge its interest rate risk
associated with CCL related borrowings. As at 31 December 2021, the notional value of the Group’s interest rate swaps
was €291 million.
If interest rates on the Group’s floating rate debt were adjusted by 1% for the years ended 31 December 2021,
31 December 2020 and 31 December 2019, the Group’s finance costs and pre-tax equity would change on an annual
basis by approximately €7 million, €2 million and €4 million, respectively. This amount is determined by calculating the
effect of a hypothetical interest rate change on the Group’s floating rate debt. This estimate does not include the effects
of other actions to mitigate this risk or changes in the Group’s financial structure.
Currency exchange rates
The Group’s exposure to the risk of changes in currency exchange rates relates primarily to its operating activities
denominated in currencies other than the functional currency, Euro. To manage currency exchange risk arising from
future commercial transactions and recognised monetary assets and liabilities, foreign currency forward and option
contracts with external third parties are used. Typically, up to 80% of anticipated cash flow exposures in each major
foreign currency for the next calendar year are hedged using a combination of forward and option contracts with third
parties.
The Group is also exposed to the risk of changes in currency exchange rates between US dollar and Euro relating to its
US denominated borrowings. The following table demonstrates the sensitivity of the Group’s profit before income taxes
and pre-tax equity as a result of changes in the value of outstanding debt instruments due to reasonable movements in
the US dollar against the Euro, with all other variables held constant. This does not take into account the effects of
derivative instruments used to manage exposure to this risk. Movements in foreign currencies related to the Group’s
other financial instruments do not have a material impact on profit before income taxes or pre-tax equity.
As part of the Acquisition, the Group acquired borrowings denominated in Australian dollars, and borrowings
denominated in other currencies swapped into Australian dollars using cross currency swaps. These Australian
borrowings are not currently swapped into Euro and are translated as part of the currency translation of the net assets
of the API business units.
Effect on profit before tax and pre-tax equity
Year ended 31 December 2021
Year ended 31 December 2020
Year ended 31 December 2019
Change in
currency rate
€ strengthens
against US$
€ weakens
against US$
%
10
10
10
€ million
€ million
176
33
87
(176)
(36)
(95)
Commodity price risk
The competitive marketplace in which the Group operates may limit its ability to recover increased costs through higher
prices. As such, the Group is subject to market risk with respect to commodity price fluctuations, principally related to its
purchases of aluminium, PET (plastic, including recycled PET, LDPE), ethylene, sugar and vehicle fuel. When possible,
exposure to this risk is managed primarily through the use of supplier pricing agreements, which enable the Group to
establish the purchase price for certain commodities. Certain suppliers restrict the Group’s ability to hedge prices
through supplier agreements. As a result, commodity hedging programmes are entered into and generally designated
as hedging instruments. Refer to Note 13 for more information. Typically, up to 80% of the anticipated commodity
transaction exposures for the next calendar year are hedged using a combination of forward and option contracts
executed with third parties. The Group estimates that a 10% change in the market price of these commodities over the
current market prices would affect operating profit during the next 12 months by approximately €116 million. This does
not take into account the effects of derivative instruments used to manage exposure to this risk or pricing agreements in
place.
Credit risk
The Group is exposed to counterparty credit risk on all of its derivative financial instruments. Strict counterparty credit
guidelines are maintained and only financial institutions that are investment grade or better are acceptable
counterparties. Counterparty credit risk is continuously monitored and numerous counterparties are used to minimise
exposure to potential defaults. Where required collateral is paid between the counterparties to minimise counterparty
risk. The maximum credit risk exposure for each derivative financial instrument is the carrying amount of the derivative.
Included in trade and other payables is €46 million (2020: nil) related to collateral received from counterparties and
included in other current assets is €4 million (2020: nil) related to collateral paid to counterparties.
Credit is extended in the form of payment terms for trade to customers of the Group, consisting of retailers, wholesalers
and other customers, generally without requiring collateral, based on an evaluation of the customer’s financial condition.
While the Group has a concentration of credit risk in the retail sector, this risk is mitigated due to the diverse nature of
the customers the Group serves, including, but not limited to, their type, geographic location, size and beverage
channel. Depending on the risk profile of certain customers, we may also seek bank guarantees. Collections of
receivables are dependent on each individual customer’s financial condition and sales adjustments granted. Trade
accounts receivable are carried at net realisable value. Typically, accounts receivable have terms of 30 to 60 days and
do not bear interest. Exposure to losses on receivables is monitored, and balances are adjusted for expected credit
losses. Expected credit losses are determined by: (1) evaluating the ageing of receivables; (2) analysing the history of
adjustments; and (3) reviewing high risk customers. Credit insurance on a portion of the accounts receivable balance is
also carried.
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Notes to the consolidated financial statements
CONTINUED
Note 28
Group companies
In accordance with section 409 of the Companies Act 2006, a full list of the Company’s subsidiaries, partnerships,
associates, joint ventures and joint arrangements as at 31 December 2021 is disclosed below, along with the country of
incorporation, the registered address and the effective percentage of equity owned at that date. Unless otherwise
stated, each entity has a share capital comprising a single class of ordinary shares and is wholly owned and indirectly
held by CCEP plc.
Name
Agua De La Vega Del Codorno, S.L.U.
Aguas De Cospeito, S.L.U.
Aguas De Santolin, S.L.U.
Aguas Del Maestrazgo, S.L.U.
Aguas Del Toscal, S.A.U.
Aguas Vilas Del Turbon, S.L.U.
Aitonomi AG
Amalgamated Beverages Great Britain Limited
Apand Pty Ltd
Associated Products & Distribution Proprietary
Australian Beer Company Pty Ltd
BBH Investment Ireland Limited
Bebidas Gaseosas Del Noroeste, S.L.U.
Beganet, S.L.U.
Beverage Bottlers (NQ) Pty Ltd
Beverage Bottlers (QLD) Ltd
Birtingahúsið ehf.
BL Bottling Holdings UK Limited
Bottling Great Britain Limited
Bottling Holding France SAS
Bottling Holdings (Luxembourg) SARL
Bottling Holdings (Netherlands) B.V.
Country of
incorporation
Spain
Spain
Spain
Spain
Spain
Spain
% equity
interest
100%
100%
100%
100%
100%
100%
15%
Switzerland
United Kingdom 100%(D)
Australia
Australia
Australia
Ireland
Spain
Spain
Australia
Australia
100%
100%(D)
50%
100%
100%
100%
100%
100%
35%
Iceland
United Kingdom 100%
United Kingdom 100%(D)
France
100%
Registered address
C/ Ribera del loira, 20-22, 2ª Planta - 28042 (Madrid)
Crta. Pino km. 1 - 2, 27377, Cospeito (Lugo), Spain
C/ Real, s/n 09246, Quintanaurria (Burgos)
C/ Ribera del loira, 20-22, 2ª Planta - 28042 (Madrid)
Ctra. de la Pasadilla, km. 3- 35250, ingenio (Gran Canaria)
C/ Ribera del loira, 20-22, 2ª Planta - 28042 (Madrid)
Rue Technopôle 10, 3960 Sierre
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
6th Floor, 2 Grand Canal Square (Dublin 2)
Avda.Alcalde Alfonso Molina, s/n- 15007 (A Coruña)
Avda Paisos Catalans, 32 – 08950 (Esplugues de Llobregat)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Laugavegur 174, 105, (Reykjavík)
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
9, chemin de Bretagne, 92784 (Issy-les-Moulineaux)
Luxembourg
Netherlands
100%
100%
2, Rue des Joncs, L-1818, Howald
Marten Meesweg 25J, 3068 AV Rotterdam
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CONTINUED
Name
Bottling Holdings Europe Limited
Brewcorp Pty Ltd
Brewhouse Investments Pty Ltd
C - C Bottlers Limited
Can Recycling (S.A.) Pty. Ltd.
CC Digital GmbH
CC Erfrischungsgetränke Oldenburg Verwaltungs GmbH
CC Iberian Partners Gestion S.L.
CC Verpackungsgesellschaft mit beschraenkter Haftung
CCA Bayswater Pty Ltd
CCEP Australia Pty Ltd
CCEP Finance (Australia) Limited
CCEP Finance (Ireland) Designated Activity Company
CCEP Group Services Ltd
CCEP Holdings (Australia) Limited
CCEP Holdings (Australia) Pty Ltd
CCEP Holdings Norge AS
CCEP Holdings Sverige AB
CCEP Holdings UK Limited
CCEP Ventures Australia Pty Ltd
CCEP Ventures Europe Limited
CCEP Ventures UK Limited
CCEP Scottish Limited Partnership
CCIP Soporte, S.L.U.
% equity
interest
Country of
incorporation
United Kingdom 100%(B)(E)
Australia
100%
Australia
Australia
Australia
Germany
Germany
Spain
Germany
Australia
100%
100%
100%(B)
50%
100%
100%
100%
100%
100%
Australia
United Kingdom 100%(A)
Ireland
United Kingdom 100%
United Kingdom 100%(A)(D)
Australia
100%
100%(A)
100%
Norway
100%
Sweden
United Kingdom 100%
100%
Australia
United Kingdom 100%(A)
United Kingdom 100%(A)
United Kingdom 100%
100%
Spain
Circular Plastics Australia (PET) Holdings Pty Ltd
Classic Brand (Europe) Designated Activity Company
Cobega Embotellador, S.L.U.
Coca-Cola Amatil (UK) Limited
Coca-Cola Europacific Investments (Singapore) Pte. Ltd.
Australia
Ireland
16.67%
100%
100%
Spain
United Kingdom 50%(I)
100%
Singapore
Registered address
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Stralauer Allee 4, 10245 (Berlin)
Stralauer Allee 4, 10245 (Berlin)
C/ Ribera del loira, 20-22, 2ª Planta - 28042 (Madrid)
Schieferstraße 20 06126 Halle (Saale)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
6th Floor, 2 Grand Canal Square, Dublin 2, Ireland
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Robsrudskogen 5, 1470 (Lørenskog)
Dryckesvägen 2 C, 136 87 (Haninge)
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
52 Milton Road, East Kilbride, Glasgow, Scotland, G74 5DJ
C/ Ribera del loira, 20-22, 2ª Planta - 28042 (Madrid)
Building 3, 658 Church Street, Cremorne VIC 3121
4th Floor, 25-28 Adelaide Road, D02 RY98 (Dublin 2)
Avda Paisos Catalans, 32 – 08950 (Esplugues de Llobregat)
1 Bartholomew Lane, London, EC2N 2AX, United Kingdom
80 Robinson Road, #02-00, 068898, Singapore
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Financial Statements
Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Notes to the consolidated financial statements
CONTINUED
Name
Coca-Cola Europacific Partners (CDE Aust) Pty Limited
Coca-Cola Europacific Partners (Fiji) Pte Limited
Coca-Cola Europacific Partners (Holdings) Pty Limited
Coca-Cola Europacific Partners (Initial LP) Limited
Coca-Cola Europacific Partners (Scotland) Limited
Coca-Cola Europacific Partners API Pty Ltd
Coca-Cola Europacific Partners Australia Pty Limited
Coca-Cola Europacific Partners Belgium SRL/BV
Coca-Cola Europacific Partners Deutschland GmbH
Coca-Cola Europacific Partners France SAS
Coca-Cola Europacific Partners Great Britain Limited
Coca-Cola Europacific Partners Holdings Great Britain Limited
Coca-Cola Europacific Partners Holdings NZ Limited
Coca-Cola Europacific Partners Holdings US, Inc.
Coca-Cola Europacific Partners Iberia, S.L.U.
Coca-Cola Europacific Partners Ísland ehf.
Coca-Cola Europacific Partners Luxembourg sàrl
Coca-Cola Europacific Partners Nederland B.V.
Coca-Cola Europacific Partners New Zealand Limited
Coca-Cola Europacific Partners Norge AS
Coca-Cola Europacific Partners Papua New Guinea Limited
Coca-Cola Europacific Partners Pension Scheme Trustees Limited
Coca-Cola Europacific Partners Portugal Unipessoal, LDA
Coca-Cola Europacific Partners Services Bulgaria EOOD
Coca-Cola Europacific Partners Services Europe Limited
Coca-Cola Europacific Partners Services SRL
Coca-Cola Europacific Partners Sverige AB
Coca-Cola Europacific Partners US II, LLC
Country of
incorporation
Australia
Fiji
% equity
interest
100%
100%
100%
Australia
United Kingdom 100%
United Kingdom 100%
100%
Australia
Registered address
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Lot 1, Ratu Dovi Road, Laucala Beach Estate, NASINU, Fiji
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
52 Milton Road, College Milton, East Kilbride, Scotland, G74 5DJ
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Australia
Belgium
Germany
100%
100%(F)
100%(G)
France
United Kingdom 100%
United Kingdom 100%
100%
100%(A)(D)
New Zealand
United States
Spain
Iceland
Luxembourg
Netherlands
New Zealand
Norway
100%
100%
100%
100%
100%
100%
100%
Papua New
Guinea
United Kingdom 100%
100%
Portugal
Bulgaria
United Kingdom 100%
100%
Belgium
Sweden
United States
100%(C)
100%
100%
Chaussée de Mons 1424, 1070 (Brussels)
Stralauer Allee 4, 10245 (Berlin)
9, chemin de Bretagne, 92784 (Issy-les-Moulineaux)
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
The Oasis, 19 Carbine Road, Mount Wellington, Auckland, 1060, New Zealand
Corporation Trust Center, 1209 Orange Street, Wilmington 19801 (Delaware)
C/ Ribera del loira, 20-22, 2ª Planta - 28042 (Madrid)
Studlahals 1, 110 (Reykjavik)
2, Rue des Joncs, L-1818, Howald
Marten Meesweg 25J, 3068 AV Rotterdam
The Oasis, 19 Carbine Road, Mount Wellington, Auckland, 1060, New Zealand
Robsrudskogen 5, 1470 (Lørenskog)
Section 23, Allotment 14, Milfordhaven Road, LAE, MOROBE PROVINCE, 411
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Quinta da Salmoura - Cabanas, 2929- 509, Azeitão (Setúbal)
48, Sitnyakovo Blvd, Serdika Center, Office Building, floor 5, 1505 (Sofia)
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Chaussée de Mons 1424, 1070 (Brussels)
Dryckesvägen 2 C, 136 87 (Haninge)
Corporation Trust Center, 1209 Orange Street, Wilmington 19801 (Delaware)
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Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Notes to the consolidated financial statements
CONTINUED
Name
Coca-Cola Europacific Partners US, LLC
Coca-Cola Europacific Partners Vanuatu Limited
Coca-Cola Immobilier SCI
Coca-Cola Production SAS
Coca-Cola Australia Foundation Limited
Compañía Asturiana De Bebidas Gaseosas, S.L.U.
Compañía Castellana De Bebidas Gaseosas, S.L.
Compañía Levantina De Bebidas Gaseosas, S.L.U.
Compañía Norteña De Bebidas Gaseosas, S.L.U.
Compañía Para La Comunicación De Bebidas Sin Alcohol, S.L.U.
Container Exchange (QLD) Limited
Container Exchange (Services) Pty Ltd
Conversia IT, S.L.U.
Crusta Fruit Juices Proprietary Ltd
Developed System Logistics, S.L.U.
Endurvinnsaln hf.
Exchange for Change (ACT) Pty Ltd
Exchange for Change (Australia) Pty Ltd
Exchange for Change (NSW) Pty Ltd
Feral Brewing Company Pty Ltd
Foodl B.V.
GR Bottling Holdings UK Limited
Infineo Recyclage SAS
Innovative Tap Solutions Inc.
Country of
incorporation
United States
Vanuatu
France
France
Australia
Spain
Spain
Spain
Spain
Spain
Australia
Australia
Spain
Australia
Spain
Iceland
Australia
Australia
Australia
Australia
% equity
interest
100%
100%
100%(G)
100%
50%
100%
100%
100%
100%
100%
50%
50%
100%
100%(J)
100%
20%
20%
20%
20%
100%(K)
33%
Netherlands
United Kingdom 100%(A)
49%(H)
France
25%
United States
Registered address
Corporation Trust Center, 1209 Orange Street, Wilmington 19801 (Delaware)
1st Floor, Govant Building, Kumul Highway, Port Vila, Vanuatu
9, chemin de Bretagne, 92784 (Issy-les-Moulineaux)
Zone d’entreprises de Bergues, Commune de Socx, 59380 (Bergues)
Level 13 , 40 Mount Street , North Sydney NSW 2060
C/ Nava, 18- 3ª (Granda) Siero - 33006 (Oviedo)
C/ Ribera del loira, 20-22, 2ª Planta - 28042 (Madrid)
Av. Real Monasterio de Sta. María de Poblet, 36, 46930 (Quart de Poblet)
C/ Ibaizábal, 57 – 48960 Galdakao (Bizkaia)
C/ Ribera del loira, 20-22, 2ª Planta - 28042 (Madrid)
Level 17, 100 Creek Street, Brisbane QLD 4000
Maddocks, Angel Place, Level 27, 123 Pitt Street, Sydney NSW 2000
C/ Ribera del loira, 20-22, 2ª Planta - 28042 (Madrid)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Av. Henry Ford, 25, Manzana 19, Complejo Pq. Ind. Juan Carlos I , 46220 Picassent (Valencia)
Knarravogur 4, 104 Reykjavik
Building C, Suite 6, Level 1, 1 Homebush Bay Drive, Rhodes NSW 2138
Building C, Suite 6, Level 1, 1 Homebush Bay Drive, Rhodes NSW 2138
Building C, Suite 6, Level 1, 1 Homebush Bay Drive, Rhodes NSW 2138
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
HNK Utrecht West, V.08, Weg der Verenigde Naties 1, 3527 KT Utrecht
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Sainte Marie la Blanche – 21200 (Dijon)
310 North Wolf Road, Wheeling, IL 60090, USA
Instelling voor Bedrijfspensioenvoorziening Coca-Cola Europacific Partners
Belgium/Coca-Cola Europacific Partners Services – Bedienden-Arbeiders OFP
Instelling voor Bedrijfspensioenvoorziening Coca-Cola Europacific Partners
Belgium/Coca-Cola Europacific Partners Services – Kaderleden OFP
Belgium
100%
Bergensesteenweg 1424 – 1070 (Brussels)
Belgium
100%
Bergensesteenweg 1424 – 1070 (Brussels)
Iparbal, 99 S.L.
Spain
100%
C/ Ibaizábal, 57 – 48960 Galdakao (Bizkaia)
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Financial Statements
Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Notes to the consolidated financial statements
CONTINUED
Name
Iparsoft, 2004 S.L.
Kollex GmbH
Lavit Holdings Inc
Lusobega, S.L.
Madrid Ecoplatform, S.L.U.
Mahija Parahita Nusantara Foundation
Matila Nominees Pty. Ltd
Neverfail Bottled Water Co Pty Limited
Neverfail SA Pty. Limited
Neverfail Springwater (VIC) Pty Limited
Neverfail Springwater Co Pty Ltd
Neverfail Springwater Co. (QLD) Pty. Limited
Neverfail Springwater Pty Ltd
Neverfail WA Pty. Limited
Pacbev Pty Ltd
Paradise Beverages (Fiji) Limited
PEÑA Umbria S.L.U.
Perfect Fruit Company Pty Ltd
PT Amandina Bumi Nusantara
PT Coca-Cola Bottling Indonesia
PT Coca-Cola Distribution Indonesia
Purna Pty. Ltd.
Quenchy Crusta Sales Pty. Ltd.
Real Oz Water Supply Co (QLD) Pty Limited
Refecon Águas - Sociedade Industrial De Bebidas, Unipessoal, LDA
Refrescos Envasados Del Sur, S.L.U.
