Coca-cola Hbc Ag · LSE:CCH
Coca-cola Hbc — Investor Day (May 2023)
138 slides from Coca-cola Hbc's investor day presentation, May 2023
Slide 1: Coca-Cola HBC Investor Day 2023
COCA-COLA HBC INVESTOR DAY 2023
Slide 2: Today's agenda
01 Welcome Today’s agenda 08:45 9:40 13:30 Setting the scene Strategies for growth Sustainable and profitable growth 01 Welcome 04 Growing our categories with the 07 Growing sustainably Zoran Bogdanovic & capabilities to win Katya Ryabets Anastassis G David Naya Kalogeraki (15 mins) Chairman, Coca-C
Slide 3: The team you will meet today
01 Welcome The team you will meet today Coca-Cola HBC presenters The Coca-Cola Company guests Anastassis G. David Zoran Bogdanovic Manolo Arroyo Chairman Chief Executive Officer Chief Marketing Officer Ben Almanzar Naya Kalogeraki Nikos Koumettis Chief Financial Officer Chief Operating Officer Presi
Slide 4: Welcome – Anastassis G. David, Chairman
Slide 5: Zoran Bogdanovic, Chief Executive Officer
BOGDANOVIC CHIEF EXECUTIVE OFFICER
Slide 6: Four years of significant growth since our last Capital Markets Day in 2019
02 Sustainable and profitable growth: introduction Four years of significant growth since our last Capital Markets Day in 2019 2018 Volume 2,192 52% Emerging Established Austria, Cyprus, Greece, Italy, 20% Developing Northern Ireland, 28% Established Republic of Ireland, Switzerland NSR Developing C
Slide 7: Four years of significant growth since our last Capital Markets Day in 2019
02 Sustainable and profitable growth: introduction Four years of significant growth since our last Capital Markets Day in 2019 2018 2022 Volume +3% 1 2,192 52% Emerging 58% 2,712 Established Austria, Cyprus, Greece, Italy, 20% Developing 18% Northern Ireland, 28% Established 24% Republic of Ireland,
Slide 8: Our business has proven resilient in a challenging macro environment
02 Sustainable and profitable growth: introduction Our business has proven resilient in a challenging macro environment 2019 2020 2021 2022 Business COVID-19 Significant War in Ukraine and as usual commodity inflation suspension of TCCC Severe disruption business in Russia and for two years post-COV
Slide 9: We operate in very attractive growth categories
02 Sustainable and profitable growth: introduction We operate in very attractive growth categories Non-Alcoholic Ready to Drink NARTD €68bn 4-6% CAGR 2024-28 market value in 2022 Coffee €32bn market value in 2022 4-5% CAGR 2024-28 Source: internal system projections, excluding Russia and Ukraine
Slide 10: We prioritise the best opportunities in our unique, 24/7 sparkling-led portfolio
02 Sustainable and profitable growth: introduction We prioritise the best opportunities in our unique, 24/7 sparkling-led portfolio SPARKLING Prioritised across the Group All other brands ENERGY Locally relevant portfolio Grow penetration and share COFFEE Focus on profitable growth Tea 2% Plant base
Slide 11: Pillars of our growth strategy are unchanged and have been key to our success
02 Sustainable and profitable growth: introduction Pillars of our growth strategy are unchanged and have been key to our success Prioritising our best opportunities 1 Leverage our • Offer the best 24/7 beverage portfolio on the planet, together with unique 24/7 portfolio The Coca-Cola Company and ot
Slide 12: Driving profitable growth through targeted innovation to enhance the portfolio
02 Sustainable and profitable growth: introduction Driving profitable growth through targeted innovation to enhance the portfolio… SPARKLING ENERGY STILLS 12 Coca-Cola HBC Investor Day Rome May 2023
Slide 13: Invested in targeted bolt-on opportunities that will accelerate growth
02 Sustainable and profitable growth: introduction Invested in targeted bolt-on opportunities that will accelerate growth… 2019 • Premium Water and 2019 • High occasion Adult Sparkling complementarity • Significant scale-up with core business in Italy • Driving growth in • Targeted expansion existin
Slide 14: Egypt acquisition adds to our growth potential
02 Sustainable and profitable growth: introduction Egypt acquisition adds to our growth potential Strong growth dynamics Egypt • 111m people and growing strongly • Low average age of 24 years Population growth1 est.+1.5% CAGR 2024-2028 • Long-term growth in GDP per capita to drive category expansion
Slide 15: Behind the scenes we've delivered significant changes
02 Sustainable and profitable growth: introduction Behind the scenes we’ve delivered significant changes DOLPHIN unlocks resources for accelerated growth Creating a future- focused organisation with a stronger focus on the customer 1,000 FTE s 1 redeployed 1. Full Time Equivalent 15 Coca-Cola HBC In
Slide 16: Behind the scenes we've delivered significant changes
02 Sustainable and profitable growth: introduction Behind the scenes we’ve delivered significant changes DOLPHIN unlocks resources for accelerated growth Creating a future- OXYGEN focused organisation will delivers major with a stronger focus process improvements on the customer Creating the capacit
Slide 17: Achieving the right balance for successful change
02 Sustainable and profitable growth: introduction Achieving the right balance for successful change Lean, agile, stable Core Reinvest in prioritised capabilities 17 Coca-Cola HBC Investor Day Rome May 2023
Slide 18: Our prioritised capabilities underpin our growth ambitions
10 Sustainable and profitable growth: introduction Our prioritised capabilities underpin our growth ambitions Revenue growth management Route to market Premiumisation and smart Cost optimised, value affordability solutions creating outlet coverage (physical and digital) Data, insights & analytics Pe
