we’ve come a long way... ...we see the way forward table of contents SHORT PROFILE / FINANCIAL HIGHLIGHTS 3 COCA-COLA HBC AT A GLANCE 4 CHAIRMAN’S LETTER 6 MANAGING DIRECTOR’S LETTER 7 STRATEGY AND EXECUTION 8 OPERATING PERFORMANCE 30 FINANCIAL PERFORMANCE 36 CORPORATE GOVERNANCE 42 SOCIAL RESPONSIBILITY 50 DIRECTORS’ BIOGRAPHIES 54 GOVERNING BODIES 56 SHAREHOLDER INFORMATION 58 IFRS FINANCIAL STATEMENTS 61 US GAAP FINANCIAL STATEMENTS 107 US GAAP/IFRS RECONCILIATION 152 CONVENIENCE TRANSLATION 154 GLOSSARY OF TERMS 156 FORWARD-LOOKING STATEMENTS 158 // short profile Coca-Cola HBC (CCHBC) is one of the world’s largest bottlers of Coca-Cola products. We operate in 26 countries, 12 of which are in the European Union, and serve a population of approximately 540 million people. We refresh our consumers with established global brands, but also with strong local brands tailored to satisfy varying tastes. Coca-Cola HBC’s shares are listed on the Athens Exchange (ATHEX:EEEK), with secondary listings on the London (LSE:CCB) and Australian (ASX:CHB) Stock Exchanges. CCHBC’s American Depositary Receipts (ADR’s) are listed on the New York Stock Exchange (NYSE: CCH). // financial highlights 2004 2004 2003 % change % change in millions except per share data and ROIC underlying reported underlying reported Volume (unit cases) 1,413 1,413 1,359 +4% +4% Net sales revenue €4,248 €4,248 €4,064 +5% +5% Gross profit 1,722 1,693 1,594 +8% +6% Operating profit (excluding pre-acquisition tax losses) 334 285 273 +22% +4% Net profit 152 112 116 +32% -3% Earnings per share 0.64 0.47 0.49 +31% -3% EBITDA 730 684 665 +10% +3% ROIC 8.5% 7.1% +140bps Note: Refer to IFRS financial statements. Underlying financial indicators exclude any charges related to the recognition of pre-acquisition tax losses and the 2004 restructuring costs. 2003 figures are revised for new accounting policy Coca-Cola HBC Annual Report * 2004 3 //Coca-Cola HBC at a glance Established markets Austria, Greece, Italy, Northern Ireland, Republic of Ireland and Switzerland Developing markets Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia Emerging markets Armenia, Belarus, Bosnia and Herzegovina, Bulgaria, Former Established Developing Emerging Total Yugoslav Republic of markets markets markets Macedonia (FYROM), Population (millions) 71 77 391 539 Moldova, Nigeria, GDP per capita (US$) 31,100 7,800 2,200 6,800 Romania, Russia, Serbia and Montenegro Per capita CSD consumption (servings) 269 242 101 144 and Ukraine Source: Canadean, EIU and CCHBC Principal milestones 2000 2001 20 02 2003 2004 2002 Territory acquisition 2003 Coca-Cola HBC completes a leveraged recapitalisation plan 2004 Coca-Cola HBC participates in the Athens 2004 CCHBC acquires all bottling and as a result returns €2 per share to shareholders Olympic Games. 17,000 athletes and 3.5 million spectators 2000 Merger Hellenic Bottling Company 2001 Territory acquisition operations in the Baltic states consumed Coca-Cola, POWERaDE, Amita Motion and Avra and Coca-Cola Beverages merge CCHBC gains full control of Russian Coca-Cola of Estonia, Latvia and Lithuania to form Coca-Cola HBC, the 2nd largest bottling operations 2002 NYSE listing 2003 Amita celebrates its 20th anniversary in Greece. Coca-Cola bottler in the world CCHBC lists on the New York Launched in 1983, it is the market leader in Greece 2004 Eight Coca-Cola HBC Stock Exchange with 29 flavors and 55% market share countries join the European Union 2000 Coca-Cola HBC is included in the FTSE4GoodEurope 2003 Water acquisitions Index which forms part of the FTSE4Good series of socially responsible 2002 Water acquisitions CCHBC expands its water presence with the acquisition of CCHBC continues implementing 2004 Water acquisition indices. Companies included in the index successfully meet criteria 2003 The Coca-Cola Company its water strategy by acquiring in the areas of working towards environmental sustainability, Valser in Switzerland and Dorna in Romania CCHBC acquires the mineral grants an extension Multivita in Poland water company Gotalka in Croatia developing positive relationships with stakeholders to the bottler’s agreements with Coca-Cola HBC and Römerquelle in Austria 2004 Coca-Cola HBC is awarded and upholding and supporting universal human rights until December 2013, with the option a «Talent Management Award» by the US institution to request a further ten-year extension to 2023 of Quality and Productivity in Houston, Texas 4 2004 * Coca-Cola HBC Annual Report 2004 Market Split Category Split 40% 19% 41% Volume 13% 16% 6% 9% 6% 7% 4% 6% 53% 17% 30% Net sales revenue 90% 85% 81% 77% 52% 14% 34% Underlying EBITDA 2001 2002 2003 2004 Established markets Developing markets Emerging markets CSD’s Other non-CSD’s Water Note: Underlying financial indicators exclude the recognition of pre-acquisition tax losses Note: Figures are reported on a constant territory basis and the 2004 restructuring costs 2004 Product Split a Coca-Col Coca-Cola light Fanta Sprite Other CSD’s Water Juices Tea CSD’s - non Other 43% 6% 15% 7% 6% 16% 4% 2% 1% Total 100% 2000 2001 20 02 2003 2004 2002 Territory acquisition 2003 Coca-Cola HBC completes a leveraged recapitalisation plan 2004 Coca-Cola HBC participates in the Athens 2004 CCHBC acquires all bottling and as a result returns €2 per share to shareholders Olympic Games. 