Refrige SGPS, Unipessoal, LDA
Roalba, S.L.U.
Sale Proprietary Co 1 Pty Ltd
Country of
incorporation
Spain
Germany
United States
Spain
Spain
Indonesia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Fiji
Spain
Australia
Indonesia
Indonesia
Indonesia
Australia
Australia
Australia
Portugal
Spain
Portugal
Spain
Australia
% equity
interest
100%
25%
14.9%
100%
100%
35.3%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
35.3%
70.6%(C)
70.6%
100%
100%
100%
100%
100%
100%
100%
100%
Registered address
C/ Ibaizábal, 57 – 48960 Galdakao (Bizkaia)
Genthiner Straße 32, 10785, Berlin
27 West 20th Street, Suite 1004, New York NY 10011
C/ Ibaizábal, 57 – 48960 Galdakao (Bizkaia)
C/Pedro Lara, 8 Pq. Tecnológico de Leganes- 28919 (Leganes)
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak, South Jakarta
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
122-164 Foster Road, Walu Bay, Suva, Fiji
Av. Real Monasterio de Sta. María de Poblet,36 – 46930 (Quart de Poblet)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak, South Jakarta , 12430
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak, South Jakarta , 12430
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak, South Jakarta , 12430
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Quinta da Salmoura - Cabanas-2925-362 Azeitão, Setúbal
Autovía del Sur A-IV, km.528- 41309 La Rinconada (Sevilla)
Quinta da Salmoura - Cabanas-2925-362 Azeitão, Setúbal
C/ Ibaizábal, 57 – 48960 Galdakao (Bizkaia)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
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Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Notes to the consolidated financial statements
CONTINUED
Name
Sale Proprietary Co 2 Pty Ltd
Sale Proprietary Co 3 Pty Ltd
Sale Proprietary Co 4 Pty Ltd
Sale Proprietary Co 5 Pty Ltd
Sale Proprietary Co 6 Pty Ltd
Sale Proprietary Co 7 Pty Ltd
Samoa Breweries Limited
Solares y Edificios Norteños, S.L.U.
Starstock Group Limited
TasRecycle Limited
VicRecycle Limited
WA Return Recycle Renew Ltd
Wabi Portugal, Unipessoal LDA
WB Investment Ireland 2 Limited
WBH Holdings Luxembourg SCS
WIH UK Limited
Wir Sind Coca-Cola GmbH
Country of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Samoa
% equity
interest
100%
100%
100%
100%
100%(D)
100%
93.9%
Spain
United Kingdom 25.3%
100%
Australia
Australia
Australia
Portugal
Ireland
50%
50%
50%
100%
100%
100%
Luxembourg
United Kingdom 100%(A)
Germany
100%
Registered address
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Vaitele Industrial Zone, Vaitele Tai, Faleata Sisifo
C/ Ibaizábal, 57 – 48960 Galdakao (Bizkaia)
Dane Mill, Broadhurst Lane, Congleton, Cheshire, England, CW12 1LA
Level 9, 85 Macquarie Street, Hobart TAS 7000
HWL Ebsworth Lawyers, Level 8, 447 Collins Street, Melbourne VIC 3000
Unit 2, 1 Centro Avenue, Subiaco WA 6008
Nº 16-A, Fracçao B, 5º Piso, Edificio Miraflores Premium Distrito: Lisboa Concelho: Oieras Freguesia: Algés, Linda-a-Velha e Cruz
Quebrada-Dafundo 1495 190 Algés.
6th Floor, 2 Grand Canal Square (Dublin 2)
2, Rue des Joncs, L-1818, Howald
Pemberton House, Bakers Road, Uxbridge, UB8 1EZ
Stralauer Allee 4, 10245 (Berlin)
(A) 100% equity interest directly held by Coca-Cola Europacific Partners plc.
(B) Class A and B ordinary shares.
(C) Class A, B and C ordinary shares.
(D) Including preference shares issued to the Group.
(E) 38.3% equity interest directly held by Coca-Cola Europacific Partners plc (100% of A ordinary shares in issue).
(F) 10% equity interest directly held by Coca-Cola Europacific Partners plc.
(G) Group shareholding of 99.99% or greater.
(H) Class A and B shares. The Group holds 49% of Class B shares.
(I)
(J) Class A and F shares
(K) Includes Ordinary shares and B Class shares
In liquidation
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Governance and Directors’ Report
Financial Statements
Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Coca-Cola Europаcific Partners plc Company financial statements
Statement of comprehensive income
Revenue from management fees
Dividend income
Administrative expenses
Operating profit
Finance income
Finance costs
Total finance costs, net
Non-operating items
Profit before taxes
Taxes
Profit after taxes
Components of other comprehensive income:
Cash flow hedges that may be subsequently reclassified to the income statement:
Pretax activity, net
Tax effect
Other comprehensive income for the period, net of tax
Comprehensive income for the period
The accompanying notes are an integral part of these Company financial statements.
Year ended
31 December 2021
31 December 2020
Note
€ million
€ million
3
4
4
52
—
(71)
(19)
15
(133)
(118)
46
(91)
(13)
(104)
2
—
2
(102)
44
775
(73)
746
24
(111)
(87)
50
709
1
710
7
(1)
6
716
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2021 as filed with the SEC.
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Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Statement of financial position
ASSETS
Non-current:
Investments
Non-current derivative assets
Other non-current assets
Total non-current assets
Current:
Amounts receivable from related parties
Other current assets
Total current assets
Total assets
LIABILITIES
Non-current:
Borrowings, less current portion
Amounts payable to related parties
Other non-current liabilities
Total non-current liabilities
Current:
Amounts payable to related parties
Current portion of borrowings
Trade and other payables
Current derivative liabilities
Total current liabilities
Total liabilities
EQUITY
Share capital
Share premium
Merger reserves
Retained earnings
Total equity
Total equity and liabilities
31 December 2021
31 December 2020
Note
€ million
€ million
The accompanying notes are an integral part of these Company financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 15 March 2022.
They were signed on its behalf by:
5
9
6
7
6
6
7
9
8
8
8
8
27,626
22,284
92
12
—
19
27,730
22,303
Damian Gammell, Chief Executive Officer
15 March 2022
1
12
13
27,743
7,237
3,227
14
10,478
1,703
986
85
—
2,774
13,252
5
220
8,466
5,800
14,491
27,743
3,437
15
3,452
25,755
6,194
—
—
6,194
3,531
714
95
35
4,375
10,569
5
190
8,466
6,525
15,186
25,755
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2021 as filed with the SEC.
Strategic ReportCoca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F
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Governance and Directors’ Report
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Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Statement of cash flows
Cash flows from operating activities:
(Loss) / profit before taxes
Adjustments to reconcile profit before tax to net cash flows from
operating activities:
Dividend income
Depreciation
Amortisation of intangible assets
Share-based payment expense
Finance costs, net
Other non-operating income
Change in operating assets/liabilities
Net cash flows (used in) / from operating activities
Cash flows from investing activities:
Investment in subsidiaries, net
Receipt from repayment of loans to related parties
Dividend received
Interest received
Proceeds from sale of property, plant and equipment
Purchase of capitalised software
Net cash flows (used in) / from investing activities
Year ended
31 December 2021
31 December 2020
Note
€ million
€ million
(91)
709
3
5
3
—
2
1
10
118
(46)
(101)
(107)
(5,729)
350
—
15
—
(1)
(5,365)
(775)
12
1
14
(14)
50
(38)
(41)
(428)
—
775
4
17
(3)
365
Year ended
31 December 2021
31 December 2020
Note
€ million
€ million
Cash flows from financing activities:
Proceeds from borrowings, net
Repayments on borrowings
Payments of principal on lease obligations
Interest paid
Dividends paid
Purchase of own Shares under share buyback programme
Exercise of employee share options
Net cash flows from / (used in) financing activities
Net change in cash and cash equivalents
Net effect of currency exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
8
8
The accompanying notes are an integral part of these Company financial statements.
6,769
(713)
(7)
(114)
(639)
—
30
5,326
(146)
146
—
—
1,952
(1,646)
(10)
(113)
(387)
(128)
13
(319)
5
(5)
—
—
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2021 as filed with the SEC.
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Financial Statements
Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Statement of changes in equity
As at 31 December 2019
Issue of shares during the year
Equity-settled share-based payments
Own shares purchased under share buyback programme
Total comprehensive income for the period
Dividends
As at 31 December 2020
Issue of shares during the year
Equity-settled share-based payments
Total comprehensive income for the period
Dividends
As at 31 December 2021
The accompanying notes are an integral part of these Company financial statements.
Share capital
Share premium Merger reserves
Retained earnings
Total equity
€ million
€ million
€ million
€ million
€ million
5
—
—
—
—
—
5
—
—
—
—
5
177
8,466
6,310
14,958
13
—
—
—
—
—
—
—
—
—
—
14
(128)
716
(387)
13
14
(128)
716
(387)
190
8,466
6,525
15,186
30
—
—
—
—
—
—
—
—
16
(102)
(639)
30
16
(102)
(639)
220
8,466
5,800
14,491
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2021 as filed with the SEC.
Strategic ReportCoca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F
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Financial Statements
Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Notes to the Company financial statements
Note 1
General information and basis of preparation
Coca-Cola Europacific Partners plc (the Company) acts as a holding company for investments in subsidiaries, as well
as а provider of various intragroup services. In addition the Company engages in general corporate activities such as
third party borrowings.
The financial statements of the Company have been prepared in accordance with the 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
financial statements were approved and signed by Damian Gammell, Chief Executive Officer on 15 March 2022 having
been duly authorised to do so by the Board of Directors.
As described in the accounting policies in Note 2, the financial statements have been prepared under the historical cost
convention except for certain items measured at fair value. Those accounting policies have been applied consistently in
all periods. The functional and presentation currency of the Company is euros and amounts are rounded to the nearest
million.
Note 2
Significant accounting policies
The preparation of these financial statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates. The significant judgements made in applying the Company’s accounting
policies were applied consistently across the annual periods.
Investments
Investments in subsidiaries are initially recognised at cost and carried net of any impairment. Investments are tested for
impairment whenever events or changes in circumstances indicate that the carrying amounts of those investments may
not be recoverable. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and
its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds
its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment
losses on continuing operations are recognised in the income statement in those expense categories consistent with the
function of the impaired asset.
For assets where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to
the revised estimate of its recoverable amount, not to exceed the carrying amount that would have been determined,
net of depreciation, had no impairment losses been recognised for the asset or CGU in prior years. A reversal of
impairment loss is recognised immediately in the income statement.
Share-based payments
The Company has established share-based payment plans that provide for the granting of share options and restricted
stock units, some with performance and/or market conditions, to certain executive and management level employees
that are employed by the Company and its subsidiaries. These awards are designed to align the interests of its
employees with the interests of its shareholders.
The Company recognises compensation expense equal to the grant date fair value for all share-based payment awards
that are expected to vest. Expense is generally recorded on a straight-line basis over the requisite service period for
each separately vesting portion of the award. As per IAS 27 the Company equity settles share-based payments for
employees of subsidiary entities and accounts for the settlement as an addition to the cost of its investment in the
employing subsidiary. Upon vesting, the Company recharges the costs of the share-based awards to the employing
subsidiary and records a reduction of the investment.
Financial instruments
(i) Financial assets
Initial recognition and measurement
Financial assets within the scope of IFRS 9, “Financial Instruments” are classified as financial assets at fair value
through profit or loss, loans and receivables, or as derivatives designated as hedging instruments in an effective hedge,
as appropriate. The Company determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or
loss, directly attributable transaction costs.
The Company’s financial assets include cash and short-term deposits, trade and other receivables, loan notes,
and derivative financial instruments.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets
designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if
they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments
entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by
IFRS 9.
Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are
designated as effective hedging instruments.
Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with
changes in fair value recognised in finance income or finance cost in the statement of comprehensive income.
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Notes to the Company financial statements
CONTINUED
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. Such assets are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance
income in the statement of comprehensive income. Losses arising from impairment are recognised in the income
statement in other operating expenses.
(ii) Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of IFRS 9 are classified as financial liabilities at fair value through profit or loss,
loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
The Company determines the classification of its financial liabilities at initial recognition. All financial liabilities are
recognised initially at fair value and, in the case of loans and borrowings, plus directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss.
Interest bearing loans and borrowings
Obligations for loans and borrowings are recognised when the Company becomes party to the related contracts and are
measured initially at the fair value of consideration received less directly attributable transaction costs.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the
effective interest method.
Gains and losses arising on the repurchase, settlement or other cancellation of liabilities are recognised respectively in
finance income and finance cost.
Trade and other payables
Trade and other payable amounts represent liabilities for goods and services provided prior to the end of the reporting
period which are unpaid as of the balance sheet date. Trade and other payables are presented as current liabilities
unless payment is not due within 12 months after the reporting period. Trade and other payables are recognised initially
at fair value and subsequently measured at amortised cost using the effective interest method, as applicable.
Management fees
As the ultimate parent entity of the Group, the Company is involved in the provision of intragroup services to certain
subsidiaries. Specifically, the Company’s employees are above-market roles, who provide services related but not
limited to strategy, people and culture, finance, legal, and business process and technology. In addition, certain
intragroup services are charged to the Company by its subsidiaries. Management fees revenue for intragroup services
provided to subsidiaries is recorded in Revenue. Costs incurred by subsidiaries are recharged to the Company and are
recorded in administrative expenses in the statement of comprehensive income.
Note 3
Dividend income
Dividends are recognised when the right to receive the dividend is established. During the year the Company has
received the following dividends:
Bottling Holdings Europe Limited
WIH UK Ltd Limited
Coca-Cola Europacific Partners Holdings US Inc
Coca-Cola Europacific Partners Deutschland GmbH
GR Bottling Holdings UK Limited
Total
Note 4
Finance income/(costs)
Interest income
Total finance income
Interest expense
Amortisation of debt discount
Total finance costs
2021
2020
€ million
€ million
—
—
—
—
—
—
262
245
242
14
12
775
2021
2020
€ million
€ million
15
15
(131)
(2)
(133)
24
24
(108)
(3)
(111)
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CONTINUED
Note 5
Investments
Balance at 1 January
Subsequent investment in subsidiaries, net
Capitalised/vested share-based payments, net
Balance at 31 December
Note 6
Amounts receivable from/payable to related parties
2021
€ million
22,284
5,336
6
2020
€ million
21,856
432
(4)
Current amounts receivable from related parties:
Financial receivables(A)
Loans
27,626
22,284
Trade receivables
During 2020, the Company subscribed for €400 million ordinary shares in CCEP Holdings (Australia) Limited, a new
wholly owned subsidiary formed in connection with the acquisition of CCL, in exchange for interest-bearing notes. In
addition, AUD preference shares in CCEP Holdings (Australia) Limited were issued with a value of €3,085 million as at
31 December 2020 (see Note 6).
During 2021, the Company subscribed for additional AUD preference shares in CCEP Holdings (Australia) Limited in
exchange for interest-bearing notes. As at the acquisition date all AUD preference shares were converted into
€5,778 million of ordinary shares.
On 31 December 2021, CCEP Holdings (Australia) Limited made a non-cash distribution of €6,171 million to the
Company that was set-off against loan notes issued from the Company to CCEP Holdings (Australia) Limited. The
transaction was deemed a return of capital and the investment in CCEP Holdings (Australia) Limited was reduced by an
equivalent amount. The residual amount of €7 million represents the remaining investment in CCEP Holdings (Australia)
Limited.
During 2021, the Company also subscribed for €2,251 million ordinary shares in CCEP Finance (Australia) Limited and
for €3,478 million ordinary shares in CCEP Holdings (Australia) Pty in exchange for cash in these amounts, as part of
the acquisition of CCL.
Total current amounts receivable from related parties
Total amounts receivable from related parties
Non-current amounts payable to related parties:
Borrowings(B)
Total non-current amounts payable to related parties
Current amounts payable to related parties:
Borrowings(C)
Cash pool payables(D)
Trade and other payables
Total current amounts payable to related parties
Total amounts payable to related parties
31 December 2021
31 December 2020
€ million
€ million
—
—
1
1
1
3,227
3,227
—
1,674
29
1,703
4,930
3,085
350
2
3,437
3,437
—
—
3,440
79
12
3,531
3,531
(A) During 2020, the Company acquired A$ denominated preference shares in CCEP Holdings (Australia) Limited, in connection with the
acquisition of CCL and the mitigation of foreign currency risk. In accordance with IFRS 9 the Company initially recorded the financial
asset at fair value and subsequently measured at amortised cost. During 2021 the preference shares were converted into ordinary
shares and were recognised as investments (see Note 5).
(B) In relation to the acquisition of CCL, the Company borrowed interest bearing euro denominated loan notes from CCEP Finance (Ireland)
DAC due between September 2025 and May 2041 with interest rates between 0.1% and 1.6%.
(C) During 2021 the interest bearing euro denominated loan notes issued in relation to the subscription of €400 million ordinary shares and
€3,040 million preference shares of CCEP Holdings (Australia) Limited were set off against a distribution from CCEP Holdings
(Australia) Limited to the Company.
(D) The Company participates in a cash pooling structure in which its available cash is swept to a cash pool header (CCEP Finance
(Ireland) DAC). Pooling allows the Company to deposit and withdraw cash on a daily basis to meet its working capital needs.
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Notes to the Company financial statements
CONTINUED
Transactions with key management personnel
Key management personnel are the members of the Board of Directors and the members of the Executive Leadership
Team that are employed by the Company. The following table summarises the total remuneration paid or accrued during
the reporting period related to key management personnel:
Note 7
Borrowings
Salaries and other short-term employee benefits(A)
Share-based payments
Termination benefits
Total
2021
2020
€ million
€ million
19
4
—
23
13
5
1
19
(A) Short-term employee benefits include wages, salaries and social security contributions, paid annual leave and paid sick leave, paid
bonuses and non-monetary benefits.
Employee costs
The following table summarises the total employee costs of the Company during the reporting period:
Non-current borrowings:
Loan notes
Lease obligations
Total non-current borrowings
Current borrowings:
Loan notes
Commercial paper
Lease obligations
Total current borrowings
Total borrowings
31 December 2021
31 December 2020
€ million
€ million
7,232
5
7,237
700
285
1
986
8,223
6,186
8
6,194
709
—
5
714
6,908
Wages and salaries
Social security costs
Total employee costs
The average number of persons employed by the Company during the year was 9 (2020: 10).
2021
2020
€ million
€ million
16
3
19
11
3
14
The loan notes as at 31 December 2021 are due between February 2022 and September 2031. The principal amounts
due are €7,915 million (2020: €6,859 million) and the applicable interest rates are between 0.2% and 2.75%. The loan
notes are stated net of unamortised financing fees of €27 million (2020: €26 million).
In May 2021, and in connection with the Acquisition, the Company received net proceeds from new borrowings in the
period of €1,668 million issuing the following bonds: $850 million 0.5% Notes due 2023, $650 million 0.8% Notes due
2024 and $500 million 1.5% Notes due 2027.
Trade and other payables includes interest payable on the borrowings of €51 million (2020: €52 million).
Lease obligations represent the present value of the Company’s lease obligations in respect of right of use assets.
The Company has amounts available for borrowing under a €1.95 billion multi currency credit facility with a syndicate of
13 banks. This credit facility matures in 2025 and is for general corporate purposes and supporting the working capital
needs. Based on information currently available, there is no indication that the financial institutions participating in this
facility would be unable to fulfil their commitments to the Company as at the date of these financial statements. The
Company’s credit facility contains no financial covenants that would impact its liquidity or access to capital. As at
31 December 2021, the Company had no amounts drawn under this credit facility.
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Notes to the Company financial statements
CONTINUED
Note 8
Equity
Share capital
As at 31 December 2021, the Company has issued and fully paid 456,235,032 (2020: 454,645,510) ordinary shares
with a nominal value of €0.01 per share. Shares in issue have one voting right each and no restrictions related to
dividends or return on capital. For more details please refer to Note 17 in the consolidated financial statements.
