We are growing faster together by
combining the strength and scale of
our large multinational business with an
expert, local knowledge of the customers
we serve and communities we support.
Our success is built on three pillars:
great brands, great people and great
execution. Done sustainably.
In this year’s report
Strategic Report
1
2
4
7
8
9
13
14
15
16
17
20
23
26
28
30
32
Who we are
Performance indicators
Our portfolio
Our operations
Our business model
Chairman and CEO In conversation
Our market drivers
Our strategy
This is Forward - our sustainability action plan
Great brands
Forward on drinks
Great people
Forward on society – people
Forward on society – communities
Great execution
Our customers
Forward on supply chain
36
37
41
45
48
61
65
68
79
80
81
Done sustainably
Forward on climate
Forward on packaging
Forward on water
Task Force on Climate-related Financial
Disclosures (TCFD)
Our stakeholders
Section 172(1) statement from the Directors
Principal risks
Viability statement
Non-financial and sustainability
information statement
Business and financial review
Governance and Directors’ Report
92
93
95
100
103
113
114
117
118
125
126
127
127
129
130
131
144
147
Chairman’s introduction
Board of Directors
Directors’ biographies
Senior management
Corporate governance report
Nomination Committee Chairman’s letter
Nomination Committee report
Audit Committee Chairman’s letter
Audit Committee report
ESG Committee Chairman’s letter
ESG Committee report
Directors’ remuneration report
Statement from the Remuneration
Committee Chairman
Overview of remuneration policy
Remuneration at a glance
Annual report on remuneration
Directors’ report
Directors’ responsibilities statement
2900
Visit our online Integrated Report
at cocacolaep.com/investors/
financial-reports-and-results/
latest-integrated-report
None of the websites referred to in this Annual Report
on Form 20-F for the year ended 31 December 2023
(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 09717350
Financial Statements
149
162
167
Independent auditor’s reports
Consolidated financial statements
Notes to the consolidated financial
statements
Company financial statements
Notes to the Company financial statements
223
227
Further Sustainability Information
234
237
Key performance data summary
Approach to sustainability reporting
and methodologies
Other Information
243
252
269
271
272
273
277
278
Risk factors
Other Group information
Form 20-F table of cross references
Exhibits
Signatures
Glossary
Useful addresses
Forward-looking statements
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
1
Who we are
Coca-Cola Europacific
Partners is one of
the world’s leading
consumer goods
companies – making,
moving and selling
some of the world’s
most loved drinks.
We make, move and sell the
world’s most loved drinks to
millions of consumers, customers
and communities every day.
Everything we do is built on three
strategic pillars: great brands,
great people and great execution.
Done sustainably.
And our success is defined by
the passion, hard work and
commitment of the 32,000(A)
people who work here at
Coca-Cola Europacific Partners
(CCEP).
(A) As at 31 December 2023.
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
2
Performance indicators
Financial
Reported revenue
€18.3bn
Reported operating profit
€2.3bn
Reported diluted earnings per share (EPS)
€3.63
Comparable diluted earnings per share
€3.71
Comparable and FX neutral revenue
Comparable operating profit
Net cash flows from operating activities
€18.7bn
€2.4bn
Reported revenue increased by 5.5%, or 8.0% on a
comparable and FX neutral basis. Volumes were
down 0.5%(A) and revenue per unit case increased
by 8.5%(B). Volume remained resilient despite
macroeconomic impacts on consumer spend
and strategic SKU rationalisation, with strong
underlying volume performance. Revenue per
case growth reflected positive headline price and
continued focus on promotional optimisation and
revenue growth management initiatives.
Reported operating profit increased by 12.0%,
or 13.5% on a comparable and fx neutral basis,
reflecting strong revenue growth, as well as the
benefit of ongoing efficiency programmes and
continuous efforts on discretionary spend
optimisation.
€2.8bn
Comparable free cash flow
€1.7bn
Return on invested capital (ROIC)
9.5%
Comparable return on invested capital
10.3%
(A) On a comparable basis, No selling day shift in FY23.
(B) On a comparable and foreign exchange (FX) neutral basis.
Comparable volume, comparable and FX neutral revenue and revenue per unit case, comparable operating profit, comparable diluted EPS, comparable free cash flow, ROIC and
comparable ROIC are non-IFRS performance measures. Refer to “Note regarding the presentation of alternative performance measures” on pages 81-82 for the definition of our
non-IFRS performance measures and pages 83-90 for a reconciliation of reported to comparable results. Comparable free cash flow excludes net of tax cash proceeds of €89
million in connection with the royalty income arising from the ownership of certain mineral rights in Australia.
€14,553m2023€13,529m2022€3,749m2023€3,791m2022€14,700m2023€13,529m2022€3,998m2023€3,791m2022€1,842m2023€1,529m2022€557m2022€1,888m2023€1,670m2022€485m2023€468m2022€497m2023 Strategic
Report
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Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
3
Performance indicators continued
Sustainability
Safety
Group: total incident rate
Number per 100 full time
equivalent employees
Our target
Climate
Water
0.84 Group: percentage greenhouse gas
our entire value chain versus 2019 16.7% Group: water replenished
as a percentage of total
sales volume
(GHG) emissions reduction across
98.7%
Reduce our total incident rate (TIR) to below
1 by 2025
We are working towards world class safety standards
and our Health, Safety and Mental Wellbeing policy is
helping to ensure that we are adopting best practices.
Our targets
Our target
Reduce emissions across our entire value chain
by 30% by 2030 (versus 2019)
Our short- and long-term targets to reduce emissions
by 30% by 2030, and to reach Net Zero by 2040, were
approved by the Science Based Targets initiative (SBTi)
as being in line with climate science.
Replenish 100% of water we use in our beverages
Together with The Coca-Cola Company (TCCC) and The
Coca-Cola Foundation (TCCF), we continue to support
replenishment programmes across our territories. In
2023, we supported 27 water replenishment projects
in Europe and 9 in API.
Drinks
Percentage sugar per litre reduction
Europe(A)
Target
10% reduction by
2025 (versus 2019)
Australia(B)
Target
25% reduction by
2025 (versus 2015)
New
Zealand(B)
Target
20% reduction by
2025 (versus 2015)
Indonesia(B)
Target
35% reduction by
2025 (versus 2015)
Our target
Reduce sugar
in our drinks
Packaging
Group: percentage of rPET used 54.6%
Our target
50% recycled plastic in our PET bottles by 2023
(Europe) and 2025 (API)
We continued to exceed our target to use >50%
recycled PET (rPET), reaching 54.6% across the Group
in 2023. We also increased our use of rPET in Europe
again, reaching 59.2%(C). In API 41.5% of the plastic we
used in our PET bottles was rPET.
Note: Our 2023 data was subject to independent limited assurance. A copy of our 2023
assurance statement, and assurance statements for prior years can be found on
cocacolaep.com/sustainability/download-centre. See detail regarding restatement
of our baseline GHG figures in our methodology statement on page 237.
(A) Sparkling soft drinks, non-carbonated soft drinks and flavoured water only. Does not include plain water or juice.
(B) Non-alcoholic ready to drink (NARTD) portfolio, including dairy. Does not include coffee, alcohol, beer or Freestyle.
(C) In 2019, we announced enhanced packaging targets for Europe, bringing forward the deadline to use at least 50%
rPET from 2025 to 2023. Since 2021, our rPET use in Europe has been >50%.
For more about our
sustainability commitments and
progress see pages 14-47
4.9%20235.0%202215.9%202315.9%202214.9%202316.8%202236.2%202331.6%2022 Strategic
Report
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Financial
Statements
Further Sustainability
Information
Other
Information
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2023 Integrated Report and Form 20-F
4
Our portfolio
Great brands, innovation and value for customers
We work with our partners to offer
consumers a wide range of quality
drinks for every taste and occasion.
We continue to expand our portfolio
by growing our core brands, while
launching and scaling new products
in categories like alcohol and coffee.
Our frontline sales force delivers
execution and activation of our
brands to support and create value
for our customers throughout the
year, particularly during key selling
moments like Halloween, Christmas
and the summer.
We are reducing the environmental
impact of our manufacturing,
distribution and packaging, as well
as delivering on our commitment to
reduce sugar across our portfolio and
offering more low or no calorie drinks.
2023 volume by brand category
1
2
3 4
1 Coca-Cola
2 Flavours, mixers and energy
59.0%
26.0%
3 RTD tea, coffee, juices and other
7.5%
4 Hydration
7.5%
Coca-Cola®
Our Coca-Cola brands come
in a range of flavours and a
great choice of packs, with
or without sugar.
More flavours and innovation
In 2023, we provided even more
flavour extensions and innovation
with a number of limited editions
including Coca-Cola® Y3000 Zero
Sugar, co-created with human and
artificial intelligence (AI), and
Coca-Cola Movement.
Supermodel Gigi Hadid fronted a
new global brand campaign, A
Recipe for Magic, pairing Coca-Cola
with special meal moments.
We also marked the FIFA Women’s
World Cup 2023 with promotions,
limited edition pack designs and in
store displays across our channels.
This activity focused on attracting
consumers and engaging
fans across our markets.
We ended the year with engaging
Christmas campaigns and
promotions to mark the holiday
season, which is an important
selling moment for CCEP.
Key product 2023
Coca-Cola Zero Sugar continued to perform in 2023
and saw volume growth of
+4.0%
2023 volume performance by category
Coca-Cola
Trademark
—%
Flavours, mixers and
energy
RTD tea, coffee,
juices and other
+1.0%
-3.0%
Hydration
-7.0%
All references to volumes are on a comparable basis. All changes are versus 2022 equivalent period unless stated otherwise. Non-IFRS performance measure. Refer to “Note regarding
the presentation of alternative performance measures” on pages 81-82 for the definition of our non-IFRS performance measures and to pages 83-90 for a reconciliation of reported
to comparable results.
Read more in Great brands
on pages 16-19
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2023 Integrated Report and Form 20-F
5
Our portfolio continued
Great brands, innovation and value for customers
Flavours, mixers
and energy
Our flavours, mixers and energy
category is driving growth for
our business and providing a
range of great tasting drinks
for consumers.
2023 energy volume
Strong volume
growth supported
by continued
distribution
gains and
exciting innovation
such as Monster
Zero Sugar.
New flavours, more low or no
calorie options, and engaging
activation
In partnership with Monster
Energy, we launched new products
including Monster Zero Sugar,
Monster Juiced Aussie Lemonade,
Monster Ultra Rosa and Monster
Ultra Peachy Keen.
Fanta continued to grow. What
The Fanta Zero Sugar returned
with a new colour and mystery
flavour, supported by on and
off shelf execution. The brand
celebrated Halloween, supported
by marketing, promotions and
in store and online execution.
Royal Bliss launched new
flavours including Aromatic Berry
in several markets.
RTD tea, coffee,
juices and other
Ready to drink (RTD) remains
an important category for
our business, with ongoing
innovation and quality brands
introduced to new markets.
Growing our portfolio with alcohol
ready to drink (ARTD)
We further grew our portfolio in the
ARTD category in several European
markets. We also announced the
creation of Absolut Vodka and
Sprite in 2024.
2023 key product
Jack Daniel’s &
Coca-Cola is the
number 1 ARTD
value brand in
Great Britain.(A)
#1
Hydration
Our hydration category
provides consumers with a
range of beverage choices for
any occasion. It includes waters,
flavoured waters, functional
waters and isotonic drinks.
Category performance
Sports drinks volumes were up 11.3%
and continue to be popular in both
Europe and API, with growth in
Powerade across all markets. To
mark the FIFA Women’s World Cup,
we launched a new Powerade
flavour, Powerade Fever Pitch.
(A) Combined portfolio of Jack Daniel’s & Coca-Cola and Jack Daniels & Coca-Cola Zero Sugar, external data source NielsenIQ last 12 weeks ending 27 January 2024.
All references to volumes are on a comparable basis. All changes are versus 2022 equivalent period unless stated otherwise. Non-IFRS performance measure. Refer to ‘Note regarding the presentation of alternative performance measures’ on page 82 for the definition of our
non-IFRS performance measures and to pages 83-90 for a reconciliation of reported to comparable results.
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2023 Integrated Report and Form 20-F
6
Acquisition of CCBPI
Faster
growth
We were excited to announce a joint venture
with Aboitiz Equity Ventures Inc. (AEV) during the
year. Together, we acquired Coca-Cola Beverages
Philippines, Inc. (CCBPI), a successful business
with attractive profitability and growth prospects.
The acquisition continues to position us as the
world’s largest Coca-Cola bottler by revenue.
Read more at cocacolaep.com/media/
news/2024/ccbpi-acquisition
Image: the Philippines business is supported
by colleagues known as the “Coca-Cola
Tigers" pictured here
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2023 Integrated Report and Form 20-F
7
Our operations
Remaining close
to our customers,
communities and
stakeholders gives us
unique knowledge of
our markets, enabling
us to deliver great
brands and great
execution, done
sustainably.
Our markets
Location of our shared
service centres
Region
Europe
Revenue by
geography(A)
Total
employees(B)
Production
facilities
Region
Revenue by
geography(A)
Total
employees(B)
Production
facilities
Iberia (Spain, Portugal
and Andorra)
18.5%
3,964
Germany
Great Britain
France and Monaco
Belgium and
Luxembourg
Netherlands
Norway
Sweden
Iceland
Bulgaria(C)
16.5%
17.5%
12.5%
6.0%
4.0%
2.0%
2.0%
0.5%
—
(A) Revenue shown is percentage
of total reported revenue as at
31 December 2023.
(B) Number of employees as at
31 December 2023.
(C) Shared service centres.
6,473
3,487
2,623
2,165
803
568
725
166
1,196
—
Australia, Pacific and Indonesia (API)
Australia
13.0%
3,652
New Zealand
and Pacific Islands
Indonesia and
Papua New Guinea
3.5%
4.0%
1,787
4,706
14
13
11
11
16
5
5
3
1
1
1
2
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2023 Integrated Report and Form 20-F
8
Our business model
How we do what we do
From developing close relationships with TCCC and other
franchisors to sourcing raw materials, our great people
make, move and sell great tasting drinks with great execution,
all done sustainably.
s
k
s
Read more about
our risks and
mitigations on
pages 68-78
1
2
3
4
5
6
7
Business disruption
Packaging
Legal, regulatory and tax
Cyber and IT resilience
Economic and political conditions
Market
Climate change and water
8
9
10
11
12
Customer and consumer buying trends
and category perception
Business transformation, integration etc
People and wellbeing
Relationships with TCCC and other
franchisors
Product quality
Great brands
Great people
Great execution
Done sustainably
We partner
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.
Associated risks: 2 8 9 11
We source
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. On
average in 2023, 84% of our
spend was with suppliers based
in our countries of operation.
Associated risks: 1 3 4 7 12
We make
Our production facilities
make and bottle our wide
range of drinks. Over 90%
of the drinks we sell are
produced in the country in
which they are consumed.
Associated risks: 3 4 7 9 10 12
Forward
on climate
Forward
on packaging
Forward
on water
Forward on
supply chain
Forward
on drinks
Forward
on society
For a better shared future
Creating value and driving
sustainable returns for our:
People
Shareholders
Franchisors
Consumers
Customers
Suppliers
Communities
Read more in our s172(1) statement
from the Directors on pages 65-67 and
Our strategy on pages 14-47
We recycle
We sell
Although 99.1% 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 packaging
collection so that materials are
recycled and reused.
Associated risks: 1 2 7
Our nearly 11,600 strong
commercial team works with a wide
range of customers, from small local
shops, supermarkets and wholesalers
to restaurants, bars and sports
stadiums, so consumers can enjoy
our great beverages. We also
provide cold drink equipment (CDE)
and supply vending machines.
Associated risks: 2 3 4 5 6 8 10
We distribute
We distribute our products
to customers and vending
partners directly, by working
closely with logistics partners.
Associated risks: 1 3 6 10
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2023 Integrated Report and Form 20-F
9
Chairman and CEO
In conversation
Left:
Sol Daurella,
Chairman
Right:
Damian
Gammell,
CEO
Growing
faster together
2023 was another great year for CCEP. We have the
momentum and platform, now including the Philippines,
to go even further together.”
— Damian Gammell, CEO
What were your personal highlights
during the year?
Sol: I am really proud of the progress
we’ve made against our sustainability
targets, and in particular the practical
measures we continue to take to both
reduce and measure our impacts. We
were delighted that the SBTi approved
our GHG emissions reduction targets
during the year, supporting our
ambition to reach Net Zero by 2040.
Damian: Our performance reinforces
the ongoing resilience and strength of
our business. That aside, I am especially
pleased with the progress we are
making with our long-term
transformation journey in Indonesia, a
truly exciting market. Also, a call out to
our joint acquisition of CCBPI with AEV,
which aims to further expand our
geographic footprint in the region and
which continues to position us as the
world’s largest Coca-Cola bottler by
revenue. Both of these markets are
aligned with our long-term strategy of
driving sustainable and stronger growth
through diversification and scale.
How would you reflect on CCEP’s
overall business performance in 2023?
Damian: I am delighted with our
progress across the business in 2023.
We continued to invest in our portfolio,
people, technology, supply chain and
sustainability, creating a solid growth
platform for all our stakeholders.
Financially we performed well,
achieving strong top and bottom line
growth, with value share gains and
impressive comparable free cash flow
generation. Furthermore, despite the
macroeconomic and inflationary
backdrop, our volume remained
resilient.
Sol: We continued to sharpen our focus
on driving profitable revenue growth
and delivering best in class customer
service. We are building on the strength
of our brands, the great partnership we
have with TCCC and our leading
capabilities, all of which has reaffirmed
CCEP as the number one value growth
creator in fast moving consumer goods
(FMCG) across Europe and NARTD in
API, as well as being ranked as the
number 1 supplier in 2023 across our
large international retail customers.
Damian: Of course, none of this is
possible without great people, and I
would like to take this opportunity to
say a very big thank you to everyone
at CCEP for their tremendous
commitment and hard work that
has contributed so much to our
success in 2023.
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2023 Integrated Report and Form 20-F
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Chairman and CEO continued
In conversation
You mentioned CCEP’s financial
performance in 2023: what stood
out for you?
Damian: All key financial metrics have
been delivered in 2023. A strong top
line, led by price and mix. We successfully
executed pricing across all markets
and continued to create value for our
category. Our focus on revenue and
margin growth management, along
with our price and promotion strategy,
drove solid gains in revenue per unit
case during the year. Our volumes also
remained resilient despite inflationary
pressures. This was driven by great in
market execution, leveraging our broad
pack price architecture, and good
underlying demand in developed
markets, offset by the right strategic
portfolio decisions for the long term.
Strong top line performance, alongside
our continued focus on cost control
and productivity efficiencies, drove
strong operating profit growth and
impressive comparable free cash flow
generation. We also returned to the
top end of our target leverage range.
So, a great year all round.
(A) APS refers to Australia, Pacific and South East Asia.
What progress have you made
on CCEP’s strategy?
Damian: We have continued to
grow our business and reach more
households, from expanding our
portfolio through the launch of
Jack Daniel’s & Coca-Cola in the
exciting and fast growing ARTD
category, and targeted innovation of
our existing brands such as the launch
of Monster Zero Sugar, to diversifying
geographically through the acquisition
of CCBPI.
We continued to invest for long-term
growth as well as developing
capabilities and driving efficiencies to
support our mid-term objectives for
the years ahead.
We also remained focused on driving
shareholder value. This is made evident
through the combination of driving
solid top and bottom line growth,
paying a record dividend, up almost
10% year on year, alongside delivering
impressive total shareholder return
(TSR) and entering the Nasdaq-100
at the end of the year.
Sol: The acquisition of CCBPI creates
a more diverse footprint for CCEP
geographically, which has prompted
the renaming of API to APS(A). It will
provide the opportunity to leverage
best practice and talent, including
supporting Indonesia’s transformation
journey. It reinforces CCEP’s aim of
driving sustainable and stronger growth
through diversification and scale, and
underpins the Company’s mid-term
strategic objectives.
Image: Amandina PET recycling plant in Bekasi, West Java, Indonesia
How are you progressing with your
sustainability commitments, and how
do these support CCEP’s strategic
objectives?
Sol: Sustainability is integral to the
success of our business. As a Board, we
will continue to make decisions, which
help us to make progress against our
long-term commitments. More than
ever, we are aware of the social and
environmental challenges we face as a
business, particularly around delivering
our short- and long-term GHG
emissions reduction targets, increasing
recycled content in our packaging and
improving our water use efficiency. Our
progress continues to be recognised
externally and we are proud to have
retained our MSCI AAA rating and our
inclusion on CDP’s A List for Climate.
Damian: We have made strong
progress against our This is Forward
commitments in 2023 and are taking
action where it matters most. On
packaging, we have introduced 100%
recycled PET bottles in Indonesia
supported by our investment in PET
recycling facilities in 2022, further
boosting our use of recycled content
in Indonesia.
We continued to invest in sustainability
focused technology through CCEP
Ventures and partnered with TCCC to
create a sustainability focused venture
capital fund.
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2023 Integrated Report and Form 20-F
11
Chairman and CEO continued
In conversation
The acquisition of CCBPI creates a more diverse footprint
for CCEP geographically while providing the opportunity
to leverage best practice and talent.”
— Sol Daurella, Chairman
How have acquisitions contributed to
the Group in 2023?
Damian: As mentioned earlier,
geographic diversification is aligned
to our long-term growth strategy,
creating an even stronger platform for
the future. Our acquisitions have also
enabled us to leverage best practice
and talent in a much bigger way than
before. For example, we have taken
16+ years of experience of the ARTD
market in Australia back to Europe as
we accelerate into this exciting and fast
growing category. This has already
delivered great results.
Sol: From a Board perspective, we have
been delighted with the progress made
this year. We believe that bringing
businesses together has created
growth operationally and culturally, and
will continue to do so. And, as Damian
has already referred to, there has been
a strong focus on sharing capabilities,
as our people have embraced best
practice and standardisation, which has
in turn improved the service we provide
to our customers.
How has your relationship with TCCC
developed this year?
Sol: It’s so important that we are fully
aligned on strategy, with both
companies sharing a common vision.
Our strong relationship is also the
foundation of our This is Forward
sustainability strategy, which is fully
aligned with TCCC’s own global World
Without Waste strategy.
Damian: We have always been closely
aligned with TCCC strategically and
that won’t change. We continue to align
our joint long-term growth plans and to
pursue solid ways of working together
with a joint investment mindset and
aligned portfolio management across
all territories.
A great example would be the joint
acquisition of CCBPI from TCCC, in line
with its stated intent to divest bottling
operations.
What is the outlook for CCEP in 2024
and beyond?
Damian: We will continue to invest in
the business to ensure we have the
right capabilities to meet the needs of
our customers, consumers and people,
and to continue to provide world class
execution and excellent service.
Consumer sentiment continues to
be impacted by the economic
environment, so, together with our
brand partners, we will remain focused
on staying affordable and relevant
while creating value for our category
and customers.
Sol: We continue to be the largest
Coca-Cola bottler by revenue, and
the CCBPI acquisition creates value
for even more customers and reaches
even more consumers.
What is consistent in our progress is the
passion, dedication and diversity of our
people, as demonstrated through our
inclusion on the Bloomberg Gender
Equality Index for the third year in a
row. As we integrate CCBPI into the
wider business, we expect to continue
to focus on inclusion and the wellbeing
of our people, as well as continuing to
advance on our sustainability
commitments.
What will determine CCEP’s success?
Damian: It all comes back to great
brands, great people, great execution,
done sustainably. We have a strong
business and have the tremendous
privilege of making, moving and selling
the world’s most loved drinks to refresh
consumers, now across 31 markets.
Together with our franchise partners,
we’re building on our deep consumer
understanding to help us bring our
great tasting drinks to even more
households.
Sol: We will continue to invest, and have
committed to almost €1 billion this year
across technology, coolers, capacity and
sustainability. This will include further
investment through CCEP Ventures,
which will help us to deliver our science
based sustainability targets and harness
new technology. We will also invest in
the capabilities and tools to ensure our
people can grow with our business.
We have delivered around €6 billion
of shareholder returns since 2016,
demonstrating our ability to deliver
consistent shareholder value. Delivering
continued shareholder value remains a
key focus for 2024 and beyond.
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FIFA Women’s World Cup
Faster
connections
Taking up Coca-Cola’s campaign theme
“Believing is Magic”, CCEP is proud to have
been involved with the FIFA Women’s World
Cup 2023, hydrating over 1.5 million players,
coaches, officials, media and spectators during
the tournament. Our commercial teams built
engagement with consumers by helping
customers create football themed activations
in store, as well as online promotions.
Watch: Peter West, General
Manager, Australia, Pacific
and Indonesia, analyses the
data behind the FIFA Women’s
World Cup.
cocacolaep.com/annual-report/
case-study/fasterconnections
Image: Licensed venue, New South Wales,
Australia during the FIFA Women’s World Cup
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Our market drivers
Our business is affected by a
range of macroeconomic and
market trends – from consumer
and sustainability factors to the
impact of new technology.
Our collaborative business model and
culture means we can adapt and thrive
in a changing environment, while our
strategy enables us to respond to both
current and future dynamics.
Consumer trends
Today’s consumers are demanding
more choice, and our evolving
portfolio offers drinks for a wide
variety of occasions. Demand for
healthier alternatives continues to
grow, which is reflected in the low and
no calorie choices across our brands.
We believe strong brands supported
by innovation are the key to meeting
changing consumer needs.
The ongoing drive for value and
convenience is coupled with the
move to shopping more online and
the desire for more drink choices.
We address these consumer trends
alongside the macroeconomic factors
we face, the impact of technology
and our focus on sustainability.
Read more in Our strategy on page 14
Macroeconomic factors
Geopolitical volatility and high
inflation continued to impact our
business and our markets in 2023. We
executed dynamic pricing strategies
across our markets to offset the
inflationary pressures we faced, while
maintaining focus on productivity.
The economic environment continues
to impact consumer sentiment,
making affordability increasingly
important for some consumers.
We actively manage our pricing
and promotional spend to remain
affordable and relevant to our
consumers, and our broad price pack
architecture helps us create the right
balance between affordability and
premiumisation.
While some markets are seeing trends
towards more shopping in discounters,
with a shift to some private label
brands, we remain well placed within
resilient categories and continued to
grow volume and value share,
maintaining our position as the number
one FMCG value creator in Europe and
NARTD in API.
Sustainability focus
There is an increasing interest in
sustainability across our markets,
particularly among younger consumers.
Government commitments to new
climate change and packaging-related
regulations also continue to impact our
business.
To ensure we meet the expectations
on us, we are further expanding and
creating new sustainability partnerships.
For example, we have partnered with
TCCC, other bottlers and Greycroft, a
seed-to-growth venture capital firm, to
create a venture capital fund focused
on sustainability.
upcycling technology to create
ethylene, a key component of plastic
bottle caps.
We continue to set our own ambitious
sustainability targets and have
received SBTi approval of our 2030
GHG emissions reduction and 2040
Net Zero targets.
Read more about This is Forward on
pages 14-47
Impact of technology
With the adoption of new digital
channels now a firmly established
trend, both consumers and customers
are seeking to do more online and
through these channels. We continue
to win through online channels,
building on our value share growth, and
are accelerating our system capabilities
to engage the digital shopper.
As consumer and channel trends are
changing, the technology we use, and
specifically the unique data insights
we gain through our in house and
partner digital platforms, are crucial.
We continue to invest in our broader
digital capabilities such as key
account and revenue growth
management tools alongside
adopting AI across our organisation,
from back office to supply chain.
Through CCEP Ventures, we have also
entered into a partnership with
Swansea University to explore CO₂
These investments will collectively
support our journey towards becoming
the world’s most digitised bottler.
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Our strategy
CCEP is a market leader in
a profitable and growing drinks
market. Our aim is to always
outperform the market, creating
value for our customers and
shareholders, while ensuring
we limit our impacts on the
world around us and support
our people and communities.
Our strategy – great brands,
great people, great execution,
done sustainably – is core to delivering
on our aim. This is Forward, our
sustainability action plan, sits at
the heart of our long-term
business strategy.
This is Forward sets out the actions
we are taking on six key social and
environmental topics, where we know
we can make a significant difference
in the areas our stakeholders want us
to prioritise.
Great brands
p16
Great people
p20
Great execution
p28
Forward on
drinks
pages 16-19
Forward on
society
pages 20-27
Our diverse portfolio is built on our core
brands like Coca-Cola, Fanta, Sprite and
Monster, as well as targeted expansion
into categories like coffee and alcohol.
We take care of our talented, passionate
and committed people who make our
business successful, and support our
suppliers, customers and communities.
At CCEP, we’re bringing new products
to a new generation of consumers based
on clear insights, while developing the
classic brands our consumers know
and love.
We are committed to reducing the sugar
in our drinks and offering low or no sugar
options – giving consumers even more
choice.
We want CCEP to be a great, engaging
place to work, where everyone is welcome,
has the opportunity to grow and can make
a difference.
F
Forward on
o
supply chain
pages 28-35
r
w
We support the growth of our two million
customers through the quality of the
service we provide, our understanding
of their businesses, the strength of
our sales force and the value our
products create.
We believe that the quality and integrity
of our products and services depend on
sustainable global supply chains
with successful and thriving farming
communities, where human rights
are respected and protected.
Done sustainably
p36
Our ambition to create a better future,
for people and the planet, sits at the heart
of how we do business, and the decisions
we take.
Central to this are our targets to reduce GHG
emissions by 30% by 2030 (versus 2019), and
to reach Net Zero by 2040. Both targets have
been validated by the SBTi as being in line
with climate science.
We want every bottle or can we sell to be
recycled or reused and we are working on
improving collection and driving circularity.
We have adopted a value chain approach
to water stewardship, focusing on water
efficiency within our own operations and
working to protect the sustainability
of the water sources that our business, our
communities and our suppliers rely upon.
Forward on
climate
pages 37-40
Forward on
packaging
pages 41-44
Forward on
water
pages 45-47
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This is Forward – our sustainability action plan
Our headline commitments
Pillar
Forward on
drinks
Forward on
society
Strategy
Commitment
Target
Great
brands
Great
people
Sugar reduction
Low or no calorie
Reduce sugar by 2025: by 10% in Europe(A), by 20% in New Zealand(B), by 25% in Australia(B), by 35% in Indonesia(B)
Over 50% of sales to come from low or no calorie drinks by 2030 (Europe by 2025)(C)
Gender diversity management
45% of management positions to be held by women by 2030
Gender diversity
Disabilities
A third of our workforce to be women by 2030
10% of our workforce represented by people with disabilities by 2030(D)
Supporting skills development
Support the skills development of 500,000 people facing barriers in the labour market by 2030
Forward on
supply chain
Great
execution
Forward on
climate
Done
sustainably
Sustainable sourcing
100% of main agricultural ingredients and raw materials sourced sustainably
Human rights
Net Zero
100% of suppliers to be covered by our Supplier Guiding Principles – including sustainability, ethics and human rights
Net Zero GHG emissions (Scope 1, 2 and 3) by 2040(E)
GHG emissions reduction
Reduce absolute GHG emissions (Scope 1, 2 and 3) by 30% by 2030(E)(F)
Renewable electricity
Use 100% renewable electricity across all markets by 2030
Supplier engagement – GHG emissions
100% of carbon strategic suppliers(G) to set science based targets by 2023 (Europe) and 2025 (API)
Supplier engagement – Renewable electricity 100% of carbon strategic suppliers to use 100% renewable electricity by 2025 (Europe) and 2030 (API)
Forward on
packaging
Forward on
water
Design
Recycled plastic
Virgin plastic
Collection
Water efficiency
Replenish
100% of our primary packaging to be recyclable by 2025
50% recycled plastic in our PET bottles by 2023 (Europe) and 2025 (API)
Stop using oil-based virgin plastic in our bottles by 2030
Collect and recycle a bottle or a can for each one we sell by 2030
10% water use ratio reduction(H) by 2030(F)
Replenish 100% of the water we use in our beverages
Regenerative water use
100% regenerative water use in leadership locations(I) by 2030
Note: For details on our approach to reporting and methodology,
please see our 2023 Sustainability reporting methodology
document on cocacolaep.com/sustainability/download-centre.
(A) Reduction in average sugar per litre in soft drinks portfolio
versus 2019. Sparkling soft drinks, non-carbonated soft drinks
and flavoured water only. Does not include plain water
or juice.
(B) Reduction in average sugar per litre in NARTD portfolio
(D) Calculated based on the total number of employees
versus 2015. Including dairy. Does not include coffee, alcohol,
beer or Freestyle.
(C) Does not include coffee, alcohol, beer or Freestyle. Low
calorie beverages ≤20kcal/100ml. Zero calorie beverages
<4kcal/100ml.
responding to our 2023 voluntary inclusion survey and the
number of employees self-declaring as having a disability.
(E) Our GHG emissions reduction and Net Zero targets have
been validated by the SBTi as being in line with climate
science.
(F) Versus 2019.
(G) Carbon strategic suppliers account for ~80% of our Scope 3
GHG emissions (~200 suppliers in total).
(H) Water use ratio: litres of water per litre of finished product
produced.
(I) NARTD production facilities which rely on vulnerable water
sources or have high water dependency. We have nine
leadership locations in Europe and four in API.
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Great brands
We are extremely privileged
to make, move and sell the
best brands in the world.
Key focus area for CCEP
We’re focused on our great brands.
In close collaboration with TCCC and
other franchisors, we are committed
to addressing evolving consumer needs
through our diversified portfolio of
products and packaging sizes.
We endorse the recommendations made
by several leading health authorities,
including the World Health Organization
(WHO), advising people to limit their
added sugar consumption to 10% of their
total calorie intake.
We continue to reduce sugar across our
portfolio, by reformulating our recipes
and introducing new products, including
new low and no calorie options.
We support transparency by providing
customers with straightforward and easy
to understand product information, and
promote responsible marketing with no
advertising of our products to children
under 13, or an older age limit in specific
regions aligned with local regulations.
Producing safe and high quality products
that our consumers can trust is essential
to what we do. We adhere to The
Coca-Cola Operating Requirements
(KORE), which define operational
controls and prioritise the sustainable
sourcing of ingredients.
Forward on
drinks
Our ambitions
Our This is Forward
commitments
Achievements in 2023
To have brands that people love
and to be category leaders with
great tasting drinks for every
occasion.
To achieve that, we are
investing in:
• strong and aligned
partnerships with brand
partners
• producing and delivering high
quality and great tasting drinks
• a broad price pack
architecture
• channel diversification
Reduce average sugar per litre
across our portfolio by 2025
• by 10% in Europe(A)
• by 20% in New Zealand(B)
• by 25% in Australia(B)
• by 35% in Indonesia(B)
Over 50% of sales to come from
low or no calorie drinks by 2030
(Europe by 2025).(C)
Related Sustainable Development Goals
Strengthened our guidelines for
the marketing of all the brands
and products manufactured or
sold by CCEP to drive further
transparency in everything we
do. Rolled out specific training
on our drinks containing alcohol
to all our frontline sales force
across our markets.
Our sales volume within the
energy category increased by
14% versus previous year
supported by solid distribution
and exciting innovation. For
example, we launched Monster
Zero Sugar in France, Great
Britain, the Netherlands and
Sweden to promote choice and
meet the growing consumer
demand for a no calorie and no
sugar variant of Monster Original
with the same full-flavoured
taste.
(A) Reduction in average sugar per litre in soft drinks
portfolio versus 2019. Sparkling soft drinks,
non-carbonated soft drinks and flavoured water
only. Does not include plain water or juice.
(B) Reduction in average sugar per litre in NARTD
portfolio versus 2015. Includes dairy. Does not
include coffee, alcohol, beer or Freestyle.
(C) Does not include coffee, alcohol, beer or
Freestyle. Low calorie beverages ≤20kcal/100ml.
Zero calorie beverages <4kcal/100ml.
Find out more about our
portfolio on pages 4-5
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Great brands continued
Performance and progress against our This is Forward commitments
Forward on
drinks
Volume by category
Sparkling
Coca-Cola
Flavours, mixers and energy
Stills
RTD tea, coffee, juices and others
Hydration
Total
2023 % of total
2022 % of total
% change(E)
85.0%
59.0%
26.0%
15.0%
7.5%
7.5%
84.5%
58.5%
26.0%
15.5%
7.5%
8.0%
100.0%
100.0%
—%
—%
1.0%
(5.0)%
(3.0)%
(7.0)%
(0.5)%
Reduction in average sugar per litre(A)
Europe(B)
Target
10% reduction by
2025 (versus 2019)
Australia(C)
Target
25% reduction by
2025 (versus 2015)
Products sold that are low or no calorie
Over 50% of sales to come from low or no
calorie drinks by 2030 (Europe by 2025)
Group
Target
50%
The plan for the year ahead
We remain confident in the resilience
of our categories and will continue to
actively manage our pricing and
promotional spend to remain
affordable and relevant to our
consumers.
We will continue to monitor consumer
trends and react to their changing
needs for a greater variety of drinks
for every occasion, including healthier
alternatives. We’ll do this by providing
even more choice through innovation,
the introduction of new low and no
calorie drinks and the reformulation of
our recipes. For example, in 2024, we will
continue to reformulate Fanta Orange
in some of our markets, to offer a
broader range of beverage options,
including zero calorie options.
We will drive engagement with our
customers and consumers through our
Coca-Cola trademark, Powerade, Fuze
Tea and Costa brands at major sport
events in 2024, including the Olympic
Games in Paris and UEFA EURO in
Germany.
New
Zealand(C)
Target
20% reduction by
2025 (versus 2015)
Indonesia(C)
Target
35% reduction by
2025 (versus 2015)
Target
50% by 2025
Target
50% by 2030(D)
(A) For details on the methodology used to calculate this KPI,
see methodology statement on page 236 .
(B) Sparkling soft drinks, non-carbonated soft drinks and
flavoured water only. Does not include plain water or juice.
(C) NARTD portfolio, including dairy. Does not include coffee,
alcohol, beer or Freestyle.
(D) Australia, Indonesia and New Zealand only.
(E) % change is related to comparable volume performance
versus 2022.
4.9%202348.4%202348.8%202247.8%202348.3%202314.9%202316.8%202215.9%202336.2%202331.6%20225.0%202215.9%2022 Strategic
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Great brands continued
Our progress explained
Our product mix and consumer choice
We offer consumers drinks for every
taste and occasion, including drinks
with or without sugar, and drinks with
ingredients which are Fairtrade or
Rainforest Alliance certified.
Our portfolio ranges from carbonated
and still soft drinks, energy drinks, and
RTD teas, to flavoured dairy, organic
soft drinks, beverages with nutritious
benefits, coffee and alcohol.
We continue to expand our portfolio
across our core brands, while also
seeking to launch and scale new
products in categories like alcohol
and coffee, and engage with
consumers through collected insights,
dedicated research and consumer
labelling.
We are further enhancing our product
mix by providing a greater range of
smaller packs, which are often more
convenient for consumers and can help
them to control their sugar intake.
In 2023, 4.6% of our drinks were enjoyed
in packages of 250ml or less.
Reducing sugar in our drinks
We are a long-standing member
of the Union of European Soft Drinks
Associations (UNESDA) and we are
committed to reducing average added
sugars in our soft drinks by a further
10% by 2025 (from 2019) across Europe,
representing an overall reduction
of 33% in the past two decades.
In 2023, in Spain, we reformulated
Sprite, giving it a more intense taste,
and introduced Sprite Zero. The brand
has taken an important step towards
greater circularity by replacing the
iconic, hard to recycle green PET bottle,
with a transparent and 100% recyclable
PET bottle.
In our key API markets we also have
ambitious 2025 sugar reduction targets
as we aim to reduce the average sugar
per litre in our NARTD portfolio by 20%
in New Zealand, by 25% in Australia
and by 35% in Indonesia (versus 2015).
Focus on low or no calorie drinks
Over the past year, we continued to
encourage people to reduce their daily
sugar intake, raising awareness of our
low calorie drinks via our point of sale
communications and by promoting
low and no sugar options.
In API, we continue to introduce and
promote more low and no sugar drinks
with a focus on zero sugar sparkling
drinks and water. For example, we are
promoting Coca-Cola Zero Sugar in
remote Indigenous communities in
Australia in collaboration with our retail
partners and their communities.
Following an assessment of the health
impacts of aspartame, global health
organisations, including the WHO,
reaffirmed the safety of the ingredient.
In 2023, we continued to use low and no
calorie sweeteners in our products.
Find out more information on our
approach to food safety and food
additives on page 251
Clear, straightforward packaging
information
We help people make informed
choices by providing clear and
transparent nutritional information,
in particular on sugar and calorie
content.
Our approach aligns with all global
and local legislation. We pioneered
Guideline Daily Amount (GDA) labelling
and this has been on our drinks in
Europe since 2009. In 2021, we adopted
the voluntary front of pack Health Star
Rating on all our non-alcoholic drinks
in Australia and adopted the same
approach in New Zealand in 2022.
We also make nutritional information
for all of our drinks available on our
websites in all our territories.
Responsible marketing
We are committed to the responsible
marketing of our products.
Our responsible sales and marketing
principles cover all media formats, point
of sale materials and packaging types.
They provide clear guidance for our
commercial teams on how our
products should be marketed, ensuring
consumers are not mislead, and helping
them to make informed choices.
Through these principles we also
encourage responsible drinking of all
our products, and ensure we comply
with all relevant laws, regulations and
industry codes on the marketing and
sale of our products, including drinks
that contain alcohol.
Together with TCCC, we have a clear
policy not to advertise or market any
of our products to children under 13,
or an older age limit in specific regions
aligned with local regulations. We play
a proactive role in leading local industry
coalitions to strengthen our actions,
with a particular focus on the rapidly
evolving digital and social media
environment and school policies.
Case study
Coca-Cola Zero
launch in Indonesia
In 2023, we launched Coca-Cola
Zero Sugar in Indonesia. The new
drink in this market is part of our
commitment to providing
Indonesian consumers with a wider
range of low and no calorie options.
The launch of Coca-Cola Zero Sugar
introduced a new design bringing all
variants of the Coca-Cola trademark
under one brand identity.
The new packaging design is easily
distinguishable and provides
transparent nutrition information
of each product.
Image: Coca-Cola Zero Sugar 390ml PET bottle
and 250ml aluminium can
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Jack & Coke
Faster on
brands
Inspired by Jack & Coke, the classic bar cocktail
known and enjoyed around the world, we were
delighted to launch Jack Daniel’s & Coca-Cola
ARTD in Great Britain, the Netherlands and Spain
in 2023. It is perfectly suited to meet consumer
demand for ARTD mixers and create value for
our customers.
Watch: Stephen Lusk, Chief
Commercial Officer, on how we
brought two iconic brands together.
cocacolaep.com/annual-report/
case-study/fasteronbrands
Image: Jack Daniel’s & Coca-Cola
ARTD cans
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Great people
We want CCEP to be a
great place to work, where
everyone is welcome, has
the opportunity to grow
and can make a difference.
Key focus area for CCEP
At CCEP, we have an engaging
workplace, enabling our great people
to do great business for our customers
today and tomorrow.
We promote wellbeing, inclusion,
diversity, development, innovation
and respect, helping to ensure that
our people at every level can be heard,
grow and have a great experience.
We’re committed to having a positive
impact on our people and their
communities by supporting economic
mobility, and building resilience.
Some people in our local communities
face significant socioeconomic barriers,
including inequality, social exclusion and
unemployment, while environmental
challenges affect their daily lives. Across
CCEP, we’re tackling these issues and
helping to remove people’s barriers
to the workplace.
Through our volunteering policy we
empower our employees to engage
with their communities.
Forward on
society
Our ambitions
Our This is Forward
commitments
Achievements in 2023
People
People
People
Wellbeing and safety of our
people.
45% of management positions
to be held by women by 2030.
Talented, passionate and
committed people who can
deliver success for CCEP with
winning capabilities, agility and
a performance mindset.
A third of our workforce to be
women by 2030.
10% of our workforce to
be represented by people
with disabilities by 2030.(A)
Open, inclusive and respectful
workplace.
Communities
Communities
Expand our contribution to
society through employee
volunteering and supporting
local community partnerships.
Support the skills development
of 500,000 people facing barriers
in the labour market by 2030.
(A) Calculated based on the total number of
employees responding to our voluntary 2023
inclusion survey (representing 38.4% of our
workforce) and the number of employees
self-declaring as having a disability.
Related Sustainable
Development Goals
We developed critical
leadership, commercial,
customer service and supply
chain capabilities through
our respective academies.
We achieved strong employee
engagement and delivered
a second inclusion survey.
We expanded and made
progress against our diversity
commitments for gender
balance, disability and
social mobility.
Communities
Together with Coca-Cola
Hellenic Bottling Company,
TCCC and TCCF, we rolled out
a Social Impact Framework and
Toolkit to help measure the
impact and progress of our
community partnerships
supporting people facing
barriers in the labour market.
We also made financial donations
to disaster relief organisations to
support first responders during
environmental disasters in Turkey,
Syria and New Zealand.
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Great people continued
Performance and progress against our This is Forward commitments
32,500
Number of hours volunteered
by our employees
2024 employer recognition
Gender diversity – Management
Gender diversity – Workforce
Supporting skills development(B)(C)
45% of management positions to be
held by women by 2030(A)
A third of our workforce to be women
by 2030
Support the skills development
of 500,000 people facing barriers
in the labour market by 2030
Group
Target
45% by 2030
Group
Target
33% by 2030
Group
Target
500,000 by 2030
Safety
Disabilities
Reduce our total incident rate
(TIR) to below 1 by 2025
10% of our workforce represented
by people with disabilities by 2030
Community contribution(C)
Total community investment
contribution (€ millions)
Group
Target
<1 by 2025
Group
Target
10% by 2030
Group
Calculated based on the total
number of employees responding
to our voluntary 2023 inclusion
survey (representing 38.4% of our
workforce) and the number of
employees self-declaring as having
a disability.
(A) Excludes Fiji and Samoa, as aligned role grades are not available for 2023 reporting. We aim to include these markets for 2024.
(B) New commitment launched in 2023. Data not available for 2022.
(C) We aim to be accurate in our reporting and continue to enhance the way we capture and report the total value of our community contribution. Figures quoted have been rounded to the nearest 100k.
13.4202310.720221.520231.520220.84202316,400202312.6%20230.9320230.8720220.6920231.04202214.8202323.8%202238.4%202337.2%202212.220220.62202225.1%2023 Strategic
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2023 Integrated Report and Form 20-F
22
Great people continued
Highlights from 2023
Workforce
diversity
Total employees
32,315(A)
n Women
n Men
Leadership
(senior management
grade including ELT)(B)(C)
3,662
Board of Directors
17
Directors of subsidiary
companies
98
Case study Measuring inclusion
across CCEP
Women
Men
8,104
Women
24,208
Men
1,406
2,256
Women
Men
6
11
Women
Men
29
69
The plan for the year ahead
People
In 2024, we will continue to prioritise our
people’s physical and mental wellbeing,
and provide an inclusive, safe and
healthy work environment.
We will continue to invest in developing
our people, strengthening our
leadership, commercial, customer
service and supply chain capabilities
in particular.
Finally, we will invest further in creating
a consistent experience for our people
across our digital people platforms.
Communities
In 2024, we will celebrate the fifth
anniversary of our Support My Cause
initiative, which supports local
charitable organisations nominated
by our employees.
We will also continue to enhance our
employee volunteering programme,
ensuring that we continue to create
positive social impact that genuinely
improves the lives of millions of people
in our communities.
We will be working with local markets
to create roadmaps to help us reach
our commitment to support the skills
development of 500,000 people facing
barriers in the labour market by 2030.
(A) CCEP full time, part time and temporary corporate employees. Full time equivalent employees as at 31 December 2023. Includes three employees who did not declare their gender.
(B) The members of the ELT and their direct reports consist of 56 women and 72 men.
(C) Directors of subsidiary companies comprising 27 women and 55 men are also included in the workforce diversity statistic under leadership.
During the year, we ran our second
inclusion survey with over 13,000
employees taking part across CCEP.
This provided employees with the
opportunity to give feedback on
their inclusion experience at CCEP
and declare personal diversity
information. We saw improvements
particularly in our people’s sense of
belonging, of being treated with
dignity and respect, and in their
belief that our leaders are
committed to diversity. We expect
the outcomes to enable us to better
understand the diversity of our
workforce, further improve
inclusivity and embed equity in our
infrastructure and people practices.
Image: Norwegian colleagues pictured in
conversation
79
is our overall inclusion score,
which considers how welcome,
safe, included and respected
our employees feel at CCEP
25.1%74.9%38.4%61.6%35.3%64.7%29.6%70.4% Strategic
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2023 Integrated Report and Form 20-F
23
Great people continued
Our progress explained
Forward on
society
Our people
Safety
At CCEP the safety and wellbeing of
our employees always come first. Our
employees receive health and safety
training, aligned with the Coca-Cola
system health and safety procedures
and local regulations.
We expect and encourage our people
to follow our policies and procedures
and take action if they become aware
of any situation or behaviour affecting
the physical or mental wellbeing of
others. Managers are responsible for
ensuring that our workplaces, processes
and equipment are kept safe for our
people.
Any potential hazard or work incident is
investigated to identify and prioritise
the short-, mid- and long-term action
plans. In case of injuries or health issues,
we make reasonable adjustments to
our employees’ duties and working
environment to support their recovery
and continued employment.
We measure our safety performance
using total incident rate (TIR) and lost
time incident rate (LTIR). This covers
everyone working for us, including
contractors and temporary workers.
We aim to reduce our TIR to below 1
by 2025.
A contractor management system is in
place across all our territories, requiring
contractors to pass a risk-based
assessment before they are permitted
to work at our sites. Tragically, in 2023,
there was one contractor fatality in
Indonesia. The incident was
investigated with the local authorities
and we continue to improve our safety
procedures to prevent a reoccurrence.
Wellbeing
By the end of 2023, we had trained
more than 1,250 Wellbeing First Aiders
across CCEP. This has created an
internal network for mental health
support, with people trained to spot
the signs of mental health conditions,
listen free of judgement and direct
colleagues to professional services
when they need support.
Approximately 1,400 people benefited
from our Employee Assistance
Programme, an independent service
in our workplace offering 24/7 free
professional support for our people and
their family. We also launched our new
Wellbeing Hub in Europe, an online
platform which offers our employees
information and support to take care
of their wellbeing. We aim to expand
to API soon.
Through our Wellbeing Leadership
training programme launched in 2023,
we helped around 1,475 leaders across
CCEP to understand their own
wellbeing needs, and to develop the
skills and confidence needed to keep
their team safe and well.
For World Health Day 2023, we ran
an internal campaign to support
a proactive approach to health, with
almost 5,000 people taking part.
Inclusion, diversity and equity
We believe that building a workforce that
better represents the communities we
serve will support our sustainable business
growth. We prioritise inclusivity across
five pillars: culture and heritage;
disability; gender; LGBTQ+; and
generations. Inclusion, Diversity and
Equity (ID&E) at CCEP is supported
by dedicated groups of employees and
leadership sponsors centrally and locally
who guide our initiatives.
We provide mandatory anti-harassment
training for all people managers and
members of the People and Culture
team. This is also recommended for all
employees. We also provide training
on broader ID&E topics, for example
inclusive leadership and allyship.
We are committed to being an equal
opportunities employer. We have a
policy of no discrimination and make
decisions about recruitment,
promotion, training and other
employment issues solely on
the grounds of individual ability,
achievement, expertise and conduct.
To ensure that line managers make
appropriate pay decisions, we provide
training and support. We monitor pay
equity within our territories.
Promoting diversity in recruitment
To ensure we have a pipeline of diverse
talent, we promote inclusion and diversity
from recruitment and apprenticeships,
to training, development and
progression. This is supported by our
clear anti-harassment and ID&E policy,
as well as our Inclusive Recruitment
Principles and Candidate Charter.
We use targeted attraction strategies
and specialist jobs boards, aimed
at under represented audiences, to
promote content on our inclusive
culture. We also share information
and stories from our people on their
inclusion experiences on social media
and our careers website to showcase
our philosophy that everyone is
welcome, can be themselves and
belong at CCEP.
In addition, we have introduced our
new Disability Pledge, including our
Company-wide commitment to
support employees with disabilities,
providing guidance and goals for local
initiatives to help us achieve this
commitment. The Disability Pledge
includes embedding inclusivity into
our processes and practices. We also
work with external partners to reach
under represented communities.
Read more in our communities
on page 26
Partnerships to support diversity
We partner with organisations and
participate in activities that contribute
to a fairer workplace and society. We
are a signatory of the LEAD Network
pledge and the Valuable 500 pledge
to accelerate gender parity and
disability inclusion. We support the
UN Women’s Empowerment Principles,
promoting gender equality and
women’s empowerment. We are
members of the Business Disability
Forum, Stonewall’s Diversity Champions
programme and the Social Mobility Index.
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Great people continued
Our progress explained
Supporting and engaging our people
Good communication is essential
to building a motivated, engaged
workforce. We are committed to
communicating clearly and transparently
with our people and their representatives
in local languages through digital
platforms, printed materials and
direct dialogue.
We engage in forums to ensure
we hear the voice of our employees.
We meet regularly with the European
Works Council, national and local
works councils, and trade unions
that represent our people across
our territories. Across our territories,
55 unions represent our employees.
We continue to innovate and extend
our digital solutions for our people to
make it easier for them to access what
they need, such as policies, training
and key data on pay and performance.
Our policies are easy to understand,
and are reviewed annually to align
with legal requirements.
We want our people to enjoy a great
experience at CCEP and feel engaged
with our business aims and strategy.
In June 2023, we conducted our annual
employee engagement survey.
The results showed sustained strong
engagement levels, with more than
24,400 colleagues (76%) participating,
which is up by 557 respondents
compared to last year. Our strong
engagement score has stayed
stable at 77.
Find out more about our Board
engagement with our people on page 61
Employee training, development
and leadership
We believe that when our people learn
and grow, our business grows too, so we
continue to invest in learning and
development across CCEP through our
strategy, The Way We Grow. This
includes developing capabilities in
leadership, commercial, customer
service and supply chain through our
academies: The Way We Lead, The Way
We Sell and The Way We Serve.
We progressed The Way We Lead
academy with around 500 leaders
gaining 360 feedback, helping them to
grow self-awareness of their leadership
style and enabling them to contribute
to a feedback culture. More than 2,500
leaders participated in a series of virtual
and in-person development modules
including coaching and performance.
We are equipping our frontline
managers through our new global
Great People Manager Programme.
Approximately 500 leaders participated
in 2023. The rollout will continue in 2024.
We offer further training opportunities
through our digital learning platforms
Juice and Academy, supporting
employee development of core
capabilities in leadership, commercial,
customer service and supply chain.
Our people can create their own talent
profile and understand their objectives,
feedback and development plan using
our digital MyPerformance@CCEP
platform.
Our digital Career Hub, live across
Europe and soon to be rolled out
in API, provides users with personalised
recommendations for vacancies, career
paths and networking opportunities.
64% of employees so far have created
their profile. We have seen our
employee engagement score increase
by five points compared to last year’s
results, with new joiners and younger
employees feeling more positively
about our progress on growth and
value, and enthusiastic about their
career opportunities at CCEP.
We 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. In 2023, we
continued to partner with One Young
World, the global forum for young
leaders. 21 CCEP delegates attended
the forum in Belfast, bringing back
valuable experiences and ideas.
Employee benefits
We pay fairly and in line with
appropriate market rates, and provide
our people with benefits according
to their country and level in the
organisation, including packages to
cover sickness, post-natal childcare,
bereavement or a long-term illness in
the family. We also offer pension plans,
life insurance and medical plans, as well
as many other flexible benefits.
Find out more about our remuneration
on pages 127-143
Case study
Investing in our
people’s capabilities
We continue to invest in developing
our commercial, customer service
and supply chain capabilities.
Around 2,450 people in our
commercial function have
participated in The Way We Sell
academy.
Alongside skills evaluations,
which enable our people to build
personalised learning journeys
with their managers, there has
been good participation across
our modules including World
Class Key Account Management,
Sales Execution and
Commercial Fundamentals.
We introduced The Way We Serve
academy in our customer service
and supply chain function and have
equipped around 360 people with
new capabilities in support planning.
Image: Sales colleague in conversation with a
customer
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Great people continued
Our progress explained
Respect for human rights
We consider human and workplace
rights to be inviolable and fundamental
to our sustainability as a business. We
support the 10 principles of the
UN Global Compact.
Our principles regarding human rights
are set out in our Human Rights policy,
which is aligned with accepted
international standards and
CCEP’s Code of Conduct (CoC).
Further information on our principles
regarding human rights is provided
in our Supplier Guiding Principles
(SGPs) and Principles for Sustainable
Agriculture (PSA). These set out
the requirements of our suppliers
related to business ethics, human
and workplace rights, the environment,
and providing benefits to communities.
Modern slavery
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
by any company that directly supplies
or provides services to our business.
Our Modern Slavery Statement
complies with the UK Modern Slavery
Act 2015 and the Australian Modern
Slavery Act 2018. It sets out the steps
taken by CCEP to prevent, identify and
address modern slavery risks across
our business and supply chain.
See our modern slavery statements at
cocacolaep.com/about-us/governance
Human rights risk assessment
We recognise that all our employees
and supply partners have a role in
identifying and mitigating human
rights risks 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
workers and trade unions.
The effective tracking and
management of these risks also ensures
compliance with relevant legislation.
We have mapped human rights-related
laws, regulatory requirements and risks
identified in human rights reports in
each of our countries. Based on this, in
2024, we will refresh our human rights
assessment strategy primarily focused
on the countries where the highest
human rights risks have been identified.
In 2023, we conducted human rights risk
assessments in Germany and Norway.
These assessments identified current
and evolving human rights risks to
ensure we develop proactive measures
to manage risks before they occur.
Human rights risk has been rated as
low within our own operations in both
Germany and Norway, however, risk
in our supplier base remains.
During 2023, we also analysed the
results of the human rights risk
assessment conducted in Indonesia
in 2022, and developed measures to
improve our social dialogue and the
conditions for women in our workforce.
As a result of human rights risks
assessments that have been
completed in Europe and API, we have
identified 12 areas as priority issues for
CCEP, as summarised in the human
rights risk assessment table to the right.
Find out more about our approach
to human rights in our supply chain on
page 33
Ethics and compliance
Our ethics and compliance programme
for all our employees and Directors
is designed to ensure we conduct
our operations in a lawful and ethical
manner. It also supports how we
work with our customers, suppliers
and third parties.
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 Gifts, Entertainment
and Anti-Bribery policy applies to all
employees. There is a mandatory
training for a targeted audience.
Find out more about our approach
to human rights at cocacolaep.com/
sustainability/human-rights
Human rights risk assessment:
priority issues
Migrant and
temporary
workers
Data
protection
Right to
privacy
Wages
Equality
and non-
discrimination
Forced labour
Health, safety
and security
Freedom of
association
Working hours
Freedom from
bribery and
corruption
Cultural rights
of minorities
Children and
young people’s
protection from
exploitation
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Great people continued
Our progress explained
Forward on
society
Our communities
Boosting skills development
and social inclusion
We’re determined to drive the
economic empowerment of under-
represented people, with a particular
focus on people with disabilities, those
from minority ethnic groups or lower
socioeconomic backgrounds, and
women, by providing employability skills
and removing barriers to the workplace.
We support a wide variety of local
community partnerships as part of
our new Skills for Impact initiative
launched in 2023.
For example, in 2023, we organised
the third BORA Jovens programme
in partnership with Portuguese NGO
Ajuda em Ação to support young
people at risk of social exclusion,
in entering the labour market. Since
the start of the programme in 2021,
approximately 400 young people have
participated, resulting in around 160 of
them entering the labour market and
almost 50 going back to school.
In Indonesia, in partnership with
associations, universities, governments,
and local NGOs, we provide mentorship
programmes to support micro, small
and medium enterprises within fashion,
food and beverages, waste
management and other sectors.
In 2023, we delivered training and
mentorships to approximately
1,000 people.
Protecting the environment
and community wellbeing
We support programmes, projects
and initiatives that help protect local
environments, address climate
adaptation and improve community
wellbeing, including major disaster relief
efforts, water replenishment projects
and local litter clean up activities.
In 2023, supporting the Sea Life Trust
on World Oceans Day, over 100 CCEP
employees participated in beach
and river clean ups across England
and Scotland.
We also help address the needs of
people in the community by donating
surplus products and working with
food banks. For example, in 2023,
in Norway, we strengthened our
partnership with Too Good to Go,
a platform that aims to combat food
waste. Through improved forecasting
and employee volunteering we have
managed to avoid the disposal of
around 600 tonnes of finished goods.
Supporting local communities
with our employees and customers
We empower our employees to take
action for the environment and engage
with their local communities through
employee volunteering.
Our Support My Cause initiative enables
employees to nominate local charities
they feel passionately about to receive
a donation from the business. Since
2019, we have donated €1.2 million to
200 local charities and community
groups across our territories. In addition,
in 2023, we donated over €400,000 to
support 125 grassroots charitable and
community partnerships located close
to our sites and offices.
We also partner with our customers
to support initiatives that tackle
societal challenges within our
communities. For example, in 2023,
we joined forces with the German
Foundation for Integration and
DEHOGA, Germany’s national
association for restaurateurs and
hoteliers, to start a mentoring
programme in the hospitality industry.
The programme supports our
customers in developing talented
young people.
Find out more about Board
engagement with communities on
page 64
Case study
Volunteering for the
Special Olympics
With TCCC, we are a long-standing
supporter of the Special Olympics
which is the world’s largest sports
organisation for children and adults
with intellectual and physical
disabilities.
Our support in Europe includes
volunteering, financial support and
product donations. In 2023, more
than 250 CCEP and TCCC people
volunteered locally or at the Special
Olympics World Games Berlin.
We also established the Unified
Business project in Great Britain,
working with Special Olympics athletes
to help develop their employability
skills to break down the barriers they
face when entering the workplace.
Image: Special Olympics Great Britain athlete
receiving an #UnbeatableTogether Team Great
Britain lanyard from CCEP volunteers
250+
employees volunteered
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Apprenticeships
Faster career
progress
We help people accelerate their careers with us by
offering a wide range of different apprenticeship
schemes, from Sales and Merchandising to Food
Technology and Engineering. One of many who
have joined us, Jennifer started as an Engineering
Apprentice at our site in East Kilbride, Great Britain.
Having now completed her qualification, she is
responsible for helping to ensure our lines run
as efficiently as possible.
Watch: Sharon Blyfield, Head of Early
Careers at CCEP, talks about how we
bring talent into the business.
cocacolaep.com/annual-report/
case-study/fastercareerprogress
Image: Sales apprentices from
the 2022 GB apprenticeship cohort
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Great execution
Forward on
supply chain
We want to win with our
customers and suppliers,
and maintain high customer
service levels.
Key focus area for CCEP
We’re working to deliver great
execution for customers. We’re driving
growth, creating value and delivering
results through close support and
collaboration, while identifying new
channels and implementing
transformative new ways to do business.
To ensure we maintain high quality
products and services for our customers
we must promote reliability, consistency
and sustainability throughout our
supply chain.
We recognise the importance of having
ethical and sustainable procurement
practices that support our business
and sustainability goals.
As a business, we rely upon a sustainable
supply of ingredients like sugar, coffee,
tea and juices as well as the raw materials
we use for our packaging like glass,
aluminium, plastic, pulp and paper.
That’s why we continue to invest in our
capabilities and the long-standing and
supportive relationships we have with
our supply chain to provide even better
service for our customers.
Our This is Forward
commitments
Achievements in 2023
100% of our main agricultural
ingredients and raw materials
sourced sustainably.
100% of our suppliers to be
covered by our Supplier Guiding
Principles (SGPs) – including
sustainability, ethics and
human rights.
Our ambitions
Our customers
Strong and supportive customer
service, known for our agility and
flexibility.
Great digital tools enabled by
high quality data and analytics,
known to be easy to do business
with and for our world class
execution.
Our suppliers
A well invested supply chain and
optimised portfolio.
Our customers
Our online customer portal,
MyCCEP.com, received a new
look and feel to make it easier
to use for customers. New tools
and functionalities are
constantly being added to
MyCCEP.com including point
of sale materials and consumer
insights to help customers grow
their businesses.
Our suppliers
Following the launch of our
Responsible Sourcing Policy
(RSP) in 2022, we focused on
actively engaging and
communicating with our
suppliers across our markets
in Europe and API and aiming
for 100% of our suppliers to
understand and comply with
our policy.
To reduce our Scope 3 GHG
emissions, we continued to
engage with our carbon
strategic suppliers, asking them
to set their own science based
targets and transition to 100%
renewable electricity. This will
ensure more of our suppliers
have strong SBTi targets in place
across our territories and help
to reduce their GHG emissions.
Related Sustainable Development Goals
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Great execution continued
Performance and progress against our This is Forward commitments
Our customers
#1
value creator for our customers
as measured by NielsenIQ
~90%
great customer service level
~1.5m
unrivalled customer coverage
Our suppliers
~16,000
We source products from over
16,000 suppliers
~€7b
In 2023, we spent ~€7 billion
with our suppliers. 84% was
spent with suppliers based in
our countries of operation
Spend covered by guiding
principles
100% of suppliers to be covered
by our SGPs
Sustainable sourcing (sugar)
100% of sugar sourced through
suppliers in compliance with our
Principles for Sustainable Agriculture
(PSA)
Sustainable sourcing (pulp and
paper)
100% of pulp and paper sourced
through suppliers in compliance with
our PSA
Group
Target
100%
Group
Target
100%
Group
Target
100%
The plan for the year ahead
Our customers
We’ll continue to regularly engage
with our customers on strategy,
planning and understanding key
priorities around new packaging
solutions and product offers to
meet changing consumer trends.
Our suppliers
We’ll continue to engage with all of
our suppliers to reduce our Scope 3 GHG
emissions, our key priority for 2024. We
will implement a targeted programme
for our most critical carbon strategic
suppliers from which we source PET,
aluminium and sugar. The programme
will help them build their own carbon
reduction roadmap and will support
our own plans to reduce GHG emissions
across our value chain by 30% by 2030
(versus 2019) and reach Net Zero
by 2040.
Upcoming legislation related to
deforestation and human rights
across many of our markets will require
compliance by both our suppliers and
CCEP. We are partnering with our
suppliers to ensure greater
collaboration and transparency on
their sourcing, in order to work towards
compliance with these regulations.
We will continue to implement and
improve our systems to understand
and anticipate potential risks
associated with our suppliers
and their supply chains.
97.9%202398.3%202398.4%202296.3%202397.3%202297.5%202299.4%202397.6%202299.8%202399.2%2022100%202299.9%202390.3%202297.3%202399.8%202299.8%202398.3%202299.7%2023 Strategic
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Great execution continued
Our customers
Customers at the heart of our business
As the world’s largest Coca-Cola bottler
by revenue, we have built long-standing
and supportive relationships with our
customers.
We are committed to delivering great
execution and creating value for them.
We do this not just by focusing on
growing our own portfolio of products,
but by considering how we can grow
the soft drinks category as a whole.
With the market continuously changing,
it is more important than ever to have
the right commercial strategies in place
to be able to respond to this evolving
landscape.
Our strong commercial team works
with a wide range of customers, ranging
from small local shops, supermarkets
and wholesalers to restaurants, bars
and sports stadiums, so consumers can
enjoy our great tasting products.
We aim to be as close as possible to
our customers, maintaining continuous
relationships at every level and every
function in order to understand their
business. This enables us to identify
opportunities and ensure these are
aligned with the customer’s ways of
working.
Image: Colleague and customer in away from home (AFH) channel, the Netherlands
Our frontline field sales teams visit our
customers on a daily basis providing
in-store execution support, while our
key accounts teams engage with
customers on a national and
international level on strategic product
planning, addressing challenges and
opportunities, supported by senior
members of the leadership team.
Much of our ability to create value for
our customers depends on the quality
of the service we provide and how we
deliver in the market.
Our focus is on ensuring our frontline
sales teams are visiting and engaging
with customers regularly, which we
measure by tracking the number of
customer visits we complete each day.
In Europe, we have about 1,600 sales
representatives in the AFH channel who
conduct up to 13 visits per day. This
represents more than 20,000 daily
accounts visits and more than 390,000
interactions with our customers on a
monthly basis. In addition to our field
sales teams, we also interact with our
AFH customers via our call agents and
digital teams, as part of our omni
contact (face, voice and digital)
strategy.
Driving digital growth
Our ability to win with our customers
has been enhanced in recent years due
to ambitious and targeted investments
in our priority capabilities. These
investments support our customers to
adopt new technologies and to focus
on digitisation. It also helps us to
engage with them through
multi contact strategies and by
investing in knowledge and analytics
to better tailor our action plans to
their needs.
Today, 85% of our volume is digitally
captured across our markets, mainly
driven by electronic data interchange
with our retail customers, B2B
platforms and call centre inbound.
We also continue to drive incremental
revenue growth in digital commerce
channels through world class execution.
This is supported by establishing high
level digital capabilities within our
teams, and by developing and
deploying the next generation of tools
to support our commercial strategy,
which includes a clear multi-year
roadmap.
Read more in Our market drivers on
page 13
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Great execution continued
Our customers continued
Driving stronger capabilities
across our commercial teams
To accelerate our journey to deliver
a great execution for our customers,
we are enhancing the capabilities of
our people.
We support the skills development of
our employees across all functions and
foster a culture of data-driven decision
making, by driving stronger capabilities
across our sales force and our key
account management team.
Through our online learning platform
Academy, we offer a wide range of
trainings for our people. We continue to
update the development programmes
and to introduce new relevant courses
designed to grow capabilities in specific
areas such as sustainability, finance skills,
negotiation and digital skills. In 2023,
we launched a new academy on the
coffee category.
Find out more about training
programmes for our people on page 24
Partnering with customers
to drive value
At CCEP, we are committed to creating
value for our customers. Considering
exactly what consumers need helps
us identify opportunities for category
growth, which is key to a successful
commercial strategy.
Winning with customers
Our retail customers include
supermarkets and hypermarkets,
which sell our drinks to consumers for
consumption at home. They represent
a significant amount of our volume, and
we measure their satisfaction through
the Advantage Group Survey.
In 2023, highlighting the strength
of our customer relationships, we
created more value than any other
NARTD business.
We work with NielsenIQ and IRI3
– retail and consumer data and insight
providers – to measure how much
value we create for our customers,
and how our individual brands support
this value creation.
