Integrated Annual Report 2021

Boldly embracing

the future

Coca‑Cola HBC Integrated Annual Report 2021

The early years

1951-1980

European consolidation

1981-1999

1951: Nigeria, where it all began

Coca-Cola HBC’s early beginnings were

inNigeria, where A.G. Leventis established

theNigerian Bottling Company in Lagos.

1953: Coca‑Cola

production begins

Production of Coca-Cola

began at a bottling facility in

Ebute-Metta, Lagos, Nigeria,

in 1953, with our first bottling

plant opening in Apapa that

same year.

1956: Honoured



An early honour for the new

business came in 1956 when the

young Queen Elizabeth II visited

the Nigerian Bottling Company

as part of her tour of Nigeria.

1977: From Africa to Ireland

In 1977 the company expanded outside

ofAfrica, acquiring the Coca-Cola franchises

inIreland.

1990s: Eastern Europe

The dramatic collapse of the Soviet Union in

1991saw a wave of change and new hope sweep

across Eastern Europe and the former Soviet

republics, presenting exciting new opportunities

for Coca‑Cola HBC across the region’s

fledglingdemocracies.

1981: Hellenic joins



Our company started the 1980s

with a statement of ambition,

acquiring the Hellenic Bottling

Company (HBC) of Greece.

1991: A defining period

We reached an historic milestone

as the Coca‑Cola HBC group

wentpublic on the Athens

stockexchange.

1999: Arriving in Russia

These heady days of the 1990s also saw Coca-Cola

HBC take its first steps in Russia. It was a significant

move for our business, which was completed in2001.

70 years of Coca‑Cola HBC

European expansion

2000-2012

The Coca-Cola HBC we know today

2013to the present day

2000: New markets, new cultures

The start of the new millennium saw the

mergerof the Hellenic Bottling Company with

Coca-Cola Beverages – forming Coca-Cola

Hellenic Bottling Company S.A. This brought

new territories, more cultures, and more

opportunities to grow.

2001: Dreams really



We acquired the remaining plants

in Russia from The Coca-Cola

Company, as well as the bottling

rights that we didn’t already own.

We quickly invested in our

Russiabusiness, creating more

jobs and opportunities for

localcommunities.

2005: Pioneering

sustainable technology

We took a big step on our

sustainability journey by

opening our first energy-

efficient Combined Heat

andPower plant in Hungary.

2005: Great Coke taste,

zero sugar

As consumer preferences

changed, The Coca-Cola

Company introduced

Coca-Cola Zero. It was a move

that would go on to drive the

Sparkling category to this day.

2013: A listing in London,



Coca‑Cola HBC reached a

landmark as it made its debut

onthe premium segment of the

London Stock Exchange. It was

also the year that the company

was registered in Switzerland

withnew headquarters.

2016: Serving up



Adult Sparkling is a high-value,

high-growth category. We are

proud to have activated

socialising away from home

withour portfolio of mixers and

straight-drinking flavours for

almost two decades.

29 markets, one family

In 2021 we announced the

acquisition of Coca-Cola

Bottling Company of Egypt,

oursecond market in Africa and

the 29th in the Coca‑Cola HBC

family. The deal was completed

in early 2022.

2020: Smell the coffee!

We made one of our biggest moves to expand our

24/7 portfolio in 2020 when we introduced COSTA

Coffee, recently purchased by The Coca-Cola

Company, to our first markets. In2021 we

strengthened our coffee offering with a 30%

shareholding in Caffè Vergnano.

70 years of Coca‑Cola HBC

2021 highlights

Volume (m unit cases)

2,412.7

2020: 2,135.6

Comparable EBIT

(€m)

831.0

2020: 672.3

Profit before tax (€m)

734.9

2020: 593.9

Comparable EPS

(€)

1.584

2020: 1.185

Primary packaging collected

forrecycling(equivalent)

46%

2020: 44%

Net sales revenue (€m)

7,168.4

2020: 6,131.8

Comparable EBIT

margin (%)

11.6

2020: 11.0

Net profit

(€m)

547.2

2020: 414.9

Basic EPS (€)