Share premium
The balance in share premium as at 31 December 2021 represents the excess over nominal value of €0.01 for
the 228,244,244 Shares issued to CCE shareholders on 28 May 2016 based on the adjusted closing stock price of
CCE ordinary Shares of €33.33 at the time of the CCEP Merger. The balance also includes €113 million excess over
nominal value of share-based payment awarded through to 31 December 2021.
Merger reserves
The Company determined that the consideration transferred to acquire CCIP and CCEG qualified for merger
relief under the Companies Act. Therefore, the excess consideration transferred over nominal value is excluded from
share premium. The cumulative balance of €8.5 billion includes the consideration transferred in excess of nominal value
of €0.01 for CCIP and CCEG of €5.5 billion and €2.9 billion, respectively.
Retained earnings
The balance in retained earnings represents the opening balance on 1 January 2021, combined with the result for the
period, dividends paid and the share-based payment reserve.
Dividends
Dividends are recorded within the financial statements in the period in which they are declared. Please refer to Note 17
in the consolidated financial statements.
Note 9
Financial risk management
Financial risk factors, objectives and policies
The Company’s activities expose it to several financial risks, market risk and liquidity risk. Financial risk activities are
governed by appropriate policies and procedures to minimise the uncertainties these risks create on the Company’s
future cash flows. Such policies are developed and approved by the Group’s treasury and commodities risk committee,
through the authority delegated to it by the Board.
Market risk
Market risk represents the risk that the fair value of future cash flows of a financial instrument will fluctuate due to
changes in market prices and includes interest rate risk, currency risk and other price risk such as commodity price risk.
Market risk affects outstanding borrowings, as well as derivative financial instruments.
Interest rates
The Company is subject to interest rate risk for its outstanding borrowings. To manage interest rate risk, the Company
maintains a significant proportion of its borrowings at fixed rates. The Company has not entered into any interest rate
swap agreements or other such instruments to hedge its interest rate risk during the periods presented.
Currency exchange rates
The Company’s exposure to the risk of changes in currency exchange rates relates primarily to its operating activities
denominated in currencies other than the functional currency, euro. To manage currency exchange risk arising from
future commercial transactions and recognised monetary assets and liabilities, foreign currency forward and option
contracts with external third parties are used. Such cash flow exposures are hedged using a combination of forward and
option contracts with third parties.
The Company is exposed to the risk of changes in currency exchange rates between US dollar and euro relating to its
US denominated borrowings.
In the statement of financial position, non-current derivative assets represent the fair value (level 2) of the cross
currency swap of the USD denominated debt to EUR.
Liquidity risk
Liquidity risk is actively managed to ensure that the Company has sufficient funds to satisfy its commitments.
The Company’s sources of capital include, but are not limited to, dividend income, public and private issuances of debt
and equity securities and bank borrowings. The Company believes its operating cash flow, cash on hand and available
short-term and long-term capital resources are sufficient to fund its working capital requirements, scheduled borrowing
payments, interest payments, capital expenditures, benefit plan contributions, income tax obligations and dividends to
its shareholders. Counterparties and instruments used to hold cash and cash equivalents are continuously assessed,
with a focus on preservation of capital and liquidity. Based on information currently available, the Company does not
believe it is at significant risk of default by its counterparties.
Note 10
Auditor’s remuneration
Please refer to Note 18 of the consolidated financial statements for details of the remuneration of the Company’s
auditor.
Note 11
Commitments
The Company has fully and unconditionally guaranteed unsecured borrowings outstanding as at 31 December 2021.
These borrowings have been issued by CCEP Finance (Ireland) DAC for €3.3 billion, and, prior to the acquisition, Coca-
Cola Amatil Limited for €1.1 billion and Coca-Cola Amatil (NZ) Limited for €46 million.
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Note 12
Significant events after the reporting period
In January 2022, the Group repaid prior to maturity €700 million of outstanding euro denominated borrowings
(€700 million 0.75% Notes 2022) due in February 2022.
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In this section
Other Information
195 Risk factors
203 Other Group information
218 Form 20-F table of cross references
220 Exhibits
222 Glossary
226 Useful addresses
227 Forward-looking statements
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Risk factors
This section examines the risks Coca-Cola Europacific Partners (CCEP) faces as a business. These risks may change
over time.
Geodemographic
COVID-19 could adversely impact our business and financial results.
Global or regional health pandemics impact our business and financial results. COVID-19 is a global stress event that is
impacting the entire CCEP value chain, causing disruption that requires well thought out business continuity plans and
response strategies. COVID-19 can cause high levels of employee absence, and requires employees to be flexible with
working from home when lockdowns are announced in our territories. In addition, there could be widespread supplier
issues, including risks of access to raw materials, specialist parts and labour being impacted due to cross border
restrictions on travel and movement of goods and services; the closure of entire customer sectors (e.g. leisure,
restaurants, pubs and bars); and changing consumer habits. Our material risk landscape may change rapidly due to the
emergence of new COVID-19 variants and the associated response from governments and societies e.g. vaccine
mandates and lockdowns.
Such events could have a material adverse impact on our sales volume, cost of sales, earnings, and overall financial
condition.
Global or regional catastrophic events could negatively impact our business and financial
results.
Our business may be affected by war, armed hostility and terrorism, major information technology (IT) outages and
large scale natural disasters especially those occurring in our territories or other major industrialised countries.
Other catastrophic events that could affect our business include the loss of senior employees, shortages of key raw
materials or widespread outbreaks of infectious disease such as COVID-19.
Such events could have a material adverse impact on our sales volume, cost of sales, earnings, inflation, volatility,
prices and availability of commodities, energy and other inputs as well as our overall financial condition.
Packaging
Waste and pollution, and the legal and regulatory responses to these issues, could adversely
impact our business.
Waste and pollution, particularly plastic and packaging waste, is a global issue affecting our business. Although the vast
majority of our packaging is fully recyclable, it is not always collected for recycling across our territories, and can end up
as land or marine litter. Concern about this, and the environmental impacts of our packaging, has led to laws and
regulations that aim to increase the collection and recycling of our packs, reduce packaging, through limiting the use of
single use plastic, introduce quotas for refillable packaging, reduce waste and littering, and introduce specific packaging
design requirements. For example, circular economy legislation has been introduced in France that requires a 50%
reduction in the number of single use plastic bottles by 2030 and the phasing out of single use plastic packaging entirely
by 2040. In Great Britain (GB) there are various regulatory proposals related to packaging, including the introduction of
deposit return schemes (DRS) and a move towards extended producer responsibility. In Spain, draft legislation would
require a 50% reduction in plastic beverage bottles and the introduction of refillable quotas. In Indonesia, the second
largest contributor to marine plastic debris, the Government has launched a plan to double plastic waste collection by
2025, reduce marine plastic debris by 70% and reduce waste at source by 30%.
If we fail to engage sufficiently with stakeholders to address concerns about packaging and recycling, or we are not able
to adapt our business to new legislation and regulation, it could result in higher costs through packaging taxes, producer
responsibility reform, damage to corporate reputation or investor confidence and a reduction of consumer acceptance of
our products and packaging.
New recycling technologies may not work or may not be developed quickly enough.
We are exploring innovative ways to achieve the packaging targets that we have set ourselves and those imposed by
legislation and regulation, for example by using plastic that has been recycled via enhanced/chemical recycling
technologies. There is a risk that these new technologies may not be developed quickly enough or may not work as well
as intended, which could limit our ability to mitigate the impact of restrictions on single use plastics. Also, these
technologies may be more expensive than current solutions, potentially reducing our profitability.
Cyber and social engineering attacks and IT infrastructure
Cyber attacks, or a deficiency in CCEP’s cyber security or a customer’s or supplier’s
cyber security, could negatively impact our business.
As our reliance on IT increases, so will the risks posed to our internal and third party systems from cyber incidents.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of
our data or information systems. It could involve gaining unauthorised access to systems, either unintentionally or
through an intentional attack (such as a war activities, state sponsored cyber terrorism, criminal attack, hacking or a
computer virus), to disrupt operations, corrupt data, steal confidential information, achieve financial gain or threaten
our Company or employees.
Our business processes require high levels of integration between our IT systems and the systems of third parties
(suppliers, customers, business partners). A cyber incident at any of those third parties can either spread to CCEP’s
systems or indirectly have a negative impact on CCEP’s ability to operate.
Companies that CCEP invests in, or that CCEP acquires, add to the risk exposure for cyber and social engineering
attacks of our Company. Any cyber incident at those organisations can have a negative impact (operationally, financially,
reputationally) on CCEP.
A cyber incident could disrupt our operations, compromise or corrupt data, or damage our brand image. Like many
companies, hackers target us, our customers and suppliers with social engineering attacks. While we have
procedures and training in place to protect us against these types of attacks, they can be successful, which could
also disrupt our operations, compromise or corrupt data, or damage our brand reputation. All of these outcomes
could negatively impact our financial results.
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Risk factors
CONTINUED
Economic and political conditions
The deterioration of global and local economic conditions could adversely affect CCEP’s
business performance and share price.
Geopolitical concerns are higher than last year, particularly with the war in Europe, the refugee crisis and other
effects.
Our performance is closely linked to the economic cycle in the countries, regions and cities where we operate. Normally,
strong economic growth in these areas results in greater demand for our products, while slow economic growth or
economic contraction decreases demand and drives down sales.
For example, adverse economic conditions decrease individuals’ disposable income and propensity to consume,
leading to the purchase of cheaper private label brands, or avoiding buying beverage products altogether. Those
consumers who do continue to buy our products may shift away from higher margin products and packages. A weak
economic climate could also increase the likelihood of customer delinquencies and bankruptcies, which would increase
the risk of accounts being deemed uncollectable. For these reasons a slowing economy would likely adversely impact
our business, operational results, financial condition and share price.
Although economic growth, globally, has rebounded strongly from the severe GDP declines that we witnessed at the
start of the pandemic, the war in Europe is likely to increase uncertainty and volatility. Much uncertainty remains relating
to future growth, employment and inflation including labour cost. These factors could directly impact our business,
operational results, financial conditions and share price. Monetary support from Central banks and significantly higher
fiscal spending from governments has been instrumental in limiting the short term economic impact of COVID-19. If this
support is not carefully unwound, it could result in widening regional economic disparities and potentially in sovereign
debt concerns in certain territories. Whether real or perceived, this could result in the availability of capital being limited,
which may restrict our liquidity.
Even in the absence of a market downturn, CCEP is exposed to substantial risk from volatility in areas such as
consumer spending and capital markets conditions, which may adversely affect the business and economic
environment. This in turn may adversely affect our business performance and share price.
Beyond the international economic situation, political risk stemming from increased polarisation is ever present, with the
threat of extremist parties in certain regions. This could affect the economic situation in our territories, which could
negatively impact our business and financial results.
Other key external economic and political factors also have the potential to specifically impact API including economic
and political instability in Papua New Guinea (PNG) and the impact on foreign currency liquidity, tariffs and
protectionism, geopolitical turbulence in the form of US-China trade wars and trade tension between Australia and
China. Low economic growth might be compounded in economies overly exposed to the tourism sector (e.g. Fiji, Bali
and NZ to a degree) due to both the people’s ability to travel depending on COVID-19 border restrictions and
willingness to travel once borders are re-opened.
API has an exposure to PNG liquidity risks and the associated impact on short-term profitability. Access to foreign
exchange in PNG is limited/restricted due to supply/demand imbalance of hard currency. The PNG Kina (PGK) is
considered to be overvalued. If the PNG Government requires assistance from the International Monetary Fund to fund
their budget deficit, they could require the Papua New Guinean Kina to be devalued which could significantly impact
API’s financial results upon translation of Kina earnings and balance sheet into Australian dollars.
Increases in costs, limitation of supplies, or lower than expected quality of raw materials could
harm our financial results.
The cost of our raw materials, ingredients, packaging materials or energy could increase over time. If that happens, and
if we are unable to pass the increased costs on to our customers in the form of higher prices, our financial results could
be adversely affected.
We use supplier pricing agreements and derivative financial instruments to manage volatility and market risk for certain
commodities. Generally, these hedging instruments establish the purchase price for these commodities before the time
of delivery. These pricing positions are taken in line with the Board’s agreed risk policy and the impact of these positions
is known and forecasted in our financial results. This may lock CCEP into prices that are ultimately greater or lower than
the actual market price at the time of delivery.
We continue to experience volatility in commodity prices mainly driven by war, political uncertainty, increased
protectionist policies and volatility impacts of capital markets.
Our suppliers could be adversely affected by a number of external events. These could include war, strikes, adverse
weather conditions, speculation, abnormally high demand, governmental controls, new taxes, national emergencies,
natural disasters, health crises, such as a pandemic, and insolvency. If this happens, and we are unable to find an
alternative source for our materials, our cost of sales, revenues, and ability to manufacture and distribute products could
be adversely affected.
The quality of the materials or finished goods delivered to us could be lower than expected. If this happens, we may
need to substitute those items for ones that meet our standards, or replace underperforming suppliers. This could
disrupt our operations and adversely affect our business. We continue to sign long-term supply agreements with
suppliers meeting our specifications and put contingency plans in place.
Changes in interest rates or our debt rating could harm our financial results and financial
position.
CCEP is subject to interest rate risk, and changes in our debt rating could have a material adverse effect on interest
costs and debt financing sources. Our debt rating can be materially influenced by a range of factors, including our
financial performance, acquisitions, and investment decisions, as well as the capital management activities of
The Coca-Cola Company (TCCC) and changes in the debt rating of TCCC.
The deterioration in political unity within the EU could significantly impact our financial results
and reduce our competitiveness in the marketplace.
There are concerns regarding the short and long-term stability of the euro and pound sterling and the euro’s ability to
serve as a single currency for a number of individual countries. These concerns could lead individual countries to revert,
or threaten to revert, to local currencies. In more extreme circumstances, they could exit from the EU, and the Eurozone
could be dissolved entirely.
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Risk factors
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Should this occur, the assets we hold in a country that reintroduces local currency could be subject to significant
changes in value when expressed in euros. Furthermore, the full or partial dissolution of the euro, the exit of one or
more EU member states from the EU or the full dissolution of the EU could cause significant volatility and disruption to
the global economy. This could affect our ability to access capital at acceptable financing costs, the availability of
supplies and materials, and demand for our products, all of which could adversely impact our financial results.
If it becomes necessary for us to conduct our business in additional currencies, we would be subjected to additional
earnings volatility as amounts in these currencies are translated into euros.
Consequences of Brexit could continue to impact our profits.
The EU and the United Kingdom (UK) Trade and Cooperation Agreement (TCA) was implemented through the
enactment of the European Union (Future Relationship) Act 2020 on 31 December 2020. The TCA provides the
framework for the relationship between the EU and the UK and consists of a free trade agreement, a partnership for
citizens’ security and a horizontal agreement on governance.
Besides trade in goods and services, the TCA also covers a broad range of areas, such as investment, competition,
state aid, tax transparency, air and road transport, energy and sustainability, data protection, and social security
coordination. Separately, the EU and the UK agreed a nuclear cooperation agreement and an agreement on security
procedures for exchanging and protecting classified information. The TCA provides that the EU and the UK may agree
to additional agreements covering other areas of cooperation in the future.
The near and medium-term impact of Brexit is still unclear and there is uncertainty about the future relationship between
the EU and the UK. However, we continue to manage the practical changes, working with both consumers and suppliers
as well as internally continuing to execute the necessary changes to our process to manage any administrative impact,
including border and customs requirements.
Political instability could negatively impact our operations and profits.
We continue to be exposed to risks associated with political instability in different parts of our territories. Although the
political situation in Catalonia is a dormant risk, should the situation deteriorate this could lead to major instability.
Such instability could result in prolonged political, economic and operational uncertainty for our business, our
customers and consumers, with potential impacts on tourism, private consumption and regulation.
Default by or failure of one or more of our counterparty financial institutions could cause us to
incur losses.
We are exposed to the risk of default by, or failure of, counterparty financial institutions with which we do business. This
risk may be heightened during economic downturns and periods of uncertainty in the financial markets.
If one of our counterparties became insolvent or filed for bankruptcy, our ability to recover amounts owed from or held in
accounts with the counterparty may be limited. In this event we could incur losses, which could negatively impact our
results and financial condition.
Market
We may not be able to respond successfully to changes in the marketplace.
CCEP operates in the highly competitive beverage industry and faces strong competition from other general and
speciality beverage companies. Our response to continued and increased competitor and customer consolidations and
marketplace competition may result in lower than expected net pricing of our products. In addition, external factors such
as the widespread outbreak of infectious disease (e.g. COVID-19) may adversely affect the market.
Changes in our relationships with large customers may adversely impact our financial
results.
A significant amount of our volume is sold through large retail chains, including supermarkets and wholesalers. Many of
these customers are becoming more consolidated, or forming buying groups, which increases their purchasing power.
They may, at times, seek to use this to improve their profitability through lower prices, increased emphasis on generic
and other private label brands, or increased promotional programmes and payment of rebates.
Competition from hard discount retailers and online retailers continues to challenge traditional retail outlets. This can
increase the pressure on all customer margins, which may then be reflected in pressure on suppliers such as CCEP.
In addition, from time to time a customer or customers choose(s) to temporarily stop selling some of our products as a
result of disputes we may have with them.
These factors, as well as others, can have a negative impact on the availability of CCEP’s products, and our profitability.
Legal, regulatory and tax
Legislative or regulatory changes (including changes to tax laws) that affect our products,
distribution, or packaging could reduce demand for our products or increase our costs.
CCEP’s business model depends on making our products and packages available in multiple channels and locations.
Laws that restrict our ability to do this could negatively impact our financial results. These include laws affecting the
promotion and distribution of our products, laws that require deposit return schemes (DRS) to be introduced for certain
types of packages, or laws that limit our ability to design new packages or market certain packages. The packaging and
climate change and water risk factors discuss global issues such as climate change, resource scarcity, marine litter and
water scarcity further.
In addition, taxes or other charges imposed on the sale of our products could increase costs or cause consumers to
purchase fewer of them. Many countries in Europe, including countries in which CCEP operates, are looking to
implement or increase such taxes. These may relate, for example, to the use of non-recycled plastic in beverage
packaging, or the use of sugar or other sweeteners in our beverages (see also the risk factors regarding packaging and
perceived health impact of our beverages and ingredients, and changing consumer buying trends).
On a European level the regulation adopted in December 2020 laying down the EU’s multi annual financial framework
for 2021-2027 includes an “own resource”, applicable as from 1 January 2021, which consists of the application of a
uniform call rate to the weight of plastic packaging waste generated in each member state that is not recycled. The
uniform call rate will be €0.80 per kilogram. Every EU member state decides how to collect the money needed to fulfil its
contribution. However, we expect some member states to install some sort of recoupment mechanism (a tax) at national
level to retrieve the outlays made to the EU. Spain has already proposed a unique plastic tax to be implemented in
2021, and GB is expected to introduce a plastic tax independent of the European levy by April 2022.
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EU member states are in the process of adopting implementing regulations to comply with the obligations of the Single
Use Plastics Directive. The obligations include a 90% collection target for plastic bottles by 2029, a requirement that
plastic bottles contain at least 30% recycled content by 2030 and a requirement for plastic beverage bottles to include
tethered closures by 2024. The deadline for transposing the Single Use Plastics Directive into national law was 3 July
2021. Some member states go further than the minimum requirements of the Directive and have adopted stricter
regulations. For example, circular economy legislation has been introduced in France, which requires a 50% reduction
in the number of single use plastic bottles by 2030 and the phasing out of single use plastic packaging entirely by 2040.