In 2023, across all our territories in
Europe and API, we created €17.1 billion
in value across our NARTD categories
for our customers, a year on year
increase of €1.2 billion.
In Europe, Coca-Cola is the highest
value brand within FMCG (€8,980m)
and the brand that has added the most
absolute value year on year (€497m).
The survey covers key retail
customers, asking them to rank
CCEP’s performance across a variety
of critical partnership areas including
strategy, operations, customer service,
marketing, innovation, people
and sustainability.
We measure ourselves against our
ambition to be our customers’ number
one supplier within the beverage
industry and FMCG. The survey covers
eight of our nine markets in Europe
(Belgium and Luxembourg (Belux),
France, Germany, Great Britain, the
Netherlands, Portugal, Spain and
Sweden(A)) alongside Australia,
New Zealand and Indonesia in API.
In 2023, CCEP secured the number one
position within FMCG across six of our
surveyed markets – Belux, Great Britain,
the Netherlands, Portugal, Spain and
Sweden(A).
Image: Colleague and customer in retail in Norway
(A) Results from Gradient CSAT report 2023, as Sweden does not
feature in the Advantage Group survey.
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Great execution continued
Our progress explained
Forward on
supply chain
Supplier
identification
Definition
Specific requirements
Requirements for all suppliers
Collaborating with our suppliers
We work with our suppliers to procure
high quality raw materials and services.
At the heart of this is our integrated
approach to sustainability – making
improvements and launching initiatives
that support responsible sourcing,
climate resilience, water stewardship
and biodiversity.
We engage with suppliers to identify
common challenges and to
decarbonise our business. The table
on the right illustrates some of the
requirements that we have put into
place for our strategic and carbon
strategic suppliers.
Our RSP is included in new contracts
and sets out the mandatory guidelines
that our direct and indirect suppliers
must comply with in order to do
business with CCEP. This includes our
SGPs, which set out the minimum
requirements we expect of all our
suppliers in areas such as workplace
policies and practices, health and safety,
environmental protection, business
integrity and human rights. It also
includes our PSA, which apply to
agricultural ingredients and raw
material suppliers and cover human
and workplace rights, environmental
protection and sustainable farm
management.
Strategic suppliers
• Directly managed and influenced
• Undergo an EcoVadis(A)
by our procurement teams
• Represent about 80% of our
addressable spend
• Engagement on sustainability
extends to approximately 450
suppliers
assessment and have a minimum
score of above 50 overall and
above 35 on each criteria
• Sustainability fully integrated
in procurement processes
and strategies
• In 2022, we launched our RSP, which
sets out mandatory guidelines for
all our suppliers
• SGPs and PSA are incorporated
into this policy
• RSP is incorporated into all new
contracts, and is part of our
standard conditions of purchase
Carbon strategic
suppliers
• Subset of strategic suppliers
• Approximately 200 suppliers
• Represent about 80% of our
Scope 3 GHG emissions
In addition to strategic supplier
requirements, carbon strategic
suppliers are encouraged to:
• set science based targets by 2023
in Europe and by 2025 in API
• transition to 100% renewable
electricity by 2025 in Europe and
by 2030 in API
(A) Provides a leading solution for monitoring sustainability in global supply chains. Suppliers that have a low score are asked to develop an action plan and improve their performance.
If suppliers do not improve their performance within a set timeframe, they may not be used in the future.
Priority ingredients
As climate change leads to more
extreme weather and increased
water stress, more sustainable
agricultural practices will be vital to
building resilience across our supply
chain and for the communities
that produce these ingredients.
Together with TCCC, we have
identified 13 priority agricultural
ingredients we rely on to make
and package our beverages.
Managing the purchase of these
ingredients together with TCCC
and other Coca-Cola bottlers, helps
us manage the challenges we face
in our supply chain as a joint
Coca-Cola system.
For more details on our priority
ingredients see page 34
Supplier risk
Understanding what we buy and taking
action when we encounter a risk is a key
aspect of our supplier relationships.
We assess suppliers across multiple
criteria such as financial value,
efficiency, innovation and risk. For our
strategic suppliers we carry out detailed
financial and supplier risk assessments.
We hold regular meetings with
suppliers to assess key issues such
as performance, innovation and
sustainability.
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Great execution continued
Our progress explained
In 2023, the multi-award winning
programme grew significantly, more
than doubling the supplier groups
participating, and beating the peak
financing target by 114%.
In partnership with the Rabo
Foundation we invested in two local
projects, focused on improving the
sustainable production capabilities
of smallholding farmers in Indonesia.
We also launched a similarly structured
programme in Indonesia in partnership
with Citibank, offering Indonesian
suppliers incentives on financing
interest rates.
Read about how we work with suppliers
to reduce their emissions on page 38
In 2023, we documented our processes
and responsibilities related to human
rights risk assessments, due diligence
and remediation or mitigation. This sets
the basis for a robust governance
framework across CCEP for human
rights related actions.
We know that some of our suppliers
will need support to measure their
emissions accurately, so that they can
develop a GHG emissions reduction
roadmap, set a science based target,
adopt GHG emissions abatement
measures and disclose their progress.
Supporting our suppliers
in reducing GHG emissions
Our suppliers are responsible for over
80% of the GHG emissions in our value
chain. We can only meet our own GHG
emission reduction targets by working
in partnership with them. That is why we
have asked approximately 200 carbon
strategic suppliers to set their own
science based targets.
In 2023, 31% of our carbon strategic
suppliers (Europe 50%, API 16%), had
SBTi validated targets.
We also track the number of suppliers
who have committed to set SBTi
targets, including those who may
have already submitted targets to
the SBTi. In 2023, a further 48% of our
carbon strategic suppliers (Europe 46%,
API 48%) committed to set science
based targets(A).
To support them, we are working
with TCCC to engage suppliers in
the Supplier Leadership on Climate
Transition (S-LOCT) programme, a
cross industry collaboration that aims
to provide suppliers with the resources,
tools and knowledge they need to
make progress on their own climate
journeys.
In 2023, around 50 CCEP suppliers were
engaged with the programme, and we
continue to encourage and support
more of our suppliers to join.
Sustainability supply chain finance
programme with Rabobank
In 2022, we implemented a new
sustainability supply chain finance
programme, structured and operated
by Rabobank.
The programme, one of the first of its
kind in the global beverage industry,
incentivises and rewards suppliers for
improving their ESG performance.
We proactively manage sustainability
risks in our supply chain using data
gathered through EcoVadis for
strategic suppliers and EcoVadis IQ for
non-strategic suppliers. In addition, we
continue to use Resilinc software,
an AI tool which helps us to proactively
identify potential risks in our supply
chain. Having used the software to map
our tier 1 suppliers in 2022, we started a
project to map our tier 2 suppliers using
Resilinc in 2023.
In 2023, we also started using FRDM, a
supply chain risk management tool, to
monitor and mitigate human rights and
climate-related risks in our supply chain.
Human rights in our supply chain
Protecting human rights is
fundamental to how we run our
business. We are committed to
ensuring everyone who works at CCEP
and in our supply chain is treated with
dignity and respect.
In 2023, we continued to provide
training on human rights to our
employees, with specific training
to procurement managers focused
on the German Supply Chain Act.
We also conducted a human rights risk
assessment in Germany and Norway
in 2023, and published our first annual
report for Norway under the Norwegian
Transparency Act. In 2024, we will
expand our reporting with our first
annual report for Germany under
the Act on Corporate Due Diligence
Obligations in Supply Chains.
(A) Based upon carbon strategic supplier-survey information.
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Great execution continued
Our progress explained
Supplier standards audits
We expect our suppliers to develop
and implement appropriate internal
business processes to ensure that
they fully comply with our SGPs.
As part of the Coca-Cola system, we
rely on independent third party audits
commissioned by TCCC to monitor
supplier compliance with our SGPs
for ingredients and primary packaging
directly purchased by CCEP and for
juices and concentrates purchased
from TCCC.
To date, these audits have covered
more than 94% of our ingredients and
primary packaging suppliers. If a
supplier fails in any aspect of the SGPs,
they are expected to implement
corrective actions. TCCC conducts
unannounced audits at its discretion
and we reserve the right to terminate
an agreement with any supplier that
cannot demonstrate that it is
upholding the SGPs’ requirements.
PSA compliance is verified through
adherence to a limited set of third
party sustainable agriculture standards
approved by TCCC. CCEP directly
purchases sugar beet and sugar cane,
pulp and paper, and tracks compliance
with the PSA for these commodities
through TCCC.
Our priority ingredients(A)
Raw
material
Beet and
cane sugar
Procurement
method
Directly by CCEP
Quantity
and brands
PSA aligned third
party standards
Compliance
and standards
• Approximately 700k
tonnes of beet sugar
• Approximately 300k
tonnes of cane sugar
• Bonsucro
• FSA Gold and Silver
• Redcert 2
• Europe: 99.9% third
party standard and
PSA compliant
• API: 97.3% third party
standard and
PSA compliant
• Europe: 99.8% FSC
or PEFC certified
and PSA compliant
• API: 99.7% FSC or
PEFC certified
and PSA compliant
Council (FSC)
• Certification endorsed by
the Programme for the
Endorsement of Forest
Certification (PEFC)
Pulp and paper(B) Directly by CCEP
• Europe: approximately 70k
• Forest Stewardship
Juice(C)
TCCC
tonnes of board for
secondary and tertiary
packaging, and marketing
materials
• API: approximately 40k
tonnes of board for
secondary and tertiary
packaging(B)
• Orange and lemon juice
from concentrate, not
from concentrate and
puree, are key ingredients
in a number of our
products (e.g. Minute
Maid)
• Sustainable Agriculture
Initiative Platform (SAI)
• Europe: 100% PSA
compliance for orange
and 100% for lemon
• API: 100% PSA compliance
for orange and lemon
Coffee and tea
Directly by CCEP
• Grinders brand
• Rainforest Alliance
• Fairtrade
• 46% compliance for this
CCEP owned brand in API
TCCC
• Costa, Chaqwa and Fuze
Tea brands
• Rainforest Alliance
• Fairtrade
• Europe: 100% PSA
compliance for coffee
and 100% for tea
(A) Our 13 priority agriculture based ingredients and bio-based packaging materials include sugar cane, sugar beet, high fructose corn syrup, stevia, orange, lemon, apple, grape, mango, coffee, tea, soy,
pulp and paper.
(B) We aim to expand reporting on this category to include additional areas such as printed and point of sale material in the future.
(C) Coca-Cola trademark beverages with juice from concentrate, not from concentrate and puree as key ingredients.
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Supply chain resilience
Faster on
resilience
We are making our supply chain more resilient
by using AI tools, such as machine learning and
demand sensing. Our Customer Demand and Supply
Planning (CDSP) programme provides us with a
better understanding of our customers, anticipating
their needs faster and responding quickly to trends
in the market.
Watch: José Antonio Echeverría,
Chief Customer Service and Supply
Chain Officer, illustrates how systems
enable us to react quicker.
cocacolaep.com/annual-report/
case-study/fasteronresilience
Image: A colleague in her second year of
professional training as a food technology
specialist on the RGB line at our Mannheim
production facility, Germany
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Done sustainably
Forward on
climate
Forward on
packaging
Forward on
water
We take our responsibility
to reduce our environmental
impact seriously.
Key focus areas for CCEP
We are committed to decarbonising
our entire business.
The Intergovernmental Panel on Climate
Change (IPCC) has highlighted the need
for urgent climate action(A). We take our
responsibility seriously, and have set GHG
emissions reduction targets aligned to
climate science.
We are taking urgent action to reduce
the impact of our packaging.
Waste and pollution, particularly from
plastic packaging, are significant global
challenges, and we are reinventing the
way we do business to progressively
move away from a linear model and the
waste it creates, towards a full circular
model.
We have adopted a value chain
approach to water stewardship.
Water is vital to our business. It is the main
ingredient in our products, essential to our
manufacturing processes and crucial for the
agricultural ingredients we use. We prioritise
water efficiency in our own operations,
while safeguarding the sustainability
of the water sources our business,
communities and suppliers rely upon.
This is Forward commitments
Achievements in 2023
Climate
Packaging
Reduce our absolute GHG
emissions (Scope 1, 2 and 3)
by 30% by 2030 by 30% by 2030
(Versus 2019).(B)
Net Zero GHG emissions (Scope
1, 2 and 3) by 2040.(B)
Use 100% renewable electricity
across all markets by 2030.
100% of carbon strategic
suppliers(C) to set science based
targets in Europe by 2023 and
in API by 2025.
100% of carbon strategic
suppliers(C) to use 100%
renewable electricity in Europe
by 2025 and in API by 2030.
Related Sustainable
Development Goals
Climate
100% of our primary packaging
to be recyclable by 2025.
50% recycled plastic in our PET
bottles in Europe by 2023 and
in API by 2025.
Stop using oil-based virgin
plastic in our bottles by 2030.
Collect and recycle a bottle or a
can for each one we sell by 2030.
Water
10% reduction in our
manufacturing water use ratio(D)
by 2030 (versus 2019).
Replenish 100% of the water
we use in our beverages.
100% regenerative water use in
leadership locations(E) by 2030.
In 2023, our Group wide targets
to reduce GHG emissions were
approved by the SBTi. To assess
how GHG emissions will reduce
by 2030, we started to build
a climate transition plan,
including carbon reduction
roadmaps with targeted
investment through to 2030.
We became a Member of the
Ellen MacArthur Foundation’s
network, the world’s leading
circular economy network that
brings together businesses,
policymakers, financial institutions,
innovators and thought leaders
to accelerate the transition to a
circular economy.
In 2023, we set a new Group wide
water use ratio (WUR) reduction
target, aiming to reduce our
water use ratio by 10% by 2030
(versus 2019). This target is an
aggregation of site level WUR
targets, which are set in line with
the sites’ water risk categorisation.
Packaging
Water
(A) www.ipcc.ch/2023/03/20/press-release-ar6-synthesis-report.
(B) Our GHG emissions reduction and Net Zero targets have been validated by the SBTi as being in line
with climate science.
(C) Carbon strategic suppliers account for ~80% of our Scope 3 GHG emissions (~200 suppliers in total).
(D) Water use ratio: litres of water per litre of finished product produced.
(E) NARTD production facilities which rely on vulnerable water sources or have high water dependency.
We have nine leadership locations in Europe and four in API.
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Done sustainably – Our environmental impact
Performance and progress against our This is Forward commitments
Forward on
climate
14
PAS 2060 carbon neutral
certified production facilities
across our territories
Reduce emissions
Renewable electricity consumption
Reduce absolute GHG emissions
(Scope 1, 2 and 3) by 30% by 2030,
versus 2019(A)
Group
Target
30% reduction by
2030 (versus 2019)
Use 100% renewable electricity
across all markets(B) by 2030
Supplier engagement
100% of carbon strategic suppliers(C)
to set science based targets by 2023
(Europe) and by 2025 (API)
Group
Target
100% by 2030
Group
Target
100%
The plan for the year ahead
We'll continue to drive the reduction
of GHG emissions across our full value
chain – empowering and supporting
our suppliers to take climate action to
reduce Scope 3 GHG emissions, while
being fully transparent about our value
chain GHG emissions and the climate
risks we face.
We aim to evolve and continue to
develop our climate transition plan,
outlining how CCEP will decarbonise
its full value chain by 2040, supported
by long-term investment.
Through CCEP Ventures, our
investment platform for sustainability
initiatives, we will continue to invest
in breakthrough solutions that could
help us reach our Net Zero 2040 target.
We will also begin work to assess our
Forest, Land and Agriculture (FLAG)
emissions, and emissions from our
business in the Philippines.
Target
100% by 2023
Target
100% by 2025
(A) Our 2023 data was subject to independent limited assurance.
A copy of our 2023 assurance statement, and assurance
statements for prior years can be found on cocacolaep.com/
sustainability/download-centre. See detail regarding
restatement of our baseline GHG figures in our
methodology statement on page 237.
(B) See page 39 for renewable electricity purchased
percentages for Group, Europe and API.
(C) Carbon strategic suppliers account for ~80% of our Scope 3
GHG emissions (~200 suppliers in total). A further 48%
(Europe 46%; API 48%) have committed to set science based
targets, including those who may have already submitted
targets to the SBTi.
16%202316.7%202315.9%202312.6%202211.6%202278.0%202373.1%202231%202317%202297.8%202397.9%202250%202327%202218.2%202310.0%202235.8%202323.5%20225%2022 Strategic
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Done sustainably – Our environmental impact continued
Our progress explained
Reducing supplier GHG emissions
More than 80% of the GHG emissions
in our value chain come from our
supply chain (Scope 3).
To reduce these emissions we have
asked around 200 carbon strategic
suppliers to set their own science based
targets and to transition to 100%
renewable electricity by 2025 in Europe
and by 2030 in API.
In 2023, around 80% of our Scope 3
GHG emissions were linked to suppliers
with SBTi validated targets. In 2023, 31%
of our suppliers have SBTi validated
targets. A further 48% have committed
to set science based targets.
We are also working together with
TCCC to collect and validate supplier
specific emission factors directly from
our suppliers, initially focusing on
packaging and ingredients suppliers,
which are the largest contributors to
GHG emissions. This work will be critical
in helping us to reflect the impact of
our suppliers’ actions more accurately.
Read more about our engagement on
climate with suppliers on page 33
Developing a climate transition plan
across our value chain
In 2023, we focused on building
roadmaps to deliver against our
short- and long-term GHG emissions
reduction targets. This work included
modelling reductions across the
business, including plans from each
market we operate in. It is the starting
point for the development of our
long-term climate transition plan.
Our carbon reduction roadmap has
been aligned with our commercial
long-term business planning, and we
have worked to align decision making
within our Capex planning processes.
To support our business planning,
we have also embedded a carbon
projection into our 2023-2025
long-term planning and 2023 business
plan. This has helped us improve the
connection between our commercial
and carbon forecasts.
~€450m
Between 2023 and 2025, we
expect to invest approximately
€450m in energy, logistics and
carbon reduction technologies
in our operations to support
our decarbonisation plan.
Read more about our climate transition
plan in our TCFD disclosure on pages 51-53
Reducing the carbon footprint
of our packaging
One of the biggest drivers of carbon
reduction comes from increasing the
amount of recycled content in our
packaging, and improving packaging
collection rates across our markets.
We are committed to reducing our use
of packaging where possible and
ensuring that the equivalent of all the
packaging we do use is collected,
reused or recycled so that it does not
end up as waste or litter.
Read more about our packaging
activities on pages 41-43
Reducing the carbon footprint
of our ingredients
Our ingredients account for
approximately 25% of our total carbon
footprint, mostly from farming,
processing and transportation.
We are working to collect more
accurate carbon data from our suppliers
and aiming for 100% compliance with
our RSP, which includes the SGPs and
PSA, and our expectations around
carbon management.
In 2024, we will work to assess and
set targets on our Forest, Land and
Agriculture (FLAG) emissions, and
finalise and embed a no-deforestation
policy, in line with SBTi guidance.
Read more about our engagement on
ingredients with suppliers on pages 32-34
GHG emissions across our value chain
(Group)(A)
Ingredients
25%
Packaging
37%
Operations and
commercial sites 11%
Transport
Cold drink
equipment
(CDE)
8%
17%
Other(B)
2%
(A) Rounded to the nearest 1%. Calculated based upon
the Scope 1, 2 and 3 emissions from each area. See our
methodology document on cocacolaep.com/sustainability/
download-centre.
(B) Other includes employee commuting, and IT and
marketing spend.
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Done sustainably – Our environmental impact continued
Our progress explained
Reducing the carbon footprint of our
operations and commercial sites
Our operations and commercial sites
account for around 11% of our total
carbon footprint.
We are working to reduce GHG emissions
from our production facilities by shifting
to on- and off-site renewable electricity,
improving energy efficiency, transitioning
from fossil fuel powered equipment to
electric machinery (such as boilers and
manual handling equipment) and
reducing our fugitive CO2 losses.
In 2023, we invested approximately
€28 million in energy, logistics and
carbon reduction technologies within
our operations. We estimate that this
could save approximately 9,000MWh
and 21,000 tonnes of CO2e per year,
potentially helping us reduce our
annual electricity and natural gas costs
by around €2 million per year. In Spain,
we replaced an old PET bottle blower
with a more energy efficient one at our
production facility in Fuenmayor. In the
Netherlands, we installed two new
electric boilers, two heat pumps and a
4km stainless steel pipe network to help
electrify our Dongen production facility.
In 2023, 14 of our production facilities
were certified under the PAS 2060
standard as carbon neutral. Site
certification follows significant efforts
to reduce emissions, including
converting forklift trucks from gas
to lithium ion powered batteries, and
switching lighting to lower power LEDs.
Remaining site emissions were offset
using Verified Carbon Standard
(VCS)-certified carbon credits.
Renewable electricity
Using renewable electricity is critical
to our efforts to decarbonise the
business.
As a member of the Climate Group’s
RE100 initiative, we are committed to
using 100% renewable electricity across
all of our markets by 2030. Investing in
renewable electricity in API could be
a major carbon reduction driver
for CCEP.
In 2023, 98.9% of the electricity
purchased and 97.8% of the electricity
we consumed in Europe came from
renewable sources(A). This difference is
due to a small amount of non-renewable
electricity consumed in leased facilities
where we do not directly control the
electricity contracts.
In API, 33.7% of the electricity purchased
and 35.8% of the electricity consumed
was from renewable sources.
We continue to invest in renewable and
low-carbon energy projects, including
on-site and power-purchase
agreements for solar, wind, combined
heat and power (CHP), district heating
and hydropower. For example, in 2023,
we signed a three year Renewable
Energy Certificate (REC) sale and
purchase agreement with PT PLN in
Indonesia. In 2023, 13 of our facilities
sourced electricity from on-site solar,
wind or hydro power, generating
around 16,000 MWh of electricity.
79.1%
of the electricity purchased in
2023 was renewable
Carbon offsetting
While our focus is on decarbonising our
business in line with a 1.5˚C reduction
pathway, we support a limited amount
of carbon offsetting outside of our
value chain in the short term.
We follow SBTi Net Zero guidance in
this area, purchasing a limited amount
of high quality carbon credits to offset
GHG emissions where we cannot
reduce further – for example, to offset
remaining emissions for our carbon
neutral production facilities.
In 2023, we retired 41,090 tCO2e of
carbon credits from the VCS-certified
Katingan Mentaya Project, protecting
peatland in Central Kalimantan,
Indonesia. These credits were used to
offset remaining emissions from our 14
carbon neutral production facilities. We
plan to continue to support our carbon
neutral sites in 2024, retiring carbon
credits we have already purchased.
Over the longer term, we will be
working to directly invest in nature
based solutions that remove carbon
from the atmosphere.
Case study
Solar panels
installation in Australia
In Australia, as part of our RE100
commitment to use 100% renewable
electricity, we installed a rooftop
solar system at our Darwin facility.
This project involved the installation
of 641 solar panels, connected by
over 8,000 metres of wire.
We estimate these panels will
generate 420 MWh per year, covering
approximately 75% of the site's
electricity needs.
The site joins production facilities
in Eastern Creek, Kewdale, Richlands
and Salisbury that already have
rooftop solar.
Image: Solar panels on the rooftop of our facility
in Darwin, Australia
641
solar panels installed
at our Darwin facility
(A) See pages 238-239 for more information on the calculation
of our renewable electricity and Scope 2 GHG emissions.
Find out more at cocacolaep.com/
annual-report/case-study/solarpanels
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Done sustainably – Our environmental impact continued
Our progress explained
Reducing emissions from our
own car fleet, vans and trucks
GHG emissions from our car fleet and
vans account for approximately 22%
of our Scope 1 emissions.
As members of the Climate Group’s
EV100 initiative, we are transitioning
to electric vehicles (EVs) or ultra-low
emission cars and vans for our own car
fleet across our territories by 2030.
We offer workplace charging and make
it convenient for employees to charge
EVs at home and on the go.
In Europe, we increased our use of
hybrid and electric cars and vans from
20% in 2022 to nearly 30% in 2023.
Reducing third party logistics emissions
Our third party distribution and
transportation emissions account
for approximately 7% of our Scope 3
GHG emissions.
We are reducing emissions by improving
our warehouse capacity, working with
suppliers to optimise the transportation
of our products, and increasing our use
of alternative fuels. Warehouse capacity
expansions at our production facilities
have reduced road miles and enabled
direct to customer deliveries instead
of using external warehouses.
Alternative fuels currently make up
around 15% of the total kilometres
driven by our third party logistics
hauliers in Europe. This includes the
use of HVO11, CNG, bioCNG and LNG.
In Belgium, Luxembourg, Spain and
Sweden we are delivering our
beverages to local customers
using electric trucks.
By working with our suppliers, we have
also cut the distance our ingredients
and raw materials travel to reach our
production facilities. Many of our own
sites are located next to our can
suppliers, eliminating the need to
transport empty cans. Some of our
production facilities, such as Grigny
in France and Halle in Germany,
manufacture their own PET bottle
pre-forms. We also run front- and
back-hauling programmes with
customers and suppliers across
Europe, which ensures that trucks
never drive empty.
In 2023, we built a new €8 million
warehouse at our production facility in
Azeitão, Portugal, and opened an external
warehouse in the Jordbro industrial
area of Sweden. Increasing our storage
capacity and improving our warehousing
enables us to minimise our truck
movements, lower costs and reduce
our CO2 footprint, while making our
operations more flexible and efficient.
In 2023, in Spain, we joined Lean &
Green, an initiative of the Association
of Companies of Manufacturers
and Distributors (AECOC), to reduce
emissions associated with the transport
and logistics sector. We are committed
to implementing a comprehensive
action plan to identify opportunities
for improvement and implementing
sustainable solutions working closely
with our suppliers and logistics partners.
Reducing our emissions from cold
drink equipment (CDE)
GHG emissions from our CDE account
for 17% of our total carbon footprint.
In 2023, we reduced the energy use
of our CDE equipment per unit across
our markets by 4.2% versus 2022(A).
Our efforts to replace old and obsolete
equipment also led to a reduction
of 5.2% in the size of our CDE fleet
and a 9.2% decrease in total energy
consumption versus 2022. This helped
drive a reduction of GHG emissions
of 10.3% CO2e from our CDE equipment
in 2023.
All new coolers purchased in 2023
were hydrofluorocarbon (HFC)-free,
meaning approximately 55% of our
cooler fleet across our territories is
now HFC-free. When we dispose of
old equipment, we take full responsibility
for its recycling and safe disposal.
In 2023, TCCC issued global cooler
energy consumption guidance and
targets for all bottlers to reduce GHG
emissions related to our cooler fleet.
Working with our suppliers we are
further refining our portfolio to meet
the guidance provided.
In API, our CDE can be one of our
largest emissions sources, due to the
use of fossil fuels in national electricity
grids across these markets. In addition
to working to improve the energy
efficiency of our fleet across API, we
strongly support the continued shift
to renewable electricity across our
markets, which will help reduce
emissions across our value chain.
Working with customers
We support our customers to reduce
their own GHG emissions. For example
in Great Britain, we continue to drive
our Net Zero Pubs, Bars and
Restaurants initiative in partnership
with Pernod Ricard and Net Zero Now.
The Net Zero Now online platform
helps businesses reach Net Zero by
providing tools to calculate, reduce and
compensate for their GHG emissions.
Certified businesses can communicate
their Net Zero status to their
stakeholders.
We also support the ECODES
Foundation Community’s HOSTELERIA
#PorElClima platform to reduce the
carbon footprint of Spain’s hospitality
sector. The platform provides tips
and tools to reduce environmental
impact and promotes the sector’s
commitment to sustainability.
(A) Calculated based upon average energy efficiency ratings of
CDE equipment installed.
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Done sustainably – Our environmental impact continued
Performance and progress against our This is Forward commitments
Forward on
packaging
Recyclability
Recycled plastic (rPET)
Collection
Virgin plastic
100% of primary packaging to be
recyclable by 2025(A)
50% recycled plastic in our PET bottles
in Europe by 2023 – other API markets
by 2025(B)
Collect and recycle a bottle or a can for
each one we sell by 2030(C)
Percentage of PET bottles that are
100% rPET(D)
Group
Target
100% by 2025
Group
Target
100%
Group
Target
100% by 2030
Group
Target
100% by 2030
Target
100% by 2023
Target
100% by 2025
The plan for the year ahead
In 2024, we will continue to take action
to drive down the footprint of our
packaging as part of our journey to
eliminate waste and reduce GHG
emissions.
We’ll do this through the key pillars of
our packaging strategy: removing
unnecessary packaging, innovating in
refillable and dispensed solutions,
working towards 100% collection so that
packaging materials can be recycled or
reused, and increasing the amount of
recycled material we use in our
packaging.
We’ll continue to work closely with our
Sustainable Packaging Office (SPO),
which streamlines all the technical and
exploratory sustainable packaging work
across our territories, accelerates our
innovation and supports progress
towards our goals.
(A) Complete data for Group and API not available for
2022 reporting.
(B) Percentage based on one way PET bottle sales (tonnes).
This excludes labels and caps.
(C) We have restated prior year 2022 national packaging
collection rate in line with new EU methodology
for calculating packaging collection rates.
(D) Percentage based on one way PET bottle sales
(individual consumer units).
54.6%202347.6%202373.2%202399.0%202398.7%202299.1%202348.5%202244.7%202272.0%202259.2%202356.3%202275.3%202376.9%202250.9%202354.0%202241.5%202326.9%202299.6%202339.2%202325.8%202264.9%202352.9%2022 Strategic
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Done sustainably – Our environmental impact continued
Our progress explained
Packaging life cycle
Through the use of life cycle analysis,
we can assess the carbon footprint of
our packaging, allowing us to make
informed decisions and helping us
prioritise our efforts to reduce the
GHG emissions of our packaging.
Many factors can help to reduce the
carbon footprint of our packaging,
including higher collection rates,
using more recycled content in our
packaging, or changing from one
packaging type to another.
Read more about our climate activities
on pages 37-40
Future pack mix
In 2023, we held workshops across our
territories to assess the product carbon
footprint of specific pack types within
our current and future portfolio. This
work informs a future pack mix strategy
that is aligned with both our sustainability
objectives to reduce GHG emissions
and our long-term business strategy.
We recognise the important role that
public policy has to play in developing
a circular economy and we take into
account upcoming legislation, which in
selected markets or sub-channels will
require us to reduce the use of single
use plastic or introduce reusable
packaging.
Refillable and reusable
Redesigning how to bring products
to people in new ways will help us to
become more resource efficient and
is part of the solution to eliminating
plastic pollution and reducing
GHG emissions.
By 2030, TCCC aims to have at least
25% of its global volume sold in
refillable glass or plastic bottles, or in
reusable containers through Coca-Cola
Freestyle or traditional fountain
dispensers.
We are working to increase the share of
reusable packaging in our portfolio and
are conducting a deeper analysis across
our business to ensure we can monitor
and report our progress. For example,
in France, we have developed a
partnership with Carrefour which
deployed a deposit system for refillable
glass bottles in 150 of its Carrefour city
stores across Paris.
47.6%
of the PET bottles we put
on the market are 100% rPET
Dispensing delivery solutions
Dispensing systems allow consumers to
enjoy our drinks more sustainably with
less packaging and in reusable and
recyclable cups or bottles. We continue
to innovate our dispensed product
offering and work with partners to
develop new digitally advanced smart
dispensing equipment.
We are engaging with customers and
consumers to encourage more
sustainable choices, such as switching
from single use to reusable drinking
vessels. For example, in France, Spain
and Sweden we partner with Burger
King to test dine-in reusable cups.
Across our markets, we are testing
consumer behaviour to better
understand the potential of dispensers
and reusable cups to reduce waste and
GHG emissions. In 2023, 6.9% of our
volume was enjoyed via dispensed
solutions (8.5% in Europe and 10.8%
in API).
Lightweighting
Initiatives to reduce the weight of our
packaging are critical to reducing
packaging GHG emissions. We have a
long-standing programme to reduce the
weight of our packaging and optimise
the materials we use. One key area of
focus in 2023 was shifting from steel to
aluminium cans in Europe, as aluminium is
lighter than steel. By replacing around
360 million steel cans with aluminium
cans we eliminated approximately
9,000 tonnes of CO2e in 2023. In API,
we only use aluminium cans.
Case study
Expanding our RGB
portfolio
In Germany we are boosting the
availability of at-home refillable
drinks options by expanding our
returnable glass bottle (RGB)
portfolio, switching to a universal
bottle.
In 2023, we introduced 1L RGB for
our Fanta, Sprite, Mezzo Mix, Vio Bio
Limo and Fuze Tea brands.
We actively promoted refillable
packaging through a consumer
campaign creating awareness
on our PET refillable portfolio.
Over the last five years, we have
significantly invested in reusable
bottles, including two new refillable
glass bottling lines and new reusable
crates.
Image: CCEP employees at our production
facility in Lüneburg, Germany, where our 1L RGB
Coca-Cola bottles are being produced
Find out more at cocacolaep.com/
annual-report/case-study/refillables
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Done sustainably – Our environmental impact continued
Our progress explained
100% recyclable
Recyclability is the first principle of
the circular economy. For packaging
to retain its value and for the material
to be recycled, it must first be collected
and be compatible with recycling
infrastructure in practice and at scale.
We want to ensure our packaging is
not just technically recyclable, but easy
and feasible for consumers to recycle.
For example, in Australia, after nearly
60 years, we replaced Sprite’s iconic
green PET bottles with clear plastic,
making it easier to recycle them into
new bottles locally.
Although we are focusing on making
our primary packaging recyclable,
we ultimately want to ensure all
the materials we use are recyclable,
preferably in a closed loop system.
To achieve this, we are taking steps
to make our secondary packaging,
such as labels and the shrink wrap we
use for multi packs, recyclable as well.
Recycled and renewable materials
Using recycled material in our bottles
and cans keeps valuable resources in
the circular economy and helps us
move away from the use of new materials
including virgin fossil based plastic.
We aim to achieve this by using
recycled aluminium in our cans and
recycled PET (rPET), PET from
renewable sources or PET obtained
through enhanced recycling. This is
a core part of our strategy to
demonstrate that PET beverage
bottles can be fully circular.
Case study
Infinite recycling with
CuRe Technology
In support of our ambition to eliminate
oil-based virgin plastic from our
bottles, through CCEP Ventures,
we are investing in CuRe Technology.
The technology uses polyester
rejuvenation to target plastics that
cannot be recycled by mechanical
recycling methods and prevents
them from being incinerated or
downcycled, or sent to landfill.
The low energy recycling process
creates high quality rPET with a
carbon footprint that is around 65%
lower than virgin PET(A). We intend
to start using CuRe Technology’s
rPET in Europe from 2025, following
the development of a new
production facility.
(A) Based on CuRe’s life cycle assessment, carbon footprint
reductions compared to virgin: 2022 figure.
Image: rPET granulate
Find out more at cocacolaep.com/
annual-report/case-study/
recyclingtech
In 2023, through CCEP Ventures,
we announced a new partnership
with universities in Spain and the
Netherlands to explore how captured
CO2 can be turned into useful products
like packaging materials which are
recyclable and thus contribute to
a circular future.
We are working with suppliers to
increase the recycled content in all
packaging types, including secondary
and tertiary packaging.
Packaging collection
and infrastructure
Packaging collection for recycling once
it has been used is critical to creating a
low-carbon, fully circular economy and
keeping plastic out of the environment.
That is why we are supporting the
creation of collection solutions across
our markets, working with national and
local governments and stakeholders.
For example, in Australia, together
with Pact Group, Cleanaway Waste
Management and Asahi Beverages,
we invested in two state of the art PET
recycling facilities: Albury–Wodonga
facility in New South Wales opened in
2022 and Altona North facility in Victoria
opened in 2023. Together, the two sites
will have the capacity to recycle the
equivalent of two billion 600ml PET
bottles per year(B).
Enhancing collection and recycling
infrastructure is often complex, and
collection solutions vary depending
on the socioeconomic and legislative
context in each market. They include
extended producer responsibility and
beverage packaging return schemes
which are driven by legislation, and
voluntary schemes which support
direct investment in local collection.
In markets where collection
infrastructure is well developed, like
Europe, Australia and New Zealand,
we support industry led, well designed,
beverage packaging return schemes,
unless a proven alternative exists. In less
developed markets, such as Indonesia,
the Pacific Islands and Papua New
Guinea, we are committed to proactive
voluntary action, directly funding
collection solutions to promote circular
economy outcomes. For example,
in Fiji, we launched the Mission Pacific
recycling programme, which rewards
customers when they redeem their
bottles at a designated collection point.
The power of our brands and
our people
We continue to use the power of
our brands to encourage consumers
to recycle our packaging via on
pack messages.
We also support a wide range of
anti-litter and clean up initiatives
through local community partnerships
and employee volunteering. As well as
removing and preventing litter, these
activities influence consumer behaviour
and raise awareness about littering
and recycling.
(B) Excluding caps and labels.
Find out more in our communities
on page 26
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Launching 100% rPET in Indonesia
Faster on
recycling
In a first for Indonesia, we have launched bottles made
from 100% rPET plastic(A) for our Coca-Cola trademark
brands, Fanta, Sprite in 390ml, and Sprite Waterlymon
in 425ml. The material comes from our Amandina PET
recycling plant and is collected via the Mahija Parahita
Nusantara foundation’s network of collection centres.
This is a step towards a closed loop circular economy
in the country and CCEP’s goal of using 50% recycled
plastic in its PET bottles by 2025 in API.
(A) This excludes the cap and label.
Watch: Joe Franses, VP Sustainability,
on tackling plastic waste.
cocacolaep.com/annual-report/
case-study/fasteronrecycling
Image: Coca-Cola Original Taste,
Coca-Cola Zero Sugar, Sprite, Fanta and
Sprite Waterlymon in 100% rPET plastic
packaging, excluding the cap and label
in Indonesia
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Done sustainably – Our environmental impact
Performance and progress against our This is Forward commitments
Forward on
water
~€5m
We invested approximately
€5 million in water efficiency
and wastewater treatment
technology in our operations
in 2023
36
In 2023, together with TCCC
and TCCF, we supported 27
water replenishment projects
in Europe and 9 in API
64
out of 66 of our NARTD
production facilities are
certified under the ISO 14001
environment management
standard(F)
Water efficiency
10% water use ratio(A) reduction
by 2030, versus 2019
Water replenishment
Replenish 100% of the water
we use in our beverages(B)
Regenerative water use(D)
100% regenerative water use
in leadership locations(E) by 2030
Group
Target
10% reduction
Group
Target
100%
(c)
The plan for the year ahead
Water is critical to nature, our
communities and our business. It is
the main ingredient in our products,
essential to our manufacturing
processes, and is critical to ensuring a
sustainable supply of the agricultural
ingredients we depend upon.
In 2024, we will update our Facility
Water Vulnerability Assessments
(FAWVAs) across our production
facilities to assess our local watershed
based risks and vulnerabilities.
Through CCEP Ventures, our
investment platform for sustainability
initiatives, we will continue to review
and invest in emerging technologies
that will help us to improve water
efficiency at our sites.
We also plan to implement seven new
water replenishment projects across
our markets in 2024.
(A) Water use ratio: litres of water per litre of finished
product produced.
(B) Based on the volume of water replenished through
replenishment projects versus the sales volume of our ready
to drink litres of finished beverages.
(C) Reduction in replenishment volume versus prior year is due
to one of our largest projects in Australia coming to an end
(Project Catalyst) in 2023.
(D) New target. Complete data not available for 2022 and
2023 reporting.
(E) NARTD production facilities which rely on vulnerable water
sources or have high water dependency. We have nine
leadership locations in Europe and four in API.
(F) All outstanding production facilities are located in
Papua New Guinea where we are actively working
towards certification.
4.9%202398.7%2023105.5%20221.3%2023107.9%2023101.6%202215.7%202360.1%2023120.8%2022 Strategic
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Done sustainably – Our environmental impact
Our progress explained
Assessing water risk
Water-related risks continue to
increase globally as the health of many
watersheds continues to deteriorate.
We map our water risks using a series
of risk assessments, in line with TCCC.
All our production facilities have their
baseline water risk assessed through
a global Enterprise Water Risk
Assessment (EWRA) using the World
Resources Institute’s (WRI) Aqueduct
3.0 tool. 21 of our 42 NARTD production
facilities in Europe, and three out of
24 NARTD production facilities in API
are located in areas of high baseline
water stress.
In 2023, 8,067 million m³ (7,405 million
m³ in Europe, and 662 million m³ in API)
of our production volumes were
sourced from areas of baseline water
stress. This represented 49.8% of our
total production volumes, (56.5% of
our production volumes in Europe
and 21.5% in API).
We also complete FAWVAs every
three years, assessing further physical,
regulatory and social risks at a
production facility level. We will be
updating this assessment across all of
our NARTD production facilities in 2024.
We also assess potential risks in water
quality and future availability to our
business, the local community and the
wider ecosystem through source water
vulnerability assessments (SVAs), which
we aim to complete every five years.
Sites address these risks through
facility water management plans
(WMPs). These are used to manage site
targets, enhance climate resilience, and
enable data sharing and reporting. In
2023, all our NARTD production facilities
had SVAs and WMPs in place.
Setting context based targets
We use the insights from these risk
assessments to categorise our sites, and
set water efficiency and replenishment
targets that are appropriate for the
context of the watershed our sites
operate in.
We categorise our sites as follows:
Leadership locations: Sites which rely
on vulnerable water sources or have a
high level of water dependency. These
sites have the highest water use
reduction targets, and must achieve
100% regenerative water use by 2030.
Advanced efficiency: Sites which
operate in a water stressed context, and
will be focused on achieving advanced
water efficiency, and best in class water
reduction targets.
Contributing locations: Sites which
operate in the lowest water risk areas,
and have water use ratio targets which
meet industry benchmark standards.
Improving water efficiency
We work to improve our water efficiency
across our operations, and measure
progress through our WUR (the amount
of water needed to produce a litre of
product). We aim to reduce our total
water use ratio by 10% by 2030 (versus
2019). This target is an aggregate of the
context based targets set at each
production facility.
In 2023, we invested approximately
€1 million in water efficiency technology
and processes and €4 million in
wastewater treament technology
in our sites. For example, in 2023, at our
production facility in Barcelona, Spain,
we optimised the water treatment
process, saving approximately 15,000m3
per year.
We estimate that our 2023 investment
in water efficiency projects could result
in savings of approximately 145,000 m³
per year and will help us avoid annual
water and wastewater treatment costs
of approximately €300,000 per year.
Returning wastewater
to the environment
We aim to safely return 100% of our
wastewater to nature. Before wastewater
is discharged from our production
facilities, we apply high treatment
standards which meet local regulations
and TCCC's Operating Requirements
(KORE).
In 2023, we discharged 9.1 million m3
of wastewater. Most of our production
facilities pre-treat wastewater on site
and send it to municipal wastewater
treatment plants. 26 of our 66 NARTD
production sites (17 in Europe, 9 in API)
have on-site wastewater treatment
plants.
Case study
Alliance for Water
Stewardship
In 2024, we became a member of
the Alliance for Water Stewardship
(AWS) to enhance our water
stewardship performance across our
sites and to ensure our continued
contribution to the global water
stewardship community.
Our joining follows several years of
AWS site certification, recognising
and rewarding good water
stewardship performance. In 2023,
our sites in Chaudfontaine, Belgium
and Dongen, the Netherlands,
which currently hold AWS platinum
certification, began the process
to re-certify their sites to the
AWS standard in 2024. In addition,
in 2024, our sites in Antwerp and
Gent, Belgium, were also AWS
platinum certified.
Image: Water replenishment project
De Liskes near our production facility
in Dongen, the Netherlands
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Done sustainably – Our environmental impact
Our progress explained
Regenerative water use
At our leadership locations, where we
face the highest water risk, we aim to
not only achieve best in class water
efficiency, but also reach 100%
regenerative water use by 2030.
Sites achieve this through
replenishment programmes within the
minor river basin of the site and
through beneficial use of their
wastewater.
Across our 13 leadership locations, we
withdrew 9.5 million m3 of water, and
discharged 3.2 million m3 of wastewater
in 2023.
Water replenishment
We aim to replenish 100% of the water
we use in our beverages through a
portfolio of projects in priority locations
across our operations and our
watersheds and within our
communities.
These replenishment projects are
managed in partnership with local
NGOs and community groups and are
funded together with TCCC and TCCF.
We focus our replenishment efforts on
three priorities:
• Operations: Projects in our leadership
locations which will contribute
towards our 100% regenerative water
use target.
• Communities: Investment in climate
resilient water, sanitation and hygiene
(WASH) projects in our priority
communities.
• Watersheds: Water stewardship
projects in our priority sourcing
regions.
In 2023, together with TCCC and TCCF
we supported 27 water replenishment
projects across Europe, and 9 in API,
replenishing 18.3 million m3 of water
across our territories, including
16.2 million m3 in Europe, and 2.1 million
m3 in API. This represents 98.7% of our
total sales volume (107.9% in Europe,
and 60.1% in API). This drop in
replenishment volumes versus
prior year is due to one of our largest
projects in Australia, Project Catalyst,
coming to an end.
In 2023, together with TCCF, we began
a major replenishment project on the
Canal des Moëres located in the
eastern part of Dunkirk, France, near
one of our leadership locations. The
project aims to restore surface water
resources in a territory that suffers
from recurring drought.
In the Netherlands, we are working
with TCCC and Natuurmonumenten
to safeguard future water supply and
improve groundwater levels in the
De Plateaux nature reserve. The project
aims to secure the water supply to
the area over the coming decade.
Collective action on water
As part of our commitment to
responsible water stewardship,
together with TCCC, we participated
in the UN Water Conference in 2023
and joined 50 other companies in
endorsing the CEO Water Mandates’
Water Resilience Coalition Open Call
to Accelerate Water Action. The aim
of this is to achieve positive water
impact in 100 vulnerable water
basins globally by 2030.
We also became a member of the
Alliance for Water Stewardship, and
participated in World Water Week
in Stockholm.
Aligning to the Science Based
Targets Network
In 2023, in partnership with TCCC and
Coca-Cola Hellenic Bottling Company,
we assessed our nature-related impacts
by completing Steps 1 and 2 of the
Science Based Targets Network (SBTN)
framework.
The goal of the SBTN is to foster
corporate action to tackle biodiversity
decline and nature loss, and ensure its
full recovery by 2050.
In Steps 1 and 2, we began to identify
our most significant impacts on nature,
and where they occur along our value
chain.
In 2024, we aim to carry out Step 3 of
the methodology – measure, set and
disclose targets to address our impact
on nature and biodiversity.
Case study
Regenerative water
for agricultural use
In 2023, at our leadership location
in Tenerife, Spain, together with
TCCC, we kicked off a project to
regenerate urban wastewater
for agricultural use.
The project is located near
the Anaga Rural Park, an area of
natural beauty in the northern tip
of Tenerife. It focuses on reusing
treated wastewater for agricultural
irrigation and the irrigation of
public parks and gardens from
the Punta de Hidalgo wastewater
treatment plant.
This project is making water
available for productive use in
a region that continues to suffer
from water scarcity. It is estimated
that over 30,000m³ was replenished
in 2023.
Image: Punta de Hidalgo wastewater
treatment plant
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Taking action on sustainability
Task Force on Climate-related Financial Disclosures (TCFD)
We acknowledge CCEP’s role in
addressing climate change, and are
committed to decarbonising our
business in line with climate science,
and being transparent about the
impacts, risks and opportunities that
climate change poses to our business.
Our climate disclosures are
based upon the four pillars and
11 recommendations of the
TCFD’s guidance. We consider
our disclosure to be consistent with
the TCFD recommendations and
recommended disclosures.
In 2023, we evolved our scenario
modelling as follows:
• Risks and opportunities were
modelled across three potential
emission pathways: > 4°C, +2.5°C
and +1.5°C.
• Scenarios have been modelled
on a gross-risk basis, assuming
no mitigating actions, or progress
on our This is Forward targets, such
as our GHG emissions reduction
targets(A). Mitigation actions and
related investments for physical
and transition risks are listed on
pages 57-58.
• Analysis has been completed over
the short (five years), medium (2030)
and long term (2040).
• Physical and transition risks have
been disclosed quantitatively over
the short term, and qualitatively over
the medium and long term term.
• This work should not be viewed as a
forecast, and will evolve in the coming
years as we refine these scenarios.
TCFD alignment overview
Recommendation Recommended disclosures and disclosure level
References and notes
Governance
a. Describe the Board’s oversight of climate-related
risks and opportunities
b. Describe management’s role in assessing and
managing climate-related risks and opportunities
Strategy
a. Describe the climate-related risks and opportunities
the organisation has identified over the short,
medium and long term
b. Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning
c. Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related
scenarios, including a 2°C or lower scenario
Risk management a. Describe the organisation’s processes for identifying
and assessing climate-related risks
b. Describe the organisation’s processes for managing
climate-related risks
c. Describe how processes for identifying, assessing, and
managing climate-related risks are integrated into the
organisation’s overall risk management framework
Metrics
and targets
a. Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in line
with its strategy and risk management process
b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
GHG emissions, and the related risks
c. Describe the targets used by the organisation to
manage climate-related risks and opportunities
and performance against targets
TCFD, Governance: pages 49-50
Corporate governance report: pages 103-112
Audit Committee report: pages 117-124
ESG Committee report: pages 125-126
We consider our disclosure to be consistent with the TCFD
Recommendations and Recommended Disclosures.
TCFD, Strategy and Metrics and targets: pages 51, 60
Our strategy: page 14
ERM framework and Principal risks: pages 68-78
Note 1, 6 and 7 to the Consolidated financial statements:
pages 167-169; pages 173-177; and pages 177-179
Viability statement: page 79
Climate transition plan: page 38
We consider our disclosure to be consistent with the TCFD
Recommendations and Recommended Disclosures. We will
continue to work to develop our climate transition plan in 2024.
TCFD, Risk management: pages 54-59
ERM framework and Principal risks: pages 68-78
Audit Committee report: pages 117-124
We consider our disclosure to be consistent with the TCFD
Recommendations and Recommended Disclosures.
TCFD, Metrics and targets: page 60
Forward on climate: pages 36-40
Long-term incentives within Annual report on remuneration:
pages 133-135
We consider our disclosure to be consistent with the TCFD
Recommendations and Recommended Disclosures.
TCFD, Metrics and targets: page 60
We consider our disclosure to be consistent with the TCFD
Recommendations and Recommended Disclosures.
Our sustainability headline commitments: page 15
Key performance data summary: pages 234-236
Notes 1, 6 and 7 to the Consolidated financial statements:
pages 167-169; pages 173-177; and pages 177-179
We consider our disclosure to be consistent with the TCFD
Recommendations and Recommended Disclosures.
(A) Our GHG emissions reduction and Net Zero targets have been validated by the SBTi as being in line with climate science.
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Governance
Board-level governance
In alignment with the TCFD
recommendations, our Board oversees
climate risk and opportunities. The Board
is supported in its oversight by its
Committees, notably the ESG and Audit
Committees, as outlined in our TCFD
governance framework.
There is close collaboration across these
Committees due to the role that both
have in our ESG reporting, disclosure
and assurance processes. A joint
meeting of these Committees was
held to discuss these matters, including
this TCFD disclosure.
The Board oversees and assesses
CCEP’s Group wide strategy, including
climate-related considerations,
ensuring alignment with emerging
regulatory mandates and market
trends. It also approves significant
financial commitments and plans to
reduce GHG emissions.
Climate-related issues are considered
as part of Board decision making. In
2023, we aligned our carbon reduction
roadmaps with our business planning
and Capex investment routines (see
page 38), sustainability metrics were
presented with asset management
requests to the Audit Committee.
The Remuneration Committee
reviewed performance against CCEP’s
GHG emissions reduction targets to
inform vesting outcomes for the
Long-Term Incentive Plan (LTIP).
The Board also receives training and
deep dives on climate-related issues.
In 2023, this included a session on
sustainable packaging and the circular
economy. An annual Board session
focused solely on risk is held each
December, and includes a review of
climate-related risks, as well as other
ESG-related risks.
Management supports the Board
Committees throughout the year.
For example, in 2023, the ESG Committee,
following guidance from CCEP’s
leadership, recommended to the
Board that we update our water
strategy to include a Group water
use efficiency target.
Management-level governance
Ownership and governance for
sustainability-related risks and
opportunities, and driving progress
against our commitments, is
embedded throughout our business.
Risk management is a key responsibility
for all senior leadership, who are
assigned ownership of specific risks,
including climate-related risks.
Risks are evaluated regularly as part
of our enterprise risk management
process (see pages 68-69).
Key leadership and management with
responsibility for climate-related issues,
are outlined in the TCFD governance
framework. The main discussion forum
for the Executive Leadership Team
(ELT) on climate matters is the
Sustainability Steering Committee
(SSC). Multiple cross functional working
groups are focused on developing the
strategy and delivering against our This
is Forward targets. Working groups, led
by key management, meet regularly,
and will bring items for information,
review and decision making to the SSC,
and to the Board Committees as
required. In 2023, the SSC reviewed
CCEP’s carbon reduction roadmap,
including progress against our 2030
trajectory, and agreed actions to
address gaps. This work, combined with
scenario risk modelling of our physical
and transition risks, will support the
development of CCEP’s climate
transition plan as it is developed in 2024.
The SSC will continue to review
development of our climate transition
plan against relevant guidance like the
UK’s Transition Plan Taskforce (TPT).
See our TCFD governance framework
on page 50
Stakeholder engagement
We engage regularly with a wide range
of stakeholders on ESG matters. Our
stakeholders have high expectations of
us to address many environmental and
social issues. Our stakeholders are
integral to every phase of our value
chain, from the suppliers which provide
raw materials to the communities where
we operate, and the people involved in
producing and selling our products.
Their insights into our most material
issues and impacts are crucial, and were
integral to the development of our This
is Forward sustainability action plan.
We advocate for climate-related issues,
supporting governmental policies and
private sector initiatives that support
rapid and sustained decreases in GHG
emissions. In 2023, we joined over 200
companies in signing the We Mean
Business Coalition’s Fossil to Clean
letter advocating for a phase out of
fossil fuels.
Read more about our stakeholders
on pages 61-64
Case study
Engaging with local
stakeholders
We are committed to ongoing
engagement with our stakeholders.
In 2023, we hosted 6 Real Talk sessions
in Europe and API, engaging with
industry, NGOs, and government,
in partnership with TCCC.
These dialogues, which are focused
on building understanding between
CCEP and key stakeholders on
critical topics, including packaging
or GHG emissions reduction, are
crucial for building shared
understanding.
Image: Panel discussions in Dongen, the
Netherlands, on packaging of the future
Real talk sessions
6
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TCFD governance framework
The Board
Met seven times in 2023
• Sets the sustainability strategy
• Has primary oversight of climate-related risks and opportunities
• Receives feedback on climate-related issues from Committee Chairs and via CEO report
ESG Committee
Met six times in 2023(A)
Nomination Committee
Met six times in 2023
Remuneration Committee
Met five times in 2023
Audit Committee
Met eight times in 2023(A)
• Responsible for overseeing performance
against This is Forward strategy and goals
• Reviews environmental and social-related risks
and opportunities, including climate-related
risks and GHG emissions reduction targets
• Oversees ESG reporting, disclosure
and assurance
• Reviews the size, structure, composition
• Aligns the Group’s remuneration policy to
• Ensures that climate-related risks and
and skills of the Board to ensure it remains
effective
• Ensures there is sufficient expertise on the
Board in areas such as risk and climate
reinforce the achievement of sustainability aims
• Oversees performance outcomes from
the LTIP, which has a 15% performance
weighting allocated to the reduction
of GHG emissions
opportunities are managed across the Group
• Oversees risk management process, including
our annual enterprise risk assessment to
identify principal risks including climate risk
• Oversees the Group’s financial and reporting
obligations, including ESG reporting
• Has oversight over sustainability metrics
for capital expenditure proposals
Executive Leadership Team (ELT)
Meets regularly throughout the year
Climate responsibility lies with the Chief Executive Officer, Chief Customer Service
and Supply Chain Officer and Chief Public Affairs, Communications and Sustainability
Officer who are responsible for providing management updates on climate-related
topics to the Board and its Committees
Sustainability Steering Committee
Meets at least quarterly. Includes ELT members
• Chief Executive Officer
• Chief Financial Officer
• General Counsel and
Company Secretary
• Chief Customer Service
and Supply Chain Officer
• Chief Commercial Officer
• Chief Integration Officer
• Chief Public Affairs,
Communications and
Sustainability Officer
Provides opportunity to review:
• This is Forward targets and our progress
against these
• Climate-related risks and scenario analysis,
• 2023 topics included the review of our carbon reduction
roadmaps across all markets, approving our new water
use efficiency target and preparing for upcoming
regulation and reporting requirements
including TCFD
• Outputs raised as required to the ESG
Committee (including on climate topics)
Compliance and Risk
Committee (CRC)
Meets every quarter
• Management committee
chaired by the Chief
Compliance Officer
• Reviews risk developments,
including climate change
risks and opportunities
Sustainable Packaging Office (SPO)
TCFD and ESG Disclosure group
• Overseen by Chief Public Affairs, Communications and
• Overseen by General Counsel and Company Secretary and
Sustainability Officer and VP Sustainability
VP Sustainability
• Responsible for ensuring a sustainable packaging strategy
can be implemented across our business, including pack mix,
recycled content and improving packaging collection
• Oversight of our work on TCFD and climate-related risks, as
well as our broader ESG reporting and disclosure approach
Other working groups
(developed as required)
Overseen by Chief Public Affairs, Communications and
Sustainability Officer and VP Sustainability. Recent focuses:
• Carbon reduction roadmaps
• Assessment of our internal carbon pricing strategy
• Completed steps 1 and 2 of the Science Based Targets
Network (SBTN) assessment to assess our biodiversity
and nature-related risks
(A) One meeting was a joint meeting of the Audit Committee and ESG Committee held in February 2023.
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Strategy
Climate change poses short-, medium-
and long-term risks to our business.
This includes physical risks that could
disrupt our operations and supply chain
through extreme weather events, such
as floods and droughts. Transition risks,
such as shifts in consumer preferences
and increased regulations to address
climate change, could be faced by
our business.
In accordance with the TCFD
recommendations, we have integrated
science based climate scenario
modelling with internal and insurance
data to build a comprehensive regional
climate analysis. This methodology
enhances our decision making
capabilities and understanding
of potential climate vulnerabilities
within our operations and value chain,
fostering climate resilience across
the organisation.
Our business and financial planning
do not depend on a single emission
pathway. Instead, our scenario analysis
informs management’s understanding
of potential risks and opportunities,
serving as a tool for informed
deliberation rather than as definitive
predictions of future events or outcomes.
Since 2022, we have partnered with
Risilience, a specialised climate analytics
company which uses technology
pioneered by the Centre for Risk
Studies at the University of Cambridge
Judge Business School, to co-develop
a digital twin platform, enabling the
modelling of both physical and
transition risks across our value
chain over a 20-30 year horizon,
aligned with five global warming
scenarios (including >4°C, +2.5°C and
+1.5°C), using shared socioeconomic
pathways (SSPs).
We also worked with external physical
climate specialists Marsh Advisory to
establish how climate change could
impact the frequency and severity of
climate-related weather events on our
manufacturing and operations, under
RCP 2.6 and 8.5 scenarios (~1.6°C and
~4.3°C respectively). This covers all
major climate-induced threats (coastal
inundation, river flooding, surface water
flooding, extreme heat, extreme wind,
wildfire and others) through 2100. In
2023, we worked with Marsh, using the
Risilience platform, to complete a pilot
assessment of the risk of reduced
production yields from sugar beet
for our supply in Great Britain, due to
chronic climate change impacts, such
as drought and changing weather
patterns. We are reviewing the
potential to scale this assessment
across our business in the future.
Our work with Risilience and Marsh
quantifies our exposure and potential
financial impacts from climate change
events across various emission
pathways. We are also enhancing
our risk management framework,
incorporating AI-powered risk sensing
techniques to identify and address
emerging risks, including those
associated with climate change.
We work in close collaboration with
TCCC to assess climate-related risks
and opportunities, driving innovation as
a system to meet consumer demands
for sustainable products and address
climate change. The knowledge gained
from these initiatives helps to inform
our strategic business planning and
investment decisions, and supports
the delivery of our climate targets.
Business planning
We integrate climate-related
considerations into our business
strategy, planning, and risk
management processes. The
knowledge gained from our climate
risk analysis helps inform our strategic
business planning and investment
decisions and supports the delivery of
our climate targets. We have assessed
the impact of climate change on
multiple aspects of our business and
financial planning, including on our
supply chain and value chain, our
products, operations, investment
in research and development, for
example through CCEP Ventures,
and investment within our operations.
As we continue to evolve our climate
scenario analysis, we aim to expand
climate risk assessments across all areas
recommended within the TCFD Annex.
We are committed to mitigating
climate-related risks through the
delivery of our This is Forward
sustainability targets. This includes
our short-term target to reduce our
absolute GHG emissions by 30% by
2030 (versus 2019), and our long-term
target to reach Net Zero by 2040.
Both targets were approved in 2023
by the SBTi as being in line with climate
science. We use a range of sustainability
performance indicators to monitor our
progress against our This is Forward
targets, including KPIs tracking our
GHG emissions, water use ratio and
packaging data. Tracking progress
against these KPIs also allows us to
identify gaps and opportunities for
improvement.
Climate Transition Plan Development
We have begun to develop a climate
transition plan, to support the delivery
of our short- and long-term climate
targets and to address identified risks
and opportunities. This includes the
development of a carbon reduction
roadmap, which outlines a potential
reduction trajectory through 2030
and 2040, aligned with our long-term
commercial plans and growth
trajectories, and includes key
decarbonisation initiatives by country,
value chain area and reduction initiative.
Modelling has been outlined on
an annual basis through 2030, with
longer-term initiatives (2030-2040)
also included. Estimated funding for
Capex and Opex initiatives has been
included, and we have aligned how
we prioritise energy, water and GHG
emissions saving projects with our
Capex planning processes. In 2023,
we also continued to pilot the use of
an internal carbon price of €100/tCO2e
to inform and influence our strategic
business decisions, such as Capex
investment in sustainability initiatives.
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We also used our carbon roadmap to
embed a carbon projection into our
2023-2025 long-range planning and
2023 business plan. This has helped us
improve the connection between our
commercial and carbon forecasts at
Group and country levels.
In 2024, we will build upon the work
completed so far, to develop a full
climate transition plan. We are
reviewing frameworks as they are
introduced, e.g. UK TPT Disclosure
Framework, and will aim to align our
climate transition plan disclosures
as relevant.
Investment
Through this work, we allocated over
€300 million between 2020-2022 to
support the ongoing decarbonisation
of our operations and value chain,
and have an investment plan of
approximately €450 million for
emissions reduction initiatives between
2023-2025. This includes continued
investment in rPET which has a
significant carbon reduction impact,
as well as other carbon, energy and
logistics saving initiatives.
Through these investments, we are
working to mitigate the physical and
transition risks we face, and realise
opportunities coming from cost,
energy and carbon savings. In 2023,
we invested approximately €28 million
in energy, logistics and carbon saving
technologies, and expect that this
could result in an annual energy and
GHG emissions saving of approximately
9,000 MWh and 21,000 tCO2e,
potentially helping us reduce our
annual electricity and natural gas costs
by around €2 million per year.
Investment in energy and water savings
projects also helps mitigate physical
risks, such as drought, on a production
site level. In 2023, we continued to
invest in water saving projects at our
sites in areas of high baseline water
stress. For example, we updated our
water treatment systems in Grigny,
France, invested in the recovery of rinse
water in La Coruña, Spain, and
optimised the water treatment process
in Barcelona, Spain. Our 2023
investment of approximately €5 million
in water initiatives could save
approximately 145,000m3 per year.
Identifying our transition risks through
scenario analysis strengthens our
resilience and helps to identify
potential opportunities from the global
transition to a low-carbon economy.
This scenario analysis identified our
greatest policy, market and reputation
risks and opportunities as coming from
packaging. Through our SPO, we
continue to monitor risks and
opportunities linked to various
packaging models and regulations,
including strategies to maximise return
on investments and improve our
strategy’s resilience through a diverse
packaging portfolio.
Our continued investment in recycled
materials such as rPET provides CCEP
with a significant opportunity to
increase our use of recycled material
and reduce our use of virgin PET. Our
investment in rPET enabled us to reach
our >50% rPET target four years early in
Europe, and reduced GHG emissions in
2023 by approximately 115,000 tCO2e(A).
rPET also provides CCEP with a
significant opportunity to increase our
recycled content level in specific
countries, to mitigate potential taxes,
and could help protect us against
potential new taxation, marketing
restrictions and bans on single use
plastic bottles which do not contain
recycled plastic.
Our investment in rPET and our target
to eliminate the use of oil-based virgin
plastic in our bottles by 2030, could also
support an opportunity to provide
lower carbon and lower waste options
to consumers, a transition scenario
outlined within our analysis. In 2023,
we took a significant step forward by
launching 100% rPET bottles,(B) across
Indonesia. In 2023, 47.6% of the PET
bottles we sold were manufactured
from 100% rPET,(B) with Europe
contributing 50.9% and API 39.2%.
Rapid decarbonisation will also require
continued engagement on policy and
regulatory shifts across our markets. In
particular, regulatory shifts that support
an expansion of renewable electricity
capacity, shifts to a circular economy
and rapid phase out of fossil fuels have
been identified as opportunities, and
we have supported these shifts as part
of our public policy work in 2023.
Business resilience
We have reviewed the potential
impacts of warming scenarios (>4°C,
+2.5°C and +1.5°C) and are confident
that we have an agile and resilient
business strategy. Through this analysis,
and careful planning in our supply chain,
commercial and procurement
functions, we believe we have a
considerable measure of resilience
to climate change. We have assessed
climate risk within our financial
statements and have come to the
conclusion that climate risk does not
materially impact the valuation of
our assets or liabilities.
Impairment testing of our intangible
assets was completed over a five year
time horizon, and we assessed that
there was no material change from
climate risk over this time horizon.
We have also assessed the impact
of climate change on the useful
economic life of our property, plant
and equipment, and no change was
required based upon this analysis.
See pages 56-57 for more information.
Based upon these assessments, we
anticipate that the impacts of climate
change will not materially affect our
going concern basis of preparation or
the Group's viability over the ensuing
three years, as reflected in our viability
statement on page 79.
We will build upon this work in 2024,
combined with continuing climate
scenario modelling of physical and
transition risks, to assess the resilience
of our carbon reduction strategy and
identify key opportunities to mitigate
identified risks to our business.
See our Viability statement on page 79
(A) Comparing 0% rPET rate versus actual 2023 54.6% rPET rate.
(B) Excluding caps and labels.
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Carbon reduction roadmap
We are working to build a climate transition plan to support the delivery of our short- and long-term GHG emissions reduction targets. In 2023, we built a carbon roadmap aligned to our
business planning processes, to support our decarbonisation through 2030. In 2024, we will build upon this work, using continued climate scenario modelling of physical and transition
risks, to assess the resilience of our strategy, identify opportunities to mitigate climate-related risks and ensure we have allocated the finance and resources to deliver our objectives.
Actual emissions (tCO2e)
6.3m
16.7% GHG emissions
reduction across our entire
value chain versus 2019
Projected emissions reduction – in line with SBTi targets(A) (tCO2e)
(A) For illustrative purposes only.
2030 target to
reduce emissions
by 30% vs 2019
-30%
4.4m
2019
2023
2025 2026
2030
Beyond value chain mitigation
Projected carbon removal
Key actions and anticipated time horizons
Our 2030 and Net Zero 2040
targets have been approved
by the SBTi as being in line
with climate science.
2040 target to
reduce emissions
by 90% vs 2019
-90%
0.6m
2040
-0.6m
Ingredients
SKU rationalisation
Reducing sugar across portfolio
Sustainable agriculture
Packaging
Accelerate rPET and rAluminium Lightweighting
Increasing recycled content
Increasing packaging collection
Packaging mix shifts
Future packaging solutions
Manufacturing
Fugitive CO2 reduction
Electric forklifts
Increasing renewable electricity
Reduction of fossil fuels
Increasing renewable energy
Transport
Alternative fuel use
Network and route optimisation
Electric vehicles
Increased use of trains
Increased vehicle efficiency
Fleet / Third party logistics efficiency
CDE
HFC free
Replace OFUs
Replace old equipment with energy efficient equipment
Grid decarbonisation
Suppliers and
partners
Supplier engagement including:
— 100% of our carbon strategic suppliers to set science based targets by 2023
(Europe) and 2025 (API)
— 100% renewable electricity by 2025 (Europe) and 2030 (API)
Advocacy and
memberships
We are committed to fostering collaborative efforts within our industry, actively
engaging with peer companies, industry associations and government bodies.
To facilitate a rapid, fair transition to a low-carbon economy, we are engaging
with key stakeholders to accelerate the following:
Through CCEP Ventures, we are committed to seeking out and
funding solutions designed to drive innovation and sustainability
progress in line with CCEP’s Net Zero 2040 ambition.
— Fossil fuel phase out
— Rapid shift to a circular economy
— Renewable electricity across all markets
Notes. CDE = Cold drink equipment, also referred to as “coolers”: Fugitive CO2 reduction refers to the loss of CO2 as an ingredient that occurs when we cap our products.
HFC = Hydrofluorocarbon. OFUs = Open fronted units (most have been retrofitted with doors), to be replaced with more energy efficient equipment.
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Risk management
Climate-related risks have been
identified as a principal risk category
for CCEP for many years, with a growing
probability of affecting our existing
business model, necessitating proactive
mitigation strategies. Our risk
management framework includes
climate risks, as detailed on page 73.
The Principal risks section of this report
on pages 68-78 further outlines the
various types of loss impacts and the
potential influence of climate risks on
our strategic objectives.
Climate risk is a principal strategic
priority, linked to our This is Forward
sustainability action plan. We assess and
identify climate risks across business,
functional and project levels, following
our enterprise risk management
process with local compliance reviews
and annual enterprise risk assessments.
We also review opportunities as part
of our risk framework, and as part of
our normal management routines.
Our approach drives progress towards
meeting our GHG emission reduction
targets and helps manage impacts
from physical, transition and regulatory
climate risks. Our commitment to this
comprehensive risk management
strategy underscores our dedication to
long-term resilience and sustainability.
