Integrated Annual Report 2020 Coca‑Cola HBC Integrated Annual Report 2020
ADAPT TO WIN OUR PEOPLE p.38
OUR SUPPLIERS p.34
THANK YOU In a year of being apart, we have been more together. OUR PEOPLE p.38 OUR CUSTOMERS p.30
OUR SUPPLIERS p.34 OUR COMMUNITIES p.42
THANK YOU OUR CONSUMERS p.26 In a year of being apart, we have been more together. 2020 highlights
Volume (m unit cases) Net sales revenue (€m) 2,135.6 6,131.8 2019: 2,264.5 2019: 7,026.0
Comparable EBIT1 (€m) Comparable EBIT1 margin (%) 672.3 11.0% 2019:758.7 2019: 10.8%
Profit before tax (€m) Net profit2 (€m) 593.9 414.9 2019: 661.2 2019: 487.5
Comparable EPS1 (€) Basic EPS (€) 1.185 1.140 2019: 1.436 2019: 1.340
Primary packaging collected In 2020, we started reporting against for recycling (equivalent) the SASB framework. 44% 2019: 48%
1. For details on APMs, refer to ‘Alternative performance measures’ section. 2. Net profit and comparable net profit refer to net You can read more on page 132. profit and comparable net profit respectively after tax attributable to owners of the parent.
Contents
Strategic Report Corporate Governance Supplementary Information 10 Chairman’s letter 76 Chairman’s introduction 230 Alternative performance measures 12 Chief Executive Officer’s letter to corporate governance 233 Other supplementary information 14 Our business at a glance 80 Board of Directors 234 Assurance statement 16 Our business model 84 Corporate Governance Report 238 Glossary 18 Our socio-economic impact 110 Directors’ Remuneration Report 20 Stakeholder engagement 131 Statement of Directors’ 22 Market review responsibilities 24 Our purpose and strategy 132 2020 SASB index 26 Leverage our unique 24/7 portfolio Financial Statements 30 Win in the marketplace 136 Independent auditor’s report 34 Fuel growth through competitiveness & investment 144 Financial statements 38 Cultivate the potential of our people 150 Notes to the consolidated financial statements 42 Earn our licence to operate 48 Key performance indicators Swiss Statutory Reporting 50 Sustainability performance 204 Report of the statutory auditor 52 Managing risk and materiality on Coca-Cola HBC AG’s 57 Viability statement consolidated financial statements 66 Financial review 210 Report of the statutory auditor 70 Segment highlights on Coca-Cola HBC AG’s financial 72 Non-financial reporting directive statements 213 Coca-Cola HBC AG’s financial statements 224 Report of the statutory auditor on the remuneration report Watch our video and learn more at https://coca-colahellenic.com/en/investors/ 225 Statutory Remuneration Report 2020-integrated-annual-report/. INTEGRATED ANNUAL REPORT 2020 1 SR
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In a year impacted by COVID‑19, we adapted fast to ensure we could continue to create value for all our stakeholders. This meant: • Caring for our people and the communities we serve page 2
• Flexing our 24/7 portfolio page 4
• Adapting our routes to market page 6
• Driving operational efficiencies page 8 The agility and commitment of our people allowed us to adapt to win, keeping us on course to become the leading 24/7 beverage partner.
Our strategy and purpose are supported by five growth pillars, each of which is a core strength or competitive advantage.
Leverage our unique 24/7 portfolio 1 go to pages 26-29. Win in the marketplace 2 go to pages 30-33. Fuel growth through competitiveness & investment 3 go to pages 34-37. Cultivate the potential of our people 4 go to pages 38-41. Earn our licence to operate 5 go to pages 42-47.
Throughout the 2020 Integrated Annual Report, we have identified areas which are relevant to each of these growth pillars. 2 COCA‑COLA HBC
CARING FOR OUR PEOPLE AND COMMUNITIES Our company culture, which values the care we show to one another while embracing change and challenge, has proved vital in the face of the difficulties of 2020.
ing for th dapt e co e a mm r u e a n it W ie s w e s e r v e
We stayed close to our communities throughout 2020. Special thanks go to our people who went the extra mile by volunteering their time to support the vulnerable. 2 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 3 SR
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ing for th dapt e co e a mm r u e a n it W ie s w e s e r v e
Global commitment, local action Our number one priority throughout 2020 remained Globally, The Coca-Cola Company and the safety of our people, as well as our customers, The Coca-Cola Foundation together with partners and communities. Coca-Cola HBC and all other bottling partners provided a $120 million support package focused Over the last 70 years, partnering with and investing on the people and organisations engaged in the in the communities we serve have always been a frontline fight against COVID-19. In addition, we core part of the way we do business. In the face of We stayed close to our donated approximately 5 million litres of beverages the challenges of 2020, the community networks communities throughout in our markets and used our supply chain to print and partnerships that we have established over the 2020. Special thanks go protective masks and hand sanitiser bottles. years, including with the Red Cross and other NGOs, to our people who went the allowed us to support those in need, those fighting extra mile by volunteering the COVID-19 pandemic on the front line and their time to support our customers who continue to serve our the vulnerable. shared communities. 4 COCA‑COLA HBC
FLEXING OUR PORTFOLIO We responded to changing consumer preferences quickly, taking smart risks to meet evolving trends and supporting more at‑home occasions.
ing to deligh apt t ou ad r c re on a su e m W e r s
Thanks to our adaptable category strategy, partnership with our customers and agile people, our consumers continued to enjoy their favourite beverage, even when drinking occasions changed.
Prioritising growing occasions As movement and trading restrictions forced more With more chances to experiment in the kitchen people to spend more time at home, consumer with meals at home, we also saw sparkling soft preferences changed. For example, with no bars and drinks play an important role in making these home restaurants open, people sought to recreate their meals extra special family occasions. favourite cocktails at home while spending time with Our Costa Coffee launch also supported our family or friends or engaging remotely. We ensured 24/7 vision, offering consumers a full range that adult sparkling soft drinks, such as Schweppes of high-quality coffee options to enjoy at home, and Kinley, were available in the appropriate packs on-the-go or at work in 14 of our markets so far. to ensure they remained relevant to this trend. 4 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 5 SR
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SSR FLEXING OUR SI PORTFOLIO We responded to changing consumer preferences quickly, taking smart risks to meet evolving trends and supporting more at‑home occasions.
ing to deligh apt t ou ad r c re on a su e m W e r s
Thanks to our adaptable category strategy, partnership with our customers and agile people, our consumers continued to enjoy their favourite beverage, even when drinking occasions changed.
Prioritising growing occasions As movement and trading restrictions forced more With more chances to experiment in the kitchen people to spend more time at home, consumer with meals at home, we also saw sparkling soft preferences changed. For example, with no bars and drinks play an important role in making these home restaurants open, people sought to recreate their meals extra special family occasions. favourite cocktails at home while spending time with Our Costa Coffee launch also supported our family or friends or engaging remotely. We ensured 24/7 vision, offering consumers a full range that adult sparkling soft drinks, such as Schweppes of high-quality coffee options to enjoy at home, and Kinley, were available in the appropriate packs on-the-go or at work in 14 of our markets so far. to ensure they remained relevant to this trend. With more people enjoying cocktails at home we prioritised our adult sparkling brands which offer consumers a range of sophisticated flavours that can be enjoyed on their own or as a mixer. 6 COCA‑COLA HBC
ADAPTING OUR ROUTES TO MARKET In a rapidly changing environment, excellent customer service meant understanding their needs and collaborating quickly to make the necessary changes.
Supporting our customers Throughout 2020 our sales teams continued As bars, restaurants and hotels gradually began to serve our customers, whilst staying close to reopen, we deployed teams to support to those who were not able to operate. For our them, filling coolers and shelves and offering customers with overstretched supply chains and marketing assistance. overworked personnel trying to keep up with By far the most apparent shift in route to market demand and changing regulations, we offered was the use of e-commerce. We shared flexible supply and merchandising services. knowledge and insights with retailers to help When retail customers’ central warehouses could simplify the online shopper journey and initiated not cope with the spikes in demand, we delivered strategic partnerships between customers who supplies direct to outlets or offered employees did not have the capabilities for quick home to get the products onto the shelves. delivery service with others that did.
ting to supp dap ort e a ou ar r c e us W to m e r s
Thanks to the efforts of our people in our markets we were able to adapt the support we provided to our customers almost overnight. 6 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 7 SR
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SSR ADAPTING OUR SI ROUTES TO MARKET In a rapidly changing environment, excellent customer service meant understanding their needs and collaborating quickly to make the necessary changes.
Supporting our customers Throughout 2020 our sales teams continued As bars, restaurants and hotels gradually began to serve our customers, whilst staying close to reopen, we deployed teams to support to those who were not able to operate. For our them, filling coolers and shelves and offering customers with overstretched supply chains and marketing assistance. overworked personnel trying to keep up with By far the most apparent shift in route to market demand and changing regulations, we offered was the use of e-commerce. We shared flexible supply and merchandising services. knowledge and insights with retailers to help When retail customers’ central warehouses could simplify the online shopper journey and initiated not cope with the spikes in demand, we delivered strategic partnerships between customers who supplies direct to outlets or offered employees did not have the capabilities for quick home to get the products onto the shelves. delivery service with others that did.
ting to supp dap ort e a ou ar r c e us W to m e r s
Thanks to the efforts of our people in our markets we were able to adapt the support we provided to our customers almost overnight. 8 COCA-COLA HBC
DRIVING OPERATIONAL EFFICIENCIES Digital investments benefit employees, customers and consumers.
Remaining competitive Prioritising safety from the beginning, our people Structural improvements made to our cost base were able to keep our supply chain fully operational. over many years have created a more flexible, resilient business which can withstand revenue Having secured safety, supply and service across our declines while protecting profitability. We moved stakeholders, we prioritised investments behind our quickly to identify, and deliver, cost savings in 2020 highest potential opportunities, allowing us to and have found new digital ways of working which protect the financial health of our business while will enable us to continue to drive efficiencies continuing to develop for the long term. We invested and remain competitive. behind our growth markets, our largest and highest potential categories and growing consumer By transforming our functional ordering platform occasions. We embraced data and sophisticated into an effective customer portal, we enabled digital technologies and our digital transformation customers to order faster and around the clock helped us support our customers and address the to keep up with spikes in demand. Apart from easy needs of consumers in a fast-changing environment. navigation and an attractive user experience, this portal now offers a range of information to help our customers, including available promotions, customised portfolio recommendations and order analytics per category, brand and package type. 8 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 9 SR
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SSR DRIVING SI OPERATIONAL EFFICIENCIES Digital investments benefit employees, customers and consumers.
it for the futur in f e ma re o t g in Remaining competitive t p Prioritising safety from the beginning, our people Structural improvements made to our cost base a were able to keep our supply chain fully operational. over many years have created a more flexible, d a resilient business which can withstand revenue e Having secured safety, supply and service across our r declines while protecting profitability. We moved a stakeholders, we prioritised investments behind our quickly to identify, and deliver, cost savings in 2020 highest potential opportunities, allowing us to e and have found new digital ways of working which protect the financial health of our business while W will enable us to continue to drive efficiencies continuing to develop for the long term. We invested and remain competitive. Thanks to our people’s behind our growth markets, our largest and highest eagerness to advance potential categories and growing consumer By transforming our functional ordering platform digital tools and occasions. We embraced data and sophisticated into an effective customer portal, we enabled innovation, we were able digital technologies and our digital transformation customers to order faster and around the clock to continue to drive value helped us support our customers and address the to keep up with spikes in demand. Apart from easy for our partners. needs of consumers in a fast-changing environment. navigation and an attractive user experience, this portal now offers a range of information to help our customers, including available promotions, customised prtfolio recommendations and order analytics per category, brand and package type. 10 COCA‑COLA HBC
Chairman’s letter
Winning partnerships
“Our vision for Dear stakeholder, colleagues who have continued to work daily in our plants and on site with customers The COVID-19 pandemic has caused the Coca‑Cola HBC to throughout the COVID-19 pandemic. largest reduction in GDP since the Great be the leading 24/7 Depression, the result of the largest While 2020 was a uniquely challenging year, beverage partner lockdowns in human history and widespread it was also a time in which we discovered upheaval in economic activity and daily life. the full measure of our strength, resilience and the strategy As of early 2021 nearly 2.5 million people as a Company and our capacity to adapt had died of the virus, bringing suffering and and improve. Our partnership with underpinning it have hardship to millions more. Our thoughts The Coca-Cola Company meant that we proven highly resilient.” remain with the people and families who received early insight into what was coming have lost their loved ones. from colleagues in China. The Board quickly identified its first priority: ensuring the The ongoing challenges for our people, our safety of our people, customers, partners Company and its stakeholders have been and communities. immense. Hospitality continues to be one of the most affected sectors, putting many The Board endorsed the establishment of our customers under severe pressure. of a Group COVID-19 Operational Task Despite this, we have been able to rise Force to oversee the Company's response to many challenges. While protecting our to both health and safety needs and people, we have maintained supply for our adaptations made in response to the customers, protected the profitability of dramatic changes in our operating our business, grown market share and have environment. To maintain alignment with continued to make progress on our strategic the Company’s culture, values and strategy objectives. This was in large part due to the during the COVID-19 pandemic, the extraordinary efforts of our people. I want Remuneration Committee oversaw to express my heartfelt thanks to all our adjustments to incentive arrangements. colleagues, and special thanks to our 10 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 11 SR
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This year, more than ever, we have seen Dividend In early 2021, we remain focused on ensuring SI the benefits of our Company culture which During the course of 2020 we were able the safety of our people, customers and values the care we show to one another while to maintain our commitment to pay communities as the COVID-19 pandemic embracing agility, change and challenge. the 2019 dividend, of €0.62 per share. continues. We will continue to adapt to This culture, which I have seen developed When considering the correct course of capture the opportunities we see in 2021 and nurtured under the leadership of Zoran action in 2021, the Board carefully assessed and beyond. Meanwhile, with vaccine Bogdanovic, will continue to play a crucial a range of possible approaches weighing our roll-outs progressing, we are eager for the role in seizing the opportunities of the continued balance sheet strength, improved new opportunities which will come once recovery period in a way that creates value financial performance in the second half the recovery is underway. The progress for all of our stakeholders. of the 2020, emerging, and distribution on our strategy in 2020 has built a stronger of COVID vaccines and the degree of business, even better positioned to achieve A proactive approach to remaining uncertainty in the operating future growth. big challenges environment. After careful consideration, Our vision for Coca-Cola HBC to be the Coca-Cola HBC’s long-term success is and in view of the strong long-term outlook leading 24/7 beverage partner, as well as linked to our ability to manage all our principal and our confidence in the Company’s the purpose and strategy underpinning it, risks, including critical sustainability issues. strategy, the Board is proposing a full-year have proven highly resilient, with the events I am pleased to report that we were once dividend payment of €0.64 per share, a 3.2% of 2020 confirming the relevance of our again rated Europe’s most sustainable increase compared with the prior year. plans. We firmly believe it provides the right beverage company by the Dow Jones We are pleased to be able to propose this path and sets the right milestones for the Sustainability Index for 2020, achieving our increase to the dividend even after a very long-term success of our Company and highest ever score. In 2020, we also retained challenging year. its stakeholders. our leadership positions and top scores in On behalf of the Board, let me extend my other ESG indices and ratings, including CDP Looking ahead good wishes to you and thank all of our climate change and water ratings, MSCI ESG, We welcomed Anna Diamantopoulou as a stakeholders for your continued support. FTSE4Good, ISS and Vigeo. new member of the Board in 2020. Anna was European Commissioner for Employment ESG ratings give us insight into our and Social Affairs and a Minister of the Greek stakeholders’ priorities and serve to galvanise Government in the past. She brings a wealth action within our organisation, as do of experience in regulatory matters and sustainability targets. Coca-Cola HBC was stakeholder relations, which we believe will among the first companies to set and be helpful in light of an increase in regulatory disclose science-based emissions targets Anastassis G. David challenges. Meanwhile, let me also take this in 2016, and in 2020, we set new 10-year Chairman of the Board opportunity to thank John Sechi for his Winning science-based targets for further reductions years of service. across our value chain. In the next ten years, we will reduce – at a minimum – our absolute The Board approved the creation of the emissions for our direct operations and role of Chief Operating Officer, with Naya partnerships production, scope 1 and 2 emissions, by Kalogeraki taking up the position. The new 55% compared with 2017 baseline levels. structure enables the CEO to focus more time on the long-term strategic direction The COVID-19 pandemic has spotlighted of the business and partnerships, while the deep interconnections between enabling us to drive faster business growth. “Our vision for Dear stakeholder, colleagues who have continued to work daily our business and stakeholders in the in our plants and on site with customers The COVID-19 pandemic has caused the communities where we work. Along with Coca‑Cola HBC to throughout the COVID-19 pandemic. largest reduction in GDP since the Great our partner The Coca-Cola Company, it has be the leading 24/7 Depression, the result of the largest While 2020 was a uniquely challenging year, been our privilege to provide those fighting beverage partner lockdowns in human history and widespread it was also a time in which we discovered the virus on the front lines with approximately upheaval in economic activity and daily life. the full measure of our strength, resilience 5 million litres of beverages, volunteer time Section 172 statement and the strategy As of early 2021 nearly 2.5 million people as a Company and our capacity to adapt and provide financial support with grants had died of the virus, bringing suffering and and improve. Our partnership with from the Coca-Cola Foundation. We also underpinning it have hardship to millions more. Our thoughts The Coca-Cola Company meant that we leveraged the capabilities of our supply Section 172 of the UK Companies Act 2006 requires directors to promote the proven highly resilient.” remain with the people and families who received early insight into what was coming chain, using our 3D printing capability to success of the company for the benefit of the members as a whole, having regard have lost their loved ones. from colleagues in China. The Board quickly make protective face shields, producing for the interests of stakeholders in their decision-making. Engaging with stakeholders identified its first priority: ensuring the special bottles for the dispense of hand is an indispensable part of how Coca-Cola HBC does business. The Board The ongoing challenges for our people, our safety of our people, customers, partners sanitisers and loaning a microbiological considers the interests of the Group’s employees and other stakeholders in its Company and its stakeholders have been and communities. detector to support laboratory testing decision-making as a matter of good governance, and understands the importance, immense. Hospitality continues to be one for COVID-19. and value, of taking into account their views, as well as considering the impact The Board endorsed the establishment of the most affected sectors, putting many of the Company’s activities on the community, environment and the Group’s of a Group COVID-19 Operational Task of our customers under severe pressure. reputation. The Board also considers what is most likely to promote the success of Force to oversee the Company's response Despite this, we have been able to rise the Company for its shareholders in the long term. Although the Company is Swiss to both health and safety needs and to many challenges. While protecting our incorporated and as such the UK Companies Act 2006 has no legal effect, this adaptations made in response to the people, we have maintained supply for our approach is in accordance with the UK Corporate Governance Code 2018. customers, protected the profitability of dramatic changes in our operating our business, grown market share and have environment. To maintain alignment with continued to make progress on our strategic the Company’s culture, values and strategy Read more about: objectives. This was in large part due to the during the COVID-19 pandemic, the How we manage risks and materiality on pages 52 to 65. extraordinary efforts of our people. I want Remuneration Committee oversaw How we engage with key stakeholders on pages 20-21. to express my heartfelt thanks to all our adjustments to incentive arrangements. Examples of how stakeholders were considered in specific decisions on pages 92-93. colleagues, and special thanks to our 12 COCA‑COLA HBC
