2019 ANNUAL REPORT BUSINESS OUR COVID-19 & OUR 2019 REPORT AN IMPORTANT MESSAGE WE CREATE THE VALUE OUR BUSINESS PERFORMANCE & OUTLOOK READING THIS REPORT IN THE CONTEXT OF COVID-19 01 COVID-19 & Our 2019 Report 40 Group Performance As you will see, we have adopted a new approach to We will continue to align with advice from the World 02 Who We Are 46 Australian Beverages Amatil’s 2019 Annual Report. We have combined our Health Organisation and the relevant Government 04 Where We Operate 50 New Zealand & Fiji Annual and Sustainability Reports for the first time, Authorities in our countries of operation. PERFORMANCE building on our commitment to move towards integrated OUTLOOK& 06 2019 Highlights 52 Alcohol & Coffee Given the significant uncertainty around the duration reporting, and to showcase the year that was for our 08 Chairman’s Review 54 Indonesia & Papua New Guinea and impacts of the COVID-19 pandemic, on 17 March 2020 company, our people and all of our stakeholders. 10 Group Managing Director’s Review 57 Corporate & Services 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 THE VALUE WE CREATE BEING A SUSTAINABLE BUSINESS pandemic and the duration, impacts and severity are 2019. The strategies, priorities, shareholder value continuing, with many unknowns. 12 Strategy and Long-term Value Creation 58 Sustainability Strategy proposition and outlook statements were relevant and 14 Our Shareholder Value Proposition 61 Sustainability Goals and Progress At Coca-Cola Amatil, protecting the health and safety appropriate at the time of being issued within the 2019 16 Thriving Customers of our people and those we work with will always be our Financial and Statutory Reports, but COVID-19 will BEING A SUSTAINABLE 20 Committed Partners overriding priority. At the time of finalising this Report cause all of them to change. 24 Engaged People GOVERNANCE & RISKS we are monitoring on a daily basis the status and impacts Amatil has a strong balance sheet and low net debt levels, BUSINESS 28 Delighted Consumers of COVID-19, to respond and adjust across all of our 62 Corporate Governance ensuring we are well positioned to navigate this event. 32 Better Environment geographies and adapt to new work rhythms and 64 Board of Directors We have been implementing contingency plans to operations – to remain focused on business continuity 38 Stakeholders 66 Group Leadership Team mitigate the impacts of COVID-19 on our workforce and and our customers during this challenging time. 68 Business and Sustainability Risks 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 FINANCIAL & STATUTORY REPORTS Our latest updates to the market can be found on our manufacturing and distribution operations, or in an office- website at www.ccamatil.com. 70 Directors’ Report (including Remuneration Report) based environment. We have suspended all international 99 Financial Report and non-essential domestic travel and implemented We thank our many customers, brand and business 150 Independent Auditor’s Report 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. OTHER INFORMATION Amatil’s Annual General Meeting of Shareholders scheduled for 26 May 2020 will also be conducted virtually, to 155 Independent Limited Assurance Report discourage physical attendance for the protection of all 156 Shareholder Information our people and our investor community. 159 Five-year Financial History 160 Glossary 161 Directories & Calendar of Events FINANCIAL & STATUTORY REPORTS ANNUAL GENERAL MEETING INFORMATION Coca-Cola Amatil’s AGM will be held virtually via our online platform at OTHER https://agmlive.link/CCL20 on 26 May 2020 at 10.00am (AEST). 1 Print date as at 14 April 2020. ABN 26 004 139 397 1 BUSINESS OUR 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 OUR GROUP STRATEGY region and one of the world’s larger bottlers of The Coca-Cola Company’s 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 range of products. 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. OUR PURPOSE PERFORM GROW EVERY DAY WE CREATE MILLIONS OF MOMENTS OF HAPPINESS 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. AND POSSIBILITIES 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. Our future is shaped by our purpose and our values form the foundation of our culture. Our PERFORMANCE Our ambition is to be a Regional Beverages Powerhouse. To achieve this, OUTLOOK& purpose unites all of us and focuses our energy. It reflects the scale of our business and the LEAD we are looking to be ‘the leading beverages business in the ASEAN and millions of people we connect with directly and through our products. It’s about what we do Strengthen Category Leadership Position Oceania region’. every day and the possibilities we are creating for the future for Shareholders and society. – 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 OUR VALUES – Innovation with our brand partners and selective Mergers and Acquisitions Step Change in Productivity and In-Market Execution in existing and new beverage categories Our Values are the basis for how we work together and operate. They guide our behaviours – World-class customer servicing capability and our decisions, every day. – New beverage categories in existing markets – Route-to-market that provides customer diversification and competitive BEING A SUSTAINABLE advantage GROWTH ACROSS GEOGRAPHIES WE ARE WE TAKE THE WE FOCUS – Effective leverage of our large-scale, low-cost manufacturing, sales and – Entering new geographies in existing beverage categories BUSINESS STRAIGHTFORWARD INITIATIVE AND ON TODAY AND distribution capability – Immediate focus on South-East Asia and Oceania based on our current operations, future growth prospects and potential for synergies AND OPEN OWN THE OUTCOME TOMORROW 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. OUR AMBITION – Balanced share of risk and rewards TO BE A REGIONAL BEVERAGES POWERHOUSE Our Ambition is to be a Regional Beverages Powerhouse in the Association of Southeast STRONG ORGANISATION Asian Nations (ASEAN) and Oceania regions as we look to grow within categories, across GOVERNANCE geographies and along the beverages value chain. We have a clear growth platform that & RISKS builds on our expert knowledge of the beverages market in ASEAN and Oceania, our Our ability to deliver our performance and achieve our growth aspirations is underpinned by a Strong Organisation with strong, accountable businesses, leading portfolio of brands, and track record of delivering innovation. 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. OUR LONG-TERM VALUE PROPOSITION In 2019 we redefined our approach to the creation of long-term value. It is a new way of thinking about how we create long-term, sustainable value that integrates our previous sustainability framework with our Shareholder value proposition.