1.499

2020: 1.140

Energy-efficient coolers

42%

2020: 36%

Contents

Strategic Report

2 Chairman’s letter

4 Chief Executive Officer’s letter

6 Our business at a glance

8 Our business model

10 Stakeholder engagement

14 Market trends

16 Our purpose and strategy

18 Leverage our unique 24/7 portfolio

24 Win in the marketplace

30 Digitalisation across

Coca‑ColaHBC

32 Fuel growth through

competitiveness and investment

38 Cultivate the potential

ofourpeople

44 Earn our licence tooperate

52 Key performance indicators

54 Sustainability performance

56 Managing risk and materiality

72 Viability statement

74 Financial review

78 Segment highlights

80 Non-financial reporting directive

Corporate Governance

84 Chairman’s introduction

tocorporate governance

88 Board of Directors

92 Corporate Governance Report

118 Directors’ Remuneration Report

141 Statement of Directors’

responsibilities

142 2021 SASB index

Financial Statements

146 Independent auditor’s report

154 Financial statements

159 Notes to the consolidated

financialstatements

Swiss Statutory Reporting

212 Report of the statutory auditor

onCoca‑Cola HBC AG’s

consolidated financial statements

216 Report of the statutory auditor

onCoca‑Cola HBC AG’s financial

statements

219 Coca‑Cola HBC AG’s financial

statements

232 Report of the statutory auditor

onthe remuneration report

233 Statutory Remuneration Report

Supplementary Information

237 Alternative performance measures

241 Other supplementary information

242 Assurance statement

246 Glossary

1. For details on APMs, refer to ‘Alternative performance

measures’ section.

2. Net profit refers to net profit after tax attributable

toowners of the parent.

Future‑focused

portfolio

page 23

teams

page 43

Future‑focused

route to market

page 29

Through the decisions that we

have made over time and are

making today, we are ensuring

that our business is ready for

what the future may hold

Boldly embracing

the future

investment

page 37

Future‑focused

packaging

page 51

1INTEGRATED ANNUAL REPORT 2021

Chairman’s letter

Embracing new

opportunities

Dear Stakeholder,

Our Company celebrated the 70-year

history of the business in 2021, a milestone

which led us to reflect on what we have

achieved even as we embrace new

opportunities. The COVID-19 pandemic

tested our entire business and every one

ofus. Now, at the start of 2022, in addition

toCOVID‑19, the conflict between Russia

and Ukraine is having a terrible impact on

millions, including our own people. I have

seen through the challenge of COVID-19

and now, through this current unimaginable

tragedy, the amazing way that the people

ofthis business care for each other and

ourstakeholders. It makes me immensely

proud. Our resilience and adaptability are

ourgreatest strengths.

The recovery in our Company’s

performance in 2021 was very strong.

Wefinished 2021 with volumes, revenue

andprofitability all greater than in 2019.

Thisrebound is largely due to the long‑term

and thoughtful approach the company took

in the beginning of the pandemic in 2020.

The Board and Management were clear that

our people and business continuity were our

top priorities. This meant that no one lost

their job at Coca‑Cola HBC as a direct result

of the pandemic, we maintained supply for

our customers, continuing to engage with

them even when their businesses were

closed, and we continued to invest in

strategic priorities for the long-term health

of the business.

From its origins as a bottling line in the

basement of the Mainland Hotel in Lagos,

Nigeria, it is incredible to reflect on the

journey which has transformed this family-

run business into a FTSE 100 company

operating across 29 markets onthree

continents. With our roots in Africa, we

areextremely pleased to be welcoming

theteam from another African market to

theGroup 70 years later. Egypt offers

tremendous potential, with a young

population of over 100 million people.

I’vebeen fortunate to meet many of the

men and women of Coca‑Cola Bottling

Company of Egypt, and I know that they

share our passion for excellence.

“As always, we look to the long‑term potential



progress that would make those who passed its

stewardship onto us proud, and with a view to



2 

Our long history of geographic and portfolio

expansion, often through acquisitions, will

serve us well as we integrate the Egyptian

business into our Group. Our Board also

benefits from several members who have

experience of large integrations and will be

available to offer advice and guidance.

Bold decisions support resilience

for the long term

In my time as chairman, I’ve seen how our

Company benefits from the Board’s great

diversity of perspectives. Six of our 13

Boardmembers were originally appointed

byourtwo large, long‑term shareholders:

TheCoca‑Cola Company and Kar‑Tess

Holding, which gives the Board particularly

relevant industry and partnership knowledge

as well as a uniquely long-term perspective

and sense of ownership. This is strengthened

and complemented by the other independent

directors’ range of skills and experience

ensuring a wide range of contributions and

high-quality discussion.

In a period of upheaval and uncertainty,

theBoard has made decisions carefully

andthoughtfully to ensure our Company

ispositioned for success for the long term.

In 2020, and again in 2021, we ensured that

we focused on our most critical people first,

our business developers who are out in the

market every day selling our portfolio of

products. Decisions taken on remuneration,

particularly for our long-term incentive

plans, ensured awards cascaded throughout

the organisation, reinforcing focus on

strategic priorities to achieve long-term

performance and the retention of our

dedicated, high-performing people.

Ourremuneration decisions consider both

the whole organisation and the long-term

health of the business. During 2021 we

embarked on a wide-ranging shareholder

consultation process, which has helped us

understand the full range of views on these

decisions and informed our thinking.

In 2021, the Board approved our most

ambitious environmental target to date,

committing to achieve net-zero emissions

by 2040. This commitmentbuilds on our

long history of integrating our social and

environmental commitments into every

decision and action we take. Because we

believe that our environmental impact along

with the socio-economic development of

our communities are integral to our future

growth, NetZeroby40 has been integrated

into management incentives.