Slide 19: Cultivating the talent and potential of our people
02 Sustainable and profitable growth: introduction Cultivating the talent and potential of our people Among Fostering and nurturing people to Top 10 FMCG employers in all markets achieve great things Our Sales Academy delivered 180,000 hours of training in 86% leaders appointed internally 85% 2022 E
Slide 20: Our purpose builds on our clear vision and values
02 Sustainable and profitable growth: introduction Our purpose builds on our clear vision and values OUR VALUES OUR VISION CUSTOMER OUR PURPOSE THE FIRST OPEN UP LEADING WE OVER I MOMENTS 24/7 MAKE IT THAT BEVERAGE SIMPLE REFRESH PARTNER DELIVER US ALL SUSTAINABLY 20 Coca-Cola HBC Investor Day Rome
Slide 21: Culture completes the cycle of continuous renewal
02 Sustainable and profitable growth: introduction Culture completes the cycle of continuous renewal = = 21 Coca-Cola HBC Investor Day Rome May 2023
Slide 22: We put sustainability at the core of our decision-making processes
02 Sustainable and profitable growth: introduction We put sustainability at the core of our decision-making processes Integration of net zero 4 3 roadmap performance in Pack Mix of the Future: management incentives optimal mid-term pack mix scenarios 2 for revenue growth & decarbonisation Including
Slide 23: Sustainable and profitable growth: introduction
02 Sustainable and profitable growth: introduction 23 Coca-Cola HBC Investor Day Rome May 2023
Slide 24: Key messages today
02 Sustainable and profitable growth: introduction Key messages today We’re continuing to grow Led by strong categories, capabilities and footprint Sustainably Profitably… … with excellent people and partners 24 Coca-Cola HBC Investor Day Rome May 2023
Slide 25: The future of marketing is now
Slide 26: Forward-Looking Statements
03 The future of marketing is now Forward-Looking Statements This presentation may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “p
Slide 27: Delivering amidst a rapidly changing landscape
03 The future of marketing is now Delivering amidst a rapidly changing landscape #1 #2 #3 External trend Aging global Media consumption Increasingly population disruption dynamic world System Recruit new Digital-led Balance scale, intimacy marketing consumers brand experiences and speed to market fo
Slide 28: Our transformation is rooted in growth
03 The future of marketing is now Our transformation is rooted in growth TCCC organic revenue(c) growth vs. long-term target Shaping our Step change growth portfolio effectiveness Organic revenues(c) implied & efficiency by long-term growth algorithm (mid-point) ~50%(a) fewer brands ~+9%(a) Actual o
Slide 29: Significant headroom to recruit consumers
03 The future of marketing is now Significant headroom to recruit consumers Italy Coca-Cola – System example PERCEPTION FOCUS: BEHAVIOUR FOCUS: Brand love Recruiting consumers Today Past More targeted Population Actives Intenders Neutrals Rejectors Percent of population 100% 25% 30% 35% 10% Marketin
Slide 30: Experiences drive consumption
03 The future of marketing is now Experiences drive consumption Occasions & rituals Innovation (e.g., Meals + Breaks) DIGITAL RETAIL LIVE Human-Centric Experiences Experiences Experiences Brand Experiences Passion points Sustainability (e.g., Sports + Music) WHICH WHERE 30 Coca-Cola HBC Investor Day
Slide 31: Significant progress to date
03 The future of marketing is now Significant progress to date TCCC digital spend as a % of total media Building an edge through experimentation ~50% Accelerating Measuring Scaling the velocity of results in success ~30% experiments real-time stories Culture of risk-taking and learning 2019 2022 31
Slide 32: Coke is cooking
03 The future of marketing is now Coke is cooking • Context: Evolve from a TV-centric into experienced-based marketing model IS COOKING • Action: Street "food and music" festival HANOI KOLKATA CAIRO and food customers activation − Creating shared stories with social media influencers • Result: Doubl
Slide 33: Key takeaways
03 The future of marketing is now Key takeaways 1 Our transformation is rooted in growth 2 We drive growth through expanding our consumer base 3 Our model is increasingly driven by digital-led experiences 4 This comes to life in the marketplace through our strong partnership with CCH 33 Coca-Cola HB
Slide 34: Growing our categories with the capabilities to win
NAYA GROWING OUR CATEGORIES\5 WITH THE CAPABILITIE TO WIN KALOGERAKI CHIEF OPERATING OFFICER
Slide 35: We understand where our largest opportunities are, in an advantaged industry
04 Growing our categories and capabilities We understand where our largest opportunities are, in an advantaged industry Forecasted value market growth range, Industry market value 2022 1 5Y CAGR 2024-20281 Sparkling €25bn +5-6% Energy €5bn +9-12% Hydration (Water & Sports) €23bn +3-4% Juices €8bn +2
Slide 36: We prioritise the best opportunities in our unique, 24/7 portfolio
04 Growing our categories and capabilities We prioritise the best opportunities in our unique, 24/7 portfolio SPARKLING Prioritised across the Group All other brands ENERGY Locally relevant portfolio Grow penetration and share COFFEE Focus on profitable growth Tea 2% Plant based <1% COFFEE SPARKLING
Slide 37: It's working - we are winning in our prioritised categories
04 Growing our categories and capabilities It’s working - we are winning in our prioritised categories and gaining share overall Sparkling Energy Coffee +5% +9% +32% >100% Volume growth Revenue growth Volume growth Volume growth 2019-221 2019-221 2019-221 2021-221 57% +230bps 19% +370bps 1% CCH Valu
Slide 38: Driving growth in our strategic priorities: Sparkling