Our approach to climate
scenario analysis
Partnering with Risilience, we
developed a digital twin model for
scenario analysis, blending CCEP’s
financial, operational, supply chain,
product and environmental data.
We modelled scenarios under
different climate emission pathways.
These pathways were defined by
assumptions about policy change,
energy outlooks, technological
innovation and global temperature
change, underpinned by Shared
Socioeconomic Pathways (SSPs)
widely used by the IPCC.
This physical climate materiality
assessment is an important step
to inform CCEP’s climate resilience
planning. Higher risk sites could be
provided with operational adaptation
plans and risk engineering
improvements to mitigate against
damage and business interruption.
See the emissions pathways and risks
assessed on page 55
Assessing physical and transition
risks and opportunities
We evaluated physical and transition
risks and opportunities over the
short- (five years), medium- (2030)
and long-term (2040 and beyond).
This is in line with a slight extension of
our business planning timeframes, and
our short-(2030) and long-term (2040)
GHG emissions reduction targets.
We analysed short-term financial
impact over five years, during which
we can influence outcomes through
strategic, capital allocation, commercial
and operational decisions. Given the
uncertainty around the financial
impacts of our climate scenario analysis
beyond five years, we have confined our
financial impact assessment to this
period. We have also conducted a
high level review of CCEP’s long-term
climate vulnerability, on a non-financial
basis, to help us identify risks and
opportunities, spot trends and support
our strategic planning.
We assessed all of the physical and
transition risks outlined by the TCFD.
Out of the risks and opportunities
assessed, seven (three physical, four
transition) were determined to be
significant based upon the quantitative
and qualitative impact to our business.
Some risks (for example, exposure to
litigation or investor market risk) were
assessed, but were not deemed critical.
We will continue to update and refine
our modelling of our climate-related
risks and opportunities over the
coming years.
See the physical and transition risks
assessed on pages 56-59
The financial and non-financial
assessment of our climate scenario
analysis was completed on a gross
risk basis. Planned mitigating actions
or opportunities linked to these risks,
such as our actions to achieve our GHG
emissions reduction targets through
our climate transition plan, have not
been taken into consideration when
evaluating the risk.
We have grouped the potential
five year discounted cash flow at
risk estimations into low, medium
and high bands, with each risk and
opportunity assessed independently.
Bands are based on a 5% profit
before tax estimate on a five year
cumulative basis.
In 2024, we will continue to refine
our climate scenario modelling,
as we continue to develop and refine
our carbon reduction strategy, and
identify opportunities to mitigate
climate-related risks to our business.
This will help us to better assess the
resilience of our climate transition plan,
and our business strategy, to ensure
we are able to mitigate risks and take
advantage of opportunities of shifting
to a low-carbon economy over the
medium to long term.
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Emissions
pathway
>4°C emissions
pathway
+2.5°C emissions
pathway
+1.5°C emissions
pathway
SSP
No Policy
SSP 5-8.5
Stated Policy
SSP 2-4.5
Paris Ambition
SSP 1-1.9
Temperature
rise by 2100
>4°C
+2.5°C
+1.5°C
Global CO2
emissions
Global action
against
climate
change
200% by 2100
-75% by 2100
Net Zero by 2050
Few or no steps taken
to limit emissions.
Current GHG emissions
levels roughly double
by 2050. The global
economy is fuelled
by exploiting fossil
fuels and energy-
intensive lifestyles.
Reliance on existing/
planned policies (not
commitments). GHG
emissions plateau
around current levels
before starting to fall
mid-century, but do
not reach Net Zero
by 2100.
Coordinated action
leads to reduced
emissions and societal
shifts towards
sustainability. While
extreme weather
increases, the most
severe climate impacts
are avoided.
Likelihood
Low
High
Low
Scope and methodology to assess key climate-related risks and opportunities
Physical
Transition
What are
physical
and transition
risks and
opportunities?
Includes risk of both acute weather
events (e.g. floods) and chronic
long-term climate shifts (e.g. rising
sea levels). Acute physical risks are
already occurring – however, the
frequency and severity of these is
expected to increase.
Transitioning to a low-carbon
economy presents risks and
opportunities, with impacts varying
by transition speed and nature.
Opportunities arise as consumers
increasingly prefer products with
lower emissions and reduced use
of water and resources.
CCEP scope
• CCEP sites and operations
• Key areas of our supply chain
• Downstream products
Quantification Estimation of the five-year cumulative discounted cash flow at risk
(without mitigation measures). This was completed independently per
risk type, including operational disruption and asset damage (physical);
and loss of revenue, increased cost implications (transition). Risks have
been prioritised in line with our ERM process. (see pages 68-69).
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Physical risk
We modelled how extreme weather events and chronic changes to weather patterns could pose a physical risk to our operations and supply chain. Our climate
scenario modelling identified potential risks from extreme weather, such as drought or flooding at production sites or key suppliers. Chronic changes in temperature
and precipitation patterns could have an impact on agricultural yields for key ingredients. Mitigating actions against these risks are reviewed as part of our business
planning processes.
Short-term (five years) cumulative gross risk financial impact estimates (assuming no mitigation)
Potential cumulative discounted cash flow at risk
Low <€350m
Medium €350m–€700m
High >€700m
Short-term (five years) cumulative gross risk (assuming no mitigation)
Physical risks
What could be expected
>4°C emissions pathway
+2.5°C emissions pathway
+1.5°C emissions pathway
Extreme weather
events could cause
disruption to facilities
and logistics routes
Increased risks of site damage due to more frequent
and severe extreme weather, including riverine and
surface water flooding. Impacts could result in
business interruption and asset damage at our
production sites.
Low
Low
Low
• Acute weather events such as extreme heat or flooding could limit our ability to produce
or distribute our products.
• Insurance premiums could increase to cover such events.
Increasing water stress
or water scarcity
Droughts can lead to water scarcity and reduced
quality in our territories, potentially raising production
costs or limiting capacity, adversely impacting our
production and sales.
Low
Low
Low
• Of our 66 NARTD production sites, 24 are in regions with baseline water stress per
WRI Aqueduct 3.0 analysis.
• Previous droughts have impacted operations.
• We modelled the risk as a potential production restriction over a two month period occurring at our
high risk sites. The risk escalates slightly in the >4°C and +2.5°C warming scenarios.
Changes to weather
and precipitation
patterns could cause
disruption to supply
of ingredients
Decreased agricultural productivity in some regions
of the world as a result of changing weather patterns
may impact the yield and/or quality of key raw
ingredients (e.g. sugar beet, sugar cane, coffee or
orange juice) that we use to produce our products.
Low
Low
Low
• Sugar yields could be negatively impacted across all emissions pathways.
• Sugar beet, as our modelling suggests, is the ingredient most vulnerable to short-term climate shifts.
France is projected to have the most significant yield reduction due to expected increased rainfall.
• Our modelling indicated that orange and coffee yields are unlikely to be significantly impacted.
Scenarios are modelled assuming no mitigating actions or progress on our stated sustainability action plan. It assumes that CCEP’s operational footprint, product portfolio and
GHG emissions remain static. Our mitigation strategy and our This is Forward sustainability commitments are designed to mitigate climate-related risks.
Medium- (2030) and long-term (2040 and beyond) non-financial assessment
In the >4°C warming scenario, physical risks at CCEP facilities, including operational and supply chain disruptions, increase significantly. A review of 27 critical facilities
under this scenario revealed long-term flooding risks, especially in Belgium, Spain, and Indonesia. These risks, mainly coastal inundation, are expected to surge post-2050.
Additionally, climate change may intensify water scarcity, affecting water quality in certain regions. Analysis using WRI Aqueduct 3.0 baseline water stress mapping
identified 21 European facilities and three NARTD facilities in API as high risk for water stress.
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Our strategic response to physical risks
Physical risk
Value chain
How could this impact our business (assuming no mitigation)?
How are we addressing these risks? (Our mitigation strategy)
Manufacturing
and operations
Extreme weather
events could
cause disruption
to facilities and
logistics routes
Increasing water
stress or water
scarcity
Manufacturing
and operations
• Damage to property at production and warehouse facilities,
• Our proactive measures against climate-related risks, especially
as well as our logistics and distribution networks.
• Compromised infrastructure and logistical channels due to
facility and equipment damage could hinder our product
manufacturing and delivery capabilities.
• Notably, severe flooding in 2021 affected our Chaudfontaine,
Belgium, and Bad Neuenahr, Germany production sites. In 2022,
floods in Australia disrupted our distribution network. We anticipate
flooding as a persistent physical risk across all emission scenarios.
from extreme weather, include significant investments in:
– Enhancing flood defences and climate adaptation measures
at our facilities
– Developing and refining our business continuity plans
• Water scarcity poses a risk to our production processes,
• We conduct continuous water risk assessments at our NARTD production
potentially leading to regulatory constraints on water usage,
which may affect our production capabilities.
• Temporary water shortages could result in increased production
expenses or limitations in production capacity, impacting our
beverage production and sales, and elevating costs.
• Of our 66 NARTD production facilities, 24 are situated in regions
with baseline water stress, as identified by the WRI Aqueduct 3.0
water risk analysis.
• In 2023, due to drought, local authorities in some of our
markets in Europe (Spain and France) escalated water risk
levels, which could have resulted in limits on industrial water
usage. These restrictions did not directly affect our sites, and
in some cases our water targets and demonstrated progress
on improving water efficiency helped to mitigate water
restrictions being imposed on our facilities.
facilities using tools like the WRI Aqueduct 3.0 baseline water risk
assessment, Facility Water Vulnerability Assessments (FAWVAs), and Source
Water Vulnerability Assessments (SVAs).
• These risk assessments directly inform the context based water targets set
at each of our NARTD facilities, and our aggregated target to reduce our
WUR(A) by 10% by 2030 (versus 2019).
• At sites located in areas of higher water stress, we work with NGOs, local
authorities and the local community to help protect the watersheds we use.
• We aim to achieve 100% regenerative water use in our leadership locations(B)
by 2030. This includes reducing our water use ratio, finding a beneficial use
for the sites’ wastewater and funding replenishment projects near these
leadership locations.
• In 2023, we invested approximately €5 million in water efficiency technology,
processes and wastewater treatment in our sites. We estimate that these
could help us save annual water and waste treatment expenses of about
€300,000 per year.
Changes to
weather and
precipitation
patterns could
cause disruption
to supply of
ingredients
Supply chain
• Changing weather patterns and/or extreme weather events
• We have asked our carbon strategic suppliers(C) to set their own science
could impact the yield and/or quality of our key ingredients and
raw materials, such as sugar beet, sugar cane, orange juice or
coffee. This could reduce the availability and quality, or increase
the cost of ingredients.
based GHG emissions reduction targets, including our ingredients suppliers.
• We aim for 100% of our key agricultural ingredients and raw materials to be
sourced in compliance with our PSA.
• We invest in water replenishment programmes in our key sourcing regions,
• Our primary sugar beet sourcing regions, including France, Great
Britain, the Netherlands and Spain, are all potentially vulnerable
to climate-related water scarcity issues, based upon WRI
Aqueduct 3.0 water risk analysis.
which focus on supporting advance water management practices.
• We aid our suppliers in measuring and setting emission reduction targets
and enhancing their emission reduction capabilities through educational
initiatives like the S-LOCT programme.
(A) Water use ratio: litres of water per litre of finished product produced.
(B) NARTD production facilities which rely on vulnerable water sources or have high water dependency. We have nine leadership locations in Europe and four in API.
(C) Carbon strategic suppliers account for ~80% of our Scope 3 GHG emissions (~200 suppliers in total).
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Transition risk
Our scenario analysis focused on the transition risks across our value chain, under three emissions pathways. Our analysis highlighted a greater potential impact from
transition risks in the near term, compared to physical risks. The level of exposure to transition risks is driven by the warming scenario, with a +1.5°C scenario showing the
highest potential transition risk. Mitigating actions against these risks are determined as part of our business planning processes.
Short-term (five years) cumulative gross risk financial impact estimates (assuming no mitigation)
Potential cumulative discounted cash flow at risk
Low <€350m
Medium €350m-€700m
High >€700m
Short-term (five years) cumulative gross risk (assuming no mitigation)
Transition risk What could be expected?
>4°C emissions pathway
+2.5°C emissions pathway
+1.5°C emissions pathway
Policy
Market
Technology
Reputation
Carbon pricing is used as a shadow mechanism through which governments
can incentivise GHG emissions reductions. The scenarios assume the use of
higher carbon prices across CCEP markets to price and penalise GHG emissions,
including those linked to packaging materials, to drive decarbonisation.
Consumer awareness of environmental impact drives a shift towards more
sustainable, lower-emission alternative products and services. The scenarios
assume that consumer preferences will shift towards packaging options that
are perceived to be more sustainable, transforming market demand.
Regulatory or market shifts may phase out fossil fuels and related equipment,
leading to a devaluation of carbon-intensive assets and potential impairment or
write-offs. CCEP's exposure is limited, primarily due to our fleet assets relying on
fossil fuels.
Levels of consumer activism could be influenced by how much climate
action is taken by the beverage sector and by CCEP. This assumes a
potential gross risk if CCEP falls behind the beverage sector, causing
increased consumer activism relative to our competitors. This assessment
does not include packaging changes likely to be required by legislation
across the sector.
Low
Low
Medium
Assumes negligible carbon taxes
Assumes an average €40/tCO2e
of carbon taxes in year five
Assumes an average €80/tCO2e
of carbon taxes in year five
Low
Low
Low
Assumes low consumer demand
for packaging types that are
perceived to be more sustainable
Assumes moderate demand for
packaging types that are
perceived to be more sustainable
Assumes rapid growing demand
for packaging types that are
perceived to be more sustainable
Low
Low
Low
Assumes that development is
fossil-fuel driven with little
innovation
Assumes moderate investment
and innovation in renewable
energy
Assumes rapid decarbonisation,
including a rapid shift to
renewable energy
Low
Low
Low
Low level of consumer activism
Moderate climate activism.
Assumes CCEP is perceived to be
in line with the beverage sector
Assumes CCEP does not
keep pace with the beverage
sector, causing increased
consumer activism
Scenarios are modelled assuming no mitigating actions or progress on our stated sustainability action plan. It assumes that CCEP’s operational footprint, product portfolio
and GHG emissions remain static. Our mitigation strategy and our This is Forward sustainability commitments are designed to mitigate climate-related risks.
Medium- (2030) and long-term (2040 and beyond) non-financial assessment
Beyond a five-year time horizon, the level of uncertainty of transition risks increases. Transition risks are anticipated to have the greatest impact in the near to
mid term. In the next five years, in light of the challenge of coordinating global climate action, modest political, economic and social changes will drive financial
impact. More significant action from policymakers to stimulate the low-carbon transition would accelerate the rate and transition, and increase the magnitude of
impacts to the business.
In the medium term, new regulations designed to decrease the use of packaging materials that contribute to GHG emissions, or that introduce quotas for refillable
packaging could require additional investment in our packaging portfolio, manufacturing capabilities and distribution network. This could be accelerated by an
increasing demand from consumers for more sustainable products. Our SPO monitors risks and opportunities linked to packaging and packaging regulation, and
reviews ways to maximise return on investments through pricing, increasing our value share and the avoidance of potential packaging-related taxes.
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Our strategic response to transition risks
Transition risks Value chain
Policy
Packaging
How could this impact our business
(assuming no mitigation)?
How are we addressing these risks?
(Our mitigation strategy)
Introduction of carbon and/or
packaging taxes or levies, aimed
at reducing GHG emissions from
packaging and waste, that could
result in:
• increased costs for packaging
materials
Operations
and raw
materials
Increase in carbon taxes, aimed
at reducing GHG emissions
within industry groups that
could result in:
• increased energy costs
• increased raw materials costs
• A target to collect and recycle a bottle or can for each one we sell by 2030. Enabled by collaboration across
industries to increase collection and recycling rates and drive a circular economy.
• Targets to reach 50% rPET in our PET bottles, and a target to stop using oil-based virgin plastic in our bottles by 2030.
• Innovating in refillable and dispensed solutions to eliminate packaging waste and reduce our GHG emissions.
• We allocated over €300 million between 2020 and 2022 to support the ongoing decarbonisation of our operations
and value chain, and have an investment plan of approximately €450 million for emissions reduction initiatives
between 2023 and 2025. This includes continued investment in rPET, as well as other carbon, energy and logistics
savings initiatives.
• Continued investment in rPET provides CCEP with a significant opportunity to increase recycled content levels in
specific markets, mitigating potential taxes, marketing constraints or bans on single use plastic bottles which do
not contain recycled plastic.
• Short- and long-term GHG emissions reduction targets to reduce our absolute GHG emissions by 30% by 2030
(versus 2019) and to reach Net Zero by 2040.
• Use renewable electricity across all of our markets by 2030.
• Engaging and working with our carbon strategic suppliers to:
– set their own science based GHG emissions reduction targets by 2023 (Europe) and 2025 (API)
– use 100% renewable electricity in their operations by 2025 (Europe) and 2030 (API)
– share their carbon footprint data with us
• Aiming to source all our agricultural ingredients and raw materials sustainably by ensuring our ingredient suppliers
meet our PSA requirements.
• During 2023, we invested approximately €28 million in energy and carbon saving technologies, saving
approximately 9,000MWh and 21,000 tonnes of CO2e annually. We estimate these investments could help us avoid
annual operating costs of approximately €2 million.
Market
(consumer)
Brands and
portfolio
• Loss of revenue and/or missed
growth opportunities
• Regular review of products and business models, based upon their carbon emissions, packaging and water usage.
• Removing packaging materials where we can, and setting targets to collect all of the packaging we use, increase
Technology
Operations
• Asset write downs, investments
in low-emission technology to
meet market regulation
Reputation
Brands and
portfolio
• Loss of revenue and/or missed
growth opportunities due to
consumer activism against our
sector and/or our products
our use of recycled content and help to implement systems to drive circularity of packaging materials.
• Investing in manufacturing equipment and transportation systems that rely on low-emission or renewable
energy sources.
• As part of our EV100 commitment, we aim to transition all of our own car and van fleet to electric or ultra-low
emissions vehicles by 2030.
• Investing in the decarbonisation of our production facilities. In 2023, we invested approximately €28 million in
energy and carbon saving technologies, saving approximately 9,000 MWh and 21,000 tonnes of CO2e annually.
• Exploring and investing in new technologies through CCEP Ventures.
• Short- and long-term GHG emissions reduction targets to reduce our absolute GHG emissions by 30% by 2030
(versus 2019) and to reach Net Zero by 2040.
• Increasing recycled content in packaging and increasing collection rates.
• Developing refillable and reusable product offerings for consumers.
• Collaborating with TCCC and other franchise partners, as part of a system approach driving the sustainability
agenda of our brands.
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Metrics and targets
Through our sustainability reporting
and disclosure, we track, measure and
manage our sustainability targets and
related metrics.
Our This is Forward sustainability
action plan targets were developed
from stakeholder insights, and our
targets are focused on our most
material issues. A full list of our
sustainability metrics, our reporting
approach and GHG emissions
calculation methodology can be found
in the Key performance data summary
on pages 234-241. Stress scenarios
regarding the ongoing viability of our
business can be found on page 79.
We are piloting the use of a carbon
price of €100/tCO2e, see page 51.
For our disclosure, we have considered
the TCFD cross industry climate-related
metrics and agriculture, food, and
forest products group metrics.
Climate targets
In 2023, our short- and long-term
GHG emissions targets were validated
by the SBTi as being in line with
climate science.
Our climate targets are as follows:
• Net Zero GHG emissions (Scope 1, 2
and 3) by 2040
• Reduce absolute GHG emissions
(Scope 1, 2 and 3) by 30% by 2030
(versus 2019)
• Use 100% renewable electricity across
all markets by 2030
• 100% of carbon strategic suppliers to
set science based targets by 2023
(Europe) and 2025 (API)
• 100% of carbon strategic suppliers
to use 100% renewable electricity
by 2025 (Europe) and 2030 (API)
Our GHG emissions targets are tied
to executive remuneration through
our LTIP, see pages 133-135.
Water metrics and targets
We focus on water efficiency in our
operations and helping to protect
water sources for our business,
communities and suppliers. Our key
water targets are as follows:
• 10% reduction in our
manufacturing water use ratio(A)
by 2030 (versus 2019)
• Replenish 100% of the water
we use in our beverages
• 100% regenerative water use in
leadership locations(B) by 2030
In 2023, we improved our water use
ratio by 4.9% versus 2019 by setting
context based targets and improving
our water efficiency.
Packaging metrics and targets
Packaging accounts for 37% of our
total value chain carbon footprint,
making it a key area where we can
reduce emissions. Reducing
unnecessary packaging and improving
packaging circularity will help reduce
our carbon emissions and support us
in reaching our climate targets.
Read more about our actions on
climate, packaging and water on pages
36-47
Cross industry climate-related and agriculture, food and forest products
group metrics
Tonnes of CO2e
Scope 1
Direct emissions (e.g. fuel used by own vehicles)
Scope 2 (market based)
Indirect emissions (e.g. electricity)
Scope 2 (location based)
Indirect emissions (e.g. electricity)
Scope 3
Biological processes, third party emissions (e.g.
ingredients, packaging, CDE, third party transportation)
GHG emissions Scope 1, 2 and 3
(full value chain)(F)
Emissions from biologically
sequestered carbon
Intensity ratio
Full value chain GHG emissions
per litre (g CO2e/litre)
GHG emissions (Scope 1 and 2)
per euro of revenue (tCO2e/€)
Energy use
Direct energy consumption
(Scope 1) (MWh)
Direct energy consumption
(Scope 2) (MWh)
Direct energy consumption
(Scope 1 and Scope 2) (MWh)
2019(C)
344,616
Group
2022
299,090
UK and UK offshore(E)
2023(D)(α)
283,745
2022
29,439
2023(D)(α)
31,431
223,114
192,053
151,795
3,084
2
384,382
308,050
292,243
17,673
17,891
5,754,177 5,095,008 4,827,581
740,511
716,943
6,321,907
5,586,151 5,263,122
773,034
748,376
71,151
87,273
350.1
298.9
283.3
36.9
28.4
23.8
228.72
2
6
10.5
225.8
9.7
1,279,302
1,141,932
1,087,216
132,144
128,873
944,117
910,444
881,571
91,904
89,995
2,223,419
2,052,376 1,968,788
224,048 218,869
Agriculture, food and forest products group metrics
Total water withdrawn (1,000m3)
26,578
Total water consumed (1,000m3)
Total production volumes from areas
of baseline water stress (1,000m3)
17,015
8,126
26,142
17,003
8,067
Note: For details on our approach to reporting and methodology see our 2023 Sustainability reporting methodology document on
cocacolaep.com/sustainability/download-centre.
(A) Measured as litres of water per litre of finished product produced. All beverage production facilities. (B) NARTD production facilities
which rely on vulnerable water sources or have high water dependency. We have nine leadership locations in Europe and four in API.
(C) The acquisition of API completed on 10 May 2021; however, the baseline metrics above are presented on a full year basis for 2019 to
allow for better period over period comparability. 2019 baseline has been restated – as described in our Key performance data
summary on pages 234-241. (D)(α) Subject to external independent limited assurance. See page 241 for details. (E) Equates to Great
Britain for CCEP. (F) Scope 2 is market based approach only.
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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
CCEP depends on
the great people
who make, move and
sell our products to
customers every day.
A comprehensive annual
engagement plan includes:
Townhalls, Speak Up channels,
engagement surveys and the
Employee Share Purchase
Plan (ESPP)
Communications and campaigns,
e.g. mental health, safety and
inclusion, online platforms, work
councils and training and
development programmes
Board engagement:
The Remuneration Committee
reviews the Group wide
remuneration policy to ensure it
remains aligned with the long-term
strategic goals of the Company
The Nomination Committee’s remit
includes key people matters such as
succession, diversity and culture
The Board engages directly with
employees through Townhalls,
facility tours, market visits, and
presentations and deep dives
at Board level
Impact/value created:
Our people create value for CCEP
by making, moving and selling our
great products
CCEP creates value for our people
through providing a safe place to
work with rewards and benefits
What matters to our people?
Being rewarded, valued and
recognised
Development opportunities
Safety at work
Inclusion and diversity
Human rights
What is measured and monitored?
Total incident rate
ESPP enrolment
Percentage of women in
management and total workforce
Attrition & Absenteeism
Percentage of workforce
represented by people with
disabilities, based on voluntary
declaration
Read more about our risks and
mitigations on pages 68-78
Outcomes of engagement:
Examples of different initiatives
undertaken as a result of engagement
can be found on pages 23-26, covering
topics such as wellbeing, diversity,
leadership and employee benefits.
Case study
Listening to women in our supply chain
This year, we launched the
Women's Listening Circles to
unite women in customer service
and supply chain, providing
spaces for them to listen to
each other’s experiences and
exchange ideas.
We aim to understand what
makes working at CCEP great
for women and identify areas
where we can improve our
gender balance, seeking
feedback on three critical areas:
safety, inclusion and development.
plans to address the issues that
matter most to our people.
We received an overwhelming
response, hearing from over
1,000 women in our
supply chain.
Image: some of our participants from
Indonesia.
Our business units and functions
have created 100-day action
Watch film at cocacolaep.com/
annual-report/case-study/
fasteroninclusivity
Read more about our people
on pages 23-25
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2023 Integrated Report and Form 20-F
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Our stakeholders continued
Our shareholders
Shareholders provide
the equity capital for
our business and hold
management to
account on financial
performance and
key environmental,
social and governance
(ESG) issues.
A comprehensive annual
engagement plan includes:
AGM, roadshows, analyst meetings,
results presentations and webcasts
Brokers appointed to provide advice
on market conditions and external
communications
Shareholder-nominated Directors
on the Board in accordance with
Shareholders’ Agreement
Outcomes of engagement:
A key outcome of shareholder
engagement in 2023 was the
inclusion of CCEP in the
Nasdaq-100 Index in December
2023, which demonstrates CCEP’s
commitment to continuing to
create sustainable long-term
value for shareholders.
Board engagement:
The CEO, CFO, Chairman and IR team
engage with investors and analysts
throughout the year and provide
updates to the Board on shareholder
views, share register, share price
performance and investor sentiment
The Remuneration Committee Chair
engages on the remuneration policy
What matters to our shareholders?
Financial performance, commodity
costs and inflationary pressures
Sustainable long-term value
Market dynamics such as consumer
behaviour and supply chain
challenges
ESG challenges and regulatory
changes
Impact/value created:
Shareholders create value for CCEP
through voting at the AGM and
continuing to invest in CCEP
CCEP creates value for shareholders
by returning cash either by paying
dividends or through share buybacks
What is measured and monitored?
Number of meetings and % of equity
investors covered by these
interactions
Analyst notes and equity investor
perceptions of strategy
Read more about our risks and
mitigations on pages 68-78
Our franchisors
We conduct business
primarily under
agreements with
franchisors that
generally give us
exclusive rights
to make, sell and
distribute beverages
in approved packaging
in specified territories.
Regular contact with franchisors
includes:
Management contact at different
functional levels, such as public
affairs, communications and
sustainability, supply chain, sales
and marketing
Ongoing dialogue with General
Managers and regular top to
top meetings
Inviting franchisors to present annual
business plans to customers
Board engagement:
Regular updates to the Board from
the CEO and the Chief Commercial
Officer via the ATC on franchisors,
including on performance,
relationships and any issues
Chairman engages directly with
key franchisors including TCCC
Impact/value created:
CCEP gains value from the exclusive
rights given by franchisors to make,
sell and distribute their products
CCEP creates value for franchisors
by driving sales to customers so
franchisors’ drinks are available where
and when consumers want them
What matters to our franchisors?
Profitable growth and value share
in our markets
Aligned strategy and incentives
Sustainable supply chains
Good continued engagement
What is measured and monitored?
Joint investment
Successful innovation
Category performance
Market share
Read more about our risks and
mitigations on pages 68-78
Outcomes of engagement:
A key outcome of franchisor
engagement in 2023 was the
acquisition of CCBPI jointly with
AEV from TCCC. The acquisition
demonstrates TCCC’s confidence
in CCEP as a business and the
continued strong relationship
between the two companies.
Further information can be
found on pages 66-67.
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2023 Integrated Report and Form 20-F
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Our stakeholders continued
Our consumers
Consumers drink the
products we make, sell
and distribute.
Read more about our
consumers on pages 17-18
Our customers
Customers sell our
products to consumers.
Read more about our
customers on pages 28-31
CCEP’s ways of engaging
with consumers include:
Collection of consumer insights
from franchisors, customers or via
dedicated research
Consumer labelling, social media,
activation in store and day to day
interaction via our sales teams
when visiting outlets
Feedback from consumers on social
media and via the consumer hotlines
Day to day interaction via our sales
team when visiting outlets
Board engagement:
Indirectly through customers
and franchisors
Direct engagement through
market visits
Presentations on trends
and behavioural patterns
Impact/value created:
Consumers create value when
buying our products
CCEP creates value for consumers
through providing a diverse portfolio
of high quality, safe and great tasting
drinks and by providing transparent
labelling to help consumers make
informed choices
What matters to our consumers?
Product quality and food safety
Environmental and affordability
concerns
What is measured and monitored?
Low and no calorie drinks as a %
of sales
% packaging that is 100% recyclable
Read more about our risks and
mitigations on pages 68-78
Regular engagement
with customers includes:
General Managers engaging
with customers on strategy
and planning and owning the
customer relationship
Account managers’ contact with
customers on business development
Our sales teams calling on customers
every day in the market
Supply chain in daily contact to
ensure customers receive the best
customer service
Board engagement:
Through management insights
What matters to our customers?
New packaging solutions
Direct engagement through
market visits held in Australia and
New Zealand
Customer engagement session
and dinner in Australia in 2023
CEO updates to the Board on pricing,
negotiations, joint value creation and
customer satisfaction metrics
Retail landscape session
Impact/value created:
Customers create value for CCEP by
selling our products to consumers
CCEP creates value for customers
through our customer centric
operating model, portfolio diversity
and quality of products and service
Product offers to meet new shopper
and consumer trends
Economic value creation
Customer service
What is measured and monitored?
Volume and revenue growth
Customer big data and advanced
analytics, e.g. NielsenIQ and IRI3,
measure brand/product
performance and value creation
Advantage Group and Ipsos
research (EU only) to evaluate
customer satisfaction
Read more about our risks and
mitigations on pages 68-78
Outcomes of engagement:
Examples of different initiatives
undertaken as a result of
engagement can be found on
pages 16-18, covering topics such
as expansion of our portfolio and
reducing sugar in our drinks.
Outcomes of engagement:
Examples of different initiatives
undertaken as a result of
engagement can be found
on pages 28-31, such as better
tailoring customer action plans
through targeted investment
into new technologies and focus
on digitisation.
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Our stakeholders continued
Our suppliers
Suppliers provide a wide
range of commodities
and services from
ingredients, packaging,
utilities, equipment, to
facilities management,
fleet, logistics and
information technology.
Processes to engage regularly
with suppliers include:
Supplier relationship management
programme through TCCC’s
procurement consortium
Partnering and collaborating with
suppliers, in areas such as business
continuity or sustainability, to foster
strategic relationships
Outcomes of engagement:
Examples of different initiatives
undertaken as a result of
engagement can be found on
pages 32-34, covering topics such
as achieving net zero, our RSP and
sustainability-linked supply chain
finance programme.
Board engagement:
Updates provided by the CEO and
CFO on key supplier relationships
Development of SGPs setting
requirements for suppliers in relation
to human rights, health and safety
and environment
Presentations to the Board on
strategic topics such as carbon
reduction and supply risk
Impact/value created:
Suppliers create value for CCEP
by providing high quality, safe and
sustainable products and services,
and optimised supply chain and
innovation partnerships
CCEP creates value for suppliers
through long-term collaborative
partnerships and provides support on
sustainable practices and emission plans
What matters to our suppliers?
Exposure to variability in the
marketplace such as pricing
and consumer behaviours
Driving progress on sustainable
supply chains
Long-term collaborative relations
and ability to grow their long-term
revenue streams
What is measured and monitored?
Quality standards and delivery times
TCCC audits to ensure adherence to
SGPs and PSA
Commitment to set science based
targets and to transition to 100%
renewable electricity
Read more about our risks and
mitigations on pages 68-78
Read more about our suppliers
on pages 32-34
Our communities
Communities are
where we operate and
where our employees
live and work.
Read more about community
engagement on page 26
Regular engagement with
our communities include:
Boosting skills development
and social inclusion, e.g. youth
development programmes, BORA
Jovens programme, apprenticeships
and collaborating with food banks
Protecting the local environment,
e.g. water replenishment and litter
clean up programmes
Supporting local communities,
e.g. grassroots initiatives and
disaster relief
Board engagement:
Board members engage with local
projects and at CCEP events
The ESG Committee is responsible
for overseeing CCEP’s relationship
with communities under the social
pillar of its remit
Impact/value created:
Communities create value for CCEP
through access to talented people, local
water sources, connection with local
policymakers and community groups
CCEP creates value for communities
through access to employment,
improving the local environment
and investing in community causes
What matters to our communities?
Employment and social inclusion
Environmental impact
Corporate citizenship
What is measured and monitored?
Community investment contribution
Employee volunteering hours
Direct beneficiaries from skills
programme
Read more about our risks and
mitigations on pages 68-78
Outcomes of engagement:
Examples of different initiatives
undertaken as a result of
engagement can be found
on page 26, covering topics such
as skills development and social
inclusion and community wellbeing
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Section 172(1) statement from the Directors
During 2023, we acted in
good faith to promote the
long-term success of CCEP
in our discussions and decision
making for the benefit of CCEP’s
shareholders as a whole, and
in doing so having regard to
stakeholders and the matters
set out in section 172 of the
Companies Act, including:
The likely consequences of
any decision in the long term
The Board recognises that its decision
making will affect CCEP’s long-term
success. When taking decisions,
particularly of strategic importance,
the Board considers the likely
consequences of any decision on
CCEP’s long-term, sustainable growth
while endeavouring to balance the
interests of all our stakeholders.
The interests of our people, and the
need to foster business relationships
with our key stakeholders
Our key stakeholders remain the
same as last year, namely our people,
shareholders, franchisors, consumers,
customers, suppliers, and communities.
How CCEP has engaged with our
stakeholders more generally is
explained on pages 61-64.
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 describe
how our business interacts with our
stakeholders, and the impacts of
these interactions, throughout this
Integrated Report. 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.
The impact of the Company’s
operations on the community
and the environment
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 action plan.
Information on our sustainability action
plan and how we are implementing
TCFD recommendations can be found
on pages 48-60. Our sustainability
governance framework guides the
Board’s decisions in this regard,
as set out on page 50.
The desirability of the Company
maintaining a reputation for high
standards of business conduct
Ensuring our business operates
responsibly is fundamental to
ensuring our long-term success.
The Board assesses and monitors
the Group’s culture to ensure it
aligns with the Group’s purpose,
values and strategy set by the Board
and oversees a corporate governance
framework, as set out on page 103,
that enables the right people to take
the right decisions at the right time.
This includes our CoC and system of
delegated authorities.
Read our CoC at view.pagetiger.com/
code-of-conduct-policy
The need to act fairly as
between CCEP’s shareholders
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 shareholders.
During 2023, the CEO, CFO,
Chairman and our IR team met with
shareholders who provide updates to
the Board on shareholder feedback
at Board meetings.
How the Board engaged with
stakeholders is set out on pages 61-64
Specific examples of how the Board
considered the views of its stakeholders
in its decision making is set out on pages
66-67
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Section 172(1) statement from the Directors
Principal decisions
The Board made several principal
decisions during 2023, 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 the
Board approached the CCBPI
acquisition and strategic portfolio
choices as principal decisions.
Image: Leadership from the Coca-Cola system and AEV
Acquisition of CCBPI
On 23 February 2024, CCEP completed
the acquisition of CCBPI jointly with
AEV, underpinning CCEP’s ambitious
mid-term strategic objectives and
solidifying CCEP’s position as the
world’s largest Coca-Cola bottler by
revenue. The proposed acquisition was
announced on 2 August 2023 with final
transaction documents approved by
the Board on 15 November 2023.
The Board and M&A Committee
(a subset of the Board with delegated
powers from the Board) was supported
in its decision making by recommendations
from its Committees on certain
topics, including:
• the ATC, which reviewed the key
transaction documents, including
the share purchase agreement and
the Bottler’s Agreement, together
with the Fairness Opinion; and
• the Audit Committee, which reviewed
the proposed capital structure and
financing arrangements to finance
CCEP’s 60% stake.
Our strategy key
Great brands
Great people
Great execution
Done sustainably
In addition, management provided
key support throughout, including
through the establishment of a Value
Realisation Committee to support the
planned integration of the transaction
and certain decisions in the lead up
to completion.
As part of its approval process, the
Board took into account numerous
factors including the impact of the
acquisition on the stakeholder
groups below.
Shareholders
The transaction is aligned to
CCEP’s strategy of pursuing inorganic
expansion opportunities and also
supports the transformation journey in
Indonesia. Management identified that
value enhancing opportunities could be
achieved through the implementation
of CCEP’s proven track record together
with the support of AEV via its local
market knowledge, capabilities and
relationships in the Philippines.
The ATC was also provided with
a Fairness Opinion from a third
party which supported the enterprise
value of $1.8 billion for CCBPI. The
consideration was paid in cash, and has
a modest impact on CCEP’s leverage.
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Section 172(1) statement from the Directors
Principal decisions
From completion, the transaction
is EPS accretive, and by working with
AEV and TCCC, there is opportunity
to unlock even more potential.
To support its decision making,
the Board received an opportunity
overview of CCBPI including scale,
profitability, market environment,
recent performance, key challenges
and the current business plan.
This was supported by an overview
of partnership considerations including
the shareholders agreement with
AEV. Using these insights, the Board
concluded that the acquisition would
result in value creation for shareholders.
Employees
Engaging and retaining our people
is a key consideration, ensuring that
everyone has a voice and feels valued.
The acquisition will create an even more
diverse workforce and provides an
opportunity to scale knowledge, best
practice and talent across CCEP. We will
also benefit from combining our talent
pools as well as sharing learnings and
best practice on digital, technology,
procurement and sustainability
capabilities.
Franchisors
Strategic portfolio choices
Franchisors are a key stakeholder
group, given the importance of
maintaining a strong relationship
and alignment with TCCC. Due to the
quality of interactions between TCCC,
AEV and CCEP, TCCC as seller of CCBPI
is confident in CCEP’s ability to hold a
majority stake and work collaboratively
as a joint venture partner with AEV.
Consumers
The acquisition enhances our consumer
reach. It also brings new brands to
CCEP’s portfolio.
Communities, environment
and customers
CCBPI runs local community
programmes including a number of
partnerships to encourage the return
of plastic bottles by consumers for
recycling via collection hubs. CCBPI also
has a joint venture with Indorama in a
PET recycling scheme, consistent with
CCEP’s approach in Indonesia at our
Amandina PET recycling plant.
Gaining deep local insights in all our
territories remains a priority, including
building experience and market
understanding to meet specific
stakeholder needs.
The Board approved a number
of strategic portfolio choices during
2023, such as the new collaboration
with existing franchise partner, TCCC,
and new brand partner Brown-Forman,
to launch Jack Daniel’s & Coca-Cola
ARTD as part of the Coca-Cola system’s
ARTD strategy.
The Board was fully supportive of the
expansion of CCEP’s ARTD strategy
across multiple markets by increasing
CCEP’s presence and assortment within
this emerging category.
The partnership with Brown-Forman
was deemed to be in the best interests
of the Company’s stakeholders, namely:
• Shareholders: due to the proposed
incremental value to be generated
• Franchisors: particularly CCEP’s key
franchise partner TCCC to
demonstrate CCEP’s commitment
to ARTD and to strengthen the
relationship with TCCC
Our strategy key
Great brands
Great people
Great execution
Done sustainably
• Customers: through the value
creation opportunity which
expanding into this category brings
• Consumers: by offering a perfect
mix of convenience and simplicity for
in-home and on-the-go occasions
To assist the Board in its decision
making, the Board received a report
from the ATC and sought views
of stakeholders via management,
including the Chief Commercial Officer.
The ATC had received materials which
included information on the strategic
objective, notably the desire to broaden
the category penetration and CCEP’s
ARTD portfolio. The materials included
the rationale and information on the
contractual framework as well as
projections on the financial and
business impact. The Board considered
the financial implications of the
partnership and the proposed supply
and distribution agreements, along
with the potential to repurpose for
other markets.
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Principal risks
CCEP identifies, assesses and
manages the principal risks
we face as a business through
strong risk management across
the organisation, mitigating risk
and pursuing the benefit of
the related opportunities.
To support this, CCEP has developed
an Enterprise Risk Management (ERM)
framework to embed risk management
within our key functions, activities and
decision making.
An overview of our approach to risk
management is provided in the
diagram to the right.
Governance
The Board has overall responsibility
for risk management at CCEP.
Oversight and monitoring is provided
by the Audit Committee with regular
reports from management. The topic
is led at the ELT by the General Counsel
and Company Secretary working with
management’s Compliance and Risk
Committee (CRC) and the One Risk
Office, which brings together all leaders
involved in risk, including the ERM team.
Each principal risk has a risk owner
at ELT level who is responsible for
considering whether the risk is properly
explained and has appropriate risk
mitigation plans in place.
The governance structure, including risk
management, is outlined on page 50
as part of our TCFD disclosure.
Identify and assess
risks and opportunities
Our annual enterprise risk assessment
(ERA) provides a top down strategic
view of risks. The members of the
Board, ELT and over 100 senior leaders
carry out a risk survey and interviews to
discuss current risks, opportunities and
emerging risks.
One of the key focuses for 2023 was on
mitigations, helping us to manage risks
more effectively with better forward
planning and controls.
Risk assessments are also carried out at
business unit, functional and programme
level. The local leadership teams review
and update risk assessments, ensuring
that risk management is incorporated
into our business routines.
Overview of the CCEP ERM framework
Identify and
assess risks and
opportunities
Functional
across
business
Governance
Top down
Annual ERA
Bottom up
Individual risk assessments
at the business unit level
Programmes
Horizon scanning Continuous scanning and analysis of emerging
risks to identify potential material threats in the future.
Scenario analysis
Prepare for uncertain conditions,
extreme and strategic risks and
opportunities e.g. climate change.
Risk indicators
(in development) Metrics and
drivers for key risks and mitigations.
Operationalising and managing
risk appetite.
Events
and issues
External incidents
Lessons learned across the system
and industry, peer incidents and
publicly available information.
Internal issues
Lessons learned from internal
incident investigations.
Risk appetite
Communication
Reporting
Once risks are identified, we analyse
them to understand the likelihood,
impact and velocity. In addition, we
also understand how we manage our
risks by measuring the effectiveness
of mitigations and actions.
Horizon scanning helps us to identify
global strategic and emerging risks,
the effects of which are not yet fully
known, and where the evolution of the
risk is highly uncertain because it is rapid,
non-linear or both. We monitor the
evolution of such threats to ensure we are
able to anticipate and manage potential
impacts to our business. Examples include
geopolitical conflicts and their impacts
on the supply chain, macroeconomic
conditions and impact on consumer
sentiments, or disruptions from AI.
Sustainability risks can impact the
way we do business, so we continue
to work with external partners like
Risilience to develop and analyse risk
scenarios, e.g. for climate change, and
help with reporting requirements.
More details are on pages 48-60.
Events and issues
We use insights and data from internal
and external sources to analyse
incidents to improve the way we
manage risks, i.e. risk sensing technology
in supplier management or learnings
from a crisis such as COVID-19.
Risk appetite
We define our appetite for each risk
through risk appetite statements to
support the business with decision
making and resource allocation.
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Principal risks continued
The risk appetite statements
are reviewed annually by the CRC
and the Audit Committee. We are
in the process of operationalising
the statements through the
implementation of risk indicators.
Communication
Our One Risk Office is a forum that
brings together first, second and third
line of defence representatives several
times a year to share risk management
knowledge across our functions and
business units, per the diagram below.
Emerging risk themes and external
factors that could impact our business
are discussed. We regularly invite
external risk experts (e.g. risk analysts to
inform us on potential scenarios of the
Middle East crisis) and risk leaders from
other organisations to help us broaden
our understanding of risk.
Reporting
An internal risk report is created
and shared on a regular basis with
leadership highlighting key risks,
emerging trends and mitigation
activities to support decision making.
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 report, we show 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. We are aware
that due to the economic downturn the
risk of fraud has increased. CCEP has
embarked on an entity wide fraud risk
assessment as part of its enhanced
fraud management plan.
Case study
How we strengthened our Business Resilience Framework (BRF)
We have strengthened our business
continuity capability to manage
a wide spectrum of disruptions
in a proactive and effective way.
We also achieved ISO 22301, the
industry standard for business
continuity and resilience (BCR)
for our shared service centres.
In 2023, we standardised and
modernised our Business Continuity
Planning through site by site training,
impact analysis, scenario planning and
testing as set out below:
Furthermore, the progress
and business impact of the
BCR programme was recognised
externally by the Business Continuity
Institute (BCI).
Statement from the judges
at the 2023 BCI Global Awards:
“The winning exercise programme
stood out to the judges due to its
originality, complexity and wide
global reach. The programme's
impact was substantial, improving
the organisation’s business continuity
management and cyber resilience
capabilities. The exercise programme
demonstrated the company’s
commitment to maintaining continuity
readiness for any challenge and
it’s a testament to their dedication
towards preparedness.”
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Principal risks continued
The table below shows our principal risks
Principal
risk
Business
disruption
Strategic
objective
Description
(What is the risk?)
Causal factors
themes (What gives
rise to the risk?)
Consequence
themes (Potential
impact of the risk)
Key control mitigations
(How we manage it)
Trend
The risk of
prolonged, large
scale natural and/or
man made
disruptive events
• Cyber attack or IT/
• Disruption to supply chains/
operational technology
system failure
• Pandemics
• Extreme weather
operations
• Safety and wellbeing of
our people
• Brand and reputation
events (floods, fires)
damage
• TCCC Business Resilience Framework
• CCEP BCR Governance Framework
• CCEP Incident Management and Crisis Response
(IMCR) process
• Natural disasters
• Civil unrest, war
and terrorism
• Financial impact
Understanding the change in trend
Confidence in our capabilities to deal with major disruptions, proven and enhanced during COVID-19.
Packaging
The risks relating to
packaging waste and
plastic pollution, and
single use plastic
• Stakeholder concern
• Brand and reputation
about the
environmental impacts
of single use plastic
packaging, litter and
packaging waste
damage from not keeping up
with community/customer
expectations
• Financial impact from
increased taxes and on the
costs of doing business
• Regulatory and compliance
impacts
Increased potential for
activism and litigation
•
• rPET roadmap
• Advocacy to support container deposit and return
schemes
• Test, trial and learn approach to refillable packaging
in multiple markets
Innovation on dispensed delivery solutions
•
• Packaging design and innovation
• CCEP Ventures investment in new recycling technologies
•
Industry collaboration
Find out more
Read about
Packaging on
pages 41-43
Our strategy key
Great brands
Great people
Great execution
Done sustainably
Risk change
Increased
Stable
Decreased
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
71
Principal risks continued
Principal
risk
Strategic
objective
Description
(What is the risk?)
Causal factors
themes (What gives
rise to the risk?)
Consequence
themes (Potential
impact of the risk)
Key control mitigations
(How we manage it)
Trend
Legal,
regulatory
and tax
The risks associated
with new or
changing legal,
regulatory or tax,
legislative
environment
and subsequent
obligations and
compliance
requirements
•
Increased regulation
on business activities
• Use of regulated
ingredients
Increased packaging
regulation
•
• Commercial and
marketing restrictions
on sugar, sweeteners
and energy ingredients
• Labelling requirements
• Distribution and sale
regulations
• Employment regulation
• Sugar & low and no
calorie sweetener,
energy drinks
ingredients, packaging
and carbon taxes
• Regulation of new
technology including AI
• Financial impact from new
• Continuous monitoring, assessment and appropriate
implementation of new or changing laws and regulations
• Dialogue with government representatives and input to
public consultations on new or changing regulations and
in anticipation of potential regulatory pressures on drinks,
carbon and packaging
• Development of compliance processes, communication
and training for employees
or higher taxes
• Stricter sales and marketing
controls impacting margins
and market share
• Punitive action from
•
regulators or other legislative
bodies
Increase to the cost of
compliance to meet stricter
or new regulatory
requirements
• Brand and reputation
damage
Cyber and IT
resilience
The risks related to
the protection of
information systems
and data from
unauthorised
access, misuse,
disruption,
modification, or
destruction
• External attackers
• Financial impact from
• Cyber strategy
seeking to ransom or
disrupt systems and data
disruption to operations
or fines
• Dependency on third
• Safety and wellbeing of
•
parties
Internal misuse (malicious
or accidental)
• Security and
maintenance of IT
infrastructure and
applications
• Change programmes
employees, customers or
business partners who may
have their personal
information stolen
• Brand and reputation damage
•
•
Information Security Policy
Information security and data privacy training and
awareness
• BCP and disaster recovery programmes
• Threat vulnerability management and threat intelligence
• Hardware lifecycle programme
• Global Security Operations Centre
• Third party risk assessments
• Data Privacy Programme
•
IT change management process
Our strategy key
Great brands
Great people
Great execution
Done sustainably
Risk change
Increased
Stable
Decreased
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
72
Principal risks continued
Principal
risk
Strategic
objective
Description
(What is the risk?)
Causal factors
themes (What gives
rise to the risk?)
Consequence
themes (Potential
impact of the risk)
Key control mitigations
(How we manage it)
Trend
Economic
and political
conditions
Market
The risks associated
with operating in
volatile and
challenging
macroeconomic
and geopolitical
conditions
• Low economic growth
• Financial impact from
or recession
• High currency and
commodity price
volatility
• High inflation
• Political instability/
conflict
• Civil unrest
reduced demand from
consumers and an increasing
cost base
• Disruption to supply chains
from sanctions or impact on
shipping/trade routes
• Hedging Policy
• Keeping a strong level of liquidity and backup credit lines
at all times for working capital purposes as well as
unexpected changes in cash flow
• Supply risk and contingency process
• Risk sensing technology
• Cross Enterprise Procurement Group (CEPG) to leverage
global collaboration
The risks to
maintaining the
relationships with
our customers
and consumers
to meet their
changing demands,
needs and
expectations
• New distribution
• Financial impact
channels and platforms
• Changing customer
and consumer habits
from reduced demand
from consumers
• Decreasing margins and
• Changes in the
competitive landscape
•
• Legislative and
market share
Inability to meet strategic
objectives
regulatory changes
• Brand and reputation damage
• Shopper insights
• Pack and product innovation
International marketing service agreement guidelines
•
• Affordability plan
• Business development plans aligned with our customers
• Key account development and category planning
• New route to market opportunities, for example eB2B
and platforms/direct to consumer
Our strategy key
Great brands
Great people
Great execution
Done sustainably
Risk change
Increased
Stable
Decreased
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
73
Principal risks continued
Principal
risk
Climate
change
and water
Read about TCFD
on pages 48-60
Our strategy key
Strategic
objective
Description
(What is the risk?)
Causal factors
themes (What gives
rise to the risk?)
Consequence
themes (Potential
impact of the risk)
Key control mitigations
(How we manage it)
Trend
The risks and
opportunities
associated with
managing the
impacts of climate
change and water
scarcity across our
value chain
• GHG emissions across
• Brand and reputation
• Target and roadmap to reduce GHG emissions by 30%
damage from not meeting
sustainability targets
• Financial impacts from future
carbon taxes and the
transition costs to low
GHG emissions
• Regulatory and compliance
impacts related to TCFD
disclosures
• The disruption of water
supply to our production
sites and key suppliers
versus 2019 and reach Net Zero emissions by 2040
• Climate transition plan
• CCEP ventures - investment platform for sustainability
initiatives
• Supplier GHG emissions reduction targets and
engagement programme
Investment in renewable and low-carbon energy projects
•
• Packaging GHG emission reduction initiatives
• Responsible Sourcing Policy
• Transport GHG emission reduction initiatives
• CDE emission reduction initiatives
• Customer and stakeholder engagement
• Enterprise water risk assessment
• FAWVAs and SVAs
• Water efficiency and replenishment initiatives
•
•
Investment in wastewater treatment technology
ISO14001 certification
our value chain,
including emissions
from our production
facilities, CDE, the
transportation of our
products, packaging
and the ingredients
that we use, and
storage of our
products
• Scarcity of water and
water quality issues
related to water
sources we and our
suppliers rely upon
• Regulatory and
legislative initiatives
aimed at reducing
GHG emissions
• Water usage
restrictions that
may be mandatory
at a local level during
scarcity peaks
• Changing consumer
and investor
preferences
Understanding the change in trend
Increasing number of extreme weather events, water scarcity and droughts expanding across many of our territories.
Great brands
Great people
Great execution
Done sustainably
Risk change
Increased
Stable
Decreased
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
74
Principal risks continued
Principal
risk
Strategic
objective
Description
(What is the risk?)
Causal factors
themes (What gives
rise to the risk?)
Consequence
themes (Potential
impact of the risk)
Key control mitigations
(How we manage it)
Trend
• Support TCCC, EU or national associations on strong
advocacy regarding low and no calorie sweeteners and
processed food as well as in innovation efforts
• Financial impacts from
decline in sales volumes
and market share (delisting,
demand decrease)
Increased regulatory scrutiny
•
• Commercial, marketing and
labelling restrictions
Increased taxes on our
products
•
• Damage to brand and
reputation
Changes
in customer
and consumer
buying trends
and category
perception
The risks relating
to our ability to
effectively adapt
and respond to
changes in customer
and consumer
preferences and
behaviour towards
our products
• Legislative changes
driven by government
or lobby groups
• External marketing
campaigns towards
alternative ingredients/
products
• Publication of
guidelines or
recommendations
related to sugar
consumption, energy
drinks or additives by
WHO or other health
authorities
Increased media
scrutiny and social
media coverage
impacting consumer
perception on
ingredients and
packaging
•
• Viability of alternatives
to sugar, sweeteners
and other ingredients
within our product
portfolio
• Consumer lifestyle
Understanding the change in trend
Increasing regulation, social media coverage of packaging and ingredients, and an ongoing difficult economic environment for
our customers and consumers.
Our strategy key
Great brands
Great people
Great execution
Done sustainably
Risk change
Increased
Stable
Decreased
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
75
Principal risks continued
Principal
risk
Strategic
objective
Description
(What is the risk?)
Causal factors
themes (What gives
rise to the risk?)
Consequence
themes (Potential
impact of the risk)
Key control mitigations
(How we manage it)
Trend
Business
transformation,
integration
and digital
capability
The risks relating
to the execution
of our strategic
and continuous
improvement
initiatives
•
• Digital transformation
Identification and
execution of supply
chain improvements
• Relationships with our
•
partners and franchisors
Ineffective coordination
between BUs and
central functions
• Change management
failure
• Diversion of
management's focus
away from our core
business
• Damage to brand and
• Competitiveness Steering Committee and governance
reputation
model for enterprise wide transformation
• Financial impacts from a
decline in our share price
arising from not realising
the value creation from
these initiatives
Industrial action and
disruption to our operations
•
• CCEP project management methodology and dedicated
programme management office
• Analysis and review of acquisition-related activities including
enterprise valuation and capital allocation, acquisition due
diligence, business performance risk indicators and
integration planning
People and
wellbeing
Read about People
on pages 20-27
Our strategy key
The risks relating
to the identification,
attraction,
development, and
retention of talent.
Also risks relating to
the wellbeing of our
people (including
human rights and
modern slavery)
• Job design and
working conditions
• Damage to brand
and reputation
• Reward and
recognition
• Misconduct by third
parties relating to
human rights
• Financial impacts from
a decline in employee
engagement and productivity
Industrial action and disruption
to our operations
•
• Punitive action from regulators
or other legislative bodies and
potential for litigation
• Community investment programmes
• Employee volunteering policy
• Business for societal impact framework
• Anti-harassment and ID&E Policy
• Recruitment: Candidate Charter
• Employee development
• Wellbeing strategy
• Safety strategy
• Annual Modern Slavery Statement and country
specific human rights risk assessments in Germany
and Norway
• CoC
• ESPP
Great brands
Great people
Great execution
Done sustainably
Risk change
Increased
Stable
Decreased
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
76
Principal risks continued
Principal
risk
Strategic
objective
Description
(What is the risk?)
Causal factors
themes (What gives
rise to the risk?)
Consequence
themes (Potential
impact of the risk)
Key control mitigations
(How we manage it)
Trend
Relationships
with TCCC
and other
franchisors
The risk of
misaligned
incentives or
strategy with
TCCC and/or
other franchisors
• Lack of effective
engagement,
communication
and/or discussion
with franchisors
• Damage to brand
and reputation
• Financial impacts, including
as a result of TCCC or other
franchisors acting adversely
to our interests with respect
to our business relationship
• Clear agreements govern these relationships
• Long range planning and annual business
planning processes
• Routine meetings between CCEP and franchisors
Product
quality
The risks relating
to ensuring the
wide range of
products we
produce are safe
for consumption
and adhere to
strict food safety
and quality
requirements
• A failure in food safety,
• Consumer health and
food quality, food
defence or food
fraud processes
safety concerns
• Reputation damage and
loss of consumer trust
• Regulatory and legal
consequences
• Financial losses
• Franchisor standards and governance
ISO 9001 and FSSC 22000 Certification
•
• Customer and consumer complaint management
•
Incident management and crisis resolution
Our strategy key
Great brands
Great people
Great execution
Done sustainably
Risk change
Increased
Stable
Decreased
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
77
Principal risks continued
Internal control procedures
and risk management
CCEP’s internal controls are designed
to manage rather than eliminate risk,
and aim to mitigate risk of fraud and
misstatements.
In addition to management
responsibility, 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 principal
and emerging risks to check they are
adequate and effective.
Our internal control processes include:
• Board approval for significant
projects, transactions 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
Read more about our approach to
internal control and risk management
in the Audit Committee report on
pages 117-124
Our processes for detecting, monitoring, and addressing cybersecurity
threats and incidents, and for ensuring timely compliance with applicable
reporting requirements, include the following:
Cybersecurity
l Established risk based cyber
l Implementation of a hardware
Risk management and strategy
Our management and Board recognise
the critical importance that a robust
cybersecurity programme and
processes play in maintaining
the integrity of CCEP’s business
applications and data. Our Chief
Information Officer (CIO), and Chief
Information Security Officer (CISO)
lead our cybersecurity programme
and regularly report to our Audit
Committee and Board on cybersecurity
matters, through which we assess,
identify, and manage material risks
from cybersecurity threats. We seek
to promote a cybersecurity culture
in which everyone feels a responsibility
to prevent cyberattacks.
Our cybersecurity policies, standards,
processes and practices are integrated
into our risk management framework,
which addresses the principal risks we
face as a business and how we identify,
assess and manage them. In addition,
our CISO and his team utilise a risk
analysis standard from the Information
Security Forum (ISF), which is aligned
with industry best practice standards
to identify and assess IT security risks
as well as numerous ISF controls
and checks.
strategy. Regular reporting of
cyber risks and risk mitigation to
the ELT, Audit Committee and
the Board;
l Conducting regular training and
awareness on information security
and data privacy for employees,
including regular phishing
exercises. This is in addition
to simulations run with the ELT
on their ability to respond to
cyber incidents;
l Continuous development and
ongoing improvement of Business
Continuity Planning (BCP) and
disaster recovery programmes,
including internal and external
testing of security controls to
identify vulnerabilities;
l Threat vulnerability management
and threat intelligence: proactive
monitoring of cyber threats and
events and implementation of
preventative measures is executed
by operating a 24/7 security event
logging and management system
through a Global Security
Operations Centre;
and software lifecycle;
l Third party risk assessments for
certain key vendors to support
third party risk management;
l Data Privacy Office including
data governance and
information classification
and handling;
l IT change management
processes to provide reasonable
assurance that only appropriate,
tested and approved changes
are implemented into our
IT landscape;
l Monthly Information Security
Committee meetings which
bring IT experts and governance
teams together into a single
forum to review, prevent, detect
and monitor threats, incidents,
and responses thereto; and
l Internal audit performs
independent risk based
audits to assess governance
and oversight and test
effectiveness of controls
over critical cyber activities.
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
78
Principal risks continued
Information regarding cyber risks
and cyber risk management is
reported to the Audit Committee,
and subsequently communicated to
the whole Board during the summary
of Committee reports. One member
of the Audit Committee has specific
responsibility for cybersecurity. In 2023,
the Audit Committee has been
presented with detailed information
on cybersecurity and internal controls,
including improvements made in
researching the emerging cyber
risk landscape.
Following an initial evaluation for risk
and business impact by our IT Security
Director and in collaboration with the
CISO, relevant cybersecurity incidents
and threats are escalated to the
corporate Incident Management Team
(IMT) and communicated in a timely
manner to our Disclosure Committee
consisting of the Chairman, CEO, CFO,
Group Company Secretary and General
Counsel, and VP Investor Relations
& Corporate Strategy. The Disclosure
Committee is responsible for reviewing
and making the determination
regarding materiality and public
disclosures pursuant to the SEC
and exchange listing rules.
We use third party experts to support
on certain aspects of our cybersecurity
programme but maintain internal
leadership and oversight of all, including
in connection with our risk processes.
We work with other bottlers and
partners such as TCCC to share
insights on potential threats.
We also monitor third party service
providers, through:
• An internal controls assessment of
our third party control framework
• Governance and performance
through reporting requirements
for major vendors
• Procurement third party risk
management processes
• Identification and oversight by
our CISO, supported by our Business
Continuity and Resilience (BCR)
team, of risks associated with those
third party service providers that are
relevant to our Business Process and
Technology (BPT) function
• Improvements in researching the
emerging threat landscape
• Improving the security of our external
attack surface; and
• Conducting due diligence into peers
and trading partners
As at the date of this report, we are not
aware of any risks from cybersecurity
threats, including as a result of any
previous cybersecurity incidents, that
have materially affected us, our
business strategy, results of operation
or financial condition. For additional
information concerning cybersecurity
risks we face, refer to the risk factor
subsection titled, “Cyber and IT
resilience” on page 71.
Governance
In addition to having a dedicated cyber
security team concerned with day to
day cybersecurity operations,
cybersecurity is also a critical area of
focus at both our executive and Board
levels, which helps ensure that the
Board executes its oversight of cyber
risks and that we consider security risks
in our business strategy.
Our cybersecurity processes for
managing and assessing cybersecurity
risks, as described above, are managed
and overseen by our Information
Security Committee, which comprises
the CIO, CCO, Chief Data Privacy
Officer and other senior management
members, and is coordinated by our
CISO who has been in situ for the past
seven years, with 20 years’ experience in
cybersecurity and information security
management. In addition, our CIO
chairs the Information Security
Committee, helping to steer it in
implementing effective processes
in response to information security
and risks. Our Information Security
Committee meets at least monthly
to oversee, discuss and manage
cybersecurity including topics such
as but not limited to data privacy,
(IT) business continuity and resiliency
based on internal and external sources
of information. Through these processes
and ongoing communications,
the Board via the Audit Committee
are informed about and monitor the
prevention, detection, mitigation and
remediation of cybersecurity threats
and incidents in real time.
As part of its general risk oversight
function, the Audit Committee
oversees CCEP’s management of
cybersecurity risk on behalf of the
Board. The Committee receives
regular updates from management
on cybersecurity risks and our efforts
to manage those risks, including reports
on a biannual basis and more frequently
as deemed appropriate by our CIO and
regular receipt of feedback on the
effectiveness of implementing
cybersecurity awareness within
company culture as a whole, such as the
results of implementing employee
training and phishing simulations.
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
79
Viability statement
In accordance with provision 31
of the 2018 UK Corporate
Governance Code (the Code),
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.
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.
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.
The assessment considered the Group’s
prospects related to revenue, operating
profit, EBITDA and comparable free
cash flow. The Directors considered
the maturity dates of 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
profit and comparable free cash flow.
Among other considerations, these
scenarios incorporated the potential
downside impact of the Group’s
principal risks, including those
related to:
• Legal and regulatory intervention,
including in relation to plastic
packaging
• Risk of cyber and social engineering
attacks
• Economic and political uncertainty
• Climate change and water
Strategic
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Governance and
Directors’ Report
Financial
Statements
Further Sustainability
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Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
80
Non-financial and sustainability 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
and sustainability information
can be found as stated in the
following table.
These pages contain, where
appropriate, details of our
policies and approach to
each matter.
Non-financial and sustainability information
Environmental matters
Page(s)
Forward on supply chain on pages 32-34
Forward on climate on pages 37-40
Forward on packaging on pages 41-43
Forward on water on pages 45-47
TCFD on pages 48-60
Employee matters
Forward on society – people on pages 23-25
Our stakeholders on pages 61-64
Social matters
Human rights
Anti-corruption and anti-bribery matters
Forward on society – communities on page 26
Forward on society - Respect for human rights on page 25
Forward on society - Respect for human rights on page 25
Our business model
Risk and principal risks
Our business model on page 8
Principal risks on pages 68-78
Risk factors on pages 243-251
Non-financial performance indicators
Sustainability performance indicators on page 3
Climate-related financial information
Key performance data summary on pages 234-236
Sustainability performance indicators on page 3
Taking action on sustainability and TCFD on pages 36-60
Principal risks on pages 68-78
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
81
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 NARTD
beverages. We make, move and sell some of the world’s most loved brands –
serving nearly 600 million consumers and helping over two million customers
across 31 countries grow. We combine the strength and scale of a large,
multinational business with an expert, local knowledge of the customers
we serve and communities we support.
Note regarding the presentation of alternative performance measures
We use certain alternative performance measures (non-IFRS 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 IFRS measures.
The alternative performance measures in this document have been calculated
in a manner consistent with those set forth in CCEP’s 2022 Annual Report on
Form 20-F filed with the SEC on 17 March 2023, and the title of certain non-IFRS
measures has been updated to better reflect their comparable nature.
For purposes of this document, the following terms are defined:
‘‘As reported’’ are results extracted from our consolidated financial statements.
"Comparable’’ is defined as results excluding items impacting comparability,
which include restructuring charges, income arising from the ownership of certain
mineral rights in Australia, gain on sale of sub-strata and associated mineral rights
in Australia, net impact related to European flooding, gains on the sale of property,
accelerated amortisation charges, expenses related to legal provisions, impact
of a defined benefit plan amendment arising from legislative changes in respect
of the minimum retirement age and acquisition and integration related costs.
Comparable volume is also adjusted for selling days.
‘‘FX neutral’’ is defined as period results excluding the impact of foreign
exchange rate changes. Foreign exchange impact is calculated by recasting
current year results at prior year exchange rates.
‘‘Capex’’ or “Capital expenditures’’ is defined as purchases of property, plant
and equipment and capitalised software, plus payments of principal on lease
obligations, less proceeds from disposals of property, plant and equipment.
Capex is used as a measure to ensure that cash spending on capital investments
is in line with the Group’s overall strategy for the use of cash.
‘‘Comparable Free cash flow’’ is defined as net cash flows from operating
activities less capital expenditures (as defined above) and net interest payments,
adjusted for items that are not reasonably likely to recur within two years, nor
have occurred within the prior two years. Comparable 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, non-discretionary lease
and net interest payments while excluding the effects of items that are unusual
in nature to allow for better period over period comparability. Comparable free
cash flow reflects an additional way of viewing our liquidity, which we believe is
useful to our investors, and is not intended to represent residual cash flow
available for discretionary expenditures.
‘‘Comparable 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. Comparable EBITDA does not reflect
cash expenditures, or future requirements for capital expenditures or contractual
commitments. Further, comparable 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 comparable EBITDA does not reflect
cash requirements for such replacements.
‘‘Net Debt’’ is defined as borrowings adjusted for the fair value of hedging
instruments and other financial assets/liabilities related to borrowings, net
of cash and cash equivalents and short-term investments. 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 comparable
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 reported 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.
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“Comparable ROIC” adjusts reported profit after tax for items impacting
the comparability of period over period financial performance and is defined
as comparable operating profit after tax attributable to shareholders divided
by the average of opening and closing invested capital for the year. Comparable
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.
Forward-looking alternative performance measures
Within this report, we provide certain forward-looking non-IFRS financial
information, which management uses for planning and measuring performance.
We are not able to reconcile forward-looking non-IFRS measures to reported
measures without unreasonable efforts because it is not possible to predict with
a reasonable degree of certainty the actual impact or exact timing of items that
may impact comparability throughout the year.
Unless otherwise stated, percentage amounts are rounded to the nearest 0.5%.
Key financial
measures(A)
Unaudited, FX impact
calculated by recasting
current year results at
prior year rates
Revenue
Cost of sales
Operating
expenses
Operating profit
Profit after taxes
Diluted earnings
per share (€)
Year ended 31 December 2023
€ millions
% change vs prior year
As reported Comparable
FX impact
As reported Comparable
FX Impact
Comparable
FX Neutral
18,302
11,582
18,302
11,576
(396)
(249)
4,488
2,339
1,669
4,353
2,373
1,701
(96)
(51)
(39)
5.5%
4.5%
6.0%
12.0%
9.5%
5.5%
4.5%
6.5%
11.0%
9.0%
(2.5%)
(2.0%)
(2.0%)
(2.5%)
(2.5%)
8.0%
6.5%
8.5%
13.5%
11.5%
3.63
3.71
(0.08)
10.5%
9.5%
(2.5%)
12.0%
(A) See Supplementary financial information - Items impacting comparability on page 90 for a reconciliation of reported
to comparable results.
Financial highlights
In 2023, our focus on leading brands, strong customer relationships and solid
in-market execution served us well. Successful implementation of our revenue
and margin growth management initiatives, along with our dynamic price and
promotion strategies across a broad pack offering, drove revenue per unit case
growth of 8.5%. Though headline pricing levels were ahead of pre-pandemic levels,
covering cost inflation, we continued to prioritise relevance and affordability.
Despite inflationary pressures in commodities and manufacturing, higher
concentrate costs and continued investment in our capabilities, we delivered
strong operating profit growth. This translated into strong comparable free
cash flow generation and enabled us to continue to return cash to shareholders,
as demonstrated by the dividend paid in the year.
The net impact of 2023 performance on our key financial measures(A) can be
summarised as follows:
• Reported revenue totalled €18.3 billion, up 5.5% on a reported basis and 8.0%
on a comparable and FX neutral basis.
• Volume was down 0.5% on both a reported and comparable basis. Revenue
per unit case increased 8.5% on a comparable and FX neutral basis.
