Coca-Cola Europacific Partners plc

Hello, and thank you all for joining us today. I'm here with Damian Gamill, our CEO, and Nick Giangiglione, our CFO. Before we begin with our opening remarks and our results for second quarter and half year 2022, a reminder of our cautionary statements. This call will contain forward-looking management comments and other statements reflecting our outlook. These comments should be considered in conjunction with the cautionary language contained in today's release, as well as the detailed cautionary statements found in reports filed with the UK, US, Dutch, and Spanish authorities. A copy of this information is available on our website at www.cococola.edu.com. Prepared remarks will be made by Damian and Nick and accompanied by a slide deck. We will then turn the call over to your questions. Please note that unless otherwise stated, metrics presented today will be on a comparable and effects neutral basis throughout. Any growth rates will also be presented on a pro forma basis. Following the call, a full transcript will be made available as soon as possible on our website. I will now turn the call over to our CEO Samian.

Thank you, Sarah, and good morning, good afternoon, and many thanks to everyone joining us today. In May, we celebrated our first year as Coca-Cola Europe Pacific partners, and I'm incredibly proud, as are the team, and pleased with the progress we've made to date. We've built a solid platform for long-term profitable growth, focused on delivering value for our shareholders and, of course, our customers. We had a fantastic first half, achieving strong top and bottom line growth, value share gains, and an impressive level of free cash flow. This really gives us confidence for the rest of the year, so I'm really pleased to be raising our 2022 revenue, profit, and free cash flow guidance today. We are very proud of our strong relationship and alignment with the Coca-Cola Company and our other brand partners such as Monster, and we are very confident in the future. We've retained our sharp focus on revenue growth management and driving efficiencies throughout the business, while continuing to invest for long-term growth, particularly in our portfolio, our digital platforms, sustainability, and of course in our people, to whom I wish to say a big, big thank you for everything you do for CCEP and our customers. So although we're mindful of the macroeconomic and the unprecedented inflationary environment, we do believe we are well placed for the second half of 2022 and beyond. I would now like to talk a little bit to the categories in which we compete. They've remained robust, and I'm very pleased that we've continued to take share, grow household penetration, and importantly, drive more value for our customers. We have great brands, which our consumers love, and on the back of ongoing investment and innovation in brands, product and packaging, our brands continue to support a very solid RGM growth platform for our customers. This means that we can continue We can continue to achieve good pricing in the market, even in the most challenging of times, because that brand love, taste, and quality are always of paramount importance to our consumers. We continue to innovate, driving excitement and growth in the NARTD category that grew by around 5% in the first half across our market. That growth was even higher in API at around 15%. This is great for our customers too, and I'm immensely proud of the longstanding and supportive relationships we have with them, particularly over the last number of years with all of the challenges that COVID brought to our business and their businesses. It's great to see that once again, during the first half, we are the largest value creator in the retail channel within FMCG in Europe and across any RTD in API. In fact, in Europe, we delivered more than twice the value to our customers than our nearest peer. We have made structural changes to our business in recent years, which positions us more favorably in the event of a potential recessionary environment. As you know, approximately 40% of our volumes come from the more inelastic away from home channel, which is naturally more resilient in challenging times. And in the home channel, We have made bold strategic decisions in recent years, clearly targeting value over volume and improving the underlying profitability of the channel. We've step-changed our recommended price pack architecture to continue to address different consumers and now confidently play across a spectrum of recommended price points and elasticities. We also continue to actively manage our headline pricing and optimize our promotions through smart, digitally led revenue growth management. So we do feel good about our categories. And although we're not seeing signs of a shift in consumption, we are well placed as we moved into more uncertain times. So this slide should be familiar. We have a simple but vital purpose to refresh Europe and API and critically to continue to make a difference to all our communities and our stakeholders. We have a simple focus around great people, great service, and great beverages, all done sustainably for a much better shared future. So now I'd like to briefly touch on each of these areas as we look back at the first half of 2022. Firstly, and most importantly to our great people, the well-being and safety of our colleagues remains our number one priority at CCEP. And our new Get Home to What You Love campaign has really brought the importance of safety to life across all of our businesses. We had a very strong participation in our first global digital engagement survey. With a stable engagement survey overall, a great result in what has been a challenging environment as we establish new ways of working post-COVID. And this score continues to position CCEP ahead of our benchmark group. In June, we saw some fantastic pride celebrations across many of our sites as we further progress our everyone is welcome philosophy. Our D&I credentials continue to be recognized externally too, and we