04 Growing our categories and capabilities Driving growth in our strategic priorities: SPARKLING key engine of growth • Sparkling largest driver of growth and profitability • Adult Sparkling driving premiumisation, enabled by multi-tier portfolio and higher price/mix vs Sparkling • Low/ no sugar fas
Slide 39: Driving growth in our strategic priorities: Energy
04 Growing our categories and capabilities Driving growth in our strategic priorities: ENERGY brings significant growth • Fastest growing category in NARTD • Portfolio of brands covering all consumer segments • Strong opportunity to continue growing per-capita consumption • Ambition of double-digit
Slide 40: Driving growth in our strategic priorities: Coffee
04 Growing our categories and capabilities Driving growth in our strategic priorities: COFFEE significant revenue pool • Significant market opportunity, with €10bn distributor value • Segmented approach across price tiers with Costa Coffee and Caffè Vergnano • Expanding out-of-home distribution ORGA
Slide 41: We have built capabilities that allow us to win in the marketplace
04 Growing our categories and capabilities We have built capabilities that allow us to win in the marketplace Revenue Growth Route to Management Market Personalised Data, Insights execution & Analytics for every outlet Digital Customer Commerce Management 41 Coca-Cola HBC Investor Day Rome May 2023
Slide 42: Our investment in Data, Insights and Analytics drives revenue and optimises smarter
04 Growing our categories and capabilities Our investment in Data, Insights and Analytics allows us to drive revenue faster and optimise smarter OUTLET DENSITY CONSUMER LIVING DENSITY CUSTOMER-CENTRIC ACTIONS SPENDING PURCHASING CUSTOMER BY OUTLET POWER MASTER DATA SEGMENTED EXECUTION URBANICITY NPS
Slide 43: Industry leading Revenue Growth Management
04 Growing our categories and capabilities Industry leading Revenue Growth Management enables us to drive smart affordability and premiumisation Price acceleration Mix acceleration Promotion optimisation Headline pricing to navigate Category mix Focus on promotion return inflation • Sparkling, Energ
Slide 44: We have more customer interactions than ever before
04 Growing our categories and capabilities We have more customer interactions than ever before due to our physical and digital Route to Market Salesforce 15,000 2 million 75% Salespeople Customers of stores visited directly Coolers 1.4 million 90% coverage 1 54% 1 Coolers In high potential outlets o
Slide 45: Digital Commerce is a key growth driver
04 Growing our categories and capabilities Digital Commerce is a key growth driver to equip our business for the future ROUTE-TO-CUSTOMER: ROUTE-TO-CONSUMER: eB2B PLATFORMS E-RETAIL & FOOD SERVICE AGGREGATORS 45 Coca-Cola HBC Investor Day Rome May 2023
Slide 46: Joint value creation is at the heart of customer partnership
04 Growing our categories and capabilities Joint value creation is at the heart of customer partnership Growth 13% 9% 5% 6% 10% 9% 5% 4% 4% 7% in value vs. 2021 % 1 FMCG 637 player in 2022 for incremental value delivered to customers 269 265 216 204 187 175 170 161 146 Source: Nielsen 46 Coca-Cola H
Slide 47: Customer centric behaviours are embedded
04 Growing our categories and capabilities Customer centric behaviours are embedded Customer Gauge Net Promoter Score • Listening to customers in real-time • True measure of customer loyalty • 48hr deadline to close the loop • Closing the loop faster drives higher NPS • We have pulsed over 740,000 c
Slide 48: Upskilling our people is fundamental to giving our capabilities an edge
04 Growing our categories and capabilities Upskilling our people is fundamental to giving our capabilities an edge 180,000 hours of learning and capability building 48 Coca-Cola HBC Investor Day Rome May 2023
Slide 49: Accelerator breakouts
04 Growing our categories and capabilities Growing our categories with the capabilities to win Accelerator breakouts 01 02 03 04 COFFEE ADULT DIGITAL DATA, SPARKLING INSIGHTS & ANALYTICS 49 Coca-Cola HBC Investor Day Rome May 2023
Slide 50: Data, Insights & Analytics
DATA, INSIGHTS & ANALYTICS RUCHIKA SACHDEVA HEAD OF DATA, INSIGHTS AND ANALYTICS
Slide 51: What is Data, Insights & Analytics (DIA)
04A Data, Insights & Analytics What is Data, Insights & Analytics (DIA) DATA From just data … SORTED … to business insights ARRANGED Enabled by Statistics ANALYSED Data Analysis Machine learning EXPLAINED Artificial intelligence through insights 51 Coca-Cola HBC Investor Day Rome May 2023
Slide 52: We leverage DIA to enhance RGM and RTM
04A Data, Insights & Analytics We leverage DIA to enhance Revenue Growth Management (RGM) and Route to Market (RTM) ‘WHAT’ to offer ‘HOW’ to serve RGM RTM Consumers Shoppers Customers/Channel Execution Sales Logistics Data, Insights & Analytics: glue powering our strategy Personalised execution for
Slide 53: Segmented execution drives customer-centric, outlet specific actions
04A Data, Insights & Analytics Segmented execution allows us to drive customer-centric, outlet specific actions Differentiate (How to understand) Segment customers Personalised Profitable promotions (How to invest) execution Assortment (What to offer) What to promote, when how often and Right produc
Slide 54: Building capabilities for sustainable growth
04A Data, Insights & Analytics Building capabilities for sustainable growth Data literacy initiatives, to build capabilities to accelerate usage and adoption of data & insights Structured and personalized learning • Online E-learning platform for all employees • Dedicated classroom sessions (5 weeks
Slide 55: Digital