Chief Executive Officer’s letter
Adapt to win
“I am proud of our teams’ Dear stakeholder, Our people were committed, flexible and agile, adapting quickly to changes ranging Nearly everyone on earth was impacted in positive attitude and from new regulations to adjusting to home some way by the COVID-19 pandemic in working. We demonstrated the strength of agility during this 2020. Across all of our markets, it brought our values-based culture, which empowers challenges and disruption to our people, our fast‑changing time.” everyone to continually learn, take action ways of working, our customers and the and ownership, while serving our customers communities we serve. with passion and excellence. I continue to be Throughout the year, the safety of our inspired by the remarkable lengths that our people remained our number one priority. people went to, as well as the genuine care With additional global best practice health they have for each other, our business and and safety protocols in place, production the communities we serve. continued uninterrupted throughout. This enabled us to sustain our business, 2020 performance avoid disruptions and continuously supply Our 2020 performance demonstrates how our customers and consumers. far we have come in building operational Our experience in Italy, an early epicentre agility and lasting margin resilience into the of the COVID-19 pandemic in Europe, and business and the actions we took were fully our close partnership with The Coca-Cola in line with the strategic growth pillars we set Company and other bottlers, enabled a fast out in 2019 as part of Growth Story 2025. exchange of effective practices. This meant Clearly the COVID-19 pandemic had an that we were well positioned to ensure that impact on our performance. However, the correct personal protective equipment notable improvements in the second half was available, and we could quickly make the contained volume declines and rigorous necessary changes to plans and processes. prioritisation of costs and investments ensured that EBIT margins were down only 12 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 13 SR
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Chief Executive Officer’s letter FS
SSR Efficient and effective collection systems 20 basis points year-on-year and that As our performance relies on the strength SI Free Cash Flow was even stronger than and capabilities of our teams, we ensured are crucial to ensuring that no package has the previous year. Thanks to the focused the continuity of learning and development, only one life, but given the movement prioritisation of optimised market even in the most unusual circumstances of restrictions in many of our markets, investments and the strong execution 2020. This meant that our people were able collection systems were disrupted during efforts of our people, we gained 40 basis to leverage fully digitised learning platforms the year. As part of our World Without Waste points of value share in non-alcoholic ready and participate in live developmental events, commitment to collect 100% of our primary to drink and 30 basis points of value share such as our first ever virtual learning packaging for recycling or reuse by 2030, in Sparkling, with market share gains in the festival, Learnfest. we actively supported collection modelling studies in 10 countries to identify majority of our markets. We also made two notable announcements improvements and advocate for the optimal We saw the enduring strength and breadth in regard to our leadership team in 2020. systems for the efficient collection of of our portfolio with growth in Sparkling, Adult A new role of Chief Operating Officer was beverage containers. Sparkling and Energy and volume growth in created with Naya Kalogeraki taking up four of our largest markets, Nigeria, Russia, the position. This role centres on strategy 2020 highlighted once again that we are Poland and Ukraine. execution, high performance and people a well-positioned and resilient business development, enabling me to focus more with a clear vision and purpose, as set out The biggest impact of the trading and time on the long-term strategic direction of in last year’s report. It has also forced each movement restrictions imposed to reduce the business, the development of capabilities of us to ask ourselves what we need to the spread of the COVID-19 pandemic was for the future and our ESG agenda. We also change and further improve to ensure we to the out-of-home channel. In the face of announced that Ben Almanzar will join the remain relevant and successful. We will this, our teams showed the flexibility required Company as Chief Financial Officer in April continue to take a disciplined approach to to shift production quickly and provide the 2021 following Michalis Imellos’ decision to strengthening our prioritised capabilities, right packs and categories as consumers leave the business after 12 years. including innovation, as we consider sought to replicate their out-of-home additional opportunities to improve beverage occasions at home. Safeguarding long‑term success efficiencies and productivity. Adapting together Decisions taken to support our long-term Although we know that the recovery from strategy while navigating short-term In addition to finding solutions for new the COVID-19 pandemic will not be simple concerns included prioritising investments occasions, we supported our customers by or straightforward, my greatest source of in technology, including in-house production changing routes to market to deliver direct confidence that we will emerge even stronger of recycled PET, temporarily cutting to stores where warehouses were overrun and smarter is the strength, adaptability, production of smaller, niche products to or as e-commerce and home delivery needs speed and passion for learning of our people. streamline supply and distribution and expanded rapidly. Adapt adjusting new product launches. Our roll I would like to thank our people for their We ensured that we were alongside them out of the Costa Coffee brand, for example, extraordinary efforts during the year and when they needed help to cope with new continued largely as planned although our customers, suppliers and all of our ways of working, supporting them in their some adjustments were made to prioritise stakeholders for their interest and to win warehouses and in stores. We also worked at-home channels. partnership. Together, we move forward with our customers in the hotels, restaurants with confidence and resolve that we can We were the first strategic bottling partner and cafés sector on a case-by-case basis to continue to adapt to win and help our of The Coca-Cola Company to launch support them as they were forced to close customers delight consumers 24/7. Costa Coffee at scale via a variety of their doors. “I am proud of our teams’ Dear stakeholder, Our people were committed, flexible and packages suited for all trade channels. agile, adapting quickly to changes ranging As different countries went into and out of Nearly everyone on earth was impacted in It is now available in 14 of our markets, positive attitude and from new regulations to adjusting to home lockdowns, we worked with The Coca-Cola some way by the COVID-19 pandemic in meaning consumers from Ireland to Russia Zoran Bogdanovic working. We demonstrated the strength of Company to help customers drive trade agility during this 2020. Across all of our markets, it brought are enjoying it at home, on-the-go and at Chief Executive Officer our values-based culture, which empowers back to their outlets as they re-opened in challenges and disruption to our people, our work, with the new range now listed in retail fast‑changing time.” everyone to continually learn, take action very different circumstances. We deployed ways of working, our customers and the and hundreds of bars, restaurants, cafés and and ownership, while serving our customers teams to build displays, fill coolers and communities we serve. work locations. Towards the end of the year, with passion and excellence. I continue to be shelves and offer marketing support. we introduced Topo Chico Hard Seltzer to Throughout the year, the safety of our inspired by the remarkable lengths that our To ensure we understood what our people five markets. We are looking forward to people remained our number one priority. people went to, as well as the genuine care needed, we were quick to listen. This meant driving both categories forward with more With additional global best practice health they have for each other, our business and replacing the annual engagement survey launches in 2021. and safety protocols in place, production the communities we serve. with three pulse surveys so we could get a continued uninterrupted throughout. We know that our vision to be the leading clearer picture of the views and experiences 24/7 beverage partner cannot be achieved This enabled us to sustain our business, 2020 performance of our people throughout. without integrating environmental, social avoid disruptions and continuously supply Our 2020 performance demonstrates how and governance considerations into our customers and consumers. far we have come in building operational While the overall engagement scores continue to be at very high levels, we saw everything that we do. Despite the challenges Our experience in Italy, an early epicentre agility and lasting margin resilience into the declines in a few countries, and our front line of 2020, we continued to make steady of the COVID-19 pandemic in Europe, and business and the actions we took were fully employees asked for more support from line progress towards our Mission 2025 our close partnership with The Coca-Cola in line with the strategic growth pillars we set managers. We learned from this feedback sustainability commitments. For instance, Company and other bottlers, enabled a fast out in 2019 as part of Growth Story 2025. and were quick to provide new tools and we began our roll out of the innovative exchange of effective practices. This meant Clearly the COVID-19 pandemic had an resources where needed. KeelClip™ paperboard solution for can that we were well positioned to ensure that impact on our performance. However, multipacks. This change will be completed the correct personal protective equipment notable improvements in the second half in our EU markets by early 2022, phasing was available, and we could quickly make the contained volume declines and rigorous out plastic wrap on our can portfolio. necessary changes to plans and processes. prioritisation of costs and investments ensured that EBIT margins were down only 14 COCA‑COLA HBC
Our business at a glance
We have beverages for every consumer The leading 24/7 occasion, from waking up in the morning, to going to bed at night. Using this advantage, beverage partner we can help our customers unlock their growth potential by ensuring they have the perfect product offering for their consumers.
Our 24/7 portfolio More than Our portfolio is the strongest, broadest and most flexible in the beverage industry. Our products cater to 100 a growing range of tastes with a wider choice of healthier brands across nine options, premium products and increasingly sustainable categories packaging, giving us an undisputed ability to delight consumers across all consumption occasions. Watch our video and learn more about our 24/7 portfolio at www.coca-colahellenic.com.
Sparkling Hydration Juice RTD Tea 74% 7% 5% 3% Percentage of Coca-Cola HBC revenue
Energy Coffee Plant‑based Premium Spirits 5% <1% <1% 3%
In addition to this broad beverage portfolio, we benefit from a targeted snacks business which represented <2% of revenue in 2020. You can read more about this on page 28. 14 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 15 SR
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We have beverages for every consumer SI The leading 24/7 occasion, from waking up in the morning, to going to bed at night. Using this advantage, beverage partner we can help our customers unlock their growth potential by ensuring they have the perfect product offering for their consumers.
Our 24/7 portfolio More than Winning in the marketplace At‑home channel Out‑of‑home channel Our portfolio is the strongest, broadest and most We have the scale and execution • Supermarkets • Hotels flexible in the beverage industry. Our products cater to 100 capability to create value for a • Convenience stores • Restaurants a growing range of tastes with a wider choice of healthier brands across nine wide range of customers with • E-commerce • Cafés options, premium products and increasingly sustainable categories differentiated, segmented • Bars packaging, giving us an undisputed ability to delight strategies. • Food delivery platforms consumers across all consumption occasions. 1.4m • Petrol stations Watch our video and learn more about our customers visited by 15,000 24/7 portfolio at www.coca-colahellenic.com. sales people
Sparkling Hydration Juice RTD Tea Where we operate Established Developing Emerging markets markets markets We benefit from a diverse combination of countries 74% 7% 5% 3% across both growth and established markets. Percentage of Coca-Cola HBC revenue 35.5% 19.1% 45.4% of Group revenue in of Group revenue in of Group revenue in 2020 2020 2020
9.6% 8.7% 13.0% Comparable EBIT Comparable EBIT Comparable EBIT margin 2020 margin 2020 margin 2020
28 27,722 countries across employees Energy Coffee Plant‑based Premium Spirits three continents 5% <1% <1% 3%
Earning our licence to operate We believe that the only way to create long-term value for all our stakeholders is through sustainable growth. We contribute to the socio-economic development of the communities where we operate, integrate sustainability into every aspect of our strategy and strive to reduce our environmental impact.
In addition to this broad beverage portfolio, we benefit from a targeted snacks business Performance, unless stated otherwise, is negatively impacted by the change in which represented <2% of revenue in 2020. You can read more about this on page 28. classification of our Russian juice business (Multon), from a joint operation to a joint venture, following its re-organisation, and positively impacted by the inclusion of H1 2020 performance of Bambi, the acquisition of which was cycled in H2 2020. In addition, profitability is positively impacted by the Group’s election to classify share of results of integral equity method investments within operating profit. Like-for-like performance adjusts for all three impacts. For a table of performance measures excluding these impacts, please refer to the ‘Supplementary information’ section. 16 COCA‑COLA HBC
Our business model
Our business model describes Delivering value for the essence of what we do: how we create value for all our our stakeholders stakeholders from the resources and relationships we use to operate the business.
1. Our resources and relationships 2. What we do
Human We are a strategic bottling partner Our success is dependent on the of The Coca‑Cola Company passion, engagement and customer We have the exclusive authorisation to bottle and sell the beverages focus of our talented people. We cultivate of The Coca-Cola Company in our 28 markets. We also partner their potential and empower them to with other beverage businesses such as Monster, Brown-Forman, leverage opportunities for growth, both Campari and Edrington to sell their products in our markets. for themselves and our Company. How our partnership works Natural The Coca-Cola Company owns, develops and markets its brands To produce our products, we use raw to the end consumer. Coca-Cola HBC is responsible for producing, materials including water, sugar, fruit distributing, and selling these beverages. We work together to concentrate, energy, glass, aluminium, ensure we have the right portfolio for our customers and consumers PET resin and paper. We source these in each market and to ensure excellent, efficient execution. using sustainable practices and seek We buy concentrate from The Coca-Cola Company under an to use them efficiently. incidence-based pricing model. We also share marketing costs and responsibilities, with The Coca-Cola Company marketing to Social and relationships consumers while we take responsibility for trade marketing to Maintaining our reputation and the our customers. trust of our key stakeholders is essential Read more about how we leverage our unique 24/7 portfolio to our business. Our most valuable and win in the marketplace on pages 26-33. stakeholder relationships are with The Coca-Cola Company, our people and the communities we operate in, our customers, suppliers, governments and regulators.
Financial Our business activities require financial capital and we seek to allocate it efficiently. This capital is provided by our equity and debt holders, as well as cash 3. How we do it flow earned from our operations.
Intellectual Innovation is embedded in our culture and the intellectual property created from that includes new packaging, new products and improvements in manufacturing, logistics and sales execution. As we expand our 24/7 1. Working with 2. Producing beverages portfolio, the importance of innovation suppliers efficiently and is increasing. We work with our suppliers sustainably to procure high-quality Using concentrate from Manufacturing ingredients, sustainably The Coca-Cola Company As a strategic partner, our plant and sourced raw materials and along with other ingredients, logistics assets allow us to prepare, equipment and services we prepare, package and package and deliver our products to required to produce deliver products with an meet the demands of customers beverages. optimised manufacturing and consumers. infrastructure and logistics network. 16 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 17 SR
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Our business model FS
SSR
Our business model describes We support the UN sustainability agenda and have linked our strategy SI Delivering value for the essence of what we do: pillars, material issues, sustainability commitments and the value created how we create value for all our for our stakeholders to the UN Sustainable Development Goals (SDGs). our stakeholders stakeholders from the resources You can find information on this in the table below, integrated into and relationships we use to discussion on our five growth pillars and also on pages 46, 50-52 and 109. operate the business.