were recently included in Bloomberg's Gender Equality Index for the second year in a row. And we were recently awarded gold at the UK Employee Experience Awards in recognition of the digital technologies we use across our workplace. As ever, great service remains a key priority, and a critical driver of our performance. We've continued supporting our customers through the reopening of Haruka and maintained levels of customer service in the 90s. In Indonesia, we had a record Ramadan period with our biggest ever activation, a huge event in the calendar representing about a third of our annual sparkling sales, more focus on our core sparkling and tea categories allowed us to effectively manage our supply chain and deliver better service to our customers across what is a wonderful period for all of our consumers. And finally, I'd like to take this opportunity to congratulate and wish the Netherlands good luck as they will represent Europe in the final of the annual global Coca-Cola bottler competition, the Candler Cup, which recognizes world-class customer service and execution. You may recall that we celebrated New Zealand winning the Cup last year. We are also extremely privileged to make, move, and sell the best beverages in the world. Coca-Cola Zero Sugar has continued to outperform across all of our markets, growing volumes by 24% versus 2019. Fanta, new flavor launches such as Fanta Raspberry in Australia, and the latest What the Fanta campaign continue to drive excitement for our consumers. Celebrating its 20th anniversary in our markets, Monster continued to gain share through great innovation and in-store execution. In GB, we are pleased to launch a new Costa Frappe range in three indulgent flavors, smooth coffee, chocolate fudge brownery, and caramel swirl. This is being supported by a great summer sampling campaign across the country. So if you come across one, make sure you try it in GB. And all of what we have just shared must continue to become more and more sustainable. This is a key focus for all of us at CCP, our consumers, our customers, and our shareholders. We want to continue to be the leader in package-less solutions, and in some of our markets, we are piloting new compact freestyle dispensing technology designed for smaller on-the-go and at-work locations. And as we continue our journey towards net-zero emissions by 2040, we even introduced lighter weight necks for our sparkling drink bottles, and we'll soon distribute 100% of our packaged beverages in returnable glass bottles to all of our Horica customers in France. To make it even easier for our consumers to recycle, similar to Germany, we've introduced new attached caps to all our plastic bottles across GB. Our progress continues to be recognized, and we're very proud to be included on the Financial Times Statista list of Europe's climate leaders, as one of 400 companies having achieved the greatest reduction in scope one and two greenhouse gas emissions between 2015 and 2020. So all in all, continued great progress towards a better shared future. Now, turning to our first half performance highlights. We continue to win with our customers, and this momentum is evidenced by our NARTD value share, which grew by around 30 basis points, both in-store and critically online. I am pleased that we delivered volume and revenue ahead of 2019 levels. The recovery of hurricane tourism, as well as a resilient home channel, led to strong volume growth of 13% in the first half. This was supported by great execution, and as I mentioned earlier, solid service levels across all our markets. Our continued focus on revenue growth management drove solid revenue per case growth significantly ahead of pre-pandemic levels. In the digital space, our transformation journey continues. And we remain on track to deliver around 30% of our European away-from-home revenue through our B2B portal, myccep.com. Given the uncertain outlook and some of the macro headwinds that we are facing, it is more important than ever for us to continue focusing on driving efficiencies throughout the business. And as you see referenced here, and which Nick will cover in more detail shortly. And having recently celebrated our first anniversary as Coca-Cola Europe Pacific Partners, I'd like to now share with you some of the key highlights. Last year, we described the Amatil transaction as the right deal at the right time. The more time I spend in the business, the more excited I get about the opportunities ahead. I firmly believe this was not just the right deal, but indeed a great deal. The API business had a great first half with revenue and profit ahead of 2019 and is moving ahead with its strategic priorities at pace. We've already made good progress in reducing the depth of our promotional support in Australia, with little impact on volumes. This is also great for our customers. We are sharing learnings and best practices in both directions, in areas such as IT infrastructure and data analytics. And our Chairman Saldorella and I recently visited New Zealand and Indonesia, which sets the benchmark for world-class execution, and we look forward to bringing learnings back into Europe too. And I'm even more excited about the transformation opportunity in Indonesia, having spent time there recently with our full board of directors. The reorientation of our portfolio is well advanced. We now have substantially exited beer and cider in Australia as planned, and the majority of the proceeds have been received from the sale of our CCEP-owned NARTD brands, with a few brands in New Zealand and Fiji still outstanding. This is all in line with the long-term growth plans that we can continue to develop with the Coca-Cola company to better align our portfolio with more focus on the core. So clearly, the growth potential from API is significant, and I look forward to sharing more at our capital markets event later this year. So on that note, I would now like to hand over to Nick to talk in more detail to the financials.

Over to you, Nick. Thank you, Damien, and thank you all for joining us today.