DIGITAL MOURAD AJARTI CHIEF DIGITAL & TECHNOLOGY OFFICER VITALIY NOVIKOV «OG COMMERCE BUSINESS DEVELOPMENT DIRECTOR _ IVOBJELIS _ CHIEF SUPPLY CHAIN OFFICER : =
Slide 56: Accelerate our growth
04C Accelerator – Digital Accelerate our growth by leveraging Digital, Data & Technology to drive CUSTOMER CENTRICITY, EMPLOYEE EXPERIENCE and OPERATIONAL PRODUCTIVITY CONSUMER AND CUSTOMER CENTRICITY EMPLOYEE EXPERIENCE OPERATIONAL PRODUCTIVITY Personalised execution Make CCH a fully Deliver strong
Slide 57: Consumer and customer centricity
04C Accelerator – Digital CONSUMER AND CUSTOMER CENTRICITY Personalised execution for every outlet with 100% digitally engaged customers, delivering joint value creation NOW: Scaled capabilities driving business today NEXT: Define future of commerce Digitize customer relationship management New busi
Slide 58: Employee experience
04C Accelerator – Digital EMPLOYEE EXPERIENCE Make CCH a fully digital workplace, where employees feel heard, valued, supported and motivated to realize their full potential NOW: Scaled capabilities driving business today NEXT: Define future of work Step change productivity and collaboration Adopt A
Slide 59: Operational productivity
04C Accelerator – Digital OPERATIONAL PRODUCTIVITY Deliver stronger results faster through data, technology & insights enabled processes and decision making NOW: Scaled capabilities driving business today NEXT: Define future of Supply Chain Transform enterprise core processes with SAP S/4 HANA Co-cr
Slide 60: Digital commerce is a key growth bet for CCH
04C Accelerator – Digital Digital commerce is a key growth bet for CCH A dedicated centalised Business Unit with a standard capability blueprint in every market ... We started from 0 less than 2 years ago dCom has quadrupled its business contribution over the last 2 years, currently at 7%1 of CCH re
Slide 61: A suite of digital solutions to enhance customer centricity
04C Accelerator – Digital A suite of digital solutions to enhance customer centricity and maximise value ROUTE-TO-CONSUMER ROUTE-TO-CUSTOMER E-RETAIL eB2B DIGITAL PLATFORMS Brick&Mortar.com A digital hub for CCHBC Custom- ers, including ordering, invoicing, and value-added services Pure Players AI C
Slide 62: Business impact of FSA
04C Accelerator – Digital Business impact of FSA Ireland case study Incidence rate Business Developers 47%1 => Global leader 100% trained on FSA business Source of OOH growth Coca-Cola Focus FSA contributed 30%1 of total OOH channel growth HBC 3-months focus on fixing the basics NSR Business impact
Slide 63: We experiment and learn with different eB2B models
04C Accelerator – Digital We experiment and learn with different eB2B models to maximize omnichannel customer satisfaction and system value 24/7 access to CCH assortment, Hybrid marketplace B2B platfrom equipment, invoicing in direct for HoReCa with open access for route to market wholesalers, CPGs,
Slide 64: Customer portal business performance
04C Accelerator – Digital Customer portal business performance CP Registered Customers CP Orders CP Order Share ‘000 ‘000 % 120 80 6.0% 112k 2022 603k 2022 3.6% 2022 70 100 5.0% +107% VAR 60 +164% VAR +1.4pp VAR ‘22/’21 ‘22/’21 ‘22/’21 80 4.0% 50 60 40 3.0% 54k 2021 228k 2021 2.2% 2021 30 40 2.0% 20
Slide 65: Sirvis ecosystem
04C Accelerator – Digital POINT OF SALES ECOSYSTEM Sirvis is a one-stop-shop hybrid marketplace It’s a digital hub specifically designed for fragmented MARKETPLACE HoReCa markets, where customers and suppliers OPERATOR can connect, generate & fulfill demand. PILOT Orders outside business hours RESUL
Slide 66: Industry 4.0 and digital transformation prioritized solutions
04C Accelerator – Digital Industry 4.0 and digital transformation prioritized solutions 01 03 Connectivity, data & computational power Human – machine interaction Manufacturing digital platform Pilot in Greece Augmented reality remote assistance Fully implemented Automated transport visibility 70% C
Slide 67: Fusion of digital and physical shapes the future of Supply Chain
04C Accelerator – Digital Fusion of digital and physical shapes the future of Supply Chain Existing scope deployed in 32 plants: Flagship capability development Connected Worker • Digitalize procedures & standards program Supply Chain Academy goes digital... • Automate task management combining powe
Slide 68: Coffee
, 4a m + ; i wh A | | =e @ PRODROMOS NIKOLAIDIS, COFFEE... BUSINESS « piRECTaB 7 ry :
Slide 69: The Coffee category is estimated at €32bn
04D CCH Coffee Business The Coffee category is estimated at: €32bn in industry market Why Coffee? • Sizeable and profitable AWAY FROM HOME • Strategic priority value 1 category • 37% of coffee NSR (2022) €10bn • High relevance and appeal across all our markets OUR MID-TERM TARGET • LSD to MSD share
Slide 70: Costa & Caffè Vergnano brands well positioned
04D CCH Coffee Business COSTA & Caffè Vergnano brands well positioned… ... to meet more diverse consumer and customer preferences in premium At home (supermarkets, e-commerce etc) PREMIUM 5-10% HoReCa MASS (served) PREMIUM 25-35% At work and on-the-go MASS (self-served) ~30% Ready-to- VALUE drink ~3
Slide 71: Costa Coffee
04D CCH Coffee Business COSTA Coffee Targeted towards younger, more modern locations, and our priority brand towards on-the-go and self-serve occasions, e.g. at work 71 Coca-Cola HBC Investor Day Rome May 2023
Slide 72: Caffè Vergnano
04D CCH Coffee Business Caffè Vergnano Targeted towards more premium HoReCa locations and those which look to offer authentic Italian espresso experience 72 Coca-Cola HBC Investor Day Rome May 2023
Slide 73: 360° Coffee capability development