• Reported operating profit was €2.3 billion, up 12.0%, or up 13.5% on comparable
and FX neutral basis.
• Reported diluted earnings per share were €3.63 or €3.71 on a comparable basis,
up 12.0% on a comparable and FX neutral basis.
• Net cash flows from operating activities were €2.8 billion. Full year comparable
free cash flow(B) was €1.7 billion.
(A) See Supplementary financial information - Items impacting comparability on page 90 for a reconciliation of reported
to comparable results.
(B) See Liquidity and capital management on pages 87-90 for a reconciliation between net cash flows from operating activities
and comparable free cash flow.
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Operational review
Revenue
Revenue totalled €18.3 billion, up 5.5% versus prior year on a reported basis, and
8.0% on a comparable and FX neutral basis. Revenue per unit case increased by
8.5% in 2023 on a comparable and FX neutral basis. Volume declined by 0.5% on
a comparable basis.
Comparable volume by category
Change versus prior period
Sparkling
Coca-ColaTM
Flavours, mixers and energy
Revenue
in millions of €
Europe
API
Total CCEP
Year ended 31 December 2023
Stills
As reported
Comparable
14,553
3,749
18,302
14,553
3,749
18,302
Reported %
change
FX neutral %
change
7.5%
(1.0%)
5.5%
8.5%
5.5%
8.0%
Hydration
RTD tea, coffee, juices and other(A)
Total
(A) RTD refers to ready to drink; Other includes alcohol and coffee.
Year ended 31 December
2023
% of total
85.0%
59.0%
26.0%
15.0%
7.5%
7.5%
2022
% of total
84.5%
58.5%
26.0%
15.5%
8.0%
7.5%
100.0%
100.0%
% change
—%
—%
1.0%
(5.0%)
(7.0%)
(3.0%)
(0.5%)
Comparable volume – selling day shift CCEP
In millions of unit cases, prior period volume
recast using current year selling days(A)
Volume
Impact of selling day shift
Comparable volume – selling day shift adjusted
Year ended 31 December
2023
3,279
n/a
3,279
2022
% change
3,300
(0.5%)
—
n/a
3,300
(0.5%)
(A) A unit case equals approximately 5.678 litres or 24 eight ounce servings, a typical volume measure used in our industry.
Volumes were down 0.5% on both a reported and comparable basis. In
Europe, strong in-market execution alongside continued consumer demand
in our developed markets drove volume growth of 0.5%, despite mixed summer
weather. API volumes were down 5.0% versus 2022, mainly driven by softer
consumer spending in Indonesia and strategic stock keeping unit (SKU)
portfolio rationalisation, partly offset by continued underlying volume
growth in Australia and New Zealand reflecting strong in-market execution.
On a brand category basis in 2023, Coca-Cola trademark volume was flat versus
2022 on a comparable basis. This reflected the strong performance of Coca-Cola
Zero Sugar, with volumes ahead of 2022 (up 4.0%) supported by targeted campaigns
and innovation, including strong activation during the FIFA Women’s World Cup.
Flavours, mixers and energy volume increased by 1.0% versus 2022 on a
comparable basis. Energy volumes were up 14.0% versus 2022, led by Monster
continuing to gain distribution and share through exciting innovation. Fanta grew
volume, reflecting strong consumer demand supported by flavour extensions.
Hydration volume decreased by 7.0% versus 2022 on a comparable basis.
Water volume decreased by 13.5%, reflecting strategic portfolio choices, such
as SKU rationalisation in Indonesia, the exit of large PET packs in Germany (Vio)
and Iberia (Aquabona), and Mount Franklin bulk packs in Australia. Sports volume
increased by 9.0%, reflecting continued favourable consumer trends mainly
benefiting Powerade across listed markets.
RTD teas, coffees, juices and other drinks volume decreased by 3.0% versus 2022
on a comparable basis. This reflects the strategic SKU rationalisation in Indonesia,
partially offset by strong volume growth in Fuze Tea across Europe
(up 23.5%). In the ARTD category, Jack Daniel’s & Coca-Cola has performed well
since launch and is now the number one ARTD value brand in Great Britain.
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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 changes
FX neutral
Revenue per unit case
Year ended 31 December
2023
14,553
147
14,700
5.56
2022
13,529
n/a
13,529
5.14
% change
7.5%
n/a
8.5%
8.0%
Revenue in Europe totalled €14.6 billion, up 7.5% versus prior year on a reported
basis, and 8.5% on an FX neutral basis. Revenue per unit case in Europe increased
by 8.0% in 2023, on a comparable and FX neutral basis, reflecting positive headline
price increases and promotional optimisation alongside favourable mix.
Revenue by geography
In millions of €
Great Britain
Germany
Iberia(A)
France(B)
Belgium and 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 2023
As reported
Reported
% change
FX neutral
% change
3,235
3,018
3,325
2,321
1,078
718
376
398
84
14,553
5.0%
12.5%
9.5%
11.0%
3.5%
5.5%
(7.0%)
(5.5%)
(3.5%)
7.5%
6.5%
12.5%
9.5%
11.0%
3.5%
5.5%
5.5%
2.0%
1.0%
8.5%
Reported revenue in Great Britain was up 5.0% versus 2022. Foreign exchange
translation negatively impacted revenue growth by 1.5%. The increase in revenue
was mainly driven by revenue per unit case growth reflecting the headline price
increase implemented at the end of the second quarter and positive brand mix,
including growth of 16.5% in Monster and the successful launch of Jack Daniel’s &
Coca-Cola. From a category perspective, Coca-Cola Zero Sugar, Fanta, Monster
and Dr Pepper showed strong volume growth.
Reported revenue in Germany was up 12.5% versus 2022. Volume was positively
impacted mainly by solid performance in the home channel versus prior year.
Additionally, revenue per unit case growth was driven by the headline price
increase implemented in the third quarter, as well as positive brand mix, with
Monster volumes up 34%. From a category perspective, Coca-Cola Zero Sugar,
Fanta, Fuze Tea and Powerade also showed strong volume growth.
Reported revenue in Iberia was up 9.5% versus 2022. This was mainly driven by
continued growth in the AFH channel and revenue per unit case growth, positively
impacted by the headline price increase implemented in the first quarter in
addition to favourable mix. From a category perspective, Coca-Cola Zero Sugar,
Sprite and Monster showed strong volume growth.
Reported revenue in France was up 11.0% versus 2022. This was mainly driven
by revenue per unit case growth supported by the headline price increase
implemented in the first quarter. From a category perspective, Fuze Tea,
Monster, Sprite and Powerade continued to grow volume.
Reported revenue in the Northern European territories (Belgium, Luxembourg,
the Netherlands, Norway, Sweden and Iceland) was up 0.5% versus 2022. Foreign
exchange translation negatively impacted revenue growth by 3.5%. The increase
in revenue was mainly driven by revenue per unit case growth as a result of the
headline price increase implemented across our markets and favourable package
mix led by the recovery of the AFH channel, including growth of 4.5% in small glass.
From a category perspective, Monster, Powerade and Aquarius showed strong
volume growth.
Revenue by segment: API
Revenue API
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
Adjust: Impact of FX changes
FX neutral
Revenue per unit case
Year ended 31 December
2023
3,749
249
3,998
6.30
2022
3,791
n/a
3,791
5.67
% change
(1.0%)
n/a
5.5%
11.0%
Reported revenue in API totalled €3.7 billion, and was down 1.0% versus 2022,
or up 5.5% on a comparable and FX neutral basis. Revenue per unit case increased
by 11.0% in 2023, on a comparable and FX neutral basis. Volume decreased by
5.0% on a comparable basis driven by solid in-market execution in Australia and
New Zealand offset by the strategic SKU rationalisation and softer consumer
spending in Indonesia.
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Revenue by geography
In millions of €
Australia
New Zealand and Pacific Islands
Indonesia and Papua New Guinea
Total API
Year ended 31 December 2023
As reported
2,385
679
685
3,749
Reported
% change
2.0%
4.5%
(14.5%)
(1.0%)
FX neutral
% change
9.5%
11.0%
(10.5%)
5.5%
Revenue in the Australia, Pacific and Indonesian territories (Australia, New Zealand
and Pacific Islands, Indonesia and Papua New Guinea) was down 1.0% versus 2022.
Foreign exchange translation negatively impacted revenue growth by 6.5%.
The underlying increase in revenue was mainly driven by revenue per unit case
growth as a result of the headline price increase implemented across all our
markets during the first half of the year and promotional optimisation in Australia.
Coca-Cola Zero Sugar, Monster and Powerade showed strong volume growth.
Cost of sales
Reported cost of sales totalled €11.6 billion, up 4.5% versus prior year on a reported
basis, and 6.5% on a comparable and FX neutral basis. Cost of sales per unit case
increased by 7.5% on a comparable and FX neutral basis.
Cost of sales
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: Total items impacting
comparability
Adjust: Restructuring charges(A}
Adjust: European flooding(B)
Adjust: Litigation(C)
Comparable
Adjust: Impact of FX changes
Comparable and FX neutral
Cost of sales per unit case
Year ended 31 December
2023
11,582
2022
11,096
% change
4.5%
(6)
(9)
9
(6)
11,576
249
11,825
3.61
(8)
(19)
11
—
11,088
n/a
11,088
3.36
n/a
4.5%
n/a
6.5%
7.5%
(A) Amounts represent restructuring charges related to business transformation activities.
(B) Amounts represent the incremental expense incurred offset by the insurance recoveries collected as a result of the July 2021
flooding events, which impacted the operations of our production facilities in Chaudfontaine and Bad Neuenahr.
(C) Amounts relate to the establishment of a provision in connection with an ongoing labour law matter in Germany.
Cost of sales in Europe increased in part due to higher volume, up 0.5% versus
2022 on a comparable basis. Cost of sales per unit case increased as well, primarily
driven by continued levels of commodity and manufacturing inflation. Sugar and
aluminium were the main drivers of commodity inflation, partially offset by lower
recycled PET and energy price levels as well as strong hedge coverage throughout
the year. Headline price increases were implemented across our markets in
response to these inflationary pressures and, alongside promotional optimisation,
drove increased revenue per unit case, resulting in increased concentrate costs.
Mix was also adverse, driven mainly by continued volume growth in energy and cans.
Cost of sales in API reflected lower volumes, down 5.0% versus 2022 on a
comparable basis, partially offset by similar inflationary pressures on commodities,
transportation and freight, and increased revenue per unit case, resulting in higher
concentrate costs.
Operating expenses
Reported operating expenses totalled €4.5 billion, up 6.0% versus prior year
on a reported basis, and 8.5% on a comparable and FX neutral basis.
Operating expenses
In millions of €. FX impact calculated by recasting current year results at
prior year rates.
As reported
Adjust: Total items impacting comparability
Adjust: Restructuring charges(A)
Adjust: Acquisition and Integration related costs(B)
Adjust: Litigation(C)
Adjust: Accelerated amortisation(D)
Adjust: Defined benefit plan amendment(E)
Comparable
Adjust: Impact of FX changes
Comparable and FX neutral
Year ended 31 December
2023
4,488
(135)
(85)
(12)
(11)
(27)
—
4,353
96
4,449
2022
% change
4,234
6.0%
(140)
(144)
(3)
—
—
7
4,094
n/a
4,094
n/a
6.5%
n/a
8.5%
(A) Amounts represent restructuring charges related to business transformation activities.
(B) Amounts represent costs incurred in connection with the proposed acquisition of CCBPI for the year ended 31 December 2023
as well as integration costs related to the acquisition of Coca-Cola Amatil Limited (CCL) recognised during the year ended
31 December 2022.
(C) Amounts relate to the establishment of a provision in connection with an ongoing labour law matter in Germany.
(D) Amounts represent accelerated amortisation charges associated with the discontinuation of the relationship between CCEP
and Beam Suntory upon expiration of the current contractual agreements.
(E) Amounts represent the impact of a plan amendment arising from legislative changes in respect of the minimum retirement age.
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Operating expenses in Europe increased, driven by continued inflationary
pressures on labour and haulage, as well as optimised investment in trade
marketing expenses to support our top line growth. With a third of operating
expenses being variable in nature, the uplift in volume reflecting resilient
consumer demand and strong in-market execution also impacted our
cost base.
Similar to Europe, comparable operating expenses in API also reflected
inflationary pressures on labour and haulage, and increased investment in
trade marketing expenses contributed to the growth in operating expenses.
Discretionary spend optimisation and the delivery of our previously announced
multi-year efficiency programme, which has now been closed out, maintained
our operating expenses as a percentage of revenue versus 2022.
Restructuring
Restructuring charges of €9 million and €85 million were recognised within
reported cost of sales and reported operating expenses, respectively, for the
year ended 31 December 2023, related principally to severance charges arising
from various transformation initiatives.
Restructuring charges of €19 million and €144 million were recognised within
reported cost of sales and reported operating expenses, respectively, for the
year ended 31 December 2022, which are primarily attributable to €82 million
of expense recognised in connection with the transformation of the full service
vending operations and related initiatives in Germany.
Effective tax rate
The reported effective tax rate was 24% and 22% for the years ended 31 December
2023 and 31 December 2022, respectively.
The increase in the reported effective tax rate to 24% in 2023 (2022: 22%) is largely
due to the increase in the UK statutory tax rate to a weighted average of 23.5%
and the review of uncertain tax positions.
The comparable effective tax rate was 24% and 22% for the years ended 31
December 2023 and 31 December 2022, respectively.
Income tax
In millions of €
As reported
Adjust: Total items impacting comparability
Adjust: Restructuring charges(A)
Adjust: European flooding(B)
Adjust: Defined benefit plan amendment(C)
Adjust: Coal royalties(D)
Adjust: Property sale(E)
Adjust: Litigation (F)
Adjust: Accelerated amortisation (G)
Comparable
Year ended 31 December
2023
534
4
15
(2)
—
(6)
(16)
5
8
538
2022
436
9
42
(3)
(1)
(29)
—
—
—
445
(A) Amounts represent the tax impact of restructuring charges related to business transformation activities.
(B) Amounts represent the tax impact of the incremental expense incurred offset by the insurance recoveries collected as a result
of the July 2021 flooding events, which impacted the operations of our production facilities in Chaudfontaine and Bad Neuenahr.
(C) Amounts represent the tax impact of a plan amendment arising from legislative changes in respect of the minimum
retirement age.
(D) Amounts represent the tax impact of royalty income arising from the ownership of certain mineral rights in Australia.
The royalty income was recognised as “Other income” in our consolidated income statement for the years ended
31 December 2023 and 31 December 2022, respectively.
(E) Amounts represent the tax impact of gains mainly attributable to the sale of property in Germany. The gains on disposal were
recognised as “Other income” in our consolidated income statement for the year ended 31 December 2023.
(F) Amounts represent the tax impact related to the establishment of a provision in connection with an ongoing labour law matter
in Germany.
(G) Amounts represent the tax impact of accelerated amortisation charges associated with the discontinuation of the relationship
between CCEP and Beam Suntory upon expiration of the current contractual agreements.
Return on invested capital
For the year ended 31 December 2023, ROIC increased by 116 basis points on a
reported basis, to 9.5%, versus 2022. On a comparable basis, ROIC increased by 120
basis points versus 2022, reflecting the increase in comparable operating profit
and continued focus on capital allocation. Comparable 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.
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ROIC
In millions of €
Reported profit after tax
Taxes
Finance costs, net
Non-operating items
Reported operating profit
Items impacting comparability(A)
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
Opening equity attributable to shareholders
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
Comparable ROIC
Year ended 31 December
2023
1,669
534
120
16
2,339
34
2,373
(570)
—
2022
1,521
436
114
15
2,086
52
2,138
(474)
(13)
1,803
1,651
10,264
7,447
17,711
9,409
7,976
17,385
17,548
9.5%
10.3%
11,675
7,033
18,708
10,264
7,447
17,711
18,210
8.4%
9.1%
(A) Reconciliation from reported to comparable operating profit is included in the Supplementary Financial Information - Items
impacting comparability section on pages 91-92.
(B) Tax rate used is the comparable effective tax rate for the year (2023: 24%, 2022: 22%).
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- 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 for both the next 12 months and the longer term
period thereafter. 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.
The Group has amounts available for borrowing under a €1.80 billion multi
currency credit facility (2022: €1.95 billion) with a syndicate of 12 banks. This credit
facility matures in 2029 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 2023, the Group had
no amounts drawn under this credit facility.
Net cash flows from operating activities were €2,806 million in 2023, a decrease
of 4.3%, or €126 million, from €2,932 million in 2022, reflecting the impact of
increased revenue performance offset by cycling the impact of working capital
improvement initiatives. These cash flows were primarily generated from our
operations and included restructuring cash outflows of €104 million.
In 2023, we continued to monitor our investment in capital expenditure
programmes, given continued uncertainty. Our 2023 capital spend on property,
plant and equipment and capitalised software as part of our business capability
programme was €812 million, compared to €603 million in 2022.
Comparable free cash flow generation for the year was strong, totalling
€1,734 million, after adjusting for €89 million net of tax cash proceeds received in
connection with the royalty income arising from the ownership of certain mineral
rights in Australia. The decrease relative to our 2022 total of €1,805 million was
largely driven by cycling the impact of working capital improvement initiatives.
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Comparable 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: Net interest payments
Adjust: Items impacting comparability(A)
Comparable free cash flow
Year ended 31 December
2023
2,806
(672)
(140)
101
(148)
(124)
(89)
1,734
2022
2,932
(500)
(103)
11
(153)
(130)
(252)
1,805
(A) During the year ended 31 December 2023, the Group has received net of tax cash proceeds of €89 million in connection with the
royalty income arising from the ownership of certain mineral rights in Australia. During the year ended 31 December 2022, €252
million of cash proceeds were received from the regional tax authorities of Bizkaia (Basque Region), in connection with the
ongoing dispute in Spain regarding the refund of historical VAT amounts related to the period 2013-2016. The proceeds associated
with these specific events have been included within the Group’s net cash flows from operating activities for the years ended
31 December 2023 and 31 December 2022, respectively. Given the unusual nature and to allow for better period over period
comparability, our comparable free cash flow measure excludes the cash impact related to these items.
In 2023, total borrowings decreased by €511 million. This was driven by repayments
on third party borrowings of €1,159 million and payments on the principal and
interest from lease obligations of €165 million, partially offset by proceeds from
third party borrowings of €694 million. Movement as a result of fair value hedges
resulted in an increase of borrowings by €40 million. Additions and other
movements on leases further increased borrowings by €191 million. All this was
partially offset by currency translation and other non-cash changes of €112 million.
The following bonds were repaid on maturity: US$850 million 0.5% Notes 2023,
repaid in May 2023; US$25 million 4.34% Notes 2023 and US$25 million 4.34% Notes
2023, both repaid in October 2023; and €350 million 2.625% Notes 2023, repaid in
November 2023. In December 2023, the Group issued €700 million 3.875%
Notes 2030 in connection with the proposed acquisition of CCBPI, which mature
in December 2030.
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.
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
Credit ratings
As of 14 March 2024
Long-term rating
Outlook
Year ended 31 December
2023
11,396
28
20
11,444
(1,419)
(568)
9,457
2022
11,907
(83)
25
11,849
(1,387)
(256)
10,206
Moody’s
Baa1
Stable
Fitch Ratings
BBB+
Stable
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) Net debt includes adjustments for the fair value of derivative instruments used to hedge both currency and interest rate risk on
the Group’s borrowings. In addition, net debt also includes other financial assets/liabilities relating to cash collateral pledged by/to
external parties on hedging instruments related to borrowings.
(B) Cash and cash equivalents as at 31 December 2023 and 31 December 2022, includes €42 million and €102 million, respectively, 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 with maturity dates when acquired of greater than three months and less than
one year. These short-term investments are held with counterparties that are continually assessed with a focus on preservation
of capital and liquidity. Short-term investments as at 31 December 2023 and 31 December 2022 includes €33 million and €49
million, respectively, of assets in Papua New Guinea kina, subject to the same currency controls outlined above.
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2023 Integrated Report and Form 20-F
89
Business and financial review continued
The ratio of net debt to comparable 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. Comparable EBITDA
is calculated as EBITDA after adding back items impacting the comparability
of year over year financial performance.
Comparable EBITDA does not reflect our cash expenditures, or future
requirements for capital expenditures or contractual commitments. Further,
comparable 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 comparable EBITDA does not reflect cash
requirements for such replacements.
Net debt to comparable EBITDA
Comparable EBITDA in 2023 totalled €3.1 billion and increased relative to 2022
by €217 million. The increase versus 2022 was primarily driven by the increase in
reported operating profit, reflecting increased revenue. The ratio of net debt to
comparable EBITDA is 3.0 versus 3.5 in 2022, reflecting the decrease in net debt
due to the repayment of borrowings and the increase in comparable EBITDA.
Dividends
In line with our commitments to deliver long-term value to shareholders,
we paid a first half interim dividend of €0.67 per share in May 2023 and a second
half interim dividend of €1.17 per share in December 2023, based on comparable
diluted earnings per share, maintaining a payout ratio of approximately 50% in
line with our dividend policy. For the year ended 31 December 2023, dividend
payments totalled €841 million (2022: €763 million).
Share buyback
No Shares were repurchased in 2023 and 2022.
Comparable EBITDA
In millions of €
Reported profit after tax
Taxes
Finance costs, net
Non-operating items
Reported operating profit
Depreciation and amortisation(A)
Reported EBITDA
Items impacting comparability
Restructuring charges(B)
Acquisition and integration related costs(C)
European flooding(D)
Litigation(E)
Property sale(F)
Sale of sub-strata and associated mineral rights(G)
Coal royalties(H)
Defined benefit plan amendment(I)
Comparable EBITDA
Net debt to EBITDA
Net debt to Comparable EBITDA
Year ended 31 December
2023
1,669
534
120
16
2,339
792
3,131
83
12
(9)
17
(54)
(35)
(18)
—
3,127
3.0
3.0
2022
1,521
436
114
15
2,086
816
2,902
119
3
(11)
—
—
—
(96)
(7)
2,910
3.5
3.5
(A) Amounts include accelerated amortisation charges associated with the discontinuation of the relationship between CCEP
and Beam Suntory upon expiration of the current contractual agreements for the year ended 31 December 2023.
(B) Amounts represent restructuring charges related to business transformation activities, excluding accelerated depreciation
included in the depreciation and amortisation line.
(C) Amounts represent costs incurred in connection with the proposed acquisition of CCBPI for the year ended 31 December 2023
as well as integration costs related to the acquisition of CCL recognised during the year ended 31 December 2022.
(D) Amounts represent the incremental expense incurred offset by the insurance recoveries collected as a result of the July 2021
flooding events, which impacted the operations of our production facilities in Chaudfontaine and Bad Neuenahr.
(E) Amounts relate to the establishment of a provision in connection with an ongoing labour law matter in Germany.
(F) Amounts represent gains mainly attributable to the sale of property in Germany. The gains on disposal were recognised as
“Other income” in our consolidated income statement for the year ended 31 December 2023.
(G) Amounts represent the considerations received relating to the sale of the sub-strata and associated mineral rights in Australia.
The transaction completed in April 2023 and the proceeds were recognised as “Other income” in our consolidated income
statement for the year ended 31 December 2023.
(H) Amounts represent royalty income arising from the ownership of certain mineral rights in Australia. The royalty income was
recognised as “Other income” in our consolidated income statement for the years ended 31 December 2023 and 31 December
2022, respectively.
(I) Amounts represent the impact of a plan amendment arising from legislative changes in respect of the minimum retirement age.
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2023 Integrated Report and Form 20-F
90
Business and financial review continued
Supplementary financial information – Items impacting comparability – Reported to comparable
The following provides a summary reconciliation of items impacting comparability for the years ended 31 December 2023 and 31 December 2022:
Full year 2023
Unaudited, in millions of € except per share data
which is calculated prior to rounding
As reported
Items impacting comparability
Restructuring charges(A)
Acquisition and integration related costs(B)
European flooding(C)
Coal royalties(D)
Property sale(E)
Litigation(F)
Accelerated amortisation(G)
Sale of sub-strata and associated mineral rights(H)
Comparable
Operating profit
2,339
Profit after
taxes
1,669
Diluted earnings
per share (€)
3.63
94
12
(9)
(18)
(54)
17
27
(35)
2,373
79
14
(7)
(12)
(38)
12
19
(35)
1,701
0.18
0.03
(0.02)
(0.03)
(0.08)
0.03
0.04
(0.07)
3.71
Full year 2022
Unaudited, in millions of € except per share data
which is calculated prior to rounding
As reported
Items impacting comparability
Restructuring charges(A)
Acquisition and integration related costs(B)
European flooding(C)
Coal royalties(D)
Defined benefit plan amendment(I)
Comparable
Operating profit
2,086
Profit after
taxes
1,521
Diluted earnings
per share (€)
3.29
163
3
(11)
(96)
(7)
2,138
121
3
(8)
(67)
(6)
1,564
0.27
0.01
(0.02)
(0.15)
(0.01)
3.39
(A) Amounts represent restructuring charges related to business transformation activities.
(B) Amounts represent costs incurred in connection with the proposed acquisition of CCBPI for the year ended 31 December 2023
as well as integration costs related to the acquisition of CCL recognised during the year ended 31 December 2022.
(C) Amounts represent the incremental expense incurred offset by the insurance recoveries collected as a result of the July 2021
(E) Amounts represent gains mainly attributable to the sale of property in Germany. The gains on disposal were recognised as
“Other income” in our consolidated income statement for the year ended 31 December 2023.
(F) Amounts relate to the establishment of a provision in connection with an ongoing labour law matter in Germany.
(G) Amounts represent accelerated amortisation charges associated with the discontinuation of the relationship between CCEP
flooding events, which impacted the operations of our production facilities in Chaudfontaine and Bad Neuenahr.
(D) Amounts represent royalty income arising from the ownership of certain mineral rights in Australia. The royalty income
was recognised as “Other income” in our consolidated income statement for the years ended 31 December 2023 and
31 December 2022, respectively.
and Beam Suntory upon expiration of the current contractual agreements.
(H) Amounts represent the considerations received relating to the sale of the sub-strata and associated mineral rights in Australia.
The transaction completed in April 2023 and the proceeds were recognised as “Other income” in our consolidated income
statement for the year ended 31 December 2023.
(I) Amounts represent the impact of a plan amendment arising from legislative changes in respect of the minimum retirement age.
Operating profit by segment
Operating profit Europe
In millions of €. FX impact calculated
by recasting current year results at prior year rates.
As reported
Adjust: Total items impacting
comparability
Comparable
Adjust: Impact of FX changes
Comparable and FX neutral
Year ended 31 December
2023
1,842
46
1,888
19
1,907
2022
1,529
141
1,670
n/a
1,670
Operating profit API
In millions of €. FX impact calculated
by recasting current year results at prior year rates.
As reported
Adjust: Total items impacting
comparability
Comparable
Adjust: Impact of FX changes
Comparable and FX neutral
% Change
20.5%
n/a
13.0%
n/a
14.0%
Year ended 31 December
2023
497
(12)
485
32
517
2022
557
(89)
468
n/a
468
% Change
(11.0%)
n/a
3.5%
n/a
10.5%
The Company’s Strategic Report is set out on pages 1-90. The Strategic Report was approved by the Board on 15 March 2024 and signed on its behalf by
Damian Gammell,
Chief Executive Officer
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2023 Integrated Report and Form 20-F
91
In this section
Governance
and Directors’
Report
92 Chairman’s introduction
93 Board of Directors
95 Directors’ biographies
100 Senior management
103 Corporate governance report
113 Nomination Committee Chairman’s letter
Nomination Committee report
114
117 Audit Committee Chairman’s letter
118
Audit Committee report
125 ESG Committee Chairman’s letter
126
ESG Committee report
127 Directors’ remuneration report
127
Statement from the Remuneration
Committee Chairman
129
130
131
Overview of remuneration policy
Remuneration at a glance
Annual report on remuneration
144 Directors’ report
147 Directors’ responsibilities statement
Image: Coca-Cola, Coca-Cola
Zero Sugar, Fanta Orange, Sprite
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2023 Integrated Report and Form 20-F
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Chairman’s
introduction
of CCBPI solidifies CCEP’s position
as the world’s largest Coca-Cola bottler
by revenue.
Some key areas of focus and decisions of
the Board during 2023 are outlined below.
Managing and mitigating the effects
of the macroeconomic environment
2023 was another challenging year
as a result of the effects of the war
in Ukraine, the conflict in the Middle
East and other economic factors.
The Board provided strategic oversight
and guidance to management to
mitigate the impacts arising from
commodity prices and inflationary
pressures. Adaptability and agility during
2023 were key and will continue to be
important into 2024.
Culture
The Board plays a critical role in
shaping the culture of the Company
by promoting growth focused and
values-based conduct and aims to
create a culture where everyone feels
welcome to be themselves and that
they are valued and belong. To monitor
this during the year, the Board received
outputs from engagement surveys,
CoC reporting, diversity statistics
and health and safety indicators.
Health, safety and wellbeing
The Board’s key priority remained the
safety of our people, customers and
communities. A number of measures
continued to be put in place to support
the physical and mental wellbeing and
health of our people. This included
enhancing the number of wellbeing
First Aiders to a new total of over 1,250.
The Board was also pleased to see an
improvement in lost time incident rate.
Read more in Great people on page
20-26
ESG
The Board continues to recognise
the growing importance of ESG to
its stakeholders, including the focus on
clear and quantifiable commitments.
The Board supported the move during
the year to an independent third
party to provide limited assurance
over selected This is Forward KPIs.
The Board also approved a new
water use ratio reduction target.
Board changes
A key aspect of my role as Chairman
is ensuring that collectively the Board
has the skills, knowledge, diversity and
experience it requires. As announced
on 14 December 2023, we are delighted
to welcome Guillaume Bacuvier to the
Board. He offers a wealth of relevant
skills and experience and succeeds
Garry Watts. Garry has been a strong
and valued Board member, and
we thank him for his invaluable
contribution throughout his tenure.
Read more about Board changes on
page 99 and 113-114
Board evaluation
We again conducted a review of
the effectiveness of the Board and
Board Committees, which helps to
support their continuous improvement.
The process was led by our Senior
Independent Director and Company
Secretary and involved the completion
of online surveys provided by
Lintstock, tailored for the Board
and each of its Committees.
The Board also approved the
appointment of Dr Tracy Long of
Boardroom Review to conduct the
external evaluation in 2024. This is in
line with the Code requirements to
appoint an external evaluator at least
once every three years.
Read more about the outputs of the
Board evaluation on page 111
Digital and innovation
Digital and innovation continue to be
key priorities for consideration by the
Board and reflect the increasing role
that technology plays in delivery to
our customers. It is critical that our
governance enables the Board to
effectively shape and oversee progress
against our technology strategy. In order
to do this, CCEP has an established
Digital Advisory Committee steered
by management and with external
experts as members.
The Board has access to the Committee
papers and in addition receives first hand
outputs of matters discussed through
the CEO report. This is in addition to deep
dives and KPIs in respect of the digital
transformation programme. This enables
the Board to have a clear understanding
of the progress and challenges in
implementation of strategy and the
impact on key stakeholders.
Sol Daurella,
Chairman
15 March 2024
On behalf of the Board, I am
pleased to present the corporate
governance report for the year
ended 31 December 2023.
The report describes CCEP’s
corporate governance framework
and procedures, and summarises
the work of the Board and its
Committees to illustrate how
we have discharged our duties
during the year.
It was another busy year, with the
Board taking the opportunity to
visit our colleagues in Australia and
New Zealand and witness first hand,
once again following the Board’s visit
to Indonesia in 2022, the positive
integration and successful collaboration
with our teams in API.
It was also announced in August 2023
that CCEP, together with AEV, had
entered into a non-binding Letter of
Intent to jointly acquire CCBPI, which
we are delighted to say completed
on 23 February 2024. The acquisition
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2023 Integrated Report and Form 20-F
93
Board of Directors
Our Board of
Directors(A) is diverse,
experienced and
knowledgeable,
bringing together
the skills needed
for our long-term
success in line with
our skills matrix.
Total number of
Directors on the Board
17
(A) Based on Directors
as at 29 February 2024.
(B) Excluding the Chairman.
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2023 Integrated Report and Form 20-F
94
Board of
Directors
1. Sol Daurella 2. Damian Gammell
3. Manolo Arroyo 4. John Bryant
5. José Ignacio Comenge 6. Nathalie Gaveau
7. Álvaro Gómez-Trénor Aguilar 8. Mary Harris
9. Thomas H. Johnson 10. Dagmar Kollmann
11. Alfonso Líbano Daurella 12. Nicolas Mirzayantz
13. Mark Price 14. Nancy Quan 15. Mario Rotllant Solá
16. Dessi Temperley 17. Garry Watts(A)
(A) Garry Watts resigned effective 31 December 2023 and was
replaced by Guillaume Bacuvier who was appointed 1 January
2024 and does not feature in the Board photograph.
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2023 Integrated Report and Form 20-F
95
Directors’ biographies
As at 31 December 2023,
our Board consisted of
our Chairman, CEO and
15 Non-executive Directors.
Biographies of our Board
members and details of Board
and Committee changes made
up until the publication of this
report are set out on pages
95-99.
Find out more at
cocacolaep.com/board-of-directors
Sol Daurella
Chairman
Date appointed to the Board May 2016
Damian Gammell
Chief Executive Officer (CEO)
Date appointed to the Board Dec 2016
Manolo Arroyo
Non-executive Director
Date appointed to the Board May 2021
Committees
Committees
Committees
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
• Sol and the Daurella family have been
part of the Coca-Cola system for over 70
years, when the first bottling agreement
was signed in Spain in 1951
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., independent 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
Key strengths/experience
• Strategy, risk management,
Key strengths/experience
• Extensive experience working in the
development and execution experience
Coca-Cola system
• 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
Beverage Group President of Anadolu
Group and CEO of Anadolu Efes, CEO and
Managing Director of Coca-Cola İçecek A.Ş.
and a number of other senior executive
roles in the Coca-Cola system including in
Russia, Australia and Germany
• Strong operational leadership
experience in international consumer
goods groups, lived and worked on 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
Coca-Cola system
•
Key external commitments
Executive Vice President and Global Chief
Marketing Officer at The Coca-Cola
Company (TCCC)
Previous roles
President of the Asia Pacific Group,
Bottling Investments Group, and Mexico
business unit of TCCC, CEO of Deoleo, S.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 and
non-executive director of ThaiNamthip
Limited and Coca-Cola Andina and non-
executive director of Effie Worldwide
Key to Committees
Affiliated Transaction Committee
Audit Committee
Environmental, Social and Governance Committee
Nomination Committee
Remuneration Committee
Committee chairman
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2023 Integrated Report and Form 20-F
96
Directors’ biographies continued
John Bryant
Independent Non-executive Director
Date appointed to the Board Jan 2021
José Ignacio Comenge
Non-executive Director
Date appointed to the Board May 2016
Nathalie Gaveau
Independent Non-executive Director
Date appointed to the Board Jan 2019
Álvaro Gómez-Trénor Aguilar
Non-executive Director
Date appointed to the Board Mar 2018
Committees
Committees
Committees
Committees
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., Compañía Vinícola
del Norte de España, S.A., Ebro Foods S.A.,
Barbosa & Almeida SGPS, S.A., Mendibea
2002, S.L. and Chairman of Ball Beverage
Can Iberica, S.L
Previous roles
Senior roles in the Coca-Cola system,
AXA, S.A., Aguila and Heineken Spain and
Vice-Chairman and CEO of MMA Insurance
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 Lightspeed
Commerce Inc., Sonepar and PortAventura
World and Senior Advisor to BCG
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 and Calida Group and President
of Tailwind International Corp, special
acquisition company
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.
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.)
and Sinensis Seed Capital SCR de RC, S.A.
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 cybersecurity
strategy process
Key external commitments
Chairman of the Board and of the
Nomination Committee and member
of the Remuneration Committee of
Flutter Entertainment plc, non-executive
director, Chairman of the Remuneration
Committee and member of the Audit,
Corporate Responsibility and Nomination
Committees of Compass Group plc and
non-executive director and member of
the Audit and Nominating and Corporate
Governance Committees of Ball Corporation
Previous roles
Executive Chairman and CEO of Kellogg
Company having previously held a variety
of senior roles in the Kellogg Company,
strategy advisor at A.T. Kearney and
Marakon Associates and non-executive
director of Macy’s Inc.
Key to Committees
Affiliated Transaction Committee
Audit Committee
Environmental, Social and Governance Committee
Nomination Committee
Remuneration Committee
Committee chairman
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2023 Integrated Report and Form 20-F
97
Directors’ biographies continued
Mary Harris
Independent Non-executive Director
Date appointed to the Board May 2023
Committees
Key strengths/experience
• Top level strategic outlook with
international and consumer focus
• Significant non-executive director
experience gained from other major
listed companies
• Deep understanding of remuneration
requirements gained from previous
Remuneration Committee chair roles
Key external commitments
Designated non-executive director for
workforce engagement and a member
of the Remuneration Committee of
Reckitt plc and a Supervisory Board
member at HAL Holding N.V.
Previous roles
Non-executive director at ITV plc,
Unibail-Rodamco Westfield SE,
Sainsbury’s, TNT Express and TNT N.V.
and Partner at McKinsey & Company
Thomas H. Johnson
Independent Non-executive Director and
Senior Independent Director
Date appointed to the Board May 2016
Committees
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,
and director of Coca-Cola Enterprises, Inc.,
GenOn Corporation, Mirant Corporation,
ModusLink Global Solutions, Inc., Superior
Essex Inc. and Tumi, Inc.
Dagmar Kollmann
Independent Non-executive Director
Date appointed to the Board May 2019
Alfonso Líbano Daurella
Non-executive Director
Date appointed to the Board May 2016
Committees
Committees
Key strengths/experience
• Expert in finance and international
Key strengths/experience
• Developed the Daurella family’s
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,
member of the Supervisory Board of
Unibail-Rodamco-Westfield SE and
Deutsche Telekom AG, non-executive
director of 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
boards of Morgan Stanley International Ltd
and Morgan Stanley and Co. International
Ltd in London, Associate Director of UBS
in London, non-executive director of KfW
IPEX-Bank and Deputy Chairman of the
Supervisory Boards of Hypo Real Estate
Holdings AG and Deutsche
Pfandbriefbank AG
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 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
Español de Credito Banesto, and Chair
of Family Business Europe
Key to Committees
Affiliated Transaction Committee
Audit Committee
Environmental, Social and Governance Committee
Nomination Committee
Remuneration Committee
Committee chairman
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
98
Directors’ biographies continued
Nicolas Mirzayantz
Independent Non-executive Director
Date appointed to the Board May 2023
Mark Price
Independent Non-executive Director
Date appointed to the Board May 2019
Nancy Quan
Non-executive Director
Date appointed to the Board May 2023
Mario Rotllant Solá
Non-executive Director
Date appointed to the Board May 2016
Committees
Committees
Committees
Committees
Key strengths/experience
• Over 30 years of strategic, operational
Key strengths/experience
• Extensive experience in the
and business transformation experience
retail industry
• A deep understanding of the
FMCG industry
• A deep understanding of
international trade
• Strong sustainability and ESG experience
• Strong strategic and sustainable
Key external commitments
Director of Puig S.L.
Previous roles
Various senior roles at IFF, including
President, Nourish Division and Divisional
CEO, Scent Division. Previously served on
the Board of the International Fragrance
Association and was a Cultural Leader at
the World Economic Forum
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
• Extensive knowledge of the
Coca-Cola system
Key strengths/experience
• Extensive international experience
in the food and beverage industry
• Significant leadership experience
• Experience of chairing a remuneration
spanning innovation and consumer
trends, research and development,
and supply chain
• Experience applicable to our expanded
geographical footprint in the API region
Key external commitments
Executive Vice President and Global Chief
Technical and Innovation Officer at TCCC,
a member of the Liberty Mutual Group
Board of Directors, the Industry Affiliates
Advisory Board for the University of
California Davis MBA Program and the
FIRST (For Inspiration and Recognition
of Science and Technology) Executive
Advisory Board
Previous roles
Various senior roles at TCCC including
Chief Technical Officer for Coca-Cola
North America, Global Research and
Development Officer, Vice President,
Innovation, Research and Development,
General Manager for Europe and Eurasia
Group, Vice President, Research and
Development, Pacific Group, responsible
for the Shanghai, Japan and India Research
and Development Centres
•
committee
In-depth technical knowledge
of the Coca-Cola system and the
bottling industry
• Development of non-profit
organisations
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 and
Remuneration Committee of Coca-Cola
Iberian Partners, S.A.
Key to Committees
Affiliated Transaction Committee
Audit Committee
Environmental, Social and Governance Committee
Nomination Committee
Remuneration Committee
Committee chairman
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
99
Directors’ biographies continued
Dessi Temperley
Independent Non-executive Director
Date appointed to the Board May 2020
Appointed 1 January 2024
Guillaume Bacuvier
Independent Non-executive Director
Date appointed to the Board Jan 2024
Committees
Committees
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 and member of the
Audit and Risk Committee 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
• Valuable perspectives on consumer
behaviours and strategy
• Brings a wealth of marketing
effectiveness insights from across
Europe and APAC
• Strong track record of commercial and
technological business transformation
Key external commitments
CEO of Worldpanel, Kantar’s consumer
panel market research division, and
non-executive director of Berger-Levrault
Previous roles
CEO of dunnhumby, a number of
senior positions at Google and Orange
and non-executive director of Attest
Technologies Limited and VEON Ltd
2023 Board and Committee changes
Effective 24 May 2023:
• Jan Bennink, Christine Cross and
Brian Smith retired from the Board
• Mary Harris, Nicolas Mirzayantz and
Nancy Quan were elected to the Board
• Mary Harris was appointed to the
Remuneration and Nomination
Committees
• Nancy Quan and Nicolas Mirzayantz
were appointed to the Environmental,
Social and Governance (ESG)
Committee
• Nathalie Gaveau was appointed to
the Affiliated Transaction Committee
(ATC)
Effective 31 December 2023, Garry Watts
resigned from the Board.
2024 Board and Committee changes
Effective 1 January 2024:
• Guillaume Bacuvier was appointed to
the Board
• Nicolas Mirzayantz was appointed to
the Audit Committee
Key to Committees
Affiliated Transaction Committee
Audit Committee
Environmental, Social and Governance Committee
Nomination Committee
Remuneration Committee
Committee chairman
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
100
Senior management
1. Nik Jhangiani 2. Clare Wardle 3. José Antonio Echeverría
4. Peter Brickley 5. Stephen Lusk 6. Ana Callol 7. Victor Rufart
8. Véronique Vuillod 9. Leendert den Hollander 10. John Galvin
11. Francesc Cosano 12. Stephen Moorhouse 13. Peter West
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
101
Senior management continued
Our senior management
team and Damian Gammell
together constitute the
members of the Executive
Leadership Team (ELT).
Nik Jhangiani
Chief Financial Officer (CFO)
Appointed May 2016
Nik has more than 30 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. Nik is also the culture
and heritage inclusion executive sponsor
at CCEP.
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 in multiple roles including Vice
President of Strategy and Transformational
Projects for the Iberia business unit, and
Vice President, Strategy and Coordination
for Supply Chain across CCEP. José Antonio
is also the disability inclusion executive
sponsor at CCEP.
Clare Wardle
General Counsel and Company Secretary
Appointed July 2016
Clare leads legal, risk, compliance, security
and company secretariat. Prior to joining
CCEP, she was Group General Counsel
and Company Secretary 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
chair of the Royal British Legion Industries’
Development Board. Clare is also the
LGBTQ+ inclusion executive sponsor
at CCEP.
Peter Brickley
Chief Information Officer (CIO)
Appointed November 2016
Peter leads the business process and
technology function at CCEP, including
steering CCEP’s investments in technology
solutions. Peter has over 25 years’
experience leading technology for global
businesses including Heineken, Centrica
and BAT. Before CCEP, he was Global CIO
and Managing Director of Global Business
Services at SABMiller. Peter is a trustee of
the Brain and Spine Foundation and chair
designate of the Chorley Building Society.
Previously, Peter was chair of the Newbury
Building Society.
Stephen Lusk
Chief Commercial Officer
Appointed March 2021
Stephen is responsible for advancing
and shaping our commercial strategy and
capabilities and driving our performance
in the market and with customers. He
works closely with business unit General
Managers to build future commercial
capability and 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 and Asia.
Before joining CCEP, he led the Coca-Cola
bottler in Singapore, Malaysia and Brunei.
Ana Callol
Chief Public Affairs, Communications
and Sustainability (PACS) 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 22 years
in roles across the spectrum of marketing,
commercial, sustainability, communications
and public affairs. Her consumer and
customer orientation and leadership
experience helps CCEP accelerate its
sustainability action plan, This is Forward,
and strengthens the development and
growth of PACS capabilities.
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
102
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.
While 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.
Véronique Vuillod
Chief People and Culture Officer
Appointed November 2020
Véronique heads CCEP’s People and
Culture function. Having joined the
Coca-Cola system and bottling operations
25 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, as
well as specialist positions in talent, people
growth and engagement. She began her
career as a management consultant with
PricewaterhouseCoopers. She is an
advocate for human centred workplaces,
supports the promotion of inclusion and
diversity, HR best practices in leadership
and workplace, and innovations networks.
Leendert den Hollander
General Manager, France
and Northern Europe
Appointed September 2020
Leendert is responsible for CCEP’s business
units in France and Northern Europe, which
includes our businesses across France,
Benelux and Nordics. 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.
Leendert is also the gender balance
and equality executive sponsor at CCEP.
John Galvin
General Manager, Germany
Appointed June 2022
John leads CCEP’s business unit in
Germany. John joined the business in 2019
and, prior to his appointment as General
Manager of Germany, held the role of Vice
President, Sales and Marketing for
Germany. Previously, John led Coca-Cola
İçecek’s business in Pakistan, and he began
his career with Diageo. He has held sales,
marketing and general management
roles across Europe and Asia, and brings
significant international experience and
leadership in the beverage sector to CCEP.
Francesc Cosano
General Manager, Iberia
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.
Peter West
General Manager, Australia, Pacific
and Indonesia
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.
Stephen Moorhouse
General Manager, Great Britain
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 CEO Forum of the
Institute of Grocery Distribution and of the
British Soft Drinks Association. Stephen is
also the multi-generational inclusion
executive sponsor at CCEP.
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
103
Corporate governance report
Governance framework
Our corporate governance framework is summarised below, with further detail provided on the following pages.
Stakeholders
Including
our people,
shareholders,
franchisors,
consumers,
customers,
suppliers and
communities
Board of
Directors
Provides overall
leadership and
independent
oversight of
performance
and is
accountable
to shareholders
for the Group’s
long-term
success
Delegation
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 and material CoC matters.
Environmental,
Social and
Governance
(ESG)
Committee
Nomination
Committee
Remuneration
Committee
Affiliated
Transaction
Committee
(ATC)
Ad hoc
committees
Oversees performance against CCEP’s strategy and
goals for ESG, reviews ESG risks facing CCEP, including
health and safety and climate change risks, and the
practices by which these risks are managed and
mitigated, recommends to the Board for approval
sustainability commitments and targets, and monitors
and reviews public policy issues that could affect CCEP
and CoC matters.
Sets selection criteria and recommends candidates for
appointment as Independent Non-executive Directors,
reviews Directors’ suitability for election/re-election by
shareholders, considers Directors’ potential conflicts of
interest, oversees development of a diverse senior
management pipeline and Director succession, and
oversees wider people matters for the Group, including
culture, diversity, succession, talent and leadership.
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.
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).
• Disclosure Committee
• Results and Dividend sub committee
Read more about our
Audit Committee on
pages 117-124
Read more about our
ESG Committee on
pages 125-126
Read more about
sustainability including
TCFD reporting
on pages 36-60
Read more about our
Nomination Committee
on pages 113-116
Read more about our
Remuneration
Committee on pages
127-143
Culture
Embodied by our CoC
and ways of working
Strategy built on three
pillars: great brands,
great people, great
execution. Done
sustainably.
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
People
32,000(A) employees
making, selling and
distributing great brands
Accountability
(A) As at 31 December 2023
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
104
Corporate governance report continued
Chairman
Code provision 9
The Chairman, Sol Daurella, was
not considered independent on her
appointment. 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
Code provision 18
Sol Daurella, the Chairman, will not be
subject to re-election during her nine
year tenure following the completion
of the merger in 2016. 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.
CCEP follows governance best practice,
with all other Directors standing for
re-election annually at the Annual
General Meeting (AGM).
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
including its shareholders. The Articles,
Shareholders’ Agreement and
frequently asked questions about
the governance framework are
available on the Company’s website at
cocacolaep.com/about-us/governance.
Statement of compliance
with the 2018 UK Corporate
Governance Code (the Code)
We follow the Code on a comply
or explain basis. CCEP is not subject
to the Code, as it has a standard listing
of ordinary shares on the Official List.
However, we have chosen to comply
with the Code 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 Code during the
year ended 31 December 2023.
A copy of the Code is available on the
Financial Reporting Council’s (FRC)
website: www.frc.org.uk/library/
standards-codes-policy/corporate-
governance/uk-corporate-
governance-code/
Remuneration
Code provision 32
The Remuneration Committee is not
composed solely of INEDs, although
it comprises a majority of INEDs. The
Shareholders’ Agreement requires that
the Remuneration Committee includes
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
Code 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.
All executives recuse themselves
from decision making when discussing
executive remuneration.
Differences between the Code
and the Nasdaq corporate governance
rules (the Nasdaq Rules)
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 Code. 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 whilst
the Code requires at least half of the
Board (excluding the Chairman) to be
independent. The independence of
CCEP’s NEDs is reviewed by the Board
on an annual basis, taking into account
the guidance contained in the Code
and the criteria established by the
Board. It has been determined that a
majority of the Board is independent
under the Code and INED criteria,
without explicitly taking into
consideration the independence
requirements outlined in the
Nasdaq rules.
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
105
Corporate governance report continued
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.
NED meetings
The Nasdaq Rules require INEDs to
meet without the rest of the Board at
least twice a year. The Code 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
2023, there were two separate
meetings of INEDs.
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 cocacolaep.com/about-us/
governance/committees.
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 comprised
only INEDs (who are also deemed
independent under the Nasdaq Rules).
However, the responsibilities of the
Audit Committee (except for
applicable mandatory responsibilities
under the Sarbanes-Oxley Act) follow
the Code’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 be a financial expert.
The Board determined that Dessi
Temperley, John Bryant and Dagmar
Kollmann possess such expertise and
are therefore deemed 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.
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.
The CCEP CoC applies to all employees,
Directors and the senior financial
officers of the Group. Our CoC seeks to
ensure that we act with integrity and
accountability in all our business
dealings and relationships. Our policies
also drive compliance with relevant
legislation. The CoC covers issues such
as 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
Code, the EU General Data Protection
Regulation, the Spanish and
Portuguese Criminal Codes and Sapin II.
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.
All employees are required to undergo
CoC training, which is also a part of the
induction process for new employees.
Training on specific topics related to
their roles is 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.
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.
See our CoC at view.pagetiger.com/
code-of-conduct-policy
CCEP considers that the CoC and
related policies address the Nasdaq
Rules on the codes of conduct for
relevant domestic US companies.
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2023 Integrated Report and Form 20-F
106
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Board leadership and company
purpose
Role of the Board
The Board is primarily responsible for
the Group’s strategic plan, risk appetite
and oversight, systems of internal
control and corporate governance
policies, to ensure the long-term
success of the Group, underpinned by
sustainability.
Read more about the Board’s role in
risk oversight in Principal risks on pages
68-78 TCFD on pages 48-60 and the
Audit Committee report on pages
118-124
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.
Read more about our strategy on page
14 and read our Nomination
Committee’s report on pages 114-116
Table 1
Roles on the Board
Role
Chairman
CEO
SID
NEDs
Responsibilities
• 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
• Leading the business
• Implementing strategy approved by the Board
• Overseeing the operation of the internal control framework
• Advising and supporting the Chairman by acting as an alternative
contact for shareholders and as an intermediary to NEDs
• Providing constructive challenge, strategic guidance, external insight
and specialist advice to the Board and its Committees
• Holding management to account
• Offering their extensive experience and business knowledge from
other sectors and industries
Company
Secretary
• 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
Stakeholders
The Board recognises the importance
of stakeholders to CCEP – both their
inputs to our business and our impact
on them. We use a matrix to help
ensure Directors have the right
engagement and information to
enable them to consider stakeholders’
interests in their decision making.
Read more about stakeholders on
pages 61-64
Training and development
To ensure constructive challenge to
management by the Board, training
and development opportunities are
provided to the Board in a wide range
of topical areas in multiple formats,
including:
• Briefings – to focus on matters of
interest to CCEP such as innovation as
well as on relevant ESG, commercial,
legal and regulatory developments
• Deep dive sessions – to address
requests from Directors to better
understand CCEP or the environment
in which it operates such as its
markets
• Site visits – to Group businesses,
production facilities and commercial
outlets to enhance knowledge of
CCEP operations and meet
employees, suppliers and customers
• External speakers – to receive insights
from experts and engage with
stakeholders
Some highlights from the programme
for 2023 are set out on page 108
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Strategic
objectives
Board activities
Key topics discussed by the Board
during 2023
The Chairman sets the Board agenda,
which consists of discussion topics
described in the table adjacent that
align with its strategic objectives
towards its aim of promoting the
long-term success of CCEP.
In addition, at Board meetings the
Directors receive reports back from
Committee Chairs, business and
commercial updates from the CEO
(including on digital, technology and
innovation), finance reports from the
CFO, reports covering governance and
regulatory updates from the Company
Secretary, and updates on business
performance and initiatives from other
key senior executives.
Strategy was also a key focus of
discussions, and the Board considered
and debated consumer trends focusing
on developments in AI, the status of the
current global market, performance
and opportunities in the API region and
the retail landscape.
Area of focus
Discussion topics
Risk
• Assessment of market uncertainty, sanctions, risks and increased costs as a
result of the war in Ukraine, Middle East and other economic factors
• Changes to retail environments and customer challenges
• Review of competitors, global market analysis and insights
People
• People strategy, including focus on employee wellbeing, employee engagement,
talent, learning and development and future ready leadership
• Promoting employee inclusion, diversity and equity
• Review of wider workforce remuneration
• Prioritising the safety of our people by piloting new technologies
Sustainability
• Continual monitoring of our progress against our sustainability strategy
• Progression of our packaging initiatives
• Created new sustainable partnerships
• Consideration of the expanding framework of sustainability reporting requirements
Commercial
• Progress towards improving route to market
• Expanding presence in API by exploring exciting new opportunities in the region, as
evidenced by the acquisition of CCBPI
• Increasing consumer choice by growing our portfolio of products into exciting
new categories such as alcoholic ready to drink (ARTD)
• Development of relationship with TCCC and other franchisors
`Link to strategy
Great
brands
Great
execution
Great
people
Done
sustainably
Finance
• Approval of capital expenditure and dividend payments
• Support for developments in innovation with CCEP Ventures, our dedicated investment fund
• Progress made on the implementation of our digital transformation programme
• Monitoring pricing challenges and opportunities in the current market
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Board activities
This timeline highlights some of the training and development opportunities received by the Board in 2023.
March 2023
April 2023
Opening of new office in Sofia, Bulgaria
Board members and senior management
attended the opening of the new, state
of the art office in Sofia. The agenda for
this visit included an ID&E lunch with
local employees.
Image: New Sofia office being officially opened
by Chairman, Sol Daurella, and CFO, Nik Jhangiani
Market and production facility tours in
Sydney, Australia and Auckland,
New Zealand
During the March 2023 Board meeting,
Board members attended tours of the
Northmead production facility and the
market in the Paramatta region of the
city, gaining insights into the wider
business in Australia, as well as a market
visit in Auckland, New Zealand.
May 2023
Sidcup production facility tour
As part of their induction programmes,
board members Nicolas and Mary were
welcomed to the Sidcup production
facility in GB.
Image: Colleagues with Board members, Nicolas
Mirzayantz and Mary Harris, during their visit
October 2023
October 2023
Plastics and packaging
Board members received a deep dive
into our packaging strategy, which
included updates on refillable packaging
and packageless to support delivery of
CCEP’s sustainability action plan, This is
Forward.
Seville production facility tour
The October Board meeting included a
visit to the Coca-Cola Rinconada
production facility in Seville, Spain.
Image: Board member, José Ignacio Comenge,
and Chief Customer Service and Supply Chain
Officer, José Antonio Echeverría, during visit
May 2023
Great Britain Business Unit (BU)
Board members received a deep dive
into the Great Britain BU during the May
Board meeting. To supplement the
insights received in this session, they also
took part in a local market visit.
September 2023
September 2023
Artificial Intelligence (AI)
The Board received an informative
session on the recent revolutions in the
capabilities of AI and innovation,
including its potential uses, risks and
impacts on CCEP during the September
strategy meeting.
API
As a part of the September strategy
session, Board members received a deep
dive into API gaining insights on the
territory from members of senior
management. Part of this session
focused on the market in the Philippines
to provide insight to the Board ahead of
the joint acquisition of CCBPI.
December 2023
Digital tools demo
Board members were given
demonstrations of multiple digital tools
used within the business, including
MyCCEP.com and Customer Demand
and Supply Planning (CDSP).
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Board support
Board meetings are generally
scheduled at least one year in advance,
with ad hoc meetings arranged to suit
business needs. Meetings are held in a
variety of locations, reflecting our
engagement with all aspects of our
international business.
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.
Independence of Non-executive
Directors
The Board reviewed the independence
of all the NEDs against the Code and
also considered the requirements of
SEC Rule 10A-3 in relation to the Audit
Committee.
It determined that Guillaume Bacuvier,
John Bryant, Nathalie Gaveau,
Mary Harris, Thomas H. Johnson,
Dagmar Kollmann, Nicolas Mirzayantz,
Mark Price, and Dessi Temperley are
independent and continue to make
effective contributions.
The Board recognises that the
remainder 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.
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 ATC
exists to oversee transactions with
affiliates. 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.
Division of responsibilities and
conflicts of interest
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 1 on page 106). 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 103.
The Board delegates certain matters
to its Committees. Each Committee
has its own written terms of reference,
which are reviewed annually. These are
available at 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.
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Board and Committee meetings
The Board held seven formal meetings
during 2023, 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 2023 is set out in
Table 2. 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. This
reflects CCEP’s joined up approach to
investing in and rewarding our people.
Table 2
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(I)
ESG
Committee(I)
Nomination
Committee
Remuneration
Committee
Chairman
Sol Daurella
Nominated by Olive Partners
7 (7)
5 (5)
6 (6)
Executive Director
Damian Gammell
Non-executive Directors
CEO
Manolo Arroyo
Jan Bennink(C)
John Bryant
Nominated by ER
Independent
Independent
Nominated by Olive Partners
José Ignacio Comenge
Christine Cross(C)
Nathalie Gaveau(E)
Álvaro Gómez-Trénor Aguilar Nominated by Olive Partners
Mary Harris(D)(F)
Thomas H. Johnson
Independent
Independent
Independent
SID
Dagmar Kollmann
Independent
Alfonso Líbano Daurella
Nicolas Mirzayantz(D)(G)
Mark Price
Nancy Quan(D)(G)
Mario Rotllant Solá
Brian Smith(C)(H)
Dessi Temperley
Garry Watts(C)
Nominated by Olive Partners
Independent
Independent
Nominated by ER
Nominated by Olive Partners
Nominated by ER
Independent
Independent
7 (7)
7 (7)
2 (2)
7 (7)
7 (7)
2 (2)
7 (7)
7 (7)
5 (5)
7 (7)
7 (7)
7 (7)
5 (5)
7 (7)
5 (5)
7 (7)
1 (2)
7 (7)
7 (7)
2 (2)
7 (7)
5 (5)
6 (6)
6 (6)
5 (5)
5 (5)(J)
5 (5)
2 (2)
1 (1)
5 (5)
6 (6)(J)
3 (3)
5 (5)
5 (5)(J)
5 (5)
7 (7)
5 (5)
7 (7)(J)
7 (7)
6 (6)
4 (4)
6 (6)
4 (4)
6 (6)(J)
1 (2)
(A) The maximum number of scheduled meetings in the period
during which the individual was a Board or Committee
member is shown in brackets.
(B) Nominated pursuant to the Articles of Association and terms
of the Shareholders’ Agreement.
(D) Effective 24 May 2023, Mary Harris, Nicolas Mirzayantz and
(H) Brian Smith was unable to attend the March 2023 Board and
Nancy Quan were appointed to the Board.
(E) Effective 24 May 2023, Nathalie Gaveau was appointed as a
member of the Affiliated Transaction Committee.
(F) Effective 24 May 2023, Mary Harris was appointed as a
ESG Committee meetings due to other pre-agreed
commitments.
(I) One meeting was a joint meeting of the Audit Committee
and ESG Committee held in February 2023.
(C) Jan Bennink, Christine Cross and Brian Smith each stepped
member of the Remuneration and Nomination Committees.
(J) Chairman of the Committee.
down from the Board effective 24 May 2023. Garry Watts
stepped down from the Board effective 31 December 2023.
(G) Effective 24 May 2023, Nancy Quan and Nicolas Mirzayantz
were appointed to the ESG Committee.
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Composition, succession
and evaluation
Board diversity and composition
The composition of the Board and its
Committees is set out on page 110. As
their biographies on pages 95-99 show,
our Board members have a range of
backgrounds, skills, experience and
nationalities, demonstrating a rich
cognitive diversity.
See an overview of our Directors’ skills
and experience on page 93
Read more about the Group’s approach
to ID&E on page 23
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, Board
Diversity Policy, Inclusion, Diversity and
Equity Policy, This is Forward and the
CoC.
Read more about Board succession
and Board diversity on pages 113-116
Board evaluation
In line with best practice, we conduct an
external Board evaluation at least once
every three years. We did this last in
2021 and have begun the process of
conducting the external evaluation in
2024.
Following the strong feedback and
outputs following the internal 2022
Board evaluation, it was determined
that a similar process was appropriate
for 2023. The Board followed the
Chartered Governance Institute’s
Principles of Good Practice for Listed
Companies when appointing Lintstock
to support in the questionnaire-based
exercise, alongside interviews with all
Directors by the SID. Lintstock has no
other connection with CCEP or any
individual Director.
The questionnaire and interview
responses were collated and reports
produced on the performance and
effectiveness of the Board, each
Committee and the Directors. The
Board discussed the results openly and
constructively.
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 3.
Table 3
2023 Board evaluation findings and actions
2023
findings
Actions
under-
taken
in 2023
Disruptive technologies
Show
preparedness for
the impacts of
disruptive
technologies and
how to harness
them.
The Board
received an
overview of the
digital
transformation
programme in
September 2023.
Board training
sessions on
innovation and
the future of
frontline have
been scheduled
for 2024.
Strategic topics
Review Board
focus on
strategic topics
including in
relation to AI,
competition and
consumer
insights.
Board meetings
throughout the
year, as well as
the Board
strategy session
held in
September 2023,
provided the
Board with
greater visibility
of competitor
analysis and
consumer trends.
The Strategy
meeting also
included a session
on AI.
Emerging markets
Demonstrate
capability and skill
in emerging
markets, including
measuring and
assessing success
in existing
territories.
ESG
Provide
additional
insights into ESG
topics such as
sweeteners,
carbon
reduction, and
water resources.
Board members
received deep
dive sessions on
Indonesia, the
Philippines and
inorganic M&A
during the
strategy meeting
in September 2023,
which provided
detailed insights
into the markets,
including risks and
opportunities.
The Board
received a deep
dive into plastics
and packaging as
part of the
October 2023
Board meeting.
The ESG
Committee
received a
presentation
about
sweeteners in
May 2023.
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Table 4
Disclosure of compliance with provisions of the Audit, risk and internal control
and Remuneration sections of the Code
Items located elsewhere in the 2023 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
Page(s)
147
147
146
68-78
79
77, 124
118-124
127-143
Audit Committee report
Directors’ remuneration report
Election and re-election of Directors
The Board has determined that
the Directors, subject to continued
satisfactory performance, shall stand
for election or re-election at the May
2024 AGM with the exception of
the Chairman, as explained on page
104. 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. The Board is
satisfied that the other commitments
of all Directors do not interfere with
their ability to perform their duties
effectively.
See the significant commitments
of our Directors in their biographies
on pages 95-99
Audit, risk and internal control
and Remuneration
Disclosures of compliance with
provisions of the Audit, risk and internal
control and Remuneration sections of
the Code are located 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 4 sets
out where each respective disclosure
can be found.
Annual General Meeting
The AGM continues to be a key date
in our annual shareholder calendar.
The 2024 AGM of the Company will
be held on 22 May 2024. The Notice
of AGM will set out further details and
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 2024.
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.
At our 2023 AGM, we were pleased
that all resolutions were passed by
>80%, save for the resolution relating
to the whitewash under Rule 9 of the
Takeover Code, which permits buyback
authorities without obliging Olive
Partners to make a general offer for
the entire issued share capital of the
Company. The resolution provides
CCEP with the mechanics and flexibility
to return cash to shareholders by
buying back shares and thus ultimately
increasing shareholder value. Since the
AGM, CCEP has continued to engage
where appropriate with its shareholders
to address any concerns they may have.
The Company has also communicated
with Institutional Shareholder Services
on their standing policy to recommend
a vote against a Rule 9 waiver which
we believe may be influencing investor
decisions in this regard. The Board
maintains that the resolution remains
in the best interest of all stakeholders
and is comforted by the security of
CCEP’s governance arrangements in
protecting the Company’s position.
Read more about our engagement
with investors on page 62
Sol Daurella,
Chairman
15 March 2024
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Nomination Committee
Chairman’s letter
above by 2030. We also met our
commitment to have 10% of the
workforce with self-declared
disabilities(A).
The Committee also heard about how
the Company was accelerating its great
leadership through the development of
programmes to enhance the skills of its
leaders to better support their people.
Insights were provided into how CCEP
continued to embed its “Everyone’s
Welcome” philosophy to encourage
and implement an inclusive culture and
ensure engagement from all levels of
the business up to the senior leadership.
In addition, the Committee received
data and actionable insights about our
people from the Group’s employee
engagement survey and monitored
progress through a regular scorecard.
Read more about our people on pages
20-26
Board succession
A key focus of the Committee is to
ensure that the Board and its
Committees have the right
composition and balance of skills,
experience, knowledge and diversity.
As announced on 14 December 2023,
we welcomed Guillaume Bacuvier to
the Board with effect from 1 January
2024 and announced the resignation of
Garry Watts. I would like to thank Garry
for his invaluable contribution to CCEP.
When considering the appointment,
the Committee noted the existing skills
on the Board and the desirability of
expertise in consumer behaviours
and strategy, as well as significant
experience in API and technology, all of
which Guillaume brings. In addition, the
Committee determined that Guillaume
had sufficient time to commit to the
Board and no conflicts of interest.
The Committee also reviewed the
composition of the Board Committees,
and as a result Nicolas Mirzayantz
succeeded Garry as member of the
Audit Committee with effect from
1 January 2024.
Read more about succession planning
on page 114 and Committee changes on
page 99
INED induction
The Committee reviewed the
arrangements for the induction of the
new INEDs appointed in 2023, Nicolas
and Mary, and for Guillaume, appointed
in 2024.
Read more about Nicolas’ and Mary’s
inductions on page 115
Board and Committee effectiveness
The Committee completed a
questionnaire to assess its effectiveness
in 2023 and determined that the
Committee continued to operate
effectively. The Committee agreed a
number of outputs from the review,
including further focusing on the
executive talent pipeline.
Availability to shareholders
I am available to shareholders
throughout the year to answer any
questions on the work of the
Committee.
Thomas H. Johnson,
Chairman of the
Nomination Committee
15 March 2024
Looking forward to 2024
• Continue to focus on securing a
strong pipeline of INED candidates
to firstly enhance the Board’s
diversity of skills, and secondly
ensure an effective induction
process for Guillaume Bacuvier
and training for all Directors
• Monitor and drive relevant This is
Forward people and societal goals
• Assess and monitor the strategy
for talent management to grow
our capabilities
• Continue to support management
to foster a culture that supports
the physical and mental safety of
all our people, and develops them
effectively to meet business needs
and drive an engaged workforce
passionate about our business
• Ensure continued focus on
employee voices, and inclusion and
diversity policies and goals
(A) Calculated based on the total number of employees
responding to our 2023 voluntary inclusion survey and the
number of employees self-declaring as having a disability.
We want CCEP to be a great
place to work, with a strong and
inspiring workplace culture.”
Dear Shareholder
I am pleased to report on the work of
the Nomination Committee during
2023.
People and Culture
The Committee continued to play an
important role in overseeing CCEP’s
approach to culture and its people. This
was facilitated through updates from
management on ID&E and wellbeing
initiatives, talent management and
capabilities for CCEP’s next generation
technology architecture. In particular,
in 2023 the Committee was pleased
to receive regular updates on CCEP’s
inclusivity commitments, with the
Company making progress towards all
targets, including the aim to have 45%
women in management roles and
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Nomination Committee report
Nomination Committee role
The key duties and responsibilities of
the Committee are set out in its terms
of reference. These are available at
cocacolaep.com/about-us/
governance/committees and include:
• Reviewing and making
recommendations to the Board on
Board appointments,
re-elections, and Board and
Committee composition
• Overseeing the evaluation of the
Board
• Ensuring and overseeing succession
planning of the Board and senior
management talent pipeline
• Assessing and monitoring culture and
ensuring effective engagement with
our people
Membership
Thomas H. Johnson
(Chairman)
Manolo Arroyo
Sol Daurella
Mary Harris
Mark Price
Member since
May 2019
May 2021
May 2016
May 2023
May 2019
Activities of the Nomination
Committee during the year
Table 1 on page 115 sets out the
matters considered by the Committee
during 2023. Further detail is provided
in this report. The Committee met six
times during the year.
See details of attendance at meetings
on page 110
Board composition and diversity
As delegated by the Board, the
Committee continuously keeps the
composition of the Board under review,
aiming to maintain a well-balanced
Board with a mix of individuals who
bring a wide range of expertise,
experience and diversity to align
with the Group’s long-term strategy.