Dividend

During 2021 we paid the 2020 dividend of

€0.64 per share. This was a 3.2% increase

compared to the prior year and represented

an increase in our pay-out ratio to 54%,

above our usual targeted range of 35 to 45%.

We are pleased to be able to continue to

make progressive dividend payments and

are proposing a dividend of €0.71 per share

for 2021. Furthermore, we have increased

the targeted pay-out range to 40 to 50%

ofcomparable EPS. This decision reflects our

assessment of the ongoing risks combined

with our confidence in business resilience

and the Company’s strong balance sheet,

aswell as our many growth opportunities.

Looking ahead

As we welcome Egypt into the Group, I

continue to have great confidence in our

Company’s future. In 2021 this company

achieved a remarkable recovery while

managing a volatile environment of changing

restrictions due to COVID-19, global supply

chain shocks and even geopolitical instability

in our territory. As I write we have seen

conflict bringing unimaginable suffering and

hardship to millions.

Together with The Coca-Cola Company

wetook the difficult but necessary decision

to suspend the production and sale of

Coca-Cola brands in Russia. We have been

operating in Russia for decades and will

support our colleagues there as we work

through the implementation of this.

Thecompany continues to provide support

on the ground through product donations

and in partnership with The Red Cross.

Iknow I speak for the Board when I say that

the people of Ukraine and our colleagues

there are foremost in our thoughts. We hope

that peace is soon restored in Ukraine.

In early 2022, we remain focused on

supporting management as they operate

inthis incredibly challenging and rapidly

changing environment as well as overseeing

the Company’s achievement of our Growth

Story 2025 objectives. As always, we look to

the long-term potential of the business to

ensure that we are making the progress

thatwould make those who passed its

stewardship onto us proud, and with a view

to the future generations who will take it over.

On behalf of the Board, I extend my thanks

to all of our people who have built the

Company into what it is today, and to all of

our stakeholders for your continued support.

Anastassis G. David

Chairman of the Board

Section 172 statement

Read more about:

How we manage risks and materiality on pages 56 to 71

How we engage with key stakeholders on pages 10 to 13

Examples of how stakeholders were considered in specific decisions on pages 100-101

Section 172 of the UK Companies Act 2006 requires directors to promote the

success of their company for the benefit of the members as a whole, having regard

to the interests of stakeholders in their decision-making. Engaging with stakeholders

is an indispensable part of how Coca‑Cola HBC does business. TheBoard considers

the interests of the Group’s employees and other stakeholders in its decision-

making as a matter of good governance, and understands the importance, and

value, of taking into account their views, as well as considering the impact ofthe

Company’s activities on the community, environment and the Group’s reputation.

The Board also considers what is most likely to promote thesuccess of the

Company for its shareholders in the long term. Although the Company is Swiss-

incorporated and as such the UK Companies Act 2006 has nolegal effect,

thisapproach is in accordance with the UK Corporate GovernanceCode 2018.

3INTEGRATED ANNUAL REPORT 2021

Chief Executive Officer’s letter

Dear Stakeholder,

As I write in March 2022, my thoughts are

withour friends, colleagues, and their families

in Ukraine. I speak from personal experience

when I say that there is nothing worse than

war. It is never a solution. It brings terrible

suffering and pain, and it impacts the lives

ofpeople like nothing else. We are facing up

tothat now as we do all we can to support our

people in Ukraine and the humanitarian relief

efforts in the region. My overriding hope is for

a fast and peaceful resolution.

This report looks back to 2021, a year that

sawa very different challenge in the form of

the continued disruption of the COVID-19

pandemic to communities and businesses

across our territories.

It was also a special year for us as we

marked70 years of building partnerships

sinceour early beginnings in Nigeria in 1951.

Thismilestone provided an opportunity to

celebrate the legacy of our business and

reflect on how we define our Company for

today and tomorrow. The spirit of partnership

that has guided us for 70 years remains the

cornerstone of our approach.

It has enabled us to adapt and evolve our

business with a strong belief and commitment

in our investments that will fuel our future

growth. Our people remain the catalysts,

making our Company stronger and better

every day. We rely on their talent and diversity

to set us apart – because the real magic

happens when we work together as one

inclusive team. By harnessing the collective

talent across our markets, we are confident

that we will achieve the speed and progress

that will enable us to lead and to win for

thelong‑term.

Delivering a strong recovery

We delivered a very strong recovery in 2021,

with all key metrics above pre-pandemic

levels. This was the result of consistent and

disciplined focus on our strategic priorities

over the last few years. We finished the year

with strong revenue growth, our highest

everEBIT margin and free cash flow, while

continuing to gain share. This performance

demonstrates the strength of our 24/7

brandportfolio, revenue growth management

capabilities, route to market and execution

excellence in our markets.