1. Our resources and relationships 2. What we do 4. Value created for our stakeholders in 2020
We are a strategic bottling partner Human For our people Our success is dependent on the of The Coca‑Cola Company • We provided jobs directly to 27,722 people passion, engagement and customer We have the exclusive authorisation to bottle and sell the beverages in 28 countries focus of our talented people. We cultivate of The Coca-Cola Company in our 28 markets. We also partner • We provided 720,146 hours of training their potential and empower them to with other beverage businesses such as Monster, Brown-Forman, • Median basic salary ratio women/men: 0.98 leverage opportunities for growth, both Campari and Edrington to sell their products in our markets. Brand Consumer for themselves and our Company. Ownership Marketing How our partnership works Portfolio Concentrate For customers Development Supply Natural The Coca-Cola Company owns, develops and markets its brands • We partnered with customers to address To produce our products, we use raw to the end consumer. Coca-Cola HBC is responsible for producing, pandemic-related challenges and co-create value materials including water, sugar, fruit distributing, and selling these beverages. We work together to Data & Insights • We increased the frequency of our customer concentrate, energy, glass, aluminium, ensure we have the right portfolio for our customers and consumers Portfolio Strategy engagement, providing customers the best support PET resin and paper. We source these in each market and to ensure excellent, efficient execution. Investments in Revenue Growth we could offer using sustainable practices and seek We buy concentrate from The Coca-Cola Company under an Capabilities Plans • In the marketplace we achieved a new total number to use them efficiently. incidence-based pricing model. We also share marketing costs Talent Exchange of almost 485,000 energy-efficient coolers and responsibilities, with The Coca-Cola Company marketing to World Without Waste Social and relationships consumers while we take responsibility for trade marketing to For the communities where we operate Maintaining our reputation and the our customers. • We trained 134,548 young people through trust of our key stakeholders is essential our #YouthEmpowered programme to to our business. Our most valuable Read more about how we leverage our unique 24/7 portfolio boost employability and win in the marketplace on pages 26-33. Customer Marketing, stakeholder relationships are with Production of Execution • We invested €8 million in local community initiatives The Coca-Cola Company, our people Beverages & Management and the communities we operate in, our Portfolio Sales Bottling CapEx For shareholders customers, suppliers, governments & Route to Investments Market • We controlled costs to support margins, finding, and regulators. and delivering, €120 million of cost savings in 2020 • In recognition of our business’ strength and future Financial opportunities, the Board has proposed a dividend Our business activities require financial of €0.64, a 3.2% increase compared with last year capital and we seek to allocate it efficiently. This capital is provided by our For wider stakeholders equity and debt holders, as well as cash 3. How we do it • We paid a total of € 3.8 billion in taxes flow earned from our operations. • Our business activities generate revenue for our customers, suppliers and contractors as well as Intellectual income for our employees Innovation is embedded in our culture and the intellectual property created from that includes new packaging, new products and improvements in manufacturing, logistics and sales For consumers execution. As we expand our 24/7 1. Working with 2. Producing beverages 3. Partnering with 4. Serving our • We provide high-quality beverages and healthy portfolio, the importance of innovation suppliers efficiently and our customers consumers and options, reducing calories per 100ml of sparkling is increasing. We work with our suppliers sustainably We grow by supporting communities soft drinks by 11.2% in 2020 compared to the to procure high-quality Using concentrate from our customers’ growth. Our 24/7 product portfolio 2015 baseline Manufacturing ingredients, sustainably The Coca-Cola Company To do this, we leverage caters to a growing range of As a strategic partner, our plant and sourced raw materials and along with other ingredients, our 24/7 portfolio and tastes and preferences with For suppliers logistics assets allow us to prepare, equipment and services we prepare, package and segmented sales a wider choice of healthier • Our spend with suppliers was €3 billion package and deliver our products to required to produce deliver products with an execution to grow the options and premium • We contributed to sustainable agricultural practices meet the demands of customers beverages. optimised manufacturing overall beverage industry, products, and we continually and farmer livelihoods by purchasing certified and consumers. infrastructure and focusing on areas of high innovate to remain relevant. sustainable agricultural ingredients for 82% of key logistics network. value opportunity and ingredients purchased executing with excellence. 18 COCA‑COLA HBC
Our socio‑economic impact Making an impact
We believe that business has Our impact Our socio‑economic impact a responsibility to address the We believe that the only way to create In conducting socio-economic studies, long-term value for all our stakeholders is we use input-output modelling to generate key global challenges affecting through sustainable growth. Coca-Cola HBC estimates of jobs supported and economic all of us and our shared planet. creates value for the societies in which we value added. Data we use in this process Now, more than ever, we strive operate by producing delicious, high-quality includes our financial information (revenues, n crea products that delight consumers and create expenses, taxes, sales volume and profits) .8b ted for Coca-Cola HBC to be a growth opportunities for our customers and as well as some data from 1 in ad 1 de suppliers, as well as through employment, The Coca-Cola Company. While rigorous, € d v force for positive change and al ue investment and taxes. Measuring and the process involves statistical modelling, to a partner in building a more to striving to increase these contributions which should be considered when interpreting ta l sustainable future. co through the sustainable growth of our and using the results from the studies. n tr business is an important part of our purpose. ib Modelling enables an assessment of three u t io While the business model on pages 16-17 key dimensions of impact: n v describes the value our business creates for ia • Direct: immediate effect in terms o u all our stakeholders, this is an incomplete r of employment, wages and output v picture of impact and value. Just as we a lu • Indirect: subsequent effect in the e measure and manage CO2 emissions c supply chain h generated both directly from our plants and a i n production and indirectly from activities • Induced: effect caused by staff spend such as raw materials sourcing, we also seek on goods or services to measure and understand the direct and Note that we do not conduct indirect socio-economic impacts of our socio-economic studies for all of our activities. Since 2010, we have conducted markets every year; studies are conducted socio-economic impact studies in our for each market on a rolling basis. In 2020, markets to gain a better understanding we conducted studies for five markets, “We support hundreds of the range and extent of the value created adding this information to the aggregate of thousands of jobs in our ecosystem. results from all socio-economic impact We support hundreds of thousands of jobs studies for the period 2017-2020. As we in our communities in our communities through direct and continue this process in 2021, even more through direct and indirect employment. We nurture our people, of the impact related to the COVID-19 offering opportunities for promotion and pandemic will become evident. indirect employment.” development. We have a wide ecosystem of suppliers and our demand helps to sustain their businesses, while at the same time we work with them to improve the sustainability of their supply chains. We invest in the markets in which we operate and we work with our customers to create shared value. Finally, taxes paid by us as well as by our suppliers and trade partners make an important contribution to the fiscal budgets of governments in the markets in which we operate. 18 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 19 SR
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Our socio‑economic impact FS
SSR Making SI an impact
We believe that business has Our impact Our socio‑economic impact How we contribute to the socio‑economic development of our communities a responsibility to address the We believe that the only way to create In conducting socio-economic studies, long-term value for all our stakeholders is we use input-output modelling to generate key global challenges affecting through sustainable growth. Coca-Cola HBC estimates of jobs supported and economic all of us and our shared planet. creates value for the societies in which we value added. Data we use in this process Now, more than ever, we strive operate by producing delicious, high-quality includes our financial information (revenues, n crea products that delight consumers and create expenses, taxes, sales volume and profits) .8b ted for Coca-Cola HBC to be a growth opportunities for our customers and as well as some data from 1 in ution to the ec ad 1 ontrib onomy de force for positive change and suppliers, as well as through employment, The Coca-Cola Company. While rigorous, € C d v alu investment and taxes. Measuring and the process involves statistical modelling, e t a partner in building a more 374,222 o to striving to increase these contributions which should be considered when interpreting indirect employment ta l sustainable future. co through the sustainable growth of our and using the results from the studies. n tr business is an important part of our purpose. ib Modelling enables an assessment of three u t 338,413 1 = 11.3 i o While the business model on pages 16-17 key dimensions of impact: 2017-2020 cumulative job in the jobs in our n v describes the value our business creates for ia • Direct: immediate effect in terms young people trained system community o u all our stakeholders, this is an incomplete r of employment, wages and output v picture of impact and value. Just as we a all footp lu • Indirect: subsequent effect in the ver rint e measure and manage CO emissions O 2 720,146 €955.8m c supply chain h generated both directly from our plants and training hours total employee costs a i n production and indirectly from activities • Induced: effect caused by staff spend 33,016 such as raw materials sourcing, we also seek on goods or services employees in the Coca-Cola System in our markets to measure and understand the direct and Note that we do not conduct indirect socio-economic impacts of our socio-economic studies for all of our More than activities. Since 2010, we have conducted markets every year; studies are conducted >98% 17,000 56 98 1 618m socio-economic impact studies in our for each market on a rolling basis. In 2020, of our total suppliers plants distribution 1.6m potential markets to gain a better understanding we conducted studies for five markets, procurement = centres customers consumers “We support hundreds of the range and extent of the value created adding this information to the aggregate in our ecosystem. results from all socio-economic impact >€2.9bn spent with of thousands of jobs studies for the period 2017-2020. As we We support hundreds of thousands of jobs local suppliers in our communities in our communities through direct and continue this process in 2021, even more through direct and indirect employment. We nurture our people, of the impact related to the COVID-19 offering opportunities for promotion and pandemic will become evident. indirect employment.” development. We have a wide ecosystem of suppliers and our demand helps to sustain €465m their businesses, while at the same time we capex spend work with them to improve the sustainability of their supply chains. We invest in the markets in which we operate and we work €3.8bn with our customers to create shared value. paid in taxes. This includes taxes paid directly by Finally, taxes paid by us as well as by our Coca-Cola HBC and taxes paid by our suppliers suppliers and trade partners make an and trade partners and their suppliers and trade important contribution to the fiscal budgets partners, related to our activities. of governments in the markets in which we operate.
Notes on methodology: • Numbers presented are aggregated based on the local socio-economic studies from Coca-Cola HBC markets published between 2017 and 2020. • All KPIs represent annual impact. • Where applicable and relevant in local socio-economic studies, the impact of other entities of the Coca-Cola System is included. 1. As per our internal master data records, including both direct and indirect active outlets (December 2020 snapshot). 20 COCA‑COLA HBC
Stakeholder engagement Our stakeholder ecosystem
Our people Our customers Our partners Our communities Our consumers Government Our shareholders The Coca‑Cola NGOs in efficiency Company
• Enhanced safety requirements • Trading and movement restrictions • Rising costs of ingredients, labour, • Financial and other support for • Ensuring product supply • COVID-19 related • Understanding the impact • Support for consumers, • Climate adaptation, move • Practicalities and security related • Supply and delivery challenges packaging material, energy and frontline workers tackling and safety regulations in addition to of COVID-19 and speed customers and communities toward net zero emissions to home working • New health and safety regulations water COVID-19 • Continuously evolving consumer health policies of recovery • Profitable growth and water and energy use • Mental wellbeing • Opportunities for growth and • Minimising the environmental • Climate change products and packages to • Movement of people • Quality and effectiveness opportunities • Packaging waste Key issues • Building the best teams value creation impact of water and energy • Waste from our packaging meet consumers’ needs and goods across and of governance • Value share in our markets • Sustainable sourcing resources, as well as emissions for healthy hydration, between countries in the industry • Offering a 24/7 beverage portfolio • Water conservation • Profitability and growth • Sustainable sourcing • Partnerships with quality, taste, innovation that meets the changing • Empowering youth and women • Industry and/or product- potential of the business communities and and convenience preferences of consumers specific policies, such as • Increasing interest in grassroots organisations taxes, restrictions the integration of ESG • Diversity and human rights or regulations into strategy • Environmental policies
• Focused and continuous • Key account managers engage • These efforts were supported • To understand what was needed • We understand consumers’ • Much of our engagement • Through open, honest • Day-to-day interaction • We include NGOs and conversations related to new health with our customers at a strategic during the year by online Innovation by our communities and support needs and preferences with governments is communication during our as business partners, joint community partners in our and safety procedures level, also providing a vital link to Days for our suppliers where key those fighting COVID-19 on the through collecting conducted at an industry Annual General Meetings, projects, joint business leadership development • Employee Assistance Programme support with pandemic-related strategic partners in packaging, frontlines, we partnered with NGOs, consumer insights. While level through trade investor roadshows, press planning, functional groups programmes, offering • Regular employee surveys to regulatory changes manufacturing and digital supply including the Red Cross this is also part of The associations. This continued releases and results on strategic issues and online training for managing understand and act on needs • Our business developers continued chain applications shared their most • We engaged with customers and Coca-Cola Company’s role, throughout the COVID-19 briefings, and ongoing ‘top-to-top’ senior virtual teams and leading in to make regular visits to outlets innovative ideas partners to understand what skills we gain access to these pandemic. We partner with dialogue with analysts management forums times of crisis How we engage and wellbeing insights as well local governments to tackle and investors • Offering personalised experiences • We provided additional support • Feedback received through our and training young adults need in • We partner with specific waste collection challenges and opportunities for personal and including financial, a free annual Group Stakeholder Forum specific markets • Consumers also provide • Through providing NGOs for targeted projects and water availability professional growth legal advisory service, online • Regular, ongoing interaction feedback on social disclosure on non-financial • We engage through our media and via the metrics to allow the • Ongoing dialogue with employee training, flexible supply and with the Coca-Cola System’s annual Group Stakeholder consumer hotlines monitoring of our progress representative bodies merchandising services Central Procurement Group Forum and our annual and our technology and on ESG issues materiality assessment, commodity suppliers as well as through ad hoc meetings
• Additional employee surveys • We increased engagement to • Our long-term work with • We supported the frontline • To address changing • In response to regulations • Ongoing engagement • Our partnership added to • We provided direct support enabled us to provide more provide the best support we could technology partners meant we efforts to tackle the COVID-19 consumer occasions, and levies on certain allows a two-way dialogue the strength and depth with grants from The support to people working under offer, but we suspended customer could easily expand the use of pandemic with financial support such as upscaled at-home types of plastic packaging, between the Company and of our 24/7 portfolio, by Coca-Cola Foundation, different conditions surveys to avoid over burdening remote monitoring tools such as (via the Coca-Cola Foundation), experiences and greater we have lightweighted investors, ensuring both launching Topo Chico Hard product donation and • Ongoing dialogue with them. While we do not have virtual and augmented reality smart product donations, and by affordability, we packages and used more good understanding of Seltzer and Costa Coffee volunteering support employees meant engagement short-term data on the impact of glasses for remote quality, safety leveraging our supply chain to strengthened our sustainable materials, and Company strategy in the • The new Open Like Never • In partnership with NGOs, levels stayed high, despite the our efforts, we believe that they will and environmental audits and produce safety equipment single-serve multi-packs we are on track to help market and that investor Before campaign also we include members of our COVID-19 pandemic solidify long-term relationships virtual plant tours • We re-purposed for appertivo-at-home collect the equivalent of concerns are considered in provided a call to action for communities in our training • Our work with partners to reduce #YouthEmpowered tools to while also introducing entry 75% of primary packaging strategic decision-making communities to support programmes; this made our water and energy use has also address employability to support packs with price points and make 100% of our • Increased requirement for their local businesses, up 13% of our first-time brought efficiencies the hard hit hospitality and tourism attractive to consumers consumer packaging standardisation of ESG and translated into managers training Outcome of engagement sectors in several markets, with new • While we strive to reduce recyclable by 2025 disclosures led us to start tangible support for our capacity in 2020 modules designed to build skills and consumer complaints, we • To address health and reporting against SASB in retail partners re-train employees also implement learnings nutrition concerns, we 2020, in addition to our from this feedback, continue to add low- or existing disclosures aligned including market specific no-sugar drink options in with GRI and TCFD improvement plans every market and provide among others transparent nutritional information Growth pillar
Read more on pages Read more on pages Read more on pages Read more on pages 38-41, 93. 26-33, 53, 92. 34-37, 42-47, 53. 18-19, 42-47. 20 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 21 SR
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Stakeholder engagement FS
SSR
The strength of our stakeholder ecosystem SI Our stakeholder enabled us to ensure the safety of our people, partners and communities while maintaining ecosystem production throughout the year.