Additional taxes levied on CCEP could harm our financial results.
CCEP’s tax filings for various periods are or may be subject to current or future audit by tax authorities. These audits
may result, or have resulted, in assessments of additional taxes, as well as interest and/or penalties, and could
adversely affect our financial results.
Changes in tax laws, regulations, court rulings, related interpretations, and tax accounting standards in countries in
which we operate, or if we are unsuccessful in defending our tax positions, may adversely affect our financial results.
In addition to legislative initiatives at EU level, several countries in which we operate also have or are planning other
legislative or regulatory measures to reduce the use of single use plastics, including plastic beverage bottles, and/or to
increase plastic collection and recycling. Such measures may include implementing a DRS under which a deposit fee is
added to the consumer price, which is refunded to them if and when the bottle is returned. Other measures may include
rules on recycled content, individual collection or recycling targets, or a ”plastic tax”. In GB, as part of our producer
responsibility obligations, we are required to purchase Packaging Recovery Notes (PRN) to show that we meet our
responsibilities for recycling and recovery of packaging waste. While we have processes in place to manage our PRN
exposure, we are subject to price volatility in PRN, which could increase costs for our business in the future.
DRS for plastic beverage bottles currently exist in some of the countries in which we do business, such as in Norway
(which is part of the European Economic Area (EEA) but is not an EU member state), the Netherlands (which has
recently extended its DRS to cover all PET bottles from July 2021), Germany and Sweden. Other countries have
recently adopted regulations for DRS for beverage packaging (such as Scotland where DRS will start in July 2022 that
includes PET plastic, cans and glass) or have adopted legislation paving the way for DRS (such as Portugal, England
and Wales, and recently Belgium).
In addition to the regulations on packaging, plastic and waste in general, concern over climate change has led to more
environmental legislative and regulatory initiatives at an EU and national level. These include areas such as greenhouse
gas (GHG) emissions, water use and energy efficiency. At the EU level, as part of the EU Green Deal, the proposed
European Climate law provides for a significant increase in the EU GHG emissions reduction target for 2030, in line
with the EU’s goal of becoming carbon neutral by 2050. Also, at a national level, we have seen a number of countries in
which we operate introduce, or start the process of introducing, legislation and regulation.
Additionally, amounts we may need to repatriate for the payment of dividends, share buybacks, interest on debt,
salaries and other costs may be subject to additional taxation when repatriated.
CCEP may be exposed to risks in relation to compliance with anti-corruption laws and other
key regulations and economic sanctions programmes.
CCEP and its subsidiaries are required to comply with the laws and regulations of the various countries in which they
conduct business, as well as certain laws of other countries, including the US. In particular, our operations are subject to
anti-corruption laws such as the US Foreign Corrupt Practices Act of 1977 (the FCPA), the UK Bribery Act 2010 (UKBA),
the Spanish and Portuguese Criminal Codes and Sapin II and other key regulations such as the corporate criminal
offence provisions of the UK Criminal Finances Act 2017 and the General Data Protection Regulation (GDPR). We are
also subject to economic sanction programmes, including those administered by the United Nations, the EU and the
Office of Foreign Assets Control of the US Department of the Treasury (OFAC), and regulations set forth under the
US Comprehensive Iran Accountability Divestment Act.
A GDPR violation could lead to fines of up to 4% of our global annual turnover, as well as negatively affect our
reputation. Since the recent European Court of Justice Schrems II ruling, EU personal data transfers to third
countries are subject to new compliance requirements, including risk assessments of foreign government
surveillance, execution of standard contractual clauses with third parties and potential supplemental measures.
Non-compliance with such transfer requirements would result in a GDPR violation.
The FCPA prohibits providing anything of value to foreign officials for the purposes of obtaining or retaining business
or securing any improper business advantage (active bribery). In our business dealings we may deal with both
governments and state owned business enterprises, the employees of which are considered foreign officials for the
purposes of the FCPA.
The provisions of the UKBA extend beyond bribery of foreign public officials, covering both public and private sector
bribery. They are more onerous than the FCPA in a number of respects, including jurisdiction, non-exemption of
facilitation payments, the receipt of bribery (passive bribery), penalties and in some cases imprisonment.
We do not currently operate in jurisdictions that are subject to territorial sanction imposed by OFAC or other relevant
sanction authorities. However, such economic sanction programmes will restrict our ability to engage or confirm
business dealings with certain sanctioned countries and with sanctioned parties.
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Violations of the above, including anti-corruption, GDPR, economic sanctions, competition law or other applicable laws
and regulations are punishable by civil and sometimes criminal penalties for individuals and companies. Currently
competition regulators are active in this sector. These penalties can vary from fines, denial of export privileges,
injunctions, asset seizures, debarment from government contracts (and termination of existing contracts) to revocations
or restrictions of licences, as well as criminal fines and imprisonment. Potentially any violation within one of these
compliance risk areas could have a negative impact on our reputation and consequently on our ability to win future
business.
Having effective compliance programmes in place can never give the assurance that related policies or procedures will
be followed at all times, or always detect and prevent violations of the applicable laws by our employees, consultants,
agents or partners.
Legal changes could affect our status as a foreign corporation for US federal income tax
purposes, or limit the US tax benefits we receive from engaging in certain transactions.
In general, for US federal income tax purposes, a corporation is considered a tax resident in the jurisdiction of its
organisation or incorporation. Because CCEP is incorporated under the laws of England and Wales, it would generally
be classified as a non-US corporation (and therefore a non-US tax resident) under these rules. However, section 7874
of the US Internal Revenue Code of 1986, as amended (IRC), provides an exception under which a non-US
incorporated entity may, in certain circumstances, be treated as a US corporation for US federal income tax purposes.
Under current law, CCEP expects to be treated as a non-US corporation for US federal income tax purposes. However,
section 7874 of the IRC and the related US Treasury regulations are complex and there is limited guidance as to their
application. In addition, changes to section 7874 of the IRC or the US Treasury Regulations could adversely affect
CCEP’s status as a foreign corporation for US federal tax purposes, and any such changes could have prospective or
retroactive application. If CCEP were to be treated as a US corporation for US federal income tax purposes, it could be
subject to materially greater US tax liability than as a non-US corporation.
Future changes to tax laws in the countries in which CCEP operates could adversely affect our
business.
Tax is a complex and evolving area where laws and their interpretation are changing regularly leading to the risk of
increased or unexpected tax costs and or additional tax reporting obligations.Tax laws could change on a prospective or
retroactive basis. Any such changes could adversely affect our business and its affiliates, and there is no assurance that
we would be able to maintain any particular worldwide effective corporate tax rate.
The Organisation for Economic Co-operation and Development (OECD) and the Inclusive Framework have agreed to
work together to create a consistent and coordinated approach to reform the international taxation rules to address the
tax challenges arising from the digitilisation of the economy and to ensure that multinational enterprises (MNEs) pay a
fair share of tax wherever they operate and generate profits (a two pillar solution). On 20th December 2021, the Global
Anti Base Erosion Model Rules (Pillar Two) was published. These rules provide for a minimum level of taxation on the
income arising in each of the jurisdictions where large MNEs operate. The OECD is expected to release detailed
commentaries and an implementation framework in 2022, with intended implementation of these rules in 2023.
Climate change and water
Global issues such as climate change, resource and water scarcity, and the legal and regulatory
responses to these issues, could adversely impact our business.
Climate change – caused by GHG emissions, in part from businesses such as ours – is resulting in global average
temperature increases and extreme weather conditions around the world. This has an adverse impact on our business.
CCEP’s products rely heavily on water, and climate change may exacerbate water scarcity and cause a deterioration of
water quality in affected regions. It could also decrease agricultural productivity in certain regions of the world, which
could limit the availability or increase the cost of key raw materials that we use to produce our products. More frequent
extreme weather events, such as storms or floods in our territories, could disrupt our facilities and distribution network,
further impacting our business.
Concern over climate change has led to legislative and regulatory initiatives aimed at limiting GHG emissions. Policy
makers continue to consider proposals that could impose mandatory requirements on GHG emissions reduction and
reporting. Other climate laws could affect other areas of our business, such as production, distribution, packaging or the
cost of raw materials. This in turn could negatively impact our business and financial results.
Water is the primary ingredient in most of our products. It is also vital to our manufacturing processes and is needed to
produce the agricultural ingredients that are essential to our business. Water scarcity and a deterioration in the quality of
available water sources in our territories or to our supply chain, even if temporary, may result in increased production
costs or capacity constraints. This could adversely affect our ability to produce and sell our beverages, and increase our
costs.
As part of our commitment to addressing our climate change impacts, we are investing in technologies that improve the
energy efficiency of our operations and reduce GHG emissions related to our packaging, cold drink equipment (CDE)
and transportation. In general, the cost of these investments is greater than investments in less energy efficient
technologies, and the period of return is often longer. Although we believe these investments will provide long-term
benefits, there is a risk that we may not always achieve our desired returns.
Perceived health impact of our beverages and ingredients, and changing
consumer buying trends
Health concerns could reduce consumer demand for some of our products, impacting our
financial performance.
There is concern that the public health consequences of obesity, particularly among young people is increasing.
Health advocates and dietary guidelines suggest that consumption of sugar sweetened beverages is a cause of
increased obesity rates, and are encouraging consumers to reduce or eliminate consumption of such products. In
addition, governments have introduced stronger regulations around the marketing, labelling, packaging, or sale
of sugar sweetened beverages. These concerns and regulations could reduce demand for, or increase the cost of, our
sugar sweetened beverages.
Consumer trends have also led to an increased demand for low calorie soft drinks, water, enhanced water, isotonics,
energy drinks, teas, coffees and beverages with natural ingredients. If we fail to meet this demand by not providing a
broad enough range of products, this could adversely affect our business and financial results.
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Competitiveness, business transformation and integration
CCEP may not identify sufficient initiatives to realise its cost saving goals to stay competitive.
We continue to assess potential opportunities for improvements as part of the ongoing business strategy to enable us to
remain competitive in the future. The strategic objective is to ensure our competitiveness in the future and encompasses
three areas: technology transformation, supply chain and commercial improvements, and working efficiently with our
partners and franchisors. The focus of these initiatives is to offset potential future increases in costs, such as materials
or headcount, and to allow investment in potential growth areas.
The initiatives are complex due to their multi functional and multi country nature, which cover many parts of
our business. Ineffective coordination and control over single initiatives and interdependent initiatives could result in us
failing to realise the expected benefits. Continual change might trigger change fatigue among our people or social
unrest in the event that such changes result in industrial action.
Restructuring could cause labour and union unrest.
Restructuring can lead to labour and union unrest. Since CCEP’s inception, we have restructured in all countries and
functions, resulting in a combination of redeployment and layoffs. While we continue to look for opportunities to enable
CCEP to maintain and improve its position within the market, this might have a negative impact on our relationship with
our employee representatives and social partners, and could cause labour and union unrest. The CCEP’s Human
Rights Restructuring guidelines set out our commitment to identify, prevent and mitigate adverse human rights impacts
resulting from or caused by our business activities. In the past, we have sought to minimise union unrest through
constructive social dialogue e.g. on employability, which has not affected our ability to achieve our objectives. We would
like to ensure that we continue this positive dialogue with the social partners. This could include more attention to
resource and workforce planning, that better anticipates the capabilities and technology savviness needed in the future.
Miscalculation of CCEP’s need for infrastructure investment could impact its
financial results.
To support revenue growth we are investing in our infrastructure, including CDE, fleet, technology, sales force, digital
capability and production equipment.
There is a risk that these investments do not generate the projected returns, either because of market or technological
changes, ineffective adoption of capabilities, or because the projected requirements of these investments may differ
from actual levels if product demands do not develop as anticipated.
Our infrastructure investments are anticipated to be long term in nature, and it is possible that they may not generate
the expected return due to future changes in the marketplace. This could adversely affect CCEP’s financial results.
Technology failures could disrupt our operations and negatively impact our business.
CCEP relies extensively on IT systems to process, transmit, store and protect electronic information. For example, our
production and distribution facilities and inventory management all use IT to maximise efficiencies and minimise costs.
Communication between our employees, customers, and suppliers also depends, to a large extent, on IT.
Our IT and operational technology (OT) systems may be vulnerable to interruptions due to events that may be beyond
our control. These include, but are not limited to, natural disasters, telecommunications failures, power outages,
hardware failures, human error and security issues e.g. cyber attacks. We have IT security controls, processes and
disaster recovery plans in place, but they may not be adequate or implemented effectively enough to ensure that our
operations are not disrupted. Cyber attacks in one country might impact our ability to do business in other countries
due to the dependencies on information systems and applications. Cyber attacks against CCEP’s suppliers or system
providers might disrupt our business.
We continually invest in IT to ensure our technology solutions are current and up to date. If we miscalculate the level of
investment needed, our software, hardware and maintenance practices could become out of date, and this could result
in disruptions to our business.
In addition, when we implement new systems or system upgrades (such as SAP and its modules), there is a risk that
our business may be temporarily disrupted during the implementation period. Centralisation of IT systems might
increase the impact of a failure of information technology or applications.
When investments in or acquisitions of companies are undertaken, such as the Acquisition of CCL, the integration of IT
systems and applications for those entities will increase the complexity and, therefore, the risk level of our IT
infrastructure.
We may not be able to execute our strategy to pursue suitable acquisitions or may have
difficulty integrating acquired businesses.
Our strategy involves, in part, pursuing disciplined and attractive investments, which are intended to create a positive
net present value for total shareholder return. Our efforts to execute this strategy may be affected by our ability to
identify suitable acquisition targets, negotiate and close acquisition and development transactions. Further, to the extent
that we are able to identify suitable investments, there are risks that integration of those investments does not proceed
as anticipated or that management attention is diverted by such opportunities, and there is no guarantee that these
investments will support the growth of CCEP or achieve the intended return.
People and wellbeing
Increases in the cost of wages and employee benefits, including pension retirement benefits,
could impact our financial results and cash flow.
The increases in the cost of wages and employee benefits, including retirement benefits, may affect our financial results
and cash flow.
The increasing inflationary trend combined with high employment levels we see globally will put pressure on future
wage negotiations and the anticipated salary budget. CCEP is engaged in a dialogue with social partners on this issue
in which no promises are made to fully compensate the rising cost of living but to look at the whole picture over the
longer term: a large employee workforce especially in front line functions, year on year salary increases awarded, year
on year growth and value creation together with customers and shareholders. It is about long-term vision. However, it
cannot be ruled out that for tactical reasons unions will take action here and there.
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Risk factors
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Adverse effects in our people’s health, wellbeing and safety could impact our business.
The COVID-19 pandemic may continue to affect the business with a higher degree of mental health issues and
increased absence rates for employees. Wellbeing initiatives require new approaches to reach all employees, especially
when restructuring takes place, which potentially increases us to the risk of long term absence. As a result, we could
face a loss of production.
Failure to abide by our health and safety policies and guidelines could result in injuries and death
of our people.
The increasing importance of flexible working and future work topics brings in the challenge of attracting, retaining and
motivating existing and future employees, which exposes us to the risk of not having the right talent, required technical
skillset, or expected levels of productivity. As a result, we could fail to achieve our strategic objectives and could
experience a decline in employee engagement, industrial action, suffer from reputational damage or litigation.
Relationship with TCCC and other franchisors
Our business success, including our financial results, depends on our relationship with TCCC
and other franchisors.
Around 90% of our revenue for the year ended 31 December 2021 was derived from the distribution of beverages under
agreements with TCCC. We make, sell and distribute products of TCCC through fixed term bottling agreements with
TCCC, which typically include the following terms:
• We purchase our entire requirement of concentrates and syrups for Coca-Cola trademark beverages (sparkling
beverages bearing the trademark “Coca-Cola” or the “Coke” brand name) and allied beverages (beverages of TCCC
or its subsidiaries, but not Coca-Cola trademark beverages or energy drinks) from TCCC. Prices, terms of payment,
and other terms and conditions of supply are determined from time to time by TCCC at its sole discretion.
• There are no limits on the prices that TCCC may charge for concentrate. TCCC maintains current effective
concentrate incidence at the same levels that CCE, CCIP and CCEG had in place before the Merger, provided certain
specific mutually agreed metrics are achieved.
• Much of the marketing and promotional support that we receive from TCCC is at its discretion. Programmes may
contain requirements, or be subject to conditions, established by TCCC that we may not be able to achieve or satisfy.
The terms of most of the marketing programmes do not and will not contain an express obligation for TCCC to
participate in future programmes or continue past levels of payments into the future.
• Our bottling agreements with TCCC are for fixed terms, and most of them are renewable only at the discretion of
TCCC at the conclusion of their terms. A decision by TCCC not to renew a fixed term bottling agreement at the end of
its term could substantially and adversely affect our financial results.
• We are obligated to maintain sound financial capacity to perform our duties, as required and determined by TCCC at
its sole discretion. These duties include, but are not limited to, making certain investments in marketing activities to
stimulate the demand for products in our territories and making infrastructure improvements to ensure our facilities
and distribution network are capable of handling the demand for these beverages.
Disagreements with TCCC concerning business issues may lead TCCC to act adversely to our interests with respect to
these relationships.
Product quality
Our business could be adversely affected if CCEP, TCCC or other franchisors and
manufacturers of the products we distribute are unable to maintain a positive brand image
as a result of product quality issues.
Our success depends on our products, and those of TCCC and other franchisors, having a positive brand image among
customers and consumers. Product quality issues, whether real or perceived, or allegations of product contamination,
even if false or unfounded, could tarnish the image of our products and result in customers and consumers choosing
other products.
Product liability claims or product recalls could also negatively impact our brand image and business results. We could
be liable if the consumption of our products causes injury or illness. We could also be required to recall products if they
become unsafe to consume through contamination, damage or because of labelling errors such as the failure to declare
an allergen.
Adverse publicity around health and wellness concerns, water usage, customer disputes, labour relations, product
ingredients, packaging recovery, and the environmental impact of products could negatively affect our overall reputation
and our products’ acceptance by our customers and consumers. This could happen even when the publicity results from
actions occurring outside our territory or control. Similarly, if product quality issues arise from products not manufactured
by us but imported into one of our territories, our reputation and consumer goodwill could be damaged.
Opinions about our business, including opinions about the health and safety of our products, can spread quickly through
social media. If we fail to respond to any negative opinions effectively and in a timely manner, this could harm the
perception of our brands and damage our reputation, regardless of the validity of the statements, and negatively impact
our financial results.
Other risks
Our business is vulnerable to products being imported from outside our territories, which
adversely affects our sales.
The territories in which we operate are susceptible to the import of products manufactured by bottlers from countries
outside our territories. When these imports come from members of the EEA, we are prohibited from taking action to stop
such imports.
Adverse weather conditions could limit the demand for our products.
Our sales are significantly influenced by weather conditions in the countries in which we operate. In particular, due to
the seasonality of our business, cold or wet weather during the summer months may have a negative impact on the
demand for our products and contribute to lower sales. This could have an adverse effect on our financial results.
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Risk factors
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Legal claims against our vendors could affect their ability to provide us with products and
services, which could negatively impact our financial results.
Many of our vendors supply us with products and services that rely on certain intellectual property rights or other
proprietary information, and are subject to other third party rights, laws and regulations. If these vendors face legal
claims brought by third parties or regulatory authorities, they could be required to pay large settlements or even cease
providing us with products and services as well as exposing CCEP to risk.
These outcomes could require us to change vendors or develop replacement solutions or be subject to third party
claims. This could result in business inefficiencies or higher costs, which could negatively impact CCEP’s financial
results.