04D CCH Coffee Business 360o Coffee capability development Building coffee expertise, telemetry and DIA* capabilities All customer baristi trained Combining data from field visits + 14 coffee experts with our coffees and our telemetry + external data sources to - trained, certified baristas coffee m
Slide 74: Coffee Telemetry: the solution in a nutshell
04D CCH Coffee Business Coffee Telemetry The solution in a nutshell Telemetry devices are We receive real-time Full visibility of major These insights support installed in all our data on sales, quality & KBIs (volume, quality, design of specific medium and large technical key business technical) fo
Slide 75: LSD to MSD share is our mid-term target
04D CCH Coffee Business LSD to MSD share is our mid-term target growth With our RTM and coffee €10 capability development, we bn are well positioned to win market • Track record of growth • COSTA and Caffè Vergnano are premium brands in all our markets 75 Coca-Cola HBC Investor Day Rome May 2023
Slide 76: Kalogeraki, Chief Operating Officer
KALOGERAKI » CHIEF OPERATING ™ ’ a Coca-Cola OFFICER . ‘ HBC
Slide 77: We have a natural advantage in driving growth across Western, Central & Eastern Europe and Africa
05 Diversified country footprint We have a natural advantage in driving growth across Western, Central & Eastern Europe and Africa Established Highest Profitable revenue creator NSR/uc in the Group Developing +10% Driver of volume & price / mix growth NSR growth1 Emerging +13% Capturing share with g
Slide 78: Established markets: Profitable revenue generator
05 Diversified country footprint Established markets Profitable revenue generator NSR NSR/uc ITALY +5% 1 32% +3%1 1.4x • Highest NSR contribution to the Group, over €1bn in 2022 on average of Group NSR on average the Group • Best performance of low/no sugar variants in the segment p.a. in 2022 p.a.
Slide 79: Established markets: Strategic priorities
05 Diversified country footprint Established markets Profitable revenue generator Strategic Priorities • Continued growth in Sparkling, strengthening our leadership supported by low/no sugar and Adults • Further strong growth of Energy • Accelerate Coffee growth • Further growth of single-serve mix
Slide 80: Developing markets: Driver of volume and price/mix growth
05 Diversified country footprint Developing markets Driver of volume and price/mix growth NSR Volume1 POLAND +10%1 19% +12% +3% on average of Group NSR improvement on average • More than doubled low/no sugar volumes since 2019 p.a. in 2022 p.a. • Highest contributor in single-serve mix improvement i
Slide 81: Developing markets: Strategic priorities
05 Diversified country footprint Developing markets Driver of volume and price/mix growth Strategic Priorities • Continued growth in Sparkling, strengthening our leadership supported by low/no sugar and Adults • Further strong growth of Energy • Accelerate Coffee growth • Further improvement of pack
Slide 82: Poland: Strong rebound after the sugar tax
05 Diversified country footprint POLAND Key drivers of further growth Strong rebound after the • Continue growth in • Fuel growth in Energy sugar tax Sparkling fueled by: − Trademark Coke and with all brands • Continue Coffee Flavours growth, supported by • Margin reset since sugar tax implementatio
Slide 83: Emerging markets: Capturing share with growing per capita consumption
05 Diversified country footprint Emerging markets Capturing share with growing per capita consumption NSR Volume1 NIGERIA +13% 1 49% +31% +8% NIGERIA on average of Group NSR improvement on average • Strongest volume growth p.a. in 2022 p.a. in the Group since 2019, driven by Sparkling • Very strong
Slide 84: Emerging markets: Strategic priorities
05 Diversified country footprint Emerging markets Capturing share with growing per capita consumption Strategic Priorities • Continued growth in Sparkling, strengthening our leadership supported by low/no sugar, Flavours and Adults • Further strong growth of Energy • Accelerate Coffee growth • Captu
Slide 85: Egypt: Attractive demographics
05 Diversified country footprint EGYPT Attractive demographics Growth opportunities • Young and growing population • Currently #2 in market share Population 64% 3rd 43% • GDP and CPI growth dynamics 111 million Below 29 years Largest in Africa Urbanisation • NARTD industry value growth • Low per cap
Slide 86: Egypt: Promising first year of acquisition, despite the challenges
05 Diversified country footprint EGYPT Promising first year of acquisition, despite the challenges Integration Share Gains Revenue per Cooler Portfolio case expansion investment optimisation Back-office NARTD +1.7pp Successful pricing 20,000 new coolers Reduced Water integration completed in 2022 ex
Slide 87: Egypt: Unlocking the growth potential
05 Diversified country footprint EGYPT Unlocking the growth potential Gain market leadership in NARTD • Further portfolio expansion with Energy acceleration -addition of Monster from Q2 2023 • Invest ahead of the market in Sparkling to close the leadership gap • Balance premiumisation and affordabil
Slide 88: Nigeria: Favourable demographics
05 Diversified country footprint Favourable demographics growing population with low per-capita consumption Nigeria Emerging 74 Sparkling 110 servings per capita, 20221 Egypt 116 CCH 142 +4% higher vs 2018 Italy 159 France* 171 Greece 191 Poland 196 Established 197 Europe 219 Developing 229 Switzerl
Slide 89: Step-changing growth in Italy
Slide 90: Italy is a market with huge potential for us
06 Step-changing growth in Italy Italy is a market with huge potential for us…. FAVOURABLE CONDITIONS TO SUCCEED HORECA MARKET 159 17m under 30 Italy 191 YEAR-ROUND 271 Greece TOURISM Spain PASSION POINTS 90 Coca-Cola HBC Investor Day Rome May 2023
