Integrated Annual Report 2020 Coca‑Cola HBC Integrated Annual Report 2020 ADAPT TO WIN 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. INTEGRATED ANNUAL REPORT 2020 1 SR CG 2020 highlights FS SSR Volume (m unit cases) Net sales revenue (€m) SI 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% In a year impacted by COVID‑19, Profit before tax (€m) Net profit2 (€m) we adapted fast to ensure we could 593.9 414.9 continue to create value for all our 2019: 661.2 2019: 487.5 Comparable EPS1 (€) Basic EPS (€) stakeholders. This meant: 1.185 1.140 • Caring for our people and the 2019: 1.436 2019: 1.340 communities we serve page 2 Primary packaging collected In 2020, we started reporting against for recycling (equivalent) the SASB framework. 44% • Flexing our 24/7 portfolio page 4 2019: 48% • Adapting our routes to market page 6 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. • Driving operational efficiencies page 8 profit and comparable net profit respectively after tax attributable to owners of the parent. The agility and commitment of our Contents people allowed us to adapt to win, Strategic Report Corporate Governance Supplementary Information keeping us on course to become the 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 leading 24/7 beverage partner. 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 144 Financial statements competitiveness & investment Our strategy and purpose are supported by five growth pillars, 150 Notes to the consolidated financial 38 Cultivate the potential of our people each of which is a core strength or competitive advantage. statements 42 Earn our licence to operate 48 Key performance indicators Leverage our unique 24/7 portfolio Swiss Statutory Reporting 1 go to pages 26-29. 50 Sustainability performance 204 Report of the statutory auditor 52 Managing risk and materiality Win in the marketplace on Coca-Cola HBC AG’s 2 go to pages 30-33. 57 Viability statement consolidated financial statements 66 Financial review Fuel growth through competitiveness & investment 210 Report of the statutory auditor 3 go to pages 34-37. 70 Segment highlights on Coca-Cola HBC AG’s financial 72 Non-financial reporting directive statements Cultivate the potential of our people 4 go to pages 38-41. 213 Coca-Cola HBC AG’s financial statements Earn our licence to operate 5 go to pages 42-47. 224 Report of the statutory auditor on the remuneration report Watch our video and learn more at https://coca-colahellenic.com/en/investors/ Throughout the 2020 Integrated Annual Report, we have 225 Statutory Remuneration Report 2020-integrated-annual-report/. identified areas which are relevant to each of these growth pillars. 2 COCA‑COLA HBC INTEGRATED ANNUAL REPORT 2020 3 SR CG FS SSR CARING FOR OUR SI 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 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 INTEGRATED ANNUAL REPORT 2020 5 SR CG FS 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 INTEGRATED ANNUAL REPORT 2020 7 SR CG FS 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. g to su aptin ppor ad t o re ur a 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 INTEGRATED ANNUAL REPORT 2020 9 SR CG FS 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.