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Coca-cola Europacific Partners Plc LSE:CCEP London Ordinary Share GB00BDCPN049 ORD EUR0.01 (DI)
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Beverages 10,606.0 695.0 109.0 43.4 22,396

Coca-Cola Europacific Partners plc Results for the six months ended 2 July 2021

02/09/2021 7:00am

UK Regulatory (RNS & others)


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Coca-Cola Europacific Partners plc

02 September 2021

COCA-COLA EUROPACIFIC PARTNERS

Results for the six months ended 2 July 2021

Strong first-half performance, driven by strong Q2 reflecting the easing of pandemic restrictions and ongoing solid in-market execution

 
         H1 2021          As     Comparable             Change vs H1 2020             Pro forma            Change vs H1 
         Metric([1])   Reported     ([1])                                             Comparable                2020 
                                                                                        ([3]) 
         ============  ========  ==========  ---------------------------------------  ==========  ------------------------------- 
                                             As Reported   Comparable    Comparable                Pro forma        Pro forma 
                                                              ([1])      Fx-Neutral                Comparable       Comparable 
                                                                            ([1])                     ([3])      Fx-Neutral([3]) 
         ============  ========  ==========  ===========  ============  ============  ==========  ============  ================= 
Total    Volume (M 
 CCEP     UC)([2])        1,227       1,227    18.0%         15.5%                         1,442      6.0% 
 Revenue (EURM)           5,918       5,918    22.5%         22.5%         21.5%           6,974     13.0%          11.5% 
 Cost of sales 
  (EURM)                  3,840       3,791    21.0%         19.5%         19.0%           4,409     11.0%          10.0% 
 --------------------  --------  ----------  ------       -------       -------       ----------  -------       -------- ------ 
 Operating expenses 
  (EURM)                  1,558       1,436    11.0%         13.0%         12.5%           1,763      3.0%           2.0% 
 --------------------  --------  ----------  ------       -------       -------       ----------  -------       -------- ------ 
 Operating profit 
  (EURM)                    520         691    94.0%         73.5%         71.0%             802     61.0%          58.0% 
 --------------------  --------  ----------  ------       -------       -------       ----------  -------       -------- ------ 
 Profit after 
  taxes (EURM)              246         500    95.0%         93.0%         90.5% 
 --------------------  --------  ----------  ------       -------       ------- 
 Diluted EPS 
  (EUR)                    0.53        1.09    89.5%         91.0%         87.5% 
 --------------------  --------  ----------  ------       -------       -------       ----------  ------------  ----------------- 
 Revenue per 
  UC (EUR)                             4.78                                 3.0%            4.78                     3.0% 
 --------------------  --------  ----------  -----------  ------------  -------       ----------  ------------  -------- ------ 
 Cost of sales 
  per UC (EUR)                         3.07                                 0.5%            3.02                     1.5% 
 --------------------  --------  ----------  -----------  ------------  -------       ----------  ------------  -------- ------ 
 Free cash flow 
  (EURM)                                648 
 --------------------  --------  ----------  -----------  ------------  ------------ 
 
 Volume (M UC)([2])       1,121       1,121     8.0%          5.5%                         1,121      5.5% 
 --------------------  --------  ----------  ------       -------       ------------  ----------  -------       ----------------- 
 Revenue (EURM)           5,385       5,385    11.5%         11.5%         10.5%           5,385     11.5%          10.5% 
 --------------------  --------  ----------  ------       -------       -------       ----------  -------       -------- ------ 
 Operating profit 
  (EURM)                    505         631    88.5%         58.5%         57.0%             631     58.5%          57.0% 
 --------------------  --------  ----------  ------       -------       -------       ----------  -------       -------- ------ 
         Revenue per 
Europe    UC (EUR)                     4.77                                 2.5%            4.77                     2.5% 
         ------------  --------  ----------  -----------  ------------  -------       ----------  ------------  -------- ------ 
 