Our people Our customers Our partners Our communities Our consumers Government Our shareholders The Coca‑Cola NGOs in efficiency Company
• Enhanced safety requirements • Trading and movement restrictions • Rising costs of ingredients, labour, • Financial and other support for • Ensuring product supply • COVID-19 related • Understanding the impact • Support for consumers, • Climate adaptation, move • Practicalities and security related • Supply and delivery challenges packaging material, energy and frontline workers tackling and safety regulations in addition to of COVID-19 and speed customers and communities toward net zero emissions to home working • New health and safety regulations water COVID-19 • Continuously evolving consumer health policies of recovery • Profitable growth and water and energy use • Mental wellbeing • Opportunities for growth and • Minimising the environmental • Climate change products and packages to • Movement of people • Quality and effectiveness opportunities • Packaging waste Key issues • Building the best teams value creation impact of water and energy • Waste from our packaging meet consumers’ needs and goods across and of governance • Value share in our markets • Sustainable sourcing resources, as well as emissions for healthy hydration, between countries in the industry • Offering a 24/7 beverage portfolio • Water conservation • Profitability and growth • Sustainable sourcing • Partnerships with quality, taste, innovation that meets the changing • Empowering youth and women • Industry and/or product- potential of the business communities and and convenience preferences of consumers specific policies, such as • Increasing interest in grassroots organisations taxes, restrictions the integration of ESG • Diversity and human rights or regulations into strategy • Environmental policies
• Focused and continuous • Key account managers engage • These efforts were supported • To understand what was needed • We understand consumers’ • Much of our engagement • Through open, honest • Day-to-day interaction • We include NGOs and conversations related to new health with our customers at a strategic during the year by online Innovation by our communities and support needs and preferences with governments is communication during our as business partners, joint community partners in our and safety procedures level, also providing a vital link to Days for our suppliers where key those fighting COVID-19 on the through collecting conducted at an industry Annual General Meetings, projects, joint business leadership development • Employee Assistance Programme support with pandemic-related strategic partners in packaging, frontlines, we partnered with NGOs, consumer insights. While level through trade investor roadshows, press planning, functional groups programmes, offering • Regular employee surveys to regulatory changes manufacturing and digital supply including the Red Cross this is also part of The associations. This continued releases and results on strategic issues and online training for managing understand and act on needs • Our business developers continued chain applications shared their most • We engaged with customers and Coca-Cola Company’s role, throughout the COVID-19 briefings, and ongoing ‘top-to-top’ senior virtual teams and leading in to make regular visits to outlets innovative ideas partners to understand what skills we gain access to these pandemic. We partner with dialogue with analysts management forums times of crisis How we engage and wellbeing insights as well local governments to tackle and investors • Offering personalised experiences • We provided additional support • Feedback received through our and training young adults need in • We partner with specific waste collection challenges and opportunities for personal and including financial, a free annual Group Stakeholder Forum specific markets • Consumers also provide • Through providing NGOs for targeted projects and water availability professional growth legal advisory service, online • Regular, ongoing interaction feedback on social disclosure on non-financial • We engage through our media and via the metrics to allow the • Ongoing dialogue with employee training, flexible supply and with the Coca-Cola System’s annual Group Stakeholder consumer hotlines monitoring of our progress representative bodies merchandising services Central Procurement Group Forum and our annual and our technology and on ESG issues materiality assessment, commodity suppliers as well as through ad hoc meetings
• Additional employee surveys • We increased engagement to • Our long-term work with • We supported the frontline • To address changing • In response to regulations • Ongoing engagement • Our partnership added to • We provided direct support enabled us to provide more provide the best support we could technology partners meant we efforts to tackle the COVID-19 consumer occasions, and levies on certain allows a two-way dialogue the strength and depth with grants from The support to people working under offer, but we suspended customer could easily expand the use of pandemic with financial support such as upscaled at-home types of plastic packaging, between the Company and of our 24/7 portfolio, by Coca-Cola Foundation, different conditions surveys to avoid over burdening remote monitoring tools such as (via the Coca-Cola Foundation), experiences and greater we have lightweighted investors, ensuring both launching Topo Chico Hard product donation and • Ongoing dialogue with them. While we do not have virtual and augmented reality smart product donations, and by affordability, we packages and used more good understanding of Seltzer and Costa Coffee volunteering support employees meant engagement short-term data on the impact of glasses for remote quality, safety leveraging our supply chain to strengthened our sustainable materials, and Company strategy in the • The new Open Like Never • In partnership with NGOs, levels stayed high, despite the our efforts, we believe that they will and environmental audits and produce safety equipment single-serve multi-packs we are on track to help market and that investor Before campaign also we include members of our COVID-19 pandemic solidify long-term relationships virtual plant tours • We re-purposed for appertivo-at-home collect the equivalent of concerns are considered in provided a call to action for communities in our training • Our work with partners to reduce #YouthEmpowered tools to while also introducing entry 75% of primary packaging strategic decision-making communities to support programmes; this made our water and energy use has also address employability to support packs with price points and make 100% of our • Increased requirement for their local businesses, up 13% of our first-time brought efficiencies the hard hit hospitality and tourism attractive to consumers consumer packaging standardisation of ESG and translated into managers training Outcome of engagement sectors in several markets, with new • While we strive to reduce recyclable by 2025 disclosures led us to start tangible support for our capacity in 2020 modules designed to build skills and consumer complaints, we • To address health and reporting against SASB in retail partners re-train employees also implement learnings nutrition concerns, we 2020, in addition to our from this feedback, continue to add low- or existing disclosures aligned including market specific no-sugar drink options in with GRI and TCFD improvement plans every market and provide among others transparent nutritional information Growth pillar
Read more on pages Read more on pages Read more on pages Read more on pages Read more on pages Read more on pages Read more on pages Read more on pages Read more on pages 38-41, 93. 26-33, 53, 92. 34-37, 42-47, 53. 18-19, 42-47. 26-29. 18-19, 42-47. 53, 93, 94, 132. 26-33, 38-47, 92-93. 42-47, 53. 22 COCA‑COLA HBC
Market review Adapting to evolving trends
Market trends How we are responding Delivered through Growth pillar Dynamic retail environment With a commitment to safety as our first and primary priority, we implemented best practices 2020 marked the biggest shift in retail in decades. The out-of-home channel has taken that allowed supply chains to remain fully operational and customers to be continuously +0.7pp the biggest hit, with restrictions on its operations continuing into 2021. Online and discounters served. We were quick to assess changing consumer needs, shifting package offerings The non-alcoholic were the best performing channels and small formats/convenience were also on the rise, to ensure that customers had the right product on their shelves, and maximising the impact ready-to-drink especially during the lockdown periods. To maintain their supply chains, retailers streamlined of our sales force by redeploying them based on market needs. Demonstrating the customer (NARTD) category the options on offer in their stores. High-demand brands became even more prominent centricity of our business, we supported and celebrated the reopening of the out-of-home posted 11% value as a result. The economic effects of the COVID-19 pandemic led to a fall in disposable income, customers with initiatives such as our inspirational Open Like Never Before campaign. growth in discounters with shopper focus on value fuelling the growth of discounters. and we gained 0.7pp of value share to 20%
Digital evolution E-commerce is one of our most dynamic channels and offers great growth potential. Trends toward digital channels, which were evident prior to 2020, drastically accelerated In 2020, we expanded our reach, partnering with many more customers including food +60% as consumers adopt faster virtual solutions and technology during the COVID-19 pandemic. delivery platforms. We have further invested in digital platforms, such as our B2B platform, Revenue in the The performance of daily tasks, such as working, getting education or banking online, has led Hybris, which allows for direct orders from our customers. With the success of our big data e-commerce channel consumers to become more comfortable with technology and to appreciate how much and advanced analytics (BDAA) pilot in Nigeria to identify customer needs, we are expanding grew by 60% in 2020 it is needed. Online shopping has seen important growth and online food orders have boomed, the model in the rest of our territories. In addition, our investments in connected coolers compared with 2019 benefitting from restricted activity in the out-of-home channel. continued despite the COVID-19 pandemic, enhancing our sales teams’ productivity.
Regulatory environment We worked with key stakeholders to ensure the safe supply of products and to support key In 2020, the regulatory environment was deeply affected by the onset of the COVID-19 sectors of the economy. In parallel, we made good progress on the Coca-Cola System’s 44% pandemic. During the first phase, border management and supply chain continuity were the key World Without Waste initiative and we are on track to help collect the equivalent of 75% In 2020, we recovered challenges. The focus subsequently shifted to kickstarting the economy, protecting employment of primary packaging and make 100% of our consumer packaging recyclable by 2025. 44% of the primary and lightening the burden on businesses through tax deferrals and the subsidisation of salaries We continue to enrich our portfolio with low- or no-sugar drink options in every market, packaging we put and social contributions. In the EU, the Green Deal, a set of policy initiatives to make Europe provide transparent nutritional information and have committed to a 25% calorie reduction in the marketplace climate neutral by 2051, remained high on the agenda. A new levy on non-recycled plastic per 100ml of sparkling beverage by 2025 compared with a 2015 baseline. packaging waste was introduced as part of the 2021-2027 EU Multiannual Financial Framework.
Consumer preferences The rising aperitivo-at-home occasion enabled us to further nurture premium propositions. Consumer preferences shifted significantly as people adjusted to restrictions and lockdowns. In hydration, we introduced Aquarius functional water, in energy we broadened our portfolio +8.5% The COVID-19 pandemic strengthened interest in health and wellness, with people looking not to span affordable options such as Predator, as well as premium brands such as Coke Single serve multi- only for organic offerings, but also those with less sugar or fat and for functional products Energy. Costa Coffee and Topo Chico Hard Seltzer expanded our 24/7 portfolio to capture packs in the at-home that can enhance immunity. Away-from-home needs are now fulfilled at home, including more drinking moments. On top of innovation, a rigorous focus on the highest potential channel grew by 8.5% in socialising, working or training. Many consumers are willing to spend more to replicate brands led to market share gains in most markets. To address consumer needs for both the second half of 2020 out-of-home experiences in their homes and consumers turn to iconic brands they trust. premium at-home experiences and greater affordability, we strengthened single-serve compared with the On the other hand, the economic disruption caused by the COVID-19 pandemic has also multi-pack offerings whilst leveraging entry packs with price points attractive to consumers. respective period increased price-sensitivity, requiring brands to be agile to address both premiumisation last year and affordability needs.
Sustainability Amid a year of unique challenges, we protected our people and deployed multiple relief Environmental, social and corporate governance (ESG) issues became even more prominent initiatives both for our communities, including medical staff and vulnerable people, and -23% following the outbreak of the COVID-19 pandemic. Employee health & safety and community for our customers. Reducing our environmental footprint and supporting our communities Absolute carbon support gained notable importance. In addition, investors have become more activist on is part of our vision to be the leading 24/7 beverage partner. Through Mission 2025, we emissions in operations climate change issues and sustainable supply chains. While plastic waste has remained a key pursue our strategic priorities on climate action, sustainable packaging, water stewardship, were lower by 23% consideration, the focus on reducing emissions has also increased. Consumers are becoming low- and no-calorie products and community engagement. In line with the goal of limiting in 2020 compared increasingly aware of the impact their decisions can have on the environment, expecting more global warming to 1.5°C above pre-industrial levels, we have established a new science-based with 2017 from manufacturers and governments. Effective solutions, along with transparency on ESG target to reduce emissions across our entire value chain. practices, will help inspire trust, build brand loyalty and eventually create competitive advantage. 22 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 23 SR
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Market review FS
SSR Adapting to SI evolving trends
Market trends How we are responding Delivered through Growth pillar Dynamic retail environment With a commitment to safety as our first and primary priority, we implemented best practices 2020 marked the biggest shift in retail in decades. The out-of-home channel has taken that allowed supply chains to remain fully operational and customers to be continuously +0.7pp the biggest hit, with restrictions on its operations continuing into 2021. Online and discounters served. We were quick to assess changing consumer needs, shifting package offerings The non-alcoholic were the best performing channels and small formats/convenience were also on the rise, to ensure that customers had the right product on their shelves, and maximising the impact ready-to-drink especially during the lockdown periods. To maintain their supply chains, retailers streamlined of our sales force by redeploying them based on market needs. Demonstrating the customer (NARTD) category the options on offer in their stores. High-demand brands became even more prominent centricity of our business, we supported and celebrated the reopening of the out-of-home posted 11% value as a result. The economic effects of the COVID-19 pandemic led to a fall in disposable income, customers with initiatives such as our inspirational Open Like Never Before campaign. growth in discounters with shopper focus on value fuelling the growth of discounters. and we gained 0.7pp of value share to 20%
Digital evolution E-commerce is one of our most dynamic channels and offers great growth potential. Trends toward digital channels, which were evident prior to 2020, drastically accelerated In 2020, we expanded our reach, partnering with many more customers including food +60% as consumers adopt faster virtual solutions and technology during the COVID-19 pandemic. delivery platforms. We have further invested in digital platforms, such as our B2B platform, Revenue in the The performance of daily tasks, such as working, getting education or banking online, has led Hybris, which allows for direct orders from our customers. With the success of our big data e-commerce channel consumers to become more comfortable with technology and to appreciate how much and advanced analytics (BDAA) pilot in Nigeria to identify customer needs, we are expanding grew by 60% in 2020 it is needed. Online shopping has seen important growth and online food orders have boomed, the model in the rest of our territories. In addition, our investments in connected coolers compared with 2019 benefitting from restricted activity in the out-of-home channel. continued despite the COVID-19 pandemic, enhancing our sales teams’ productivity.
Regulatory environment We worked with key stakeholders to ensure the safe supply of products and to support key In 2020, the regulatory environment was deeply affected by the onset of the COVID-19 sectors of the economy. In parallel, we made good progress on the Coca-Cola System’s 44% pandemic. During the first phase, border management and supply chain continuity were the key World Without Waste initiative and we are on track to help collect the equivalent of 75% In 2020, we recovered challenges. The focus subsequently shifted to kickstarting the economy, protecting employment of primary packaging and make 100% of our consumer packaging recyclable by 2025. 44% of the primary and lightening the burden on businesses through tax deferrals and the subsidisation of salaries We continue to enrich our portfolio with low- or no-sugar drink options in every market, packaging we put and social contributions. In the EU, the Green Deal, a set of policy initiatives to make Europe provide transparent nutritional information and have committed to a 25% calorie reduction in the marketplace climate neutral by 2051, remained high on the agenda. A new levy on non-recycled plastic per 100ml of sparkling beverage by 2025 compared with a 2015 baseline. packaging waste was introduced as part of the 2021-2027 EU Multiannual Financial Framework.
Consumer preferences The rising aperitivo-at-home occasion enabled us to further nurture premium propositions. Consumer preferences shifted significantly as people adjusted to restrictions and lockdowns. In hydration, we introduced Aquarius functional water, in energy we broadened our portfolio +8.5% The COVID-19 pandemic strengthened interest in health and wellness, with people looking not to span affordable options such as Predator, as well as premium brands such as Coke Single serve multi- only for organic offerings, but also those with less sugar or fat and for functional products Energy. Costa Coffee and Topo Chico Hard Seltzer expanded our 24/7 portfolio to capture packs in the at-home that can enhance immunity. Away-from-home needs are now fulfilled at home, including more drinking moments. On top of innovation, a rigorous focus on the highest potential channel grew by 8.5% in socialising, working or training. Many consumers are willing to spend more to replicate brands led to market share gains in most markets. To address consumer needs for both the second half of 2020 out-of-home experiences in their homes and consumers turn to iconic brands they trust. premium at-home experiences and greater affordability, we strengthened single-serve compared with the On the other hand, the economic disruption caused by the COVID-19 pandemic has also multi-pack offerings whilst leveraging entry packs with price points attractive to consumers. respective period increased price-sensitivity, requiring brands to be agile to address both premiumisation last year and affordability needs.