Litigation or legal proceedings could expose us to significant liabilities and damage our
reputation.
CCEP is a party to various litigation claims and legal proceedings. We evaluate these claims and proceedings to assess
the likelihood of unfavourable outcomes and to estimate, if possible, the amount of potential losses. Based on these
assessments and estimates, we establish reserves or disclose the relevant claims or proceedings, as appropriate.
These assessments and estimates are based on the information available to management at the time and involve a
significant amount of management judgement. As a result, actual outcomes or losses may differ materially from those in
the current assessments and estimates.
We have bottling and other business operations in markets with strong legal compliance environments. Our policies and
procedures require strict compliance with all laws and regulations that apply to our business operations, including those
prohibiting improper payments to government officials. Those policies are supported by leadership and are ingrained in
our business through our compliance culture and training. Nonetheless, we cannot guarantee that our employees will
always ensure full compliance with all applicable legal requirements.
Improper conduct by our employees could damage our reputation or lead to litigation or legal proceedings that could
result in civil or criminal penalties, including substantial monetary fines as well as disgorgement of profits.
TCCC and Olive Partners, S.A. (Olive Partners) hold significant shareholdings in CCEP and their
views may differ from those of our public shareholders.
Around 19% and 36% of CCEP’s Shares are owned by European Refreshments (ER, a wholly owned subsidiary of
TCCC) and Olive Partners respectively. As a result of their shareholdings, TCCC and Olive Partners can influence (or,
potentially, control the outcome of) matters requiring shareholder approval, subject to our Articles of Association and the
Shareholders’ Agreement. The views of TCCC and Olive Partners may not always align with each other or our other
shareholders.
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Shareholder information
The Company was incorporated in England and Wales on 4 August 2015, as a private company under the Companies
Act 2006 (the Companies Act). On 4 May 2016, the Company was reregistered as a public company limited by shares
and changed its name from Coca-Cola European Partners Limited to Coca-Cola European Partners plc.
On 10 May 2021, the Company changed its name from Coca-Cola European Partners plc to Coca-Cola Europacific
Partners plc. It is registered at Companies House, Cardiff, under company number 9717350. The business address for
Directors and senior management is Pemberton House, Bakers Road, Uxbridge, UB8 1EZ, England.
The Company is resident in the UK for tax purposes. Its primary objective is to make, sell and distribute ready to drink
beverages.
Annual General Meeting
It is intended that the Company’s 2022 Annual General Meeting (AGM) will be held at Pemberton House, Bakers Road,
Uxbridge, UB8 1EZ in May 2022. However, at the date of this report, there remains continued uncertainty regarding
COVID-19 and the Company may be required to make alternative arrangements.
Registered shareholders will be sent a Notice of AGM, or notice of availability of the Notice of AGM, closer to the time of
the AGM, and will be notified of any change affecting the AGM through an appropriate channel.
Directors and senior management
Biographies of the Board of Directors and senior management are set out on pages 67 to 73. Sol Daurella and Alfonso
Líbano Daurella are first cousins.
Service contracts and loss of office arrangements
It is the Remuneration Committee’s policy that there should be no element of reward for failure. When considering
payments in the event of a loss of office, it takes account of the individual circumstances, including the reason for the
loss of office, Group and individual performance, contractual obligations of both parties as well as share and pension
plan rules.
Service contracts for Executive Directors provide for a notice period of not more than 12 months from CCEP and not
more than 12 months from the individual. The standard Executive Director service contract does not confer any right to
additional payments in the event of termination. However, it does reserve the right for the Group to impose garden leave
(i.e. leave with pay) on the Executive Director during any notice period. In the event of redundancy, benefits would be
paid according to CCEP’s redundancy guidelines for GB prevailing at that time. Executive Directors may be eligible for a
pro rata bonus for the period served, subject to performance, but no bonus will be paid in the event of gross misconduct.
The treatment of unvested long-term incentive awards is governed by the rules of the relevant plan and depends on the
reasons for leaving. The cost of legal fees spent on reviewing a settlement agreement on departure may be provided
where appropriate. The Company also reserves the right to pay for outplacement services as appropriate.
The Non-executive Directors (NEDs), including the Chairman of the Board, do not have service contracts but have
letters of appointment. NEDs are not entitled to compensation on leaving the Board.
Directors and senior management interest in shares
Other than Sol Daurella, Alfonso Líbano Daurella and José Ignacio Comenge, who indirectly owned 7.2%
(32,746,168 Shares), 1.4% (6,573,282 Shares), and 1.7% (7,834,271 Shares) of the Shares outstanding as of
25 February 2022, respectively, no Director or member of senior management individually owned more than 1% of the
Company’s Shares as of 25 February 2022.
Table 1 shows the number of share options held by Directors and other members of senior management as at
25 February 2022, including the applicable exercise price and the date when the applicable exercise period ends.
Other employee related matters
Note 18 to the consolidated financial statements provides a breakdown of employees by main category of activity. As at
31 December 2021, we had around 33,000 employees, of whom none were located in the US. We have seen a
significant increase in the number of employees as a result of API integration. A number of our employees in Europe
and API are covered by collectively bargained labour agreements, most of which do not expire. However, wage rates, in
some countries must be renegotiated at various dates throughout 2022. We believe we will be able to renegotiate these
wage rates with satisfactory terms.
Table 1
Share options held by Directors and other members of senior management as at
25 February 2022
Name
Grant date
Expiry date
Exercise price
Damian Gammell
5 November 2015
5 November 2025
Stephen Moorhouse
31 October 2013
31 October 2023
Stephen Moorhouse
30 October 2014
30 October 2024
Veronique Vuillod
5 November 2012
5 November 2022
Veronique Vuillod
31 October 2013
31 October 2023
Veronique Vuillod
30 October 2014
30 October 2024
$39.00
$31.46
$32.51
$23.21
$31.46
$32.51
Total number of Shares subject
to outstanding options including
exercisable and unvested options
324,643
11,446
11,074
2,069
1,777
3,200
203
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Nature of trading market
The Company has one class of ordinary shares. These shares are traded on the Nasdaq Stock Market (XNAS), London
Stock Exchange (LSE), Euronext Amsterdam (AEX) and the Spanish Stock Exchanges (of which the lead exchange is
Madrid (MADX)).
Listing information
Ticker symbol (all exchanges)
ISIN code
Legal entity identifier
CUSIP
SEDOL number (XNAS)
SEDOL number (LSE)
SEDOL number (AEX)
SEDOL number (MADX)
CCEP
GB00BDCPN049
549300LTH67W4GWMRF57
G25839104
BYQQ3P5
BDCPN04
BD4D942
BYSXXS7
Share capital
The Articles of Association of the Company (the Articles) contain no upper limit on the authorised share capital of the
Company. Subject to certain limitations under the Shareholders’ Agreement, the Board has the authority to offer, allot,
grant options over or otherwise deal with or dispose of shares to such persons, at such times, for such consideration
and upon such terms as the Board may decide, only if approved by ordinary resolution of our shareholders.
As at 31 December 2021 the Company had 456,235,032 Shares issued and fully paid. As at 25 February 2022, the
Company had 456,382,668 Shares issued and fully paid.
Under the Shareholders’ Agreement and the Articles, the Company is permitted to issue, or grant to any person rights to
be issued, securities, in one or a series of related transactions, in each case representing 20% or more of our issued
share capital, only if approved in advance by special resolution of our shareholders.
Pursuant to this authority, our shareholders have passed resolutions allowing a maximum of a further 303,523,712
Shares (as of 25 February 2022) to be allotted and issued, subject to the restrictions set out below:
1. pursuant to a shareholder resolution passed on 26 May 2021 regarding the authority to allot new shares, the Board
is authorised to allot shares and to grant rights to subscribe for or convert any security into shares:
a. up to a nominal amount of €1,517,618.56 (representing 151,761,856 Shares; such amount to be reduced by any
allotments or grants made under paragraph 1(b) below in excess of such sum); and
b. comprising equity securities (as defined in the Companies Act) up to a nominal amount of €3,035,237.12
(representing 303,523,712 Shares; such amount to be reduced by any allotments or grants made under
paragraph 1(a) above) in connection with an offer by way of a rights issue:
i.
ii.
to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and
to holders of other equity securities as required by the rights of those securities or as the Board otherwise
considers necessary,
and so that the Board may impose any limits or restrictions and make any arrangements which it
considers necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal,
regulatory or practical problems in, or under the laws of, any territory or any other matter; and
2. pursuant to a shareholder resolution passed on 26 May 2021 regarding authority to disapply pre-emption rights, the
Board is authorised to allot equity securities (as defined in the Companies Act) for cash under the authority given by
the shareholder resolution described in paragraph 1 above and/or to sell shares held by the Company as treasury
shares for cash as if section 561 of the Companies Act did not apply to any such allotment or sale, such power to be
limited:
a.
to the allotment of equity securities and sale of treasury shares in connection with an offer of, or invitation to
apply for, equity securities (but in the case of the authority granted under paragraph 1(b) above, by way of a
rights issue only):
i.
ii.
to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and
to holders of other equity securities, as required by the rights of those securities, or as the Board otherwise
considers necessary,
and so that the Board may impose any limits or restrictions and make any arrangements which it considers
necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or
practical problems in, or under the laws of, any territory or any other matter; and
b.
in the case of the authority granted under paragraph 1(a) above and/or in the case of any sale of treasury
shares, to the allotment of equity securities or sale of treasury shares (otherwise than under paragraph 2(a)
above) up to a nominal amount of €227,642.78 (representing 22,764,278 Shares).
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Shares not representing capital
None.
Table 2
Outstanding share-based payment awards
Shares held by CCEP
We are not permitted under English law to hold our own Shares unless they are repurchased by us and held in treasury.
At our 2021 AGM, our shareholders passed a special resolution that allows us to buy back our own Shares in the
market as permitted by the Companies Act. On 13 February 2020, the Board announced a share buyback programme
of up to €1 billion. All Shares repurchased as part of the buyback programme have been cancelled. Details of the
Shares bought back are provided under Share buyback programme below. In light of macroeconomic uncertainty
brought about by the outbreak of COVID-19, on 23 March 2020, the Company announced the suspension of the
buyback programme until further notice.
Share-based payment awards
Table 2 shows the share-based payment awards outstanding under each of the CCE 2010 Incentive Award Plan (2010
Plan) and the Long-Term Incentive Plan 2016 (CCEP LTIP) as at 31 December 2021 and 25 February 2022.
For more details about the share plans and awards granted, see Note 22 to the consolidated financial statements on
pages 170-171.
History of share capital
Table 3 page 206 sets out the history of our share capital for the period from 1 January 2019 until 25 February 2022.
Share buyback programme
The maximum number of Shares authorised for purchase at the 2021 AGM was 45,528,556 Shares, representing 10%
of the issued Shares at 13 April 2021, reduced by the number of Shares purchased, or agreed to be purchased,
between 13 April and 26 May 2021. No Shares have been purchased under the 2021 shareholder authority as at the
date of this report. The existing authority to buy back Shares will expire at the 2022 AGM. We intend to seek
shareholder approval to renew the authority to buy back Shares.
US shareholders
To the knowledge of the Company, 211 holders of record with an address in the US held a total of 456,311,098 Shares
(or 99% of the total number of issued Shares outstanding) as at 25 February 2022. However, some Shares are
registered in the names of nominees, meaning that the number of shareholders with registered addresses in the US
may not be representative of the number of beneficial owners of Shares resident in the US.
Plan
2010 Plan
CCEP LTIP
Date of award
(dd/mm/yy)
Type of
award(A)
Total number of
Shares awarded to
employees
outstanding as at
31 December 2021
Total number of
Shares awarded to
employees
outstanding as at
25 February 2022(B)
Price per Share
payable on
exercise/
transfer ($)
Expiration
date
(dd/mm/yy)
05/11/12
31/10/13
31/10/13
30/10/14
05/11/15
01/03/19
01/03/19
11/12/19
11/12/19
17/03/20
17/03/20
30/06/20
14/12/20
14/12/20
26/06/21
26/06/21
26/06/21
26/06/21
26/06/21
26/06/21
29/09/21
29/09/21
25/11/21
25/11/21
Option
Option
Option
Option
Option
PSU
RSU
PSU
RSU
PSU
RSU
RSU
PSU
RSU
PSU
PSU
RSU
RSU
RSU
RSU
PSU
RSU
PSU
RSU
150,417
3,051
488,881
132,571
3,051
375,211
1,105,404
1,089,935
1,009,881
1,009,881
375,088
334,792
34,684
13,273
5,953
33,694
11,950
5,953
391,861
390,389
37,986
1,334
14,816
4,056
330
312
651
330
620
312
453,555
42,075
976
340
37,674
1,334
14,816
4,056
297
312
—
330
620
312
453,555
42,075
976
340
23.21
31.46
31.46
32.51
39.00
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
05/11/22
30/06/23
31/10/23
30/10/24
05/11/25
01/03/22
01/03/22
01/03/22
01/03/22
17/03/23
17/03/23
01/03/22
17/03/23
17/03/23
01/03/22
17/03/23
20/02/22
01/03/22
22/02/23
17/03/23
15/03/24
15/03/24
15/03/24
15/03/24
(A) PSU is performance share unit. RSU is restricted stock unit.
(B) When an employee leaves CCEP, the expiration date of their options is shortened so options with a new expiration date may appear
between the year end and the later reporting date. These are not new options but options that have been moved from another row in
the table.
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Table 3
Share capital history
Period
1 January 2019
Nature of Share issuance Number of Shares
474,920,066
Opening balance
Consideration
N/A
Cumulative balance of
issued Shares at end of
period
474,920,066
1,741,820
Exercise price per Share
ranging from $9.89 to
$39.00
476,661,886
350,584
Nil
477,012,470
1 January to
31 December 2019
1 January to
31 December 2019
1 January to
31 December 2019
1 January to
31 December 2020
1 January to
31 December 2020
1 January to
31 December 2020
1 January to
31 December 2021
Shares issued in
connection with the
exercise of stock
options
Shares issued in
connection with the
fulfilment of RSU and
PSU share-based
payment awards
Shares cancelled as
part of buyback
programme
Shares issued in
connection with the
exercise of stock
options
Shares issued in
connection with the
fulfilment of RSU and
PSU share-based
payment awards
Shares cancelled as
part of buyback
programme
Shares issued in
connection with the
exercise of stock
options
(20,612,593)
€1 billion
456,399,877
763,103
Exercise price per Share
ranging from $18.40 to
$32.51
457,162,980
1 January to
25 February 2022
547,730
Nil
457,710,710
1 January to
25 February 2022
(3,065,200)
€128 million
454,645,510
1,290,506
Exercise price per Share
ranging from $19.68 to
$32.51
455,936,016
Period
1 January to
31 December 2021
1 January to
31 December 2021
1 January to
25 February 2022
Nature of Share issuance Number of Shares
299,016
Shares issued in
connection with the
fulfilment of RSU and
PSU share-based
payment awards
Consideration
Nil
Cumulative balance of
issued Shares at end of
period
456,235,032
Shares cancelled as
part of buyback
programme
Shares issued in
connection with the
exercise of stock
options
Shares issued in
connection with the
fulfilment of RSU and
PSU share-based
payment awards
Shares cancelled as
part of buyback
programme
—
—
456,235,032
146,985
Exercise price per Share
ranging from $23.21 to
$32.51
456,382,017
651
Nil
456,382,668
—
—
456,382,668
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Marketing
CCEP relies extensively on advertising and sales promotions to market its products. TCCC and other franchisors
advertise in all major media to promote sales in the local areas we serve. We also benefit from regional, local and global
advertising programmes conducted by TCCC and other franchisors. Certain advertising expenditures by TCCC and
other franchisors are made pursuant to annual arrangements.
Competition
CCEP competes mainly in the manufacturing, sale and distribution of non-alcoholic ready to drink (NARTD) beverages
industry and adjacencies, including squashes/cordials, hot beverages, low alcoholic beverage and premium spirits.
CCEP competes in the Western Europe and API segments, and primarily manufactures, sells and distributes the
products of TCCC, as well as those of other franchisors such as Monster Energy and Capri Sun AG.
CCEP and TCCC engage in a variety of marketing programmes to promote the sale of TCCC’s products in territories in
which we operate. The amounts to be paid to us by TCCC under the programmes are determined annually and are
periodically reassessed as the programmes progress. Marketing support funding programmes entered into with TCCC
provide financial support, principally based on our product sales or on the completion of stated requirements, to offset a
portion of the cost of our marketing programmes. Except in certain limited circumstances, TCCC has no specified
contractual obligation to participate in expenditures for advertising, marketing and other support in our territories. The
terms of similar programmes TCCC may have with other licensees and the amounts paid by TCCC under them could
differ from CCEP’s arrangements.
We take part in various programmes and arrangements with customers to increase the sale of products. These include
arrangements under which allowances can be earned by customers for attaining agreed sales levels or for participating
in specific marketing programmes.
Dependence on franchisors
As a franchise business, CCEP’s business success, including its financial results, depends upon its relationships with
TCCC and its other franchisors. For more about our relationships with franchisors, see the Risk factors on page 201.
CCEP competes mainly with:
• NARTD and non-alcoholic, non-ready to drink (for example squashes/cordials and hot beverages) brand and private
label manufacturers, sellers and distributors
• Alcoholic beverage manufacturers, sellers and distributors – in the sense that some of their products may be
considered to be substitutes to CCEP’s own products for certain consumer occasions. More recently CCEP entered
the hard seltzer market.
A small number of such companies may also be contracted by CCEP as manufacturers (e.g. co-packers) or commercial
partners (e.g. on behalf of which CCEP sells and/or distributes, or which sells and/or distributes on CCEP’s behalf).
CCEP sells and distributes to a wide range of customers, including both physical and online food and beverage
retailers, wholesalers and out of retail customers. The market is highly competitive and all CCEP customers and
consumers may choose freely between products of CCEP and its competitors. Many of CCEP’s customers are under
increasing competitive pressure, including with the increasing market share of discounters, the growth of e-commerce
food and beverage players, emergence of quick commerce and customer consolidation.
CCEP competes with respect to a wide range of commercial factors, including brand awareness, product and packaging
innovations, supply chain efficacy, customer service, sales strategy, marketing, and pricing and promotions.
The level of competition faced by CCEP may be affected by, for example, changing customer and consumer product,
brand, and packaging preferences; shifts in customers’ industries; competitor strategy shifts; new competitor entrants;
supplier dynamics; the weather; and social, economic, political or other external landscape shifts.
Key factors affecting CCEP’s competitive strength include, for example, CCEP’s strategic choices; investments;
partnerships (e.g. with customers, franchisors and suppliers); people management; asset base (e.g. property, plant,
fleet, and equipment); technological sophistication; and processes and systems.
Impact of governmental regulation
Our business is sensitive to the economic and political action and conditions in our countries of operation. The risks this
can pose to our business are set out in our Principal risks on pages 42-47 and in our Risk factors on pages 195-202. By
responding to these challenges positively, we can gain a competitive advantage.
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Material contracts
There are no material contracts outside the ordinary course of business to which the Company (or any of its
subsidiaries) is a party, that are to be performed in whole or in part, at or after the filing of this report, other than as set
out below.
The Company and certain of its subsidiaries entered into certain material agreements in relation to the acquisition of
CCL as set out below.
During 2021, the required shareholder, regulatory and court approvals were obtained and on 10 May 2021, the
Company acquired 100% of the issued and outstanding shares of CCL.