         Volume (M 
API       UC)([2])          106         106                                                  321      8.0% 
 Revenue (EURM)             533         533                                                1,589     19.0%          15.5% 
 --------------------  --------  ----------                                           ----------  -------       -------- ------ 
 Operating profit 
  (EURM)                     15          60                                                  171     71.0%          63.0% 
 --------------------  ========  ==========                                           ==========  -------       -------- ------ 
 Revenue per 
  UC (EUR)                             4.89                                                 4.80                     4.0% 
 --------------------  --------  ----------                                           ----------  ------------  -------- ------ 
 

DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:

"We are pleased to report a strong H1 performance, as we confidently navigate the varied impact of the pandemic across our markets, with our focus remaining on supporting our people, customers and communities. Top-line growth, operating margin improvement and stronger free cash flow generation demonstrate the strength of our business and the successful integration of Coca-Cola Amatil. We continue to be excited by this opportunity, being unlocked through the great collaboration and sharing across all our European markets and API. I would also like to highlight the extraordinary efforts and high engagement of all our colleagues, to whom I am extremely grateful.

"Together with The Coca-Cola Company and our other franchise partners, our collective focus on our core brands alongside solid in-market execution has served us well, growing share(7) both instore and online. We are resolved in our determination to move further and faster towards a stronger and even more sustainable future. We continue to protect our business for the short-term whilst engaging in ongoing transformational programmes. We are taking meaningful actions to adjust our cost base to be fit and competitive for the longer-term, and we continue to invest for future growth, particularly in digital, sustainability, our portfolio and our people. Our digital business is on track for record revenues this year. We are progressing towards our 2040 net zero carbon ambition, recently announcing plans to accelerate our use of recycled plastic (rPET), saving an additional 43,000 tonnes of virgin plastic each year. I am also extremely proud that two of our manufacturing sites have recently been certified carbon neutral. And we are driving future revenue streams like Costa and Topo Chico, with exciting portfolio plans for the balance of the year.

"Whilst we are reassured by the pace of recovery and are cautiously optimistic, our strong H1 performance and full-year guidance for 2021 demonstrate our confidence in the future of our business. We will go further together, creating greater, more sustainable value for all stakeholders."

___________________________

1. Refer to 'Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures' for further details and to 'Supplementary Financial Information' for a reconciliation of reported to comparable and reported to pro forma comparable results; Change percentages against prior year equivalent period unless stated otherwise

   2.     A unit case equals approximately 5.678 litres or 24 8-ounce servings 

3. Pro forma figures as if the acquisition of Coca-Cola Amatil Limited occurred at the beginning of the period presented for illustrative purposes only, it is not intended to estimate or predict future financial performance or what actual results would have been. Acquisition completed on 10 May 2021. Prepared on a basis consistent with CCEP accounting policies and include transaction accounting adjustments for the period 1 January to 10 May. Refer to 'Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures' for further details.

Note: All footnotes included after the 'About CCEP' section

 
Q2 & H1 HIGHLIGHTS([1],[3]) 
 

Q2 Pro forma revenue (+29.0%)([4])

(Reported revenue +53.5%)

-- Pro forma comparable volume +22.0%([5]) driven by the reopening of Away from Home (AFH) given the easing of restrictions across most of our markets & the cycling of soft comparables (volumes Q2 2020 -22.0% vs 2019; Q2 2021 -5.0% vs 2019)

volumes by channel: AFH +54.0% reflecting reopenings (-14.5% vs 2019) & recovery of immediate consumption (IC) packs; Home +8.0% (+2.0% vs 2019) supported by recovery of IC & continued growth in future consumption packs (e.g. multipack cans +3.5%([6]) vs 2020; +19.0%([6]) vs 2019)

-- Recent trading impacted by renewed restrictions in API, soft international tourism & tougher comparables in other markets with July & August combined pro forma comparable volume slightly down (volumes Q3 2020 -4.0% vs 2019)

-- Pro forma revenue per unit case +6.0%([2],[4]) reflecting positive pack & channel mix driven by the improvement in AFH volumes & growth in IC packs alongside favourable price & brand mix

H1 Pro forma revenue (+11.5%)([4])

(Reported revenue +22.5%)

-- NARTD value share growth([7]) across measured channels both in store (+60bps) & online (+100bps)

-- Pro forma comparable volume +6.0%([5]) driven by Q2 (see above) & the cycling of soft comparables (volumes H1 2020 -13.0% vs 2019; H1 2021 -7.5% vs 2019)