Sustainability Amid a year of unique challenges, we protected our people and deployed multiple relief Environmental, social and corporate governance (ESG) issues became even more prominent initiatives both for our communities, including medical staff and vulnerable people, and -23% following the outbreak of the COVID-19 pandemic. Employee health & safety and community for our customers. Reducing our environmental footprint and supporting our communities Absolute carbon support gained notable importance. In addition, investors have become more activist on is part of our vision to be the leading 24/7 beverage partner. Through Mission 2025, we emissions in operations climate change issues and sustainable supply chains. While plastic waste has remained a key pursue our strategic priorities on climate action, sustainable packaging, water stewardship, were lower by 23% consideration, the focus on reducing emissions has also increased. Consumers are becoming low- and no-calorie products and community engagement. In line with the goal of limiting in 2020 compared increasingly aware of the impact their decisions can have on the environment, expecting more global warming to 1.5°C above pre-industrial levels, we have established a new science-based with 2017 from manufacturers and governments. Effective solutions, along with transparency on ESG target to reduce emissions across our entire value chain. practices, will help inspire trust, build brand loyalty and eventually create competitive advantage. 24 COCA‑COLA HBC
Our purpose and strategy We will deliver on our vision through a clear purpose and strategy To deliver on our vision of being the Built on five key pillars of growth, each of which is a core strength or competitive advantage, our 2025 strategy leading 24/7 beverage partner, we is underpinned by new Growth Mindset Values and introduced a new strategy in 2019. guided by clear targets. This plan to achieve our vision Growth Story 2025 gives us a roadmap reflects the significant opportunities ahead that will help us deliver growth and value for our Company and all to grow with our customers and to delight of our stakeholders. consumers across our 28 markets, around the clock.
Our purpose Our growth pillars
We are devoted to LEVERAGE OUR growing every UNIQUE 24/7 PORTFOLIO customer and 1 delighting every Read more on pages 26-29. consumer 24/7
WIN IN THE 2 MARKETPLACE Read more on pages 30-33.
By nurturing passionate & FUEL GROWTH THROUGH empowered COMPETITIVENESS & INVESTMENT teams 3 of people Read more on pages 34-37.
CULTIVATE THE POTENTIAL 4 OF OUR PEOPLE Read more on pages 38-41. While enriching our communities & caring for the environment EARN OUR LICENCE 5 TO OPERATE Read more on pages 42-47.
Our Growth Mindset Values
WINNING WITH CUSTOMERS NURTURING OUR PEOPLE We are the selling organisation We believe in our people, devoted to providing innovative and have a passion to develop solutions to create shared value ourselves and others
Read more about our values on pages 38-41. 24 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 25 SR
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SSR We will deliver on our vision through SI a clear purpose and strategy To deliver on our vision of being the Built on five key pillars of growth, each of which is a core While 2020 brought unprecedented challenges, We expect a strong recovery in FX-neutral revenues, strength or competitive advantage, our 2025 strategy Growth Story 2025 allowed us to be clear about what along with a small increase in EBIT margin. Looking further leading 24/7 beverage partner, we is underpinned by new Growth Mindset Values and would enable our long-term success as well as what we ahead, beverages continue to be a high-potential industry introduced a new strategy in 2019. guided by clear targets. This plan to achieve our vision needed to adapt in 2020 to ensure we kept on our path. and we see many growth opportunities within our evolving Growth Story 2025 gives us a roadmap reflects the significant opportunities ahead that will help The actions we took were fully in line with this vision and brand portfolio and our markets. We therefore believe us deliver growth and value for our Company and all the strategic growth pillars which underpin it. In 2021, we that, once the recovery is underway, our business can to grow with our customers and to delight of our stakeholders. will take a similar approach, adapting and prioritising the return to the revenue and EBIT margin growth trajectory consumers across our 28 markets, most relevant initiatives within our pillars as the situation that we introduced alongside our Growth Story around the clock. requires. Our financial targets for the business in 2021 2025 strategy. reflect the continuing impact of the COVID-19 pandemic.
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CULTIVATE THE POTENTIAL • Invest in building the best teams in the industry Employee OF OUR PEOPLE • Develop an inclusive growth culture around our engagement empowered people 4 score greater than the high-performing norm Read more on pages 38-41. While enriching our communities & caring for the environment EARN OUR LICENCE • Be an environmental leader, engage our communities TO OPERATE behind water and waste initiatives, and empower youth, 5 together with our partners Accomplish Read more on pages 42-47. Mission 2025 sustainability commitments Our Growth Mindset Values
WINNING WITH CUSTOMERS NURTURING OUR PEOPLE EXCELLENCE INTEGRITY LEARNING PERFORMING AS ONE We are the selling organisation We believe in our people, We strive for unparalleled We always do what is right, We listen, have a natural We collaborate with agility devoted to providing innovative and have a passion to develop performance by amazing not just what is easy, and are curiosity to learn and are to unlock the unique strength solutions to create shared value ourselves and others customers with our passion accountable for the results empowered to take of diverse teams and speed smart risks Read more about our values on pages 38-41. 26 COCA‑COLA HBC
GROWTH PILLAR 1 LEVERAGE OUR UNIQUE 24/7 PORTFOLIO
KPIs Highlights in 2020 Priorities in 2021 • FX-neutral revenue • Continued expanding to become the leading • Continue our work on the rationalisation growth • Volume growth 24/7 beverage partner, creating shared of our portfolio, prioritising scalable and • FX-neutral revenue value with our consumers and customers profitable brands as well as products, whilst per case growth • Maintained resilience in the sparkling driving disciplined innovation Stakeholders category by leveraging low- and no-sugar • Maximise our efforts to capture growing variants, flavour and pack architecture at-home occasions Our consumers • Achieved another year of double-digit • Increase the penetration of single-serves Our customers revenue growth in energy drinks and and affordable entry packs helping expand continued the roll-out of Coca-Cola Energy our price/mix Shareholders and Predator Energy • Continue the roll-out of Costa Coffee, The Coca-Cola Company • Launched Costa Coffee in the first building our presence in one of the most 14 countries attractive beverage categories Risks • Entered the hard seltzer category with the • Accelerate the expansion of Aquarius • Consumer health launch of Topo Chico in the first five markets functional water in our markets and wellbeing • Strategic stakeholder relationships • Geopolitical & macroeconomic 26 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 27 SR
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A resilient portfolio for Our broad and flexible portfolio, together a new reality with our expertise in adjusting our pack/price As the COVID-19 pandemic created architecture, will continue to allow us to upheaval in many aspects of daily life, our leverage these trends. broad 24/7 portfolio gave us a wealth of options to continue to provide consumers Well‑loved brands support growth with well-loved and trusted brands. We had As the COVID-19 pandemic hit our markets Percentage of Coca‑Cola HBC revenue the flexibility to shift production quickly, during 2020, we focused on key sparkling providing the right packs and categories to products as the main drivers of all our KPIs Highlights in 2020 Priorities in 2021 meet the changing needs and buying activities. Trademark Coke and Adult patterns of our consumer base. Sparkling were prioritised as the main growth • FX-neutral revenue and premiumisation drivers in the category. • Continued expanding to become the leading • Continue our work on the rationalisation We were able to capitalise on all the work growth Our long-term efforts to provide healthier 24/7 beverage partner, creating shared of our portfolio, prioritising scalable and we had already been doing to strengthen, • Volume growth options across our portfolio also helped broaden and flex our portfolio to capture • FX-neutral revenue value with our consumers and customers profitable brands as well as products, whilst ensure the resilience of Sparkling, which per case growth more occasions and drinking moments. • Maintained resilience in the sparkling driving disciplined innovation was one of the best performing categories This gave us a particular advantage as Stakeholders category by leveraging low- and no-sugar • Maximise our efforts to capture growing during the year. consumption shifted from out-of-home variants, flavour and pack architecture at-home occasions to at-home during the lockdowns and We managed to gain share in the majority Our consumers Sparkling 74% • Achieved another year of double-digit • Increase the penetration of single-serves restrictions were imposed across of our markets in the sparkling category. Hydration 7% The power of our portfolio and the resilience Juice 5% Our customers revenue growth in energy drinks and and affordable entry packs helping expand our markets. of well-loved brands like Coke, supported Energy 5% As lifestyles changed, many consumer continued the roll-out of Coca-Cola Energy our price/mix by our unrivalled execution in our markets, RTD Tea 3% Shareholders activities were brought home. We focused Premium Spirits 3% and Predator Energy • Continue the roll-out of Costa Coffee, allowed us to deliver strong market Plant-based <1% The Coca-Cola on helping consumers replicate out-of- share performance. Coffee <1% Company • Launched Costa Coffee in the first building our presence in one of the most home occasions at home, and capturing Snacks 2% 14 countries attractive beverage categories increased opportunities like ‘socialising’ Our focus in recent years on providing Risks • Entered the hard seltzer category with the • Accelerate the expansion of Aquarius and ‘screen time’ experiences. The changed healthier new options across our portfolio • Consumer health launch of Topo Chico in the first five markets functional water in our markets landscape made affordability a greater of sparkling and still beverages, while and wellbeing factor, and we adjusted our activations emphasising low or no-sugar choices to our • Strategic stakeholder in response, shifting towards packs with consumers, is reaping benefits. Overall our relationships relevant price points for the consumer. low- and no-sugar variants grew 2.7% during • Geopolitical & the year with brands like Coca-Cola Zero At the same time, premiumisation will macroeconomic and Fanta Zero growing 2.5% and continue to be an opportunity, particularly 67.8% respectively. in at-home drinking occasions. This focus on creating upscale drinking experiences at home supported our revenue per case expansion. 28 COCA‑COLA HBC
Leverage our unique 24/7 portfolio continued
To celebrate the emergence from Within only six months, the AdeZ multi-seed Supporting consumer health lockdowns, the Coca-Cola System launched range captured 8% of total AdeZ 2020 sales and wellbeing the new Open Like Never Before campaign. volume in countries where it was introduced, The COVID-19 pandemic strengthened The message of emerging stronger and showing high potential for further growth. existing trends related to health and creating a better shared future, highlighted We also continued to build on the wellness, with consumers looking for in a manifesto film featuring spoken word introduction of FuzeTea, the differentiated products with less sugar but also for artist George the Poet, is an extension of and innovative ready-to-drink tea we functional products that support wellness. our Company’s purpose to partner with our launched three years ago. We introduced Consumers’ tastes and preferences customers, delight our consumers and no-sugar formulas in several of our markets continue to evolve, and we continue to enrich our communities. The call to action during the year, responding to consumer innovate to meet these needs. Our portfolio for communities to support their local preferences and a renewed focus on health includes reformulated recipes to reduce businesses translated into tangible support and wellness. added sugar and we offer diet, light and for our retail partners. zero-calorie as well as functional drinks. Beyond Coke brand products, we continue Expanding our offerings To help consumers make informed choices, to build our adult sparkling category which is At Coca-Cola HBC, we expanded into we facilitate portion control through the composed of three diverse and alcoholic beverages over a decade ago introduction of smaller packages, and we complementary brands: Schweppes, Kinley through our premium spirits distribution. provide clear and transparent nutritional and the recently acquired Lurisia. These Our spirits portfolio includes brands like Jack information on all our packs. The Guideline products provide a variety of sophisticated Daniels, Aperol, Macallan and Famous Grouse, Daily Amount labels provide at-a-glance flavours that can be consumed on their own and is distributed in 25 of our markets. information on calories as well as sugar and or used as mixers. During 2020, we In line with our vision of becoming the all key nutrients. leveraged the rising trend of the socialising- leading 24/7 beverage partner, this is a at-home drinking occasion, advancing our At the same time, we continue the trial of strategic category for us, allowing us to joint activation of Premium Spirits with our ‘traffic-light’ front-of-pack labels in several expand our offerings into every consumer adult sparkling products. of our markets, a colour-coded evolution of occasion. It provides us with strong the current monochrome Reference Intake cross-selling opportunities for our core model used across Europe. Still products with high beverage portfolio through mix activation The World Health Organization recommends relevance in 2020 and creates a compelling offering for hotels, that no more than 10% of total energy/ As changing consumer patterns impacted restaurants and cafés, the HoReCa channel, calorie consumption comes from added on-the-go occasions and bottled water offering a one-stop-shopping partner. sales, we turned our focus to new growing sugars, and we have committed to reduce segments with products highly relevant in In 2020, we also entered into the dynamic calories per 100ml of sparkling soft drinks the context of 2020. We have introduced hard seltzer category with the launch of by 25% between 2015 and 2025 across all Aquarius functional water, a hydration Topo Chico in selected markets. The new of our markets. At the end of 2020, we proposition enhanced with minerals, in 12 of drink, which is a sparkling water with alcohol achieved an 11.2% reduction compared with our countries. We also rolled out innovations and natural flavours, is inspired by the 2015 levels. in the juice category, where we are capturing 125-year old Topo Chico sparkling mineral revenue opportunities through Cappy water brand, which has long been popular Responsible marketing lemonades and Dobry Water+ juice. with mixologists in the US and Latin America. At Coca-Cola HBC we are focused on As we move forward, we plan to learn from aligning our commercial practices with Energy, one of the best performing the launch in our first markets and build our sustainability and business goals. The way categories during the year, delivered a fifth presence in this promising category. we engage in direct commercial activity consecutive year of double-digit volume and the way we advertise and promote are growth. Our growth came from both existing Our targeted approach to Snacks saw central to cultivating a relationship of trust products and innovations, and the category the acquisition of Bambi, a leading Serbian with all of our stakeholders. benefited from both affordable brand confectionery business, in 2019. This options like Predator Energy and premium acquisition added to our footprint in Snacks We adhere to The Coca-Cola Company’s propositions such as Coca-Cola Energy. where we already had a presence through Global Responsible Marketing Policy, as well This enriched portfolio supported market the Tsakiris business in Greece and Cyprus. as its Global School Beverage Guidelines, share gains in the majority of our markets. Bambi, with its iconic Plazma brand, is now which means that we do not market directly We also achieved value share gains in the present in 10 of our markets and offers a to children under 12 and we do not offer energy category during the year, with an good complementary opportunity for our our beverages in primary schools, except increase of 1.5pp. existing beverage portfolio. This portfolio when required by local law, or requested by school authorities. In addition, through the Adez, our plant-based, sugar-free beverage has led to very strong performance in 2020 European Soft Drinks Association (UNESDA) line, has continued to add to our revenue per with products that were highly relevant we remain committed not to offer added- case and recently expanded its range into for the consumer throughout the sugar beverages in secondary schools new dairy-free, multi-seed variants. This COVID-19 pandemic as well as through across the EU and Switzerland. new multi-seed range consists of two successful innovations. unsweetened propositions and provides a sophisticated flavour experience, offering Freshness and quality Throughout the COVID-19 pandemic, health-conscious consumers the benefits of we continued to offer the highest quality protein and fibre. beverages by applying end-to-end quality and food safety standards. In order to further enhance this culture of excellence, we maintained a strong focus on capability building and development. 28 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 29 SR
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To celebrate the emergence from Within only six months, the AdeZ multi-seed Supporting consumer health Through increased collaboration with We set out a new policy to reduce food loss SI lockdowns, the Coca-Cola System launched range captured 8% of total AdeZ 2020 sales and wellbeing our suppliers of key ingredients and and food waste, or recycle or reuse food the new Open Like Never Before campaign. volume in countries where it was introduced, The COVID-19 pandemic strengthened packaging materials, we further improved waste in manufacturing, warehouses and The message of emerging stronger and showing high potential for further growth. existing trends related to health and our partnerships, with only one critical distribution as well as at a customer level. creating a better shared future, highlighted non-compliance in the year. We also analyse the potential of food loss We also continued to build on the wellness, with consumers looking for in a manifesto film featuring spoken word and waste per type and category. introduction of FuzeTea, the differentiated products with less sugar but also for As a result of the lockdowns in our markets, artist George the Poet, is an extension of and innovative ready-to-drink tea we functional products that support wellness. we replaced product age audits on the In particular, we report the age of our our Company’s purpose to partner with our launched three years ago. We introduced Consumers’ tastes and preferences UN Sustainable shopfloor with a delivery age measure, finished beverages, and put into place customers, delight our consumers and no-sugar formulas in several of our markets continue to evolve, and we continue to providing us with all relevant freshness actions to minimise the number of products enrich our communities. The call to action Development Goals during the year, responding to consumer innovate to meet these needs. Our portfolio information for products leaving which risk being expired. In the last five years, for communities to support their local We serve our consumers with preferences and a renewed focus on health includes reformulated recipes to reduce our warehouses. the trend of expired products has decreased businesses translated into tangible support a broad range of high-quality and wellness. added sugar and we offer diet, light and from 0.5% to 0.3% in both juices and products. In doing so, we As every year, we carefully monitored for our retail partners. zero-calorie as well as functional drinks. carbonated soft drinks. create value by contributing consumer complaints. In 2020, we registered Beyond Coke brand products, we continue Expanding our offerings To help consumers make informed choices, to global goals for good health 19 complaints per 100 million bottles sold. While we made good progress in 2019 to to build our adult sparkling category which is At Coca-Cola HBC, we expanded into we facilitate portion control through the and wellbeing, innovation, Whilst our aspiration will always be zero reduce food loss from finished beverages, composed of three diverse and alcoholic beverages over a decade ago introduction of smaller packages, and we responsible production and complaints, we implemented market-specific moving to 0.17% from 0.21% in 2018, this complementary brands: Schweppes, Kinley through our premium