The Scheme Implementation Deed
The Scheme Implementation Deed, dated 4 November 2020, and amended on 14 February 2021, by and among the
Company, CCL and CCEP Australia Pty Ltd (CCEP Australia), provides for the implementation of the scheme of
arrangement for the acquisition by CCEP Australia of all of the issued shares of CCL (other than shares of CCL held by
TCCC) held by certain independent shareholders (CCL Scheme Shareholders), on the terms and conditions set forth
in Attachment 2 to the Scheme Implementation Deed (Scheme), including the provisions relating to the consideration to
be provided by CCEP Australia for the transfer of the shares of CCL held by the CCL Scheme Shareholders equal to
AUD $13.50 per share, subject to the adjustments set out therein.
The Co-operation and Sale Deed
The Co-operation and Sale Deed dated 4 November 2020, by and among the Company, CCEP Australia, TCCC, and
Coca-Cola Holdings Overseas Limited, provided for the acquisition by CCEP Australia of the shares of CCL indirectly
held by TCCC. The sale and purchase obligations set out under the Co-operation and Sale Deed became effective upon
implementation of the Scheme.
Copies of material contracts
For further details regarding the Scheme Implementation Deed and the Co-operation and Sale Deed, please refer to
Exhibits 4.7 and 4.8 respectively to the Company’s 2020 Annual Report on Form 20-F filed with the SEC.
Articles of Association
For a summary of certain principal provisions of the Company’s Articles of Association (the Articles), see Other
Information – Other Group information – Articles of Association of the 2018 Annual Report on Form 20-F, filed on
14 March 2019. A copy of the Company’s Articles has been filed as Exhibit 1 to this Form 20-F.
Documents on display
CCEP is subject to the information requirements of the US Securities Exchange Act of 1934, as amended (the
Exchange Act), applicable to FPIs. In accordance with these requirements, we file our Annual Report on Form 20-F and
other related documents with the US Securities and Exchange Commission (SEC). It is possible to read and copy
documents that we have filed with the SEC at the SEC’s office. Filings with the SEC are also available to the public from
commercial document retrieval services, and from the website maintained by the SEC at www.sec.gov.
Our Annual Report on Form 20-F is also available on our website at www.cocacolaep.com/investors/financial-reports-
and-results/integrated-reports. Shareholders may also order a hard copy, free of charge – see Useful addresses on
page 226.
Exchange controls
Other than those individuals and entities subject to economic sanctions that may be in force from time to time, we are
not aware of any other legislative or legal provision currently in force in the UK, the US, the Netherlands or Spain
restricting remittances to non-resident holders of CCEP’s Shares or affecting the import or export of capital for the
Company’s use.
Taxation information for shareholders
US federal income taxation
US federal income tax consequences to US holders of the ownership and disposition of CCEP
Shares
This section summarises the material US federal income tax consequences of owning Shares as capital assets for tax
purposes. It is not, however, a comprehensive analysis of all the potential US tax consequences for such holders, and it
does not discuss the tax consequences of members of special classes of holders which may be subject to other rules,
including, but not limited to: tax exempt entities, life insurance companies, dealers in securities, traders in securities that
elect a mark-to-market method of accounting for securities holdings, holders liable for alternative minimum tax, holders
that, directly or indirectly, hold 10% or more (by vote or by value) of the Company’s stock, holders that hold Shares as
part of a straddle or a hedging or conversion transaction, holders that purchase or sell Shares as part of a wash sale for
US federal income tax purposes, or US holders whose functional currency is not the US dollar. In addition, if a
partnership holds Shares, the US federal income tax treatment of a partner will generally depend on the status of the
partner and the tax treatment of the partnership and may not be described fully below. This summary does not address
any aspect of US taxation other than US federal taxation (such as the estate and gift tax, the Medicare tax on net
investment income or US state or local tax).
Investors should consult their tax advisors regarding the US federal, state, local and other tax consequences of owning
and disposing of Shares in their particular circumstances.
This section is based on the IRC, its legislative history, existing and proposed regulations, published rulings and court
decisions, and on the United Kingdom-United States Tax Treaty (the Treaty), all of which are subject to change, possibly
on a retroactive basis.
A US holder is a beneficial owner of Shares that is, for US federal income tax purposes, (i) a citizen or individual
resident of the US, (ii) a US domestic corporation, (iii) an estate whose income is subject to US federal income taxation
regardless of its source, or (iv) a trust if a US court can exercise primary supervision over the trust’s administration and
one or more US persons are authorised to control all substantial decisions of the trust. A non-US holder is a beneficial
owner of Shares that is neither a US holder nor a partnership for US federal income tax purposes.
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CONTINUED
Taxation of dividends
Subject to the passive foreign investment company (PFIC) rules discussed below, a US holder is subject to US federal
income taxation on the gross amount of any dividend paid by CCEP out of the Company’s current or accumulated
earnings and profits (as determined for US federal income tax purposes). Dividends paid to a non-corporate US holder
will generally constitute “qualified dividend income” and be taxable to the holder at a preferential rate, provided that (i)
CCEP is eligible for the benefits of the Treaty, (ii) CCEP is not a PFIC (as discussed below) for either its taxable year in
which the dividend is paid or the preceding taxable year and (iii) certain minimum holding period and other requirements
are met. CCEP currently believes that dividends paid with respect to its Shares should constitute qualified dividend
income for US federal income tax purposes if CCEP was not, in the year prior to the year in which the dividend was
paid, and is not, in the year in which the dividend is paid, a PFIC for US federal income tax purposes and provided that
the certain minimum holding period is met. US holders should consult their own tax advisors regarding the availability of
the preferential dividend tax rate on dividends paid by CCEP.
For US federal income tax purposes, a dividend must be included in income when the US holder actually or
constructively receives the dividend. Dividends paid by CCEP to corporate US holders will generally not be eligible for
the dividends received deduction. For foreign tax credit purposes, dividends will generally be income from sources
outside the US and will generally, be “passive” or “general” income for purposes of computing the foreign tax credit
allowable to a US holder.
The amount of a dividend distribution (including any UK withholding tax) on Shares that is paid in a currency other than
the US dollar will generally be included in ordinary income in an amount equal to the US dollar value of the currency
received on the date such dividend distribution is includible in income, regardless of whether the payment is, in fact,
converted into US dollars on such date. Generally, any gain or loss resulting from currency exchange fluctuations during
the period from the date the dividend payment is includible in income to the date the payment is converted into US
dollars will be treated as ordinary income or loss and will not be eligible for the preferential tax rate on qualified dividend
income. Generally, the gain or loss will be income or loss from sources within the US for foreign tax credit purposes.
Distributions in excess of CCEP’s earnings and profits, as determined for US federal income tax purposes, will be
treated as a return of capital to the extent of the US holder’s basis in its Shares and thereafter as capital gain, subject to
taxation as described below.
Taxation of capital gains
Subject to the PFIC rules discussed below, a US holder will generally recognise gain or loss on any sale, exchange,
redemption or other taxable disposition of Shares in an amount equal to the difference between the US dollar value of
the amount realised on the disposition and the US holder’s tax basis, determined in US dollars, in the Shares. Any such
capital gain or loss will generally be a long-term gain or loss, subject to tax at a preferential rate for a non-corporate US
holder, if the US holder’s holding period for such Shares exceeds one year. Any gain or loss recognised by a US holder
on the sale or exchange of Shares will generally be treated as income or loss from sources within the US for foreign tax
credit limitation purposes. The deductibility of capital losses is subject to limitations.
PFIC status
A non-US corporation is a PFIC in any taxable year in which, after taking into account the income and assets of certain
subsidiaries, either (i) at least 75% of its gross income is passive income or (ii) at least 50% of the quarterly average of
its assets is attributable to assets that produce or are held to produce passive income. Currently, we do not believe that
CCEP Shares will be treated as stock of a PFIC for US federal income tax purposes. However, we review this annually,
and therefore this conclusion is subject to change. If CCEP was to be treated as a PFIC, unless a US holder elects to
treat CCEP as a “qualified electing fund” (QEF) or to be taxed annually on a mark-to-market basis with respect to its
Shares, any gain realised on the sale or exchange of such Shares would in general be treated as ordinary income
rather than capital gain. Instead, a US holder would be treated as if he or she had realised such gain rateably over the
holding period for Shares and generally would be taxed at the highest tax rate in effect for each such year to which the
gain was allocated. In this case, an interest charge in respect of the tax attributable to each such year would apply.
Certain distributions would be similarly treated if CCEP were treated as a PFIC. In addition, each US person that is a
shareholder of a PFIC may be required to file an annual report disclosing its ownership of shares in a PFIC and certain
other information.
We do not intend to provide to US holders the information required to make a valid QEF election.
Information reporting and backup withholding
In general, information reporting requirements will apply to dividends received by US holders of Shares, and the
proceeds received on the disposition of Shares effected within the US (and, in certain cases, outside the US), in each
case, other than US holders that are exempt recipients (such as corporations).
Backup withholding may apply to such amounts if the US holder fails to provide an accurate taxpayer identification
number (generally on an IRS Form W-9 provided to the paying agent or the US holder’s broker) or is otherwise subject
to backup withholding.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed
as a refund or credit against a holder’s US federal income tax liability, if any, provided the required information is given
to the IRS on a timely basis.
Certain US holders may be required to report to the IRS on Form 8938 information relating to their ownership of foreign
financial assets, such as the Shares, subject to certain exceptions (including an exception for Shares held in accounts
maintained by certain financial institutions). US holders should consult their tax advisors regarding the effect, if any, of
these rules on their obligations to file information reports with respect to the Shares.
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US federal income tax consequences to non-US holders of the ownership and disposition of
CCEP Shares
In general, a non-US holder of Shares will not be subject to US federal income tax or, subject to the discussion below
under Information reporting and backup withholding, US federal withholding tax on any dividends received on Shares or
any gain recognised on a sale or other disposition of Shares including any distribution to the extent it exceeds the
adjusted basis in the non-US holder’s Shares unless:
• the dividend or gain is effectively connected with such non-US holder’s conduct of a trade or business in the US (and,
if required by an applicable tax treaty, is attributable to a permanent establishment maintained by the non-US holder
in the US); or
• in the case of gain only, such non-US holder is a non-resident alien individual present in the US for 183 days or more
during the taxable year of the sale or disposition, and certain other requirements are met.
Special rules may apply to a non-US holder who was previously a US holder and who again becomes a US holder in a
later year.
A non-US holder that is a corporation may also be subject to a branch profits tax at a rate of 30% (or such lower rate
specified by an applicable tax treaty) on its effectively connected earnings and profits for the taxable year, as adjusted
for certain items.
Information reporting and backup withholding
Dividends with respect to Shares and proceeds from the sale or other disposition of Shares received in the US or
through certain US related financial intermediaries by a non-US holder, may be subject to information reporting and
backup withholding unless such non-US holder provides to the applicable withholding agent the required certification
showing its non-US status, such as a valid IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI, or otherwise
establishes an exemption, and otherwise complies with the applicable requirements of the backup withholding rules.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed
as a refund or credit against a holder’s US federal income tax liability, if any, provided the required information is given
to the IRS on a timely basis.
UK taxation consequences for US holders
The following summarises certain UK tax consequences of the ownership and disposition of Shares for US holders who
are not resident in the UK for tax purposes and to whom split year treatment does not apply, who do not carry on a
trade, profession or vocation through a permanent establishment or branch or agency in the UK, and who are the
absolute beneficial owners of their Shares and hold such Shares as a capital investment.
This information is a general discussion based on UK tax law and what is understood to be the practice of HMRC, all as
in effect on the date of publication, and all of which are subject to differing interpretations and change at any time,
possibly with retroactive effect. It is not a complete analysis of all potential UK tax considerations that may apply to a US
holder. In addition, this discussion neither addresses all aspects of UK tax law that may be relevant to particular US
holders nor takes into account the individual facts and circumstances of any particular US holder. Accordingly, it is not
intended to be, and should not be construed as, tax advice.
Distributions on Shares
No UK tax is required to be withheld from cash distributions on Shares paid to US holders. In addition, US holders will
not be subject to UK tax in respect of their receipt of cash distributions on their Shares.
Sale, exchange, redemption or other dispositions of Shares
US holders will not be subject to UK tax on capital gains in respect of any gain realised by such US holders on a sale,
exchange, redemption or other disposition of their Shares. Special rules may apply to individual US holders who have
ceased to be resident in the UK for tax purposes and who make a disposition of their Shares before becoming once
again resident in the UK for tax purposes.
While Shares are held within the DTC clearance system, and provided that DTC satisfies various conditions specified in
UK legislation and has not made an election for the alternative system of change under Section 97A of the UK Finance
Act 1986 which applies to the Shares (a Section 97A Election), electronic book entry transfers of such Shares should
not be subject to UK stamp duty, and agreements to transfer such Shares should not be subject to Stamp Duty Reserve
Tax (SDRT). Confirmation of this position was obtained by way of formal clearance by HMRC and we are not aware that
any Section 97A Election has been made. Likewise, transfers of, or agreements to transfer, such Shares from the DTC
clearance system into another clearance system (or into a depositary receipt system) should not, provided that the other
clearance system or depositary receipt system satisfies various conditions specified in UK legislation and that DTC has
not made a Section 97A Election, be subject to UK stamp duty or SDRT.
In the event that Shares have left the DTC clearance system, other than into another clearance system or depositary
receipt system, any subsequent transfer of, or agreement to transfer, such Shares may, subject to any available
exemption or relief, be subject to UK stamp duty or SDRT at a rate of 0.5% of the consideration for such transfer or
agreement (in the case of UK stamp duty, rounded up to the next multiple of £5). Any such UK stamp duty or SDRT will
generally be payable by the transferee and must be paid (and any relevant transfer document duly stamped by HMRC)
before the transfer can be registered in the books of the Company. In the event that Shares that have left the DTC
clearance system, other than into another clearance system or depositary receipt system, are subsequently transferred
back into a clearance system or depositary receipt system, such transfer or agreement may, subject to any available
exemption or relief, be subject to UK stamp duty or SDRT at a rate of 1.5% of the consideration for such transfer (or,
where there is no such consideration, 1.5% of the value of such Shares). Notwithstanding the foregoing provisions of
this paragraph, a transfer of securities may in certain circumstances be subject to UK stamp duty or SDRT based on the
market value of the relevant securities if this is higher than the amount of the consideration for the relevant transfer.
THIS SUMMARY IS NOT EXHAUSTIVE OF ALL POSSIBLE TAX CONSEQUENCES. IT IS NOT INTENDED AS LEGAL
OR TAX ADVICE TO ANY PARTICULAR HOLDER OF SHARES AND SHOULD NOT BE SO CONSTRUED. HOLDERS
OF SHARES SHOULD CONSULT THEIR OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES
APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
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CONTINUED
Selected financial data
The following selected financial data has been extracted from, and should be read in conjunction with, the consolidated
financial statements of the Group and their accompanying notes.
On 10 May 2021, Coca-Cola European Partners plc (Legacy CCEP) acquired Coca-Cola Amatil Limited (referred to as
CCL pre-acquisition, and API post acquisition), and subsequently changed its name to Coca-Cola Europacific
Partners plc (the Company, or Parent Company). The financial results presented herein for the period from
1 January 2017 through to the Acquisition date refer to Legacy CCEP and its consolidated subsidiaries, and the period
from the Acquisition date to 31 December 2021 refer to the combined financial results of CCEP.
The financial information presented here has been 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).
Income statement
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative expenses
Operating profit
Finance income
Finance costs
Total finance costs, net
Non-operating items
Profit before taxes
Taxes
Profit after taxes
2021
€ million
2020
€ million
2019
€ million
2018
€ million
13,763
10,606
12,017
11,518
(8,677)
5,086
(2,496)
(1,074)
1,516
43
(172)
(129)
(5)
1,382
(394)
988
(6,871)
3,735
(1,939)
(983)
813
33
(144)
(111)
(7)
695
(197)
498
(7,424)
4,593
(2,258)
(787)
1,548
49
(145)
(96)
2
1,454
(364)
1,090
(7,060)
4,458
(2,178)
(980)
1,300
47
(140)
(93)
(2)
1,205
(296)
909
2017
€ million
11,062
(6,772)
4,290
(2,124)
(906)
1,260
48
(148)
(100)
(1)
1,159
(471)
688
Statement of financial position
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Total equity
Total equity and liabilities
Capital stock data
Number of shares (in millions)
Share capital (in € million)
Share premium (in € million)
Per share data
Basic earnings per share (€)
Diluted earnings per share (€)
Dividends declared per share (€)
2021
€ million
23,330
5,760
29,090
15,787
6,093
21,880
7,210
29,090
456
5
220
2.15
2.15
1.40
2020
€ million
15,161
4,076
19,237
9,072
4,140
13,212
6,025
19,237
455
5
192
1.09
1.09
0.85
2019
€ million
15,582
3,103
18,685
8,414
4,115
12,529
6,156
18,685
456
5
178
2.34
2.32
1.24
2018
€ million
15,225
2,991
18,216
7,860
3,792
11,652
6,564
18,216
475
5
152
1.88
1.86
1.06
2017
€ million
14,880
3,314
18,194
8,222
3,287
11,509
6,685
18,194
485
5
127
1.42
1.41
0.84
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Operations review
Revenue
Revenue increased by €3.2 billion, or 30.0%, from €10.6 billion in 2020 to €13.8 billion in 2021. Refer to the Business
and financial review for a discussion of significant factors that impacted revenue in 2021, as compared to 2020.
2020 vs 2019
Refer to Other Information – Other Group information – Operations review of the 2020 Annual Report on Form 20-F,
filed on 12 March 2021.
Volume
Refer to the Business and financial review for a discussion of significant factors that impacted volume in 2021,
as compared to 2020.
2020 vs 2019
Refer to Other Information – Other Group information – Operations review of the 2020 Annual Report on Form 20-F,
filed on 12 March 2021.
Cost of sales
On a reported basis, cost of sales increased 26.5%, from €6.9 billion in 2020 to €8.7 billion in 2021. Refer to the
Business and financial review for a discussion of significant factors that impacted cost of sales in 2021, as compared to
2020.
2020 vs 2019
Refer to Other Information – Other Group information – Operations review of the 2020 Annual Report on Form 20-F,
filed on 12 March 2021.
Selling and distribution expenses and administrative expenses
The following table presents selling and distribution expenses and administrative expenses for the periods presented:
Selling and distribution expenses
Administrative expenses
Total
2021
€ million
2,496
1,074
3,570
2020
€ million
1,939
983
2,922
On a reported basis, total operating expenses increased by 22.0% from €2.9 billion in 2020 to €3.6 billion in 2021,
reflecting the inclusion of API.
Selling and distribution expenses increased by €557 million, or 29.0%, versus 2020, primarily driven by newly acquired
API operations and an increase in variable expenses such as logistic costs due to higher volumes, partially offset by a
continued focus on discretionary spend optimisation in areas such as trade marketing expenses, travel and meetings.
Administrative expenses increased by €91 million, or 9.5%, versus 2020, mainly reflecting the continuation of
restructuring activity related to the Accelerate Competitiveness programme and costs associated with the acquisition
and integration of CCL.
2020 vs 2019
Refer to Other Information – Other Group information – Operations review of the 2020 Annual Report on Form 20-F,
filed on 12 March 2021.
Finance costs, net
Finance costs, net totalled €129 million and €111 million in 2021 and 2020, respectively. The following table summarises
the primary items impacting our interest expense during the periods presented:
Average outstanding debt balance (€ million)
Weighted average cost of debt during the year
Fixed rate debt (% of portfolio)
Floating rate debt (% of portfolio)
2021
11,428
1.2%
95%
5%
2020
6,978
1.4%
95%
5%
Non-operating items
Non-operating items represented an expense of €5 million in 2021 and an expense of €7 million in 2020. Non-operating
expenses include remeasurement gains and losses related to currency exchange rate fluctuations on financing
transactions denominated in a currency other than the subsidiary’s functional currency. Non-operating items are shown
on a net basis and reflect the impact of any derivative instruments utilised to hedge the foreign currency movements of
the underlying financing transactions. Non-operating items also include the Group’s share of the profit or loss after tax of
equity accounted investments.