Board Diversity policy
The Board and the Nomination
Committee recognise the benefits that
diverse characteristics have to offer to
all aspects of governance. In 2023, the
Board’s Diversity policy was updated to
make it clear that, in respect of
appointments not only to the Board,
but to Committees that it recognises
the benefits of having diversity with
regard to a wide range of
characteristics such as age, gender,
ethnicity, sexual orientation and
disability, as well as educational and
professional background. The policy
drives balance and alignment with
CCEP's purpose, strategy and values,
through agreed principles and targets
which reflect the measures the Board
will take when considering its own
membership and approach.
The Board has set an overall target within
the policy of at least 33% of the Board to
be represented by women by 2023 with a
longer-term aim of 40%, in line with the
FTSE Women Leaders. In addition, we aim
to have at least one Director from a
minority ethnic background in line with
the Parker Review.
See our diversity policy including INED
selection criteria at cocacolaep.com/
about-us/governance
In respect of the Listing Rule 14.3, as at
31 December 2023, we remain pleased
to report that we have met the target
to have at least one Board leadership
position held by a woman (the
Chairman) and one Director from
an ethnic minority background.
Unfortunately, we have not met the
target of 40% representation by
women on the Board but will, with our
stakeholders, work towards that as
a longer-term aim. The Board was
pleased that representation by women
on our Board increased to 35.3% in
2023 from 29.4% in 2022, and will
remain mindful of the Listing Rule
requirements during its next INED
recruitment process, whilst also
considering the necessary skills and
experience required on the Board
at such time.
Our Board-level diversity statistics
are disclosed in accordance with the
Nasdaq Rules in Table 2 and in
accordance with Listing Rules (LR)
in Table 3 and Table 4 on page 116.
The gender of senior management
and their direct reports can be found
on page 22.
Non-executive Director succession
During the year, the Committee
considered the Board roles that would
need to be recruited for as current
INED appointments approached the
maximum terms envisaged by the
Code, taking into account the review
of Directors’ skills as well as actions
identified in the Board evaluation.
Due to Garry Watts’ resignation from
the Board in December 2023, external
recruitment consultant firm MWM
Consulting was appointed to help
identify a longlist of potential INED
candidates with the correct candidate
specifications. MWM Consulting has no
other connection to CCEP and has no
connection to any individual Director.
The Chairman and other Committee
and Board members met with a
shortlist of candidates during 2023.
This process resulted in the
Committee’s recommendation to
the Board and subsequent approval
by the Board that Guillaume Bacuvier
be appointed to the Board on 1 January
2024. Guillaume’s skills complement
the existing expertise of the Board well,
providing experience in many desired
fields. His appointment was announced
to the market on 14 December 2023.
Guillaume’s biography can be found
on page 99.
You can find the list of Non-executive
Directors determined to be
independent on page 109.
See an overview of our Directors’
diversity, skills and experience on
page 93
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Nomination Committee report continued
Director inductions
The Nomination Committee reviews
the induction programme for new
Directors. All new Directors receive a
suite of induction materials as well as
mentorship from established Directors.
Meetings with members of the Board
and the ELT, and site visits in a number
of our markets are also arranged.
Over 2023, the newly appointed
INEDs’ induction programme included
attending the March Board meeting in
Australia and New Zealand, attending
an ID&E event in the new Bulgaria
office, and market visits in GB, Sweden
and Australia. They also attended a
market visit and production facility
tour in France and received bespoke
training on CCEP’s franchisor agreements
and governance documents.
Senior management succession
The Committee is committed to
supporting the development and
progression of diverse talent at senior
management level and acknowledges
the recommendations of the Parker
Review in developing ethnic diversity
targets for senior management. The
Committee considers and
recommends succession plans for the
Group’s ELT to the Board.
Over 2023, the Committee oversaw a
change to the structuring of the
European BUs, with Leendert den
Hollander assuming an expanded role
to incorporate the France BU as part of
his responsibilities in Northern Europe.
Table 1
Matters considered by the Nomination Committee during 2023
Meeting date
Key agenda items
February 2023
May 2023
July 2023
• Board succession and Committee memberships
• Board induction schedule for new INEDs
• NED independence and AGM re-elections
• Nomination Committee report in the 2022 Integrated Report
• People and Culture KPI update
• Our people strategy
• Talent management and succession planning for ELT and
senior management
• 2024 External Board evaluation proposal
• Annual Governance Review
• Global workforce dashboard and engagement survey results
• World class key account management programme
• Union and industrial relations landscape
• Next generation technology architecture - people workstream
• Succession planning and Board skills matrix
September 2023
• Board succession - INED candidates
October 2023
December 2023
• Global workforce dashboard
• Succession planning for ELT and senior management
• Board succession - INED candidate selection
• 2023 Internal Board evaluation
• People and Culture KPI Scorecard
• People and Culture key achievements 2023
• Inclusive culture and leadership
• Board succession - INED appointment
• Terms of reference
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116
Nomination Committee report continued
Table 2
Nasdaq Board diversity disclosure(A)
Board Diversity Matrix
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
As of 31 December 2023
United Kingdom
Yes
No
17
As of 31 December 2022
United Kingdom
Yes
No
17
Female
6
Male
11
Non-binary
Did not
disclose gender
Female
—
—
5
Male
12
Non-binary
Did not
disclose gender
—
—
1
1
—
—
—
7
Table 3 – LR14 Annex 1(a) reporting on gender identity or sex
FCA listing requirements
Men
Women
Not specified/prefer not to say
Number of Board members
11
6
—
Percentage of the Board
65
35
—
Number of senior
positions on the Board (B)
2
1
—
Number of
executive management
10
3
—
Percentage of
executive management
77
23
—
Table 4 – LR14 Annex 1(b) reporting on ethnic background
Number of Board members
Percentage of the Board
Number of senior
positions on the Board (B)
Number of
executive management
Percentage of
executive management
White British or other White
(including minority-white groups)
Mixed/Multiple ethnic groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/prefer not to say
16
—
1
—
—
—
94
—
6
—
—
—
3
—
—
—
—
—
12
—
1
—
—
—
92
—
8
—
—
—
(A) Disclosure permitted with Director consent.
(B) Senior positions on the Board include the Chairman, Chief Executive Officer or Senior Independent Director. The Chief Financial Officer is not a member of the Board.
The data in the above tables was collected voluntarily through the annual Directors & Officers (“D&O”) questionnaires. The data is used purely to satisfy CCEP’s
Board and leadership diversity disclosure requirements under the UK’s Financial Conduct Listing Rules and Nasdaq requirements. The Board was asked to self-
report their data through questions raised in the D&O questionnaire on gender identity, sexual orientation and ethnic background.
Thomas H. Johnson,
Chairman of the Nomination Committee
15 March 2024
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Audit Committee
Chairman’s letter
as indefinite-lived intangible assets,
as well as the associated disclosure
included in the FY23 preliminary
results published on 23 February 2024.
On 7 March 2024, the SEC staff
completed its review with no
further comments raised to CCEP.
External auditor re-tender
The Committee considered the
mandatory 2025 audit re-tender
including discussing and approving the
proposed approach to the tender. The
Committee leveraged best practice
insights on how companies approached
this in addition to the learnings from the
FRC’s Best Practice Guide to Audit
Tendering.
ESG
During 2023, in addition to receiving
regular ESG regulatory updates, the
Committee agreed with the ESG
Committee those matters that would
warrant consideration by the joint
meeting of the Committees including
the TCFD statement, year end ESG
reporting and disclosure, and assurance
of ESG performance data. In addition,
the Committee supported the
transition to EY as assurance provider for
FY23 for CCEP’s This is Forward metrics.
Risk management
During 2023, on behalf of the Board, risk
management remained a priority with
ongoing discussions on:
• ERM framework, including
identification and assessment of
principal and emerging risks, risk
factors, associated mitigations and
processes and their appropriateness
• Water scarcity assessment, including
scenario analysis and mitigations
• The cybersecurity programme and
associated risks
• Business continuity and resilience
• Fraud prevention and detection
• A number of tax topics
The above was driven by the impact
from the wider macroeconomic
environment, the war in Ukraine and the
conflict in the Middle East, including
inflation, volatility in commodity prices
and currency fluctuations, increased
recession risk and the enhanced cyber
threat.
Other
The Committee continued to monitor
governance developments such as the
BEIS Consultation on Restoring Trust in
Audit and Corporate Governance,
GDPR compliance and with the support
of management the Committee were
given comfort that they met the FRC
guidance on Audit Committee
minimum standards.
Auditor effectiveness
The Committee completed a
questionnaire to assess the effectiveness
of the auditor with positive feedback
from the Committee.
Read more about our auditors
on page 123
Committee effectiveness
The Committee completed a
questionnaire to assess its effectiveness
in 2023. The review determined that the
Committee continued to operate
effectively, with minor action areas
identified and subsequently closed
during the year including an appetite
for further training on developing areas
such as ESG and cybersecurity.
Availability to shareholders
I am available to shareholders throughout
the year to answer any questions on the
work of the Committee.
Dessi Temperley,
Chairman of the Audit Committee
15 March 2024
Looking forward to 2024
• Overseeing the inclusion of CCBPI
in the Groups’ consolidated
financial statements and the
finalisation of the Purchase Price
Allocation exercise
• Continued focus on ESG reporting
and regulatory matters, including
the European Corporate
Sustainability Reporting Directive
(CSRD)
• Concluding the external auditor
re-tender
• Further heightened attention on
cyber, fraud, anti-bribery, resilience,
business continuity and internal
control
Supporting the successful
acquisition of CCBPI was a key role
of the Committee during 2023.”
Dear Shareholder
I am very pleased to introduce the Audit
Committee report setting out the key
matters and issues considered in 2023.
Committee membership
The Committee was pleased to
welcome Nicolas Mirzayantz to the
Committee following the retirement of
Garry Watts on 31 December 2023.
CCBPI acquisition
The Committee reviewed the financing
and structuring and also hedging
strategy to support the acquisition by
CCEP of its 60% share of CCBPI, as well
as the related disclosures in the 2023
financial statements.
SEC correspondence
The Committee reviewed the
Company's correspondence with the
SEC on its long-standing policy of
accounting for the TCCC bottling rights
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Audit Committee report
Membership*
Dessi Temperley
(Chairman)
John Bryant
Member since
May 2020
January 2021
Dagmar Kollmann
May 2019
Nicolas Mirzayantz
January 2024
*
Garry Watts was a member of the Committee until
31 December 2023
See details of meeting attendance in
2023 on page 110
Read more about the Audit Committee
members on pages 95-99
Key responsibilities
The roles and responsibilities of the
Audit Committee are set out in the
terms of reference, which are available
at cocacolaep.com/about-us/
governance/committees, and are
reviewed annually by the Committee.
Key responsibilities are detailed below.
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
Other
• Supporting the Board in relation to
specific matters, including oversight
of dividends, capital structure, and
capital expenditures
The Committee Chairman reports back
at most Board meetings on matters of
particular relevance and the Board
receives copies of the Committee
papers and minutes of meetings.
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 Code, the Committee
comprised four NEDs in 2023, each of
whom the Board has deemed to be
independent. The Board is satisfied that
the Committee as a whole has
competence relevant to the FMCG
sector, in which the Group operates.
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 cybersecurity
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 auditor
• 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
auditor and management relating to
the financial statements and internal
control systems
• Making recommendations to the
Board in respect of the external
auditor’s appointment,
reappointment or removal
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 majority of the
Audit Committee satisfies these
requirements and that those members
may each be regarded both as an Audit
Committee financial expert and as
independent, 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.
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Audit Committee report continued
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 2023 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.
Financial reporting, significant
financial issues and material
judgements
During 2023, the Committee considered
the significant accounting judgements
and estimates, and their
appropriateness and disclosure,
including the Group's long-standing
policy and judgement on accounting
for the TCCC bottling rights as
indefinite-lived intangible assets.
The Committee met regularly with
management during 2023 to consider
the financing and hedging strategies in
relation to the CCPBI acquisition.
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.
See our Viability statement on page 79
Audit Committee assessment
of the 2023 Integrated Report
The Committee undertook a review
of a developed draft of the 2023
Integrated Report and provided its
feedback, which was reflected in the
report.
The Committee considered whether
the Group’s position, strategic
approach and performance during the
year were accurately and consistently
portrayed throughout the 2023
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 auditor.
The estimates and judgements made
on the significant financial reporting
matters regarding the financial
statements are summarised in Table 2
on page 121 and 122. 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.
Matters considered by the Audit
Committee during 2023
The Committee met eight times during
the year and held one joint meeting
with the ESG Committee. 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:
• Accounting and reporting matters
• Accounting for TCCC bottling rights
• Oversight of SOX compliance
• Legal matters
• Corporate integrity programme
• Business continuity management and
cybersecurity
• Enterprise Risk Management
• Capital projects, including review of
sustainability metrics
• Tax and treasury matters
• Climate risk disclosures
• External auditor re-tender
• Oversight of CCBPI acquisition
process and related financing
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 2023, in
addition to standing items, is set out in
Table 1 on page 120.
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Audit Committee report continued
Table 1
Matters considered by the Audit Committee during 2023
Meeting date
Key matters considered in addition to standing agenda items(A)(B)
February 2023
(two meetings,
including one joint
meeting of the
ESG Committee
and Audit
Committee)
• 2022 preliminary Q4 and full
year results, including significant
estimates and judgements
• Listing rule compliance with
TCFD recommendations and
review of TCFD statement
• Internal audit ESG reporting
• SOX compliance
• Pay for performance
• IAS 36 impairments
• Tax matters
• 2023 internal audit plan
• Corporate Integrity
Programme
readiness
March 2023
• 2022 Integrated Report,
• Reappointment of the external
including viability and going
concern statements,
accounting policies and related
significant judgements and
estimates, segmental reporting,
hedging activities, related
parties and post-employment
benefits
auditor
• SOX compliance
• 2023 internal audit plan
• Internal Audit Charter and the
Independence and Objectivity
Policy
• Treasury matters
• Investment policy renewal
December 2023
April 2023
• FY23 profit forecast
• 2023 Q1 trading update
• First half interim dividend
May 2023
• Accounting and reporting
matters
• SOX 2023 planning
• Tax matters including tax
strategy paper
• Capital allocation and
expenditure
• IT/cybersecurity update
• ERM update
• Audit firm re-tender
• Audit Committee evaluation
and auditor effectiveness
review
Meeting date
July 2023
Key matters considered in addition to standing agenda items(A)(B)
• 2023 HY accounting and
• Business continuity and
reporting matters
• External audit HY interim review
and 2023 audit fee schedule
• HY financial release
October 2023
• Accounting and reporting
matters
• 2023 financial and ESG audit
status
• 2023 Q3 trading update
• SOX updates
• Second half interim dividend
• Capital allocation and
expenditure
• ERM update
• SOX compliance
• Corporate Integrity
Programme
• Capital allocation and
expenditure
resilience
• Principal risks
• Treasury matters
• Tax update
•
• Corporate Integrity Programme
• Tax matters
• IT update
• Group risk appetite framework
• GB Pension Scheme buy-in
• CCBPI accounting and
financing
• Preliminary 2024 internal audit
plan and budget
• Treasury matters
• SEC comment letter on
accounting for TCCC bottling
rights
(A) During February and March 2024, the Committee discussed matters regarding the year ended 31 December 2023,
which included:
– Reviewing the 2023 preliminary Q4 and full year results and the 2023 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 2023 Integrated Report is fair, balanced and understandable
– Independent auditor’s report on the 2023 full year results
– Approval of this Audit Committee report
– Progress on SEC comment letter on TCCC bottling rights
(B) During February 2024, a joint meeting of the Audit Committee and ESG Committee was held to undertake a review of the TCFD
statement and listing rule compliance as well as an update on EY assurance over selected This is Forward KPI’s.
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Audit Committee report continued
Table 2
Significant reporting matters in relation to financial statements considered by the Audit Committee during 2023
Accounting area
Key financial impacts
Audit Committee considerations
Accounting for TCCC
bottling rights
TCCC franchise intangibles
at 31 December 2023: €11.8 billion
Deductions from revenue
and sales incentives
Total cost of customer marketing
programmes in 2023: €5.4 billion
Accrual at 31 December 2023: €1.3 billion
Tax accounting and reporting
2023 book tax expense: €534 million
2023 cash taxes: €509 million
2023 effective tax rate: 24.2%
The Group’s bottling agreements with TCCC contain performance requirements and convey the
rights to distribute and sell products within specified territories. The agreements in each territory
are for initial terms of 10 years that can be renewed for another 10 years. 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 the bottling
agreements as at 31 December 2023, 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.
During 2023, the Committee reviewed the Group's long-standing policy and judgment on accounting
for the TCCC bottling rights as indefinite-lived intangible assets confirming its appropriateness and
continued disclosure as a significant judgment.
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 total 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.
The Group evaluated a number of tax matters during the year, including legislative developments
across tax jurisdictions, 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.
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Audit Committee report continued
Accounting area
Key financial impacts
Audit Committee considerations
Asset impairment analysis
Indefinite lived intangible assets at
31 December 2023: €11.8 billion
Goodwill at 31 December 2023: €4.5 billion
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 cash
generating units (CGUs) level, which for the Group are based on geography and generally
represent the individual territories in which the Group operates.
Restructuring accounting
Restructuring cost recorded in 2023: €94 million
Other items impacting operating
profit comparability
Remaining items impacting operating
profit comparability recorded in 2023:
€60 million (credit)
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 the various sensitivity analyses performed by management, including the impact of
climate change, in order to assess the impact of changes in critical assumptions on test results.
The Committee was satisfied with the assumptions used by the Group and also considered and
reviewed the Group’s disclosures about its impairment testing.
The Committee was regularly updated by management on the nature of restructuring initiatives and
key assumptions underpinning the related provision in the financial statements.
The Committee reviewed the Group's restructuring expense of €94 million as well as the
restructuring provision balance of €116 million as at 31 December 2023, 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.
The Committee reviewed the remaining items impacting operating profit comparability for the
year, primarily related to royalty income arising from the ownership of certain mineral rights in
Australia, the sale of the sub-strata and associated mineral rights in Australia and the sale of
property in Germany, partly offset by accelerated amortisation charges associated with the
discontinuation of the relationship between CCEP and Beam Suntory upon expiration of the
current contractual agreements.
The Committee was satisfied with the classification of the items impacting comparability as well as the
related disclosures in the financial statements.
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2023 Integrated Report and Form 20-F
123
Audit Committee report continued
See details of the amounts paid to
the external auditor in Note 17 to the
consolidated financial statements on
page 200.
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. 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 used a questionnaire
to review the effectiveness of the
external auditor and focused on
four key areas: the audit partner, audit
planning and execution, reporting
by the auditor and the role of
management. The review determined
the audit to be very effective, with
some minor areas for improvement
which will be reviewed and
implemented in 2024.
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
2023 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 audit-related 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 2024 AGM.
External audit
Effectiveness of the external
audit process
The Committee has responsibility and
oversight of the Group’s relationship
with its external auditor, 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. In
accordance with the UK and SEC
external auditor independence rules,
Sarah Kokot would face mandatory
rotation as lead audit partner following
the completion of the 2025 audit.
The Committee acknowledges the
provisions contained in the Code 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 mandatory 2025 Audit
re-tender, the Committee has begun
the process of re-tendering the role
of external auditor.
In 2023, 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 audit-related
services.
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
124
Audit Committee report continued
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 40 full time, professional
audit staff based in London, Berlin,
Madrid, Sofia and Sydney, with a range
of business expertise working across
multiple disciplines.
Effectiveness of the internal
audit function
At the start of the year, the Committee
reviewed the internal audit plan for
2023 and agreed its scope, budget and
resource requirements for the year. The
Committee continued to monitor the
plan and forward-looking audit radar to
make sure recommendations remained
appropriate for the year ahead.
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. The Chief Audit Executive
attended the scheduled meetings of
the Committee during 2023 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 Code 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 provided updates on the internal
control framework, including any
proposed updates and amends and the
remediation of any identified control
deficiencies during the year.
In 2023, 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 assessments 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.
Read more about the Board’s role in
risk oversight of principal risks on pages
68-78 and TCFD on pages 48-54
Raising concerns
In each of our territories, we have
established ways for our people and
others to raise concerns in relation to
possible wrongdoing in financial
reporting, suspected misconduct, or
other potential breaches of our CoC.
These include options to seek advice
from the line manager and/or raise a
report through our internal Speak Up
resources and/or our dedicated and
confidential external Speak Up
channels. In December 2022, it was
agreed that certain CoC topics would
be covered within the remit of the ESG
Committee, with any matters above the
materiality threshold to be referred to
the Audit Committee, which provides
the Board with key information for its
consideration as appropriate.
View our CoC at view.pagetiger.com/
code-of-conduct-policy
Investigations into potential breaches
of our CoC are overseen in each BU by
the BUs CoC Committee, chaired by
the BUs Vice President, Legal. All
potential CoC breaches and corrective
actions are overseen by the Group CoC
Committee, which is a sub committee
of the Compliance and Risk
Committee, a management
committee chaired by the Chief
Compliance Officer (CCO). The Group
CoC Committee also:
• Ensures that all reported breaches
have been recorded and investigated
in a timely manner and a conclusion
reached
• Evaluates trends
• Ensures consistent application of the
CoC across CCEP
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 CCO.
There were no whistleblowing matters
that required Audit Committee or
Board attention in 2023.
Dessi Temperley,
Chairman of the Audit Committee
15 March 2024
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
125
ESG Committee
Chairman’s letter
water, society, drinks and supply chain.
We put a particular focus on CCEP’s
carbon reduction roadmap, packaging
collection and approach to water
stewardship, efficiency and
replenishment. Our gender diversity
and disability roadmap were also key
focus areas.
The Committee also spent significant
time focusing on CCEP’s Forward on
drinks commitments relating to sugar
reduction and low and no calorie
sweeteners (LNCS) across CCEP’s
markets. In May 2023, the Committee
met with representatives from TCCC to
undertake a deep dive into TCCC-led
advocacy and innovation on LNCS.
Carbon reduction roadmap
Following CCEP's 2030 GHG emissions
reduction target, and the Net Zero 2040
target being validated by the Science
Based Targets initiative (SBTi) as being in
line with climate science, the Committee
spent significant time reviewing CCEP's
2030 GHG emissions trajectory and
carbon roadmap. A deep dive was held
into Scope 3 GHG emissions to
understand the key drivers of CCEP’s
emissions which would be factored into
the development of a climate transition
plan.
Read more on our updated SBTi targets
on page 60
Customers and sustainability
The Committee spent time discussing
trends in CCEP’s customer sustainability
expectations and priorities including
the renewed focus of many to set
science based carbon reduction targets
beyond Scope 1 and 2 to Scope 3 GHG
emissions.
Regulation
The Committee also reviewed the
latest developments in ESG reporting
and disclosure including the EU
Corporate Sustainability Reporting
Directive (CSRD).
Given the fast evolving ESG reporting
landscape and the interconnectivity
with the Audit Committee, a joint
committee meeting was held in
February 2023 to agree the matters for
joint consideration including the TCFD
statement and assurance.
We received and considered reports
from management regarding concerns
raised by our people and provided the
Board with key information for its
consideration as appropriate.
Committee effectiveness
The Committee completed a
questionnaire-based exercise to assess
its effectiveness in 2023. The review
determined that it continued to
operate effectively. Progress has been
made to action outputs around
training, remit and composition.
Mario Rotllant Solá,
Chairman of the ESG Committee
15 March 2024
Other
We reviewed assessments of
water-related risks at key facilities, and
endorsed an update to CCEP's water
use efficiency target.
The Committee also discussed and
assessed the potential impact of the
Extended Producer Responsibility
(EPR) legislation in the Philippines
following announcement of the
proposed CCBPI acquisition and
endorsed a new approach and metric
to evaluating health and safety
performance.
Code of Conduct
The Committee reviewed the
adequacy of the CoC arrangements
and how to ensure they allow
appropriate follow up action and
onward reporting.
Looking forward to 2024
• Continue to develop climate
transition plan and ensure
alignment with the disclosure
framework for climate transition
plans published by the UK’s
Transition Plan Taskforce (TPT)
• Track evolving regulation across our
markets on sustainability action and
ESG reporting
• Continue to review CCEP’s
approach to deforestation,
biodiversity and nature
• Water remains a high priority, and
we will oversee this year's update of
our FAWVAs and roadmaps to
improve our water use efficiency
across markets
The Committee dedicated
significant time to discussing
progress against the
This is Forward sustainability
action plan across Europe and
API.”
Dear Shareholder
I am very pleased to introduce the ESG
Committee report setting out the key
matters and issues considered for 2023.
Committee membership
The Committee was pleased to
welcome Nancy Quan and Nicolas
Mirzayantz following the conclusion of
the 2023 AGM.
This is Forward
The Committee’s main focus during
2023 was the oversight of CCEP’s This is
Forward sustainability action plan. The
Committee received updates on all our
six action areas: climate, packaging,
Strategic
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Financial
Statements
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
126
ESG Committee report
Membership*
Mario Rotllant Solá
(Chairman)
Member since
May 2022
Nathalie Gaveau
January 2019
Nicolas Mirzayantz
Mark Price
Nancy Quan
May 2023
May 2019
May 2023
*
Jan Bennink and Brian Smith were members of the
Committee until 24 May 2023
ESG Committee role
The key duties and responsibilities of the
Committee are set out in its terms of
reference. These are available at
cocacolaep.com/about-us/governance/
committees.
ESG activities in 2023
The Committee met six times in
2023, including a joint meeting with
the Audit Committee. The main focus
of the Committee was monitoring
CCEP’s progress against its sustainability
action plan, This is Forward, but it did
consider other matters, which are
detailed below.
Reporting and regulatory updates
• Review of FY22 reporting and
performance
• Limited assurance of FY22
sustainability performance data
• During the joint meeting with the
Audit Committee in February 2023,
the Committee reviewed the TCFD
statement with consideration to
listing Rule compliance and TCFD
recommendations and considered
a report by internal audit on ESG
reporting readiness.
Read more on TCFD reporting
on pages 48-60
• Updates included on:
– CSRD
– EU proposed Directive on
Corporate Sustainability Due
Diligence
– International Sustainability
Standards Board (ISSB)
– UK mandatory reporting
requirements such as TCFD and
TPT
– EPR legislation in the Philippines
Climate
• Deep dive on GHG emissions and
carbon reduction pathways
• Reviewing progress against CCEP’s
science based emissions reduction
targets across Europe and API
Packaging
• Update on cross system strategic
approach to packaging collection and
tracking progress against the TCCC
aligned collection target
• Deep dive into cross system strategic
approach to collection in Indonesia
Social
• Approval of Modern Slavery
Statement
• CoC reporting compliance
• Discussions on customer sustainability
expectations and priorities
• Anti-bribery update
Image: CCEP has committed to switch all of its cars and vans to electric vehicles, or ultra-low emission
vehicles where electric vehicles are not viable by 2030
Governance
• Overview of the Committee's
sustainability priorities including:
– Decarbonisation and carbon
reduction roadmap
– Carbon offset and removal strategy
– Accelerated focus on 100%
collection throughout Europe
and API
• Committee terms of reference
• Review of Committee effectiveness
• Corporate reputation update
• Legal and compliance
communications and training
• Update on approach to health
and safety
Other
• Update on the role of CCEP Ventures
in supporting This is Forward
sustainability action plan and CCEP’s
Net Zero 2040 target
• TCCC’s approach to consumer-
focused sustainability marketing
and communications
• Water Stewardship Strategy
Mario Rotllant Solà,
Chairman of the ESG Committee
15 March 2024
Strategic
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Statements
Further Sustainability
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
127
Statement from the Remuneration Committee Chairman
Remuneration outcomes for 2023
Annual bonus
The strong overall business
performance outlined in the Strategic
Report has been reflected through
the annual bonus, with performance
against all three financial metrics being
above target. Revenue and comparable
operating profit increased year on
year by 5.5% and 11.0%, respectively.
This, alongside strong comparable
free cash flow generation, has resulted
in an overall Business Performance
Factor (BPF) of 165% of target being
achieved. The strong business
performance is also a reflection of
the exceptional leadership of the
CEO throughout 2023, which resulted
in an Individual Performance Factor
(IPF) of 1.15x being awarded to him.
The final bonus payment to the
CEO was 79% of maximum. Further
details are provided on pages 131-132
of the ARR.
2021 Long-Term Incentive Plan
The 2021 Long-Term Incentive Plan
(LTIP) award, granted in September
2021, was subject to earnings per share
(EPS), return on invested capital (ROIC)
and CO2e reduction performance
targets over the three year period
to 31 December 2023. Around 275
senior executives and management
participated in the scheme, including
the CEO.
CCEP has performed very strongly
over the last three years, with cumulative
EPS growth of 20.5% per annum(A)
and outperformance of our ROIC
and CO2e reduction targets. This level
of performance results in a formulaic
vesting outcome of 2.0x target.
In assessing the formulaic vesting
outcome, the Committee also
undertook a holistic assessment of
overall performance over the three
year period to determine whether the
level of vesting was a fair reflection of
broader CCEP performance. In the
course of its assessment, the
Committee noted that:
• As with EPS and ROIC, CCEP’s
performance against its other key
financial indicators had been equally
strong, as disclosed in more detail on
pages 2-3 of the Strategic Report
• CCEP had delivered +50% total
shareholder return over the
performance period, which was
upper decile versus our sector and
ahead of the FTSE 100, Euronext 100
and S&P 500 indices
• The wider stakeholder experience,
including that of our employees,
had been positive, with no material
areas of concern identified
• CCEP had delivered strongly
against our sustainability initiatives,
as disclosed in more detail on page
134 of the ARR
As a result of the assessment, the
Committee determined that the
overall performance of the business
continued to be strong. Nonetheless,
it was recognised that when the CO2e
reduction targets were set in 2021
there remained a degree of uncertainty
about what represented appropriately
stretching performance for the
business. The Committee had been
keen to include the metric, given its
importance to CCEP’s sustainability
agenda, but as a relatively new measure
there remained a number of moving
parts. Reflecting now, the Committee
considers it appropriate to follow a
similar approach to the 2020 LTIP and
apply downwards discretion in respect
of the final vesting level to cap the
outcome at target. This reduces the
overall vesting level to 1.85x target and
the Committee believes this to be a
fair reflection of overall performance.
This is estimated to have a final vesting
value for the CEO of £7.4 million, which
includes £1.2 million of benefit from the
strong share price growth and dividend
delivery over the performance period,
which has delivered more than
£6 billion of value to shareholders.
Remuneration outcomes for 2023
reflect strong overall business
performance.”
Dear Shareholder
On behalf of the Board, I am pleased
to present the Directors’ remuneration
report for CCEP for the year ended
31 December 2023. This includes a
summary of our remuneration policy
(page 129), which shareholders
approved at our 2023 AGM. We have
also set out our Annual report on
remuneration (ARR) (pages 131-143),
which outlines how we implemented
the policy during 2023 and how we
intend to do so in 2024. This will be
subject to an advisory vote at our
2024 AGM.
All references to revenue, operating profit, operating free cash flow, EPS and ROIC targets refer to those measures that are defined within the ARR
(A) Comparable and on a tax and currency neutral basis, adjusted for brand sales.
Strategic
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Financial
Statements
Further Sustainability
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Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
128
Statement from the Remuneration Committee Chairman continued
Implementation of remuneration
policy in 2024
The Committee considers that our
overall remuneration framework
remains fit for purpose and will
implement our remuneration policy for
2024 on the same basis as for 2023 (see
pages 141-142 for further details).
The Committee has approved a 2.0%
salary increase for the CEO, effective
1 April 2024, which is significantly lower
than the 3.5% merit increase for the
wider GB workforce.
The structure of the 2024 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 free cash
flow. These targets will include the
performance of the Philippines
business following the successful
acquisition of CCBPI. For the CEO, his
individual element will be assessed
against objectives aligned to the key
strategic areas of focus of the business,
which include: market share,
operational objectives, ESG and people
targets.
The 2024 LTIP award will continue to be
based on a mix of EPS, ROIC, and CO2e
reduction. Due to the timing of the
acquisition of CCBPI, and to enable
robust targets to be set for the
combined business, the awards will be
made in Q2. The targets will be set at
stretching levels taking into account
both our long-term plan and external
forecasts. Targets will be fully disclosed
in next year’s ARR.
Following the end of the performance
period, LTIP awards will be subject to an
additional two-year holding period.
Looking ahead
We regularly monitor the performance of
our remuneration policy and will
continue to engage with shareholders
where necessary to ensure we are
implementing the policy in a way which
is aligned with both good governance
and commercial best practice.
While the targets for the 2023 LTIP
were substantially increased to reflect
our CO2e reduction trajectory at the
time of grant, the Committee is
conscious that the targets for the
2022 LTIP (due to vest in March 2025)
were set in a consistent manner with
those for the 2020 and 2021 awards.
As such, the Committee will keep
performance against the 2022 targets
under review and ensure that the
overall outcome appropriately reflects
underlying performance at the point
of vesting.
Our remuneration policy and
outcomes reflect a strong emphasis
on performance-related pay, aligned to
shareholder interests and our strategic
aims. I hope we continue to receive
your support in respect of our ARR at
our forthcoming AGM in May 2024.
John Bryant,
Chairman of the
Remuneration Committee
15 March 2024
All references to revenue, operating profit, operating free cash flow, EPS and ROIC targets refer to those measures that are defined within the ARR
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2023 Integrated Report and Form 20-F
129
Overview of remuneration policy
Governance framework
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
Annual bonus
metrics
LTIP
metrics
Operating profit
EPS
Simple, transparent and
aligning the interests of
management and
shareholders
Revenue
ROIC
Operating free
cash flow
Co2e
See ARR for definitions
• Only two simple incentive
plans operated
CEO pay mix linked to
performance at target
22%
Fixed
pay
29%
Annual
bonus
49%
LTIP
• 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
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)
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
Key features
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
Key features
• Target bonus
opportunity is 150% of
salary
• Bonus calculated by
multiplying the target
bonus by a BPF (0-200%)
and an 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
Key features
• 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
Link to strategy
Supports recruitment and
retention of Executive
Directors of the calibre
required for the long-term
success of the business
Link to strategy
•
Incentivises delivery of
the business plan on an
annual basis
• Rewards performance
against key indicators
which are critical to the
delivery of the strategy
Link to strategy
• Focused on delivery of
Group performance over
the long term
• Delivered in shares to
provide alignment with
shareholders’ interests
A full copy of the Remuneration policy can be found on pages 122–129 of the 2022 Integrated Report,
in the reports & results section of the investor section of our website at cocacolaep.com/investors
All references to revenue, operating profit, operating free cash flow, EPS and ROIC targets for 2024 refer to those measures that are
defined within the ARR
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
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Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
130
Remuneration at a glance
Overview of 2023 remuneration performance
Overview of 2024 CEO remuneration framework
Annual bonus outcomes
Operating profit
Reported
long-term KPIs
Comparable EPS(B)
1.91x target
Revenue
1.03x target
Operating free cash flow
e
t
1.95x target
Comparable ROIC(B)
CCEP share price(A) (US$)
70
65
60
55
50
31 Dec 2022 31 Dec 2023
(A) Nasdaq listing
Bonus pay out = 79%
of maximum (including
IPF of 1.15x)
Fixed pay
Annual bonus
LTIP
Base salary
2.0% increase
for 2024
£1.27m
CO2e reduction per litre
(Europe reduction
2020-2023)
Benefits
• Car allowance
• Private medical
• School fees
• Financial planning
1 Operating profit 50%
1 ROIC
2 Revenue
30%
2 EPS
42.5%
42.5%
3 Operating free
20%
3 Reduction in
15.0%
cash flow
CO2e
0x–1.2x
Individual multiplier
2023 CEO single figure
CEO shareholding
£1.4m
(11%)
£3.5m
(29%)
£7.4m
(60%)
As at 31 Dec 2023
2,156% of salary
300% of salary
Fixed pay
2023 total value
Annual bonus £12.3m
LTIP
Current shareholding
Shareholding requirement
Pension
Pension scheme
contribution and cash in
lieu aligned
to wider workforce
£27k
150%
360%
250%
500%
Target
Maximum
Target
Maximum
(B) Comparable diluted EPS and comparable ROIC are non-IFRS performance measures. Refer to ‘Note regarding the presentation
of alternative performance measures’ on pages 81-82 for the definition of our non-IFRS performance measures and to page 90
for a reconciliation of reported to comparable results.
All references to revenue, operating profit, operating free cash flow, EPS and ROIC targets
for 2023 outcomes and for 2024 refer to those measures that are defined within the ARR.
Read more in the Annual report on remuneration from page 131
12312317.4 %202310.3%20239.1%20229.2%20213.7120233.3920222.832021
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Annual report on remuneration
Remuneration outcomes for 2023
The following pages set out details of the remuneration received by Directors
for the financial year ending 31 December 2023. Prior year figures have also been
shown. Audited sections of the report have been identified.
The Directors’ remuneration in 2023 was awarded in line with the remuneration
policy, which was approved by shareholders at the AGM in May 2023.
Single figure table for Executive Directors (audited)
Individual
Year
Damian
Gammell
2023
2022
Salary
(£000)
1,235
1,208
Taxable
benefits
(£000)
Pension
(£000)
99
135
27
26
Fixed
pay
(£000)
1,361
1,369
Annual
bonus
(£000)
Long-term
incentives
(£000)
Variable
remuneration
(£000)
Total
remuneration
(£000)
3,525
3,730
7,396(A)
7,054(B)
10,921
10,784
12,282
12,153
(A) Estimated value based on three month average share price and exchange rate at 31 December 2023 of US$61.15 (£49.25)
and includes £589,000 cash payment in respect of dividend equivalents to be paid on the vested Shares. Number will be restated
in next year’s single figure table to show the final value on the vesting date of 15 March 2024. Around £650,000 of the vest value
is attributable to share price appreciation.
(B) Restated from £6,720,000 in last year’s single figure table to reflect actual share price on vesting date of $55.09 (£45.25)
on 17 March 2023 applied to 144,544 vested Shares and £513,000 cash payment in respect of dividend equivalents paid
on the vested Shares.
Notes to the single figure table for Executive Directors (audited)
Base salary
Damian Gammell received a salary increase of 2.0% from £1,217,098 to £1,241,440
effective from 1 April 2023. This increase was significantly lower than the merit
increase provided to the wider GB workforce of 6.0%.
Taxable benefits
During the year, Damian Gammell received the following main benefits: car
allowance (£14,000), financial planning allowance (£10,000), schooling allowance
(£50,000 net) and family private medical coverage (£7,000).
Pension
The pension provisions that apply to Damian Gammell are aligned to all other GB
employees. Damian Gammell elected to receive a contribution into the pension
scheme up to the annual allowance with the balance up to the maximum allowed
by the Remuneration Policy as a cash allowance. This equates to a total payment
of £30,000 from CCEP inclusive of employer National Insurance contributions
(i.e. the actual benefit received by Damian Gammell is less than £30,000 per year).
Annual bonus
Around 12,000 people across the organisation participate in the annual bonus
(~38% of our total workforce). Around 70% of our employees participate in annual
variable remuneration plans in total, including the annual bonus, sales incentive
plans (~22% of our people), and local incentive plans (~25% of our people).
Overview of CCEP’s annual bonus design
The 2023 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%).
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)
BPF
(0x to 2.0x)
IPF
(0x to 1.2x)
Final
bonus
outcome
(0% to 360%
of base salary)
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Annual report on remuneration continued
2023 annual bonus outcome – BPF
As set out in the Statement from the Remuneration Committee Chairman (page
127) overall performance in 2023 has been strong. This has been reflected in the
annual bonus outcome, with performance for all three financial measures being
above target.
Performance targets
Performance outcomes
Weighting
50%
Threshold
(0.25x
multiplier)
€2,135m
Target
(1x multiplier)
€2,286m
Maximum
(2x multiplier)
€2,437m
Actual outcome
€2,423m
Multiplier
achieved
1.91x
30%
20%
€17,772m €18,636m €19,254m
€2,489m
€2,305m
€2,074m
€18,655m
€2,481m
Measure
Operating
profit(A)
Revenue(B)
Operating
free cash
flow(C)
Total
100%
1.03x
1.95x
1.65x
(A) Comparable operating profit on a FX neutral basis at budget rates.
(B) Revenue on a FX neutral basis at budget rates.
(C) Comparable operating profit before depreciation and amortisation and adjusting for capital expenditures, restructuring cash
expenditures and changes in operating working capital, on an FX neutral basis at budget rates.
2023 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.
Damian Gammell once again provided exceptional leadership of the business
during 2023 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 1.15x for the year.
Further details of some of the specific objectives, which link to our strategy pillars
(great brands, great people, great execution, done sustainably) achieved, are
included in the table below:
2023 objectives
Value share growth
in sparkling
Performance delivered
• Full year sparkling volume maintained versus
2022. Value share growth target in sparkling
not met.
• NARTD value share gains across measured
channels both in-store & online
Strategic
objective
M&A
• Acquisition of CCBPI completed in February
2024
Competitiveness
• Delivered savings significantly ahead of target
Diversity and inclusion
• Increase in senior management gender ratio
• Exceeded disability inclusion target(A)
(A) Calculated based on the total number of employees responding to our voluntary 2023 inclusion survey (representing 38.4% of our
workforce) and the number of employees self-declaring as having a disability.
Link to strategy
Great
brands
Great
people
Great
execution
Done
sustainably
2023 annual bonus outcome – calculation
Based on the level of performance achieved, as set out above, this resulted in a
cash bonus paid following the year end to Damian Gammell as follows:
Target
bonus
(150% of
base salary)
BPF
(1.65x)
IPF
(1.15x)
Final
bonus
outcome
(285% of
base salary)
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Annual report on remuneration continued
Long-term incentives
Awards vesting for performance in respect of 2023
The 2021 LTIP award was subject to EPS, ROIC and CO2e reduction performance
targets measured over the three year performance period from 1 January 2021 to
31 December 2023.
Performance targets(D)
Weighting
42.5%
42.5%
15%
Threshold
(25% vesting)
€3.04
Target
(100% vesting)
€3.41
Maximum
(200% vesting)
€3.67
8.3%
9.2%
9.9%
6.0%
per litre
8.0%
per litre
10.0%
per litre
Actual
performance
outcome
€3.78
10.4%
17.4%(α)
per litre
Final
vesting
level
2.00x
2.00x
2.00x
2.00x
1.85x
Measure
EPS(A)
ROIC(B)
CO2e
reduction(C)
Total formulaic
vesting level
Total vesting
after discretion
(A) Comparable and on a tax and currency neutral basis, adjusted for brand sales.
(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.
(α) This metric was subject to external independent limited assurance for the year ended 31 December 2023. Please see
cocacolaep.com/sustainability/download-centre for our 2023 assurance statement.
In assessing the formulaic vesting outcome of the 2021 LTIP, the Committee
additionally undertook a holistic assessment of overall performance over the three
year period to determine whether the formulaic outcome was an appropriate
vesting level for all participants (around 275 people who occupy the most senior
roles in the business) and reflected underlying Company performance. 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 described below.
As a result of the assessment the Committee determined the overall performance
of the business to be strong. However, as outlined in the Statement from the
Remuneration Committee Chairman (page 127) the Committee considered it
appropriate to follow a similar approach to that used for the 2020 LTIP and apply
downwards discretion in respect of the final vesting level for the CO2e reduction
measure and cap this at target. This reduced the overall vesting level to 1.85x
target, and the Committee believes this to be a fair reflection of overall
performance.
As the award does not vest until 15 March 2024, the final value of the award has
been estimated based on the average share price over the three month period
from 1 October 2023 to 31 December 2023 of US$61.15 (£49.25). This would result in
a final pay out of around £7.4 million including the value of the cash payment to be
received in respect of dividend equivalents accrued during the performance
period. As outlined in the Chairman’s letter, this value included the benefit of the
significant increase in share price over the three year performance period, which
has delivered over £6 billion of value to shareholders over the same period. The
actual value on the vesting date will be reported in next year’s ARR.
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Holistic review of overall performance over 2021 LTIP performance period
Overall business performance
• NARTD value share growth over the performance period
(2021 = +40bps, 2022 = +10bps, and 2023 = +10bps).
• Largest FMCG value creator in Europe, and largest NARTD value creator in
Australia and New Zealand – created over €1.3 billion of value in 2023 for our
customers in Europe, Australia and New Zealand. Across the three year
performance period, we created over €3.2 billion of value for customers across
our markets, by focusing on core brands, in-market execution and revenue
growth management initiatives.
• Strong revenue per unit case (FY23 +8.5%, Europe: +8.0% and API: +11.0%) driven
by positive headline price increases and promotional optimisation alongside
favourable mix.
• We committed to rebasing our cost base versus pre-pandemic levels. As a % of
revenue, our comparable operating expenses are lower now (FY23: 24%), in-line
with last year (FY22: 24%), mitigating inflationary pressures with productivity
initiatives and more importantly below 2019 (FY19: 26%).
• Strong comparable free cash flow generation of €1.7 billion in 2023, in-line with
our medium-term objective of at least €1.7 billion.
Shareholder experience
• Share price performance – highest share price in history of company of
$66.82 achieved during the performance period, and exceeded in early
2024. Share price as at the date of signing the report remains over 25%
above the grant price.
• Significant value delivered to shareholders through continued payments of
dividends - FY23 dividend per share of €1.84 (+9.5% versus 2022), and cumulative
dividends of €2.2 billion over the period, maintaining an annualised dividend
pay-out ratio of approximately 50%.
• Strong TSR growth – 50% growth over the three year period, which was
top decile performance versus FMCG peers and out-performed the
FTSE 100 (32%), Euronext 100 (37%) and S&P 500 (34%).
Successful acquisition and integration of CCL
• Completed the acquisition of Coca-Cola Amatil (CCL) in May 2021 to become
a truly global bottler and solidify our position as the largest Coca-Cola bottler
by revenue in the world.
• Integration now well advanced, with portfolio reorientation initiatives
completed, and strong financial performance in 2023 (achieving both revenue
and operating profit growth versus last year(A)).
(A) On a comparable and FX neutral basis
Continued delivery of our sustainability agenda
• CCEP’s focus on long-term value creation and innovation positions sustainability
at the heart of everything we do. Over the 2021 LTIP performance period we
delivered the following:
– 16.7% reduction across our Scope 1, 2 and 3 GHG emissions since 2019.
– Reduction in our Group Water Use Ratio of 4.9% versus 2019.
– Continued to exceed our target to use >50% rPET, reaching 54.6% across the
Group, and 59.2% in Europe in 2023.
– 48.3% of our volume sold came from low or no calorie products, making
progress against our target to reach 50% by 2030.
Wider workforce and other stakeholder experiences
• Our primary focus throughout the performance period, in the context of the
global COVID-19 pandemic and macro geopolitical environment, was on the
safety and wellbeing of our colleagues. This included emotional and mental
wellbeing support through a COVID-19 support hub, an expanded EAP, and
a significant Mental Health First Aider programme to provide ongoing support
to all employees.
• In recognition of the rising cost of living, one-off payments were delivered
in 2022 to our lowest paid colleagues in selected markets.
• As disclosed in previous remuneration reports, there was limited financial impact
on all employees during the COVID-19 pandemic, with continued frontline and
Group incentive payouts, limited use of government support schemes, with a
total value received of less than 0.2% of total employee expenditure, and
continued salary increases for over 75% of employees in 2021.
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Annual report on remuneration continued
• In 2022, we launched the new global Employee Share Purchase Plan (ESPP),
Further details are set out below:
which gives our employees the opportunity to buy Shares in CCEP on a regular
basis. For every share an employee purchases, CCEP will provide a matching
share, up to an agreed limit. In Great Britain, we offer a similar opportunity under
an employee share plan, which makes use of a tax-efficient opportunity for
employees to become shareholders through salary sacrifice arrangements.
Around 43% and 75% of eligible employees were participating in the global ESPP
and Great Britain share plan, respectively, on 31 December 2023.
• Focus on our communities – Our employees in Europe volunteered 32,500 hours
with a total of €14.8 million in community investment in Europe and API. Our
Support My Cause initiative enables employees to nominate local charities they
feel passionately about for a donation from the business. Since 2019, we have
donated €1.2 million to 200 local charities and community groups across our
territories. In addition, in 2023, we donated over €400,000 to support 125
grassroots charitable and community partnerships located close to our sites and
offices.
• Focus on our customers – We have an unrivalled customer coverage with which
we jointly create value, with more than €3 billion added to the FMCG industry
since 2021.
Awards granted in 2023 (audited)
A conditional award of performance share units (PSUs) was granted under the
CCEP LTIP to Damian Gammell on 13 March 2023, 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. Financial 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. Targets for CO2e reduction were significantly increased
versus those used for prior awards.
Individual
Damian
Gammell
Date of
award
13 Mar
2023
Maximum
number of
Shares
under award
130,738
Target
number of
Shares under
award(A)
Face value
65,369 US$55.20 US$7,216,738
Closing
Share price
at date
of award
Performance
period
1 Jan 2023
–
31 Dec 2025
Normal
vesting
date
13 Mar
2026
(A) Number of Shares awarded calculated using 10 day average share price to the normal grant date (13 March 2023) of US$55.13.
The vesting of awards is subject to the achievement of the following performance
targets:
Measure
EPS(A)
ROIC(B)
CO2e
reduction(C)
Definition
EPS achieved in the final year of
the performance period (FY
2025)
ROIC achieved in the final year of
the performance period (FY
2025)
Relative reduction in total value
chain GHG emissions since 2022
(gCO2e/litre)
Vesting level(D) (% of target)
Weighting
42.5%
25%
€3.63
100%
€4.07
200%
€4.37
42.5%
10.8%
12.0%
13.1%
15%
12.0%
per litre
14.5%
per litre
17.0%
per litre
(A) Comparable and on a tax and currency neutral basis, adjusted for brand sales. 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 Group value chain.
(D) Straight-line vesting between each vesting level (shown).
Any award vesting for the CEO will be subject to a two year post-vesting holding period.
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Annual report on remuneration continued
Historical TSR performance and CEO remuneration outcomes
The chart below compares the TSR performance of CCEP from admission up until 31 December 2023 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 to CCEP.
30 trading day average data: against S&P 500, Euronext 100 and FTSE 100
Total shareholder return data
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:
CEO single figure of remuneration
(‘000)
Annual bonus pay out (as a %
of maximum opportunity)
LTI vesting (as a % of maximum
opportunity)
2016(A)
2016(A)
2017
2018
2019
2020
2021
2022
2023
John Brock
Damian Gammell
Damian Gammell
Damian Gammell
Damian Gammell
Damian Gammell
Damian Gammell
Damian Gammell
Damian Gammell
US$3,890
£27
£3,716
£3,821
£7,839
£5,513
£7,672
£12,153(B)
£12,282
31.23%
40.6%
60.7%
63.1%
43.7%
35.3%
84.1%
85.8%
79.3%
N/A
N/A
N/A
N/A
59.0%
36.5%
45.0%
92.5%
92.5%
(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 2020 LTIP.
CCEPS&P 500Euronext 100FTSE 100May 2016Dec 2016Dec 2017Dec 2018Dec 2019Dec 2020Dec 2021Dec 2022Dec 2023050100150200250300 Strategic
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Annual report on remuneration continued
Percentage change in CEO and Director remuneration
The table below shows the percentage change in CEO and Director remuneration from 2022 to 2023 (and between prior years) 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(B)
John Bryant(C)
José Ignacio Comenge
Christine Cross(B)
Nathalie Gaveau
Álvaro Gómez-Trénor Aguilar
Mary Harris(D)
Thomas H. Johnson
Dagmar Kollmann
Alfonso Líbano Daurella
Nicolas Mirzayantz(D)
Mark Price
Nancy Quan(D)
Mario Rotllant Solá
Brian Smith(B)(F)
Dessi Temperley(E)
Garry Watts(G)
Base
salary/fee
2.2%
4.3%
1.3%
4.5%
2023
Taxable
benefits
(26.7)%
0.5%
133.3%
(87.5)%
(61.0)% (100.0)%
17.9%
1.0%
(11.1)%
33.3%
(65.4%)
(100.0)%
12.2%
200.0%
1.2%
n/a
7.8%
3.8%
(2.9)%
n/a
5.5%
n/a
8.0%
(59.2)%
8.0%
(5.6)%
62.5%
n/a
23.1%
20.0%
66.7%
n/a
100.0%
n/a
33.3%
(83.3)%
(30.0)%
(16.7)%
Annual
bonus
(5.5)%
(7.0)%
2022
Base
salary/fee
Taxable
benefits(H)
2.5%
3.4%
0.7%
0.6%
Annual
bonus
4.6%
11.7%
Base
salary/fee
0.4%(I)
1.7%
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
n/a
n/a
2.4%
71.9%
200.0%
n/a
(7.8)%
200.0%
3.5%
2.0%
1.6%
6.5%
2.4%
n/a
2.7%
16.8%
1.0%
n/a
5.8%
n/a
14.3%
6.5%
15.3%
(7.5)%
125.0%
125.0%
80.0%
200.0%
100.0%
n/a
550.0%
150.0%
n/a
n/a
200.0%
n/a
125.0%
500.0%
150.0%
50.0%
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
n/a
n/a
0.0%
n/a
0.0%
n/a
0.0%
0.0%
0.0%
0.0%
n/a
0.0%
0.0%
0.0%
n/a
0.0%
n/a
0.0%
109.1%
69.0%
0.0%
2021
Taxable
benefits(H)
0.0%
1.1%
0.0%
n/a
100.0%
n/a
300.0%
400.0%
0.0%
100.0%
n/a
n/a
300.0%
n/a
n/a
0.0%
n/a
300.0%
n/a
n/a
n/a
Annual
bonus
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
n/a
n/a
2020
Base
salary/fee
Taxable
benefits(H)
2.0%
2.7%
0.5%
n/a
0.0%
n/a
1.0%
(1.5)%
0.0%
0.0%
n/a
5.5%
0.2%
0.0%
n/a
(66.7)%
n/a
(80.0)%
(75.0)%
(66.7)%
(71.4)%
n/a
3.5% (100.0)%
71.2%
(83.3)%
1.0% (100.0)%
n/a
n/a
71.7%
(50.0)%
n/a
1.0%
n/a
n/a
n/a
(80.0)%
n/a
n/a
0.8% (100.0)%
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
n/a
n/a
(A) Appointed to the Board on 26 May 2021.
(B) Resigned from the Board on 24 May 2023.
(C) Appointed to the Board on 1 January 2021.
(D) Appointed to the Board on 24 May 2023.
(E) Appointed to the Board on 27 May 2020.
(F) Appointed to the Board on 9 July 2020.
(G) Resigned from the Board on 31 December 2023.
(H) Reduction and increases in taxable benefits reflect the impact of travel restrictions across 2020, 2021 and 2022.
(I) No increase was applied for 2021, but small increase reflects the 2020 salary increase applying only from 1 April 2020.
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Annual report on remuneration continued
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 2023 and
2022, along with the percentage change of each.
Total employee expenditure
Dividends(A)
(A) There were no share buybacks in 2022 or 2023.
2023
€2,433m
€841m
2022
% change
€2,318m
€763m
5.0%
10.2%
CEO pay ratio
The table below shows the ratio of the CEO’s single figure of remuneration for
2023 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 were excluded from the calculation, then
the median ratio would be 75:1. The main reason for the increase in the ratio from
2022 to 2023 is driven by a change in the disclosed LTIP value for the CEO.
Year
2023
2022
2021
2020
2019
Method
Option B
25th percentile
ratio
246:1(A)
281:1
221:1
175:1
250:1
Median
ratio
189:1(B)
171:1
162:1
105:1
169:1
75th percentile
ratio
150:1(C)
130:1
92:1
83:1
111:1
The Committee has chosen Option B (hourly gender pay gap information as
at 5 April 2023) 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.
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 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. In
consideration of these points, the Committee considers that the levels of
remuneration are appropriate.
(A) The individual used in this calculation received total pay and benefits of £50,000 (of which £36,000 was salary).
(B) The individual used in this calculation received total pay and benefits of £65,000 (of which £52,000 was salary).
(C) The individual used in this calculation received total pay and benefits of £82,000 (of which £56,000 was salary).
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Annual report on remuneration continued
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.
Statement of Directors’ share ownership and share interests (audited)
Interests of the CEO
The CEO is required to hold 300% of their 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.
Damian
Gammell(D)
Share ownership requirements and the number of Shares held by Damian
Gammell are set out in the table below.
Interests
in share
incentive
schemes
subject to
performance
conditions at
31 December
2023(A)(B)(C)
Interests in
Shares at 31
December 2023
Share
ownership
requirement
as a %
of salary
Share
ownership
as a % of salary
achieved at
31 December
2023
Shareholding
guideline
met
Interests in
share option
schemes(A)(B)
510,907
443,920
324,643
300%
2,156%
ü
Details of the CEO’s share awards are set out in the table below.
Director
and grant date
Damian
Gammell(A)
17 Mar 2020
29 Sep 2021
10 Mar 2022
13 Mar 2023
Form of award
Exercise price
PSU(B)
PSU(C)(D)
PSU(C)
PSU(C)
N/A
N/A
N/A
N/A
Number of
Shares subject
to awards at 31
December 2022
156,264
149,406
163,776
(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 2023.
(D) A further 138,201 shares will vest under the 2021 LTIP on 15 March 2024.
Granted
during the year
Vested
during the year
Exercised
during the year
Lapsed
during the year
Number of
Shares subject
to awards at 31
December 2023
End of
performance
period
Vesting date
–
–
–
144,544
–
–
–
N/A
N/A
N/A
N/A
11,720
–
31 Dec 2022
17 Mar 2023
–
–
–
149,406
163,776
130,738
31 Dec 2023
15 Mar 2024
31 Dec 2024
10 Mar 2025
31 Dec 2025
13 Mar 2026
–
130,738
(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 US$39.00. No options were exercised by the CEO during the year.
(B) The performance condition was satisfied at 92.5% of maximum on 31 December 2022. Award vested on 17 March 2023.
(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 2021 PSU awards will vest at 185% of target (138,201 shares) on 15 March 2024.
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Annual report on remuneration continued
Interests of other Directors (audited)
The table below gives details of the Share interests of each NED either through
direct ownership or connected persons.
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.
Sol Daurella(A)(B)
Manolo Arroyo
Jan Bennink(C)
John Bryant
José Ignacio Comenge(A)(D)
Christine Cross(C)
Nathalie Gaveau
Álvaro Gómez-Trénor Aguilar(A)
Mary Harris(E)
Thomas H. Johnson
Dagmar Kollmann
Alfonso Líbano Daurella(A)
Nicolas Mirzayantz(E)
Mark Price
Nancy Quan(E)
Mario Rotllant Solá
Brian Smith(C)
Dessi Temperley
Garry Watts(F)
(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 57.5% of Olive.
(C) Resigned from the Board on 24 May 2023. Share interests stated are as at the date of resignation.
(D) José Ignacio Comenge’s Share interests increased to 7,855,504 on 12 February 2024 following an increase to his overall holding in
Olive Partners.
(E) Appointed to the Board on 24 May 2023.
(F) Resigned from the Board on 31 December 2023. Share interests stated are as at the date of resignation.
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
Interests in Shares at
31 December 2023
33,385,384
–
49,790
3,340
7,842,464
Individual
–
–
3,143,876
–
14,000
–
6,701,540
7,930
–
–
–
–
–
10,000
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 2023. Prior year figures are
also shown.
2023 (£’000)
Chairman/
Committee
fees
Taxable
benefits(D)
Total
fees
30
30
12
53
16
11
25
0
19
48
52
16
9
30
9
36
6
37
32
7
1
0
8
12
0
9
13
14
16
12
5
13
12
8
12
2
7
5
619
116
46
146
113
45
119
98
84
181
149
106
73
127
68
133
42
129
122
Base
fee
582
85
34
85
85
34
85
85
51
117
85
85
51
85
51
85
34
85
85
Base
fee
578
84
84
84
84
84
84
84
–
116
84
84
–
84
–
84
84
84
84
2022 (£’000)
Chairman/
Committee
fees
Taxable
benefits(D)
26
26
34
33
16
46
14
–
–
37
48
20
–
25
–
28
14
29
40
3
8
12
9
9
9
3
8
–
13
10
3
–
6
–
9
12
10
6
Total
fees
607
118
130
126
109
139
101
92
–
166
142
107
–
115
–
121
110
123
130
Sol Daurella
Manolo Arroyo
Jan Bennink(A)
John Bryant
José Ignacio Comenge
Christine Cross(A)
Nathalie Gaveau
Álvaro Gómez-Trénor
Aguilar
Mary Harris(B)
Thomas H. Johnson
Dagmar Kollmann
Alfonso Líbano
Daurella
Nicolas Mirzayantz(B)
Mark Price
Nancy Quan(B)
Mario Rotllant Solá
Brian Smith(A)
Dessi Temperley
Garry Watts(C)
(A) Resigned from the Board on 24 May 2023.
(B) Appointed to the Board on 24 May 2023.
(C) Resigned from the Board on 31 December 2023.
(D) 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 relevant meeting.
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Annual report on remuneration continued
In determining the IPF for Damian Gammell for 2024, he will be assessed against a
number of objectives which are aligned to the key longer-term strategic objectives of
the business, which include:
Objectives include:
• Growth in volume and volume share aligned with the business plan
Strategic objective
• Succession planning
• Operational targets relating to our recent acquisitions
• Sustainability objectives
Link to strategy
Great
brands
Great
people
Great
execution
Done
sustainably
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 fuller
description of individual performance objectives, including specific quantitative
measures (where appropriate) and their outcomes, will also be disclosed in next
year’s ARR.
Implementation of remuneration policy for 2024
Base salary
Damian Gammell will receive a 2.0% salary increase effective 1 April 2024. This is
lower than the average merit increase provided to the wider GB workforce of 3.5%.
Individual
Damian Gammell
2023 salary
£1,241,440
2024 salary
(effective from 1 April)
£1,266,269
% increase
2.0%
Taxable benefits
No significant changes to the provision of benefits are proposed for 2024.
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 contribution into the pension scheme
up to the annual allowance, with the balance up to the maximum allowed by
the Remuneration Policy (£30,000 inclusive of employer National Insurance
contributions) as a cash allowance.
Annual bonus
No changes have been made to the structure of the annual bonus plan for 2024,
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 131.
The financial measures and relative weightings will also remain unchanged.
Measure
Operating profit
Revenue
Operating free cash
flow
Definition
Comparable operating profit on a FX neutral basis at
budget rates
Revenue on a FX neutral basis at budget rates
Comparable operating profit before depreciation and
amortisation and adjusting for capital expenditures,
restructuring cash expenditures and changes in
operating working capital, on a FX neutral basis at
budget rates
Weighting
50%
30%
20%
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Annual report on remuneration continued
Long-term incentive
Damian Gammell’s long-term incentive opportunity for 2024 will be aligned with
the limits set out in the remuneration policy. He will be granted a target award of
250% of salary and may receive up to two times this target award if the maximum
performance targets are achieved.
The 2024 LTIP award will continue to be based on a mix of EPS, ROIC and CO2e
reduction, unchanged from last year, and the targets will be set at stretching levels
taking into account both our long-term plan and external forecasts.
Due to the timing of the acquisition of CCBPI, and to enable robust targets to be
set for the combined business, the awards will be made in Q2. Full details of the
targets will be disclosed in next year’s ARR.
Following the end of the performance period, awards will be subject to an
additional two year holding period.
Chairman and NED fees
The NED base fee, Chairman fee were increased by 3.5% with effect from
1 April 2024, as outlined below, alongside increases to the additional fee for the
Senior Independent Director and Committee membership fees. Fees were last
increased with effect from 1 April 2022, other than for the Nomination Committee
which were last increased with effect from 1 April 2023.
Role
Chairman
NED basic fee
Additional fee for Senior Independent Director
Additional fee for
Committee Chairman
Audit and Remuneration Committees
Affiliated Transaction, Nomination and
ESG Committees
Current fees
Fees effective
1 April 2024
£582,000
£602,250
£85,000
£31,750
£37,250
£36,000
£88,000
£32,750
£37,250
£36,000
Additional fee for
Committee
membership
Audit and Remuneration Committees
£16,000
£16,500
Affiliated Transaction, Nomination and
ESG Committees
£15,500
£16,000
The Remuneration Committee
The entire Board determines the terms of the compensation of the CEO and
fees for the NEDs and Chairman and approves 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.
The Terms of Reference can be found on our website at cocacolaep.com/about-
us/governance/committees.
Remuneration Committee members and attendance
In line with the Shareholders’ Agreement, the Committee has five members, as set
out on pages 95-99. There are three independent NEDs, one Director nominated
by Olive Partners and one Director nominated by ER. The Committee formally
met five times during the year. Attendance is set out in Table 2 on page 110 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.
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 2023, the wider Deloitte firm
also provided CCEP with other tax and consultancy services.
Total fees received by Deloitte in relation to the remuneration advice provided
to the Committee during the year amounted to £61,400 based on the required
time commitment.
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Annual report on remuneration continued
Remuneration Committee key activities
The table below gives an overview of the key agenda items discussed at each
scheduled meeting of the Remuneration Committee during 2023:
Summary of voting outcomes
The table below shows how shareholders voted in respect of the ARR and the
remuneration policy at the AGM held on 24 May 2023:
Meeting date Key agenda items
February
2023
• Approval of financial performance
outcome for 2022 annual bonus
• Approval of final vesting outcome for
2020 LTIP
• Approval of 2022 annual bonus
Resolution
outcome for the ELT
• Review of ELT individual
objectives in respect of the 2023
annual bonus
Approval of the ARR
Approval of the remuneration policy
Votes
for (%)
81.46%
99.10%
Votes
against (%)
Number of votes
withheld
18.54%
0.90%
477,284
70,554
This Directors’ remuneration report is approved by the Board and signed on its behalf by
John Bryant,
Chairman of the Remuneration Committee
15 March 2024
March
2023
• Approval of 2023 annual bonus financial
• Approval of 2023 ELT
performance measures and targets
• Approval of 2023 LTIP opportunities
• Review of Chairman and NED fees
Remuneration packages
• Review of 2022 Remuneration
Report
May 2023
• Review of Committee effectiveness
• Advisor review
• AGM voting update
• Deloitte Market Update
October
2023
• Review of 2023 annual bonus and 2021
• Review of executive shareholding
LTIP performance
guidelines
• Review of Malus and Clawback Policy
• Review of annual report on wider
workforce remuneration
December
2023
• Review of first draft of the 2023
Remuneration Report
• Base pay design for 2024
• Incentive design for 2024
• Performance update for 2023 annual
bonus
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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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 2023.
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 1-90,
represent 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
Table 1
Other information that is relevant to the Directors’ report, and which is
incorporated by reference into this report, can be located as follows:
Disclosure
Names of Directors during the
year
Review of performance,
financial position and likely
future developments
Section of report
Board of Directors
Strategic Report
Page(s)
94-99
81-90
Dividends
Principal risks
Information on share capital
relating to share classes, rights
and obligations
Business and financial review and Note 16
to the consolidated financial statements
81-90, 197-198
Principal risks section of the Strategic
Report
Note 16 to the consolidated financial
statements, and the Share capital section
in Other Group information
68-78
197-198, 253-254
Financial instruments and
financial risk management
Cash balances and borrowings Notes 10 and 13 to the consolidated
Notes 12 and 26 to the consolidated
financial statements
182-186, 214-217
181, 186-190
financial statements
Significant events after the
reporting period
Note 27 to the consolidated financial
statements
Forward on society – our people
217
23-24
Information on employment of
disabled persons
Workforce engagement
• 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
Business relationships with
suppliers, customers and
others
• Replacement INEDs must be recommended to the Board by the Nomination
GHG and energy consumption Forward on climate, TCFD metrics and
Forward on society – our people and Our
stakeholders
23-25, 61-64
Forward on society – people, Forward on
supply chain and Our stakeholders
23-25, 32-34,
61-64
targets and GHG methodology, key
performance data summary
37-40, 60,
234-241
Responsibility statement
Directors’ responsibilities statement
147
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
Read more about the re-election and election of Directors in the Corporate governance
report on page 112
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Directors’ report continued
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.
Read more about the roles and responsibilities of the Board and the main Committees of the
Board in the Governance and Directors’ Report on pages 103-146
Directors’ indemnity arrangements
Qualifying third party indemnities were in place throughout 2023, 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
cocacolaep.com/about-us/governance.
Political donations
The Group made no political donations or contributions during 2023 (2022: 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 below shows the significant interests in Shares
of which the Company has been notified as at 31 December 2023, 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 2023 AGM, under
which the Company may purchase up to 45,826,533 Shares, representing 10% of
the Company’s issued share capital at 5 April 2023, reduced by the number of
Shares purchased or agreed to be purchased between 5 April and 24 May 2023. No
Shares were purchased under this authority in 2023.
We intend to seek to renew the authority to purchase Shares at the 2024 AGM.
For more details, see the Share buyback programme section in Other Group information
on page 254
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
146
Directors’ report continued
Table 2
Interests in Shares of which the Company has been notified
Percentage of
total voting rights
notified to the
Company as at
the year end(C)
Number of
voting rights notified
to the Company as at
the year end
36.1%
19.01%
166,128,987
87,950,640
Percentage of
total voting rights
notified to the
Company as
at the date of
this report(C)
36.1%
19.01%
Number of
voting rights
notified to the
Company as
at the date of
this report
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
2023 or the date of this report.
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 2023 was €1.8 billion
• Note and guarantee agreement in relation to the A$250 million 4.20% Notes 2031
• Note and guarantee agreement in relation to the US$50 million 4.34% Notes 2023
Research and development
TCCC’s second-largest innovation centre is based in Belgium, where products for
Europe, the Middle East, Africa and part of South Asia are developed. CCEP does
not have its own research and development centre, but the Company invests in
and undertakes certain activities for the development of innovative solutions
(such as packaging concepts or less energy, water and carbon intensive beverage
manufacturing technology), 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.(D)
(D) This policy has applied for the last three years.
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.
• 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 2024 AGM.
Going concern
As part of the Directors’ consideration of the appropriateness of adopting the
going concern basis in preparing the Parent Company and consolidated financial
statements, the Directors have taken into account the Group’s overall financial
position, exposure to the principal risks and future business forecasts. For the
Parent Company, the Directors also considered the ability of its subsidiaries to
remit earnings. At 31 December 2023, the Group had cash and cash equivalents of
€1.4 billion and had access to a €1.8 billion undrawn committed credit facility, which
is free of financial covenants and in place until at least January 2029. The Directors
have also considered the stress testing performed as part of the assessment of
viability set out on page 79.