spirits distribution. provide clear and transparent nutritional consumption as well as improvement plans which we expect will help increased to 0.23% in 2020. The main and the recently acquired Lurisia. These Our spirits portfolio includes brands like Jack information on all our packs. The Guideline partnerships. us limit the number of complaints to 17 per reason behind this was the higher level of products provide a variety of sophisticated Daniels, Aperol, Macallan and Famous Grouse, Daily Amount labels provide at-a-glance 100 million bottles sold in 2021. product expiries during the out-of-home flavours that can be consumed on their own and is distributed in 25 of our markets. information on calories as well as sugar and channel lockdowns, in particular during the or used as mixers. During 2020, we In line with our vision of becoming the all key nutrients. Tackling food loss and food waste first wave of the COVID-19 pandemic. leveraged the rising trend of the socialising- leading 24/7 beverage partner, this is a at-home drinking occasion, advancing our At the same time, we continue the trial of in our value chain strategic category for us, allowing us to joint activation of Premium Spirits with our ‘traffic-light’ front-of-pack labels in several We are preventing food loss to preserve expand our offerings into every consumer adult sparkling products. of our markets, a colour-coded evolution of water and other natural resources, to avoid occasion. It provides us with strong the current monochrome Reference Intake related carbon emissions and to mitigate cross-selling opportunities for our core Still products with high model used across Europe. the related social and economic effects beverage portfolio through mix activation in agriculture. The World Health Organization recommends relevance in 2020 and creates a compelling offering for hotels, that no more than 10% of total energy/ As changing consumer patterns impacted restaurants and cafés, the HoReCa channel, calorie consumption comes from added on-the-go occasions and bottled water offering a one-stop-shopping partner. sales, we turned our focus to new growing sugars, and we have committed to reduce segments with products highly relevant in In 2020, we also entered into the dynamic calories per 100ml of sparkling soft drinks the context of 2020. We have introduced hard seltzer category with the launch of by 25% between 2015 and 2025 across all Aquarius functional water, a hydration Topo Chico in selected markets. The new of our markets. At the end of 2020, we proposition enhanced with minerals, in 12 of drink, which is a sparkling water with alcohol achieved an 11.2% reduction compared with Expanding our Our offering consists of a full range of our countries. We also rolled out innovations and natural flavours, is inspired by the 2015 levels. Costa Coffee products covering diverse in the juice category, where we are capturing 125-year old Topo Chico sparkling mineral portfolio with consumer needs and preferences. revenue opportunities through Cappy water brand, which has long been popular Responsible marketing This includes: beans, roasted and ground 1 lemonades and Dobry Water+ juice. with mixologists in the US and Latin America. At Coca-Cola HBC we are focused on Costa Coffee coffee; Nespresso and Nescafé Dolce 1 As we move forward, we plan to learn from aligning our commercial practices with Gusto compatible coffee pods; ready- Energy, one of the best performing In 2020, as part of our vision to the launch in our first markets and build our sustainability and business goals. The way to-drink coffee; and Costa Express, a self- categories during the year, delivered a fifth become the leading 24/7 beverage presence in this promising category. we engage in direct commercial activity serve, barista-quality coffee on-the-go. consecutive year of double-digit volume and the way we advertise and promote are partner, we launched Costa Coffee, growth. Our growth came from both existing Our targeted approach to Snacks saw To secure a great in-cup result, a broad During 2020, given the restrictions in place central to cultivating a relationship of trust bringing high-quality coffee to 14 products and innovations, and the category the acquisition of Bambi, a leading Serbian range of fully supported coffee machines in the out-of-home channel due to the with all of our stakeholders. of our markets with an ambitious benefited from both affordable brand confectionery business, in 2019. This are available to our out-of-home COVID-19 pandemic, our initial launch options like Predator Energy and premium acquisition added to our footprint in Snacks We adhere to The Coca-Cola Company’s plan to expand coverage to all our customers, along with other services to targeted primarily the at-home channel, propositions such as Coca-Cola Energy. where we already had a presence through Global Responsible Marketing Policy, as well territories by 2023. make Costa Coffee the best coffee later expanding into more channels This enriched portfolio supported market the Tsakiris business in Greece and Cyprus. as its Global School Beverage Guidelines, experience. We help these customers as conditions allowed. Coffee is a growing multibillion-dollar avoid downtime and meet demand more share gains in the majority of our markets. Bambi, with its iconic Plazma brand, is now which means that we do not market directly category across our geographies, forecast efficiently with digital solutions, connecting The positive impacts of these investments We also achieved value share gains in the present in 10 of our markets and offers a to children under 12 and we do not offer to grow 4% annually. The coffee category all our professional and automatic coffee were already visible in 2020, as we energy category during the year, with an good complementary opportunity for our our beverages in primary schools, except is allowing us to capture more consumer machines to a live data feed. By investing managed to recruit several hundred increase of 1.5pp. existing beverage portfolio. This portfolio when required by local law, or requested by occasions, partner even more closely with customers in the out-of-home channel school authorities. In addition, through the in top quality direct-to-consumer solutions, Adez, our plant-based, sugar-free beverage has led to very strong performance in 2020 our customers across all channels and and we have developed a rich pipeline European Soft Drinks Association (UNESDA) we are also enabling our non-HoReCa line, has continued to add to our revenue per with products that were highly relevant strengthen our ability to address every of prospective customers. we remain committed not to offer added- customers to offer barista-quality coffee case and recently expanded its range into for the consumer throughout the drinking moment throughout the day. sugar beverages in secondary schools to their shoppers. In the current year, we are continuing new dairy-free, multi-seed variants. This COVID-19 pandemic as well as through across the EU and Switzerland. Coffee is also on a premiumisation journey, to build our Costa Coffee business by new multi-seed range consists of two successful innovations. As part of our commitment to providing an accretive revenue opportunity. sustainability and creating shared value, entering new markets and expanding into unsweetened propositions and provides a In recent years, we have developed the more channels and platforms in the sophisticated flavour experience, offering Freshness and quality Costa Coffee is the only coffee brand which Throughout the COVID-19 pandemic, required infrastructure, processes and markets where Costa launched in 2020. health-conscious consumers the benefits of is 100% Rainforest Alliance certified. we continued to offer the highest quality capabilities around coffee. These assets, protein and fibre. This certification ensures that coffee beverages by applying end-to-end quality together with our best-in-class route to produced for us leads to improved and food safety standards. In order to market, mean we are well positioned livelihoods for farmers as well as protection further enhance this culture of excellence, to capture this growth opportunity with of forests and climate change adaptation we maintained a strong focus on capability a strong brand like Costa. in forest communities. building and development. 1. Nespresso and Nescafé Dolce Gusto are both brands of Nestlé S.A. 30 COCA‑COLA HBC
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KPIs Highlights in 2020 Priorities in 2021 • FX-neutral revenue • Ensured the safety of our people, • Continue to evaluate our revenue growth growth • Volume growth customers, partners and communities and management approach to address • FX-neutral revenue maintained business continuity through consumer needs for affordability as well per case growth decisive, timely and effective action as premiumisation Stakeholders • Provided customers with the best support • Further invest to improve our ability to serve we could offer as they faced challenges online shoppers and respond to rapid growth Our customers caused by rapidly shifting demand patterns • Advance our big data and advanced Shareholders • Strengthened our relationship with analytics capabilities to further enhance
The Coca-Cola e-retailers and started partnering with our segmented execution model Company new channels, achieving higher market • Continue our efforts to enhance our digital Risks share online capabilities through B2B2C platforms (B2B • Accelerated the use of big data, advanced platforms that reach the final consumer) • Channel mix • Geopolitical and analytics and new technology, including • Introduce the sales academy in all our macroeconomic sales force automation, image recognition markets by the end of the year and web-based ordering • Launched the new sales academy to drive our salesforce’s capability to deliver improved customer service, performance and execution • 36% of all coolers in the marketplace are now energy efficient and eco-friendly 30 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 31 SR
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GROWTH PILLAR 2 WIN IN THE MARKETPLACE
By the side of our customers We subsequently determined that similar After first ensuring the safety of our people, temporary supply issues were occurring customers, partners, and communities, in other markets, and we reached an our second priority during the year was to agreement to support one of our most ensure business continuity through decisive, important customers with a listing of 15 timely and effective action. additional products in five different countries, some of which have become permanent. Retail moves online Throughout 2020 our salespeople Although the dynamic e-commerce continued to serve every one of our We redeployed salespeople from the channel is still a small proportion of our customers that was able to operate, whilst out-of-home to at-home channels and overall revenue, it has doubled in value over KPIs Highlights in 2020 Priorities in 2021 maintaining contact with our customers who increased the remote selling capabilities the last two years. The channel offers great were not. We have increased the frequency of our sales teams. In parallel we accelerated • FX-neutral revenue • Ensured the safety of our people, • Continue to evaluate our revenue growth growth potential with high margins, and it growth of our customer engagement, providing our activities in e-commerce, especially on also has a greater proportion of single-serve • Volume growth customers, partners and communities and management approach to address customers with the best support we could our own sales platform for our customers, and low- and no-sugar mix compared with partnering with food delivery platforms and • FX-neutral revenue maintained business continuity through consumer needs for affordability as well offer as they faced their own challenges modern trade. working with our wholesale customers to per case growth decisive, timely and effective action as premiumisation caused by rapidly shifting demand patterns. develop direct-to-consumer offerings. E-commerce growth during 2020 was Stakeholders • Provided customers with the best support • Further invest to improve our ability to serve Excellent customer service remained our fuelled by lockdowns and restrictions Throughout the COVID-19 pandemic, we we could offer as they faced challenges online shoppers and respond to rapid growth north star ambition. Achieving this in a rapidly implemented across our markets. This changing environment meant listening to have been by the side of our customers, Our customers caused by rapidly shifting demand patterns • Advance our big data and advanced encouraged customers that had never customers’ concerns and collaborating maintaining personal relationships and shopped online to try it for the first time. Shareholders • Strengthened our relationship with analytics capabilities to further enhance quickly to make changes. For example, to supporting them to deliver or to build online During the second and third quarters, 70% e-retailers and started partnering with our segmented execution model reduce pressure on some supermarkets’ sales. Our ability to segment customers of our online shoppers were new to the The Coca-Cola allowed us to efficiently shift investment to Company new channels, achieving higher market • Continue our efforts to enhance our digital supply chains, in some cases we arranged channel, and we expect more than half will direct deliveries to stores rather than to the outlets which gained relevance, ensuring share online capabilities through B2B2C platforms (B2B continue to order online. As a result, the Risks customers’ central warehouses. flawless execution. number of customers we are collaborating • Accelerated the use of big data, advanced platforms that reach the final consumer) • Channel mix Efforts to help our customers navigate As our customers re-opened during periods with in e-commerce increased by over 80%. analytics and new technology, including • Introduce the sales academy in all our • Geopolitical and challenges fulfilling their shoppers’ demands of lower restrictions, we continued to Online shopping has allowed us to further macroeconomic sales force automation, image recognition markets by the end of the year also generated value for our business. provide support and build trust, supplying expand our network of online food takeaway and web-based ordering When our sales team in Serbia determined masks and hand sanitiser for new hygiene partnerships. We have co-operated with needs. Safety was always our first priority, • Launched the new sales academy to drive that an international client was experiencing food delivery platforms, helping them product shortfalls from a private label but we continued to prepare to capture the our salesforce’s capability to deliver increase the value of each transaction by supplier, we helped the customer close this opportunities that will emerge once including a beverage with every meal. improved customer service, performance supply gap with our products. recovery begins. and execution • 36% of all coolers in the marketplace are now energy efficient and eco-friendly 32 COCA‑COLA HBC
Win in the marketplace continued
Across our markets, we have designed While our capabilities are centrally led in an combination meals, with a meal and beverage aligned way across our business, we make for a single price point, and improved product sure that each country has the flexibility to positioning in online menus. make their own choices, focusing on the development of capabilities that are most During the COVID-19 pandemic, we also relevant to their local realities. started connecting our brick-and-mortar customers with our food delivery platform partners to deliver grocery products, Big data and advanced analytics including our own, to consumers at home. We are accelerating our use of big data, advanced analytics and artificial intelligence To support our e-commerce success, we capabilities across our business with the aim accelerated capability development through to cover our largest markets by 2021. UN Sustainable various bootcamps, sharpening our digital Development Goals skills, sharing best practices and aligning our We use data and analytics capabilities to As we build our business by system priorities. In 2021, we will continue to identify and capture value-creation helping our customers to grow invest to improve our ability to serve online opportunities, particularly for top-line and thrive, we make substantial shoppers and respond to rapid growth. acceleration and cost optimisation, and to contributions to the improve our service and operations across achievement of the Sustainable Commercial capabilities all functions. Development Goals related to as a competitive advantage We are now able to analyse data at a granular ending poverty, decent work, Accelerating our critical growth capabilities level, allowing us to make decisions and sustainable communities, is a key driver of our Growth Story 2025 implement focused initiatives that generate responsible production, strategy. These capabilities have incremental value in targeted areas of the justice and strong institutions, strengthened our response to the COVID-19 business. These capabilities greatly enhance as well as partnerships. pandemic and will be even more relevant our segmented execution model by in the new environment that emerges. identifying customer needs in different locations and different types of outlets. As a Our business is equipped with five crucial result, our sales force is able to have a bigger capabilities: growth-focused big data and impact per customer visit. In the fragmented advanced analytics, value-led revenue growth market of Nigeria, where we rolled out these management (RGM), tech-enabled route to enhanced analytics capabilities in 2019, we market, customer-centric key account have continued to see promising results, management and disciplined innovation. including volume increases and improved These attributes enable us to better outlet prioritisation for new product understand the real and changing needs of launches. We are currently expanding this our customers and consumers, drive rapid model to the rest of our markets. revenue recovery in a profitable manner and anticipate or react to new challenges faster and smarter than our competition. During 2020 we prioritised building the skills immediately required to best support our customers and our front-line employees in such volatile times. We also captured all the capability-related learnings from the COVID-19 pandemic in order to be better equipped to manage the changing environment. As route-to-market plans and sales and distribution models shifted during the year, our people required new capabilities quickly. Our new sales academy is developing a sales force that constantly strives to improve our service, executing with excellence in every channel for prioritised drinking moments. In 2020 we piloted the sales academy in Russia, Romania and Poland, giving our sales force the experiences and the full curriculum to build the capabilities needed at each stage of their development. Developed as a transformative digital learning approach to help build our teams’ capabilities on the job, the sales academy will be introduced in all of our markets in 2021. 32 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 33 SR
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Win in the marketplace continued FS