Slide 91: Opportunity one: Drive Sparkling led by Italian passion points
06 Step-changing growth in Italy And we have started to capture that opportunity, with few & focused big bets OPPORTUNITY ONE Drive Sparkling led by Italian passion points Food Football Music Fanta Adult Sparkling • Coke & Pizza • Napoli & Juve • Milan I festival • Carnival & Halloween • Adult Spark
Slide 92: Opportunity two: Win in fastest growing segments
06 Step-changing growth in Italy And we have started to capture that opportunity, with few & focused big bets OPPORTUNITY TWO Win in fastest growing segments Energy Ready to drink tea Sports Premium Spirits • Monster 4x vs 2018 • Doubled in 4 years • Became #1 in • Local & international • Became #1
Slide 93: We are investing significantly in capabilities
06 Step-changing growth in Italy We are investing significantly in capabilities Since 2021 +200 Price realization more BDs Pack mix improvement vs 19 -now 1,000 strong sales team Since Single-serve mix +4pp 2023 +57% 90% contribution to revenue growth Growth in coverage vs. 2021 Category mix improve
Slide 94: Investing in sustainable packaging solutions and expanding capacity
06 Step-changing growth in Italy We are investing in sustainable packaging solutions and expanding capacity PACKAGING rPET CAPACITY 100% rPET €30m Investment Investing ahead of growth 3 new lines by 2025 Live in 2023 in Gaglianico pre-form plant +18% in capacity vs 2022 Keel Clip on multipack cans 9
Slide 95: With a significant step forward in results
06 Step-changing growth in Italy With a significant step forward in results…. Key indicators 22% revenue Driving Customer value Single-Serve Share gains vs expansion vs 21 consumption creation focus 2018 NSR/uc +12% 500m more #1 Value creator Single-serve mix +2pp in NARTD + transactions over 2021-2
Slide 96: We expect to drive accelerated growth for Italy in the mid-term
06 Step-changing growth in Italy We expect to drive accelerated growth for Italy in the mid-term Huge per capita Win in Sparkling Expand Stills & Drive capabilities consumption • Meals association Energy • Grow coverage opportunity • Focus on Zeros Opportunity to • Expand coolers OOH as the catalyst
Slide 97: Kateryna Ryabets, Head of Sustainability
KATERYNA RYABETS | “HEADOF ~ SUSTAINABILITY
Slide 98: We have a long-standing track record in sustainability
07 Growing sustainably We have a long-standing track record in sustainability Placing it at the core of our business model 2010 2016 2018 2020 2021 2022 First science-based Mission 2025 announced Science-based targets NetZeroby40 Net Positive Biodiversity targets adopted with 17 commitments for 2030
Slide 99: Stakeholders' expectations are changing rapidly
07 Growing sustainably Stakeholders’ expectations are changing rapidly CUSTOMERS SHAREHOLDERS • Net zero commitments • Financial AND sustainability performance • Zero-waste programmes • Business resilience REGULATORS CONSUMERS • Legislation and taxation pressure • Affordability, availability, accoun
Slide 100: Creating value and strengthening business resilience
07 Growing sustainably Creating value and strengthening business resilience, while prioritising sustainability SUSTAINABILITY OUTCOME BUSINESS BENEFIT Energy use reduced by 30 % since 2010 €50m savings in 2021 99% of electricity in EU & CH Resilience in volatile energy market from renewable or clean
Slide 101: Our Sustainability strategy covers seven most critical areas
07 Growing sustainably Our Sustainability strategy covers seven most critical areas, with clear time-bound targets People & Climate Packaging Water Agriculture Nutrition Communities Biodiversity % Recyclability % Water use in % Sustainable % Calories Net Positive # people through water-risk plants S
Slide 102: Seven critical areas with time-bound targets and 2022 progress
07 Growing sustainably Our Sustainability strategy covers seven most critical areas, with clear time-bound targets People & Climate Packaging Water Agriculture Nutrition Communities Biodiversity % Recyclability % Water use in % Sustainable Calories Net Positive # people through 100% :100% water-risk
Slide 103: NetZeroby40: delivered on roadmap targets in first two years
07 Growing sustainably NetZeroby40 In the first two years we have delivered on our roadmap targets SBTi baseline NetZeroby40 ??? announced 5.9 for NetZero 4.91 -25% CO2 2030 vs 2017 baseline 4.11 3.71 1.61 2017 2020 2021 2022 Actual 2022: From 2024 to 2039: >15% reduction vs 2017 baseline Beyond val
Slide 104: 89% of our emissions are Scope 3
07 Growing sustainably 89% of our emissions are Scope 3 Packaging, ingredients and coolers as major contributors Electricity, purchased Fuels in manufacturing, Our key focus projects heat, steam, CHPs Scope own fleet Scope • Renewable fuels 1 Scope 1 • Green Fleet 2 Other Scope 3 • Piloting green hy
Slide 105: Increasing circularity of our packaging: recovering packaging
07 Growing sustainably Increasing circularity of our packaging: recovering packaging and reducing waste DRS1 MARKETS EGYPT NIGERIA 5 EU markets: live Supporting government The Coca-Cola System- 4 EU markets: go live in to develop an led collection model 2023-20242 EPR3-based national starts in 2023
Slide 106: Increasing circularity of our packaging: 100% rPET
07 Growing sustainably Increasing circularity of our packaging: 100% rPET in selected markets rPET IN-HOUSE 100% rPET PRODUCTION LAUNCHES >€50m 100% INVESTMENTS rPET PORTFOLIO • Italy / Gaglianico • 2022: Switzerland, • Poland / Krakow Italy1, Austria • Romania / Ploeisti • 2023: Romania, Ireland 1.
