How CCEP performed in H1 and our plans for growth
As Coca-Cola European Partners publishes its financial performance for H1 2020, Chief Financial Officer Nik Jhangiani discusses the results, CCEP’s response to coronavirus, changing consumer demand and opportunities for growth.
First, I want to take this opportunity to thank health and key workers across Europe for keeping us safe.
Despite the difficult operating circumstances, Coca-Cola European Partners has been able to continue to make, move, and sell our drinks. Importantly, we have also been able to support our colleagues, customers and communities while protecting the business for the longer term.
Our performance has been resilient despite the challenging backdrop, and trading improved throughout the quarter as restrictions were lifted.
At the beginning of the outbreak, we took immediate actions in four key areas protecting the well-being of our people, serving our customers, supporting our communities, and preserving the long-term future of our business.
None of this would have been possible without my colleagues across the business. I’m hugely grateful for their hard work and dedication throughout this incredibly challenging time.
As we recover, we are making sure colleagues can safely return to their offices and workplaces by implementing new hygiene and social distancing measures and continuing to provide tools and resources to support colleagues working from home. We’ve also strengthened our wellbeing programme for colleagues, and all our employees have access to a 24/7 support line.
We are supporting customers returning to business, particularly those customers who have been hardest hit like pubs, bars and restaurants. Initiatives like Helpthehoreca in the Netherlands and JaimeMonBistrot in France have been created to encourage people to return to their favourite restaurant and cafes. These are just some examples of the work we’re doing in the countries where we operate.
We’re a leader in the €100 billion soft drinks category. It is robust, resilient and set to keep growing long term despite the immediate impact of the pandemic.
We are focused on growing the sparkling category and our market share through top brands like Coca-Cola, Diet Coke/Coke Light and Fanta orange and flavours.
We will provide targeted support for brands like Fuze Tea and Tropico which can help us win and we will continue to grow Sprite and Monster Energy.
With Costa Coffee, an incredibly strong brand to work with.
We are targeting growth in online grocery and home delivery services as well as our B2B online portal, MY.CCEP.com.
Investment will be even more targeted than before. From the beginning, we took early action to conserve cash, including freezing all non-essential capital expenditure.
From our consumers to our customers, digital-first is becoming the norm. We're staying ahead by making the most of digital tools and technology to support the business recovery – whether that is new ways of serving customers, collaborating with colleagues or reducing our environmental footprint.
Our portal, My.CCEP.com, is helping us drive revenue growth and be the best online partner to our customers. It enabled us to process almost €1 billion in revenue last year and we are developing the functionality of the platform so it is even easier to do business with us.
We are innovating in online capabilities, enabling us to be more analytical about what really works so we can target our spending better and improve cut through with consumers. But we want to have a presence in every channel – we’re seeing the increased use of digital platforms in convenience, discounters and a number of other important channels, as well as grocery. Food aggregators will also be of increased importance as people look to use home food delivery services more and more.
A green future is part of our growth plan - it’s the right thing to do, consumers demand it, and we want to be part of the solution.
We signed the ‘Recover Better’ business statement, calling on businesses and governments to prioritise science-based climate action in their coronavirus recovery efforts.
We are making progress on our ‘This is Forward’ sustainability action plan, with science-based and measurable targets to help us reduce our overall carbon footprint. We feel so strongly about this, that we have made it part of how we reward people. 15% of our long-term incentive award will be based on the extent to which CCEP reduces its carbon emissions over the next three years.
Packaging will of course be a significant part of this. In October 2019, we announced an evolved commitment to reach 50% recycled plastic (rPET) in our bottles by 2023, two years ahead of our original schedule, with the aim of achieving 100% rPET in the future. This year, we were able to transition all our locally produced bottles in Sweden to 100% rPET, a first globally for The Coca-Cola system.
And last month, we also announced our fifth innovation partnership through CCEP Ventures, in CuRe. CuRe is an enhanced recycling start-up which allows us to safely use difficult to recycle plastic polyester waste and will help us remove 200,000 tonnes of virgin plastic from our packaging. This is another example of the importance of CCEP Ventures in helping us find and foster real innovation.
There are encouraging signs that many of our customers are opening up for business. However, many of our customers continue to operate at significantly reduced capacity and on-the-go consumption remains under pressure.
Looking forward, we are focused on leveraging our solid capabilities to drive a robust second half recovery. We are confident about the future of our business, driven by an even stronger sustainability and digital agenda.
The pandemic has strengthened our determination to go further and faster in building a better and greener future for our business, for people and for the planet.