SSR This allowed them to shift their focus to Across our markets, we have designed While our capabilities are centrally led in an We are driving operational excellence Finally, we also continue to drive our portfolio SI combination meals, with a meal and beverage aligned way across our business, we make through machine learning, improving our price/mix, focusing on adult sparkling online retailing due to the closures in the for a single price point, and improved product sure that each country has the flexibility to forecasting for short and long-term propositions which offer a higher revenue out-of-home channel. positioning in online menus. make their own choices, focusing on the customer demand in our markets. This per case. In Russia, the introduction of new In addition, we are investing further in the development of capabilities that are most streamlines inventory management and smaller packs for Schweppes, along with its During the COVID-19 pandemic, we also growth of our own direct-to-consumer relevant to their local realities. prevents out-of-stock incidents. We are expanded assortment, led to the brand started connecting our brick-and-mortar platform in Switzerland, Qwell. The platform also transforming our promotion growing 36.4% in the country during 2020. customers with our food delivery platform includes a web-based ordering system and a management with increased capabilities to partners to deliver grocery products, Big data and advanced analytics mobile application, which offers potential identify profitable promotion tactics and including our own, to consumers at home. We are accelerating our use of big data, Optimising sales and scaling opportunities. advanced analytics and artificial intelligence optimise investment. Our algorithms distribution models To support our e-commerce success, we capabilities across our business with the aim provide a holistic measurement of the return In light of the changing landscape, we accelerated capability development through UN Sustainable Supporting customers through key to cover our largest markets by 2021. on investment for each promotion, including increased our efforts to strengthen our various bootcamps, sharpening our digital account management Development Goals the negative impact of forward buying, offering with existing customers as well as skills, sharing best practices and aligning our We use data and analytics capabilities to As we build our business by As we evolve into an even more customer- competitive promotions and cross-brand target new outlets. We were able to further system priorities. In 2021, we will continue to identify and capture value-creation helping our customers to grow centric business, we need to ensure our cannibalisation. optimise sales and distribution because our invest to improve our ability to serve online opportunities, particularly for top-line and thrive, we make substantial people have the skills to build exceptional To further scale our capabilities we are specialised sales force, intelligent cooler shoppers and respond to rapid growth. acceleration and cost optimisation, and to contributions to the customer partnerships. We constantly assets, ample use of technology and improve our service and operations across achievement of the Sustainable combining a number of data sets to develop assess our people’s readiness and potential unparalleled execution make us the industry Commercial capabilities all functions. Development Goals related to a 360-degree view of each of our to take customer partnerships to the next customers, while also maintaining strong leader with the most extensive and flexible We are now able to analyse data at a granular ending poverty, decent work, level, and we address any gaps in skills. as a competitive advantage data governance. processes across our territory. Accelerating our critical growth capabilities level, allowing us to make decisions and sustainable communities, In 2020, we designed and delivered a We employed external data and leveraged is a key driver of our Growth Story 2025 implement focused initiatives that generate responsible production, number of analytical tools in record time to Revenue growth management big-data advanced analytics capabilities in strategy. These capabilities have incremental value in targeted areas of the justice and strong institutions, help our key account managers analyse Our revenue growth management 2020 to update our outlet segmentation strengthened our response to the COVID-19 business. These capabilities greatly enhance as well as partnerships. profitability in the new reality and take fast framework is key to ensuring profitable model and identify new high-potential pandemic and will be even more relevant our segmented execution model by actions around investment, activities and top-line growth. Through this capability we outlets. We rolled out image recognition in the new environment that emerges. identifying customer needs in different assortment mix to drive improved work to maximise the value and the number technology starting in Russia and expanding locations and different types of outlets. As a profitability. This has enhanced and Our business is equipped with five crucial of our transactions. We deliver this by into Nigeria and Ireland, and we are ready result, our sales force is able to have a bigger automated planning processes, in capabilities: growth-focused big data and improving category and package mix as well to further scale it across our markets. impact per customer visit. In the fragmented collaboration with our customers. advanced analytics, value-led revenue growth market of Nigeria, where we rolled out these as through pricing and increasing the return This allows our salesforce to spend more management (RGM), tech-enabled route to In light of the challenges our customers enhanced analytics capabilities in 2019, we on investment on our promotions. time with customers, while obtaining more market, customer-centric key account faced to maintain business continuity, have continued to see promising results, RGM continued to increase in importance accurate and granular data from the outlets. management and disciplined innovation. we took the opportunity to redefine the role including volume increases and improved during 2020 as a key growth catalyst and We have continued investing in new coolers of our key account managers, better aligning These attributes enable us to better outlet prioritisation for new product we continuously evaluated our approach to to support our business growth and have our internal functions with those of our understand the real and changing needs of launches. We are currently expanding this address consumer needs for affordability reached 85% coverage of our top customer customers. This generated quicker actions our customers and consumers, drive rapid model to the rest of our markets. as well as premiumisation. outlets. In parallel, we also continue to build and efficiencies on both sides, allowing for revenue recovery in a profitable manner and our network of internet-connected coolers Our smaller multi-serve entry packs offer uninterrupted operations and delivering anticipate or react to new challenges faster which help us drive the efficiency of our attractive price points for the consumer in enhanced profitability. and smarter than our competition. a margin accretive way for us, while growing assets and enhance our sales teams’ We also supported our key account During 2020 we prioritised building the skills transactions in smaller baskets. Sales of the productivity. We have a total of 1.4 million managers with training in negotiations. immediately required to best support our multi-serve entry pack format grew by 7.5% coolers on customer premises, and more This helps them successfully build plans with customers and our front-line employees in the year, helped by the introduction of than a third, 39%, have online connections. our retail partners. in such volatile times. We also captured all smaller PET packs in Russia and Poland. In 2020, we developed and evolved a range the capability-related learnings from When it comes to premiumisation, we have of digital solutions for customer service the COVID-19 pandemic in order to be continued to expand our multi-pack and ordering, and to provide solutions for better equipped to manage the offerings of single-serves, building on our customers’ shoppers. One of these changing environment. emerging opportunities like the socialising solutions is our Hybris platform, which As route-to-market plans and sales and and meals-at-home occasions. These has been transformed from a functional distribution models shifted during the year, efforts have improved our single-serve mix ordering platform to a user-friendly our people required new capabilities quickly. in the at-home channel, growing volumes customer portal for business owners Our new sales academy is developing a sales by +7.2% in 2020. who want to order regularly or who have force that constantly strives to improve our requests. The re-designed platform is used To further support premiumisation, we service, executing with excellence in every in 22 of our markets and has been a notable also increased the visibility of our glass channel for prioritised drinking moments. success. In Russia, for example, active users packages and launched relevant innovations. In 2020 we piloted the sales academy in increased from 2,000 to 46,000 during 2020, We introduced Coke in returnable glass Russia, Romania and Poland, giving our sales with 18% of all orders in the country coming bottles in Austria and in Romania we force the experiences and the full curriculum through this channel. increased the visibility of the 330 ml glass to build the capabilities needed at each bottles. Our efforts in Romania have helped We also supported our customers with their stage of their development. Developed as us drive more premium occasions at-home, digital transformation. We created a transformative digital learning approach achieving double-digit growth for the glass e-Partnershop, an exclusive selling platform to help build our teams’ capabilities on the bottles for the second consecutive year. providing direct home delivery for our job, the sales academy will be introduced wholesaler customers. in all of our markets in 2021. 34 COCA‑COLA HBC
GROWTH PILLAR 3 FUEL GROWTH THROUGH COMPETITIVENESS & INVESTMENT
KPIs Highlights in 2020 Priorities in 2021 • OpEx as % of NSR • No disruption to the supply chain, with all • Enhance flexibility in production to support • CapEx as % of NSR production plants and warehouses our 24/7 portfolio and innovation • Comparable EBIT margin • ROIC remaining operational • Kick off in-house production of recycled • Cost savings of €120m versus original plan, PET pre-forms, ensuring availability at lower Stakeholders supporting profitability cost and boosting circular economy Partners in • KeelClipTM installations in Ireland and Austria, • Continuous investment in packaging efficiencies as a first step to replace shrink film from can solutions that reduce carbon footprint Shareholders multi-packs across Europe and improve recyclability • Digital transformation investments • Enable Company-wide core processes Risks to improve serving our customers and digitisation leveraging SAP S4 • Cyber incidents consumers, enhance employee experience • Further roll-out of augmented reality • Foreign exchange and commodity costs and increase operational productivity technologies and new production • Geopolitical and maintenance strategies macroeconomic • Quality • Sustainability: Plastics and packaging waste 34 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 35 SR
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GROWTH PILLAR 3 FUEL GROWTH THROUGH COMPETITIVENESS & INVESTMENT
Prioritising safety from the beginning, One benefit of lockdown was learning we Coca-Cola HBC demonstrated strong can operate effectively using new digital resilience, maintaining production and ways of working, with fewer physical avoiding any supply interruptions in our meetings and less travel. territory. This success required a mindset that encourages innovation, a willingness Optimising infrastructure In 2020, we piloted new maintenance to embrace data and sophisticated digital Despite a reduction in capital expenditure approaches in 25 production lines and we plan technologies, and a culture of investing compared with our original 2020 plans, we to implement this approach further in 2021. in people and capabilities. continued upgrading production lines as Across the business, our optimisation KPIs Highlights in 2020 Priorities in 2021 To support local communities, we used our required to keep up with our expanding 24/7 facilities and equipment in ways that we had portfolio. Twelve production lines were efforts have resulted in a 30% reduction in • OpEx as % of NSR • No disruption to the supply chain, with all • Enhance flexibility in production to support never tried before. Whether it was producing installed in nine countries and we started plants across our territory, from 80 in 2008 • CapEx as % of NSR production plants and warehouses our 24/7 portfolio and innovation custom-made hand sanitiser bottles in our installing equipment for KeelClip™, a to 56 at the end of 2020. At the same time, • Comparable EBIT margin minimalist paperboard packaging solution we increased our production lines per plant remaining operational • Kick off in-house production of recycled plant in Northern Ireland or printing face • ROIC shields using our 3D technology in Russia, replacing shrink film for our can multi-packs. by 42% which allowed us to maintain our • Cost savings of €120m versus original plan, PET pre-forms, ensuring availability at lower We intend to continue with these capacity and create more efficient and Stakeholders Nigeria, Poland and Romania, we did our supporting profitability cost and boosting circular economy best to address local needs by being agile investments in 2021. flexible facilities. To improve our service TM offering while reducing our costs, we have Partners in • KeelClip installations in Ireland and Austria, • Continuous investment in packaging and adaptable. To improve manufacturing efficiency, optimised our logistic network by reducing efficiencies we continued investing in automatic line as a first step to replace shrink film from can solutions that reduce carbon footprint As the COVID-19 pandemic began in the our distribution centres by 65% and our Shareholders changeovers to reduce idle time, expanding multi-packs across Europe and improve recyclability first quarter of 2020, we took decisive and warehouses by 35% over the same time production line capacity by nearly 1% annually. • Digital transformation investments • Enable Company-wide core processes early action to reduce operating costs, period. These structural improvements in Risks This technology supports smaller runs of delivering €120 millions of cost savings for the cost base and the shift of fixed costs to to improve serving our customers and digitisation leveraging SAP S4 new products, helping us respond quickly to 2020 versus our original plans. About 80% variable ones where possible, have created • Cyber incidents consumers, enhance employee experience • Further roll-out of augmented reality changing consumer needs and preferences. • Foreign exchange and of these savings came from reduced direct a lean and resilient operating model, able commodity costs and increase operational productivity technologies and new production marketing expenses as we worked with We have launched a new maintenance to maintain good profitability despite • Geopolitical and maintenance strategies The Coca-Cola Company to prioritise strategy with a customised, condition-based challenged revenues, as happened in 2020. macroeconomic in-store promotions and delay or adjust new approach to servicing important machinery. • Quality product launches. There were also other By replacing a standardised, planned • Sustainability: Plastics sources of savings, including for business maintenance approach with one that is more and packaging waste travel, meetings and events. This cost flexible, we have reduced maintenance costs control helped support profitability as we by 10% over three years while limiting faced lower revenues. equipment downtime. While spending will return to more normal levels as revenues recover, we do expect some cost reductions to be permanent. 36 COCA‑COLA HBC
Fuel growth through competitiveness & investment continued
Leveraging technology and big data The technology was introduced at eight We also increased our investments in the Our ongoing investments in technology, additional sites in 2020, and we are working Hybris business-to-business e-commerce together with the commitment of all our to introduce it in 11 more warehouses in platform. The new system design and people, helped us move fast to tackle the 2021. We are also introducing a real-time functionalities transformed the platform challenges of the COVID-19 pandemic. transport tracking and traffic monitoring into an easy-to-use customer portal Expanding our capabilities in this area, we platform to step change supply chain for business owners who want to order introduced new digital tools in 2020 related visibility and give customers insight into the regularly. The enhanced Hybris portal to customer and consumer centricity, arrival time of our shipments. is available in 22 of our markets. remote working for our employees and As we expand our use of machine-learning operational productivity. algorithms for demand forecasting and Innovations and investments Following the outbreak of COVID-19, we planning, our next step is to combine all the reduce our environmental impact moved quickly to have as many employees elements of manufacturing into one digital Despite challenges and disruptions caused as possible work from home. Even though platform for more insight into production by the COVID-19 pandemic, we focused on the number of employees working remotely lines, energy use and maintenance needs. our sustainability commitments and succeeded in improving and reducing doubled overnight in early 2020, we achieved To transition our procurement online, we product packaging. These efforts were a smooth transition and ensured business have completed the design of the SAP Ariba supported during the year by online continuity, exploiting in full our systems’ e-procurement solution with plans to launch Innovation Days for our suppliers where key functionalities. Processes such as order in Romania in the first quarter of 2021 and strategic partners in packaging, manufacturing taking, production planning, delivery, roll out to additional countries by the end of and digital supply chain applications shared settlements and invoicing can all be handled the year. The Mercateo e-marketplace, their most innovative ideas. by employees working remotely. offering significant cost-efficiencies in In less than one month, we managed to tail-spend activities, has been deployed in six To ensure we have a reliable supply of roll-out a multi-factor authentication countries while a new digital buying platform recycled PET (rPET) to achieve our 2030 system and enforced a stronger password for trade marketing materials has gone live in World Without Waste target, we are policy to protect our digital corporate 16 countries. investing in innovative technology for our Krakow bottling plant in Poland. The identities. Overall, we have aligned our cyber Our digital transformation also helped us installation of the SIPA EREMA system will strategic programme with the NIST Cyber support our customers and address the allow us to produce ready-to-fill pre-form Security Framework and we are continuously needs of consumers in a fast-changing bottles from PET flakes we produce from investing in cyber security in order to ensure environment. Our use of technology drove pulverised PET waste. By skipping the business resilience. Our efforts have been e-commerce solutions and helped us address production of PET pellets, the usual process recognised by the Dow Jones Sustainability new requirements for business-to-business for processing rPET, and finely pulverising Index which ranked Coca-Cola HBC at 2nd and direct-to-consumer product distribution. place in Europe and 3rd globally for the cyber PET to reduce the need for sorting, this security criterion in 2020. In addition, our two We acted to help wholesaler customers technology cuts energy consumption, helps main IT centres (Sofia & Athens) have been manage severe disruption to their businesses with ensuring rPET supply, decreases awarded the ISO 27001 certification in during the year. By analysing online delivery transport costs and boosts the circular recognition of our Information Security platforms, we identified difficulties in filling economy. Our installation of the SIPA Management System (ISMS) credentials. the increasing number of incoming orders. EREMA system in Poland is the first of its In response, we created a web shop in only kind in Europe and will be completed in 2021. Technology has proved invaluable in two weeks for wholesalers, providing them In line with the EU’s Directive on single-use maintaining a healthy supply chain in the with a direct path to consumers. This platform plastic, we are on course to produce face of lockdowns and other restrictions. is now live in Armenia, Bosnia & Herzegovina, tethered caps for more than 90% of relevant Fortunately, we had already been working Greece, Italy, Ireland and Nigeria. with remote monitoring tools, such as virtual packs by 2023, one year ahead of the and augmented reality smart glasses, and deadline. We are also working to develop we were therefore able to quickly expand use alternatives to plastic straws, cups and lids. of these tools for remote quality, safety and We have already introduced paper straws in environmental audits and virtual plant tours. Italy and Croatia and will introduce these across Europe in 2021. Augmented reality technology allowed engineers and operators to complete installations and commissioning of new production lines remotely, even at the height of the COVID-19 pandemic. Augmented reality technology also aids our warehouse colleagues in picking inventory from stock and combining goods for customer delivery. It is currently used for a third of all picking orders, delivering near 100% accuracy and improving productivity. 36 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 37 SR
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Fuel growth through competitiveness & investment continued FS