On this basis, the Directors have a reasonable expectation that the Group and
Parent Company have 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 2024
Coca-Cola Europacific Partners plc
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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 a 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 Group’s and Company’s
transactions and disclose with
reasonable accuracy at any time the
financial position of the Group and 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 Group and Company and hence
for taking reasonable steps for the
prevention and detection of fraud and
other irregularities.
Under applicable law and regulations,
the Directors are also responsible for
preparing a Strategic Report, Directors’
report, Annual report on remuneration,
and Corporate governance report that
comply with that law and those
regulations. The Directors are
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 95-99,
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 Strategic 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 2024
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In this section
Financial
Statements
149 Independent auditor’s reports
162 Consolidated financial statements
167 Notes to the consolidated financial
statements
223 Company financial statements
227 Notes to the Company financial
statements
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Independent auditor’s report to the members of Coca-Cola Europacific Partners plc
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 2023 and of the Group’s and the Parent Company’s profit 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 2023 which comprise:
Group
Parent Company
Consolidated statement of financial
position as at 31 December 2023
Statement of financial position as at
31 December 2023
Consolidated income statement for the
year then ended
Statement of comprehensive income for the
year then ended
Consolidated statement of comprehensive
income for the year then ended
Statement of cash flows for the year then
ended
Consolidated statement of changes in
equity for the year then ended
Statement of changes in equity for the year
then ended
Consolidated statement of cash flows for
the year then ended
Related notes 1 to 11 to the financial
statements including material accounting
policy information
Related notes 1 to 29 to the financial
statements, including material accounting
policy information
The financial reporting framework that has been applied in their preparation is
applicable law, UK adopted International Accounting Standards, IFRS as adopted
by the European Union and International Financial Reporting Standards as issued
by the IASB.
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.
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 liquidity
forecast for the going concern period which covers a year from the date of
signing this audit opinion. The Group has modelled downside scenarios in their
liquidity forecasts in order to incorporate unexpected changes to the
forecasted liquidity of the Group. They have also considered the impact of the
acquisition of Coca-Cola Beverages Philippines, Inc completed in February 2024.
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, including climate-related 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.
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• We confirmed the cash and cash equivalents balance of €1.4 billion as at
31 December 2023 and verified the cash flows from operating activities of
€2.8 billion in the year. We obtained evidence of the Group’s €1.8 billion
multi-currency credit facility which is available through to January 2029, noting
no associated financial covenants. The facility is undrawn as at 15 March 2024.
• 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 assessed the ability of the subsidiaries of the Group to remit earnings to the
Parent Company.
• We reviewed the Group and Parent Company going concern disclosures
included in the Directors’ Report on page 146 and Note 1 to the consolidated
and Parent Company financial statements on pages 167 and 227, respectively, 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.
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 six
components.
• The components where we performed full or specific audit procedures
accounted for 91% of adjusted profit before tax (measure used to
calculate materiality), 86% of revenue and 89% of total assets.
Key audit
matters
• Accrued customer marketing costs.
• Accounting for uncertain tax positions.
Materiality
• Overall Group materiality of €100m which represents 4.8% of the
adjusted profit before tax.
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Independent auditor’s report to the members of Coca-Cola Europacific Partners plc 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, the potential impact of climate change and other
factors such as recent internal audit results when assessing the level of work to be
performed at each company.
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 68 reporting components of the Group (17 of
which are trading components), we selected 36 components covering 25
corporate components and 11 trading components, which represent the principal
business units within the Group.
Of the 36 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 six components (“specific scope
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. We have also performed specified procedures over
23 locations, primarily in relation to the testing of cash and cash equivalents.
The table below illustrates the coverage obtained from the work performed by our audit teams.
Full scope
Specific scope
Coverage
Specified procedures
Remaining components
Total reporting components
Notes
Number
% Group adjusted profit before tax
% Group revenue
% Total assets
See Notes
2023
2022
7
6
13
23
32
68
7
5
12
22
33
67
2023
99%
(8)%
91%
—%
9%
100%
2022
97%
4%
101%
—%
(1)%
100%
2023
76%
10%
86%
6%
8%
2022
75%
10%
85%
3%
12%
2023
83%
6%
89%
4%
7%
2022
84%
6%
90%
3%
7%
A, B
A, B, C, D
B
E
100%
100%
100%
100%
(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 accrued customer marketing costs was subject to audit procedures performed by the Group team and at six full scope components, three specific scope components and specified procedures at two components.
(C) The specific scope components relate to four trading components.
(D) 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 scope
audit procedures were subjected to testing of Group-wide controls and analytical review.
(E) Of the remaining 32 components that together represent 9% of the Group’s adjusted profit before tax, none are individually greater than 3% of the Group’s adjusted profit before tax. For the remaining components in this category, we performed other procedures,
including testing of Group-wide controls, analytical review procedures and testing of consolidation journals including intercompany eliminations to respond to any potential risks of material misstatement to the Group financial statements.
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Independent auditor’s report to the members of Coca-Cola Europacific Partners plc continued
Changes from the prior year
We have not removed any audits designated as full scope 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. In the current year, we included one additional specific scope component in
our scope which includes certain intangibles assets. As this is a cost centre, this has
reduced our coverage over adjusted profit before tax compared to the prior year.
We performed specified procedures for a larger number of components, primarily
relating to cash and cash equivalents across the Group.
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
primary 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 team. For the 29 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.
During the current audit cycle, we completed a combination of physical visits to
component teams and alternative oversight procedures, including meeting our
European full and specific scope components at our global audit event held in
London. We also attended video meetings and live reviewed our local audit teams’
working papers. Our physical visits included the Senior Statutory Auditor or
delegates visiting Australia, Spain, Germany, France, Great Britain, Belgium and
Indonesia.
Our site visits (both physical and virtual) involved: meeting 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 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.
Climate change
Stakeholders are increasingly interested in how climate change will impact the
Group. 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 which could cause disruption to facilities and logistics routes,
increasing water stress or water scarcity, changes to weather and precipitation
patterns which could cause disruption to the supply of ingredients as well future
regulations (e.g. carbon tax related to greenhouse gas emissions). These are
explained on pages 48 to 60 in the Task Force On Climate Related Financial
disclosures and on pages 68 to 78 in the principal risks. The Group has also
explained its climate commitments on page 36. All of these disclosures form part
of the “Other information,” rather than the audited financial statements. Our
procedures on these unaudited 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, in line with our responsibilities on “Other information”.
In planning and performing our audit we assessed the potential impacts of
climate change on the Group’s business and any consequential material impact on
its financial statements.
The Group has explained in Note 1 (Impact of climate change) its articulation of
how climate change has been reflected in the financial statements including how
this aligns with their commitment to achieve net zero emissions by 2040. In Note 6
(Intangible assets and goodwill) and Note 7 (Property, plant and equipment) to
the financial statements, narrative explanation including further details over the
Group’s considerations has been provided.
Our audit effort in considering the impact of climate change on the financial
statements was focused on evaluating management’s assessment of the impact
of climate risk, physical and transition, their climate commitments, the effects of
material climate risks disclosed on pages 56 to 59 and the significant judgements
and estimates disclosed in Note 3 and whether these have been appropriately
reflected in asset values, useful economic lives, cash flow projections used in
assessing the recoverable amount of the Group’s CGUs, and also in the going
concern and viability assessment. As part of this evaluation, we performed our own
risk assessment, supported by our climate change internal specialists, to
determine the risks of material misstatement in the financial statements from
climate change which needed to be considered in our audit.
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We also challenged the Directors’ considerations of climate change risks in their
assessment of going concern and viability and associated disclosures. Where
considerations of climate change were relevant to our assessment of going
concern, these are described above.
Based on our work we have not identified the impact of climate change on the
financial statements to be a key audit matter or to impact a key audit matter.
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.
Key observations communicated to the Audit Committee
We concluded that 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.
Risk
Our response to the risk
Accrued customer marketing costs
Refer to the Audit Committee Report (page
121-122); Accounting policies (pages 169 and
170).
The Group participates in various programmes
and arrangements with customers referred
to as “promotional programmes”, which
are recorded as deductions from revenue.
The off-invoice discounts activity totalled
€5.4 billion for the year ended 31 December
2023 (2022: €5.2 billion), with €1.3 billion of
accrued customer marketing costs as of
31 December 2023 (2023: €1.3 billion).
We performed audit procedures over this matter at ten reporting components which
covered 93% of the Group balance.
We obtained an understanding of the Group’s revenue recognition policies and
processes and how they are applied, and for full and specific scope reporting
components evaluated the design and tested the operating effectiveness of controls,
including IT 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 and assess the completeness of the accrual:
• We evaluated management’s methodology to estimate the year-end accrued
customer marketing costs, in particular the use of historical trends.
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
forecasted sales volumes, expected customer
performance or amounts ultimately claimed
by customers.
• 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 on the ratio of accrued customer marketing
costs to relevant data such as gross revenue 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
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 14 to the consolidated
financial statements.
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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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.
Risk
Our response to the risk
Accounting for uncertain tax positions
Refer to the Audit Committee Report (page
121-122); Accounting policies (pages 171 and
208).
At 31 December 2023, the Group recorded
provisions for uncertain tax positions of which
€175 million (31 December 2022: €122 million)
are included in current tax liabilities and the
remainder in non-current tax liabilities.
The Group is subject to income tax in
numerous jurisdictions and is routinely under
audit by tax authorities in the ordinary course
of business as described in Note 20 and
Note 22 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 is
judgemental, because of the inherent
uncertainty related to the tax exposures,
which may result in materially different
outcomes. Specifically, each tax position
involves the evaluation of unique and evolving
facts and circumstances.
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 obtained management’s calculations and agreed inputs to source documentation
where applicable.
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 evaluated the assumptions used by
management to assess its uncertain tax positions and compliance with the
requirements of IFRIC 23. We developed our independent range of possible outcomes
for the Group’s tax exposures based on evidence obtained, which we compared to the
Group’s provisions. Where exposures arise in jurisdictions with similar laws and
regulations, we also considered whether the evaluation of tax risks was consistent across
those jurisdictions and took into account any resolution of these issues with the tax
authorities.
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.
In the prior year, our auditor’s report included a key audit matter in relation to the
carrying value of goodwill and indefinite lived intangibles. In the current year, we
concluded that this is no longer a key audit matter due to the continued growth in
the Group’s significant cash generating units and as we concluded there is no risk
of a material misstatement.
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.
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.
We determined materiality for the Group to be €100 million (2022: €87 million),
which is 4.8% (2022: 4.7%) of adjusted profit before tax. We believe that the
adjusted profit before tax provides 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 2022 reflects the increase in profit before
taxation, driven by continued growth in the business in the current year.
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2023 Integrated Report and Form 20-F
155
Independent auditor’s report to the members of Coca-Cola Europacific Partners plc continued
We determined materiality for the Parent Company to be €139 million
(2022: €142 million), which is 1% (2022: 1%) of shareholder’s equity.
During the course of our audit, we reassessed initial materiality and the actual
adjusted profit before tax was slightly higher than the forecasted adjusted profit
before tax and hence the recalculated materiality 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.
ADJUSTED PROFIT BEFORE TAX MEASURE
Starting basis
• Profit before tax: €2,203 million
Adjustments
• Gain on property sale: €54 million
• Gain on sale of sub-strata and associated mineral rights: €35 million
• Coal royalty income: €18 million
• Total adjustments: €107 million
Adjusted basis
• €2,096 million (adjusted profit before tax)
Materiality
• Materiality maintained at planning level of €100 million versus
€104.8 million on adjusted final reported profit before tax
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% (2022: 75%) of our planning materiality, namely €75 million (2022: €65 million).
We reviewed any misstatements identified in our 2022 Group audit to assess their
potential recurrence in 2023 (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, 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 €15 million to €37.5 million (2022: €13.1 million to €32.7 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 €5 million (2022: €4.3 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 1 to 90, Governance and Directors’
report set out on pages 91 to 147 and Other Group Information set out on pages
242 to 278 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.
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2023 Integrated Report and Form 20-F
156
Independent auditor’s report to the members of Coca-Cola Europacific Partners plc continued
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.
• 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
79;
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.
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 Parent Company’s 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 146;
• 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 146;
• Directors’ statement on fair, balanced and understandable set out on page 147;
• Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on page 68-78;
• The section of the annual report that describes the review of effectiveness of
risk management and internal control systems set out on page 77 and 124; and
• The section describing the work of the Audit Committee set out on page
117-124.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page
147, 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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2023 Integrated Report and Form 20-F
157
Independent auditor’s report to the members of Coca-Cola Europacific Partners plc continued
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: U.K. 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 regulations 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 of 1934 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.
• 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;
• Assessing whistleblowing incidences for those with a potential financial
reporting impact;
• Evaluating the historical performance of CCEP against similar companies;
• Understanding the Group’s annual bonus scheme and long-term incentive
plan performance targets and their propensity to influence on efforts made
by management to manage revenue and earnings;
• Understanding the related party transactions and significant transactions
occurring with related parties in the year;
• Assessing the key judgements and estimates and significant transactions
occurring in year; and
• Considering the controls framework, including IT General controls, that the
Group has established to prevent, deter and detect fraud; and how senior
management monitors those programmes and 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.
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 and also testing over manual consolidation
journals and journals indicating large or unusual transactions based on our
understanding of the business. 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. Any
instances of non-compliance with laws and regulations, including in relation
to fraud, were communicated by/to components and considered in our audit
approach, if applicable. In addition, we completed procedures to conclude on the
compliance of the disclosures in the annual report and accounts with all applicable
requirements.
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2023 Integrated Report and Form 20-F
158
Independent auditor’s report to the members of Coca-Cola Europacific Partners plc continued
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 eight years, covering the years ending 31 December 2016 to
31 December 2023.
• The audit opinion is consistent with the additional report to the Audit
Committee.
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 2024
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
159
Report of independent registered public accounting firm
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 2023 and
2022, 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 2023, 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 2023 and 2022, and the results of its operations and its cash
flows for each of the three years in the period ended 31 December 2023, 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 2023, 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 2024 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.
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.
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2023 Integrated Report and Form 20-F
160
Report of independent registered public accounting firm continued
Accrued
customer
marketing
costs
Description of the matter
How we addressed the matter in our audit
The Group participates in various programmes and
arrangements with customers referred to as “promotional
programmes”, which are recorded as deductions from revenue.
The off-invoice discounts activity totalled €5.4 billion for the year
ended 31 December 2023, with €1.3 billion of accrued customer
marketing costs as of 31 December 2023.
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 the forecasted sales
volumes, expected customer performance or amounts
ultimately claimed by customers.
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 14
to the consolidated financial statements.
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 and the completeness of the accrual, our audit procedures included, among others,
testing management’s methodology to estimate the year-end accrued customer marketing costs, in
particular the use of historical trends. 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 compared accrued customer marketing costs to subsequent cash settlements on a sample
basis. We performed analytical procedures on the ratio of accrued customer marketing costs to relevant
data such as gross revenue 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.
Accounting
for uncertain
tax positions
At 31 December 2023, the Group recorded provisions for
uncertain tax positions of which €175 million are included in
current tax liabilities and the remainder in non-current tax
liabilities.
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.
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 20 and Note 22 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 is judgemental, because of
the inherent uncertainty related to the tax exposures, which
may result in materially different outcomes. Specifically, each
tax position involves the evaluation of unique and evolving facts
and circumstances.
We obtained management’s calculations and agreed inputs to source documentation where applicable.
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 evaluated the assumptions used by management to
assess its uncertain tax positions and compliance with the requirements of IFRIC 23. We developed our
independent range of possible outcomes for the Group’s tax exposures based on evidence obtained,
which we compared to the Group’s provisions. Where exposures arise in jurisdictions with similar laws and
regulations, we also considered whether the evaluation of tax risks was consistent across those
jurisdictions and took into account any resolution of these issues with the tax authorities.
/s/ Ernst & Young LLP
We have served as the Group’s auditor since 2016.
London, United Kingdom
15 March 2024
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2023 Integrated Report and Form 20-F
161
Report of independent registered public accounting firm continued
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 2023, 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).
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 2023, 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
statements of financial position of the Group as of 31 December 2023 and
2022, 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 2023, and the related notes and our report
dated 15 March 2024 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 2024
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
162
Consolidated income statement
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative expenses
Other income
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.
Year ended 31 December
2023
€ million
18,302
(11,582)
6,720
(3,178)
(1,310)
107
2,339
65
(185)
(120)
(16)
2,203
(534)
1,669
1,669
—
1,669
3.64
3.63
2022
€ million
17,320
(11,096)
6,224
(2,984)
(1,250)
96
2,086
67
(181)
(114)
(15)
1,957
(436)
1,521
1,508
13
1,521
3.30
3.29
2021
€ 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
Note
4
17
17
23
18
18
20
5
5
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
163
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:
Pre-tax activity, net
Tax effect
Foreign currency translation, net of tax
Cash flow hedges:
Pre-tax activity, net
Tax effect
Cash flow hedges, net of tax
Other reserves:
Pre-tax activity, net
Tax effect
Other reserves, net of tax
Items that may be subsequently reclassified to the income statement
Items that will not be subsequently reclassified to the income statement:
Pension plan remeasurements:
Pre-tax activity, net
Tax effect
Pension plan remeasurements, net of tax
Items that will not be subsequently reclassified to the income statement
Other comprehensive (loss)/income 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.
Note
Year ended 31 December
2023
€ million
1,669
2022
€ million
1,521
2021
€ million
988
20
12
20
15
20
(246)
—
(246)
21
(11)
10
3
—
3
(205)
—
(205)
(64)
17
(47)
(9)
3
(6)
260
—
260
277
(63)
214
7
(1)
6
(233)
(258)
480
(108)
35
(73)
(73)
(306)
1,363
1,363
—
1,363
(45)
11
(34)
(34)
(292)
1,229
1,202
27
1,229
301
(63)
238
238
718
1,706
1,684
22
1,706
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2023 Integrated Report and Form 20-F
164
Consolidated statement of financial position
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
6
6
7
12
20
25
12
8
19
9
24
24
10
10
13
15
22
12
20
Year ended 31 December
2023
€ million
2022
€ million
Note
Current:
Current portion of borrowings
12,505
Current portion of employee benefit liabilities
4,600
Current provisions
5,201
Current derivative liabilities
191
21
252
Current tax liabilities
Amounts payable to related parties
Trade and other payables
12,395
4,514
5,344
100
1
295
22,649
22,770
Total current liabilities
161
58
1,356
123
2,547
351
22
568
1,419
6,605
29,254
Total liabilities
257
85
EQUITY
Share capital
1,380
Share premium
139
Merger reserves
2,466
Other reserves
479
94
256
Retained earnings
Equity attributable to shareholders
Non-controlling interest
1,387
Total equity
6,543
Total equity and liabilities
29,313
Note
13
15
22
12
19
14
16
16
16
16
16
Year ended 31 December
2023
€ million
1,300
8
114
99
253
270
5,234
7,278
21,278
5
276
287
(823)
8,231
7,976
—
7,976
29,254
2022
€ million
1,336
8
115
76
241
485
5,052
7,313
21,866
5
234
287
(507)
7,428
7,447
—
7,447
29,313
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 2024. They were signed on its behalf by:
Damian Gammell,
Chief Executive Officer
15 March 2024
10,096
10,571
191
45
169
3,378
75
46
108
55
187
3,513
82
37
14,000
14,553
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2023 Integrated Report and Form 20-F
165
Consolidated statement of cash flows
Year ended 31 December
2023
2022
2021
Year ended 31 December
2023
2022
2021
Note
€ million
€ million
€ million
Note
€ million
€ million
€ million
2,203
1,957
1,382
Proceeds from sale of equity instruments
Investments in equity instruments
Interest received
Other investing activity, net
(5)
—
58
(9)
(2)
13
—
—
(4)
25
—
(2)
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
Gain on sale of sub-strata and associated mineral
rights
Gain on the sale of property
Finance costs, net
Income taxes paid
Changes in assets and liabilities:
Increase in trade and other receivables
Decrease/(increase) in inventories
Increase 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
7
6
21
23
23
18
653
139
57
(35)
(54)
120
715
101
33
—
—
114
(509)
(415)
(5)
6
124
80
(11)
38
(282)
(244)
885
(15)
37
46
693
89
16
—
—
129
(306)
(242)
(1)
507
8
(116)
(42)
Net cash flows from operating activities
2,806
2,932
2,117
Cash flows from investing activities:
Acquisition of bottling operations, net of cash
acquired
Purchases of property, plant and equipment
Purchases of capitalised software
Proceeds from sales of property, plant and
equipment
Proceeds from sales of intangible assets
Proceeds from the sale of sub-strata and
associated mineral rights
Net (payments)/proceeds of short-term
investments
—
(672)
(140)
—
(5,401)
(500)
(103)
(349)
(97)
101
37
35
11
143
—
25
—
—
23
(342)
(207)
198
Net cash flows used in investing activities
(937)
(645)
(5,605)
Cash flows from financing activities:
Proceeds from borrowings, net
Changes in short-term borrowings
Repayments on third party borrowings
Settlement of debt-related cross currency swaps
Payments of principal on lease obligations
Interest paid
Dividends paid
Exercise of employee share options
Transactions with non-controlling interests
Acquisition of non-controlling interest
Other financing activities, net
13
13
13
13
13
13
16
19
694
—
(1,159)
69
(148)
(182)
(841)
43
—
(282)
(16)
—
(285)
(938)
—
(153)
(130)
(763)
13
—
—
(20)
4,877
276
(950)
—
(139)
(97)
(638)
28
(73)
—
5
Net cash flows (used in)/from financing activities
(1,822)
(2,276)
3,289
Net change in cash and cash equivalents
47
11
(199)
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
(15)
(31)
10
10
1,387
1,419
1,407
1,387
83
1,523
1,407
The accompanying notes are an integral part of these consolidated financial
statements.
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
166
Consolidated statement of changes in equity
As at 1 January 2021
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
Profit after taxes
Other comprehensive income/(loss)
Total comprehensive income/(loss)
Acquisition of non-controlling interests
Issue of shares during the year
Equity-settled share-based payment expense
Share-based payment tax effects
Dividends
As at 31 December 2022
Profit after taxes
Other comprehensive loss
Total comprehensive income/(loss)
Cash flow hedge (gains)/losses transferred to cost of inventories
Tax effect on cash flow hedge (gains)/losses transferred to cost of inventories
Issue of shares during the year
Equity-settled share-based payment expense
Purchases of shares for equity settled Employee Share Purchase Plan
Share-based payment tax effects
Dividends
As at 31 December 2023
Note
12
16
21
20
16
16
16
21
20
16
12
12; 20
16
21
20
16
Share capital
Share
premium
Merger
reserves
€ million
5
—
—
—
—
—
—
—
—
—
—
5
—
—
—
—
—
—
—
—
5
—
—
—
—
—
—
—
—
—
—
5
€ million
192
—
—
—
—
—
—
28
—
—
—
220
—
—
—
—
14
—
—
—
234
—
—
—
—
—
42
—
—
—
—
276
€ million
287
—
—
—
—
—
—
—
—
—
—
287
—
—
—
—
—
—
—
—
287
—
—
—
—
—
—
—
—
—
—
287
Other
reserves
€ million
(537)
—
465
465
—
—
(84)
—
—
—
—
(156)
—
(272)
(272)
(79)
—
—
—
—
(507)
—
(233)
(233)
(114)
31
—
—
—
—
—
(823)
Retained
earnings
€ million
6,078
982
237
1,219
—
—
—
—
16
3
(639)
6,677
1,508
(34)
1,474
—
—
33
10
(766)
7,428
1,669
(73)
1,596
—
—
—
54
(4)
1
(844)
8,231
Total
€ million
6,025
982
702
1,684
—
—
(84)
28
16
3
(639)
7,033
1,508
(306)
1,202
(79)
14
33
10
(766)
7,447
1,669
(306)
1,363
(114)
31
42
54
(4)
1
(844)
7,976
Non-
controlling
interest
€ million
—
6
16
22
228
(73)
—
—
—
—
—
177
13
14
27
(204)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total
equity
€ million
6,025
988
718
1,706
228
(73)
(84)
28
16
3
(639)
7,210
1,521
(292)
1,229
(283)
14
33
10
(766)
7,447
1,669
(306)
1,363
(114)
31
42
54
(4)
1
(844)
7,976
The accompanying notes are an integral part of these consolidated financial statements.
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2023 Integrated Report and Form 20-F
167
Notes to the consolidated financial statements
Note 1
General information and basis of preparation
Coca-Cola Europacific Partners plc (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.
Basis of preparation
These consolidated financial statements of the Group reflect the following:
• They have been prepared in accordance with UK 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 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 2023 were approved and signed by Damian Gammell,
Chief Executive Officer, on 15 March 2024 having been duly authorised to do so by
the Board of Directors.
Impact of climate change
As part of the preparation of these consolidated financial statements, the Group
has considered the impact of climate change risks on the current valuation of the
Group’s assets and liabilities, particularly in the context of the risks and scenarios
identified in the Task Force on Climate-related Financial Disclosures (TCFD) on
pages 48-60 of the Strategic Report. There has been no material impact on the
financial reporting judgements and estimates arising from the considerations of
the Group and, as a result, the valuation of the Group’s assets and liabilities as of
31 December 2023 have not been affected. The Group’s considerations were
specifically focused on the impact of climate change risks on the projected cash
flows used in the impairment assessment of our indefinite lived intangible assets
and goodwill (refer to Note 6) as well as the carrying value and useful economic
lives of property, plant and equipment (refer to Note 7). As the pace and
effectiveness of a global transition to a low-carbon economy evolve, including the
development of government policies aiming to address the risks arising from
climate change, the Group will continue to monitor and assess the relevant
implications on the valuation of the Group’s assets and liabilities that could arise in
future years.
• 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 2023, 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 euro million except where
otherwise indicated.
• They have been prepared on a going concern basis (refer to the “Going concern”
paragraph on page 146).
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.
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Notes to the consolidated financial statements continued
The Group treats transactions with non-controlling interests that do not result in a
loss of control as equity transactions.
The principal exchange rates used for translation purposes in respect of one euro
were:
British pound
US dollar
Norwegian
krone
Swedish krona
Icelandic krona
Australian dollar
Indonesian
rupiah(B)
New Zealand
dollar
Papua New
Guinean kina
Average for the year ended 31 December(A)
Closing as at 31 December
2023
1.15
0.92
0.09
0.09
0.01
0.61
0.06
0.57
0.26
2022
1.17
0.95
0.10
0.09
0.01
0.66
0.06
0.60
0.27
2021
1.16
0.85
0.10
0.10
0.01
0.63
0.06
0.60
0.24
2023
1.15
0.90
0.09
0.09
0.01
0.61
0.06
0.57
0.24
2022
1.13
0.94
0.10
0.09
0.01
0.64
0.06
0.60
0.27
(A) For the year ended 31 December 2021, the rates for the Asia Pacific region 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.
When the Group loses control over a subsidiary, it derecognises the related assets
(including goodwill), liabilities, non-controlling interest and any other components
of equity, while any resulting gain or loss is recognised 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 period from 1 January 2021 through
to the acquisition of CCL (the Acquisition) effective 10 May 2021 refer to Coca-
Cola European Partners plc (Legacy CCEP) and its consolidated subsidiaries. The
periods from the Acquisition to the year ended 31 December 2023 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.
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 exchange rates in effect at the
end of each reporting period. Revenues and expenses are translated at average
monthly 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.
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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 2023, 31 December 2022 and
31 December 2021.
The following table summarises the number of selling days for the years ended
31 December 2023, 31 December 2022 and 31 December 2021 (based on a
standard five day selling week):
2023
2022
2021
First half
130
130
131
Second half
130
130
130
Full year
260
260
261
Comparability
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 the Group’s Asia Pacific territories, the fourth quarter
would typically reflect higher sales volumes in the 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.
Note 2
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.
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
The Group has applied the following standards and amendments for the first time
in the year ended 31 December 2023.
IFRS 17 “Insurance Contracts”
IFRS 17 “Insurance Contracts” is a comprehensive new standard for insurance
contracts covering recognition, measurement, presentation and disclosure. IFRS 17
replaces IFRS 4 “Insurance Contracts”. The overall objective of IFRS 17 is to provide
a comprehensive accounting model for insurance contracts that is more useful
and consistent for insurers covering all relevant accounting aspects.
The new standard had no impact on the consolidated financial statements of the
Group.
Definition of Accounting Estimates – Amendments to IAS 8
The amendments to IAS 8 clarify the distinction between changes in accounting
estimates, changes in accounting policies and corrections of errors. They also
clarify how entities use measurement techniques and inputs to develop
accounting estimates.
These amendments had no impact on the consolidated financial statements of
the Group.
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Notes to the consolidated financial statements continued
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice
Statement 2
The amendments to IAS 1 “Presentation of Financial Statements” and IFRS
Practice Statement 2 “Making Materiality Judgements” provide guidance and
examples to help entities apply materiality judgements to accounting policy
disclosures. The amendments aim to help entities provide accounting policy
disclosures that are more useful by replacing the requirement for entities to
disclose their “significant” accounting policies with a requirement to disclose their
“material” accounting policies and adding guidance on how entities apply the
concept of materiality in making decisions concerning accounting policy
disclosures.
The amendments had no impact on the consolidated financial statements of the
Group.
Deferred Tax related to Assets and Liabilities arising from a Single Transaction –
Amendments to IAS 12
The amendments to IAS 12 “Income Tax” narrow the scope of the initial recognition
exception, so that it no longer applies to transactions that give rise to equal
taxable and deductible temporary differences such as leases and
decommissioning liabilities.
The amendments had no material impact on the consolidated financial
statements of the Group.
International Tax Reform - Pillar Two Model Rules - Amendments to IAS 12
The Group has adopted International Tax Reform – Pillar Two Model Rules
(Amendments to IAS 12) upon their release on 23 May 2023. The amendments
provide a temporary mandatory exception from deferred tax accounting for the
top-up tax, which is effective immediately, and require new disclosures about the
Pillar Two exposure (see Note 20 for further details).
The Group has not early adopted any other amendments to accounting standards
that have been issued but are not yet effective. These amendments are not
expected to have a material impact to the Group in the current or future periods
and on foreseeable future transactions.
Note 3
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 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 6 for further details on the judgement regarding the lives of
bottling agreements.
Significant estimates
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 climate-related
risks. Refer to Note 6 for the sensitivity analysis of the assumptions used in the
impairment analysis of goodwill and intangible assets with indefinite lives.
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Notes to the consolidated financial statements continued
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 14 for further details.
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 20 for further details regarding income taxes.
Defined benefit plans
The determination of pension benefit costs and obligations is 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 15 for further details about the Group’s defined
benefit pension plan costs and obligations, including sensitivities to the key
assumptions applied.
Note 4
Segment information
Description of segment and principal activities
The Group derives its revenues through a single business activity, which is making,
selling and distributing an extensive range of primarily non-alcoholic ready to drink
beverages. The Group’s Board continues to be its Chief Operating Decision Maker
(CODM), which 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.
The following table provides a reconciliation between reportable segment
operating profit and consolidated profit before tax:
Year ended 31 December
2023
2022
2021
Europe
API
Total
Europe
API
Total
Europe
API
Total
€ million € million € million
€ million € million € million
€ million € million € million
Revenue
14,553
3,749
18,302
13,529
3,791
17,320
11,584
2,179
13,763
Comparable
operating profit(A)
Items impacting
comparability(B)
Reported operating
profit
Total finance costs,
net
Non-operating
items
Reported profit
before tax
1,888
485
2,373
1,670
468
2,138
1,500
272
1,772
(34)
2,339
(120)
(16)
(52)
2,086
(114)
(15)
(256)
1,516
(129)
(5)
2,203
1,957
1,382
(A) Comparable operating profit includes comparable depreciation and amortisation of €558 million and €196 million for Europe and
API respectively, for the year ended 31 December 2023. Comparable depreciation and amortisation charges for the year ended
31 December 2022 totalled €549 million and €223 million for Europe and API respectively. Comparable depreciation and
amortisation charges for the year ended 31 December 2021 totalled €564 million and €162 million for Europe and API respectively.
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Notes to the consolidated financial statements continued
(B) Items impacting the comparability of period over period financial performance for 2023 primarily include restructuring charges of
€94 million (refer to Note 17) and accelerated amortisation charges of €27 million (refer to Note 6), partially offset by €18 million
of royalty income arising from the ownership of certain mineral rights in Australia (refer to Note 23), considerations of €35 million
received relating to the sale of the sub-strata and associated mineral rights in Australia (refer to Note 23) and gains of €54 million
mainly attributable to the sale of property in Germany (refer to Note 23). Items impacting the comparability for 2022 included
restructuring charges of €163 million (refer to Note 17), partially offset by €96 million of other income arising from the favourable
court ruling pertaining to the ownership of certain mineral rights in Australia (refer to Note 23) and net insurance recoveries
received of €11 million arising from the July 2021 flooding events.
No single customer accounted for more than 10% of the Group’s revenue during
the years ended 31 December 2023, 31 December 2022 and 31 December 2021.
Revenue by geography
The following table summarises revenue from external customers by geography,
which is based on the origin of the sale:
Year ended 31 December
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.
2023
€ million
3,325
3,018
3,235
2,321
1,078
718
376
398
84
14,553
2,385
679
685
3,749
18,302
2022
€ million
3,034
2,682
3,088
2,089
1,042
682
404
421
87
13,529
2,339
649
803
3,791
17,320
2021
€ million
2,495
2,335
2,613
1,813
926
557
391
375
79
11,584
1,359
377
443
2,179
13,763
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:
Year ended 31 December
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.
2023
€ million
6,455
3,162
2,523
940
623
439
349
225
38
360
15,114
5,065
1,687
682
7,434
22,548
2022
€ million
6,401
3,091
2,469
896
613
428
349
242
36
271
14,796
5,281
1,755
726
7,762
22,558
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173
Notes to the consolidated financial statements continued
Note 5
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(C) (€)
Diluted earnings per share(C) (€)
Year ended 31 December
2023
2022
1,669
1,508
459
—
459
3.64
3.63
457
1
458
3.30
3.29
2021
982
456
1
457
2.15
2.15
(A) As at 31 December 2023, 31 December 2022 and 31 December 2021, the Group had 459,200,818, 457,106,453 and
456,235,032 Shares, respectively, in issue and outstanding.
(B) For the years ended 31 December 2023, 31 December 2022 and 31 December 2021, 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.
(C) Basic and diluted earnings per share are calculated prior to rounding.
Note 6
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 with TCCC contain performance
requirements and convey the rights to distribute and sell products within
specified territories. The agreements in each territory are for initial terms of
10 years that can be renewed for another 10 years. 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 the bottling agreements as at 31 December 2023,
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. Refer to Note 19
for details surrounding the subsequent sale of certain non-alcoholic ready to drink
brands to TCCC, which was completed in tranches.
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174
Notes to the consolidated financial statements continued
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
predominantly between five and seven years. Amortisation expense for capitalised
software is included within administrative expenses and was €94 million, €83
million and €75 million for the years ended 31 December 2023, 31 December 2022
and 31 December 2021, 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 €10 million, €10 million and €9 million for the years ended
31 December 2023, 31 December 2022 and 31 December 2021, respectively.
Non-TCCC franchise intangible
In connection with the Acquisition, the Group acquired certain bottling
agreements with non-TCCC distribution partners, mainly Beam Suntory, which
contain performance requirements and convey the rights to distribute and sell
products within specified API territories. The non-TCCC bottling arrangements
were recorded at fair value at the acquisition date and were initially amortised
over an expected economic useful life of 20 years. On 2 August 2023, the Group
announced that CCEP and Beam Suntory will discontinue their relationship
effective 1 July 2025 (Australia) and 1 January 2026 (New Zealand). CCEP will
remain the exclusive manufacturing, sales and distribution partner for Beam
Suntory in Australia and New Zealand through the end of the current contractual
terms set to expire on 30 June 2025 and 31 December 2025, respectively. The
discontinuance of the relationship triggered a change in the assigned useful
economic life of the intangible assets effective from the second half of 2023,
resulting in an accelerated amortisation charge of €27 million recognised for the
year ending 31 December 2023. As at 31 December 2023, finite-lived intangible
assets of €94 million were reflected in the consolidated statement of financial
position related to the Beam Suntory distribution rights, primarily attributable to
those available in Australia. Total amortisation expense for these assets is
recognised within administrative expenses and totalled €35 million, €8 million and
€5 million for the years ended 31 December 2023, 31 December 2022 and 31
December 2021, respectively.
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175
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 2021
Additions
Disposals
Transfers and reclassifications
Currency translation adjustments
As at 31 December 2022
Additions
Disposals
Transfers and reclassifications
Currency translation adjustments
As at 31 December 2023
Accumulated amortisation:
As at 31 December 2021
Amortisation expense
Disposals
Currency translation adjustments
As at 31 December 2022
Amortisation expense
Disposals
Currency translation adjustments
As at 31 December 2023
Net book value:
As at 31 December 2021
As at 31 December 2022
As at 31 December 2023
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
12,008
—
—
—
(134)
11,874
—
—
—
(116)
11,758
—
—
—
—
—
—
—
—
—
12,008
11,874
11,758
22
—
—
11
6
39
—
—
—
(7)
32
—
—
—
(7)
(7)
—
—
7
—
22
32
32
571
40
(27)
39
(2)
621
64
(27)
63
(1)
720
(297)
(83)
22
(2)
(360)
(94)
27
1
(426)
274
261
294
197
1
—
—
(3)
195
—
—
—
(1)
194
(53)
(10)
—
2
(61)
(10)
—
—
(71)
144
134
123
149
—
—
—
(1)
148
—
—
—
(6)
142
(5)
(8)
—
—
(13)
(35)
—
—
(48)
144
135
94
47
63
(1)
(38)
(2)
69
92
—
(65)
(2)
94
—
—
—
—
—
—
—
—
—
47
69
94
12,994
4,623
104
(28)
12
(136)
12,946
156
(27)
(2)
(133)
12,940
(355)
(101)
22
(7)
(441)
(139)
27
8
(545)
—
—
—
(23)
4,600
—
—
—
(86)
4,514
—
—
—
—
—
—
—
—
—
12,639
12,505
12,395
4,623
4,600
4,514
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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 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 2023, the Group had other
CGUs with total indefinite lived intangible assets of €1,349 million (2022: €1,369 million)
and goodwill of €370 million (2022: €380 million).
The recoverable amount of each CGU was determined through a value in use
calculation, which uses cash flow projections for a five year period. These
projections reflect the impact of climate change on our business as well as the
mitigating actions and strategies we are undertaking to support our commitment
to reach Net Zero by 2040. 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 an inflation-based long-term terminal growth rate
between 1.6% and 4.5%.
• 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
Australia
Great Britain
Germany
Pacific(A)
2023
2022
Pre-tax
discount rate
Pre-tax
discount rate
%
9.3
11.1
9.8
10.1
11.2
%
8.7
9.1
9.3
7.9
9.7
Cash generating unit
Iberia
Australia
Great Britain
Germany
Pacific(A)
2023
Indefinite lived
intangible assets
€ million
4,289
2,596
1,680
1,060
816
Year ended 31 December
2022
Indefinite lived
intangible assets
€ million
4,289
2,690
1,646
1,060
849
Goodwill
€ million
1,275
1,397
200
748
524
(A) Pacific refers to New Zealand and Pacific Islands.
(A) Pacific refers to New Zealand and Pacific Islands.
Goodwill
€ million
1,275
1,450
200
748
547
The Group did not record any impairment charges as a result of the tests
conducted in 2023 and 2022.
The Group’s Iberia, Australia, Great Britain and Germany CGUs have substantial
headroom when comparing the value in use calculation of the CGU versus the
CGU’s total carrying value.
For the Group’s Pacific CGU, the headroom in the 2023 impairment analysis was
approximately 11% of total carrying value. The Group estimates that a 0.9%
reduction in the terminal growth rate or a 0.7% increase in the discount rate, each
in isolation, would eliminate existing headroom in Pacific.
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Notes to the consolidated financial statements continued
For the Group’s Indonesia CGU, the headroom in the 2023 impairment analysis was
approximately 11% of total carrying value. The indefinite lived intangible assets and
goodwill equalled €143 million in total and the pre-tax discount rate used in the
test was 12.2%. The Group estimates that a 1.2% reduction in the terminal growth
rate or a 0.8% increase in the discount rate, each in isolation, would eliminate
existing headroom in Indonesia.
Note 7
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
2
3
3
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 an 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.
The transition to a low-carbon economy may impact the carrying value and
remaining useful economic lives of the Group’s property, plant and equipment.
The Group continues to invest in more efficient, cleaner and more technologically
advanced assets, however, the significant majority of the Group’s assets currently
in operation are likely to be substantially depreciated ahead of our Net Zero 2040
target, as set out in our Strategic Report on pages 37-40. In addition, the Group
continuously monitors the latest developments in government legislation in
relation to climate-related risks. Currently, no legislation has been passed that will
materially impact the carrying value and remaining useful economic lives of the
Group.
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. 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.
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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:
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
Cost:
As at 31 December 2021
Additions
Disposals
Assets held for sale
Transfers and reclassifications
Currency translation adjustments
As at 31 December 2022
Additions
Disposals
Transfers and reclassifications
Currency translation adjustments
As at 31 December 2023
Accumulated depreciation:
As at 31 December 2021
Depreciation expense
Disposals
Assets held for sale
Transfers and reclassifications
Currency translation adjustments
As at 31 December 2022
Depreciation expense
Disposals
Transfers and reclassifications
Currency translation adjustments
As at 31 December 2023
Net book value:
As at 31 December 2021
As at 31 December 2022
As at 31 December 2023
663
1
(3)
(29)
27
(11)
648
20
(1)
2
(12)
657
—
—
—
—
—
—
—
—
—
—
—
—
663
648
657
2,429
3,578
131
(28)
(26)
37
(42)
2,501
71
(44)
84
(26)
2,586
(766)
(128)
19
10
—
22
(843)
(137)
28
—
—
(952)
1,663
1,658
1,634
221
(103)
(8)
75
(40)
3,723
271
(214)
124
(18)
3,886
(1,473)
(380)
105
9
3
(2)
(1,738)
(318)
204
3
5
(1,844)
2,105
1,985
2,042
1,026
65
(49)
—
36
32
1,110
73
(47)
34
(9)
1,161
(631)
(127)
49
—
(2)
(14)
(725)
(112)
43
(1)
4
(791)
395
385
370
298
59
(58)
—
2
(4)
297
101
(51)
3
(1)
349
(151)
(58)
53
—
—
3
(153)
(61)
47
—
—
(167)
147
144
182
160
21
(8)
—
8
(2)
179
9
(3)
12
(2)
195
(91)
(22)
8
—
—
2
(103)
(25)
3
—
—
(125)
69
76
70
206
287
—
—
(184)
(4)
305
344
—
(259)
(1)
389
—
—
—
—
—
—
—
—
—
—
—
—
206
305
389
Total
€ million
8,360
785
(249)
(63)
1
(71)
8,763
889
(360)
—
(69)
9,223
(3,112)
(715)
234
19
1
11
(3,562)
(653)
325
2
9
(3,879)
5,248
5,201
5,344
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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:
Buildings and improvements
Vehicle fleet
Machinery, equipment and containers
Furniture and office equipment
Total
Year ended 31 December
2023
€ million
427
171
81
2
681
2022
€ million
465
133
82
3
683
Total additions to right of use assets during 2023 were €192 million
(2022: €208 million).
The following table summarises depreciation charges relating to right of use
assets for the periods presented:
Buildings and improvements
Vehicle fleet
Machinery, equipment and containers
Furniture and office equipment
Total
Year ended 31 December
2023
€ million
67
58
32
2
159
2022
€ million
63
57
34
2
156
During the years ended 31 December 2023 and 31 December 2022, the total
expense relating to low value and short-term leases was €24 million and
€24 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 2023, the total value of lease extension and termination options
included within right of use assets was €17 million (2022: €35 million).
The Group incurred variable lease expenses of €157 million in 2023 (2022: €153 million),
primarily included in administrative expenses. This amount mainly consists of the
variable component of lease payments for product transportation services in
Australia and New Zealand, whereby these components are dependent on various
factors such as number of cases of product delivered, number of trips and pallets.
Note 8
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. Cost of inventories also
includes the transfer from equity of gains and/or losses on qualified cash flow
hedges relating to inventory purchases. Spare parts, classified and accounted as
inventories, 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:
Finished goods
Raw materials and supplies
Spare parts and other
Total inventories
Year ended 31 December
2023
€ million
750
449
157
1,356
2022
€ million
777
452
151
1,380
Write downs of inventories totalled €59 million, €41 million and €41 million for the
years ended 31 December 2023, 31 December 2022 and 31 December 2021,
respectively. The majority of these write downs were included in cost of sales on
the consolidated income statement. None of these write downs of inventory were
subsequently reversed.
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Notes to the consolidated financial statements continued
Note 9
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 their transaction price 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 and 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 continued recession risk across our European territories, the Group
supplements 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 2023 and
31 December 2022.
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
Year ended 31 December
2023
€ million
2,348
142
16
7
9
25
2022
€ million
2,287
102
30
15
14
18
2,547
2,466
The following table summarises the change in the allowance for doubtful
accounts for the periods presented:
As at 31 December 2021
Provision for impairment recognised during the year
Receivables written off during the year as uncollectable
Reversals
Currency translation adjustments
As at 31 December 2022
Provision for impairment recognised during the year
Receivables written off during the year as uncollectible
Allowance for
doubtful accounts
€ million
(49)
(15)
5
1
1
(57)
(9)
9
2
1
(54)
Trade accounts receivable, gross
Allowance for doubtful accounts
Total trade accounts receivable
Year ended 31 December
Reversals
2023
€ million
2,601
(54)
2,547
2022
€ million
2,523
(57)
2,466
Currency translation adjustments
As at 31 December 2023
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181
Notes to the consolidated financial statements continued
Note 10
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
Year ended 31 December
2023
€ million
465
954
1,419
2022
€ million
491
896
1,387
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
Year ended 31 December
2023
€ million
2022
€ million
662
305
64
58
26
118
48
42
96
477
190
88
35
21
358
26
102
90
Total cash and cash equivalents
1,419
1,387
Included within cash and cash equivalents as at 31 December 2023 and
31 December 2022 are Papua New Guinea cash assets of €42 million
and €102 million respectively, 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.
As at 31 December 2023, short-term investments were €568 million (2022: €256
million), which included €33 million (2022: €49 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.
Cash receipts arising from the interest earned on cash and cash equivalents and
short-term investments were €58 million, €25 million and €12 million for the years
ended 31 December 2023, 31 December 2022, and 31 December 2021 respectively,
and in the current year considered a major class of gross cash receipts from
investing activities. Accordingly, these have been presented separately in the
Group’s consolidated statement of cash flows in the current year.
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Notes to the consolidated financial statements continued
Note 11
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, short-term investments,
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 13 for further details regarding the
Group’s borrowings.
The following table summarises the book value and fair value of the Group’s
borrowings as at the dates presented:
Fair value of borrowings
Book value of borrowings (Note 13)
Year ended 31 December
2023
€ million
10,580
11,396
2022
€ million
10,503
11,907
The Group’s derivative assets and liabilities are carried at fair value both upon initial
recognition and subsequently. The fair value 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 the Group’s 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 12 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:
Assets at fair value:
Derivatives (Note 12)
Liabilities at fair value:
Derivatives (Note 12)
Year ended 31 December
2023
€ million
2022
€ million
261
268
448
263
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.
Note 12
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.
All derivative financial instrument assets and liabilities are recorded at fair value in
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
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Notes to the consolidated financial statements continued
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 objectives. 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.
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.
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.
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 9 for trade accounts
receivable, Note 14 for trade and other payables, Note 13 for borrowings and Note
19 for amounts receivable and payable with related parties.
Location – statement
of financial position
Year ended 31 December
2023
€ million
2022
€ million
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
Current derivative assets
Foreign currency contracts Current derivative assets
Interest rate and cross
currency swaps
Current derivative assets
38
—
62
94
20
47
30
4
157
133
27
97
Total assets
261
448
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
Deal contingent forwards
Current derivative liabilities
Total liabilities
30
2
137
58
36
5
268
6
10
171
47
29
—
263
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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 variability in cash
flows attributable to currency fluctuations and commodity price fluctuations
associated with certain highly probable forecasted transactions, including
purchases of raw materials, finished goods and services denominated in
non-functional currencies, the receipts of interest as well as the payments
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 in the consolidated statement of
changes in equity. Any changes in the fair value of these cash flow hedges that are
the result of ineffectiveness are recognised immediately in the line item in 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. If the hedged cash flow
results in a subsequent recognition of a non-financial asset or liability, the gains
and/or losses accumulated in equity are included in the measurement of the cost
of the asset or liability. For other cash flow hedges, the amounts deferred in equity
are then recognised within the line item in 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.
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 euro using the respective year end spot rate):
Notional maturity profile
Total
Less than
1 year
1 to 3 years
3 to 5 years Over 5 years
Cash flow hedges
€ million
€ million
€ million
€ million
€ million
Foreign currency contracts
Interest rate and cross currency
swaps
Commodity contracts
As at 31 December 2021
Foreign currency contracts
Interest rate and cross currency
swaps
Commodity contracts
As at 31 December 2022
Deal contingent foreign currency
forwards
Foreign currency contracts
Interest rate and cross currency
swaps
Commodity contracts
As at 31 December 2023
1,074
2,225
922
4,221
1,723
2,079
1,397
5,199
636
1,105
1,306
1,441
4,488
912
144
566
1,622
1,292
760
834
2,886
636
980
602
829
3,047
162
1,365
356
1,883
431
604
563
1,598
—
125
—
588
713
—
—
—
—
—
416
—
416
—
—
520
9
529
—
716
—
716
—
299
—
299
—
—
184
15
199
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 €1.3 billion as at 31 December 2023, €2.1 billion as
at 31 December 2022 and €2.2 billion as at 31 December 2021. The net notional
amount of the other outstanding foreign currency cash flow hedges was
€1.1 billion as at 31 December 2023, €1.7 billion as at 31 December 2022 and
€1.1 billion as at 31 December 2021. The net notional amount of outstanding
commodity-related cash flow hedges was €1.4 billion as at 31 December 2023,
€1.4 billion as at 31 December 2022 and €0.9 billion as at 31 December 2021.
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Notes to the consolidated financial statements continued
During 2023, the Group entered into deal-contingent foreign currency forwards
with a total notional amount of €636 million in order to mitigate the foreign
currency risk arising from the proposed acquisition of CCBPI. These instruments
were recorded as cash flow hedges. Refer to Note 19 for further information
concerning the proposed acquisition. As of 31 December 2023, a loss of €5 million
is recognised in other comprehensive income related to changes in the fair value
of these instruments.
Outstanding cash flow hedges as at 31 December 2023 are expected to be settled
between 2024 and 2036.
The following table provides a reconciliation by risk category of the net of tax
impacts on the cash flow hedge reserve disclosed in Note 16, resulting from cash
flow hedge accounting:
Foreign
currency
contracts
€ million
(1)
108
Commodity
contracts
€ million
20
209
Interest rate
and cross
currency
swaps
€ million
1
(16)
Total
€ million
20
301
3
(76)
(13)
(86)
(84)
26
13
—
153
43
—
(28)
46
(84)
151
102
(19)
(117)
(13)
(149)
Cash flow hedges
As at 1 January 2021
Net fair value gains/(losses) recognised in OCI
Net (gains)/losses reclassified from OCI to
income statement or transferred to cost of
inventories
Gains transferred to goodwill
As at 31 December 2021
Net fair value gains/(losses) recognised in OCI
Net (gains)/losses reclassified from OCI to
income statement or transferred to cost of
inventories
As at 31 December 2022
Net fair value gains/(losses) recognised in OCI
Net (gains)/losses reclassified from OCI to
income statement or transferred to cost of
inventories(A)
As at 31 December 2023
The following table summarises the net of tax effect of the cash flow hedges in
the consolidated income statement for the periods presented:
Location – Income statement
Cost of sales
Cash flow hedging instruments
Foreign currency
contracts
Commodity contracts Cost of sales
Commodity contracts
Selling and
distribution expenses
Interest rate and cross
currency swaps
Finance costs
Total
Amount of gain/(loss) reclassified
from the cash flow hedge reserve into profit
Year ended 31 December
2023
€ million
1
—
17
10
28
2022
€ million
19
83
34
13
149
2021
€ million
(3)
74
2
13
86
Ineffectiveness associated with these cash flow hedges was not material during
any year presented within these financial statements.
Fair value hedges
The Group has designated certain cross currency swaps used to mitigate foreign
currency 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):
20
(26)
10
4
79
67
5
(3)
104
38
(111)
(10)
(111)
Interest rate and cross currency swaps
Fair value hedges
35
(8)
31
As at 31 December 2021
Interest rate and cross currency swaps
Less than
1 year
€ million
—
1 to 3 years
3 to 5 years Over 5 years
€ million
—
€ million
—
€ million
166
—
—
—
—
—
—
—
—
275
275
—
500
500
450
450
166
665
665
434
434
Total
166
166
1,165
1,165
1,159
1,159
(A) The amount includes a net of tax gain of €83 million transferred from the cash flow hedge reserve to the cost of inventories.
As at 31 December 2022
Interest rate and cross currency swaps
As at 31 December 2023
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Notes to the consolidated financial statements continued
The net notional amount of outstanding interest rate and cross currency swaps
designated in a fair value hedge relationship with borrowings was €1,159 million as
at 31 December 2023, €1,165 million as at 31 December 2022 and €166 million as at
31 December 2021.
The following table summarises the gains/(losses) recognised from the settlement
of fair value hedges within the consolidated income statement for the periods
presented:
Non-designated
hedging instruments
Foreign currency
contracts(A)
Total
Location – Income statement
Non-operating items
Year ended 31 December
2023
€ million
(5)
2022
€ million
(5)
2021
€ million
—
(5)
(5)
—
(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.
Fair value hedges
Interest rate and cross
currency swaps
Total
Location – Income
statement
Finance costs
Year ended 31 December
2023
€ million
(30)
2022
€ million
2
2021
€ million
(2)
(30)
2
(2)
Net investment hedges
The Group had no net investment hedges in place as at 31 December 2023 or
31 December 2022; 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.
The carrying value of the hedged item recognised in borrowings as at
31 December 2023 is €1,051 million (31 December 2022: €1,019 million), which
includes accumulated amounts of fair value hedging adjustments of €106 million
reduction in borrowings (31 December 2022: €146 million reduction in borrowings).
Non-designated hedges
The Group periodically enters into derivative instruments that are designed to
hedge various risks but are not designated as hedging instruments.
At times, it enters into other short-term non-designated hedges to mitigate its
exposure to changes in cash flows attributable to currency fluctuations associated
with no qualifying hedged items such as 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 in the consolidated income statement that is
consistent with the nature of the hedged risk.
There were €215 million of outstanding non-designated foreign currency hedges
related to hedging foreign currency exposure on intercompany loans as at
31 December 2023. There were €29 million outstanding non-designated hedges as
at 31 December 2022.
The following table summarises the gains/(losses) recognised from non-designated
derivative financial instruments in the consolidated income statement for the
years presented:
Note 13
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
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.
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187
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:
€500 million 1.125% Notes 2024
€350 million 2.375% Notes 2025
€250 million 2.75% Notes 2026(E)
€600 million 1.75% Notes 2026(E)
€400 million 1.50% Notes 2027(E)
€250 million 1.50% Notes 2027
€500 million 1.75% Notes 2028(E)
€750 million 0.20% Notes 2028
€500 million 1.125% Notes 2029
€500 million 1.875% Notes 2030(E)
€700 million 3.875% Notes 2030(A)
€500 million 0.70% Notes 2031(E)
€800 million 0.00% Notes 2025
€700 million 0.50% Notes 2029
€1,000 million 0.875% Notes 2033
€750 million 1.50% Notes 2041
Foreign currency bonds (swapped into euro)(F):
US$650 million 0.80% Notes 2024
US$500 million 1.50% Notes 2027
Year ended 31 December
2023
€ million
2022
€ million
Year ended 31 December
2023
€ million
2022
€ million
Australian dollar denominated bonds:
A$100 million 3.50% Notes 2024
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)(F):
NOK1 billion 3.04% Notes 2028
NOK750 million 2.75% Notes 2030
US$50 million 2.6525% Notes 2030
JPY10 billion 4.15% Notes 2036(E)
JPY12.3 billion 1.06% Notes 2037(E)
Lease obligations
Total non-current borrowings
—
19
13
19
33
83
34
128
9
92
68
45
67
65
66
21
14
20
35
86
36
135
9
99
73
47
74
71
542
10,096
535
10,571
—
349
245
588
381
258
478
745
496
482
694
482
798
695
991
746
—
451
498
349
240
580
370
259
466
744
495
472
—
473
798
695
991
746
608
466
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Notes to the consolidated financial statements continued
Borrowings are stated net of unamortised financing fees of €30 million and €33
million, as at 31 December 2023 and 31 December 2022, respectively.
Interest expense recognised on lease liabilities totalled €17 million, €14 million and
€10 million in 2023, 2022 and 2021, respectively.
Credit facilities
During 2023, the amount available under the Group’s multi currency credit facility
was €1.80 billion. This amount is available for borrowing with a syndicate
of 12 banks. This credit facility matures in 2029 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 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 2023, the Group had no amounts drawn under this credit
facility.
Current:
Euro denominated bonds:
€500 million 1.125% Notes 2024
€350 million 2.625% Notes 2023(B)
Foreign currency bonds (swapped into euro)(F):
US$650 million 0.8% Notes due 2024
US$850 million 0.50% Notes due 2023(C)
Australian dollar denominated bonds:
A$100 million 3.5% Notes 2024
Foreign currency bonds
(swapped into New Zealand dollar)(F):
US$25 million 4.34% Notes 2023(D)
US$25 million 4.34% Notes 2023(D)
Lease obligations
Total current borrowings
Year ended 31 December
2023
€ million
2022
€ million
500
—
588
—
62
—
—
150
1,300
—
350
—
797
—
24
24
141
1,336
(A) In December 2023, the Group issued €700 million 3.875% Notes 2030 in connection with the proposed acquisition of CCBPI. Refer
to Note 19 for further information concerning the proposed acquisition
(B) In November 2023, the Group repaid on maturity the outstanding amount related to the €350 million 2.625% Notes 2023.
(C) In May 2023, the Group repaid on maturity the outstanding amount related to the US$850 million 0.50% Notes due 2023.
(D) In October 2023, the Group repaid on maturity the outstanding amount related to US$25 million 4.34% Notes 2023 and
US$25 million 4.34% Notes 2023 assumed as part of the Acquisition.
(E) Bond designated in full or partially in a fair value hedge relationship.
(F) Cross currency swaps are used by the Group to swap foreign currency bonds into the required local currency.
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Notes to the consolidated financial statements continued
Changes in liabilities arising from financing activities
The following table provides a reconciliation of movements of liabilities to cash flows arising from financing activities:
Borrowings,
less current
portion
Interest
payable(B)
Derivatives
(assets)/
liabilities
held to
hedge
borrowings(C)
Dividend
payable(B)
Total
€ million
€ million
€ million
€ million
€ million
Borrowings,
less current
portion
Interest
payable(B)
Derivatives
(assets)/
liabilities
held to
hedge
borrowings(C)
Dividend
payable(B)
Total
€ million
€ million
€ million
€ million
€ million
Current
portion
of borrowings
€ million
As at 01 January 2021
Acquisition of API
Changes from financing cash
flows
Proceeds from third party
borrowings, net
Changes in short-term
borrowings(A)
Repayments on third party
borrowings
Payment of principal on
lease obligations
Interest paid
Dividends paid
Other non-cash changes
Amortisation of discount,
premium and issue costs
Other non-cash movements
Movement as a result of fair
value hedges
Changes in fair values
Currency translation
Reclassifications
Total changes
As at 31 December 2021
Changes from financing cash
flowsChanges in short-term
borrowings(A)
Repayments on third party
borrowings
805
381
6,382
1,251
—
4,877
276
(950)
(139)
(10)
—
—
39
6
—
33
—
—
—
—
—
83
9
—
100
909
545
1,350
(909)
5,408
11,790
(285)
(938)
—
—
57
—
—
—
—
—
(87)
—
108
—
—
—
—
21
78
—
—
(3)
—
—
16
—
—
—
—
—
—
—
—
—
(98)
(28)
—
(110)
(110)
—
—
2
—
7,246
1,648
Payment of principal on
lease obligations
Interest paid
Dividends paid
—
4,877
Other financing activities
Other non-cash changes
Amortisation of discount,
premium and issue costs
Other non-cash movements
Movement as a result of fair
value hedges
Changes in fair values
Currency translation
Reclassifications
Total changes
As at 31 December 2022
Changes from financing cash
flows
Proceeds from third party
borrowings, net
Repayments on third party
borrowings
Payment of principal on
lease obligations
Settlement of debt-related
cross-currency swaps
Interest paid
Dividends paid
—
276
—
(950)
—
—
(139)
(97)
(638)
(638)
—
(3)
639
—
869
15
—
—
—
(98)
105
—
1 5,865
3 13,111
—
(285)
—
(938)
Current
portion
of borrowings
€ million
(153)
(14)
—
(1)
(1)
34
11
—
—
—
—
—
—
4
171
(172)
—
111
1,333
(14)
1,336
(1,333)
(1,219)
10,571
—
694
(1,159)
(148)
—
(17)
—
—
—
—
—
—
—
(116)
—
—
—
112
—
—
—
—
(4)
74
—
—
—
—
(165)
—
—
—
—
—
—
—
—
—
—
(763)
—
—
(153)
(130)
(763)
(1)
3
766
1,083
—
(161)
45
(18)
—
27
(83)
—
(2)
—
45
91
—
1 (1,209)
4 11,902
—
—
—
69
—
—
—
694
—
(1,159)
—
—
—
(841)
(148)
69
(182)
(841)
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Notes to the consolidated financial statements continued
Borrowings,
less current
portion
Interest
payable(B)
Derivatives
(assets)/
liabilities
held to
hedge
borrowings(C)
Dividend
payable(B)
Total
€ million
€ million
€ million
€ million
€ million
Current
portion
of borrowings
€ million
Other non-cash changes
Amortisation of discounts,
premium, issue costs and fair
value adjustments
Other non-cash movements
Movement as a result of fair
value hedges
Changes in fair values
Currency translation
Reclassifications
Total changes
—
93
—
—
5
98
40
—
(40)
1,235
(36)
(77)
(1,235)
(475)
As at 31 December 2023
1,300
10,096
—
164
—
—
—
—
(1)
73
—
—
—
25
17
—
111
28
—
5
844
1,199
—
—
40
25
(2)
(102)
—
1
—
(400)
5 11,502
(A) In 2023, changes in short-term borrowings include €6,810 million of newly issued and €6,810 million of repaid EUR commercial
paper. In 2022, changes in short-term borrowings included €2,464 million and €2,749 million of newly issued and repaid EUR
commercial paper, respectively.
(B) Interest payable and dividends payable balances are presented within the “Trade and other payables” line item in the Group’s
consolidated statement of financial position.
(C) Interest rate and cross currency swaps used to hedge interest rate risk and currency fluctuations of non-functional currency
borrowings, refer to Note 12.
Total cash outflows for leases were €165 million, €167 million and €149 million for
the years ended 31 December 2023, 31 December 2022 and 31 December 2021,
respectively.
Note 14
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 70 to 80 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 €5.4 billion, €5.2 billion and
€4.1 billion for 2023, 2022 and 2021, 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(B)
Other accrued expenses
Total trade and other payables
Year ended 31 December
2023
€ million
2,306
1,340
338
532
280
438
2022
€ million
2,221
1,348
288
500
253
442
5,234
5,052
(A) Includes amounts of €622 million (2022: €212 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.
(B) This line item includes a payable of €59 million in 2023 and €57 million in 2022 to the Spanish tax authorities. Refer to Note 24 for
further details.
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Notes to the consolidated financial statements continued
Note 15
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 restructuring that are 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:
Year ended 31 December
2023
Rest of
world
GB
Total
GB
2022
Rest of
world
Total
€ million
€ million
€ million
€ million
€ million
€ million
Retirement benefit
obligation
Other employee benefit
liabilities
Total non-current employee
benefit liabilities
77
—
77
81
33
158
33
114
191
—
—
—
77
31
77
31
108
108
Defined benefit plans
The Group sponsors a number of defined benefit pension plans in Belgium,
France, Germany, Great Britain, Luxembourg, Norway, Australia and Indonesia. The
majority of the defined benefit plans are either career average, final salary or
hybrid plans, and operate on a funded basis with assets held in external funds. The
Group’s Great Britain plan (GB Scheme) is 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 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.
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).
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).
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Notes to the consolidated financial statements continued
As part of its risk management strategy, in September 2023, the board of trustees
entered into a buy-in agreement with Just Retirement Ltd. to acquire an
insurance policy with the intent of matching a specific portion of the GB Scheme’s
future cash flows arising from the accrued pension liabilities of retired members.
The transaction was financed entirely using a portion of the existing plan assets,
with no further funding required from the Group. On an IAS 19 “Employee
Benefits” basis, the subsequent fair value of the insurance policy matches the
present value of the liabilities being insured. As the purchase price of the annuity
of €257 million exceeded the IAS 19 accounting value of the corresponding
liabilities, an asset remeasurement loss of €26 million has been recorded in other
comprehensive income.
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
2022 and has been updated to 31 December 2023 to reflect our defined benefit
obligation, for known events and changes in market conditions as allowed under
IAS 19.
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 underperformed 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:
Year ended 31 December
2023
Rest of
world
GB
Total
GB
2022
Rest of
world
Total
GB
2021
Rest of
world
Total
Service cost
Past service
(credit)/cost(A)
Net interest
(income)/cost
Administrative
expenses
Total cost
€ million € million € million
14
14
—
€ million € million € million
18
18
—
€ million € million € million
26
10
16
—
(7)
(7)
—
(2)
(2)
(29)
(1)
(1)
(2)
(2)
1
(1)
1
—
(1)
1
7
1
6
—
(2)
1
18
1
16
1
(17)
6
1
1
24
(23)
2
2
7
(A) The current year activity is predominantly comprised of the impact of a plan amendment arising from legislative changes in
respect of the minimum retirement age in France.
Other comprehensive income
The following table summarises the changes in other comprehensive income
related to our pension plans for the years presented:
Year ended 31 December
2023
Rest of
world
GB
Total
GB
2022
Rest of
world
Total
GB
2021
Rest of
world
Total
€ million € million € million
€ million € million € million
€ million € million € million
Actuarial loss/(gain)
on defined benefit
obligation arising
during the period
Return on plan
assets less/(greater)
than discount rate
Net charge to other
comprehensive
income
39
32
71
(712)
(125) (837)
(60)
(6)
(66)
65
(28)
37
808
74
882
(177)
(58) (235)
104
4
108
96
(51)
45
(237)
(64) (301)
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Notes to the consolidated financial statements continued
Benefit obligation and fair value of plan assets
The following tables summarise the changes in the pension plan benefit obligation and the fair value of plan assets for the periods presented:
Year ended 31 December
2023
Rest of
world
GB
Total
GB
2022
Rest of
world
Total
Year ended 31 December
2023
Rest of
world
GB
Total
GB
2022
Rest of
world
Total
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
Reconciliation of benefit
obligation:
Benefit obligation at beginning
of plan year
Service cost
Past service (credit)/cost
Interest costs on defined benefit
obligation
Plan participants contribution
Actuarial loss/(gain) – experience
Actuarial (gain)/loss –
demographic assumptions
Actuarial loss/(gain) – financial
assumptions
Benefit payments
Administrative expenses
Currency translation adjustments
Benefit obligation at end of
plan year
937
—
—
45
—
21
(13)
31
529
14
(7)
1,466
14
(7)
1,739
—
—
32
—
26
2
674
18
(2)
2,413
18
(2)
7
28
7
—
39
28
33
2
60
36
30
(13)
54
(740)
(132)
(872)
15
36
9
—
23
(33)
(70)
(103)
—
20
1
(2)
1
18
(57)
—
(65)
(72)
(129)
1
—
1
(65)
1,008
548
1,556
937
529
1,466
Reconciliation of fair value
of plan assets:
Fair value of plan assets at
beginning of plan year
Interest income on plan assets
Return on plan assets (less)/
greater than discount rate
Plan participants contributions
Employer contributions
Benefit payments
Currency translation adjustment
Fair value of plan assets at end
of plan year
952
46
(65)
—
11
(33)
20
572
16
1,524
62
1,840
34
664
6
2,504
40
28
36
21
(70)
(2)
(37)
36
32
(103)
18
(808)
—
11
(57)
(68)
(74)
28
21
(72)
(1)
(882)
28
32
(129)
(69)
931
601
1,532
952
572
1,524
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Notes to the consolidated financial statements continued
Timing of benefit payments
The weighted average duration of the defined benefit plan obligation as at
31 December 2023 is 15 years, including 16 years for the GB Scheme. The weighted
average duration of the defined benefit plan obligation as at 31 December 2022
was 16 years, including 17 years for the GB Scheme.
