This page contains forward looking statements & alternative performance measures. Please see the bottom of this page for further details.
A diverse & growing category
The non-alcoholic ready to drink category is big (€100bn), well positioned & expected to grow at a 2-3% CAGR (€30bn) over the next 10 years.
Investing for future growth
We are the market leader (c.28% share) & continue to build scale (1m outlets, 1m coolers, 6,000 strong salesforce).
Close alignment with TCCC
We are more aligned than ever before with The Coca-Cola Company.
Driving profitable growth
Mid-term annual objectives including low single digit revenue growth & mid single digit operating profit growth.
Solid, flexible balance sheet
Strongfocus on free cash flow generation (at least €1bn per annum expected) & solid balance sheet (Net Debt to Adjusted EBITDA of 2.5X-3.0X).
Sustainable investor returns
We have a ~50% dividend payout ratio objective and up to €1bn share buyback programme for 2020.
Definitions of alternative performance measures
Our 2019 Guidance and Mid Term Annual Objectives contain alternative performance measures (non-GAAP performance measures) as defined below. These differ from our reported GAAP measures prepared under International Financial Reporting Standards by adjusting for items affecting the comparability of period-over-period financial performance, unless identified separately below. We use alternative performance measures to make financial, operating and planning decisions and to evaluate and report performance. We believe these measures provide useful information to investors to better analyse our business performance and allow for greater comparability between periods. We are not able to reconcile forward looking non-GAAP performance measures to reported GAAP 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.
For a historical reconciliation of our alternative performance measures to the reported GAAP measures, please refer to our unaudited results for the six months ended 28 June 2019, published on 8 August 2019, and to our 2018 Integrated Report and Form 20-F, published on 14 March 2019, as applicable. The alternative performance measures included herein should be read in conjunction with and do not replace the directly reconcilable GAAP measure.
‘‘Comparable’’ is defined as results excluding items impacting comparability, such as restructuring charges, Merger and integration related costs, out of period mark-to-market impact of hedges, litigation provisions and net tax items relating to rate and law changes. Comparable volume is also adjusted for selling days.
‘‘Fx-Neutral’’ is defined as comparable 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 plus purchases of capitalised software and payments of principal on lease obligations, less proceeds from disposals of property, plant and equipment. Capex is used as a measure to ensure that the cash spending is in line with the Group’s overall strategy for the use of cash.‘‘ROIC’’ is defined as comparable operating profit after tax divided by the average of opening and closing invested capital for the year. Invested capital is calculated as the addition of borrowings and equity less cash and cash equivalents. 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.
‘‘Free cash flow’’ is defined as net cash flows from operating activities less capital expenditures (as defined above) and interest paid. Free cash flow is used as a measure of the Group’s cash generation from operating activities, taking into account investments in property, plant and equipment and non-discretionary lease and interest payments. Free cash flow is not intended to represent our residual cash flow available for discretionary expenditures.
‘‘Net Debt to Adjusted EBITDA’’ Net Debt is defined as the net of cash and cash equivalents less currency adjusted borrowings. Adjusted EBITDA is calculated as Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), after adding back items impacting the comparability of year over year financial performance. Adjusted EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments. Further, Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs, and although depreciation and amortisation are non-cash charges, the assets being depreciated and amortised are likely to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements. The ratio of net debt to Adjusted EBITDA is used by investors, analysts and credit rating agencies to analyse our operating performance in the context of targeted financial leverage.
‘‘Dividend Payout Ratio’’ is defined as dividends as a proportion of comparable profit after tax. Dividends subject to Board approval.
Forward looking statements
This document contains statements, estimates or projections that constitute “forward-looking statements” concerning the financial condition, performance, results, strategy and objectives of Coca-Cola European Partners plc and its subsidiaries (together “CCEP” or the “Group”). Generally, the words “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 those set forth in the “Risk Factors” section of CCEP’s 2018 Integrated Report/Annual Report on Form 20-F, including the statements under the following headings: Changing consumer preferences and the health impact of soft drinks (such as sugar alternatives); Legal and regulatory intervention (such as the development of regulations regarding packaging, taxes and deposit return schemes); Packaging and plastics (such as climate change, resource scarcity, marine litter and water scarcity); Competitiveness and transformation; Cyber and social engineering attacks; The market (such as customer consolidation and route to market); Economic and political conditions (such as continuing developments in relation to the UK’s exit from the EU); The relationship with TCCC and other franchisors; Product quality; and Other risks (such as global pandemics, including their impact on our supply chain).
Due to these risks, CCEP’s actual future results, dividend payments, and capital and leverage ratios may differ materially from the plans, goals, expectations and guidance set out in CCEP’s forward-looking statements. 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. CCEP assumes no responsibility for the accuracy and completeness of any forward-looking statements. Any or all of the forward-looking statements contained in this filing and in any other of CCEP’s respective public statements may prove to be incorrect.
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Our people make, sell and distribute the world's best loved drinks across 13 countries in Western Europe.