Slide 107: Innovating to increase share in reusable packaging and minimise plastic
07 Growing sustainably Innovating to increase share in reusable packaging and minimise plastic REFILLABLES PACKAGELESS SECONDARY from PACKAGING plastic to INCREASING PILOTING paper REDUCING RETURNABLE GLASS ‘COMPACT FREESTYLE’ PLASTIC BOTTLE SHARE DISPENSER • Up to 60% less • 40+ beverages • KeelCli
Slide 108: Committed to water reduction and water stewardship projects
07 Growing sustainably Committed to water reduction in our operations and water stewardship projects in our communities 1 Nicosia, Cyprus water stewardship project • grey water reuse Target 2025 Actual 2022 • rainwater harvesting • smart watering -20% 2 -7.4% 2 • saving up to 3 m litres of water per
Slide 109: Our diverse partnerships help us succeed
07 Growing sustainably Our diverse partnerships help us succeed, with… Customers • Joint programmes promoting circular packaging and supporting communities • Sustainable solutions driving business value while doing good Customer ~50% energy-efficient coolers estimated €72 m cost savings for customer
Slide 110: Funding our sustainability programme
07 Growing sustainably Funding our 2022: issued our first green bond for €500m sustainability programme The funds may be allocated to the following spend categories 2, aligned to the UN SDGs 2021 ELIGIBLE GREEN CATEGORY UN SDGs €171 million spend Circular economy on emissions reduction in 2021 (cape
Slide 111: We put sustainability at the core of our decision-making processes
07 Growing sustainably We put sustainability at the core of our decision-making processes Integration of net zero 4 3 roadmap performance in Pack Mix of the Future: management incentives optimal mid-term pack mix scenarios 2 for revenue growth & decarbonisation Including internal carbon 2 pricing an
Slide 112: Delivering, Focusing, Funding
07 Growing sustainably Delivering on first two years of our net zero roadmap Focusing on circular packaging to decarbonise our portfolio and reduce waste: • designing Pack Mix of the Future • leading implementation of national collection schemes Funding our sustainability journey using green finance
Slide 113: Driving shareholder value – Ben Almanzar, CFO
SHARE VALUE ALMANZAR CHIEF FINANCI OFFICER
Slide 114: We have consistently delivered strong financial results: revenue
09 Driving shareholder value We have consistently delivered strong financial results REVENUE 20.6% • Strong performance since 2016 14.2% − Resilience through business cycles 5.8% • Acceleration in volume growth 5.9% 6.0% − From 3% (2016-19) to 5% (2020-2022), both 3.7% 3.0% excluding Russia and Ukra
Slide 115: We have consistently delivered strong financial results: EBIT
09 Driving shareholder value We have consistently delivered strong financial results EBIT 11.6% • Strong focus on cost management helped deliver 10.8% 11.0% 9.5% 10.2% 10.1% record performance 8.3% − 11.6% EBIT margin in 2021 929.7 − EBIT of £929.7m in 2022 831.0 758.7 680.7 • EBIT expansion outpace
Slide 116: Years of efficiency improvements have created a resilient business
09 Driving shareholder value Years of efficiency improvements have created a resilient business 11.0% -1.1pp 10.2% Production efficiencies 9.9% >€100m since 2020 Savings from productivity initiatives 2016 2019 2022 Cost to Serve as % of NSR -0.5pp vs 2016 Optimised warehouse and logistics infrastruc
Slide 117: Efficiencies are embedded in our business
09 Driving shareholder value Efficiencies are embedded in our business Productivity Operational Sustainability Digitalisation • Continuous • Oxygen: simplification • Investments towards • New technologies in modernisation of of processes and in-house production production driving production lines fo
Slide 118: Productivity initiatives adding value
09 Driving shareholder value Productivity initiatives adding value • Continuous modernisation of our production − Additional automated production lines add flexibility and reduced waste − Increased energy efficiency, reducing utility costs and lower production overheads − Digital tools to improve pe
Slide 119: FCF generation supports our strong balance sheet
09 Driving shareholder value FCF generation supports our strong balance sheet… 195.8 Free cash flow Working capital 126.8 108.3 • Record FCF delivery in • Efficient working capital 645 2022 generation for 3rd 33.2 12.4 601 consecutive year 8.7 • Increased profitability with 497 EBITDA up +59% vs 201
Slide 120: …while keep investing in the business
09 Driving shareholder value …while keep investing in the business 6.9% 7.6% Capex 6.4% 7.5% 6.4% 5.8% 5.3% Continue investing in: 590 541 • Increasing capacity & technical capability while modernising 484 production facilities 465 427 378 • Upgraded coolers driving 332 immediate consumption • Digit
Slide 121: Clear capital allocation priorities drive shareholder value
09 Driving shareholder value Clear capital allocation priorities drive shareholder value Leverage ratio 1. Organic investment 1.5-2.0x in the business 54% 45% 44% 45% 46% 44% 43% 2. Progressive dividend policy payout ratio 40%-50% €0.71 €0.78 €0.62 €0.64 €0.57 €0.54 3. Strategic M&A €0.44 4. Additio
Slide 122: M&A that supports our strategy
09 Driving shareholder value M&A that supports our strategy Criteria Criteria Geographical expansion Increase exposure to Strong high growth geographies strategic rationale Bolt-on: in existing categories Sound Smaller businesses, with financial returns potential to scale Geographic fit Bolt-on: in