Tax expense
In 2021, our reported effective tax rate was 28.5%. This includes a €127 million deferred tax expense due to the
enactment of corporate income tax increases in the UK and the Netherlands as well as an enacted law change in
Indonesia which held its statutory income tax rate, reversing a previously enacted rate reduction.
In 2020, our reported effective tax rate was 28.3%. This includes a €43 million deferred tax expense due to the
enactment of corporate income tax rate increases in the UK and the Netherlands. These increases reverse previously
enacted rate reductions.
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Cash flow and liquidity review
Liquidity and capital resources
Our sources of capital include, but are not limited to, cash flows from operating activities, public and private issuances of
debt and equity securities and bank borrowings. Based on information currently available, we do not believe we are at
significant risk of default by our counterparties.
2020
During 2020, our primary sources of cash included: (1) €1,490 million from operating activities, net of cash payments
related to restructuring programmes of €205 million and contributions to our defined benefit pension plans of €52 million;
and (2) proceeds of €1.6 billion from the issuance of €600 million 1.75% notes due in 2026, €250 million 1.5% notes due
in 2027 and €750 million 0.2% notes due in 2028.
The Group satisfies seasonal working capital needs and other financing requirements with operating cash flow, cash on
hand, short-term borrowings and a line of credit. In May 2021, and in connection with financing the Acquisition, the
Group received net proceeds from new borrowings in the period of €4,877 million issuing the following bonds:
€800 million 0% Notes due 2025, €700 million 0.5% Notes due 2029, €1,000 million 0.875% Notes due 2033,
€750 million 1.5% Notes due 2041 and $850 million 0.5% Notes due 2023, $650 million 0.8% Notes due 2024,
$500 million 1.5% Notes due 2027. At 31 December 2021, the Group had €1,216 million in third party debt maturities in
the next 12 months, €286 million of which was in the form of short-term commercial paper and overdraft, €700 million in
the form of euro denominated notes and €230 million of Australian dollar denominated notes. In addition to using
operating cash flow and cash in hand, the Group may repay its short-term obligations by issuing more debt, which may
take the form of commercial paper and/or longer-term debt. Further details regarding the level of borrowings at the year
end are provided in Note 14 of the consolidated financial statements.
In line with our commitments to deliver long-term value to shareholders, in November 2021 the Board declared a full
year dividend of €1.40 per Share, maintaining a dividend payout ratio of approximately 50%. For the year ended 31
December 2021, dividend payments totalled €638 million.
On 23 March 2020, in response to COVID-19, the Board took the decision to suspend the share buyback programme.
No shares were repurchased in 2021.
Credit ratings and covenants
The Group’s credit ratings are periodically reviewed by rating agencies. The ratings outlook from Moody’s and Fitch is
stable and continue to be investment-grade as at end of 2021. Changes in the operating results, cash flows or financial
position could impact the ratings assigned by the various rating agencies. The credit rating can be materially influenced
by a number of factors including, but not limited to, acquisitions, investment decisions, and capital management
activities of TCCC, and/or changes in the credit rating of TCCC. Should the credit ratings be adjusted downward, the
Group may incur higher costs to borrow, which could have a material impact on the financial condition and results of
operations.
Our primary uses of cash were: (1) repayments on borrowings of €790 million, repayments of principal on lease
obligations of €116 million (refer to Financing activities below) and net interest payments of €91 million; (2) dividend
payments of €386 million; (3) purchases of Shares under our share buyback programme of €129 million; and (4) spend
on property, plant and equipment of €348 million and software of €60 million.
The discussion of our 2019 cash flow activities has not been included as this can be found under Other Information –
Other Group information – Cash flow and liquidity review of the 2019 Annual Report on Form 20-F, filed on 16 March
2020.
Operating activities
2021 vs 2020
Our cash derived from operating activities totalled €2,117 million in 2021 versus €1,490 million in 2020. This increase
was primarily due to the inclusion of API and continued recovery from COVID-19.
2020 vs 2019
Refer to Other Information – Other Group information – Cash flow and liquidity review of the 2020 Annual Report
on Form 20-F, filed on 12 March 2021.
Investing activities
2021 vs 2020
During 2021, we paid €5.4 billion for the acquisition of CCL, net of cash acquired. Net proceeds from settlement of our
short term investments were €198 million.
Capital asset investments represent a primary use of cash for our investing activities. The following table summarises
the capital investments for the periods presented:
Summary of cash flow activities
2021
During 2021, our primary sources of cash included: (1) €2,117 million from operating activities, net of cash payments
related to restructuring programmes of €205 million and contributions to our defined benefit pension plans of €39 million;
and (2) proceeds of €5.2 billion from the issuance of debt for acquisition purposes.
Supply chain infrastructure
Cold drink equipment
Fleet and other
Total capital asset investments
2021
€ million
2020
€ million
267
76
6
349
283
57
8
348
Our primary uses of cash were: (1) acquisition of CCL, net of cash acquired, of €5.4 billion (2) repayments on
borrowings of €950 million, repayments of principal on lease obligations of €139 million (refer to Financing activities
below) and net interest payments of €97 million; (3) dividend payments of €638 million; and (4) spend on property, plant
and equipment of €349 million and software of €97 million.
Investments in supply chain infrastructure relate to investments in our manufacturing and distribution facilities. In
addition, during 2021 the Group spent €97 million (2020: €60 million) on capitalised development activity, primarily in
relation to the continuation of our business capability programme.
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CONTINUED
During 2022, we expect our capital expenditures to be invested in similar categories as those listed in the table above.
Whilst the level of capital expenditure is uncertain, we expect our operating cash flow, cash in hand and available short-
term capital resources will be sufficient to fund future capital expenditures.
2020 vs 2019
Refer to Other Information – Other Group information – Cash flow and liquidity review of the 2020 Annual Report on
Form 20-F, filed on 12 March 2021.
Financing activities
2021 vs 2020
Our net cash used in financing activities totalled €3,289 million in 2021, versus €100 million in 2020.
The following table summarises our financing activities related to the issuances of and payments on debt for the periods
presented (in € millions):
Issuances of debt
€800 million notes
€700 million notes
€1,000 million notes
€750 million notes
$850 million notes
$650 million notes
$500 million notes
€600 million notes
€250 million notes
€750 million notes
Maturity date
September 2025
September 2029
May 2033
May 2041
May 2023
May 2024
January 2027
March 2026
November 2027
December 2028
Rate
—%
0.50%
0.88%
1.50%
0.50%
0.80%
1.50%
1.75%
1.50%
0.20%
2021
797
693
990
745
702
537
413
—
—
—
2020
—
—
—
—
—
—
—
600
250
750
Total issuances of debt, less short-term
borrowings, net of issuance costs
Net issuances of short-term borrowings
Total issuances of debt, net
—
(A)
4,877
1,600
276
5,153
—
1,600
Payments on debt
€350 million
$300 million
$250 million
A$100 million
A$45 million
JPY3 billion
A$100 million
A$30 million
$525 million
$250 million
$300 million
Maturity date
November 2021
September 2021
August 2021
May 2021
July 2021
August 2021
August 2021
September 2021
September 2020
August 2021
September 2021
Lease obligations
—
Repayments on third-part borrowings, less
short-term borrowings
Rate
floating
4.5%
3.3%
4.6%
6.7%
2.5%
4.3%
6.0%
3.5%
3.3%
4.5%
—
Net payments of short-term borrowings
—
(A)
Total payments on debt
(A) These amounts represent short-term euro commercial paper with varying interest rates.
2021
(350)
(174)
(223)
(65)
(30)
(24)
(65)
(19)
—
—
—
(139)
(1,089)
—
(1,089)
2020
—
—
—
—
—
—
—
—
(470)
(52)
(47)
(116)
(685)
(221)
(906)
Our financing activities during 2021 included dividend payments totalling €638 million, based on a dividend rate of €1.40
per Share. In 2020, dividend payments totalled €386 million.
There were no payments under the share buyback programme in 2021. This compares to total payments of €129 million
relating to Shares that were repurchased in 2020.
There were no drawdowns from our credit facility in 2021 and the facility was undrawn at 31 December 2021. During
March 2020, €400 million was drawn against our credit facility, of which €300 million was repaid during March 2020 and
€100 million was repaid during April 2020. No other amounts were drawn under this facility during 2020 and the facility
was undrawn at 31 December 2020.
Lease obligations
During the year ended 31 December 2021 and 31 December 2020, total cash outflows from payments of principal
on lease obligations were €139 million and €116 million, respectively.
2020 vs 2019
Refer to Other Information – Other Group information – Cash flow and liquidity review of the 2020 Annual Report on
Form 20-F, filed on 12 March 2021.
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CONTINUED
Raw materials
CCEP purchases concentrates and syrups from TCCC and other franchisors to manufacture products. In addition, the
Group purchases sweeteners, juices, coffee, mineral waters, finished product, carbon dioxide, fuel, pallets, ocean
freight, haulage, virgin and recycled PET (plastic) preforms, glass, aluminium and plastic bottles, aluminium and steel
cans, pouches, closures, post-mix and packaging materials. The Group generally purchases raw materials, other than
concentrates, syrups and mineral waters, from multiple suppliers. The product licensing and bottling agreements with
TCCC and agreements with some of our other franchisors provide that all authorised containers, closures, cases,
cartons and other packages, and labels for their products must be purchased from manufacturers approved by the
respective franchisor. The principal sweetener we use is sugar derived from sugar beets in Europe and sugar cane in
API. Our sugar purchases are made from multiple suppliers. The Group does not separately purchase low-calorie
sweeteners because sweeteners for low-calorie beverage products are contained in the concentrates or syrups we
purchase.
The Group produces most of its plastic bottle requirements within the production facilities, half from using preforms
purchased from multiple suppliers and the remainder from self-manufactured preforms. The Group believes the self-
manufacture of certain packages serves to ensure supply and to reduce or manage costs. The Group manages its
continuity of materials and supplies closely, although the supply and price of specific materials or supplies are, at times,
adversely affected by strikes, weather conditions, speculation, abnormally high demand, governmental controls, new
taxes, national emergencies, natural disasters, price or supply fluctuations of their raw material components, and
currency fluctuations.
Contractual obligations
The following table reflects the Group's contractual obligations as at 31 December 2021:
Total
Less than 1 year
1 to 3 years
3 to 5 years
More than 5 years
€ million
€ million
€ million
€ million
€ million
Borrowings and
interest
obligations(A)
Lease
obligations(B)
Purchase
agreements(C)
13,599
1,369
2,551
2,274
7,405
699
156
206
109
249
14,547
167
1,692
59
2,816
6
2,389
228
17
7,650
(A) These amounts represent the Group’s scheduled debt maturities and estimated interest payments related to the Group’s long-term debt
obligations, excluding leases. Refer to Note 14 of the consolidated financial statements for further details about the borrowings of
CCEP. Interest on fixed rate debt has been calculated based on applicable rates and payment dates. Interest on variable rate debt has
been calculated using the forward interest rate curve. Refer to Note 26 of the consolidated financial statements for further details about
financial risk management within CCEP.
(B) These amounts represent the Group’s minimum lease payments (including amounts representing interest), obligations related to lease
agreements committed to but not yet commenced and lease payments due under non-cancellable short-term or low value lease
agreements.
(C) These amounts represent non-cancellable purchase agreements with various suppliers that are enforceable and legally binding and that
specify a fixed or minimum quantity that we must purchase. All purchases made under these agreements have standard quality and
performance criteria. In addition to these amounts, the Group has outstanding capital expenditure purchase orders of approximately €94
million as at 31 December 2021. The Group also has other purchase orders raised in the ordinary course of business which are settled
in a reasonably short period of time. These are excluded from the table above. The Group expects that the net cash flows generated
from operating activities will be able to meet these liabilities as they fall due.
The above table does not reflect the impact of derivatives and hedging instruments, other than for long-term debt, which
are discussed in Note 26 of the consolidated financial statements. Furthermore, the exact timing of our tax provisions is
not certain and these have been excluded from the above table. Refer to Note 21 of the consolidated financial
statements for further information.
The above table also does not reflect employee benefit liabilities of €148 million, which include current liabilities of €10
million and non-current liabilities of €138 million as at 31 December 2021. Refer to Note 16 of the consolidated financial
statements for further information.
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CONTINUED
Properties
The Group’s principal properties include production facilities, distribution and logistics centres, shared service centres, business unit headquarter offices and corporate offices.
The table below summarises the main properties which the Group uses as at 31 December 2021:
Great Britain
France Belgium/ Luxembourg
Netherlands
Norway
Sweden
Germany
Iberia
Iceland
Total
Production facilities(A)
Leased
Owned
Total
Distribution and logistics facilities
Leased
Owned
Total
1
4
5
1
—
1
Corporate offices and business unit headquarters
Leased
Owned
Total
2
—
2
Production facilities(A)(B)
Leased
Owned
Total
Distribution and logistics facilities
Leased
Owned
Total
Corporate offices and business unit headquarters
Leased
Owned
Total
—
5
5
—
—
—
1
—
1
—
3
3
2
—
2
1
—
1
—
1
1
—
—
—
1
—
1
—
1
1
—
—
—
—
—
—
—
1
1
—
—
—
—
—
—
2
14
16
12
7
19
1
—
1
1
10
11
3
4
7
3
—
3
—
2
2
—
—
—
—
—
—
Australia
New Zealand and Pacific Islands
Indonesia and Papua New Guinea
10
3
13
9
2
11
1
—
1
5
7
12
4
—
4
1
—
1
—
11
11
9
3
12
1
—
1
4
41
45
18
11
29
9
—
9
Total
15
21
36
22
5
27
3
—
3
(A) All production facilities are a combination of production and warehouse facilities.
(B) Production facilities include NARTD, alcoholic beverage and other manufacturing sites.
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CONTINUED
The Group uses two shared service centres, both located in Bulgaria.
The Group’s principal properties cover approximately 5.8 million square metres in the aggregate of which 0.9 million
square metres is leased and 4.9 million square metres is owned. The Group believes that its facilities are adequately
utilised and sufficient to meet its present operating needs.
At 31 December 2021, the Group operated approximately 13 thousand vehicles of various types, the majority of which
are leased. The Group also owned approximately 1.6 million pieces of cold drink equipment, principally coolers and
vending machines.
Disclosure controls and procedures
Evaluation of disclosure controls and procedures
The Group maintains “disclosure controls and procedures”, as defined in Rule 13a-15(e) under the Exchange Act, which
are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is
recorded, processed, summarised and reported within the time periods specified in the US SEC’s rules and forms, and
that such information is accumulated and communicated to the Group’s management, including the Chief Executive
Officer (CEO) and Chief Financial Officer (CFO), as appropriate to allow timely decisions regarding required disclosure.
The Group’s management, with the participation of the CEO and CFO, has evaluated the effectiveness of the Group’s
disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as at 31 December 2021. Based on that
evaluation, the Group’s CEO and CFO have concluded that the Group’s disclosure controls and procedures were
effective.
Management’s report on internal control over financial reporting
The Group’s management is responsible for establishing and maintaining adequate internal control over financial
reporting for the Group, as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is
a process designed under the supervision of the principal executive and financial officers to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of the Group’s consolidated financial
statements for external reporting purposes in accordance with IFRS issued by the IASB. The Group’s internal control
over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the Group’s transactions and dispositions of assets; (2) are designed to
provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Group’s
consolidated financial statements in accordance with IFRS, and that receipts and expenditures are being made only in
accordance with authorisations of management and the Directors of the Group; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorised acquisition, use or disposition of the Group’s assets that could
have a material effect on the Group’s consolidated financial statements. Internal control systems, no matter how well
designed, have inherent limitations and may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that internal controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Group has excluded Coca-Cola Amatil Ltd, which was acquired in May 2021, from its evaluation of the
effectiveness of the Company’s internal control over financial reporting as at 31 December 2021. The Group has
included the financial results of Coca-Cola Amatil Ltd in the consolidated financial statements from the date of the
Acquisition. Coca-Cola Amatil Ltd constituted 33.8% and 6.4% of total assets and net assets, respectively, as at
31 December 2021 and 15.8% and 14.2% of revenues and net income, respectively, for the year then ended. Under
guidelines established by the U.S. Securities and Exchange Commission, companies are permitted to exclude
acquisitions from their assessment of internal control over financial reporting for the first fiscal year in which the
acquisition occurred.
Management, with the participation of the Chief Executive Officer and Chief Financial Officer, assessed the
effectiveness of the Group’s internal control over financial reporting as at 31 December 2021, using the criteria set forth
in the Internal Control-Integrated Framework issued by The Committee of Sponsoring Organizations of the Treadway
Commission. Based on this assessment, management has determined that the Group’s internal control over financial
reporting as at 31 December 2021 was effective. Ernst & Young LLP (EY), the Group’s independent registered public
accounting firm, has issued a report on the Group’s internal control over financial reporting as at 31 December 2021,
which is set out on page 128.
Changes in internal control over financial reporting
There has been no change in the Group’s internal control over financial reporting (as defined in Rule 13a-15(f) under
the Exchange Act) during 2021 that has materially affected, or is reasonably likely to materially affect, the Group’s
internal control over financial reporting.
Principal accountants’ fees and services
The Audit Committee has established policies and procedures for the engagement of the independent registered public
accounting firm, Ernst & Young LLP (Auditor Firm ID: 1438), to render audit and certain assurance and tax services. The
policies provide for pre-approval by the Audit Committee of specifically defined audit, audit-related, tax and other
services that are not prohibited by regulatory or other professional requirements. EY is engaged for these services when
its expertise and experience of CCEP are important. Most of this work is of an audit nature.
Under the policy, pre-approval is given for specific services within the following categories: advice on accounting,
auditing and financial reporting matters; internal accounting and risk management control reviews (excluding any
services relating to information systems design and implementation); non-statutory audit; project assurance and advice
on business and accounting process improvement (excluding any services relating to information systems design and
implementation relating to CCEP’s financial statements or accounting records); due diligence in connection with
acquisitions, disposals and arrangements in which two or more parties have joint control (excluding valuation or
involvement in prospective financial information); income tax and indirect tax compliance and advisory services;
employee tax services (excluding tax services that could impair independence); provision of, or access to, EY
publications, workshops, seminars and other training materials; provision of reports from data gathered on
non-financial policies and information; and assistance with understanding non-financial regulatory requirements. The
Audit Committee has delegated authority to the Chairman of the Audit Committee to approve permitted services
provided that the Chairman reports any decisions to the Committee at its next scheduled meeting. Any proposed service
not included in the approved service list must be approved in advance by the Audit Committee Chairman and reported
to the Committee, or approved by the full Audit Committee in advance of commencement of the engagement.
The Audit Committee evaluates the performance of the auditor each year. The Committee keeps under review the
scope and results of audit work and the independence and objectivity of the auditor. External regulation and CCEP
policy requires the auditor to rotate its lead audit partner every five years. See the Audit Committee Chairman’s Letter
for further information regarding the rotation of the lead audit partner in 2021. The audit fees payable to EY are reviewed
by the Committee for cost effectiveness each year. Details of fees for services provided by the auditor are provided in
Note 18 of the consolidated financial statements.