-- Pro forma revenue per unit case +3.0%([2],[4]) (+0.5%([8]) vs 2019) reflecting favourable brand mix alongside positive pack & channel mix driven by the improvement in AFH volumes in Q2 & favourable underlying price

H1 Pro forma comparable operating profit +58.0%([4])

(Reported operating profit +94.0%)

-- Pro forma cost of sales per unit case +1.5%([2],[4]) reflecting increased revenue per unit case driving higher concentrate costs, emerging commodity inflation & adverse mix, partially offset by the favourable recovery of fixed manufacturing costs given higher volumes

-- Pro forma comparable operating profit of EUR802m, +58.0%([4]) reflecting the increased revenue, the benefit of ongoing efficiency programmes & our continuous efforts on discretionary spend optimisation

H1 EPS

   --       Comparable diluted EPS of EUR1.09, +87.5%([4]) (reported +89.5%) 

Other

-- Coca-Cola Amatil acquisition completed 10 May 2021, integration well underway and on trac k

   --       Sustainability highlights: 

rPET: Belgium & Luxembourg to become a 100% market & GB moving all on-the-go packs to 100%. Announced industry partnerships to build new PET recycling facilities in Australia & Indonesia

Signed up to the EU Code of Conduct on Responsible Business & Marketing Practices

Two manufacturing sites in Spain & Sweden certified carbon neutral

-- Today, CCEP announces that it is transferring its US stock exchange listing to The NASDAQ Global Select Market from The New York Stock Exchange. CCEP's shares are expected to begin trading as a NASDAQ-listed security on 13 September 2021, and will continue to trade under the ticker symbol CCEP. All other listings will remain unchanged

-- Dividend: as previously stated, full-year dividend to be announced at Q3 to reflect the earnings of the enlarged business([10])

 
FY21 GUIDANCE 
 

The outlook for FY21 reflects our current assessment of the scale and magnitude of the COVID-19 pandemic, which is subject to change as we continue to monitor ongoing developments. Guidance is on a comparable basis, reflecting the timing impact of the acquisition of API which completed on 10 May 2021, and based on actual FX rates.

   --       Revenue: comparable growth of 26-28%([9]) 
   --       Operating profit: comparable growth of 40-44%([9]) 
   --       Comparable effective tax rate: 20%([9]) 
   --       Dividend payout ratio: c.50%([9],[10]) 
 
Second-quarter & First-half Revenue Performance by Geography([1]) 
 

All values are unaudited, changes versus equivalent 2020 period

 
                                         Second-quarter                           First-half 
                              -------------------------------------  ------------------------------------- 
                                                        Fx-Neutral                             Fx-Neutral 
                              EUR million   % change     % change    EUR million   % change     % change 
============================  ===========  ==========  ============  ===========  ==========  ============ 
Great Britain                         694    30.5%        27.5%            1,192    16.0%        15.0% 
----------------------------  -----------  ------      -------       -----------  ------      ------- 
France([12])                          485    23.0%        23.0%              896    11.0%        11.0% 
----------------------------  -----------  ------      -------       -----------  ------      ------- 
Germany                               624    25.5%        25.5%            1,091     7.5%         7.5% 
============================  ===========  ======      =======       ===========  ======      ======= 
Iberia([13])                          649    67.5%        67.5%            1,069    16.5%        16.5% 
============================  ===========  ======      =======       ===========  ======      ======= 
Northern Europe([14])                 640    17.0%        14.0%            1,137     6.0%         4.0% 
============================  ===========  ======      =======       ===========  ======      ======= 
Total Europe                        3,092    31.0%        29.5%            5,385    11.5%        10.5% 
API([11]) (Pro forma)([3])            792    32.5%        27.0%            1,589    19.0%        15.5% 
============================  ===========  ======      =======       ===========  ======      ======= 
Total CCEP (Pro forma)([3])         3,884    31.5%        29.0%            6,974    13.0%        11.5% 
 

API

-- Cycling the strongest pandemic impact in Q2, volumes reflect minimal restrictions in Australia & NZ & a strong Ramadan period in Indonesia (ahead of renewed restrictions). Strong growth in the Home channel in Australia. Coca-Cola No Sugar outperformed in Australia & Monster continued to grow in all markets in both Q2 & H1. Sparkling outperformed in Indonesia during the festive period led by Fanta.