Retirement benefit status
The following table summarises the retirement benefit status of pension plans as
at the dates presented:
Year ended 31 December
2023
Rest of
world
GB
Total
GB
2022
Rest of
world
Total
€ million
€ million
€ million
€ million
€ million
€ million
Net benefit status:
Present value of obligation
(1,008)
(548)
(1,556)
(937)
(529) (1,466)
Fair value of assets
Net benefit status:
Retirement benefit surplus (Note
25)
931
(77)
—
601
53
134
1,532
(24)
134
Retirement benefit obligation
(77)
(81)
(158)
952
15
15
—
572
43
120
1,524
58
135
(77)
(77)
The surplus for 2023 is primarily related to the defined benefit plans in Germany
and Belgium. The surplus 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:
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
Male
Female
Year ended 31 December
2023
Rest of
world
%
3.6
3.6
2.3
GB
%
4.5
N/A
3.1
Average
%
4.2
3.6
2.9
GB
%
4.8
N/A
3.3
Year ended 31 December
2023
Rest of
world
GB
Average
GB
2022
Rest of
world
%
4.0
3.6
2.4
2022
Rest of
world
Average
%
4.5
3.6
3.0
Average
21.4
23.9
19.8
23.2
21.0
23.7
21.9
24.4
19.8
23.1
21.3
24.0
22.3
25.0
20.0
23.5
21.7
24.6
22.8
25.5
20.0
23.5
22.1
24.9
(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 tables summarise the sensitivity of the defined benefit obligation to
changes in the weighted average principal assumptions for the periods presented:
Year ended 31 December 2023
Impact on defined benefit obligation (%)
Principal assumptions
Discount rate
Rate of compensation
increase(A)
Rate of price inflation
Mortality rates
Increase in assumption
Decrease in assumption
Change in
assumption
0.5%
0.5%
0.5%
1 year
GB
(7.3)
N/A
4.6
2.3
Rest of
world
Average
(4.1)
(6.2)
1.6
3.2
1.7
0.5
4.1
2.1
GB
7.9
N/A
(4.5)
(2.5)
Rest of
world
4.4
Average
6.7
(1.4)
(3.0)
(1.8)
(0.5)
(4.0)
(2.2)
Year ended 31 December 2022
Impact on defined benefit obligation (%)
Increase in assumption
Decrease in assumption
Principal assumptions
Discount rate
Rate of compensation
increase(A)
Rate of price inflation
Mortality rates
Change in
assumption
GB
Rest of
world
Average
0.5%
(7.9)
(4.0)
(6.5)
0.5%
0.5%
1 year
N/A
3.9
3.0
1.6
3.1
1.7
0.6
3.6
2.5
GB
8.6
N/A
(3.8)
(2.8)
Rest of
world
4.4
Average
7.1
(1.4)
(2.9)
(1.7)
(0.5)
(3.4)
(2.4)
(A) The compensation increase assumption is no longer applicable to the valuation of the defined benefit obligation associated with
the GB Scheme in light of the plan closure effective 31 March 2021.
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 from 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.
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Notes to the consolidated financial statements continued
The following table summarises pension plan assets measured at fair value as at the dates presented:
Total
Year ended 31 December 2023
Investments quoted
in active markets
Unquoted investments
Total
Year ended 31 December 2022
Investments quoted
in active markets
Unquoted investments
GB
Rest of world
GB
Rest of world
GB
Rest of world
GB
Rest of world
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
Equity securities(A)
Fixed income securities:(B)
Corporate bonds and notes
Government bonds(C)
Cash and other short-term investments(D)
Other investments:
Real estate funds(E)
Insurance contracts(F)
Investment funds(G)
Derivatives(H)
Total
154
211
335
25
255
463
77
12
—
117
770
19
21
—
—
7
154
—
94
41
6
26
—
—
—
—
(476)
—
208
260
—
5
(3)
—
—
—
—
—
203
77
—
280
185
56
692
28
274
207
76
6
—
185
—
—
1,131
23
43
—
—
5
56
28
5
15
—
5
—
—
(467)
—
216
—
—
1
1,524
1,202
294
(250)
—
—
—
—
—
207
71
—
278
1,532
934
321
(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) The unquoted amounts within this category relate to repurchase agreements (where the Scheme has sold government bonds with the agreement to repurchase at a fixed date and price). The commitment to repurchase the government bonds reduces the pension
assets and is reflected at fair value based on the repurchase price. The assets sold are reported at their fair value, reflecting that the Scheme retains the risks and rewards of ownership of those assets. The asset portfolio of the GB Scheme was refined during 2022 by
entering into repurchase agreement of government bonds in order to better match the Scheme liability and to offset the exposure to interests and inflation rates, while remaining invested in the assets of similar risk profile.
(D) 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.
(E) 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.
(F) Insurance contracts exactly match the amount and timing of certain benefits and therefore the fair value of these insurance policies is deemed to be the present value of the related obligations.
(G) Primarily includes investments in equity securities, fixed income securities and combinations of both. Fair values are sourced from broker quotes.
(H) The unquoted amounts within derivatives primarily relate to total return swaps, which represent the current value of future cash flows arising from the swap determined using discounted cash flow models and market data at the reporting date.
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197
Notes to the consolidated financial statements continued
Contributions
To support a long-term funding arrangement, during 2019 the Group entered into
a partnership agreement with the GB Scheme and 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 €32 million, €32 million and €39 million
during the years ended 31 December 2023, 31 December 2022 and
31 December 2021, respectively. Included within the 2023 contribution is €11 million
relating to the Partnership agreement. The Group expects to make contributions
of €31 million for the full year ending 31 December 2024.
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 €8 million and €8 million
as at 31 December 2023 and 31 December 2022, respectively, and is included
within the current portion of employee benefit liabilities. The non-current portion
of these liabilities totalled €33 million and €31 million as at 31 December 2023 and
31 December 2022, 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 €81 million for the year ended 31 December 2023,
€79 million for the year ended 31 December 2022 and €62 million for the year
ended 31 December 2021.
Note 16
Equity
Share capital
As at 31 December 2023, the Company has issued and fully paid 459,200,818
Shares. Shares in issue have one voting right each and no restrictions related to
dividends or return of capital.
As at 1 January 2021
Issuances of Shares
Cancellation of Shares
As at 31 December 2021
Issuance of Shares
Cancellation of Shares
As at 31 December 2022
Issuance of Shares
Cancellation of Shares
As at 31 December 2023
Number of Shares
Share capital
millions
455
1
—
456
1
—
457
2
—
459
€ million
5
—
—
5
—
—
5
—
—
5
The number of Shares increased in 2023, 2022 and 2021 from the issue of 2,094,365,
871,421 and 1,589,522 Shares, respectively, following the exercise of share-based
payment awards.
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Notes to the consolidated financial statements continued
Share premium
The share premium account increased by cash received for the exercise of options
by €42 million in 2023, €14 million in 2022 and €28 million in 2021.
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.
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
Reserve related to the acquisition of non-
controlling interests
Other reserves(A)
Total other reserves
Year ended 31 December
2023
€ million
31
197
2022
€ million
104
197
2021
€ million
151
197
(974)
(728)
(509)
(79)
2
(823)
(79)
(1)
(507)
—
5
(156)
(A) Other reserves relate 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 2023 are included in the consolidated statement of comprehensive
income or directly within the consolidated statement of changes in equity.
Dividends
Dividends are recorded within the Group’s consolidated financial statements in
the period in which they are paid.
First half dividend(A)
Second half dividend(B)
Total dividend on ordinary shares paid
Year ended 31 December
2023
€ million
308
533
841
2022
€ million
256
507
763
2021
€ million
—
638
638
(A) Dividend of €0.67 per Share was paid in first half of 2023. Dividend of €0.56 per Share was paid in first half of 2022.
(B) Dividend of €1.17 per Share was paid in second half of 2023. Dividend of €1.12 per Share was paid in second half of 2022.
A full year dividend of €1.40 per Share was paid in 2021.
Dividends attributable to restricted stock units and performance share units that
are unvested at the period end date are accrued accordingly. During 2023, an
incremental dividend accrual of €3 million has been recognised (2022: €3 million,
2021: €1 million).
Non-controlling interest
As at 31 December 2023, 31 December 2022 and 31 December 2021, equity
attributable to non-controlling interest was nil, nil and €177 million, respectively.
In December 2022, the Group entered into a share purchase agreement (SPA)
with TCCC to acquire the remaining 29.4% ownership interest of its subsidiary, PT
Coca-Cola Bottling Indonesia, for a total consideration of €282 million. The
acquisition completed in the first quarter of 2023, following the resolution of
customary conditions (refer to Note 19). As at 31 December 2022, the non-
controlling interest was derecognised.
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.
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Notes to the consolidated financial statements continued
Note 17
Total operating costs
The following tables summarise the significant cost items by nature within
operating costs for the years presented:
Year ended 31 December
Transportation costs(A)
Employee benefits
Depreciation of property, plant and
equipment, excluding restructuring
Amortisation of intangible assets
Restructuring charges, including
accelerated depreciation(B)
Other selling and distribution expenses
Total selling and distribution expenses
Transportation costs(A)
Employee benefits
Depreciation of property, plant and
equipment, excluding restructuring
Amortisation of intangible assets
Acquisition related costs
Restructuring charges, including
accelerated depreciation(B)
Other administrative expenses
Total administrative expenses
Total operating expenses
2023
€ million
958
1,116
236
6
—
862
3,178
3
608
93
130
12
85
379
1,310
4,488
2022
€ million
851
1,110
246
7
1
769
2,984
16
544
99
94
3
143
351
1,250
4,234
2021
€ million
631
975
245
4
45
596
2,496
2
462
76
83
49
91
311
1,074
3,570
(A) Transportation costs include warehousing and delivery costs to the final customer destination. They exclude depreciation and
amortisation.
(B) See restructuring costs table.
Restructuring costs
Increase in provision for restructuring
programmes (Note 22)
Amount of provision unused (Note 22)
Accelerated depreciation and non-cash
costs
Other cash costs(A)
Total restructuring costs
Restructuring costs by function:
Cost of sales
Selling and distribution expenses
Administrative expenses
Year ended 31 December
2023
€ million
2022
€ million
2021
€ million
78
(10)
11
15
94
9
—
85
115
(8)
44
12
163
19
1
143
93
(13)
60
13
153
17
45
91
(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 2023, as part of the continuation of this program, the Group announced
additional restructuring proposals. These initiatives resulted in €7 million of
restructuring charges primarily related to severance costs. As at
31 December 2023, the programme is substantially complete.
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Notes to the consolidated financial statements continued
In November 2022, the Group announced a new efficiency programme to be
delivered by the end of 2028. This programme focusses on further supply chain
efficiencies, leveraging global procurement and a more integrated shared service
centre model, all enabled by next generation technology including digital tools
and data and analytics.
In 2023, as part of this efficiency programme, the Group announced restructuring
proposals resulting in €82 million of recognised costs primarily related to expected
severance payments.
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
Year ended 31 December
2023
€ million
1,841
339
253
2,433
2022
€ million
1,769
316
233
2,318
2021
€ million
1,544
302
170
2,016
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
2023
2022
2021
No. in thousands
No. in thousands
No. in thousands
11.6
17.1
4.1
32.8
12.5
16.6
4.0
33.1
10.9
14.9
3.9
29.7
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
Year ended 31 December
2023
2022
2021
€ thousand
€ thousand
€ thousand
3,759
6,269
10,028
1,019
717
3,136
6,248
9,384
1,002
213
4,751
5,493
10,244
1,234
313
11,764
10,599
11,791
36
36
47
47
35
35
Total audit and all other fees
11,800
10,646
11,826
(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
attested engagements.
(C) Represents fees for all other allowable services.
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Notes to the consolidated financial statements continued
Note 18
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
Year ended 31 December
2023
€ million
65
(162)
(23)
(120)
2022
€ million
67
(162)
(19)
(114)
2021
€ million
43
(153)
(19)
(129)
(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 €47 million, €50 million and €27 million in 2023, 2022 and 2021, respectively. Cross
currency swap and interest rate swap expense totalled €67 million, €31 million and €14 million in 2023, 2022 and 2021, respectively.
Refer to Note 12 for further details.
(B) Other finance costs principally includes amortisation of the discount on external debt and interest on leases.
Note 19
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 2023, 19.20% 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-year terms and
each contains the right for the Group to request a 10-year renewal. The existing
bottling agreements expire no earlier than 1 September 2025. Additionally, two of
the Group’s seventeen 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)
Amounts affecting finance costs, net(D)
Total net amount affecting
the consolidated income statement
Year ended 31 December
2023
€ million
140
(3,964)
25
4
2022
€ million
117
(3,805)
19
—
2021
€ million
50
(3,056)
9
—
(3,795)
(3,669)
(2,997)
(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 and reimbursement of certain
marketing expenses.
(D) Amounts relate to bank fees recharges for bank guarantees.
The following table summarises the transactions with TCCC that impacted the
consolidated statement of financial position for the periods presented:
Amounts due from TCCC
Amounts payable to TCCC
Year ended 31 December
2023
€ million
101
229
2022
€ million
130
442
In December 2022, the Group entered into a share purchase agreement (SPA)
with TCCC to acquire the remaining 29.4% ownership interest of its subsidiary, PT
Coca-Cola Bottling Indonesia, for a total consideration of €282 million. As at
31 December 2022, we recognised a redemption liability equalling the
consideration amount, which was reflected within the amounts payable to related
parties line of our consolidated statement of financial position. The acquisition
completed on 15 February 2023, following the resolution of customary conditions.
In February 2022, the Group entered into asset sale arrangements with TCCC,
pursuant to which the Group agreed to sell certain non-alcoholic ready to drink
beverage brands predominantly available in Australia and New Zealand, which
were acquired as part of the business combination transaction consummated on
10 May 2021, for a total consideration approximating €182 million. The sale price
approximated the fair value of the brands assessed at the acquisition date. During
the first half of 2022, the Group partially completed the asset sale transaction and
classified the remaining brands as assets held for sale in our consolidated
statement of financial position as at 31 December 2022. The remaining portion of
the asset sale transaction was finalised during the first half of 2023. The Group has
also entered into commercial agreements with TCCC to facilitate ongoing
manufacturing, distributing and/or selling activities pertaining to these brands.
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.
Proposed acquisition of Coca-Cola Beverages Philippines, Inc. (CCBPI)
In November 2023, the Group together with Aboitiz Equity Ventures Inc. (AEV)
entered into a definitive agreement with The Coca-Cola Company (TCCC) to
jointly acquire 100% of CCBPI, a wholly owned subsidiary of TCCC, for an estimated
total consideration of US$1.8 billion on a debt-free, cash-free basis. The proposed
acquisition reflects a 60:40 ownership structure between CCEP and AEV. The
parties also agreed that if any currently unforeseen events lead AEV to terminate
its participation in the proposed acquisition, at the election of TCCC, CCEP may
acquire 60% or 100% of CCBPI. The transaction, which is subject to a number of
customary closing conditions, including the receipt of regulatory approval, is
expected to complete during the first quarter of 2024 (refer to Note 27 for
further details).
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 2023, 20.80% 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 seventeen
Directors, including the Chairman, are nominated by Olive Partners, three of whom
are affiliated with Cobega.
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203
Notes to the consolidated financial statements continued
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:
Amounts affecting revenue(A)
Amounts affecting cost of sales(B)
Amounts affecting operating expenses(C)
Total net amount affecting
the consolidated income statement
Year ended 31 December
2023
€ million
2022
€ million
2021
€ million
1
(69)
(18)
(86)
2
(76)
(17)
(91)
1
(49)
(11)
(59)
(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 maintenance and repair services and transportation.
The following table summarises the transactions with Cobega that impacted the
consolidated statement of financial position for the periods presented:
Amounts due from Cobega
Amounts payable to Cobega
Year ended 31 December
2023
€ million
16
22
2022
€ million
3
24
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 service provider supporting the
operation of container refund schemes in certain Australian states, a PET recycling
plant in Indonesia and a manufacturer of alcoholic beverages (divested during the
first half of 2022).
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.
Other related parties include coordinators of container deposit schemes in certain
Australian states over which significant influence is held.
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
Year ended 31 December
2023
€ million
2022
€ million
2021
€ million
(68)
(28)
(85)
(73)
(9)
(85)
(49)
(9)
(52)
(181)
(167)
(110)
(A) Amounts principally relate to container deposit scheme charges in Australia.
(B) Amounts principally relate to the purchase of certain raw materials.
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204
Notes to the consolidated financial statements continued
The following table summarises the balances with associates, joint ventures and
other related parties:
Amounts due from associates
Amounts payable to associates
Amounts payable to joint ventures
Amounts payable to other related parties
Year ended 31 December
2023
€ million
6
2
7
10
2022
€ million
6
9
—
10
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:
Year ended 31 December
2023
€ million
2022
€ million
2021
€ million
Note 20
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.
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, unless it gives rise to equal taxable and deductible temporary
differences; or
Salaries and other short-term employee
benefits(A)
Share-based payments
Total
31
20
51
30
15
45
22
7
29
• 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.
(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.
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205
Notes to the consolidated financial statements continued
2023, 2022 and 2021 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
Year ended 31 December
2023
€ million
2022
€ million
2021
€ million
555
(10)
545
11
(22)
—
(11)
460
(37)
423
35
(22)
—
13
534
436
323
(53)
270
6
(9)
127
124
394
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, unless it gives rise to equal taxable
and deductible temporary differences; 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.
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206
Notes to the consolidated financial statements continued
The following table summarises the taxes on items recognised in other
comprehensive income (OCI) and directly within equity for the periods presented:
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): cash flow
hedges
Deferred tax charge/(credit): share-
based compensation
Current tax charge/(credit): share-based
compensation
Total taxes charged/(credited) to equity
Year ended 31 December
2023
€ million
2022
€ million
2021
€ million
11
(43)
8
(24)
(31)
(1)
—
(32)
(20)
(11)
—
(31)
—
(2)
(8)
(10)
63
63
1
127
—
(3)
—
(3)
The effective tax rate was 24.2%, 22.3% and 28.5% for the years ended
31 December 2023, 31 December 2022 and 31 December 2021, 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:
Accounting profit before tax
from continuing operations
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
Year ended 31 December
2023
€ million
2022
€ million
2021
€ million
2,203
1,957
1,382
518
43
15
—
(10)
(32)
534
371
115
2
—
7
(59)
436
262
72
2
127
(7)
(62)
394
(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 23.5% (2022: 19%, 2021: 19%).
(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) The prior year adjustment is principally due to the release of tax reserves that are no longer required and tax audit settlements.
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207
Notes to the consolidated financial statements 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 2021
Amount charged/(credited) to income statement
(excluding effect of tax rate changes)
Amounts charged/(credited) directly to OCI
Amount charged/(credited) to equity
Acquired through business combinations
Balance sheet reclassifications
Effect of movements in foreign exchange
As at 31 December 2022
Amount charged/(credited) to income statement
(excluding effect of tax rate changes)
Amounts charged/(credited) directly to OCI
Amount charged/(credited) to equity
Balance sheet reclassifications
Effect of movements in foreign exchange
As at 31 December 2023
Analysed as follows:
Deferred tax asset
Deferred tax liability
Franchise
and other
intangible assets
Property, plant
and equipment
Financial assets
and liabilities
€ million
3,285
€ million
251
€ million
36
Tax
losses
€ million
(14)
Employee
and retiree
benefit accruals
€ million
(14)
Tax
credits
€ million
(12)
Other,
net
€ million
25
(4)
—
—
(4)
(1)
(22)
3,254
(14)
—
—
—
(49)
3,191
(11)
—
—
2
(2)
(4)
236
2
—
—
10
—
248
5
(20)
—
—
(1)
(3)
17
11
11
(31)
—
—
8
7
—
—
—
(4)
—
(11)
—
—
—
—
—
(11)
5
(11)
(2)
—
—
(1)
(23)
(15)
(43)
(1)
—
2
(80)
—
—
—
—
—
—
(12)
(12)
—
—
—
—
(24)
11
—
—
—
4
(9)
31
17
—
—
(10)
7
45
Total,
net
€ million
3,557
13
(31)
(2)
(2)
(4)
(39)
3,492
(11)
(32)
(32)
—
(40)
3,377
As at 31 December
2022
As at 31 December
2023
(21)
3,513
(1)
3,378
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208
Notes to the consolidated financial statements continued
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.
The gross and tax effected amounts including expiry dates, where applicable, of
unrecognised losses, tax credits and deductible temporary differences available
for carry forward are as follows:
Tax losses expiring:
Beyond 10 years
No time limit
Tax credits expiring:
Within 10 years
Beyond 10 years
Deductible temporary differences
No time limit
Year ended 31 December
2023
€ million
2022
€ million
2021
€ million
Gross
amount
Tax
effected
Gross
amount
Tax
effected
Gross
amount
Tax
effected
3
1,391
1,394
1
264
265
3
1,657
1,660
1
288
289
—
1,803
1,803
57
35
92
17
17
57
35
92
4
4
58
43
101
79
79
58
43
101
20
20
100
45
145
53
53
—
310
310
100
45
145
11
11
Total
1,503
361
1,840
410
2,001
466
As at 31 December 2023, no deferred tax liability has been recognised in respect of
€244 million (2022: €309 million) of unremitted earnings in subsidiaries, associates
and joint ventures.
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 2023, €175 million
(31 December 2022: €122 million) of these provisions is included in current tax
liabilities and the remainder is included in non-current tax liabilities.
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. When an uncertain tax liability is regarded as probable, it is
measured on the basis of the Group’s best estimate.
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.
Global minimum top-up tax
On 11 July 2023, the Finance (No.2) Act 2023 was enacted in the United Kingdom,
introducing a global minimum effective tax rate of 15%. The legislation
implements a domestic top-up tax and a multinational top-up tax effective for
accounting periods starting on or after 31 December 2023.
The Group expects to be subject to the top-up tax in relation to its operations in a
few countries. However, since the newly enacted tax legislation in the United
Kingdom is only effective from 1 January 2024, there is no current tax impact for
the year ended 31 December 2023.
The Group has applied a temporary mandatory relief from recognising and
disclosing information about deferred tax assets and liabilities in relation to top-
up tax and accounts for it as a current tax when it is incurred.
If the top-up tax had applied in 2023, the additional tax expense relating to the
Group’s operations for the year ended 31 December 2023 would be immaterial.
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2023 Integrated Report and Form 20-F
209
Notes to the consolidated financial statements continued
The following table summarises our share option activity for the periods
presented:
2023
2022
2021
Average
exercise
price
Shares
Average
exercise
price
Average
exercise
price
Shares
Shares
thousands
US$
thousands
US$
thousands
US$
2,272
—
(1,352)
35.30
—
33.86
2,758
—
(484)
34.19
—
29.00
4,051
—
(1,290)
31.68
—
26.33
—
—
(2)
23.21
(3)
19.68
920
37.42
2,272
35.30
2,758
34.19
920
37.42
2,272
35.30
2,758
34.19
Outstanding at
beginning of year
Granted
Exercised
Forfeited, expired
or cancelled
Outstanding
at end of year
Options exercisable
at end of year
Note 21
Share-based payment plans
The Group has an established Share options plan and a Long-Term Incentive Plan
(LTIP) for certain executive and management level employees that provide for
granting restricted stock units, some with performance and/or market conditions.
These awards are designed to align the interests of executives and management
with the interests of shareholders.
During 2022, the Group launched a new global Employee Share Purchase Plan
(ESPP), which gives employees the opportunity to purchase CCEP Shares on a
regular basis and become a shareholder, promoting an ownership culture. Under
the ESPP, participating employees are granted matching Shares when certain
vesting and non-vesting conditions are met.
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.
During the years ended 31 December 2023, 31 December 2022 and
31 December 2021, compensation expense related to our share-based payment
plans totalled €57 million, €33 million and €17 million, respectively. The expense
arising from equity-settled share-based payment transactions was €54 million
for the year ended 31 December 2023 (2022: €33 million; 2021: €16 million).
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 2023, 31 December 2022 and 31 December 2021. All options
outstanding as at 31 December 2023, 31 December 2022 and 31 December 2021
were valued and had exercise prices in US dollars.
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2023 Integrated Report and Form 20-F
210
Notes to the consolidated financial statements continued
The weighted average Share price during the years ended 31 December 2023,
31 December 2022 and 31 December 2021 was US$60.96, US$51.21 and US$55.68,
respectively.
The following table summarises the weighted average remaining life of options
outstanding for the periods presented:
Key assumptions for grant date fair value
The following table summarises the weighted average grant date fair values
per unit:
Restricted stock units and performance share units
Grant date fair value – service conditions (US$)
2023
59.21
59.23
2022
45.43
45.44
2023
2022
2021
Grant date fair value – service and performance conditions (US$)
Range of
exercise prices
US$
15.01 to 25.00
25.01 to 40.00
Total
Options
outstanding
Weighted
average
remaining life
Options
outstanding
Weighted
average
remaining life
Options
outstanding
Weighted
average
remaining life
thousands
years
thousands
years
thousands
—
920
920
0
1.60
1.60
—
2,272
2,272
0
2.20
2.20
151
2,607
2,758
years
0.85
3.04
2.92
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, 0.1 million and 0.1 million unvested RSUs outstanding with a
weighted average grant date fair value of US$50.67, US$42.74 and US$43.29 as at
31 December 2023, 31 December 2022 and 31 December 2021, 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 2.1 million, 1.8 million and
1.3 million of unvested PSUs, with weighted average grant date fair values of
US$48.95, US$41.65 and US$43.07 outstanding as at 31 December 2023,
31 December 2022 and 31 December 2021, respectively.
The PSUs granted in 2023, 2022 and 2021 are subject to performance conditions of
absolute EPS and ROIC, each with a 42.5% weighting, and to a sustainability metric,
focused on the reduction of greenhouse gas emissions (CO2e) across our entire
value chain with a 15% weighting.
Employee Share Purchase Plan
Through the ESPP, employees are able to contribute on a regular basis up to
a maximum amount deducted from their salary for the purpose of purchasing
CCEP Shares. Every quarter, for each purchased share, CCEP awards participating
employees matching Shares at the same time. Participating employees become
owners of the matching Shares 12 months after the award, as long as they remain
in employment and do not sell the related purchased Shares during this period.
Participants have all the rights of a shareholder in respect of their purchased
Shares and matching Shares (once they are fully owned by the employees),
including dividend rights and voting rights. During the years ended 31 December 2023
and 31 December 2022, the Group recognised a compensation expense related to
the ESPP of €14 million and €3 million, respectively.
Note 22
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.
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211
Notes to the consolidated financial statements continued
Provisions
The following table summarises the movement in each class of provision for the
periods presented:
As at 31 December 2021
Charged/(credited) to profit or
loss:
Additional provisions
recognised
Unused amounts reversed
Utilised during the period
Translation
As at 31 December 2022
Charged/(credited) to profit or
loss:
Additional provisions
recognised
Unused amounts reversed
Utilised during the period
Translation
As at 31 December 2023
Non-current
Current
As at 31 December 2023
Restructuring
provision
Decommissioning
provision
Other
provisions(A)
€ million
103
€ million
€ million
20
11
Total
€ million
134
115
(8)
(74)
1
137
78
(10)
(89)
—
116
26
90
116
7
(2)
(1)
—
24
1
(9)
(1)
—
15
15
—
15
2
(3)
(1)
—
9
24
(1)
(4)
—
28
4
24
28
124
(13)
(76)
1
170
103
(20)
(94)
—
159
45
114
159
(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 17 for further details regarding our restructuring programmes.
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 from 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.
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212
Notes to the consolidated financial statements continued
Guarantees
In connection with ongoing litigation and tax matters in certain territories,
guarantees of approximately €1,127 million have been issued (2022: €646 million).
The Group was required to issue these guarantees to satisfy potential obligations
arising from such litigation. In addition, we have approximately €37 million of
guarantees issued to third parties through the normal course of business
(2022: €29 million). 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.
Commitments
Commitments beyond 31 December 2023 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 2023. 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
€165 million as at 31 December 2023. 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 2023, the Group had committed to a number of lease agreements
that have not yet commenced. The minimum lease payments for these lease
agreements totalled €23 million.
Proposed Acquisition of Coca-Cola Beverages Philippines, Inc. (CCBPI)
In November 2023, the Group together with Aboitiz Equity Ventures Inc. (AEV)
entered into a definitive agreement with The Coca-Cola Company (TCCC) to jointly
acquire 100% of Coca-Cola Beverages Philippines, Inc. (CCBPI) (refer to Note 19 and
Note 27 for further details).
Note 23
Other income
Other income for the year ended 31 December 2023 totalled €107 million
(31 December 2022: €96 million, 31 December 2021: nil). The balance is primarily
attributable to the following activities.
The Group recognised €18 million of royalty income arising from the ownership of
mineral rights in Queensland, Australia (2022: €96 million). On 7 March 2023, the
Group entered into an agreement to sell the sub-strata and associated mineral
rights. Upon regulatory approval, the transaction was consummated in April 2023.
The total consideration approximated €35 million.
The Group recognised a gain of €54 million related to the sales of properties,
mainly attributable to the sale of property in Germany completed on 7 July 2023.
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
Coal royalties(A)
Miscellaneous receivables
Total other current assets
Year ended 31 December
2023
€ million
130
40
—
181
351
2022
€ million
180
41
96
162
479
(A) As at 31 December 2022, the amount related to the royalty income recognised in connection with a favourable court ruling
pertaining to the ownership of certain mineral rights in Australia. Refer to Note 23 for further detail.
VAT receivables
In 2014, a dispute arose between the Spanish tax authorities and the regional tax
authorities of Bizkaia (Basque Region) as to the responsibility for refunding VAT to
CCEP. Pertaining to the VAT assessment for years 2013 to 2016, the Group
recognised a VAT receivable of €214 million within other non-current assets, for
the year ended 31 December 2021. During 2022, the Group received €252 million,
inclusive of interest, from the regional tax authorities of Bizkaia following the
Arbitration Board ruling and recognised an additional VAT receivable of
€25 million from the Basque Region within Other current assets, and a payable of
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Notes to the consolidated financial statements continued
€57 million to the Spanish tax authorities within Trade and other payables, both
inclusive of interest. As at 31 December 2023, the VAT receivable balance of
€25 million remains unchanged, while the VAT payable balance increased to
€59 million resulting from interests. The classification of both balances remains
unchanged.
Related to the same dispute between the Spanish tax authorities and the regional
tax authorities of Bizkaia (Basque Region), on 8 February 2023 the Group received
a proposed VAT assessment for years 2017 to 2019, approximating €250 million,
inclusive of interest. For the period under the proposed assessment, the VAT
refund was issued by the Spanish tax authorities. We believe that the Group will
continue to be held neutral in respect of the VAT dispute.
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 a 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 2023 totalled €22 million and are
comprised of properties expected to be sold in the near future.
Assets classified as held for sale as at 31 December 2022 totalled €94 million and
were predominantly comprised of €40 million related to certain non-alcoholic
ready to drink brands that were sold to TCCC (refer to Note 19 for further details),
as well as €29 million related to a sale of property in Germany (refer to Note 23 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
Retirement benefit surplus (Note 15)
Investments
Other
Total other non-current assets
Year ended 31 December
2023
€ million
134
39
122
295
2022
€ million
135
35
82
252
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.
Financial assets at fair value through other comprehensive income relate to equity
investments. These investments are not held for trading purposes, and hence the
Group has opted to recognise fair value movements through other
comprehensive income. There have been no significant changes in fair value of
these investments during the period.
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214
Notes to the consolidated financial statements continued
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
Year ended 31 December
2023
€ million
2022
€ million
35
4
39
33
2
35
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 89% and 90% of the Group’s interest
bearing borrowings were comprised of fixed rate borrowings at
31 December 2023 and 31 December 2022, respectively. The Group also
modifies its interest rate exposure through the use of interest rate swaps. As at
31 December 2023 and 31 December 2022, the notional value of the Group’s
interest rate swaps was €1,123 million and €1,146 million, respectively.
If interest rates on the Group’s floating rate debt were adjusted by 1% for the years
ended 31 December 2023, 31 December 2022 and 31 December 2021, the Group’s
finance costs and pre-tax equity would change on an annual basis by
approximately €9 million, €9 million and €7 million, respectively. This amount is
determined by calculating the effect of a hypothetical interest rate change on the
Group’s floating rate debt.
Currency exchange rates
Foreign currency exchange risk can only arise on financial instruments that are
denominated in a currency other than the functional currency in which they are
measured. Translation-related risks are therefore not included in the assessment
of the Group’s exposure to currency risks. Translation exposures arise from
financial and non-financial items held by the Group with a functional currency
different from the Group’s presentation 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. This risk is
managed by entering into cross currency swaps upon issuance thereby mitigating
all the foreign currency risk.
The Group also has borrowing denominated in Australian dollars that are not
swapped into euro and are converted as part of the currency translation of the net
assets of API, and, as such, movements in exchange rates would not impact profit.
The Group’s main foreign currency exchange rate exposure relates to the change
in value of the euro against other currencies. The impact of a reasonably probable
movement such as 10% appreciation of the euro on the Group’s pre-tax equity
would have led to a €6 million loss as at 31 December 2023 (31 December 2022:
€29 million loss; 31 December 2021: €11 million gain). A 10% weakening of the euro
would have led to an equal but opposite effect. The impact on the Group’s pre-tax
equity is due to changes in the fair value of foreign currency hedges designated as
cash flow hedges.
During 2023, the Group entered into deal contingent foreign currency forwards
(refer to Note 12 for further details) in order to mitigate the foreign currency risk
arising from the proposed acquisition of CCBPI. A 10% appreciation of the euro as
at 31 December 2023 would have led to a €64 million loss impacting the Group’s
pre-tax equity. A 10% weakening of the euro would have led to an equal but
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Notes to the consolidated financial statements continued
opposite effect. There would be no impact on the Group’s income statement as
these instruments are designated as cash flow hedges.
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.
Commodity price risk
10% increase in commodity prices equity gain
10% decrease in commodity prices equity loss
Year ended 31 December
2023
€ million
144
(144)
2022
€ million
140
(140)
2021
€ million
92
(92)
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 12 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.
During the year ended 31 December 2023, the Group implemented a new gas and
power hedging programme to manage its exposure to changes in commodity
prices in relation to its purchases of power and gas, by entering into financial swaps
designated in a cash flow hedge relationship. As at 31 December 2023, the notional
value of the swaps was €89 million and amounts of €13 million and €52 million were
included in derivative assets and derivative liabilities, respectively (refer to Note
12).
The following table demonstrates the sensitivity to reasonably possible changes in
commodity prices at the reporting date, with all other variables held constant. The
impact on the Group’s pre-tax equity is due to changes in the fair value of
commodity hedges designated as cash flow hedges. There is no impact on the
Group’s income statement as all commodity derivatives are designated as
hedging instruments in cash flow hedges.
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
€20 million (2022: €25 million) related to collateral received from 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 initially recognised at their transaction price 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. A default on a
financial asset is when the counterparty fails to make contractual payments when
they fall due. 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- 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.
The Group has amounts available for borrowing under a €1.80 billion multi
currency credit facility (2022: €1.95 billion) with a syndicate of 12 banks. This credit
facility matures in 2029 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 2023, the Group had no
amounts drawn under this credit facility.
In 2022, the Group implemented a new sustainability-linked supply chain finance
programme. The facility is provided by a third party bank and will help our
suppliers get paid earlier than under contractual credit terms. Supplier balances
under supply chain finance facilities are disclosed in Note 14.
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 2023
Trade and other payables
Amounts payable to related
parties
Borrowings
Derivatives
Lease liabilities
Total financial liabilities
31 December 2022
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
4,875
4,875
270
11,803
268
774
270
1,322
99
159
—
—
2,325
42
237
—
—
—
—
2,681
5,475
39
141
88
237
17,990
6,725
2,604
2,861
5,800
4,714
4,714
485
12,314
263
752
485
1,336
76
149
—
—
2,597
17
217
—
—
2,179
51
129
—
—
6,202
119
257
Total financial liabilities
18,528
6,760
2,831
2,359
6,578
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 downwards, the Group may incur higher
costs to borrow, which could have a material impact on the financial condition and
results of operations.
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2023 Integrated Report and Form 20-F
217
Notes to the consolidated financial statements continued
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 comparable EBITDA. Net debt is
calculated as borrowings adjusted for the fair value of hedging instruments and
other financial assets/liabilities related to borrowings, net of cash and cash
equivalents and short term investments. Comparable EBITDA is calculated as
EBITDA and adjusted for items impacting comparability.
Refer to Note 11 for the presentation of fair values for each class of financial assets
and financial liabilities and Note 12 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.
Note 27
Significant events after the reporting period
On 14 February 2024, in connection with the acquisition of Coca-Cola Beverages
Philippines, Inc. CCBPI, the Group entered into a term loan facility agreement with
the Bank of the Philippine Islands. A term loan facility in an aggregate amount of
US$500 million is made available under the agreement to be utilised in Philippine
Peso (PHP), which has been defined as the base currency. On 20 February 2024,
the Group drew down a PHP23.5 billion (US$420 million) loan under the facility
with a maturity date of 20 February 2034. The vast majority of the balance (90% of
the total principal amount of the loan) is repayable in full upon maturity.
On 23 February 2024, the joint acquisition of Coca-Cola Beverages Philippines, Inc.
CCBPI was successfully consummated for a total consideration of US$1.68 billion
(€1.55 billion), all of which was settled in cash upon completion. The Group paid
US$1.0 billion (€930 million) of the total consideration, commensurate with the
effective 60:40 ownership structure of CCBPI. The transaction is going to be
accounted for under IFRS 3 “Business Combinations”, using the acquisition method
of accounting. The Group has commenced the purchase price allocation
procedures related to the assets acquired and liabilities assumed, which as of the
date of this filing remain incomplete.
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 2023 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.
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
Country of incorporation
Spain
Spain
Spain
Spain
Spain
Spain
% equity
interest
100%
100%
100%
100%
100%
100%
Registered address
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Crta. Pino km. 1 - 2, 27377, Cospeito (Lugo), Spain
C/ Real, s/n 09246, Quintanaurria, Burgos, Spain
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Ctra. de la Pasadilla, km, 3-35250, ingenio (Gran Canaria), Spain
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Associated Products & Distribution Proprietary
BBH Investment Ireland Limited
Australia
Ireland
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
6th Floor, 2 Grand Canal Square, Dublin 2, Ireland
100%
100%(O)
100%
Switzerland
United Kingdom 100%(D) Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Bruderhausstrasse 10, CH-6372 Ennetmoos, Switzerland
15%
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Notes to the consolidated financial statements continued
Name
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
BNI B.V.
BNII Inc.
BNI (Finance) B.V.
Bottling Great Britain Limited
Bottling Holding France SAS
Bottling Holdings (Luxembourg) SARL
Bottling Holdings (Netherlands) B.V.
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 Limited
CCEP Holdings (Australia) Limited
CCEP Holdings (Australia) Pty Ltd
CCEP Holdings Norge AS
CCEP Holdings Sverige AB
CCEP Holdings UK Limited
Country of incorporation
Spain
Spain
Australia
Australia
Iceland
% equity
interest
100%
100%
100%
100%
Registered address
Avda. Alcalde Alfonso Molina, S/N-15007, (A Coruna), Spain
Avda Paisos Catalans, 32, 08950, Esplugues de Llobregat, Spain
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
34.5%
Laugavegur 174, 105, Reykjavík, Iceland
United Kingdom 100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Netherlands
Philippines
100%
100%(G) V&A Law Center, 11th Ave Cor 39th St., Bonifacio Global City, Fort Bonifacio, 1634 Taguig City
Marten Meesweg 25 J, 3068 AV, Rotterdam, Netherlands
NCR, Fourth District, Philippines
Netherlands
United Kingdom 100%(D) Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
France
9 chemin de Bretagne, 92784, Issy-les-Moulineaux, France
Marten Meesweg 25 J, 3068 AV, Rotterdam, Netherlands
100%
100%
Luxembourg
100%
2, Rue des Joncs, L-1818, Howald, Luxembourg
Netherlands
United Kingdom 100%(B)(E) Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Marten Meesweg 25 J, 3068 AV, Rotterdam, Netherlands
100%
100%
Australia
Australia
Australia
Germany
Germany
Spain
Germany
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
100%
100%(B)
50%
100%(I)
100%
100%
100%
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, Germany
Stralauer Allee 4, 10245, Berlin, Germany
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Schieferstrasse 20, 06126, Halle (Saale), Germany
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Australia
United Kingdom 100%(A) Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Ireland
3 Dublin Landings, North Wall Quay, Dublin, D01 C4E0, Ireland
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
100%
100%
United Kingdom 100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
United Kingdom 100%(A)(D) Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Norway
Sweden
Robsrudskogen 5, Lørenskog, 1470, Norway
100%
Dryckesvägen 2 C, 136 87, Haninge, Sweden
100%(A)
100%
United Kingdom 100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
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Notes to the consolidated financial statements continued
Name
CCEP Scottish Limited Partnership
CCEP Ventures Australia Pty Ltd
CCEP Ventures Europe Limited
CCEP Ventures UK Limited
CCIP Soporte, S.L.U.
% equity
interest
Registered address
52 Milton Road, College Milton, East Kilbride, Scotland, G74 5DJ, United Kingdom
Country of incorporation
United Kingdom 100%(P)
Australia
United Kingdom 100%(A) Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
United Kingdom 100%(A) Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Spain
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
100%
100%
Circular Plastics Australia (PET) Holdings Pty Ltd
Classic Brand (Europe) Designated Activity Company
Cobega Embotellador, S.L.U.
Coca-Cola Europacific Partners (CDE Aust) Pty Limited
Coca-Cola Europacific Partners (Fiji) Pte Limited
Coca-Cola Europacific Partners (Holdings) Pty Limited
Australia
Ireland
Spain
Australia
Fiji
Australia
16.67%
Building 3, 658 Church Street, Cremorne VIC 3121, Australia
100%
100%
100%
100%
100%
Charlotte House, Charlemont Street, Saint Kevin's, Dublin, D02 NV26
Avda Paisos Catalans, 32, 08950, Esplugues de Llobregat, Spain
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
Coca-Cola Europacific Partners (Initial LP) Limited
United Kingdom 100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Coca-Cola Europacific Partners (Scotland) Limited
United Kingdom 100%
52 Milton Road, College Milton, East Kilbride, Scotland, G74 5DJ, United Kingdom
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
Australia
Australia
Belgium
Germany
France
100%
100%
100%
100%(F)
100%(G)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Chaussée de Mons 1424, 1070 Brussels, Belgium
Stralauer Allee 4, 10245, Berlin, Germany
9 chemin de Bretagne, 92784, Issy-les-Moulineaux, France
Coca-Cola Europacific Partners Great Britain Limited
United Kingdom 100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Coca-Cola Europacific Partners Holdings Great Britain Limited United Kingdom 100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Coca-Cola Europacific Partners Holdings NZ Limited
Coca-Cola Europacific Partners Holdings US, Inc.
Coca-Cola Europacific Partners Iberia, S.L.U.
New Zealand
United States
Spain
The Oasis, 19 Carbine Road, Mount Wellington, Auckland, 1060, New Zealand
100%
100%(A)(D) Corporation Trust Center, 1209 Orange Street, Wilmington DE, USA
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
100%
Coca-Cola Europacific Partners Investments (Singapore) Pte. Ltd. Singapore
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
Iceland
Luxembourg
Netherlands
New Zealand
Norway
100%
100%
100%
100%
100%
100%
80 Robinson Road, #02-00, 068898, Singapore
Studlahals 1, 110, Reykjavik, Iceland
2, Rue des Joncs, L-1818, Howald, Luxembourg
Marten Meesweg 25 J, 3068 AV, Rotterdam, Netherlands
The Oasis, 19 Carbine Road, Mount Wellington, Auckland, 1060, New Zealand
Robsrudskogen 5, Lørenskog, 1470, Norway
Coca-Cola Europacific Partners Papua New Guinea Limited
Papua New Guinea 100%
Section 23, Allotment 14, Milfordhaven Road, LAE, Morobe Province, 411, Papua New Guinea
Coca-Cola Europacific Partners Pension Scheme Trustees Limited United Kingdom 100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Coca-Cola Europacific Partners Portugal Unipessoal LDA
Coca-Cola Europacific Partners Services Bulgaria EOOD
Portugal
Bulgaria
100%
100%
Quinta da Salmoura - Cabanas-2925-362 Azeitão, Setúbal, Portugal
2 Donka Ushlinova Street, Garitage Park, Office Building 4, floor 6, Sofia, 1766, Bulgaria
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2023 Integrated Report and Form 20-F
220
Notes to the consolidated financial statements continued
Name
Coca-Cola Europacific Partners Services Europe Limited
Coca-Cola Europacific Partners Services SRL
Coca-Cola Europacific Partners Sverige AB
% equity
interest
Country of incorporation
United Kingdom 100%
Registered address
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Belgium
Sweden
100%(N) Chaussée de Mons 1424, 1070 Brussels, Belgium
100%
136 87, Haninge, Sweden
Coca-Cola Europacific Partners US, LLC
United States
100%
Corporation Trust Center, 1209 Orange Street, Wilmington 19801, Delaware, USA
Coca-Cola Europacific Partners US II, LLC
Coca-Cola Europacific Partners Vanuatu Limited
United States
Vanuatu
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.
France
France
Australia
Spain
Spain
Spain
Spain
Compañía Para La Comunicación De Bebidas Sin Alcohol, S.L.U.
Spain
Container Exchange (QLD) Limited
Circular Economy Systems Pty Ltd
Crusta Fruit Juices Proprietary Limited
Developed System Logistics, S.L.U.
Endurvinnslan hf.
Exchange for Change (ACT) 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.
Australia
Australia
Australia
Spain
Iceland
Australia
Australia
Australia
100%
100%
100%(G)
100%
—%(L)
100%
100%
100%
100%
100%
—%(L)
50%
100%(J)
100%
20%
20%
20%
100%(K)
33.3%
49%(H)
21.8%
Corporation Trust Center, 1209 Orange Street, Wilmington 19801, Delaware, USA
1st Floor, Govant Building, Kumul Highway, Port Vila, Vanuatu
9 chemin de Bretagne, 92784, Issy-les-Moulineaux, France
Zone d' entreprises de Bergues, 59380, Commune de Socx, France
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
C/ Nava, 18- 3ª (Granda) Siero - 33006, Oviedo, Spain
C/ Ribera Del Loira 20-22, 2a Planta, 28042, (Madrid), Spain
Av. Real Monasterio de Sta., Maria de Poblet, 3646930, Quart de Poblet, Spain
C/ Ibaizábal, 57, Galdakao, 48960, Bizkaia, Spain
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Level 17, 100 Creek Street, Brisbane QLD 4000, Australia
Maddocks, Angel Place, Level 27, 123 Pitt Street, Sydney NSW 2000, Australia
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,
Spain
Knarravogur 4, 104 Reykjavik, Iceland
Building C, Suite 6, Level 1, 1 Homebush Bay Drive, Rhodes NSW 2138, Australia
Building C, Suite 6, Level 1, 1 Homebush Bay Drive, Rhodes NSW 2138, Australia
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Netherlands
United Kingdom 100%(A) Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
France
HNK Utrecht West, V.02, Weg der Verenigde Naties 1, 3527 KT, Utrecht, Netherlands
Sainte Marie la Blanche, 21200, Dijon, France
United States
300 Brookside Avenue, Ambler, PA 19002, 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%
1424 – B1070 Bergensesteenweg, Brussels, Belgium
Belgium
100%
1424 – B1070 Bergensesteenweg, Brussels, Belgium
Ionech Limited
United Kingdom 14.8%
6th Floor, Manfield House, 1 Southampton Street, London, England, WC2R 0LR
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Notes to the consolidated financial statements continued
Name
Kollex GmbH
Lavit Holdings Inc
Lusobega, S.L.
Madrid Ecoplatform, S.L.U.
Mahija Parahita Nusantara Foundation
Matila Nominees Pty. Limited
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) Pte 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
Refrescos Envasados Del Sur, S.L.U.
Refrige SGPS, Unipessoal, LDA
Sale Proprietary Co 1 Pty Ltd
Sale Proprietary Co 2 Pty Ltd
Sale Proprietary Co 3 Pty Ltd
Sale Proprietary Co 4 Pty Ltd
Sale Proprietary Co 5 Pty Ltd
Country of incorporation
Germany
United States
Spain
Spain
Indonesia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Fiji
Spain
Australia
Indonesia
Indonesia
Indonesia
Australia
Australia
Australia
Spain
Portugal
Australia
Australia
Australia
Australia
Australia
% equity
interest
20%
13.7%
100%
100%
—%(L)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
35.31%
100%(C)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Registered address
Kottbusser Damm 25-26, 10967, Berlin, Germany
27 West 20th Street, Suite 1004, New York NY 10011, USA
C/ Ibaizábal, 57, 48960, Bizkaia, Galdakao, Spain
C/Pedro Lara, 8 Pq. Tecnologico de Leganes, 28919, (Leganes), Spain
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak,
South Jakarta, 12430, Indonesia
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., Maria de Poblet, 3646930, Quart de Poblet, Spain
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, Indonesia
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak,
South Jakarta, 12430, Indonesia
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak,
South Jakarta, 12430, Indonesia
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
Autovía del Sur A-IV, km.528- 41309, La Rinconada, Sevilla, Spain
Quinta da Salmoura - Cabanas-2925-362 Azeitão, Setúbal, Portugal
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
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222
Notes to the consolidated financial statements continued
Name
Sale Proprietary Co 6 Pty Ltd
Sale Proprietary Co 7 Pty Ltd
Samoa Breweries Limited (SBL)
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
Samoa
Australia
Australia
Australia
Portugal
% equity
interest
100%(D)
100%
100%
—%(M)
—%(M)
—%(L)
100%
Registered address
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, Samoa
Level 9, 85 Macquarie Street, Hobart TAS 7000, Australia
HWL Ebsworth Lawyers, Level 8, 447 Collins Street, Melbourne VIC 3000, Australia
Unit 2, 1 Centro Avenue, Subiaco WA 6008, Australia
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, Portugal
Ireland
100%
3 Dublin Landings, North Wall Quay, Dublin, D01 C4E0, Ireland
Luxembourg
2, Rue des Joncs, L-1818, Howald, Luxembourg
United Kingdom 100%(A) Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Germany
Stralauer Allee 4, 10245, Berlin, Germany
100%
100%
(A) 100% equity interest directly held by Coca-Cola Europacific Partners plc.
(B) Class A and B ordinary shares.
(C) Series A, B, C and D 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) In liquidation.
(J) Class A and F shares.
(K) Includes ordinary shares and B Class shares.
(L) Company limited by guarantee. CCEP is a member along with one other member.
(M) Company limited by guarantee. CCEP is a member along with two other members.
(N) Class A, B and C ordinary shares.
(O) Includes redeemable preference shares and discretionary dividend shares issued to the Group.
(P) Limited partnership.
Note 29
Subsidiaries exempt from audit
The following UK subsidiaries will take advantage of the audit exemption set out
within section 479A of the Companies Act 2006 for the year ended
31 December 2023.
Name
CCEP Holdings (Australia) Limited
WIH UK Limited
Amalgamated Beverages Great Britain Limited
Registration number
12982568
10140214
01994995
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Coca-Cola Europacific 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/(loss):
Cash flow hedges that may be subsequently reclassified to the income statement:
Pre-tax activity, net
Tax effect
Other comprehensive income/(loss) for the period, net of tax
Comprehensive income for the period
The accompanying notes are an integral part of these Company financial statements.
Note
3
4
4
Year ended 31 December
2023
€ million
42
1,275
(70)
1,247
16
(268)
(252)
(7)
988
3
991
4
—
4
995
2022
€ million
34
581
(47)
568
20
(127)
(107)
(15)
446
2
448
(3)
—
(3)
445
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 2023 as filed with the SEC.
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2023 Integrated Report and Form 20-F
224
Statement of financial position
ASSETS
Non-current:
Investments
Non-current derivative assets
Other non-current assets
Total non-current assets
Current:
Current derivative assets
Other current assets
Total current assets
Total assets
LIABILITIES
Non-current:
Borrowings, less current portion
Amounts payable to related parties
Non-current derivative liabilities
Other non-current liabilities
Total non-current liabilities
Current:
Amounts payable to related parties
Current portion of borrowings
Trade and other payables
Total current liabilities
Total liabilities
EQUITY
Share capital
Share premium
Merger reserves
Retained earnings
Total equity
Total equity and liabilities
Year ended 31 December
Note
2023
€ million
2022*
01 January 2022*
€ million
€ million
The accompanying notes are an integral part of these Company financial
statements.
*The comparative information has been restated. Refer to Note 1.
The financial statements were approved by the Board of Directors and authorised
for issue on 15 March 2024. They were signed on its behalf by:
Damian Gammell,
Chief Executive Officer
15 March 2024
5
9
9
7
6
9
6
7
8
8
8
8
27,406
27,099
27,093
35
9
123
9
92
12
27,450
27,231
27,197
47
11
58
86
14
100
1
12
13
27,508
27,331
27,210
4,979
3,227
80
9
8,295
4,130
1,089
67
5,286
13,581
5
276
8,466
5,180
13,927
27,508
6,063
3,227
130
11
9,431
3,000
1,148
69
4,217
13,648
5
233
8,466
4,979
13,683
27,331
7,237
3,227
—
14
10,478
1,703
986
85
2,774
13,252
5
220
8,466
5,267
13,958
27,210
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 2023 as filed with the SEC.
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2023 Integrated Report and Form 20-F
225
Statement of cash flows
Year ended 31 December
2023
€ million
2022
€ million
Note
The accompanying notes are an integral part of these Company financial
statements.
Cash flows from operating activities:
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
Investment write down
Change in operating assets/liabilities
Net cash flows used in operating activities
Cash flows from investing activities:
Investments in subsidiaries, net
Investments in equity instruments
Dividend received
Interest received
Net cash flows from investing activities
Cash flows from financing activities:
Proceeds from borrowings, net
Repayments on borrowings
Settlement of debt-related cross currency swaps
Payments of principal on lease obligations
Interest paid
Dividends paid
Exercise of employee share options
Net cash flows 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
3
4
5
5
5
3
8
988
446
(1,275)
(581)
1
2
24
252
2
(104)
(110)
(282)
(5)
1,275
—
988
1,114
(1,125)
69
(1)
(137)
(841)
43
(878)
—
—
—
—
1
2
16
107
11
(29)
(27)
—
—
581
19
600
1,304
(985)
—
(1)
(138)
(766)
13
(573)
—
—
—
—
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2023 Integrated Report and Form 20-F
226
Statement of changes in equity
As at 01 January 2022 (as previously reported)
Investment write down
As at 01 January 2022 (restated)
Issue of shares during the year
Equity-settled share-based payments
Total comprehensive income for the period
Dividends
As at 31 December 2022 (restated)
Issue of shares during the year
Equity-settled share-based payments
Total comprehensive income for the period
Purchases of shares for equity-settled Employee Share Purchase Plan
Dividends
As at 31 December 2023
The accompanying notes are an integral part of these Company financial statements.
Note
1
Share capital
Share premium
Merger reserves
Retained earnings
Total equity
€ million
5
—
5
—
—
—
—
5
—
—
—
—
—
5
€ million
220
—
220
13
—
—
—
233
43
—
—
—
—
€ million
8,466
—
8,466
—
—
—
—
8,466
—
—
—
—
—
276
8,466
€ million
5,800
(533)
5,267
—
33
445
(766)
4,979
—
54
995
(4)
(844)
5,180
€ million
14,491
(533)
13,958
13
33
445
(766)
13,683
43
54
995
(4)
(844)
13,927
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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 a 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 UK 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 2024, 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.
The financial statements of the Company have been prepared on a going concern
basis (refer to the Going concern paragraph on page 146).
During 2023, the Company established that its investment in WIH UK Limited, a
wholly owned subsidiary, of €533 million should have been written down to zero by
2020. As a result, the previously reported Investments have been overstated. The
correction has been reflected by restating each of the affected financial
statement line items for prior periods, more specifically, decreasing Investments
and Retained Earnings by €533 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 Separate Financial
Statements, 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.
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2023 Integrated Report and Form 20-F
228
Notes to the Company financial statements continued
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.
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 include 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.
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2023 Integrated Report and Form 20-F
229
Notes to the Company financial statements continued
Trade and other payables
Trade and other payable amounts represent liabilities for goods and services
provided to the Company 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 from management fees.
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:
Note 4
Finance income/(costs)
Interest income
Total finance income
Interest expense
Amortisation of debt discount
Total finance costs
Note 5
Investments
Balance at 1 January
Subsequent investment in subsidiaries
Investments in equity instruments
Capitalised/vested share-based payments, net
Year ended 31 December
Investment write down
Year ended 31 December
2023
€ million
16
16
(266)
(2)
(268)
2022
€ million
19
19
(125)
(2)
(127)
Year ended 31 December
2023
2022*
€ million
27,099
282
5
22
(2)
€ million
27,093
—
—
17
(11)
Coca-Cola Europacific Partners Holdings US Inc
Coca-Cola Europacific Partners API Pty Ltd
CCEP Finance (Australia) Limited
Bottling Holdings Europe Limited
Coca-Cola Europacific Partners Deutschland GmbH
Total
2023
€ million
896
270
102
—
7
1,275
2022
€ million
516
—
—
49
16
581
Balance at 31 December
27,406
27,099
In March 2023, CCEP Ventures UK Limited issued one million new ordinary shares
of £1 to the Company, resulting in an increase of the Company investment of
€1.1 million. In December 2023, the Company subscribed for 282 million ordinary
shares on CCEP Holdings (Australia) Limited and for 3.4 million ordinary shares in
CCEP Ventures UK Limited in exchange for cash in these amounts. The Company
also made a €1 incorporation payment to BNI B.V.
As part of its impairment review, the Company recognised a partial write down of
its investment in CCEP Ventures Europe Limited for €2 million.
During 2022, the Company recognised a full write down of its investment in CCEP
Ventures UK Limited for €3 million and a partial write down of its investment in
CCEP Ventures Europe Limited for €8 million.
*The comparative information has been restated. Refer to Note 1.
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2023 Integrated Report and Form 20-F
230
Notes to the Company financial statements continued
Note 6
Amounts receivable from/payable to related parties
Year ended 31 December
2023
€ million
2022
€ million
2021
€ million
Non-current amounts payable to related
parties:
Borrowings(A)
Total non-current amounts payable to
related parties
Current amounts payable to related
parties:
Cash pool payables(B)
Trade and other payables
Total current amounts payable to related
parties
Total amounts payable to related parties
3,227
3,227
4,094
36
4,130
7,357
3,227
3,227
2,942
58
3,000
6,227
1,674
29
1,703
4,930
Employee costs
The following table summarises the total employee costs of the Company during
the reporting period:
3,227
Wages and salaries
Social security costs
3,227
Total employee costs
The average number of persons employed by the Company during the year was
7 (2022: 7, 2021: 9).
Note 7
Borrowings
(A) 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%.
(B) 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.
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:
Non-current borrowings:
Loan notes
Lease obligations
Total non-current borrowings
Current borrowings:
Loan notes
Commercial paper
Lease obligations
Year ended 31 December
Total current borrowings
2021
Total borrowings
Salaries and other short-term employee
benefits(A)
Share-based payments
Total
2023
€ million
2022
€ million
17
5
22
16
2
18
€ million
19
4
23
(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 loan notes as at 31 December 2023 are due between May 2024 and
September 2031. The principal amounts due are €6,141 million (2022: €7,915 million,
2021: €7,915 million) and the applicable interest rates are between 0.2% and 2.75%.
In May 2023, the Company repaid $850 million 0.5% notes received in May 2021.
The loan notes are stated net of unamortised financing fees of €15 million
(2022: €20 million, 2021: €27 million).
Year ended 31 December
2023
€ million
12
5
17
2022
€ million
13
3
16
2021
€ million
16
3
19
Year ended 31 December
2023
€ million
4,976
3
4,979
1,088
—
1
1,089
6,068
2022
€ million
6,059
4
6,063
1,147
—
1
1,148
7,211
2021
€ million
7,232
5
7,237
700
285
1
986
8,223
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2023 Integrated Report and Form 20-F
231
Notes to the Company financial statements continued
During 2022, the Company entered into interest rate swaps with notional value of
€1 billion, which were designated in a fair value hedge relationship with euro
denominated bonds. As at 31 December 2023, fair value adjustments in respect of
those interest rate swaps are €(80) million (2022: €(130) million) included within
non-current borrowings.
Trade and other payables include interest payable on the borrowings of
€45 million (2022: €47 million, 2021: €51 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 €1.80 billion multi-currency
credit facility with a syndicate of 12 banks. This credit facility matures in 2029 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 2023, the Company had no amounts drawn
under this credit facility.
Note 8
Equity
Share capital
As at 31 December 2023, the Company has issued and fully paid 459,200,818
(2022: 457,106,453; 2021: 456,235,032) 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 16 of the consolidated financial statements.
Share premium
The balance in share premium as at 31 December 2023 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 €189 million
(2022: €146 million) excess over nominal value of share-based payment awarded
through to 31 December 2023.
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 the 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 €6.6 billion and €2.9 billion,
respectively.
Retained earnings
The balance in retained earnings represents the opening balance on
1 January 2023, combined with the result for the period, dividends paid
and the share-based payment reserve.
The prior period comparative information has been restated. Refer to Note 1.
Dividends
Dividends are recorded in the period in which they are paid. Refer to Note 16 of
the consolidated financial statements.
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2023 Integrated Report and Form 20-F
232
Notes to the Company financial statements continued
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- 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
Refer to Note 17 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 2023. These borrowings have been issued by CCEP
Finance (Ireland) DAC for €3.2 billion, Coca-Cola Amatil Limited for €0.7 billion and
BNI (Finance) B.V. for €0.7 billion.
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 CCEP’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.
Currency exchange rates
Foreign currency exchange risk can only arise on financial instruments that are
denominated in a currency other than the functional currency in which they are
measured. Translation-related risks are therefore not included in the assessment
of the Company’s exposure to currency risks. Translation exposures arise from
financial and non-financial items held by the Company with a functional currency
different from the Company’s presentation 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.
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.
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Image: Coca-Cola Zero Sugar
and Coca-Cola Original Taste
In this section
Further
Sustainability
Information
234 Key performance data summary
237 Approach to sustainability reporting and
methodology
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2023 Integrated Report and Form 20-F
234
Key performance data summary
Metric
Climate
Scope 1 GHG emissions (tonnes of CO2e)
Scope 2 GHG emissions — market based approach (tonnes of CO2e)
Scope 2 GHG emissions — location based approach (tonnes of CO2e)
Scope 3 GHG emissions (tonnes of CO2e)
Scope 1, 2 and 3 GHG emissions – Full value chain(A) (tonnes of CO2e)
Scope 1, 2 and 3 GHG emissions – Full value chain(A) per litre (gCO2e per litre)
Absolute reduction in total value chain(A) GHG emissions (Scope 1, 2 and 3) since
2019 (%)
Relative reduction in total value chain(A) GHG emissions (Scope 1, 2 and 3)
per litre since 2019 (%)
GHG Scope 1 and 2(A) emissions per litre of product produced
(gCO2e per litre)
Manufacturing energy use ratio (MJ per litre of finished product produced)
Emissions from biologically sequestered carbon
Percentage of electricity purchased that comes from renewable sources (%)
Percentage of electricity consumed that comes from renewable sources (%)
Tonnes of CO2e offset through carbon credits (tonnes of CO2e)
Percentage of carbon strategic suppliers having targets approved by SBTi (%)
Note: For a full list of CCEP’s headline sustainability commitments as part of our This is Forward sustainability action plan, please refer
to “Our headline commitments” on page 15. For details on our approach to reporting and methodology please see our 2023
Sustainability reporting methodology document on cocacolaep.com/sustainability/download-centre.
(A) Market based approach only.
(B) 100% of carbon strategic suppliers to set science based targets by 2023 (Europe) and 2025 (API). Carbon strategic suppliers
account for ~80% of our Scope 3 GHG emissions (~200 suppliers in total).
Group
Europe
API
2023α
2022Δ
2019
BaselineΔ
2023α
2019
BaselineΔ
2023α
2019
BaselineΔ
283,745
299,090
344,616
193,305
229,527
90,440
115,089
151,795
192,053
223,114
9,542
7,546
142,254
215,567
292,243
308,050
384,382
117,289
168,899
174,954
215,482
4,827,581 5,095,008 5,754,177
3,161,595
3,763,414 1,665,987
1,990,763
5,263,122
5,586,151
6,321,907
3,364,441 4,000,487 1,898,680
2,321,419
283.3
298.9
350.1
224.3
280.3
530.7
613.2
-30% by 2030
16.7
19.1
26.8
0.35
11.6
14.6
29.6
0.35
100% by 2030
87,273
71,151
79.1
78.0
74.2
73.1
41,090
9,375
100% by 2025(B)
31
17
15.9
20.0
15.5
0.30
98.9
97.8
50
18.2
13.5
74.9
0.56
33.7
35.8
16
α This metric was subject to external independent limited assurance for the year ended 31 December 2023.
Δ Our 2019 baseline and 2022 data was subject to external independent limited assurance for the year ended 31 December 2022,
and was included within our 2022 Integrated Report and Form 20-F. A copy of the assurance statement for these periods can be
found on cocacolaep.com/assets/Sustainability/Documents/2022/2022-Assurance-statement.pdf. In line with the WRI/WBCSD
GHG Protocol, our baseline figures for 2019 and prior years 2020-2022 have been restated to include updated emissions factors
and more accurate data. These restated emissions were outside the scope of the latest independent limited assurance review.
The acquisition of API completed on 10 May 2021. The Group and API sustainability metrics are presented on a full year basis for
2019 baseline calculated on a pro forma basis to allow for better period over period comparability.
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235
Key performance data summary continued
Metric
Packaging
Percentage of all primary packaging that is recyclable (%, based on unit case)
Percentage of PET used which is rPET (%, based on tonnes of material)
Primary packaging collected for recycling as a percentage of total primary packaging (%, based on individual units)
Percentage of PET bottles that are 100% rPET (%, based on individual consumer units)
100% by 2025
50% by 2025(A)
100% by 2030
Water
Total water withdrawal (1,000m3)
Total water withdrawals from areas of high or extremely high baseline water stress (1,000m3)
Percentage of water withdrawn in regions with high or extremely high water stress (%)
Total production volumes from areas of high or extremely high baseline water stress(B) (1,000m3)
Percentage of production volumes from areas of high or extremely high baseline water stress (%)
Total volume of water replenished (1,000m3)
Water replenished as percentage of total sales volumes (%)
Manufacturing water use ratio (litres of water per litre of finished product produced)
Percentage reduction in manufacturing water use ratio since 2019 (%)
Group
Europe
API
2023α
2022Δ
2023α
2023α
99.1
54.6
73.2
47.6
26,142
12,904
50.1
8,067
49.8
48.5
72.0
44.7
26,578
13,036
49.8
8,126
49.1
99.0
59.2
75.3
50.9
20,783
11,651
56.3
7,405
56.5
16,189
107.9
1.58
1.3
99.6
41.5
64.9
39.2
5,360
1,253
24.7
662
21.5
2,150
60.1
1.73
15.7
18,339
19,732
100% by 2030
10% vs. 2019
98.7
1.61
4.9
105.5
1.60
Note: For a full list of CCEP’s headline sustainability commitments as part of our This is Forward sustainability action plan, please refer
to “Our headline commitments” on page 15. For details on our approach to reporting and methodology please see our 2023
Sustainability reporting methodology document on cocacolaep.com/sustainability/download-centre.
(A) 50% recycled plastic (rPET) in our PET bottles by 2023 (Europe) and 2025 (API).
(B) 21 out of 42 non-alcoholic ready to drink (NARTD) production facilities in Europe and three out of 24 NARTD production facilities
α This metric was subject to external independent limited assurance for the year ended 31 December 2023. Please see
cocacolaep.com/sustainability/download-centre for our 2023 assurance statement.
Δ This metric was subject to external independent limited assurance for the year ended 31 December 2022 and was included in our
2022 Integrated Report and Form 20-F. Please see cocacolaep.com/assets/Sustainability/Documents/2022/2022-Assurance-
statement.pdf for our 2022 assurance statement.
in API are located in areas of water stress (based on WRI water stress mapping).
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Key performance data summary continued
Metric
Supply chain
Percentage of sugar sourced through suppliers in compliance with our Principles for Sustainable Agriculture
(PSA) (%)
Percentage of pulp and paper sourced through suppliers in compliance with our PSA (%)
Percentage of total supplier spend covered by Supplier Guiding Principles (%)
Drinks
Europe: Reduction in average sugar per litre in soft drinks(A)(B) portfolio since 2019 (%)
New Zealand: Reduction in average sugar per litre in NARTD(A)(C) portfolio since 2015 (%)
Australia: Reduction in average sugar per litre in NARTD(A)(C) portfolio since 2015 (%)
Indonesia: Reduction in average sugar per litre in NARTD(A)(C) portfolio since 2015 (%)
Percentage of volume sold which is low or no calorie (%)
Society
Percentage of women in management positions (senior manager level and above)(E) (%)
Percentage of women in total workforce (%)
Percentage of people self-declaring as having a disability in our workforce (%)(F)
Safety – Total incident rate (TIR) (number per 100 full time equivalent employees)
Safety – Lost time incident rate (LTIR) (number per 100 full time equivalent employees)
Total number of volunteering hours (number of hours)(G)(H)
Total community investment contribution (millions of €)(H)
Number of people supported in skills development (number)(H)
Group
Europe
API
2023α
2022Δ
2023α
2023α
100%
100%
100%
99.4
99.8
97.9
97.6
99.2
97.5
10% by 2025
20% by 2025
25% by 2025
35% by 2025
99.9
99.8
98.3
4.9
50% by 2030(D)
48.3
48.4
45% by 2030
33% by 2030
10% by 2030
38.4
25.1
12.6
0.84
0.60
37.2
23.8
0.87
0.61
0.93
0.72
32,500
28,500
31,500
500,000 by 2030
14.8
16,400
12.2
13.4
97.3
99.7
96.3
15.9
14.9
36.2
47.8
0.69
0.41
1,000
1.5
Note: For a full list of CCEP’s headline sustainability commitments as part of our This is Forward sustainability action plan, please refer
to “Our headline commitments” on page 15. For details on our approach to reporting and methodology please see our 2023
Sustainability reporting methodology document on cocacolaep.com/sustainability/download-centre.
(A) Volumes are based on RTD litre sales to CCEP customers and reflect changes for new product launches, cessation of products as
they occur based on sales timings. Reformulations are captured on a half-yearly basis given high number of beverage formulas
across Europe. Reformulations made in the first-half of the year are reflected in the current reporting period calculation. Second-
half reformulations are reflected in the next reporting period. Note the data source and methodology on when to apply recipe
changes differ from the calculation of the GHG emissions of our ingredients.
(B) Sparkling soft drinks, non-carbonated soft drinks and flavoured water only. Does not include water or juice.
(C) Non-alcoholic ready to drink (NARTD), including dairy. Does not include coffee, alcohol, beer or Freestyle.
(D) Europe 50% by 2025. Does not include coffee, alcohol, beer or Freestyle. Low calorie beverages ≤20kcal/100ml. Zero calorie
beverages <4kcal/100ml.
(E) Excludes Fiji and Samoa, as aligned role grades are not available for 2023 reporting. We aim to include these markets for 2024. For
full year 2022 Papua New Guinea was also excluded and no restatement has taken place.
(F) Calculated based on the total number of employees responding to our voluntary 2023 inclusion survey (representing 38.4% of our
workforce) and the number of employees self-declaring as having a disability.