It is thanks to the strong drive, creativity,

adaptability, and passion of our people, who

enabled us to navigate the volatile operating

environment while embracing change,

challenge and care, which are all central to

ourculture. Our results and future plans also

reflect our partnership with The Coca-Cola

Company, which remains stronger than ever.

“I am especially proud that even in these most

challenging of times, we are nurturing a strong

team that genuinely cares for one another,

underlined by resilience and belief in our future.

We remain focused as one connected team





Building

partnerships

4 

Accelerating capabilities

development

A critical driver of our growth is the

accelerateddevelopment of our prioritised

capabilities, which are increasingly proving

tobe our competitive advantage for building

sustainable long-term growth. Talent

development, Revenue Growth Management,

Route to Market, Big Data Advanced Analytics

and KeyAccount Management are now also

complemented by the accelerated Digitalisation

of our Company.

Targeted investment behind our Digital

Commerce strategy, regarding both route

tocustomer and route to consumer, is a key

focus in this area. This is supported by a newly

established and capable team that is driving

anambitious agenda. The Customer Portal,

our main B2B platform, which saw significant

development over the last 18 months, allows

our customers to order direct from us 24

hours a day, 7 days a week. This now accounts

for 8% of our transactions, up from 2% just

ayear ago. It is convenient for customers,

andcritically, it allows our business developers

to spend more time on category strategy

execution and customer relationships rather

than order taking.

We also continue to add value to our

customers in the broader e-marketplace.

Wehave increased our digital shelf space,

visibility, and activations on the e-commerce

websites of our biggest customers, and we

are now working extensively with newer,

digital-only customers, such as food delivery

platforms, which is driving strong growth.

New markets and brands

I am very pleased that during 2021 we

completed two strategic transactions which

are strengthening our growth potential.

Thesedemonstrate very well our focus on

strategic additions to our territories alongside

relevant bolt-on additions to our portfolio.

With our acquisition of Coca‑Cola Bottling

Company of Egypt (CCBCE), our Company

has added a second market in Africa, 70 years

after the Company was founded in Nigeria.

This means that we now seek to refresh one

quarter of the continent’s population. Egypt’s

young and rapidly growing population of more

than 100 million people brings our consumer

base to over 715 million, while positioning

ustowards high‑growth markets that will

fuelour business for many years to come.

Iamgrateful for the trust placed in us by

TheCoca‑Cola Company and the previous

shareholders of CCBCE, and am very

excitedabout the potential of the business

anditspeople.

We also acquired a 30% stake in Caffè

Vergnano, a family-owned Italian coffee

company, further strengthening our

coffeeportfolio. Caffè Vergnano is highly

complementary to our existing Costa Coffee

proposition and will allow us to address an

even wider range of consumer tastes and

segments, increasing our relevance in this

fast-growing category.

Our boldest sustainability

commitment to date

2021 was also a pivotal year in our

sustainability journey with our commitment

tonet zero emissions across our value chain

by 2040, a continuation of a journey we began

many years ago. We are confident in our track

record and our robust, action-based plan to

achieve this commitment. But we will also

need the support of our partners, with 90%

ofour emissions coming from suppliers

throughout our value chain. Our commitment

to net zero is now integrated into every

business decision we take.

Our sustainable packaging strategy is a key

driver towards net zero. We are committed

todelivering our Mission 2025 targets and

working towards a World Without Waste with

The Coca-Cola Company, developing ways

tocollect more packages and design new

sustainable ways of serving our beverages.

In2021, we transitioned to 100% rPET for all

single serve Sparkling Soft Drinks and iced-tea

in Italy and now sell five water brands in 100%

rPET bottles. With targeted initiatives to

increase our in-house production capacity for

rPET, we are taking a meaningful step towards

our target of increasing the percentage of

rPET to 35% by 2025.

The Coca-Cola Company also made a global

commitment to increase the percentage of

beverages sold in reusable packaging to 25%

by 2030. To support this goal, we have already

started our journey together to increase

our‘packageless’ offerings through new

dispensed solutions and this strategy will

remain a focus for the coming years.

Our successful partnership with our suppliers

saw us introduce KeelClip™ in 10 markets

bythe end of 2021, a paperboard packaging

that replaces plastic shrink wrap on multipack

cans. The roll out in our EU markets will be

completed this year. We also continue to

invest in infrastructure to collect and recycle

our packaging to ensure a circular packaging

economy. We now have deposit return

schemes in place or in progress in 12 of our

markets, and work with governments, NGOs

and academic institutions to determine the

right schemes everywhere we operate.

I am proud of the support that we continue

toprovide to our communities, particularly the

opportunities we give to young people to help

them develop their full potential. In 2018, we

promised to train one million young people

by2025 via our flagship #YouthEmpowered

programme, and to date have supported

more than 548,000.

