Coca-Cola Europacific Partners(CCEP) - 2020 Q4 - Annual Report

Financial Performance - Comparable diluted EPS declined by 29% driven by the decline in comparable operating profit, partially offset by the return of approximately €130 million to shareholders before the suspension of the €1 billion share buyback program in March 2020[26] - Free cash flow generation was over €900 million, close to the medium-term objective of generating at least €1 billion a year, despite the impact of COVID-19[29] - The company achieved strong free cash flow of €924 million, supported by a strong balance sheet, enabling a full-year dividend payout ratio of approximately 50%[113] - In 2020, Coca-Cola paid dividends totaling €386 million to shareholders[92] Impact of COVID-19 - Comparable volumes declined by 10% reflecting the adverse impact of COVID-19, particularly on immediate consumption and the away from home channel[27] - The hydration category experienced a significant volume decline of 34% due to COVID-19 restrictions affecting immediate consumption[50] - The company donated more than 600,000 unit cases (3.3 million liters) of products to foodbanks, medical, and key workers during the pandemic[111] - The company provided €3 million in product donations and financial aid to support local communities during the pandemic[103] - The company gained overall market share during 2020 despite the challenges posed by the COVID-19 pandemic[113] Sustainability Initiatives - GHG emissions within the value chain fell by 11.9% compared to 2019 and by 37.7% compared to 2010[34] - The company aims to reach net zero greenhouse gas emissions by 2040 and to reduce GHG emissions across its value chain by 30% by 2030[34] - CCEP aims to reduce absolute GHG emissions by 30% by 2030, aligned with the Paris Agreement to limit global warming to 1.5℃[134] - The company has set an ambition to reach net zero GHG emissions by 2040, supported by a €250 million investment over three years[164] - The company is committed to ensuring that 100% of primary packaging is recyclable or reusable[195] - The company plans to cut GHG emissions by 30% across its entire value chain by 2030, with a significant focus on supply chain emissions[200] - The company is committed to sourcing 100% of agricultural ingredients from sustainable sources[195] - The company aims for 50% of its PET bottles to come from recycled materials by 2023[195] Product and Market Development - Coca-Cola Zero Sugar was the number one soft drinks brand for absolute value growth across markets, according to Nielseniq[44] - Monster brand achieved a volume growth of 15.5% in 2020, becoming the number one energy brand in Spain and Portugal[46] - Coca-Cola introduced Topo Chico hard seltzer, marking its entry into the alcohol category in Europe[52] - Costa Coffee expanded into Germany in 2020, following its introduction in Great Britain in 2019[51] - The company continues to expand its portfolio into areas believed to drive significant growth in the coming years[43] - The company is expanding its product range to include hard seltzers and hot coffee, enhancing its market presence[178] - CCEP has introduced new brands such as Costa and Topo Chico, which are expected to scale up further in 2021[134] Employee and Community Engagement - The company invested approximately €9 million in employee training and development in 2020[89] - The company reported a total of 4,012 employees in its Iberia operations as of December 31, 2020[58] - Over 5,000 colleagues participated in online wellbeing training modules during the pandemic[125] - CCEP's internal communication platform, Redline, has grown significantly, providing a sense of community during the pandemic[129] - The digital platform My.CCEP.com now has around 31,000 customers using it, three times more than at the beginning of the year[120] Strategic Acquisitions and Investments - Coca-Cola European Partners is considering the acquisition of Coca-Cola Amatil Limited to enhance its growth strategy in the Asia Pacific region[92] - The acquisition of Coca-Cola Amatil was announced, solidifying the company's position as the largest Coca-Cola bottler by revenue and creating a platform for accelerated growth[113] - The company deferred non-critical capital expenditures of approximately €200 million to protect performance during the pandemic[113] - CCEP's innovation investment program, CCEP Ventures, partnered with startups Foodl and StarStock to enhance product accessibility for consumers[147] Digital Transformation - The company is focusing on digital solutions to adapt to changing consumer behaviors, particularly in e-commerce[130] - The company is enhancing its digital investments to empower its sales force and leverage analytics[189]