SSR The technology was introduced at eight We also increased our investments in the In 2020, we revisited our procurement Leveraging technology and big data “Even though the number of employees SI Our ongoing investments in technology, additional sites in 2020, and we are working Hybris business-to-business e-commerce guidelines to implement stricter rules over together with the commitment of all our to introduce it in 11 more warehouses in platform. The new system design and working remotely doubled overnight in early human rights, ethics and compliance people, helped us move fast to tackle the 2021. We are also introducing a real-time functionalities transformed the platform 2020, we achieved a smooth transition and practices expected from our suppliers, and challenges of the COVID-19 pandemic. transport tracking and traffic monitoring into an easy-to-use customer portal retrained our buyers’ community about the Expanding our capabilities in this area, we platform to step change supply chain for business owners who want to order ensured business continuity, exploiting in full sustainability risk assessment tools available introduced new digital tools in 2020 related visibility and give customers insight into the regularly. The enhanced Hybris portal for supplier selection and governance. arrival time of our shipments. is available in 22 of our markets. our systems’ functionalities.” to customer and consumer centricity, We have made significant progress together remote working for our employees and As we expand our use of machine-learning with our suppliers to assure or certify the operational productivity. algorithms for demand forecasting and Innovations and investments To reduce our carbon footprint and improve farms where our ingredients are cultivated, Following the outbreak of COVID-19, we planning, our next step is to combine all the reduce our environmental impact recyclability, we introduced bio-based but we also recognise that there is more we moved quickly to have as many employees elements of manufacturing into one digital Despite challenges and disruptions caused aseptic fibre packaging in Serbia with need to do. Together with our partners, as possible work from home. Even though platform for more insight into production by the COVID-19 pandemic, we focused on polymer-based internal layers derived from The Coca-Cola Company, we have a target the number of employees working remotely lines, energy use and maintenance needs. our sustainability commitments and sugar cane, and continued with light- for sourcing our priority ingredients, succeeded in improving and reducing weighting initiatives, ensuring that all our doubled overnight in early 2020, we achieved To transition our procurement online, we including natural sweeteners and fruit juices, product packaging. These efforts were packages are FSC (Forest Stewardship a smooth transition and ensured business have completed the design of the SAP Ariba according to our Sustainable Agriculture supported during the year by online Council) certified. In addition, the cans we continuity, exploiting in full our systems’ e-procurement solution with plans to launch Guiding Principles (SAGP). We apply these Innovation Days for our suppliers where key use are among the lightest in the market. functionalities. Processes such as order in Romania in the first quarter of 2021 and principles with our suppliers through strategic partners in packaging, manufacturing taking, production planning, delivery, roll out to additional countries by the end of By the end of 2020, 50% of the material preferred external third-party verifications and digital supply chain applications shared settlements and invoicing can all be handled the year. The Mercateo e-marketplace, used for our corrugated cardboard was and encourage suppliers to use sustainable their most innovative ideas. by employees working remotely. offering significant cost-efficiencies in recycled content and we expect to use farming standards to maximise value and contain their costs. This framework is In less than one month, we managed to tail-spend activities, has been deployed in six To ensure we have a reliable supply of more than 70% recycled content in integrated into internal governance and roll-out a multi-factor authentication countries while a new digital buying platform recycled PET (rPET) to achieve our 2030 cardboard in 2021. KeelClip™ technology procurement processes. system and enforced a stronger password for trade marketing materials has gone live in World Without Waste target, we are was installed in Austria and Ireland as a first policy to protect our digital corporate 16 countries. investing in innovative technology for our step in our commitment to replace plastic In 2020, we sourced over 82.4% of total key Krakow bottling plant in Poland. The wrap on all can multi-packs in our EU identities. Overall, we have aligned our cyber Our digital transformation also helped us commodities for use as ingredients from installation of the SIPA EREMA system will markets. This roll-out will be completed by strategic programme with the NIST Cyber support our customers and address the certified farms, an increase from 74% the allow us to produce ready-to-fill pre-form early 2022, saving more than 3,000 metric Security Framework and we are continuously needs of consumers in a fast-changing prior year. We will continue our work in this bottles from PET flakes we produce from tonnes of CO emissions and avoiding 2,000 investing in cyber security in order to ensure environment. Our use of technology drove 2 area to achieve our 2025 ingredient sourcing pulverised PET waste. By skipping the metric tonnes of plastic each year. business resilience. Our efforts have been e-commerce solutions and helped us address target of 100% certification against our production of PET pellets, the usual process recognised by the Dow Jones Sustainability new requirements for business-to-business During 2020, we launched our Green Fleet sustainable agriculture principles for our key for processing rPET, and finely pulverising Index which ranked Coca-Cola HBC at 2nd and direct-to-consumer product distribution. programme centred on the aspiration to agricultural ingredients. place in Europe and 3rd globally for the cyber PET to reduce the need for sorting, this reduce our vehicle CO2 emissions through Looking beyond the current COVID-19 We acted to help wholesaler customers technology cuts energy consumption, helps security criterion in 2020. In addition, our two new options of Electric, Compressed Natural pandemic environment, it’s clear that manage severe disruption to their businesses with ensuring rPET supply, decreases main IT centres (Sofia & Athens) have been Gas (CNG), Hybrids and Liquified Petroleum connectivity based on augmented and during the year. By analysing online delivery transport costs and boosts the circular awarded the ISO 27001 certification in Gas (LPG) powertrains, where practical. virtual reality coupled with robotics and platforms, we identified difficulties in filling economy. Our installation of the SIPA recognition of our Information Security We will continue with this initiative across automated vehicles will become ever-more the increasing number of incoming orders. EREMA system in Poland is the first of its Management System (ISMS) credentials. the Company throughout 2021 and beyond, critical, allowing business supply chains to In response, we created a web shop in only kind in Europe and will be completed in 2021. to support reductions in line with our Technology has proved invaluable in two weeks for wholesalers, providing them adapt quicker and react rapidly to all sources In line with the EU’s Directive on single-use science-based emissions targets while maintaining a healthy supply chain in the with a direct path to consumers. This platform of disruption. To this end, we are working plastic, we are on course to produce maintaining high-calibre fleet options at face of lockdowns and other restrictions. is now live in Armenia, Bosnia & Herzegovina, towards a truly end-to-end digital supply tethered caps for more than 90% of relevant competitive pricing. Fortunately, we had already been working Greece, Italy, Ireland and Nigeria. chain, which will strengthen planning, visibility with remote monitoring tools, such as virtual packs by 2023, one year ahead of the and partnerships with suppliers, logistic and augmented reality smart glasses, and deadline. We are also working to develop UN Sustainable Managing sustainability risks providers and equipment manufacturers. alternatives to plastic straws, cups and lids. we were therefore able to quickly expand use Development Goals in our supply chain We have already introduced paper straws in We consider our suppliers to be critical of these tools for remote quality, safety and Our sustained efforts to reduce Italy and Croatia and will introduce these partners to the ongoing success of our environmental audits and virtual plant tours. our costs and improve our across Europe in 2021. business. We therefore consider sustainability Augmented reality technology allowed impact have generated within our supply chain to be as important engineers and operators to complete significant results for our as the management of sustainability issues installations and commissioning of new business, our communities, within our own operations. production lines remotely, even at the height society and the environment. of the COVID-19 pandemic. Augmented These results correspond to We monitor the performance of critical reality technology also aids our warehouse contributions to the suppliers through supply base assessments, colleagues in picking inventory from stock Sustainable Development audits of compliance and an online platform and combining goods for customer delivery. Goals for clean water and from EcoVadis which helps us monitor risks It is currently used for a third of all picking sanitation, clean energy, using 21 criteria from international standard orders, delivering near 100% accuracy and economic growth, industry setters. In 2020, over 800 of our critical improving productivity. innovation, sustainable suppliers have been assessed using this communities, responsible platform, a 75% increase compared with production, climate action, 2019, and we plan to expand its use further life below water and life on land. for better supply chain monitoring. 38 COCA‑COLA HBC
GROWTH PILLAR 4 CULTIVATE THE POTENTIAL OF OUR PEOPLE
KPIs Highlights in 2020 Priorities in 2021 • Employee engagement • Protected our people’s health and safety, • Accelerate the development of talent • Percentage of managers that are women and provided resources to cope in and the prioritised organisational • Lost time accident rate difficult times capabilities for growth • Listened to our people, acted on • Drive new ways of working to enable our Stakeholders their feedback, strove to maintain morale, people to be more productive, resilient and Our people optimism and performance staying true adaptable, and provide care and support to to our Company values preserve their wellbeing Risks • Prepared for the new normal, established • Continue building a diverse workforce that • Health and Safety and promoted new ways of working reflects our customer base and communities, • People • Prioritised development of talent and and an inclusive workplace for all • Geopolitical and macroeconomic organisational capabilities that support our • Nurture the mindset, skills and value-based long-term growth behaviours of the evolving profile of leadership for the new era, invest in our leaders’ development and inspire them to grow 38 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 39 SR
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Our Growth Mindset Values SI
Winning with customers Integrity We are the selling organisation devoted We always do what is right, not just what to providing innovative solutions to create is easy, and are accountable for the results. shared value. Learning Nurturing our people We listen, have a natural curiosity to learn We believe in our people, and have a and are empowered to take smart risks. GROWTH PILLAR passion to develop ourselves and others. Performing as one 4 Excellence We collaborate with agility to unlock We strive for unparalleled performance the unique strength of diverse teams. CULTIVATE by amazing customers with our passion THE POTENTIAL and speed. OF OUR PEOPLE
A foundation of trust Very quickly, we encouraged approximately In a period of tumultuous change, our 10,000 employees to work from home. strength was our ability to trust our people We upgraded connectivity and provided the to do the right thing. Our most important digital collaboration tools they needed to decisions and actions in 2020 involved continue to be productive and successful. This project, called Key Initiatives for protecting our people and listening to find We expanded communication channels to Tomorrow, defined priorities regarding out what they needed to stay safe and to ensure that our people remained well- commercial activities and organisational support and care for our customers, informed and our front-line leaders capabilities as well as digital tools needed ensuring the continuity of our business. maintained a dialogue with their team to navigate the coming period. This was true across our markets struggling members. For further support, we also set with pandemic-related restrictions, but also up webinars on remote working, resilience We were also very quick to listen. It was in war zones such as the conflict in Armenia. and wellbeing. essential to really understand what our KPIs Highlights in 2020 Priorities in 2021 people needed in different markets, all with Our trust in our people was re-confirmed Family members were also offered support. different restrictions but radically changed • Employee engagement • Protected our people’s health and safety, • Accelerate the development of talent in 2020 as we witnessed their impressive We introduced a global employee assistance operating environments. We conducted • Percentage of managers dedication and extraordinary efforts. programme, providing 24/7 confidential three all-employee surveys, with special that are women and provided resources to cope in and the prioritised organisational By striving to create an irresistible place to support service for our people and their pandemic-related surveys in May and July • Lost time accident rate difficult times capabilities for growth work, where our people feel heard, valued families, whereas previously only some 2020, in addition to our annual Employee • Listened to our people, acted on • Drive new ways of working to enable our markets had such a plan. Through an Stakeholders and supported in their safety, wellbeing and Engagement Index Survey later in October. their feedback, strove to maintain morale, people to be more productive, resilient and personal and professional growth, we seek external partner, the programme offers to re-confirm their trust in our Company. trained specialists for challenges ranging Survey results helped us understand what Our people optimism and performance staying true adaptable, and provide care and support to from work-related issues and relationship worked, and where more help was needed. to our Company values preserve their wellbeing By October, results showed that 90% of Supporting our people in the difficulties to isolation and trauma support. Risks • Prepared for the new normal, established • Continue building a diverse workforce that respondents felt well-informed, 93% were COVID‑19 pandemic In early April, when the COVID-19 pandemic satisfied with the protective equipment and • Health and Safety and promoted new ways of working reflects our customer base and communities, Our first and primary priority for 2020 was began to dramatically affect our markets, 95% were aware of pandemic-related safety • People • Prioritised development of talent and and an inclusive workplace for all to ensure the safety of our people, as well as we were quick to adjust different rewards protocols. We found that 16% of our people • Geopolitical and organisational capabilities that support our • Nurture the mindset, skills and value-based our customers, partners and communities. and benefit plans, while we maintained all required more support from their direct macroeconomic This was the focus of our Company leadership long-term growth behaviours of the evolving profile of incentives for employees working on the manager, and we took immediate action as well as the cross-functional teams leading front lines with our customers as well as in leadership for the new era, invest in our to address this need. In Hungary, our leaders our COVID-19 pandemic response across our plants, to maintain supply. At the same publicly re-committed to supportive leaders’ development and inspire the Group and in each market. time the Operating Committee forfeited leadership behaviours and in Nigeria we them to grow There have been significant changes to how their own merit increases and instituted pay re-trained our people through simulating work is done and how we keep ourselves and increase freezes. typical situations where our people required others safe. Special guidelines and protocols We were quick to find new ways to work support and showcasing the leaders’ were developed and implemented across with each other and to collaborate with potential responses. all our facilities, including the use of personal each other and our customers. Beyond our protective equipment. short-term crisis management response, we used agile principles to work out our mid-term response to the changing commercial and talent market place, with 145 people collaborating across 14 cross-functional and cross-market teams. 40 COCA‑COLA HBC
Cultivate the potential of our people continued
To increase support and peer learning, We adapted our wellbeing framework and Employee engagement: we built communities with virtual networking programmes early on in 2020 and quickly outperforming peer companies (%) sessions for our people to connect and introduced changes addressing the share their experiences. Our revived weekly COVID-19 pandemic. In some markets, Group-wide news bulletin, ‘We Stay we enhanced our insurance programmes, 90 Connected,’ offered tips on self-care and providing more consistency in coverage for employee support, as well as other tools all our people. 75 CCHBC 90 CCHBC
for peer learning and sharing. It was also 89 CCHBC CCHBC 88 CCHBC Different wellbeing programmes are 60 used to share information about what we available in different markets, but our were doing across the markets to support employees are offered programmes for 45 our people, customers and communities healthcare, dependant care, financial and how our business was adapting to the support and emotional wellbeing. Relevant new environment. initiatives include medical and health 30
insurance benefits, preventative measures ecile lo al norm op Health, safety and wellbeing such as medical check-ups, a savings 15 While we undertook many new measures to scheme and life insurance, as well as ensure the safety and continued health of counselling and relaxation techniques. 0 2017 2018 2019 2020 2020 our people in the extraordinary environment of 2020, our workplaces have become A culture of sharing, learning increasingly safe over the past few years and and adaptation results while participation remained high at we aim for continual improvement. In 2020, One of our greatest strengths is our 75% of our workforce. we continued our focus on behaviour-based values-based culture. It was a source of safety programmes implemented in 53 of The drop in 2020 reflected a change resilience as our common beliefs helped our production plants and warehouses as in responses from employees working us adapt with speed and flexibility as the well as in 18 markets for our sales employees. on the front lines in production plants COVID-19 pandemic spread. It also allowed Of the barriers to safety identified under this and warehouses. Survey responses from us to prioritise our actions based on limited programme in 2020, 72% have already been employees able to work remotely available data and most importantly to care fully eliminated. remained steady. for our people and their safety. Employee accidents in our workplace fell While respondents confirmed that they As we seek to increase support and for the 11th consecutive year in 2020. have the right resources and tools to sharing to empower our people, we have We achieved a Lost Time Accident Rate of perform their work, there was interest in introduced storytelling tools like Red Talks 0.23 compared with 0.33 in 2019. This 30% even greater support from line managers. to help our people connect and get inspired improvement reflects the best result we We immediately acted to address this by each others’ experiences. Importantly, have achieved as a Company. The overall important finding, introducing new tools this is as much about learning from failures Lost Time Incident Frequency Rate for to help leaders support our people. as successes. Coca-Cola Hellenic contractors fell by 16% We continue to benchmark our employee in 2020 compared with 2019. We introduced storytelling at our Top 300 engagement against other high-performing leaders conference in 2020 with a While there were no employee fatalities, companies, partnering with Qualtrics, our subsequent roll-out across our markets. we regret to report that two contractors new partner in measuring company culture. The COVID-19 pandemic required us to died in road accidents during the year. Our 2020 results were three percentage adapt tools for this, helping people use This compares with nine contractor fatalities points above the Qualtrics Global Top smart phones to film their stories about in road incidents in 2019. Decile Norm, which represents the top 10% learning from failures and growing as a result of more than 15 million people from more Our fleet safety training programmes aim of challenges. This approach helped with than 350 companies. to improve safety for all drivers within the connection and supported peer learning. Group. The number of accidents per million In addition, our Red Talks storytelling Unlocking our unique strengths kilometres travelled fell to 2.20, compared programme shares stories of personal and building new capabilities with 2.63 in 2019. transformations across the Group, inspiring As a Company, we are focused on developing our people to change, grow and adapt for organisational capabilities that support success in a rapidly changing environment. Lost Time Accident Rate trend our success and long-term growth. Half way (# LTA per 100 FTE) Our recent transition to ongoing through 2020, our Key Initiatives for performance conversations with mutual Tomorrow project, which leveraged agile 1.4 accountability served us well in the new methods with cross functional teams, working environment of 2020. We know that developed our mid-term responses to the
1.2 1.35 continuous feedback, as opposed to one-off changing operating environment and also annual reviews, makes us a better company, highlighted the changing importance of 1.0 helping our people learn and adapt. More than certain organisational capabilities. This led 75% of our people with on-line access us to a full review of all our organisational 0.8 provided feedback to their managers in the capabilities, and subsequent review of last quarter of 2020. organisational design and resource allocation 0.6 required for them. These works confirmed We conducted three all-employee the relevance of our Growth Story strategy, 0.4 surveys during the year to better understand