2019 ANNUAL REPORT For personal use only OUR BUSINESS PERFORMANCE & OUTLOOK 01 COVID-19 & Our 2019 Report 40 Group Performance 02 Who We Are 46 Australian Beverages 04 Where We Operate 50 New Zealand & Fiji 06 2019 Highlights 52 Alcohol & Coffee 08 Chairman’s Review 54 Indonesia & Papua New Guinea 10 Group Managing Director’s Review 57 Corporate & Services THE VALUE WE CREATE BEING A SUSTAINABLE BUSINESS 12 Strategy and Long-term Value Creation 58 Sustainability Strategy 14 Our Shareholder Value Proposition 61 Sustainability Goals and Progress 16 Thriving Customers 20 Committed Partners 24 Engaged People GOVERNANCE & RISKS 28 Delighted Consumers 62 Corporate Governance 32 Better Environment 64 Board of Directors 38 Stakeholders 66 Group Leadership Team 68 Business and Sustainability Risks FINANCIAL & STATUTORY REPORTS 70 Directors’ Report (including Remuneration Report) 99 Financial Report 150 Independent Auditor’s Report OTHER INFORMATION 155 Independent Limited Assurance Report 156 Shareholder Information 159 Five-year Financial History 160 Glossary 161 Directories & Calendar of Events For personal use only ANNUAL GENERAL MEETING Coca-Cola Amatil’s AGM will be held virtually via our online platform at https://agmlive.link/CCL20 on 26 May 2020 at 10.00am (AEST). ABN 26 004 139 397 BUSINESS OUR COVID-19 & OUR 2019 REPORT AN IMPORTANT MESSAGE WE CREATE THE VALUE READING THIS REPORT IN THE CONTEXT OF COVID-19 As you will see, we have adopted a new approach to We will continue to align with advice from the World Amatil’s 2019 Annual Report. We have combined our Health Organisation and the relevant Government Annual and Sustainability Reports for the first time, Authorities in our countries of operation. PERFORMANCE building on our commitment to move towards integrated OUTLOOK& Given the significant uncertainty around the duration reporting, and to showcase the year that was for our and impacts of the COVID-19 pandemic, on 17 March 2020 company, our people and all of our stakeholders. Amatil withdrew the earnings guidance, which was 1 At the time of publication of this 2019 Annual Report previously issued to the market on 20 February 2020. (“Report”), the world is responding to the COVID-19 This Report reflects our results and achievements for pandemic and the duration, impacts and severity are 2019. The strategies, priorities, shareholder value continuing, with many unknowns. proposition and outlook statements were relevant and At Coca-Cola Amatil, protecting the health and safety appropriate at the time of being issued within the 2019 of our people and those we work with will always be our Financial and Statutory Reports, but COVID-19 will BEING A SUSTAINABLE overriding priority. At the time of finalising this Report cause all of them to change. we are monitoring on a daily basis the status and impacts Amatil has a strong balance sheet and low net debt levels, BUSINESS of COVID-19, to respond and adjust across all of our ensuring we are well positioned to navigate this event. geographies and adapt to new work rhythms and We have been implementing contingency plans to operations – to remain focused on business continuity mitigate the impacts of COVID-19 on our workforce and and our customers during this challenging time. operations. We will continue to evolve our response We have cancelled large gatherings and implemented and assess the impact of this global pandemic as its physical distancing measures designed to protect our people, effect on our business becomes clearer. whether they work in our field-based sales teams, front-line Our latest updates to the market can be found on our manufacturing and distribution operations, or in an office- website at www.ccamatil.com. based environment. We have suspended all international and non-essential domestic travel and implemented We thank our many customers, brand and business measures to ensure we can equip our teams to work partners across all regions for working with us in GOVERNANCE virtually where possible, and safely in all other situations. partnership to continue to meet the needs of our customers & RISKS and protect the communities in which we operate. Amatil’s Annual General Meeting of Shareholders scheduled for 26 May 2020 will also be conducted virtually, to discourage physical attendance for the protection of all our people and our investor community. FINANCIAL & STATUTORY REPORTS For personal use only INFORMATION OTHER OTHER 1 Print date as at 14 April 2020. 