Investing in our people and

nurturing our values‑based culture

We also remain steadfast in our commitment

to invest in our people, their potential, and

support personal and professional growth

through a variety of learning and developmental

programmes. Our Sales Academy, Supply

Chain Academy, Excel leadership programme

and our annual LearnFest event are some

examples of this. Today, more than 70%

ofour learning content is available online,

andthis has allowed us to innovate, adapt

andaccelerate to new ways of learning.

Thewhole team is committed to building

amore diverse workforce in an inclusive

workplace environment. It is a commitment

that I am personally passionate about and we

have made some good progress. In 2021 56%

of all appointments were women.

2021 also saw us conduct a comprehensive

review of our business to ensure that our

organisational structure and teams are

designed to support our strategic big bets

forfuture growth. To pursue our vision of

being the leading 24/7 beverage partner,

weenhanced our resources and expertise in

coffee, digital commerce, data and analytics,

and sustainability. And I was pleased to

seethat 85% of appointments were

internalcandidates.

The introduction of the COO role in 2020

hasenabled us to strengthen our leadership

capacity, performance edge and coordination

as well as sharpen our focus on people

development. The structure enables me to

spend more time on our strategic partnerships,

strategic agenda and targeted prioritised

areas, like culture and D&I, which I oversee

personally. I am also able to invest more time

behind our sustainability and regulatory agenda.

We also created a new role of Strategy and

Transformation Director in 2021. The role

isdesigned to drive more efficient and

bettercoordinated strategy execution by

transforming our enterprise-wide processes

and projects from the start. This will drive

better simplification, prioritisation and create

more time for customer focused initiatives.

Our 70th anniversary last year also gave

metime to reflect on my 25 years with the

Company. I am as proud today to work with

my colleagues across Coca‑Cola HBC as I was

when I first walked through the doors of the

Zagreb office all those years ago.

I am especially proud that even in these most

challenging of times, we are nurturing a strong

team that genuinely cares for one another,

underlined by resilience and belief in our future.

We remain focused as one connected team

on both what we are trying to achieve and

howwe will deliver it. While we look back at our

achievements, we recognise there is much

more to learn and improve. I am truly grateful

to be part of a team that is driven by deep

values, continues to have ambitious bold

dreams, and is committed to creating value

inthe market with our customers, while making

avisible difference to the world we care for.

Zoran Bogdanovic

Chief Executive Officer

5INTEGRATED ANNUAL REPORT 2021

Our business at a glance

The leading 24/7

beverage partner

Coca‑Cola HBC is a growth‑focused consumer

packaged goods business and strategic bottling

partner of The Coca-Cola Company.

Our 24/7 portfolio

Our portfolio is the strongest

and broadest in the beverage

industry. Our products cater

toagrowing range oftastes

with a wider choice of healthier

options, premium products

andincreasingly sustainable

packaging, giving us an

undisputed ability to delight

consumers across all

consumption occasions.

74%

Percentage ofCoca‑Cola HBC revenue

7% 4%

Sparkling Hydration Juice

RTD Tea

Energy

<1%

Coffee

3% <2%<1%

SnacksPlant based Premium spirits and flavoured



6 

Earning our licence



We create value for all stakeholders, making

a strong contribution to the development

ofthe societies in which we operate through

employment and our wider supply chain,

aswell as through community projects which

have long been a core way of doing business

for us. We operate in a way that preserves

our environment, integrating sustainability

into our decision making and actions.

Winning in the marketplace

We produce and sell an unparalleled

portfolioof beverage brands relevant to

every customer, consumer and occasion.

Our route to market is second to none

across our markets since it includes a

widerange of consumer channels – from

supermarkets and convenience stores

tohotels, cafés andrestaurants – and

encompasses more customers than any

competitor. Customer service and focus is

critical for ourbusiness and we are devoted

to helping our customers grow their

businesses, which inturn grows ours.

+90bpsbps

value share gained in NARTD

countries across three continents

36,000

employees

Where we operate

In 2021 we celebrated our 70th year. Our roots date back to 1951 when A.G. Leventis

founded the Nigerian Bottling Company in Lagos. Since then the business has expanded

across Europe and Russia, and in 2022 we added Egypt. Today we seek to refresh 715 million

consumers in 29 markets, spanning three continents.

Egypt

added

in 2022

Established markets

34.6%

of Group revenue

12.1%

Comparable EBIT

margin

Developing markets

19.0%

of Group revenue

7.8%

Comparable EBIT

margin

Emerging markets

46.4%

of Group revenue

12.7%

Comparable EBIT

margin

7INTEGRATED ANNUAL REPORT 2021

Our business model

Delivering value for



Our business model

1. Our resources and relationships

3. What we do

Read more about how we leverage our

unique 24/7 portfolio and win in the

marketplace on pages 18 to 29.

2. How we do it

Human

Our success is dependent on the passion

and customer focus of our talented

people. We empower them to pursue

growth opportunities, both for

themselves and our Company.

Natural

To produce our products, we use raw

materials including water, energy and

PET resin. We source these using

sustainable practices and seek to use

them efficiently.