(G) Australia and Indonesia only. The volunteering policy has been rolled out to all CCEP markets in 2023. Each business unit is
responsible for the level of implementation, which might vary from market to market.
(H) We aim to be accurate in our reporting and continue to enhance the way we capture the total value of our community
contribution. Figures quoted have been rounded to the nearest 100k.
α This metric was subject to external independent limited assurance for the year ended 31 December 2023.
Δ This metric was subject to external independent limited assurance for the year ended 31 December 2022. Note the baseline year
for Europe reduction in average sugar per litre in soft drinks portfolio has changed to 2019 since we issued our 2022 Integrated
Report and Form 20-F.
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Approach to sustainability reporting and methodologies
Our approach to reporting and methodology
CCEP’s carbon footprint is calculated in accordance with the World Resource
Institute (WRI) and World Business Council for Sustainable Development (WBCSD)
Greenhouse Gas (GHG) Protocol Corporate Standard, using an operational
control approach to determine organisational boundaries.
Less than 5% of our value chain carbon footprint is based on estimated emissions.
This includes the site energy emissions for small leased offices where energy
invoices or the square metre footage size is not available, or packaging emissions
where product specifications are unavailable. We also estimate the electricity
consumption for the pure electric and plug-in hybrids in our company car fleet.
GHG emissions are reported in tonnes of carbon dioxide equivalent (tonnes CO2e
or tCO2e), accounting for different Global Warming Potentials (GWPs) of the
different GHGs.
Note on sources of data and calculation methodologies
Under the GHG Protocol, we measure our emissions in three Scopes. We disclose
the Scope 1, 2, and 3 carbon emissions of our full value chain, including all key
emissions related to our production facilities, operational centres, sales offices,
distribution centres, cold drink equipment (CDE), our own operated and owned
transportation as well as third party distribution, business travel, ingredients and
packaging. We also disclose biogenic emissions which are outside of the three
WRI/WBCSD GHG Protocol Scopes. GHG emissions are reported on a gross basis,
independent of any GHG trades, offsets or carbon credits.
Where we refer to our own operations, unless otherwise indicated, we are referring
to our own production, sales/distribution, combined sales/production facilities,
administrative offices and fleet owned or controlled by CCEP, including our
shared-service centre in Bulgaria.
In-scope sales volumes were based on ready to drink litre sales to CCEP customers
and reflect changes as they occur based upon sales timings. Sales from
distribution agreements are excluded as the GHG emissions associated with these
products will be accounted for by the Brand owners. Alcohol sales volume is
included if CCEP manufacture the alcohol products. Sales volumes from
imports/exports from/to non-CCEP countries are excluded to avoid
double counting.
2019 Baseline and recalculation methodology
Our baseline years is 2019. The acquisition of API completed on 10 May 2021. The
Group and API sustainability metrics are presented on a full year basis for 2019
baselines calculated on a pro forma basis to allow for better period over period
comparability.
In line with the WRI/WBCSD GHG Protocol guidance, we restate our baseline and
subsequent year data when there are significant acquisitions, new emissions
factors, and more accurate data. We apply a significance threshold of 5%, but also
re-baseline in line with best practice, in order to retain consistency and
comparability across years.
In 2024, we have restated our baseline figures for 2019 and 2020-2022 as necessary;
increasing baseline and subsequent year emissions by ~350,000 tCO2e. Key
changes include:
• National packaging collection rate changes in European markets, driven by new
EU methodology for calculating packaging collection rates.
• Changes to SBTi boundary which now includes emissions from Category 7 and
new sources of emissions for Category 1 (marketing and IT spend)
• Shifts in emissions factor source for Well-To-Tank (WTT)/Transmission and
Distribution emissions
• Shifts in emission factors for CO2 as ingredient
• Improvements in data, and inclusion of previously non-included emissions
sources.
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Approach to sustainability reporting and methodologies
Scope 1 GHG emissions sources
Includes direct owned and operated sources of emissions such as:
• Stationary combustion sources, such as natural gas, diesel/petrol fuel for
back up boilers/generators and on-site shunting vehicles, light fuel oil, liquid
petroleum gas (LPG) for forklift trucks, Compressed natural gas (CNG) and
the non-biogenic element of biofuels such as HVO100.
The carbon emission factors for Scope 2 emissions are applied in terms of the two
methods provided by the GHG Protocol:
(1) Location based: All electricity purchased is converted into CO2 emissions using
the average grid emissions factor for electricity in the country in which it is
purchased. Energy Attribute Certificates (EAC) are not applied to the total
Scope 2 emissions.
• Mobile combustion such as diesel and petrol for CCEP operated customer
(2) Market based: All electricity purchased is converted to CO2 using emissions
delivery, vans and car fleet.
• Fugitive emissions of refrigerants.
• Fugitive CO2 emissions from manufacturing processes (i.e. losses occurring
during product carbonisation process).
• On-site renewables including geothermal, solar, water turbine, ground source
heat (listed as GHG emission sources, but zero rated in terms of carbon
emissions).
• Fugitive biogas from Anaerobic Digesters.
We follow Beverage Industry Environmental Roundtable (BIER) emissions sector
guidance on the emissions source for the source of the CO2 supplied to CCEP to
carbonate soft drinks, and whether these are generated from fossil or biogenic
sources of CO2.
Scope 2 GHG emissions – purchased electricity, heat and steam
We report Scope 2 emissions according to the GHG Protocol Scope 2 Guidance.
We use the Scope 2 market based approach to report our aggregated Scope 1, 2
and 3 GHG emissions, and to set our aggregated targets.
We include indirect sources of GHG emissions from the generation of electricity,
heat and steam we use at our sites.
factors from contractual instruments which CCEP has purchased or entered
into. EACs are applied based on RE100 guidance which allows for EACs to be
used against electricity consumed in the same market as where the EACs are
purchased.
Any sites with no contractual instruments for renewable electricity supply will have
a residual factor applied (where available), which has had renewable contractual
instruments removed.
The quantity of purchased renewable electricity was verified through renewable
electricity certificates such as Guarantees of Origin (GoOs) in the EU, Renewable
Energy Guarantees of Origin (REGOs) in the UK, Large-scale Generation
Certificates (LGCs) in Australia or Power Purchase Agreements (PPAs) from our
electricity suppliers in each country and through meter readings of renewable
electricity generated on site.
In 2023, we completed a review of our site renewable electricity purchases,
and noted that some market based instruments were not in place for a limited
number of locations in prior years 2019-2022. This included our PPA solar farm in
Wakefield, our water turbine in Chaudfontaine, and our purchased electricity in
Iceland. We have restated our purchased and consumed Renewable Electricity
figures for Wakefield and Chaudfontaine for FY2019-FY2022 to reflect this.
In 2023, in line with RE100 technical guidance, we no longer use passive claims for
renewable electricity use in Iceland. Due to this change, in FY2023, we did not have
GoOs available to cover renewable electricity purchases in Iceland. As a result, in
FY2023, renewable electricity purchase and use is not claimed for Iceland, and the
residual emission factor was applied.
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Approach to sustainability reporting and methodologies
In leased non-production facilities where we do not control the purchase of the
electricity, we apply the national grid emissions factor for those sites. Where the
landlord has provided evidence that they are purchasing renewable electricity on
our behalf, we will report this in line with the market based approach. Emissions
related to the generation of electricity for these sites are included in our Scope 2
emissions. In 2023, we used ~20,000 MWh of electricity in non-production facilities,
where we do not control the purchase of electricity, or use on-site solar.
Scope 3 GHG emissions
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.
CCEP uses emission factors relevant to the source data including UK Department
for Energy Strategy and Net Zero (DESNZ), Australia’s Department of Industry,
Science, Energy and Resources factors for state-level electricity factors, and
International Energy Agency (IEA) emission factors for all other grid factors at a
national level.
Data sources include:
• Energy data: from metered sources, supplier invoices or calculations and
estimates based on energy benchmarks published in the Best Practice
Programme’s Energy Consumption Guide 19 (ECON 19).
• Packaging specifications.
• Recipe data for key ingredients. If a recipe change occurs during a reporting
year, it is applied for the full year sales.
• National Recycling Rates, calculated in line with our Collection Rates metric. We
have restated prior year 2019-2022 rates in line with updated European
methodology for calculating packaging collection rates.
• Supplier data for Recycled Content Rates.
• Consumer CO2 released from carbonated products.
• Calculations of CDE emissions are based on weighted average daily (kWh/24h)
supplier energy consumption rates and by subtracting any savings achieved
through carbon/energy use reduction initiatives completed during the
reporting period or prior years.
• Transport fuel is calculated according to actual litres used or kilometres
recorded with vehicle fuel efficiency rates provided by suppliers.
• Supply of water, treatment of wastewater and waste management are
calculated by using litre and weight (kg) data respectively.
• Spend data used to calculate Category 1 purchased goods and services
(Marketing and IT spend). Marketing spend includes: sales and marketing
agency and services spend, and trade marketing. IT spend includes fixed and
mobile telecoms, IT hardware and software, and outsourced services.
• Employee headcount and job role used to calculate employee commuting data.
Includes WTT assumptions.
• We have started to use supplier specific emission factors for sugar beet in
Europe and will extend this to other packaging and ingredient suppliers over the
coming years.
Scope 3 reported categories
The following Scope 3 categories are reported by CCEP in our total value chain
figures, and are included in our current Science Based Targets initiative (SBTi)
target boundary, representing approximately 90% of our Scope 3 emissions:
• Category 1: purchased goods and services (including the packaging we put on
the market, the ingredients used in our products, purchased water, IT, telecoms
and sales and trade marketing spend).
• Category 3: fuel- and energy-related activities not already included in Scope 1 or
Scope 2 (e.g. WTT, transmission and distribution from energy supply to our sites
and assets).
• Category 4: upstream transportation and distribution (transportation of finished
products paid for by CCEP).
• Category 5: waste generated in operations (emissions from disposal of waste
generated at our production facilities).
• Category 6: business travel (including employee business travel by rail and air).
• Category 7: employee commuting (including commuting and home working
emissions).
• Category 8: upstream leased assets (including the home charging of company
plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV)).
• Category 11: use of sold products (including CO2 emissions released by
consumers, in accordance with BIER guidance).
• Category 12: end of life treatment of sold products.
• Category 13: downstream leased assets (including the emissions generated from
the electricity used by our hot and cold drink equipment at our customers’
premises).
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Approach to sustainability reporting and methodologies
The following Scope 3 categories are not included in CCEP’s current SBTi target
boundary. We will provide additional information in our 2024 CDP response, using
estimated emission calculations:
• Category 1: purchased goods and services (additional purchased goods and
services that are not included above).
• Category 2: capital goods.
• Category 11: use of sold products (including home chilling).
• Category 15: investments (including investments in joint venture recycling
facilities and CCEP Ventures investments).
All other Scope 3 categories (9, 10, 14) are not currently applicable to CCEP.
Emissions from biologically sequestered carbon
Methodologies and boundaries
Emissions from biologically sequestered carbon are reported outside of the three
Scopes of our reported GHG emissions, in line with WRI/WBCSD GHG Protocol
guidance. CO2 is used to carbonate our soft drinks, therefore we follow the BIER
guidance on reporting CO2 emissions from biogenic sources for fugitive losses and
release by consumers.
Our scope for reporting emissions from biologically sequestered carbon includes:
• Biofuels (such as HVO100, Bio-CNG, wood) used in vehicles and sites
• Anaerobic biogas (where CO2 is released from combustion of the biogas)
• Biofuel where blended with diesel/petrol (forecourt fuels)
• Biogenic-sourced CO2 ingredient: we follow the BIER emissions sector guidance.
Each source of biologically sequestered carbon is calculated separately using
appropriate biogenic carbon emission factors and then aggregated to provide
our reported total.
Emissions from the production and transportation of biofuels are accounted for in
Scope 3 as part of Category 5 WTT.
Emissions from conversion of biogenic CO2 to a higher GWP GHG are accounted
for in Scope 1 (i.e. anaerobic biogas where organic material is converted to
biomethane, and not all of the biomethane fully combusted and is therefore not
converted back to CO2, these biomethane emissions are included under Scope 1).
CCEP uses the most up-to-date emission factors from DESNZ/DEFRA for
biogenic CO2 and anaerobic biogas and for biofuels and bio-blends.
Exclusions
Emissions from carbon removals within our value chain related to biomass
feedstock production for bioenergy are well below the significance threshold for
CCEP, so removals have yet to be estimated. If the level of significance changes in
the future, CCEP will follow the latest guidance from the GHG Protocol on
accounting for removals.
Biogenic emissions from electricity generation are excluded for CCEP. Carbon
conversion factors are provided by DEFRA/DESNZ for electricity in the UK grid
generated by biomass power stations. However, no similar carbon factors for all
other CCEP countries is available from credible or reliable sources. Therefore, to
be consistent, CCEP does not report these biogenic emissions for only one of our
territories. It is hoped that an international data source (e.g. IEA) will provide these
conversion factors in future.
Definitions
Biogenic CO2 emissions are defined as CO2 emissions related to the natural carbon
cycle, as well as those resulting from the production, harvest, combustion,
digestion, fermentation, decomposition, and processing of biologically based
materials. Biologically based feedstocks, also referred as “biologically sequestered
carbon,” are non-fossilized and biodegradable organic materials originating from
modern or contemporarily grown plants, animals, or microorganisms.
Biogenic emissions are inherently accounted for in the atmosphere’s natural
carbon cycle. Reporting them within Scopes 1, 2, or 3 would lead to double
counting of emissions, as the sequestration of CO₂ during the growth of the
biomass is not accounted for in these scopes.
Additional information on the methodology for all This is Forward indicators is available on
cocacolaep.com/sustainability/download-centre.
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Approach to sustainability reporting and methodologies continued
External assurance of our sustainability disclosures
CCEP appointed Ernst & Young LLP (EY) to provide limited assurance over
selected sustainability metrics for the year ended 31 December 2023 marked with
the α-sign. The assurance engagement was planned and performed in accordance
with the International Federation of Accountants’ International Standard for
Assurance Engagements Other than Audits or reviews of Historical Financial
Information (ISAE 3000 (Revised)).
A table of all sustainability metrics subject to assurance is available within the metrics
and targets of our TCFD statement on page 60, the Long-Term Incentive Plan
(LTIP) performance target table on page 133 (CO2 reduction actual performance
outcome) and our key performance data summary on pages 234-236.
The EY assurance statement is available on cocacolaep.com/sustainability/download-centre.
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 2023 as filed with the SEC.
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In this section
Other
Information
243 Risk factors
252 Other Group information
269 Form 20-F table of cross references
271 Exhibits
272 Signatures
273 Glossary
277 Useful addresses
278 Forward-looking statements
Image: Sprite, Coca-Cola, Monster Zero Sugar,
Monster Ultra Zero Sugar, Jack Daniel’s & Coca-Cola
RTD and Fanta Orange
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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.
metal containers of up to three litres. Regulations will likely be adopted by EU
member states in 2024, with compliance dates between then and 2040.
Business disruption
Global or regional catastrophic events could negatively impact our business
and financial results.
Our business may be affected by prolonged internal and/or external disruptive
events, including natural disasters such as hurricanes, floods, fires, earthquakes, and
health crises such as pandemics, and man-made events such as wars and political
turmoil, as well as cyber attacks or system failures that may have a material impact
on our ability to operate the business, or on our suppliers or customers. Recent
examples of disruptive events include the COVID-19 pandemic, the current
conflicts between Russia and Ukraine, and Israel and Gaza, which have directly and
indirectly impacted us and our consumers. Other potential disruptive events
include the loss of critical assets and infrastructure, the loss of (or loss of access to)
critical employees, including through government lockdowns or industrial
disputes, major IT outages due to a cyber incident or similar, and the failure of
third party supplied raw materials, critical services or utilities such as electricity, gas
and water.
These disruptive events could have a material adverse impact on our sales volume,
cost of sales, earnings, and overall financial condition.
Packaging and recycling
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. Concerns regarding the environmental impacts of
packaging have led to governments in countries we operate in implementing laws
and regulations that aim to increase the collection and recycling of our packs;
reduce packaging waste and litter, including through limiting the use of single use
plastic; and introduce quotas for refillable packaging, as well as specific packaging
design requirements.
The European Commission is working on a revision of the Packaging and
Packaging Waste Directive, setting increasingly stringent mandatory reuse targets
on soft drinks and carbonated alcoholic beverages in EU member states, takeaway
beverages filled at the point of sale, recycled content targets for plastic packaging
and a mandatory deposit return scheme (DRS) for single use plastic bottles and
In addition to initiatives at the 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 increases to 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 if and when
the bottle is returned. Other measures may include rules on recycled content,
requirements to purchase packaging recovery notes (PRN) to show that we meet
our responsibilities for recycling and recovery of packaging waste, individual
collection or recycling targets, or a plastic tax. The adoption of new or more
stringent rules could increase our costs and may have a material impact on the
cost and efficiency of our operations.
If we fail to sufficiently address stakeholder concerns about packaging and
recycling, or we are not able to adapt our business to new legislation and
regulation on a timely or cost-effective basis, or at all, it could result in higher costs
through packaging taxes, producer responsibility reform, regulatory fines, damage
to corporate reputation or investor confidence, and a reduction of consumer
acceptance of our products and packaging.
Health concerns regarding the contents of our packaging materials, and
regulatory responses to those concerns, could increase our costs and harm
our reputation.
We are also subject to regulations governing the contents of our packaging, and
may become subject to more stringent regulations in that regard.
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.
Read more about packaging on pages 41-44
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Risk factors continued
Legal, regulatory and tax
Future changes to tax laws in the countries in which we operate could
adversely affect our business.
We are subject to multiple national, state, regional, and local taxes in the
jurisdictions in which we operate, including corporate income tax and sales tax.
Tax is a complex evolving area, 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. An increase in our
effective tax rate would negatively impact the results of our operations.
The Organisation for Economic Co-operation and Development (OECD) and the
Inclusive Framework (IF) 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 digitalisation 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). In 2021, the Global Anti-Base Erosion
Model Rules (Pillar Two) was published, providing for a minimum level of taxation
on the income arising in each of the jurisdictions where large MNEs operate.
The Pillar Two rules were enacted in the UK under the Finance (No.2) Act 2023
introducing a global minimum effective tax rate of 15%. The legislation
implements a domestic top-up tax and a multinational top-up tax effective
for accounting periods starting on or after 31 December 2023.
Additionally, direct or indirect 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 which we operate 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.
Such changes may arise through the raising of an existing tax or the imposition
of a new one.
Additional taxes levied on us could harm our financial results.
Our tax filings for various periods are or may be subject to current or future audit
by tax authorities. These audits have resulted, and may in the future result, 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. 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.
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.
These regulations are complex and there is limited guidance as to their
application. In addition, changes to applicable 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.
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245
Risk factors continued
Legislative or regulatory changes that affect our operations, access to raw
materials, products, distribution or packaging could reduce demand for our
products or increase our costs.
Our business model depends on making our products and packages available in
multiple channels and locations. Laws that restrict our ability to do so, including
laws affecting the promotion and distribution of our products, imposing levies on
products with sugar and sweeteners, and limiting our ability to design or market
certain packages, could increase our costs, decrease demand for our products,
and negatively impact our financial results.
For example, our products are subject to, and may in the future be subject to,
additional marketing and commercial restrictions based on ultra-processed food
or nutrition grounds, promotions or marketing to children, or pressure from
customers or regulators to develop discriminatory front of pack labelling.
Additionally, we are subject to licensing and other regulatory requirements in the
jurisdictions in which we operate, and changes in these rules could increase our
compliance costs or impact our ability to operate.
We may be exposed to risks in relation to compliance with anti-corruption laws
and other key regulations and economic sanctions programmes.
We and our subsidiaries are required to comply with the laws and regulations of
the various countries in which we 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 Sanctions, Accountability,
and Divestment Act.
One of the purposes of data protection laws is to protect individuals’ fundamental
rights and freedom, particularly their right to protection of their personal data. In
addition, EU personal data transfers to third countries are subject to significant
and evolving 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, UKBA, and other anti-corruption regulations are aimed at preventing
bribery in dealings with foreign entities. These rules are complex and may reach
our dealings with both public and private sector entities and officials. In our
business dealings, we may deal with governments, state owned business
enterprises, and private sector entities.
We do not currently operate in jurisdictions that are subject to territorial sanctions
imposed by OFAC or other relevant sanction authorities. However, such economic
sanction programmes restrict our ability to engage or confirm business dealings
with certain sanctioned countries and with sanctioned parties.
Violations of the above, including anti-corruption, data protection laws, economic
sanctions, competition law or other applicable laws and regulations, are punishable
by civil and sometimes criminal penalties for individuals and companies. These
penalties can include 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.
Any violation within one of these compliance risk areas could have a negative
impact on our reputation and on our ability to win future business.
Due to the fast pace of changing statutory and regulatory environment, we
cannot guarantee that our compliance programmes, policies and procedures will
be followed at all times, or that we will always detect and prevent violations of the
applicable laws by our employees, consultants, agents or partners. Implementing
new or additional internal compliance systems or oversights may also increase our
operating costs.
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Risk factors continued
Legal claims against our suppliers could affect their ability to provide us with
products and services, which could negatively impact our financial results.
Many of our suppliers provide 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 suppliers 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
expose us to risk.
These outcomes could require us to change suppliers or develop replacement
solutions or be subject to third party claims. This could result in business
inefficiencies, delays or higher costs, which could negatively impact our financial
results.
Litigation or legal proceedings could expose us to significant liabilities
and damage our reputation.
We are 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. Actual outcomes or losses may differ
materially from those in the current assessments and estimates. Recent EU
legislation has increased the ability to bring claims, including of greenwashing,
against CCEP.
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.
Cyber and IT resilience
Cyber attacks, or a deficiency in our cybersecurity or a customer’s or supplier’s
cybersecurity, 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 a third party gaining unauthorised access to systems, either unintentionally
or through an intentional attack (such as activities due to war, state sponsored
cyber terrorism, criminal attack, hacking or a computer virus), which could disrupt
operations, compromise or corrupt data, damage our brand reputation, threaten
our Company or employees and negatively impact our financial results.
Our business processes require high levels of integration between our IT systems
and the systems of third parties (suppliers, customers, business partners, systems
providers) and companies that we invest in or acquire. A cyber incident at any of
those entities could either spread to our systems or indirectly have a negative
impact on our ability to operate. Similarly, cyber attacks in one country might
impact our ability to do business in other countries due to the dependencies on
information systems and applications.
Technology failures could disrupt our operations and negatively impact
our business.
We rely 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 systems may be vulnerable to interruptions
due to implementation of new systems or systems upgrades (such as our system
applications and product in data processing (SAP) and its modules) and 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, such as cyber attacks. Centralisation of IT systems might
increase the impact of a failure of IT applications. 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.
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 integrate new entities following
investment or acquisition, the integration of IT systems and applications for those
entities will increase the complexity and the risk level of our IT infrastructure.
Read more about our cyber security risk management on pages 77-78
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Risk factors continued
Economic and political conditions
The deterioration of global and local economic and political conditions could
adversely affect our business performance and share price.
Our performance is closely linked to the global economic cycle as well as macro
and microeconomic conditions in the countries, regions and cities where we
operate. Normally, slow economic growth or economic contraction decreases
demand and drives down sales.
For example, adverse economic conditions decrease individuals’ disposable
income, potentially leading to the purchase of cheaper private label brands or
avoiding buying beverage products altogether.
Currently, many major economies are going through monetary tightening to
contain high inflation following a multi-year monetary and fiscal expansion and
supply chain dislocations. The war in Ukraine is further increasing the uncertainty
and volatility, mainly through energy prices and supply uncertainty.
The ongoing uncertainties around economic growth, employment, inflation,
commodities, currencies, costs, and the availability of financial resources could
directly impact our business, operating results, financial conditions, cash flows,
liquidity requirements and share price. Geopolitical concerns are higher than last
year, particularly with the ongoing war in Ukraine, the conflict in the Middle East,
the global refugee crisis, and elections resulting in more populist or extremist
parties gaining support and polarised coalition governments, creating a very
volatile macroeconomic environment.
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 availability, tariffs and
protectionism, geopolitical turbulence in the form of US-China trade wars and
trade tension between Australia and China. Additionally, API is exposed to PNG
liquidity risks and the associated impact on short-term profitability. Access to
foreign exchange in PNG is limited due to a 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 its
budget deficit, it could require the PGK to be devalued, which could significantly
impact API’s financial results upon translation of PGK 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 before the time of delivery,
which may lock us into prices that are ultimately higher or lower than the actual
market price at the time of delivery.
We continue to experience volatility in commodity prices and foreign exchange
mainly driven by central banks’ global tightening policies; supply chain disruptions
due to military conflicts; political uncertainty across key global powers; and
increased protectionist policies.
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 our products could be
adversely affected.
The quality of the materials or finished goods we receive 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.
Changes in interest rates or our debt rating could harm our financial results
and financial position.
We are 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 TCCC and changes in its debt rating. If our credit rating
declines or interest rates continue to increase, as they have done in recent years,
there is no guarantee that we will be able to access debt financing on favourable
terms, or at all.
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248
Risk factors continued
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-term 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 the EU, and the Eurozone could be dissolved entirely. 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 use additional currencies, we would be subjected
to additional earnings volatility as amounts in these currencies are translated into
euros.
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, the 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.
We operate in the highly competitive beverage industry and face strong
competition from other general and speciality beverage companies. The timing
and effectiveness of our response to continued and increased competitor
and customer consolidations and marketplace competition may result in lower
than expected net pricing of our products. Additionally, the loss of key contracts
or customers to our competitors may decrease our sales volume, revenues and
profitability and damage our reputation.
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 consolidating, or are
forming buying groups, which increases their purchasing power. They may 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 us.
In addition, from time to time, a customer or customers choose(s) to temporarily
or permanently stop selling some of our products as a result of disputes with us.
These factors, can have a negative impact on the availability of our products, and
our profitability.
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.
Our business is vulnerable to products being imported from outside our
territories, which adversely affects our sales.
Some of the territories in which we operate permit imports of products
manufactured by bottlers from countries outside our territories. When these
imports come from members of the European Economic Area, we are prohibited
from taking action to stop such imports.
Climate change and water
Water scarcity and additional regulations on water supply or use could
adversely impact our business.
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 or 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, negative publicity,
and a loss in consumer confidence.
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Risk factors continued
Climate change, and the legal and regulatory responses, could adversely
impact our business.
Climate change is resulting in global average temperature increases and
increasingly frequent and severe extreme weather conditions around the
world, and the effects of this change appear to be accelerating. More frequent
extreme weather events, such as storms or floods in our territories, could disrupt
our facilities and distribution network, further impacting our business. It may
also lead to decreased agricultural productivity in certain regions of the world
that limits the availability or increases the cost of key raw materials that we use
to produce our products. Additional climate laws may affect other areas of our
business, such as production, distribution, packaging or the cost of raw materials.
Concern over climate change has led to more environmental legislative and
regulatory initiatives at an EU and national level. These include areas such as
GHG emissions, water use and energy efficiency.
Governments and private parties are increasingly filing lawsuits or initiating
regulatory action based on allegations that certain public statements regarding
sustainability-related matters and practices by companies are greenwashing,
i.e. misleading information or false claims overstating potential benefits. Threat
of such actions and the negative publicity arising from them presents additional
uncertainty regarding the extent to which we may face increased risk of liability
stemming from our climate change or sustainability practices.
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, 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, and
there is a risk that we may not achieve our desired returns.
Read more about climate and water on pages 37-40 and 45-47
Changes in customer and consumer buying trends and category perception
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, are 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.
At the same time, there is additional scrutiny by the World Health Organisation,
EFSA and national health authorities on sweeteners, with many studies and impact
assessments on health ongoing. Some of these studies may lead to additional
regulatory constraints or additional tax, like in France, where a soda tax applies
to both products with sugar and those with sweeteners.
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 are unable to meet this demand by providing a broad
enough range of products, our business and financial results could be negatively
impacted.
Business transformation, integration and digital capability
We may not identify sufficient initiatives to realise our cost saving goals to stay
competitive.
We continue to assess opportunities for improvements as part of the ongoing
business strategy to enable us to remain competitive in the future. This strategic
objective encompasses all the support functions, technology transformation,
supply chain and commercial improvements and working efficiently with our
partners and franchisors.
The initiatives are complex due to their multi functional and multi country nature.
Ineffective coordination and control over single initiatives and interdependent
initiatives could result in us failing to realise the expected benefits.
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Risk factors continued
Restructuring could cause labour and union unrest.
Since our 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 maintain and improve our 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. Continual change might
trigger change fatigue among our people or social unrest in the event that such
changes result in industrial action.
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. However, there is no guarantee that our efforts will continue to be
successful or have the desired effect.
Miscalculation of our need for infrastructure investment could impact our
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 will not generate the projected returns, either
because of market or technological changes, or ineffective adoption of
capabilities, or because the projected requirements of the investments differ
from actual levels. This could adversely affect our financial results.
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 shareholder value. Our efforts to execute this
strategy require us to identify suitable acquisition targets (such as Coca-Cola
Beverages Philippines, Inc. (CCBPI)), negotiate, and close acquisition and
development transactions. Further, to the extent that we are able to identify
suitable investments, negotiations may not proceed as anticipated and
management attention may be diverted by such opportunities. We may also
encounter unexpected difficulties, joint venture partner disputes, cost or delays in
restructuring and integrating acquired businesses or bottling operations into our
operating, governance, sustainability and internal control structures, including
extending our Company’s internal control over financial reporting to newly
acquired businesses, which may increase the risk of failure to prevent
misstatements in our consolidated financial statements. There is no guarantee
that these investments will ultimately be accretive, support our growth or achieve
the intended result.
People and wellbeing
Failure to attract, retain and motivate existing and future employees.
Our ability to achieve our strategic objectives is reliant on having the right talent
and people. The increasing importance of flexible working and future work topics
brings the challenge of attracting, retaining and motivating existing and future
employees who have the talent we need, the required technical skill set, and the
expected levels of motivation to deliver. As a result, we could fail to achieve our
strategic objectives and could experience a decline in employee engagement,
industrial action, reputational damage or litigation.
Increases in the cost of wages and employee 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 the high employment levels we
see globally will put pressure on future wage negotiations and the anticipated
salary budget. We are engaged in a dialogue with social partners on this issue.
However, we cannot guarantee that our efforts will be successful in creating
consensus or that unions representing our employees will not take future actions
that are disadvantageous to us.
Adverse effects on our people’s health, wellbeing and safety could impact
our business.
Failure to adequately manage workplace hazards or abide by our health and
safety policies and guidelines could result in injuries and deaths among our
people. In turn, this can have an adverse impact on employee engagement and
productivity levels. The increase of stress and employees feeling burnt out 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 the risk to us of long-term absence and loss of
productivity levels.
Read more about our people in Great people on pages 20-27
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2023 Integrated Report and Form 20-F
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Risk factors continued
Misconduct by third parties relating to human rights could lead to reputational
and financial damage.
Supplier monitoring and due diligence of suppliers might fail or it may not be able
to prevent suppliers’ abuse of human rights including modern slavery, resulting in
media and public attention. This could cause a reputational and financial impact
on CCEP, including negative ratings in benchmarks, leading to an impact on
investors becoming less likely to invest in CCEP.
Relationship with The Coca-Cola Company (TCCC) and other franchisors
Our business success, including our financial results, depends on our
relationship with TCCC and other franchisors.
Around 87% of our revenue for the year ended 31 December 2023 was derived
from the distribution of beverages under agreements with TCCC. We make, sell
and distribute these products through 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.
• 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.
• 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, which could have a
material adverse effect on our business, results of operations, business and
customers relationships, and reputation.
Other risks
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. Five of our
Directors, including the Chairman, were nominated by Olive Partners, and two of
our Directors were nominated by ER. As a result of their shareholdings and Board
seats, TCCC and Olive Partners can influence matters requiring shareholder and
Board approval, subject to our Articles of Association and the Shareholders’
Agreement. The views and interests of TCCC and Olive Partners may not always
align with each other or those of other shareholders.
Product quality
Our business could be adversely affected if we, TCCC or other franchisors and
manufacturers of the products we distribute are unable to maintain a positive
brand image as a result of product safety, product quality, food defence or
food fraud issues.
Adequate and effective quality control methods are vital to ensure the safety and
integrity of the products we manufacture. The food additives we use have been
approved as safe by globally recognised authorities, including the Joint FAO/WHO
Expert Committee on Food Additives (JECFA), the European Food Safety
Authority (EFSA), the Food Standards Australia New Zealand (FSANZ), Indonesia
National Agency of Food and Drug Control (BPOM) and National Department of
Health, Papua New Guinea. We only use additives in our drinks when they are
needed for preserving, colouring, sweetening or balancing acidity. In addition, all
our employees are responsible for ensuring we only supply safe products and are
required to follow all relevant policy guidelines, procedures and processes at our
production facilities and across our entire supply chain. Factors such as improper
handling, storage, or inadequate/inefficient sanitation practices during the
manufacturing process can introduce contaminants, leading to adverse health
effects for our consumers. Additionally, failure to meet stringent quality standards
may result in product recalls, regulatory fines, and legal liabilities. Negative
publicity surrounding safety and quality issues may jeopardise our Company's
reputation, as it may erode consumer trust and loyalty, affecting our market share
and long-term profitability.
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Other Group information
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 registered 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 (CCEP).
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 2024 Annual General Meeting (AGM) will be held
on 22 May 2024. However, shareholders will be notified if the Company is 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 Directors and senior management are set out on pages 95-99.
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 7.3% (33,385,110 Shares), 1.5% (6,701,540 Shares), and
1.7% (7,855,504 Shares) of the Shares outstanding as of 29 February 2024,
respectively, no Director or member of senior management individually
owned more than 1% of the Company’s Shares as of 29 February 2024.
Table 1 shows the number of share options held by Directors and other members
of senior management as at 29 February 2024, including the applicable
exercise price and the date when the applicable exercise period ends.
Other employee-related matters
Note 17 to the consolidated financial statements provides a breakdown of
employees by main category of activity. As at 31 December 2023, we had around
32,000 employees, of whom none were located in the US. A number of our
employees in Europe and API are covered by collectively bargained labour
agreements, most of which do not expire. However, in some countries, wage rates
must be renegotiated at various dates throughout 2024. 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 29 February 2024
Grant date
Expiry date
Exercise price
Total number of Shares
subject to outstanding
options including
exercisable and
unvested options
5 November 2015
5 November 2025
US$39.00
324,643
Name
Damian
Gammell
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Other Group information continued
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)
549300LTH67W4GWMRF57
ii.
CCEP
GB00BDCPN049
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 2023, the Company had 459,200,818 Shares, nominal value €0.01
per share, issued and fully paid. As at 29 February 2024, the Company had
459,416,557 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 305,510,225 Shares (as of 29 February 2024) to be allotted
and issued, subject to the restrictions set out below:
(1) pursuant to a shareholder resolution passed on 24 May 2023 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 €1,527,551.12 (representing 152,755,112 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 €3,055,102.25 (representing 305,510,225 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.
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 24 May 2023 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.
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,
ii.
b. 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
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 €229,132.66 (representing 22,913,266 Shares).
c.
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Other Group information continued
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 2023 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 2023 and 29 February 2024.
For more details about the share plans and awards granted see Note 21 to the consolidated
financial statements on pages 209-210
History of share capital
Table 3 on page 255 sets out the history of our share capital for the period from
1 January 2021 until 29 February 2024.
Share buyback programme
The maximum number of Shares authorised for purchase at the 2023 AGM was
45,826,533 Shares, representing 10% of the issued Shares at 5 April 2023, reduced
by the number of Shares purchased, or agreed to be purchased after 5 April 2023
and before 24 May 2023. No Shares have been purchased under the 2023
shareholder authority as at the date of this report. The existing authority to buy
back Shares will expire at the 2024 AGM. We intend to seek shareholder approval
to renew the authority to buy back Shares.
US shareholders
To the knowledge of the Company, 405 holders of record with an address in the
US held a total of 459,287,301 Shares (or 99.97% of the total number of issued
Shares outstanding) as at 29 February 2024. 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)
30/10/14 Option
05/11/15 Option
29/09/21
29/09/21
25/11/21
25/11/21
10/03/22
10/03/22
10/03/22
10/03/22
05/09/22
05/09/22
13/03/23
13/03/23
13/03/23
13/03/23
13/03/23
10/08/23
10/08/23
PSU
RSU
PSU
RSU
PSU
RSU
RSU
RSU
PSU
RSU
PSU
PSU
RSU
RSU
RSU
PSU
RSU
Total number
of Shares awarded
to employees
outstanding as at
31 December 2023
223,650
Total number
of Shares awarded
to employees
outstanding as at
29 February 2024(B)
175,911
695,961
424,565
38,821
670
34
458,127
1,521
375
44,955
10,852
948
2,626
386,646
205
411
40,800
5,036
1,524
557,961
781,805(C)
37,827
1,240(C)
34
455,971
1,521
375
43,581
10,852
948
2,626
384,014
205
411
39,399
5,036
1,524
Price per
Share
payable on
exercise/
transfer
(US$)
Expiration
date
(dd/mm/yy)
32.51 30/10/24
39.00 05/11/25
—
—
—
—
15/03/24
15/03/24
15/03/24
15/03/24
— 09/03/25
—
15/03/24
— 01/03/25
— 09/03/25
— 09/03/25
— 09/03/25
— 09/03/25
—
12/03/26
— 01/07/24
— 01/07/25
—
—
—
13/03/26
13/03/26
13/03/26
(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.
(C) The 2021 LTIP award was subject to EPS, ROIC and CO2e reduction performance targets measured over the three year
performance period from 1 January 2021 to 31 December 2023 and is due to vest on 15 March 2024. Read more in the Annual
report on remuneration on page 134.
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Other Group information continued
Table 3
Share capital history
Period
1 January 2021
1 January to
31 December
2021
1 January to
31 December
2021
1 January to
31 December
2021
1 January to
31 December
2022
1 January to
31 December
2022
Nature of Share issuance
Opening balance
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
1 January to
31 December
2022
Shares cancelled
as part of buyback
programme
Number
of Shares
454,645,510
1,290,506
Consideration
N/A
Exercise price per
Share ranging from
US$19.68 to US$32.51
Cumulative balance
of issued Shares
at end of period
454,645,510
455,936,016
299,016
Nil
456,235,032
Period
1 January to
31 December
2023
1 January to
31 December
2023
Nature of Share issuance
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
Number
of Shares
1,323,879
Consideration
Exercise price per
Share ranging from
US$31.46 to US$39.00
Cumulative balance
of issued Shares
at end of period
458,430,332
770,486
Nil
459,200,818
—
—
456,235,032
1 January to
31 December
2023
Shares cancelled
as part of buyback
programme
—
—
459,200,818
482,420
Exercise price per
Share ranging from
US$23.21 to US$32.51
456,717,452
1 January to
29 February 2024
389,001
Nil
457,106,453
1 January to
29 February 2024
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
—
—
457,106,453
1 January to
29 February 2024
Shares cancelled
as part of buyback
programme
215,739
Exercise price per
Share ranging from
US$32.51 to US$39.00
459,416,557
—
—
Nil
459,416,557
—
459,416,557
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Other Group information continued
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.
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.
Read more about our relationships with franchisors, see the Risk factors on pages 243-251
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 and low alcoholic ready to drink (ARTD) beverages. 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.
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 for CCEP’s own
products on certain consumer occasions. More recently, CCEP entered the ARTD
segment with Jack Daniel’s & Coca-Cola ready to drink (RTD) and intends to
make further entrances with ARTD in the near future with launches such as
Absolut Vodka & Sprite ARTD.
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, increase of private label, 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.
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Other Group information continued
Impact of governmental regulation
Our business is sensitive to the economic and political action and conditions in our
countries of operation. The risks these can pose to our business are set out in our
Principal risks on pages 68-78 and in our Risk factors on pages 243-251.
Material contracts
Neither the Company (nor any member of the Group) has entered into any
material contracts, for the two years immediately preceding publication of this
report, that are to be performed in whole or in part at or after the filing of this
report, other than contracts entered into in the ordinary course of business.
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
ir.cocacolaep.com/financial-reports-and-results/integrated-reports. Shareholders
may also order a hard copy, free of charge – see Useful addresses on page 277.
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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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 includable 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 includable 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.
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2023 Integrated Report and Form 20-F
259
Other Group information continued
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.
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 which split year treatment does not apply, which do not carry on a
trade, profession or vocation through a permanent establishment or branch or
agency in the UK, and which 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.
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260
Other Group information continued
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 (and the UK rules relating to non-resident taxation of disposals of
shares in “UK property rich” companies are not expected to apply with respect to
the Shares, and would in any event only apply to a non-UK holder who holds
(together with connected persons) 25% or more of the shares in a relevant “UK
property rich” company). Special rules may apply to individual US holders which
have ceased to be resident in the UK for tax purposes and who make a disposition
of their Shares whilst UK non-resident before becoming once again resident in the
UK for tax purposes within five years from departure.
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 charge 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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2023 Integrated Report and Form 20-F
261
Other Group information 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.
The financial results presented herein for the period from 1 January 2021
through to the acquisition of CCL (the Acquisition) effective 10 May 2021 refer to
Coca-Cola European Partners plc (Legacy CCEP) and its consolidated subsidiaries.
The periods from the Acquisition to the year ended 31 December 2023 refer to
the combined financial results of CCEP.
The financial information presented here has been prepared in accordance with
UK 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).
2023
€ million
18,302
2022
€ million
17,320
(11,582)
(11,096)
6,720
6,224
2021
€ million
13,763
(8,677)
5,086
2020
€ million
10,606
(6,871)
3,735
2019
€ million
12,017
(7,424)
4,593
Statement of financial position
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Total equity
2023
2022
2021
2020
2019
€ million
22,649
6,605
29,254
14,000
7,278
21,278
7,976
€ million
22,770
6,543
29,313
14,553
7,313
21,866
7,447
€ million
23,330
5,760
29,090
15,787
6,093
21,880
7,210
€ million
15,161
4,076
19,237
9,072
4,140
13,212
6,025
€ million
15,582
3,103
18,685
8,414
4,115
12,529
6,156
Total equity and liabilities
29,254
29,313
29,090
19,237
18,685
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 (€)
459
5
276
3.64
3.63
1.84
457
5
234
3.30
3.29
1.68
456
5
220
2.15
2.15
1.40
455
5
192
1.09
1.09
0.85
456
5
178
2.34
2.32
1.24
Income statement
Revenue
Cost of sales
Gross profit
Selling and distribution
expenses
Administrative expenses
Other Income
Operating profit
Finance income
Finance costs
Total finance costs, net
Non-operating items
Profit before taxes
Taxes
Profit after taxes
(3,178)
(2,984)
(2,496)
(1,939)
(2,258)
Dividends declared per Share (€)
(1,310)
107
2,339
65
(185)
(120)
(16)
2,203
(534)
1,669
(1,250)
(1,074)
(983)
96
2,086
67
(181)
(114)
(15)
1,957
(436)
1,521
—
1,516
43
(172)
(129)
(5)
1,382
(394)
988
—
813
33
(144)
(111)
(7)
695
(197)
498
(787)
—
1,548
49
(145)
(96)
2
1,454
(364)
1,090
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2023 Integrated Report and Form 20-F
262
Other Group information continued
Operations review
Revenue
Revenue increased by €1.0 billion, or 5.5%, from €17.3 billion in 2022 to €18.3 billion in
2023. Refer to the Business and financial review for a discussion of significant
factors that impacted revenue in 2023, as compared to 2022.
2022 vs 2021
Refer to Other Information – Other Group information – Operations review of the
2022 Annual Report on Form 20-F, filed on 17 March 2023.
Volume
Refer to the Business and financial review for a discussion of significant factors
that impacted volume in 2023, as compared to 2022.
2022 vs 2021
Refer to Other Information – Other Group information – Operations review of the
2022 Annual Report on Form 20-F, filed on 17 March 2023.
Cost of sales
On a reported basis, cost of sales increased 4.5%, from €11.1 billion in 2022 to €11.6
billion in 2023. Refer to the Business and financial review for a discussion of
significant factors that impacted cost of sales in 2023, as compared to 2022.
2022 vs 2021
Refer to Other Information – Other Group information – Operations review of the
2022 Annual Report on Form 20-F, filed on 17 March 2023.
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
2023
€ million
3,178
1,310
4,488
2022
€ million
2,984
1,250
4,234
On a reported basis, total operating expenses increased by 6.0% from €4.2 billion in
2022 to €4.5 billion in 2023.
Selling and distribution expenses increased by €194 million, or 6.5%, versus 2022,
primarily driven by increased inflation, partially offset by a continued focus on
discretionary spend optimisation.
Administrative expenses increased by €60 million, or 5.0%, versus 2022, mainly
reflecting increased inflation and the continuation of restructuring activity related
to various transformation initiatives.
2022 vs 2021
Refer to Other Information – Other Group information – Operations review of the
2022 Annual Report on Form 20-F, filed on 17 March 2023.
Finance costs, net
Finance costs, net totalled €120 million and €114 million in 2023 and 2022,
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)
2023
11,761
1.6%
89%
11%
2022
12,431
1.3%
90%
10%
Non-operating items
Non-operating items represented an expense of €16 million in 2023 and an
expense of €15 million in 2022. 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 and
impairments.
Tax expense
In 2023, our reported effective tax rate was 24.2%. The increase from 2022 is largely
due to the increase in the UK statutory tax rate to a weighted average of 23.5%
and the review of uncertain tax positions.
In 2022, our reported effective tax rate was 22.3%. The decrease from 2021 is
largely due to the remeasurement of deferred tax positions following the
enactment of tax rate changes in the United Kingdom, the Netherlands and
Indonesia in the prior period.
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2023 Integrated Report and Form 20-F
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Other Group information continued
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.
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
December 2023 the Group issued €700 million of 3.875% notes maturing in 2030. At
31 December 2023, the Group had €1,150 million in third party debt maturities in the
next 12 months, €500 million in the form of euro denominated notes, €588 million of
US dollar denominated notes swapped into euro and €62 million of Australian dollar
denominated notes. No short-term commercial papers were issued at
31 December 2023. 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 13 of the consolidated
financial statements.
In line with our commitments to deliver long-term value to shareholders, in April
and November 2023 the Board declared interim dividends of €0.67 and €1.17 per
Share, respectively, maintaining annualised dividend payout ratio of approximately
50%. For the year ended 31 December 2023, dividend payments totalled €841
million.
There were no payments under the share buyback programme in 2023.
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 2023. 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.
Summary of cash flow activities
2023
During 2023, our primary sources of cash included: (1) €2,806 million from
operating activities, net of cash payments related to restructuring programmes of
€104 million and contributions to our defined benefit pension plans of €32 million;
(2) proceeds from borrowings, net of issuance costs of €694 million; (3) proceeds
of €69 million related to the settlement of debt-related cross currency swaps; (4)
proceeds of €101 million primarily related to the sale of property; (5) proceeds of
€37 million related to the sale of certain non-alcoholic ready to drink brands to
TCCC and (6) proceeds of €35 million related to the sale of sub-strata and
associated mineral rights in Australia.
Our primary uses of cash were: (1) repayments on borrowings of €1,159 million,
repayments of principal on lease obligations of €148 million (refer to Financing
activities below) and net interest payments of €124 million; (2) dividend payments of
€841 million; (3) spend on property, plant and equipment of €672 million and software
of €140 million; (4) investments in short-term financial assets of €342 million, and (5)
acquisition of non-controlling interest of €282 million .
2022
During 2022, our primary sources of cash included: (1) €2,932 million from operating
activities, net of cash payments related to restructuring programmes of €86
million and contributions to our defined benefit pension plans of €32 million; and
(2) proceeds of €143 million related to the sale of certain non-alcoholic ready to
drink brands to TCCC.
Our primary uses of cash were: (1) repayments on borrowings of €1,223 million,
repayments of principal on lease obligations of €153 million (refer to Financing
activities below); (2) net interest payments of €130 million; (3) dividend payments
of €763 million; (4) spend on property, plant and equipment of €500 million and
software of €103 million; and (5) investments in short-term financial assets of €207
million.
The discussion of our 2021 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 2021 Annual Report on Form 20-F, filed on 15 March 2022.
Operating activities
2023 vs 2022
Our cash derived from operating activities totalled €2,806 million in 2023 versus
€2,932 million in 2022. This decrease was primarily due to cycling the impact of
working capital improvement initiatives.
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Other Group information continued
2022 vs 2021
Refer to Other Information – Other Group information – Cash flow and liquidity
review of the 2022 Annual Report on Form 20-F, filed on 17 March 2023.
Investing activities
2023 vs 2022
During 2023, proceeds related to the sale of property, plant and equipment
totalled €101 million, primarily related to the sale of properties. Proceeds from
the sale of certain non-alcoholic ready to drink brands to TCCC totalled
€37 million. Proceeds related to the sale of sub-strata and associated mineral
rights in Australia totalled €35 million. Net outflows related to short-term
investments were €342 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:
Supply chain infrastructure
Cold drink equipment
Fleet and other
Total capital asset investments
2023
2022
€ million
€ million
532
110
30
672
393
83
24
500
Investments in supply chain infrastructure relate to investments in our manufacturing
and distribution facilities. In addition, during 2023 the Group spent €140 million
(2022: €103 million) on capitalised development activity, primarily in relation to the
continuation of our business capability programme and further investments in
technology and digitisation.
During 2024, we expect our capital expenditures to be invested in similar categories
as those listed in the table above. While 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.
2022 vs 2021
Refer to Other Information – Other Group information – Cash flow and liquidity
review of the 2022 Annual Report on Form 20-F, filed on 17 March 2023.
Financing activities
2023 vs 2022
Our net cash used in financing activities totalled €1,822 million in 2023. In 2022,
net cash used in financing activities totalled €2,276 million.
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
€700 million
Total issuances of debt,
less short-term borrowings,
net of issuance costs
Net issuances of short-term
borrowings
Total issuances of debt, net
Payments on debt
$850 million
US$25 million
US$25 million
€350 million
€700 million
A$200 million
A$30 million
A$125 million
Lease obligations
Total repayments
on third party borrowings,
less short-term borrowings
Net payments of short-term
borrowings
Total payments on debt
Maturity date
December 2023
Rate
3.875%
—
(A)
Maturity date
May 2023
October 2023
October 2023
November 2023
February 2022
March 2022
July 2022
July 2022
—
Rate
0.500%
4.340%
4.340%
2.625%
0.750%
3.375%
5.060%
3.125%
—
2023
694
694
—
694
2023
(775)
(17)
(17)
(350)
—
—
—
—
(148)
2022
—
—
—
—
2022
—
—
—
—
(700)
(134)
(20)
(84)
(153)
—
(A)
(1,307)
(1,091)
—
(1,307)
(285)
(1,376)
(A) These amounts represent short-term euro commercial paper with varying interest rates. In 2023, changes in short-term borrowings
include €6,810 million of newly issued and €6,810 million of repaid EUR commercial paper. In 2022, changes in short-term
borrowings included €2,464 million and €2,749 million of newly issued and repaid EUR commercial paper, respectively.
Our financing activities during 2023 included dividend payments totalling €841
million, based on a full year dividend rate of €1.84 per Share. In 2022, dividend
payments totalled €763 million.
There were no payments under the share buyback programme in 2023 and 2022.
There were no drawdowns from our credit facility in 2023 and 2022. The facility was
undrawn at 31 December 2023 and 31 December 2022, respectively.
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Other Group information continued
During 2023 our financing activities also included the acquisition of non-controlling
interest of €282 million. Further details are provided in Note 19 of the consolidated
financial statements.
Contractual obligations
The following table reflects the Group's contractual obligations as at
31 December 2023:
Lease obligations
During the year ended 31 December 2023 and 31 December 2022, total cash
outflows from payments of principal on lease obligations were €148 million and
€153 million, respectively.
2022 vs 2021
Refer to Other Information – Other Group information – Cash flow and liquidity
review of the 2022 Annual Report on Form 20-F, filed on 17 March 2023.
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, approximately 60% 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.
Borrowings and
interest
obligations(A)
Lease
obligations(B)
Purchase
agreements(C)
Total
Less than 1 year
1 to 3 years
3 to 5 years More than 5 years
€ million
€ million
€ million
€ million
€ million
11,803
1,322
2,325
2,681
5,475
782
179
232
139
232
238
12,823
94
1,595
83
2,640
41
2,861
20
5,727
(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 13 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 future 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 €165 million as at 31 December 2023. 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 include the impact of contractual obligations related to
derivative financial instruments. A table containing this information is presented 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 20 of the consolidated financial statements for further
information.
The above table also does not reflect employee benefit liabilities of €199 million,
which include current liabilities of €8 million and non-current liabilities of €191
million as at 31 December 2023. Refer to Note 15 of the consolidated financial
statements for further information.
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2023 Integrated Report and Form 20-F
266
Other Group information 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 2023:
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
—
5
5
—
—
—
1
—
1
—
3
3
1
—
1
1
—
1
—
1
1
—
—
—
1
—
1
—
1
1
1
—
1
—
—
—
—
1
1
—
—
—
—
—
—
2
14
16
15
6
21
1
—
1
1
10
11
3
4
7
3
—
3
—
2
2
—
—
—
—
—
—
Australia
New Zealand and Pacific Islands
Indonesia and Papua New Guinea
Production facilities(A)(B)
Leased
Owned
Total
Distribution and logistics facilities
Leased
Owned
Total
Corporate offices and business unit headquarters
Leased
Owned
Total
10
4
14
9
2
11
1
—
1
(A) All production facilities are a combination of production and warehouse facilities.
(B) Production facilities include NARTD, alcoholic beverage and other production facilities.
6
7
13
4
—
4
1
—
1
—
11
11
9
3
12
1
—
1
4
41
45
21
10
31
9
—
9
Total
16
22
38
22
5
27
3
—
3
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Other Group information continued
The Group uses two shared service centres, both located in Bulgaria.
The Group’s principal properties cover approximately 5.6 million square metres in
the aggregate of which 0.9 million square metres is leased and 4.7 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 2023, the Group operated approximately 13,000 vehicles of
various types, the majority of which are leased. The Group also owned
approximately 1.4 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 2023. 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 (i) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the Group’s transactions and dispositions of assets; (ii) 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 (iii) 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.
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Other Group information continued
Management, with the participation of the CEO and CFO, assessed the
effectiveness of the Group’s internal control over financial reporting as at
31 December 2023, 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 2023
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 2023, which is set out on page 161.
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 2023 that has
materially affected, or is reasonably likely to materially affect, the Group’s internal
control over financial reporting.
Auditor’s 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, audit-related assurance
services, other assurance services and other 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 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
require the auditor to rotate its lead audit partner every five years. 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 17 of
the consolidated financial statements.
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2023 Integrated Report and Form 20-F
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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
Page
n/a
n/a
n/a
n/a
243-251
167, 198, 252, 257, 277
2, 4-5, 7, 81-90, 171-172,
261-265
Item 8
Financial Information
A – Consolidated Statements and Other Financial
Information
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
C – Organizational structure
D – Property, plants and equipment
217-222
Item 10 Additional Information
177-179, 264, 266
A – Share capital
Item 4A Unresolved Staff Comments
Item 5
Operating and Financial Review and Prospects
A – Operating results
B – Liquidity and capital resources
n/a
B – Memorandum and articles of association
82-86, 89-90, 261-262
C – Material contracts
D – Exchange controls
87-88, 263-265
E – Taxation
C – Research and development, patents and licences, etc.
146
F – Dividends and paying agents
D – Trend information
E – Critical Accounting Estimates
Item 6
Directors, Senior Management and Employees
2, 4-5, 13, 82-90
n/a
G – Statement by experts
H – Documents on display
I – Subsidiary Information
A – Directors and senior management
95-102, 252
J - Annual Report to Security Holders
B – Compensation
C – Board practices
D – Employees
E – Share ownership
127-143, 230
Item 11 Quantitative and Qualitative Disclosures about
93-103, 117-124,
127-143, 252
Market Risk
Item 12 Description of Securities Other than Equity Securities
200, 252
A – Debt Securities
209-210, 139-140, 252
B – Warrants and Rights
F – Recovery of Erroneously Awarded Compensation
n/a
C – Other Securities
Item 7
Major Shareholders and Related Party Transactions
D – American Depository Shares
A – Major Shareholders
B – Related Party Transactions
C – Interests of experts and counsel
146
201-204, 217
n/a
Page
159-222, 261-266
217
253
n/a
253
n/a
n/a
n/a
253-255
145, 257
257
257
257-260
n/a
n/a
257
217-222
n/a
214-216
n/a
n/a
n/a
n/a
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2023 Integrated Report and Form 20-F
270
Form 20-F table of cross references continued
Part II
Item 13 Defaults, Dividend Arrearages and Delinquencies
Item 14 Material Modifications to the Rights of Security Holders
and Use of Proceeds
Item 15 Controls and Procedures
Item 16A Audit Committee Financial Expert
Item 16B Code of Ethics
Item 16C Principal Accountant Fees and Services
Item 16D Exemptions from the Listing Standards for Audit
Page
n/a
n/a
161, 267-268
105, 118
105
200, 268
n/a
Item 16E Purchases of Equity Securities by the Issuer and Affiliated
Committee
145-146, 254-255
Item 16F Change in Registrant’s Certifying Accountant
Purchasers
Item 16G Corporate Governance
Item 16H Mine Safety Disclosure
Item 16I Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
Item 16J Insider Trading Policies
Item 16K Cybersecurity
Part III
Item 17
Financial Statements
Item 18
Financial Statements
Item 19
Exhibits
n/a
104-106
n/a
n/a
n/a
77-78
159-222
n/a
271
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2023 Integrated Report and Form 20-F
271
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 4.7
Exhibit 8
Exhibit 12.1
Exhibit 12.2
Exhibit 13
Exhibit 15.1
Exhibit 97
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 2023.
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).
Coca-Cola Europacific Partners plc Long-Term Incentive Plan (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 6-K filed with the SEC on April 12, 2023).
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.
Coca-Cola Europacific Partners plc Policy on Recoupment of Incentive Compensation (approved by the Board on 18 October 2023).
Exhibit 101.INS
XBRL Instance Document.
Exhibit 101.SCH
XBRL Taxonomy Extension Schema Document.
Exhibit 101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.
Exhibit 101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.
Exhibit 101.LAB
XBRL Taxonomy Extension Label Linkbase Document.
Exhibit 101.PRE
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 2024
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Glossary
Unless the context otherwise requires, the following terms have the meanings shown below.
2010 Plan
AEV
the Acquisition
AFH
AGM
AI
API
APS
ARR
ARTD
Articles
ATC
B2B
BCP
Board
BPF
BU
Capex
CCE or Coca-Cola
Enterprises
CCBPI
CCBPI acquisition
CCEG or Coca-Cola
Erfrischungsgetränke
CCE 2010 Incentive Award Plan
Aboitiz Equity Ventures Inc.
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
Away from home channel
Annual General Meeting
artificial intelligence
Australia, Pacific and Indonesia region incorporating Coca-Cola
Amatil Limited and its subsidiaries and business unit
Australia, Pacific and South East Asia region and renamed API
business unit following the CCBPI acquisition
Annual report on remuneration
alcoholic ready to drink
Articles of Association of Coca-Cola Europacific Partners plc
Affiliated Transaction Committee
business to business
business continuity planning
Board of Directors of Coca-Cola Europacific Partners plc
Business Performance Factor
a business unit of the Group
capital expenditure
Coca-Cola Enterprises, Inc.
Coca-Cola Beverages Philippines, Inc.
acquisition of Coca-Cola Beverages Philippines, Inc. jointly with
Aboitiz Equity Ventures Inc. (AEV) from The Coca-Cola
Company (TCCC) resulting in a 60:40 ownership structure
between CCEP and AEV which completed on 23 February 2024
Coca-Cola Erfrischungsgetränke GmbH (which changed its
name to Coca-Cola European Partners Deutschland GmbH
from 22 August 2016)
CCEP or the Group
Coca-Cola Europacific Partners plc (registered in England and
Wales number 709717350) and its subsidiaries and subsidiary
undertakings from time to time
CCEP LTIP
CCEP Long-Term Incentive Plan 2016
CCIP or Coca-Cola Iberian
Partners
CCL
CCO
CDE
CDP
CDSP
CEO
CFO
Coca-Cola Iberian Partners, S.A. (which changed its name to
Coca-Cola European Partners Iberia S.L.U. from 1 January 2017)
Coca-Cola Amatil Limited
Chief Compliance Officer
cold drink equipment
formerly Carbon Disclosure Project, name shortened to CDP in
2013
Customer Demand and Supply Planning
Chief Executive Officer (of Coca-Cola Europacific Partners plc)
Chief Financial Officer (of Coca-Cola Europacific Partners plc)
Chairman
the Chairman of Coca-Cola Europacific Partners plc
CGU
CIO
CISO
Cobega
CoC
cash generating unit
Chief Information Officer (of Coca-Cola Europacific Partners
plc)
Chief Information Security Officer (of Coca-Cola Europacific
Partners plc)
Cobega, S.A.
Code of Conduct
Coca-Cola system
comprises The Coca-Cola Company and around 225 bottling
partners worldwide
the Code
CODM
Committee(s)
Committee Chairman/
Chairmen or Chair
UK Corporate Governance Code 2018
chief operating decision maker
the five Committees with delegated authority from the Board:
the Audit, Remuneration, Nomination, Environmental, Social
and Governance and Affiliated Transaction Committees
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
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Glossary continued
Company Secretary
COVID-19 (also pandemic) the Coronavirus-19 pandemic, from March 2020
CRC
Company Secretary (of Coca-Cola Europacific Partners plc)
Compliance and Risk Committee, a management committee
chaired by the Chief Compliance Officer
Deloitte
Director(s)
DNV
DRS
DTC
DTRs
EBITDA
EEA
EcoVadis
EFSA
EIR
EPS
ERA
ERM
ESG
EWRA
ESPP
EU
Deloitte LLP
a (the) Director(s) of Coca-Cola Europacific Partners plc
international accredited registrar and classification society
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
provider of business sustainability ratings
European Food Safety Authority
effective interest rate
earnings per share
enterprise risk assessment
enterprise risk management
Environmental, Social and Governance
Enterprise Water Risk Assessment
Global Employee Share Purchase Plan
European Union
European Refreshments
or ER
Exchange Act
European Refreshments Unlimited Company, a wholly-owned
subsidiary of TCCC
the US Securities Exchange Act of 1934
Executive Leadership
Team or ELT
EY
FAWVA
FCPA
FLAG
FMCG
FSC
the CEO and his senior leadership direct reports
Ernst & Young LLP
Facility Water Vulnerability Assessment
US Foreign Corrupt Practices Act of 1977
Forest, Land and Agriculture
fast moving consumer goods
Forest Stewardship Council
FPI
FRC
Fx or FX
GAAP
GB
GB Scheme
GHG
Group or CCEP
HMRC
IAS
IASB
IBR
ID&E
IEA
IFRIC
IFRS
INEDs
IPCC
IPF
IRC
IRS
ISAE 3000
ISO
ISO 14001
ISO 22301
IT
KORE
KPI
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
Foreign exchange
Generally Accepted Accounting Principles
Great Britain
the Great Britain defined benefit pension plan
greenhouse gas
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
International Accounting Standards
International Accounting Standards Board
incremental borrowing rate
Inclusion, Diversity & Equity
International Energy Agency
International Financial Reporting Interpretations Committee
International Financial Reporting Standards
Independent Non-executive Directors of
Coca-Cola Europacific Partners plc
Intergovernmental Panel on Climate Change
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 Standardization
International standard for environmental management systems
International standard for Business Continuity and Resilience
information technology
The Coca-Cola Operating Requirements
key performance indicator
Leadership locations
NARTD Production Facilities which rely on vulnerable water
sources or have high water dependancy
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Glossary continued
LGBTQ+
pertaining collectively to people who identify as lesbian, gay,
bisexual, or transgender, and to people who identify as queer or
with gender expressions outside perceived societal norms,
including non-binary, intersex and questioning of their gender
identity and/or sexual orientation, along with their allies
Listing Rules or LRs
the Listing Rules of the UK Financial Conduct Authority
Partnership
Pension Plan 1 and
Pension Plan 2
PET
LSE
LTI
LTIP
LTIR
M&A
Merger
NARTD
Nasdaq
London Stock Exchange
long-term incentive
Long-Term Incentive Plan
lost time incident rate
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
OCI
OFAC
Official List
Olive Partners
Opex
Packageless
Non-executive Directors of Coca-Cola Europacific Partners plc
non-governmental organisation
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, S.A.
operating expenditure
Dispensed solutions for serving drinks without packaging such
as fountain or Coca-Cola Freestyle
Pack mix
the packaging portfolio mix of beverages
PFIC
PRN
PSA
PSU
RAS
RGB
ROIC
rPET
RSP
RTD
RSU
S&P
SBTi
SDG
SDRT
SEC
SGP
Shares
SID
SKU
SOX or the Sarbanes-Oxley
Act
the Spanish Stock
Exchanges
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
packaging recovery notes
Principles of Sustainable Agriculture
performance share unit
Risk appetite statement
returnable/refillable glass bottle
return on invested capital
recycled PET
CCEP’s Responsible Sourcing Policy, launched in 2022
ready to drink
restricted stock unit
Standard & Poor’s
Science Based Targets initiative
UN Sustainable Development Goals
stamp duty reserve tax
Securities and Exchange Commission of the US
Supplier Guiding Principles
ordinary shares of €0.01 each of Coca-Cola Europacific Partners
plc
Senior Independent Director
stock keeping unit
the US Sarbanes-Oxley Act of 2002
the Barcelona, Bilbao, Madrid and Valencia Stock Exchanges
Parent Company or
Company
Paris Agreement
Coca-Cola Europacific Partners plc
the agreement on climate change resulting from UN COP21,
the UN Climate Change Conference, also known as the 2015
Paris Climate Conference
SPO
SSPs
SVA
TCCC
CCEP’s Sustainable Packaging Office
shared socioeconomic pathways
source water vulnerability assessment
The Coca-Cola Company
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Glossary continued
TCCF
TCFD
TIR
TSR
The Coca-Cola Foundation
Task Force on Climate-related Financial Disclosures
total incident rate
total shareholder return
UK Accounting Standards Financial Reporting Standards issued by the Accounting
UKBA
UNESDA
UN
unit case
VAT
WBCSD
WEEE
WHO
WMP
WRI
Standards Board
UK Bribery Act 2010
Union of European Soft Drinks Associations
United Nations
approximately 5.678 litres or 24 eight ounce servings, a typical
volume measurement unit
value added tax
World Business Council for Sustainable Development
EU Directive on Waste Electrical and Electronic Equipment
World Health Organisation
water management plan
World Resources Institute
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
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
277
Useful addresses
Registered office
Coca-Cola Europacific Partners plc
Pemberton House
Bakers Road
Uxbridge
UB8 1EZ
Registered in England and Wales
Company number: 09717350
+44 (0)1895 231313
Share registration
US shareholders:
Computershare
150 Royall Street
Canton
MA 02021
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 on or around
10 April 2024, 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 ir.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 quoting
their 16 digit control number.
Agent for service of process in the US
The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
278
Forward-looking statements
6. risks and uncertainties relating to the integration and operation of the joint
venture with AEV and acquisition of CCBPI, including the risk that our integration
of CCBPI’s business and operations may not be successful or may be more
difficult, time consuming or costly than expected.
Due to these risks, CCEP’s actual future financial condition, results of operations,
and business activities, including its results, dividend payments, capital and
leverage ratios, growth, including growth in revenue, cost of sales per unit case and
operating profit, free cash flow, market share, tax rate, efficiency savings,
achievement of sustainability goals, including Net Zero emissions and recycling
initiatives, capital expenditures, our agreements relating to and results of the joint
venture with AEV and acquisition of CCBPI, and ability to remain in compliance
with existing and future regulatory compliance, may differ materially from the
plans, goals, expectations and guidance set out in forward-looking statements.
These risks may also adversely affect CCEP’s share price. Additional risks that may
impact CCEP’s future financial condition and performance are identified in filings
with the SEC which are available on the SEC’s website at www.sec.gov. CCEP does
not undertake any obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise,
except as required under applicable rules, laws and regulations. Any or all of the
forward-looking statements contained in this filing and in any other of CCEP’s
public statements may prove to be incorrect.
This document contains statements, estimates or projections that constitute
“forward-looking statements” concerning the financial condition, performance,
results, guidance and outlook, dividends, consequences of mergers, acquisitions,
joint ventures, and divestitures, including the joint venture with Aboitiz Equity
Ventures Inc. (AEV) and acquisition of Coca-Cola Beverages Philippines, Inc.
(CCBPI), strategy and objectives of Coca-Cola Europacific Partners plc and its
subsidiaries (together CCEP or the Group). Generally, the words “ambition”,
“target”, “aim”, “believe”, “expect”, “intend”, “estimate”, “anticipate”, “project”, “plan”,
“seek”, “may”, “could”, “would”, “should”, “might”, “will”, “forecast”, “outlook”, “guidance”,
“possible”, “potential”, “predict”, “objective” and similar expressions identify
forward-looking statements, which generally are not historical in nature.
Forward-looking statements are subject to certain risks that could cause actual
results to differ materially from CCEP’s historical experience and present
expectations or projections. As a result, undue reliance should not be placed on
forward-looking statements, which speak only as of the date on which they are
made. These risks include but are not limited to:
1. those set forth in the “Risk Factors” section of this 2023 Annual Report on
Form 20-F;
2. risks and uncertainties relating to the global supply chain and distribution,
including impact from war in Ukraine and increasing geopolitical tensions and
conflicts including in the Middle East and Asia Pacific region, such as the risk that
the business will not be able to guarantee sufficient supply of raw materials,
supplies, finished goods, natural gas and oil and increased state-sponsored cyber
risks;
3. risks and uncertainties relating to the global economy and/or a potential
recession in one or more countries, including risks from elevated inflation, price
increases, price elasticity, disposable income of consumers and employees,
pressure on and from suppliers, increased fraud, and the perception or
manifestation of a global economic downturn;
4. risks and uncertainties relating to potential global energy crisis, with potential
interruptions and shortages in the global energy supply, specifically the natural gas
supply in our territories. Energy shortages at our sites, our suppliers and customers
could cause interruptions to our supply chain and capability to meet our
production and distribution targets;
5. risks and uncertainties relating to potential water use reductions due to
regulations by national and regional authorities leading to a potential temporary
decrease in production volume; and