1 WHO WE ARE Coca-Cola Amatil is one of the largest bottlers and distributors of non-alcoholic and alcoholic ready-to-drink beverages in the Asia Pacific region and one of the world’s larger bottlers of The Coca-Cola Company’s range of products. OUR PURPOSE EVERY DAY WE CREATE MILLIONS OF MOMENTS OF HAPPINESS AND POSSIBILITIES Our future is shaped by our purpose and our values form the foundation of our culture. Our purpose unites all of us and focuses our energy. It reflects the scale of our business and the millions of people we connect with directly and through our products. It’s about what we do every day and the possibilities we are creating for the future for Shareholders and society. OUR VALUES Our Values are the basis for how we work together and operate. They guide our behaviours and our decisions, every day. WE ARE WE TAKE THE WE FOCUS STRAIGHTFORWARD INITIATIVE AND ON TODAY AND AND OPEN OWN THE OUTCOME TOMORROW OUR AMBITION TO BE A REGIONAL BEVERAGES POWERHOUSE Our Ambition is to be a Regional Beverages Powerhouse in the Association of Southeast Asian Nations (ASEAN) and Oceania regions as we look to grow within categories, across geographies and along the beverages value chain. We have a clear growth platform that builds on our expert knowledge of the beverages market in ASEAN and Oceania, our leading portfolio of brands, and track record of delivering innovation. For personal use only 2 COCA-COLA AMATIL ANNUAL REPORT 2019 BUSINESS OUR OUR GROUP STRATEGY Our Group strategy is our blueprint for success. It positions us to capture growth and deliver long-term value. We know that our WE CREATE markets will continue to change. We are confident in our ability to adapt and adjust to capitalise on opportunities and address THE VALUE challenges as and when they arise. As a Group, we are focused on two overarching objectives – Perform and Grow. The success of both is built on a foundation of a Strong Organisation. PERFORM GROW The Perform objective is guided by our Shareholder Value Proposition and is We are a strong organisation with a proven ability to adapt and capitalise our primary day-to-day focus. The three strategic pillars within this – Lead, on opportunities to further grow our portfolio of brands and businesses. Execute, Partner – were defined as part of our 2014 strategic review and are Our growth agenda positions us to deliver long-term sustainable returns the basis on which our businesses structure their plans. to our Shareholders. PERFORMANCE Our ambition is to be a Regional Beverages Powerhouse. To achieve this, OUTLOOK& LEAD we are looking to be ‘the leading beverages business in the ASEAN and Strengthen Category Leadership Position Oceania region’. – Leading brands in each of our major categories in each market Our growth agenda seeks to maximise opportunities and position us to – Up-weighted levels of innovative marketing continually strengthening brand equity deliver long-term sustainable returns to our Shareholders. We have a clear growth platform that focuses on: – Evolving portfolio that adapts to changing consumer preferences GROWTH WITHIN CATEGORIES EXECUTE – Innovation with our brand partners and selective Mergers and Acquisitions Step Change in Productivity and In-Market Execution in existing and new beverage categories – World-class customer servicing capability – New beverage categories in existing markets – Route-to-market that provides customer diversification and competitive BEING A SUSTAINABLE advantage GROWTH ACROSS GEOGRAPHIES – Effective leverage of our large-scale, low-cost manufacturing, sales and – Entering new geographies in existing beverage categories BUSINESS distribution capability – Immediate focus on South-East Asia and Oceania based on our current operations, future growth prospects and potential for synergies PARTNER Better Alignment with The Coca-Cola Company and Our Other Brand Partners GROWTH ALONG THE VALUE CHAIN – Shared vision of success and aligned objectives – Vertical integration and extensions of our existing value chain in current – Joint plans for growing System profitability geographies – increasing the role we play in getting our great beverages into the hands of consumers. – Balanced share of risk and rewards STRONG ORGANISATION GOVERNANCE & RISKS Our ability to deliver our performance and achieve our growth aspirations is underpinned by a Strong Organisation with strong, accountable businesses, a One Amatil mindset led by the Group Leadership Team and a lean Group centre that safeguards and shapes our future. In 2019 we accelerated the implementation of our Strong Organisation through divestment of the SPC business and announcement of the integration of Alcohol & Coffee into each of our geographies. This has simplified our manufacturing model, strengthened our customer focus, and improved our emphasis on our Beverages Powerhouse ambition. A ONE AMATIL MINDSET We believe the Group Leadership Team has a shared accountability for a One Amatil mindset so we are making decisions that are in the best interests of Amatil overall. There are many opportunities to share learnings, leverage expertise and share services. A LEAN GROUP OFFICE FINANCIAL & STATUTORY An essential component of our model is a lean Group Office, which provides functional leadership to support our businesses and a One Amatil approach to safeguarding and shaping our future. This ensures we operate in line with the expectations of our Board, realise our ambition of becoming a Regional Beverages Powerhouse and create REPORTS long-term value for Shareholders and for society.