Social and relationships

Maintaining the trust of stakeholders

isessential to our business. Our most

valuable relationships are with

TheCoca‑Cola Company, our people

and the communities we operate in, our

customers, suppliers and governments

and regulators.

Financial

Our business activities require financial

capital and we seek to allocate it

efficiently. This capital is provided by our

equity and debt holders, as well as cash

flow earned from our operations.

Intellectual

Innovation is embedded in our culture

andthe intellectual property created from

that includes new packaging, new products

and improvements in manufacturing,

logistics and sales execution.

Manufacturing

Our plant and logistics assets allow

ustoprepare, package and deliver

ourproducts to meet the needs

ofcustomers and consumers.

We are a strategic bottling partner



We have the exclusive right to bottle

andsell the beverages of The Coca‑Cola

Company in our 29 markets. We also

partner with other beverage businesses

such as Monster Energy, Brown‑Forman,

Campari and Edrington to sell their

products inourmarkets.

How our partnership works

The Coca-Cola Company owns and

develops its brands while Coca‑Cola HBC

is responsible for producing, distributing, and

selling these beverages, using concentrate

we buy from The Coca-Cola Company

under an incidence-based pricing model.

We work together to ensure we have the

right portfolio for our customers and

consumers in each market and to ensure

excellent, efficient execution. We also share

marketing costs and responsibilities, with

The Coca-Cola Company marketing to

consumers while we take responsibility

fortrade marketing to our customers.

plants

1. Working with suppliers

We work with our suppliers

toprocure high-quality

ingredients, sustainably

sourced raw materials and

equipment and services

required to produce beverages.

2. Producing beverages

efficiently and sustainably

Using concentrate from

TheCoca-Cola Company

alongwith other ingredients,

weprepare, package and deliver

products with an optimised

manufacturing infrastructure

and logistics network.

3. Partnering with



We grow by supporting our

customers’ growth, leveraging

our 24/7 portfolio, focusing on

areas of high value opportunity

and executing with excellence.

4. Serving our consumers

and communities

Our 24/7 product portfolio

catersto a range of tastes and

preferences and we continually

innovate to remain relevant.

distribution centres

8 

4. Value created

€3.4bn

paid in taxes

796,942

training hours for

our people

548,835

2017-2021 cumulative

young people trained in

ourcommunities

job in the

System

jobs in our

community

€1,015.2m

total employee costs

31,920

employees in the Coca-Cola

System in our markets

5. Socio‑economic contribution

1.7m

customers served

715

potential consumers refreshed

16,200

suppliers operating

acrossour value chain

>€3.5bn

spent with local

suppliers

Our impact

We believe that the only way to create

long-term value for all our stakeholders

isthrough sustainable growth. We create

socio-economic value for the societies in

which we operate by creating jobs, training

workers, building physical infrastructure,

procuring raw materials, transferring

technology, paying taxes, expanding access

to products and services, and creating

growth opportunities for our customers,

distributors, retailers and suppliers.

Measuring and managing these contributions

through the sustainable growth of our

business is an important partof our purpose.

Since 2010 we have conducted socio-

economic impact studies in our markets

tobetter understand the range and extent

ofthe value created inourecosystem.

To read the methodology behind

our socio-economic impact

numbers, please see page 247

Our people

• In 2021 we provided jobs directly to 27,211

people in 28 countries

• Median basic salary ratio women/men: 1.15

Our customers

• We increased the frequency of our customer

engagement, providing customers with

thebest support

• In the marketplace we achieved anew

totalnumber of almost 577,000

energy‑efficientcoolers

Our communities

• We trained 210,422 young people through

our #YouthEmpowered programme

toboost employability

• We invested €6.8 million in local

community initiatives

Our shareholders

• We continued to control costs and generate

strong growth in profit

• In recognition of our business’s strength and

future opportunities, the Board has proposed

a dividend of €0.71 per share, a +10.9%

increase compared with last year

Our wider stakeholders

• Our business activities generate revenue

forour customers, suppliers and contractors

as well as income for our employees

Our consumers

• We provide high-quality beverages and

healthy options, reducing calories per 100ml

of sparkling soft drinks by 15% in 2021

compared to our 2015 baseline

Our suppliers

• We spent over €3.5 billion with local suppliers

• We are working with our suppliers to support

their sustainable practices and emission

reduction plans

320,311

indirect employment across

thevalue chain

€11.5bn

created in added value across

our value chain

€541m

CapEx spend in our markets

* With the addition of Egypt.

9INTEGRATED ANNUAL REPORT 2021

Stakeholder engagement

Building on 70 years



engagement for



The strength of our stakeholder

ecosystem enabled us to

ensure the safety of our people,

partners and communities while

maintaining production

throughout the year.