17,000 athletes and 3.5 million spectators 2000 Merger Hellenic Bottling Company 2001 Territory acquisition operations in the Baltic states consumed Coca-Cola, POWERaDE, Amita Motion and Avra and Coca-Cola Beverages merge CCHBC gains full control of Russian Coca-Cola of Estonia, Latvia and Lithuania to form Coca-Cola HBC, the 2nd largest bottling operations 2002 NYSE listing 2003 Amita celebrates its 20th anniversary in Greece. Coca-Cola bottler in the world CCHBC lists on the New York Launched in 1983, it is the market leader in Greece 2004 Eight Coca-Cola HBC Stock Exchange with 29 flavors and 55% market share countries join the European Union 2000 Coca-Cola HBC is included in the FTSE4GoodEurope 2003 Water acquisitions Index which forms part of the FTSE4Good series of socially responsible 2002 Water acquisitions CCHBC expands its water presence with the acquisition of CCHBC continues implementing 2004 Water acquisition indices. Companies included in the index successfully meet criteria 2003 The Coca-Cola Company its water strategy by acquiring in the areas of working towards environmental sustainability, Valser in Switzerland and Dorna in Romania CCHBC acquires the mineral grants an extension Multivita in Poland water company Gotalka in Croatia developing positive relationships with stakeholders to the bottler’s agreements with Coca-Cola HBC and Römerquelle in Austria 2004 Coca-Cola HBC is awarded and upholding and supporting universal human rights until December 2013, with the option a «Talent Management Award» by the US institution to request a further ten-year extension to 2023 of Quality and Productivity in Houston, Texas Coca-Cola HBC Annual Report * 2004 5 // Chairman’s letter The performance of Coca-Cola HBC in 2004 provides a valuable continue to be rewarded through strategic initiatives targeting the insight into the evolutionary process that has taken place in the years continued expansion of our dynamic product portfolio. since the company was first formed. Finally, looking back on the year, it would be remiss not to mention Over those years, attention was given to establishing and refining the Athens 2004 Olympic Games. The return of the world’s premier a strong corporate culture with principles and values that bring sporting event to Greece, home of Coca-Cola HBC, lifted spirits and rewards to our business and to key stakeholders in the markets we forged a bond between the diverse cultures of Europe and the world. serve. Coca-Cola HBC and the Coca-Cola system are honoured to have been associated with the success of the Games and are proud to have While 2004 proved challenging due to a number of external factors contributed in some small way to the success of the XXVIII that impacted many companies in the fast moving consumer goods Olympiad through activities in Greece and our markets across the sector, Coca-Cola HBC was able to continue its progress, and meet, world. or in a number of instances even exceed, the goals it set itself. We have developed people, systems and processes that have created a In closing, on behalf of the Board of Directors, I would like to united, respected, innovative and international enterprise by thank our employees for their contribution, our customers for integrating 26 individual markets whilst managing to maintain the their business, our consumers for their continued support and our diverse quality of their unique cultures and traditions. shareholders for their confidence in our future. As the Company looks ahead to 2005, our intention is to continue to build on the fundamentals that supported our growth and development in the past. In practice, this means showing respect and consideration for our people, our 38,000 employees whose families rely on us for their livelihood. It means continuing to serve our customers and consumers with passion, by responding to their changing needs and desires with openness and integrity. It means managing and caring for the environment in a responsible and accountable manner and it means helping to enrich the lives of our local communities through the sponsorship of sport, music and culture. In fulfiling these basic objectives, we anticipate that we will see the realisation of the true George A. David potential of our emerging and developing market segment and will Chairman CAGR = 6% CAGR = 14% CAGR = 41% 2001 1,185 2001 496 2001 13.5% 2001 119 2001 (19) 2001 3.2% 2002 1,268 2002 579 2002 14.9% 2002 193 2002 36 2002 5.2% 2003 1,359 2003 665 2003 16.4% 2003 273 2003 116 2003 7.1% 2004 1,413 2004 730 2004 17.2% 2004 334 2004 152 2004 8.5% Volume EBITDA EBITDA Margin EBIT Net Profit ROIC million u.c.