Growing faster together

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 The Coca-Cola Company (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 non-alcoholic ready to drink (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. 

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 Coca-Cola Beverages Philippines Inc. (CCBPI) with Aboitiz Equity Ventures (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.

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. 

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 alcoholic ready to drink (ARTD) category, 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.

(A) APS refers to Australia, Pacific and South East Asia

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. 

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.

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 their stated intent to divest bottling operations.

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. 

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.