How we engage

• Focused and continuous conversations

• Employee Assistance Programme

• Regular employee surveys to understand

and act on needs and wellbeing

• Offering personalised experiences and

opportunities for personal and

professional growth

• Ongoing dialogue with employee

representative bodies

Outcomes of engagement

• Support for our people to maintain

engagement levels, which remained

highin 2021

• Higher levels of satisfaction with line

manager support were reported as we

addressed needs of people working under

different conditions

Relevant KPIs

• Employee engagement

• Percentage of managers that are women

• Lost time accident rate

Principal risks

• Health and safety

• People retention

• Geopolitical and security environment

Read more on pages 46-50.

Material issues

• Climate change

• Corporate citizenship

• Economic impact

• Packaging and waste management

• Water stewardship

Growth pillars

Our suppliers

Emission reductions in our

supply chain

As part of our efforts to partner with our

suppliers, we held our first ever supplier

sustainability event in 2021. At the event

weprompted our suppliers to establish

their own science-based emissions targets

by 2030 and collaborate with us to develop

longer-term net zero aspirations with

focus on several key packaging and

ingredients partners. Better partnerships

are crucial to achieve our ambitious

NetZeroby40 target.

Approximately 90% of our Company’s

carbon footprint comes from Scope 3

emissions, which occur in the value chain,

linked to our operations, but are generated

from sources beyond our control. Together

with the Coca-Cola System, we have so far

initiated sustainability partnerships with

about 20 critical suppliers, representing

50% of our Scope 3 emissions.

11INTEGRATED ANNUAL REPORT 2021

Stakeholder engagement continued

Key challenges

• Ensuring product supply and safety

• Continuously evolving our products

tomeet consumers’ needs for healthy

hydration, quality, taste, innovation

andconvenience

How we engage

• We understand consumers’ needs and

preferences through collecting consumer

insights. While this is also part of

TheCoca‑Cola Company’s role, we gain

access to these insights

• Consumers also provide feedback on

social media and via the consumer hotlines

Outcomes of engagement

• We continued to evolve our portfolio

offering to address changing consumer

moments and invested further in

digitaland e‑commerce to meet new

shopperneeds

Relevant KPIs

• % reduction of calories per 100ml SSD

• # consumer complaints

Principal risk

• Product quality and food safety

Read more on pages 8, 22, 27, 35.

Material issues

• Nutrition

• Responsible marketing

• Sustainable sourcing

• Corporate citizenship

Growth pillars

Delivering value for





Across all markets, we took our commitment

to create value for wider society seriously,

continuing to focus on COVID-19 support,

disaster relief and our #YouthEmpowered

programme. For COVID-19, we again

provided a mixture of cash donations,

freeproducts and donations of equipment.

Weprovided more than 300 refrigerators,

for instance, to expand capacity for

vaccinestorage in Greece. In response

toearthquakes, floods and wildfires,

wecontributed cash or donated products

to support victims, governments, fire

brigades, and the Red Cross in Croatia,

Greece, North Macedonia and Russia.

Despite the pandemic, which has limited

in-person programmes, we remain on track

to support the employability of one million

young people across our markets by 2025.

InItaly and Greece we re-purposed

#YouthEmpowered tools to address the

needs of the hard-hit hospitality sector and

delivered masterclasses for young people

aspiring to a HoReCa career. In Czech

Republic we helped young people from

vulnerable backgrounds find high-quality

jobs, while in Hungary we started training

young people with disabilities.

The Coca‑Cola

Company

Key challenges

• Climate adaptation, move toward net zero

emissions and water and energy use

• Packaging waste

• Sustainable sourcing

• Partnerships with communities and

grassroots organisations

• Diversity and human rights

How we engage

• We include NGOs and community

partners in our leadership development

programmes, offering online training for

managing virtual teams and leading in

times of crisis

• We partner with specific NGOs for

targeted projects

• We engage through our annual Group

Stakeholder Forum and our annual

materiality assessment, as well as through

ad hoc meetings

Outcomes of engagement

• 6% training capacity for our first-time

managers went to NGO leaders in 2021

Relevant KPIs

• # partnering NGOs

Principal risks

• Plastics and packaging waste

• Managing our carbon footprint

• Suppliers and sustainable sourcing

• Water availability and usage

• Ethics and compliance

Read more on pages 46-47, 50.

Material issues

• Climate change

• Corporate citizenship

• Human rights, diversity and inclusion

• Packaging and waste management

• Water stewardship

Growth pillar

NGOs

13INTEGRATED ANNUAL REPORT 2021

Market trends

Market trends How we are responding Delivered through Growth pillar

Dynamic retail environment

In 2021 we saw an improvement in private consumption, boosting performance across categories.

The out-of-home channel recovered from 2020 closures, yet restrictions on its operations

were not fully lifted in all countries and were dependent on vaccination rates and COVID-19

case evolution. Online retailers and discounters experienced strong growth again in 2021.

The COVID-19 pandemic has demonstrated the value of close customer partnerships.