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Form 20-F table of cross references
Part I
Item 1
Item 2
Item 3
Identity of Directors, Senior Management and Advisors
Offer Statistics and Expected Timetable
Key Information
B - Capitalization and indebtedness
C - Reasons for the offer and use of proceeds
D - Risk factors
Item 4
Information on the Company
A - History and development of the company
B - Business overview
Item 4A
Item 5
C - Organizational structure
D - Property, plants and equipment
Unresolved Staff Comments
Operating and Financial Review and Prospects
A - Operating results
B - Liquidity and capital resources
C - Research and development, patents and licences, etc
D - Trend information
E - Critical Accounting Estimates
G - Safe harbor
Item 6
Directors, Senior Management and Employees
A - Directors and senior management
B - Compensation
C - Board practices
D - Employees
E - Share ownership
Item 7
Major Shareholders and Related Party Transactions
A - Major shareholders
B - Related party transactions
C - Interests of experts and counsel
Page
n/a
n/a
n/a
n/a
195-202
134, 203-204, 226
8-11, 50-63, 138-140, 144-146,
178-183, 197, 207, 215
178-183
144-146
n/a
52-63, 212-217
56-57, 213-214
110
50-63
n/a
227
67-71, 203
92-107, 156-160, 166
66-81, 86-91, 92-107, 203
37-39, 163, 203
39, 103-104, 203
109
164-166
n/a
Item 8
Financial Information
A - Consolidated Statements and Other Financial Information
58, 125-183, 208, 211-217
Page
B - Significant Changes
Item 9
The Offer and Listing
A - Offer and listing details
B - Plan of distribution
C - Markets
D - Selling shareholders
E - Dilution
F - Expenses of the issue
Item 10
Additional Information
A - Share capital
B - Memorandum and articles of association
C - Material contracts
D - Exchange controls
E - Taxation
F - Dividends and paying agents
G - Statement by experts
H - Documents on display
I - Subsidiary Information
Item 11
Item 12
Quantitative and Qualitative Disclosures about Market Risk
Description of Securities Other than Equity Securities
A - Debt Securities
B - Warrants and Rights
C - Other Securities
D - American Depository Shares
177
n/a
n/a
204
n/a
n/a
n/a
204-206
208
208
208
208-210
n/a
n/a
208
178-183
175-176
n/a
n/a
n/a
n/a
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Form 20-F table of cross references
CONTINUED
Part II
Item 13
Item 14
Item 15
Item 16A
Item 16B
Item 16C
Item 16D
Item 16E
Item 16F
Item 16G
Item 16H
Item 16I
Part III
Item 17
Item 18
Item 19
Defaults, Dividend Arrearages and Delinquencies
Material Modifications to the Rights of Security Holders and
Use of Proceeds
Controls and Procedures
Audit Committee Financial Expert
Code of Ethics
Principal Accountant Fees and Services
Exemptions from the Listing Standards for Audit Committee
Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
Change in Registrant’s Certifying Accountant
Corporate Governance
Mine Safety Disclosure
Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
Financial Statements
Financial Statements
Exhibits
Page
n/a
n/a
128, 217
75, 87
75-76
163, 217
n/a
109, 205
n/a
75-76
n/a
n/a
129-133
n/a
220
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Exhibits
The following documents, which form a part of this Annual Report on Form 20-F, have been filed with the US Securities and Exchange Commission (SEC) via its EDGAR system and can be viewed on the SEC’s website at www.sec.gov.
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4.1
Exhibit 4.2
Exhibit 4.3
Exhibit 4.4
Exhibit 4.5
Exhibit 4.6
Exhibit 8
Exhibit 12.1
Exhibit 12.2
Exhibit 13
Exhibit 15.1
Exhibit 101.INS
Exhibit 101.SCH
Exhibit 101.CAL
Exhibit 101.DEF
Exhibit 101.LAB
Exhibit 101.PRE
Articles of Association of CCEP (incorporated by reference to Exhibit 99.1 to CCEP’s Form 6-K filed with the SEC on May 30, 2019).
Description of rights attached to each class of CCEP securities registered under Section 12 of the Exchange Act as at 31 December 2021.
Shareholders’ Agreement by and among the Company, Olive Partners, S.A., European Refreshments, Coca-Cola GmbH and Vivaqa Beteiligungs GmbH & Co. KG (incorporated by reference to Annex C to the proxy
statement/prospectus contained in CCEP’s Form F-4/A registration statement filed with the SEC on April 11, 2016).
Form of Bottler’s Agreement entered into between The Coca-Cola Company and the bottling subsidiaries of CCEP (incorporated by reference to Exhibit 10.7 to the Company’s Form F-4/A registration statement filed with the
SEC on April 7, 2016).
Coca-Cola European Partners plc Long-Term Incentive Plan 2016 (incorporated by reference to Exhibit 4.1 to CCEP’s Form S-8 registration statement filed with the SEC on June 1, 2016).
Rules of the Coca-Cola Enterprises Belgium/Coca-Cola Enterprises Services Belgian and Luxembourg Share Savings Plan (incorporated by reference to Exhibit 4.3 to CCEP’s Form S-8 registration statement filed with the
SEC on June 1, 2016).
Trust Deed and Rules of Coca-Cola Enterprises UK Share Plan (incorporated by reference to Exhibit 4.2 to the Company’s Form S-8 registration statement filed with the SEC on June 1, 2016).
The Coca-Cola Enterprises, Inc. 2010 Incentive Award Plan (As Amended Effective February 7, 2012) (incorporated by reference to Exhibit 99.1 to Coca-Cola Enterprises, Inc.’s Current Report on Form 8-K filed on
February 9, 2012).
Deed of Assumption and Replacement relating to Equity Awards of Coca-Cola Enterprises, Inc. (incorporated by reference to Exhibit 4.3 to the Company’s Post-Effective Amendment No. 1 on Form S-8 to Form F-4
registration statement filed with the SEC on June 1, 2016).
List of Subsidiaries of the Company (included in Note 28 of the consolidated financial statements in this Annual Report on Form 20-F).
Rule 13a-14(a) Certification of Damian Gammell
Rule 13a-14(a) Certification of Nik Jhangiani
Rule 13a-14(b) Certifications
Consent of Ernst & Young LLP, UK
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Definition Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document
The total amount of long-term debt securities issued by the Company or any subsidiary under any one instrument which requires filing consolidated or unconsolidated financial statements does not exceed 10% of the total assets of the Company and
its subsidiaries on a consolidated basis. The Company agrees to furnish a copy of any long-term debt security instrument which requires filing consolidated or unconsolidated financial statements to the SEC on request.
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Signatures
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused
and authorised the undersigned to sign the Annual Report on Form 20-F on its behalf.
Coca-Cola Europacific Partners plc
/s/ Damian Gammell
Damian Gammell
Chief Executive Officer
15 March 2022
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Glossary
Unless the context otherwise requires, the following terms have the meanings shown below.
2010 Plan
CCE 2010 Incentive Award Plan
Accelerate Competitiveness
proposals announced in October 2020 aimed at reshaping CCEP using
technology enabled solutions to improve productivity and include the closure of
certain production sites in Germany and Iberia
Admission
the date of the Company’s admission to the UK market (28 May 2016)
Annual General Meeting
Australia, Pacific and Indonesia region incorporating Coca-Cola Amatil Limited
and its subsidiaries
Accelerate Profit Performance Plan
Annual report on remuneration
Affiliated Transaction Committee
business to business
business continuity planning
business continuity and resilience
UK Department for Business, Environment and Industrial Strategy
business impact analysis
Board of Directors of Coca-Cola Europacific Partners plc
Business Performance Factor
the departure of the UK from the EU
a business unit of the Group
capital expenditure
CCE or Coca-Cola Enterprises
Coca-Cola Enterprises, Inc.
CCEG or Coca-Cola
Erfrischungsgetränke
CCEP or the Group
Coca-Cola Erfrischungsgetränke GmbH (which changed its name to Coca-Cola
European Partners Deutschland GmbH from 22 August 2016)
Coca-Cola Europacific Partners plc (registered in England and Wales number
9717350) and its subsidiaries and subsidiary undertakings from time to time
CCEP LTIP
CCEP Long-Term Incentive Plan 2016
CCIP or Coca-Cola Iberian
Partners
Coca-Cola Iberian Partners, S.A. (which changed its name to Coca-Cola
European Partners Iberia S.L.U. from 1 January 2017)
AGM
API
APPP
ARR
Articles
ATC
B2B
BCP
BCR
BEIS
BIA
Board
BPF
Brexit
BU
Capex
CCL
CDE
CDP
CEO
CFO
CIO
CGU
Chairman
Cobega
Coca-Cola Amatil Limited
cold drink equipment
Climate Disclosure Project, formerly known as the Carbon Disclosure Project
Chief Executive Officer (of Coca-Cola Europacific Partners plc)
Chief Financial Officer (of Coca-Cola Europacific Partners plc)
Chief Information Officer (of Coca-Cola Europacific Partners plc)
cash generating unit
the Chairman of Coca-Cola Europacific Partners plc
Cobega, S.A.
CoC
CODM
Committee(s)
Code of Conduct
chief operating decision maker
the five committees with delegated authority from the Board: the Audit,
Remuneration, Nomination, Corporate Social Responsibility and Affiliated
Transaction Committees
Committee Chairman/Chairmen
the Chairman/Chairmen of the Committee(s)
Committee member(s)
member(s) of the Committees
Companies Act
the UK Companies Act 2006, as amended
Company or Parent Company
Coca-Cola Europacific Partners plc
Company Secretary
Company Secretary (of Coca-Cola Europacific Partners plc)
COP 21
COP 26
the 21st Conference of the Parties to the United Nations Framework Convention
on Climate Change,
the 26th Conference of the Parties to the United Nations Framework Convention
on Climate Change,
COVID-19 (also coronavirus and
pandemic)
the Coronavirus-19 pandemic, from March 2020 through all of 2021 and into
2022.
CSR
Deloitte
Director(s)
DNV GL
Corporate Social Responsibility
Deloitte LLP
a (the) director(s) of Coca-Cola Europacific Partners plc
international accredited registrar and classification society
Articles of Association of Coca-Cola Europacific Partners plc
Coca-Cola system
comprises The Coca-Cola Company and around 225 bottling partners worldwide
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Glossary
CONTINUED
DRS
DTC
DTRs
EBITDA
EEA
EAP
EIR
EPS
ERA
ERM
EY
ESP
EU
deposit return scheme(s)
Depository Trust Company
the Disclosure Guidance and Transparency Rules of the UK Financial Conduct
Authority
earnings before interest, tax, depreciation and amortisation
European Economic Area
Employee Assistance Programme
effective interest rate
earnings per share
enterprise risk assessment
enterprise risk management
Ernst & Young LLP
GB Employee Share Plan
European Union
European Refreshments or ER
European Refreshments Unlimited Company, a wholly-owned subsidiary of
TCCC
Exchange Act
the US Securities Exchange Act of 1934
Executive Leadership Team or
ELT
the CEO and his direct senior leadership reports
E&C
FAWVA
FCPA
FIFO
FMCG
FPI
FRC
FTSE4Good
ethics and compliance
facility water vulnerability assessment
US Foreign Corrupt Practices Act of 1977
first-in, first-out method
fast moving consumer goods
foreign private issuer, a term that applies to a company under the rules of the
Nasdaq Stock Exchange that is not a domestic US company
the Financial Reporting Council
a series of ethical investment stock market indices launched in 2001 by the
FTSE Group
GAAP
GB Scheme
GMs
GHG
Generally Accepted Accounting Principles
the Great Britain defined benefit pension plan
General Managers of Coca-Cola Europacific Partners plc
greenhouse gas
GHG Protocol or WRI/WBCSD
GHG Protocol
the GHG Protocol is the internationally recognised, standard framework for
measuring greenhouse gas (GHG) emissions from private and public sector
operations and their value chains
Group or CCEP
HMRC
HoReCa
HR
I&D
IAS
IASB
IAS Regulations
IBR
IEA
IFRIC
IFRS
INEDs
IPF
IRC
IRS
ISAE 3000
ISO
IT
Coca-Cola Europacific Partners plc and its subsidiaries and subsidiary
undertakings from time to time
Her Majesty’s Revenue and Customs, the UK’s tax authority
hotels, restaurant and cafes
human resources
inclusion and diversity
International Accounting Standards
International Accounting Standards Board
International Accounting Standards (IAS) Regulations relate to the harmonisation
of the financial information presented by issuers of securities in the European
Union
incremental borrowing rate
International Energy Agency
International Financial Reporting Interpretations Committee
International Financial Reporting Standards
Independent Non-executive Directors of Coca-Cola Europacific Partners plc
Individual Performance Factor
the US Internal Revenue Code of 1986, as amended
US Internal Revenue Service
International Standard on Assurance Engagements 3000
International Organization for Standardisation
information technology
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Strategic Report
Governance and Directors’ Report
Governance and Directors’ Report
Financial Statements
Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Glossary
CONTINUED
KPI
LGBT+
key performance indicator
pertaining collectively to people who identify as lesbian, gay, bisexual, or
transgender, and to people with gender expressions outside traditional norms,
including nonbinary, intersex, and other queer people (and those questioning their
gender identity or sexual orientation), along with their allies
Listing Rules or LRs
the Listing Rules of the UK Financial Conduct Authority
LSE
LTI
LTIP
M&A
Merger
NARTD
Nasdaq
London Stock Exchange
long-term incentive
Long-Term Incentive Plan
merger and acquisition(s)
the formation of Coca-Cola European Partners plc on 28 May 2016 through the
combination of the businesses of Coca-Cola Enterprises, Inc., Coca-Cola Iberian
Partners, S.A. and Coca-Cola Erfrischungsgetränke GmbH
non-alcoholic ready to drink
The Nasdaq Stock Market
Nasdaq Rules
the corporate governance rules of Nasdaq
NEDs
NGO
NYSE
OCI
OFAC
Official List
Non-executive Directors of Coca-Cola Europacific Partners plc
non-governmental organisation
New York Stock Exchange
other comprehensive income
Office of Foreign Assets Control of the US Department of the Treasury
the Official List is the list maintained by the Financial Conduct Authority of
securities issued by companies for the purpose of those securities being traded
on a UK regulated market such as London Stock Exchange
Olive Partners
Opex
Olive Partners, S.A.
operating expenditure
Parent Company or Company
Coca-Cola Europacific Partners plc
Paris Agreement
the agreement on climate change resulting from UN COP21, the UN Climate
Change Conference, also known as the 2015 Paris Climate Conference
Partnership
Pension Plan 1 and
Pension Plan 2
PET
PFIC
PR
PRN
PSU
the partnership agreement entered into between the Group, the GB Scheme and
CCEP Scottish Limited Partnership to support a long-term funding arrangement
the Germany defined benefit pension plans
polyethylene terephthalate
passive foreign investment company
public relations
Packaging Recovery Notes
performance share unit
Remuneration policy
the remuneration policy as approved by shareholders at the Company’s AGM
held on 22 June 2017
rPET
RTD
ROIC
ROU
RSU
SAGP
SBTi
SDRT
SDG
SEC
SGP
recycled PET
ready to drink
return on invested capital
right of use
restricted stock unit
Sustainable Agriculture Guiding Principles
Science Based Targets initiative
stamp duty reserve tax
UN Sustainable Development Goals
Securities and Exchange Commission of the US
Supplier Guiding Principles
Shareholders’ Agreement
Shares
SID
the shareholders’ agreement dated 28 May 2016 between Coca-Cola European
Partners plc and Olive Partners, S.A., European Refreshments, Coca-Cola
GmbH and Vivaqa Beteiligungs Gmbh & Co. KG
ordinary shares of €0.01 each of Coca-Cola Europacific Partners plc
Senior Independent Director
SOX or the Sarbanes-Oxley Act
the US Sarbanes-Oxley Act of 2002
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Financial Statements
Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Glossary
CONTINUED
S&P
Standard & Poor’s
the Spanish Stock Exchanges
the Barcelona, Bilbao, Madrid and Valencia Stock Exchanges
SPO
SVA
TCA
TCCC
TCFD
the Acquisition
Sustainable Packaging Office
source water vulnerability assessment
EU-UK Trade and Cooperation Agreement
The Coca-Cola Company
Task Force on Climate-related Financial Disclosures
under the binding offer made in November 2020, revised in February 2021,
acquiring the entire issued share capital of Coca-Cola Amatil Limited from The
Coca-Cola Company, under the terms of a Co-operation and Sale Deed, and
from shareholders other than The Coca-Cola Company, effected by means of a
scheme of arrangement
TSR
total shareholder return
UK Accounting Standards
Financial Reporting Standards issued by the Accounting Standards Board
UKBA
UKCGC
UNESDA
UN OHCHR
unit case
VAT
WEEE
WMP
UK Bribery Act 2010
UK Corporate Governance Code 2018
Union of European Soft Drinks Associations
United Nations Office of the High Commission on Human Rights
approximately 5.678 litres or 24 eight ounce servings, a typical volume
measurement unit
value added tax
EU Directive on Waste Electrical and Electronic Equipment
water management plan
WRI/WBCSD GHG Protocol or
GHG Protocol
the GHG Protocol is the internationally recognised, standard framework for
measuring greenhouse gas (GHG) emissions from private and public sector
operations and their value chains
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Governance and Directors’ Report
Financial Statements
Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
Useful addresses
Registered office
Coca-Cola Europacific Partners plc
Pemberton House
Bakers Road
Uxbridge
UB8 1EZ
Registered in England and Wales
Company number: 9717350
+44 (0)1895 231313
Share registration
US shareholders:
Computershare
462 South 4th Street
Suite 1600
Louisville
KY 40202
1-800-418-4223
Shareholders in Europe and outside the US:
Computershare
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
+44 (0)370 702 0003
Report ordering
Shareholders who would like a paper copy of the Integrated Report, which will be despatched from around 14 April 2022, can make their request by post to the
Company Secretary, Pemberton House, Bakers Road, Uxbridge UB8 1EZ, United Kingdom or by making a request via www.cocacolaep.com/financial-reports-
and-results/integrated-reports or by sending an email to sendmaterial@proxyvote.com or by making a request via www.proxyvote.com or by phoning (in the
US) 1-800-579-1639 or (outside the US) +1-800-579-1639.
Agent for service of process in the US
The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
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Financial Statements
Financial Statements
Other Information
Other Information
Coca-Cola Europacific Partners plc I 2021 Integrated Report and Form 20-F
The full extent to which COVID-19 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, achievement of sustainability goals and the results of the integration of the businesses
following the Acquisition, including expected efficiency and combination savings, 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.
Forward looking statements
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 this 2021 Annual Report on Form 20-F, including the statements under
the following headings: Geodemographic (such as the adverse impacts that war and terrorism, COVID-19 and related
government restrictions and social distancing measures implemented in many of our markets, and any associated
economic downturn, may have on our financial results, operations, workforce and demand for our products); Packaging
(such as refillables and recycled plastics); Cyber and social engineering attacks and IT infrastructure (including third
parties); Economic and political conditions (such as increased volatility, inflation, energy and commodity costs, the UK’s
exit from the EU, the EU-UK Trade and Cooperation Agreement, and uncertainty about the future relationship between
the UK and EU); Market (such as disruption due to customer negotiations, customer consolidation and route to market);
Legal, regulatory and tax (such as the development of regulations regarding packaging, taxes and deposit return
schemes); Climate change and water (such as net zero emission legislation and regulation, and resource scarcity);
Perceived health impact of our beverages and ingredients, and changing consumer buying trends (such as sugar
alternatives and other ingredients); Competitiveness, business transformation and integration; People and wellbeing;
Relationship with TCCC and other franchisors; Product quality; and Other risks;
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.
Coca-Cola Europacific Partners plc | 2021 Integrated Report and Form 20-F Registered office
Pemberton House
Bakers Road
Uxbridge UB8 1EZ
Registered in England and Wales
Company number: 09717350
www.cocacolaep.com