Coca-Cola Europacific Partners(CCEP) - 2018 Q4 - Annual Report

Financial Performance - Coca-Cola European Partners reported a revenue of €11.5 billion for the fiscal year ended December 31, 2018[14]. - The diluted earnings per share on a comparable basis were €2.30, reflecting a strong financial performance[14]. - The company achieved a return on invested capital (ROIC) of 9.9%[14]. - Free cash flow for the year was €1.1 billion, indicating robust cash generation capabilities[15]. - Reported revenue totaled €11.5 billion, up 4.0% versus prior year, or up 4.5% on an fx-neutral basis[106]. - Reported operating profit was €1.3 billion, up 3.0%, while comparable operating profit was €1.6 billion, up 7.0%[106]. - Reported diluted earnings per share were €1.86 or €2.30 on a comparable and fx-neutral basis, up 8.5%[106]. - Net cash flows from operating activities were €1.8 billion, with full year free cash flow of €1.1 billion[106]. - Executed €500 million share buyback and announced an annual dividend of €1.06 per share, an increase of 26.0% from 2017[106]. - Comparable volume decreased 1.0% while revenue per unit case increased 5.5%[106]. - Key operating profit factors included solid revenue growth on a comparable and fx-neutral basis driven by strong revenue per unit case growth[107]. - Comparable operating margins improved as gross margin was broadly maintained and post-Merger synergy benefits were realized[108]. Sustainability Initiatives - 100% of the electricity purchased in 2018 was from renewable sources, demonstrating a commitment to sustainability[32]. - In 2018, 27.6% of the PET used for bottles was recycled PET (rPET), and 98% of the packaging was recyclable, as part of CCEP's commitment to sustainability[51]. - CCEP's sustainability action plan, "This is Forward," includes measurable targets across drinks, packaging, and society, with a focus on water, climate, and supply chain[51]. - The company aims to collect 100% of its packaging and reduce sugar in its drinks as part of its sustainability action plan, "This is Forward"[60]. - The company achieved a recycling rate of 98% for its packaging in 2018, with a target of 100% recyclability for all primary packaging by 2025[164]. - In 2018, 27.6% of the PET used for bottles was sourced from recycled PET, with a goal of reaching 50% by 2025[164]. - The company plans to cut greenhouse gas emissions from its core business by 50% and across its entire value chain by 35% by 2025[152]. - The company aims to reduce water usage in manufacturing by 20% and replenish 100% of the water used in areas of water stress[152]. - The company is committed to ensuring that 100% of its main agricultural ingredients and raw materials come from sustainable sources by 2020[152]. - The company collected 584 tons of waste from coastal clean-up initiatives in Spain and Portugal, involving 5,270 volunteers[169]. - In 2018, the company reduced GHG emissions across core operations by 50.64% compared to a 2010 baseline[190]. - The company achieved a 4.14% reduction in Scope 1 and 2 carbon emissions versus 2017, and a 59.17% reduction versus the 2010 baseline[198]. - The energy use ratio was 0.317 MJ/litre of product in 2018, a reduction of 17.22% since 2010[190]. - In 2018, the company managed 15 community-based water replenishment projects, replenishing 141% of the water used in drinks sourced from areas of water stress[185]. - The company aims to purchase 100% renewable electricity by 2020 as part of its commitment to the RE100 initiative[191]. Product Development and Market Strategy - Coca-Cola European Partners launched Fuze Tea, which quickly became one of the top three ready-to-drink teas in most markets[26]. - The company expanded its sparkling drink range with new flavors and continued to grow its energy drink portfolio, including Monster and Relentless[24]. - The company plans to evolve its product portfolio to include more plant-based beverages and ready-to-drink coffee products[16]. - CCEP has identified an incremental retail sales opportunity of €30 billion in its markets by 2028, positioning itself as a leader in the non-alcoholic ready-to-drink category[47]. - In 2018, CCEP launched Fuze Tea, which has become the number three ready-to-drink tea in most markets, with expectations that 80% of industry growth will come from the non-sparkling category over the next decade[49]. - The company is diversifying its drinks portfolio, including ready-to-drink organic teas, to meet evolving consumer needs[60]. - The focus is on value over volume, with initiatives like small size premium packs to cater to consumer preferences[65]. - The company is adapting its business model to reflect diverse customer segments, particularly focusing on the away-from-home market where it is currently underrepresented[49]. - The company is investing in technology to improve customer service and sales force efficiency, particularly in the away-from-home channel[60]. - CCEP aims for low single-digit revenue growth and mid-single-digit operating profit growth, targeting a free cash flow of at least €1 billion per annum over the medium term[49]. Workforce and Community Engagement - The company has pledged that 40% of management positions will be held by women by 2025, with women currently holding 35.6% of these positions[51]. - In 2018, 35.6% of management positions were held by women, with a target of 40% by 2025[78]. - The company introduced a new volunteering policy allowing employees to dedicate up to two paid working days a year for charity work[179]. - In 2018, the company contributed €5 million, or 0.41% of profit before tax, to community activities, with employees dedicating 11,955 volunteer hours[178]. - The company engages with approximately 19,000 suppliers to address sustainability issues and improve supply chain practices[71]. - The company emphasizes creating long-term value for customers through world-class execution and a customer-centric operating model[63].