Theflexibility of our route to market allowed us to actively support our customers so that

they could drive more transactions and capture growth opportunities as markets began to

reopen, which was particularly valuable for our out-of-home customers. The at-home

channel performed strongly during 2021, as drinking occasions at home remained strong

even as lockdowns eased. We remained a key partner to our at-home customers, ensuring

product availability and adapting our offering.

+0.9pp

We gained or maintained

share in the majority

ofour markets in the

non-alcoholic ready-to-

drink (NARTD) category

and gained 0.9pp

ofvalueshare to 27%

Consumer preferences

The COVID-19 pandemic strengthened interest in health and wellness, with people looking not

only for organic offerings, but also those with less sugar or fat and for functional products that

can enhance immunity. Consumers are getting accustomed to socialising, working or training

at home. Many consumers are willing to spend more to replicate out-of-home experiences in

their homes, turning to iconic brands they trust.

We continued to leverage the trend for out-of-home experiences at home, with our adult

sparkling portfolio performing well through 2021, supported by our joint activation of

Premium Spirits. Our increasingly broad portfolio of energy brands and innovations supported

strong growth. Following the 2020 launch of Costa Coffee in 14 markets, we rolled out to

an additional three markets in 2021. We also acquired a stake in Caffè Vergnano, a premium

Italian coffee brand which complements our Costa Coffee offering. Our non-sparkling

portfolio recovered, boosted by the reopening of hotels, restaurants and cafés as well as

areturn of on‑the‑go consumption.

+14%

The at-home channel

continued to grow in

2021 with volumes up

14% in comparison to

2019 and 10% above

2020 volumes

Digital evolution

Trends toward digital channels have further accelerated throughout the pandemic, as

consumers adopt faster virtual solutions and technology. The performance of daily tasks

online, suchas working, getting education or banking, has led consumers to become more

comfortable with technology and to appreciate how much it is needed. Online shopping has

seen important growth and online food orders expanded, benefiting from periods of restricted

activity in the out-of-home channel.

Our business-to-business Customer Portal has transformed into an engagement-driven

digital platform for businesses, allowing us to more than quadruple digital transactions

to8% of our total transactions in 2021. We have increasingly digitised our route to market

inthe e‑commerce channel, partnering with e‑retailers and food delivery platforms to

maximise online sales. We also expanded the use of our data, advanced analytics and artificial

intelligence capabilities, achieving coverage of advanced analytics solutions across all our

largest markets during the year.

+87%

Revenue in the

e-commerce channel

grew by 87% in 2021

compared with 2020

Sustainability

In 2021, the COVID-19 pandemic remained the world’s biggest challenge. As the world gradually

lifted lockdowns and rolled out vaccinations, employee health and safety and community support

were high priorities. Climate change mitigation and adaptation, and commitments tocut

emissions were in the spotlight of the UN Climate Change Conference in Scotland in November.

Consequently, businesses have been announcing ambitious net zeroemissions targets while

investing in more sustainable packaging solutions. Equality and inclusion have been of increased

concern in 2021. As a result, consumers and customers expect governments and businesses

to take bolder action. Effective solutions to sustainability challenges, and transparent practices,

help strengthen brand reputation, customer loyalty and competitiveadvantage.

While unique challenges continued in 2021, protecting our people remained our top priority.

We supported both our communities and our customers with numerous relief initiatives,

including charitable and product donations. We stayed on track with our Mission 2025

sustainability commitments. We announced our most ambitious sustainability goal to date:

a commitment to reduce emissions to net zero across our value chain by 2040. Moreover,

we continue to make progress on creating a diverse and inclusive workplace and were

ranked 8th of over 11,000 companies assessed globally by the Refinitiv D&I index.

-24%

Absolute carbon

emissions in operations

were lower by 24% in

2021 compared with 2017

Regulatory environment

Policy makers tried to balance the need to restart economies with fiscal gaps created by

theongoing pandemic. The European Commission proposed a number of policies and new

mechanisms to achieve its target of drastically reducing net greenhouse gas emissions.

Atthesame time, the Farm‑to‑Fork strategic framework and the new Code of Conduct for

responsible business and marketing practices focus on creating sustainable food systems.

Packaging remained on the agenda in the EU, through the transposition of the Single Use

Plastic and the revision of the Plastic Packaging and Packaging Waste Directives.

Our target to achieve net zero emissions across our entire value chain by 2040 is part

ofour commitment to create a sustainable food system. Additionally, we continued to

progress towards achieving our Mission 2025 goals to help collect the equivalent of 75%

ofprimary packaging, make 100% of our consumer packaging recyclable and achieve a

25% calorie reduction in our sparkling beverage portfolio. As part of the Coca-Cola System

in Europe and the European Soft Drinks Association, we are also contributing to the EU’s

voluntary code of conduct for responsible food businesses.

46%

In 2021, we recovered

46% of the primary

packaging we put

inthemarketplace

Adapting to

evolving trends

14 