Slide 123: Laser-focus on improving returns, while growing the business
09 Driving shareholder value Laser-focus on improving returns, while growing the business 15.8% ROIC 14.8% 14.2% ex. Egypt 13.7% 12.4% 11.1% 14.1% +380bps vs 2016 10.3% +10% on average Net profit after tax (NOPAT) improvement +18% Capital turnover 2016 2017 2018 2019 2020 2021 2022 (Revenue/Invested
Slide 124: We have high confidence in the growth algorithm
09 Driving shareholder value We have high confidence in the growth algorithm NARTD market Value share CCH price / value growth gain (NARTD) mix improvement Across categories, packs, channels and countries 2019-2022 2019-2022 2019-2022 +5% 1 +270bps 2 +4.7% 3 1. 4-year CAGR, excluding Russia & Ukrain
Slide 125: Organic EBIT should grow ahead of organic revenue in future years
07 Delivering 09 Drivingprofitable growth shareholder value Organic EBIT should grow ahead of organic revenue in future years 2019 - 2022 ENABLERS MID-TERM Organic NSR Pricing Organic EBIT growth +7% p.a. 1 Mix AHEAD of Organic EBIT Operational leverage Organic +7% p.a. 1 Cost efficiencies Revenue g
Slide 126: Mid-term guidance: organic revenue and EBIT margin growth
09 Driving shareholder value Organic revenue Organic EBIT margin • Continued focus on ROIC growth growth expansion +6-7% on average p.a. +20-40bps on average p.a. • CAPEX 6.5-7.5% of revenue • Growing Free Cash Flow to support capital allocation priorities 126 Coca-Cola HBC Investor Day Rome May 202
Slide 127: Driving shareholder value
09 Driving shareholder value Driving shareholder value Confidence Continued Driving Clear in growth efficiency EBIT growth capital allocation algorithm improvement ahead of priorities revenue growth 127 Coca-Cola HBC Investor Day Rome May 2023
Slide 128: Zoran Bogdanovic, Chief Executive Officer
NOV anit BOGDA EXECU OFFICER Coca-Cola HBC
Slide 129: Key messages today
10 Sustainable and profitable growth: conclusions Key messages today We’re continuing to grow Led by strong categories, capabilities and footprint Sustainably Profitably… … with excellent people and partners 129 Coca-Cola HBC Investor Day Rome May 2023
Slide 130: Strong track record of investing, adapting and driving performance
10 Sustainable and profitable growth: conclusions Strong track record of investing, adapting and driving performance 2016 to 2019 2020 to 2022 Onwards Recovery and strong Managing through operating leverage significant change + 5% 250bps + +9% Strong NSR growth NSR avg organic growth Margin improvem
Slide 131: Clear growth priorities in attractive growing categories
10 Sustainable and profitable growth: conclusions Clear growth priorities in attractive growing categories Forecasted value market growth Industry Market value 20221 5Y CAGR 2024-20281 Sparkling €25bn +5-6% Energy €5bn +9-12% Hydration (Water & Sports) €23bn +3-4% Juices €8bn +2-4% Ready-to-drink te
Slide 132: Our prioritised capabilities underpin our growth ambitions
10 Sustainable and profitable growth: conclusions Our prioritised capabilities underpin our growth ambitions Revenue growth management Route to market Premiumisation and smart Cost optimised, value affordability solutions creating outlet coverage (physical and digital) Personalised Talent developmen
Slide 133: Growth opportunities across our diversified markets
10 Sustainable and profitable growth: conclusions Growth opportunities across our diversified markets Sparkling Soft Drinks Forecast growth rates Nigeria Emerging 74 110 Sparkling Mid-term servings per capita, 20223 GDP per capita Egypt 116 Population1 CAGR2 CCH 142 +4% higher vs 2018 Italy 159 Emer
Slide 134: We're working in a sustainable way
10 Sustainable and profitable growth: conclusions We’re working in a sustainable way… …environmentally, socially and with a clear set of stretching targets • CLIMATE − NetZeroby40 target set in 2022 − 50% of coolers energy efficient − 50% of total energy used in plants from renewable and clean1 sour
Slide 135: Our success is underpinned by our people and partners
10 Sustainable and profitable growth: conclusions OUR PEOPLE OUR PARTNERS OUR CUSTOMERS OUR CONSUMERS Our success is underpinned by our people and partners, and our joint focus on customers and consumers 135 Coca-Cola HBC Investor Day Rome May 2023
Slide 136: We have high confidence in the growth algorithm
10 Sustainable and profitable growth: conclusions We have high confidence in the growth algorithm NARTD market Value share CCH price / value growth gain (NARTD) mix improvement Across categories, packs, channels and countries 2019-2022 2019-2022 2019-2022 +5% 1 +270bps 2 +4.7% 3 1. 4-year CAGR, excl
Slide 137: Mid-term guidance: organic revenue and EBIT margin growth
10 Sustainable and profitable growth: conclusions Organic revenue Organic EBIT margin • Continued focus on ROIC growth growth expansion +6-7% on average p.a. +20-40bps on average p.a. • CAPEX 6.5-7.5% of revenue • Growing Free Cash Flow to support capital allocation priorities 137 Coca-Cola HBC Inve
Slide 138: Key messages today
10 Sustainable and profitable growth: conclusions Key messages today We’re continuing to grow Led by strong categories, capabilities and footprint Sustainably Profitably… … with excellent people and partners 138 Coca-Cola HBC Investor Day Rome May 2023