-- Revenue/UC([15]) growth supported by positive pack & channel mix given the lifting of restrictions & underlying favourable price.

France

-- Volumes reflect the reopening of AFH given easing restrictions & cycling soft comparables. Continued growth in the Home channel led by IC pack formats. Coca-Cola Zero Sugar, Monster & Capri-Sun all outperformed in both Q2 & H1.

-- Revenue/UC([15]) broadly flat due to positive pack & brand mix offset by normalised promotional activity & frequency.

Germany

-- Volume growth driven by the reopening of AFH given easing of restrictions & cycling soft comparables & customer disruptions last year. Continued momentum in the Home channel helped by the border trade business. Coca-Cola Zero Sugar, Monster & Fuze Tea all outperformed.

-- Revenue/UC([15]) growth supported by positive brand mix driven by Monster & the proactive delisting of some PET waters, alongside positive pack mix & favourable underlying price.

Great Britain

-- Volumes reflect strong AFH rebound & restocking following the easing of restrictions, increased domestic tourism & cycling soft comparables. Continued growth in the Home channel led by IC pack formats. During both Q2

& H1,        Coca-Cola Zero Sugar & Monster continued to outperform, with volumes up vs 2019. 

-- Revenue/UC([15]) growth supported by positive brand mix led by Monster & positive pack mix driven by increased mobility.

Iberia

-- Volumes driven by the reopening of AFH given easing restrictions, particularly in Spain which over-indexes in its exposure to HoReCa([16]) . Weaker Home volumes reflect the increased Spanish VAT rate within this channel. Strong recovery of glass & Monster outperformed in all channels during both Q2 & H1.

-- Revenue/UC([15]) growth supported by improving pack & channel mix driven by the reopening of HoReCa([16]) outlets & positive underlying price.

Northern Europe

-- Volumes reflect the reopening of AFH given easing of restrictions, increased domestic tourism & cycling soft comparables. Continued growth in the Home channel led by cans e.g. small cans Q2:+41.5% & H1:+52.5%. Coca-Cola Zero Sugar, Monster & Capri-Sun all outperformed in both Q2 & H1, with volumes up vs 2019.

-- Revenue/UC([15]) (excluding soft drinks taxes([17]) ) growth driven by underlying price & positive pack mix as demand for IC packs increased. Channel mix & brand mix were also favourable during the quarter.

___________________________

Note: All values are unaudited and all references to volumes are on a comparable basis

 
Second-quarter & First-half Pro forma Volume Performance by Category([1],[3]) 
 

Comparable volumes, changes versus equivalent 2020 period.

 
                                                   Second-quarter                First-half 
                                               % of Total    % Change    % of Total    % Change([5]) 
============================================  ============  ==========  ============  =============== 
Sparkling                                         84.5%       18.5%         84.5%            6.0% 
  Coca-Cola(TM)                                   58.5%       16.0%         59.0%            4.5% 
  Flavours, Mixers & Energy                       26.0%       24.5%         25.5%           10.0% 
Stills                                            15.5%       45.0%         15.5%            5.5% 
  Hydration                                        7.5%       45.0%          7.5%          (1.0)% 
  RTD Tea, RTD Coffee, Juices & Other([18])        8.0%       45.0%          8.0%           13.0% 
Total                                            100.0%       21.5%        100.0%            6.0% 
 

Coca-Cola(TM)

-- H1 Classic +3.0%; Lights +7.5% driven by reopening of AFH following the easing of restrictions & strong performance by the reformulated & rebranded Coca-Cola Zero Sugar (+11.0%)

   --    H1 Coca-Cola Zero Sugar in growth vs 2019 (+10.0%) 

Flavours, Mixers & Energy

-- Q2 Fanta +24.5%; H1 +8.0% driven by the reopening of AFH following the easing of restrictions & a strong Ramadan period in Indonesia

-- H1 Energy +36.5% reflecting continued growth across all markets led by Monster from strong innovation, distribution & value share growth([7]) (+170bps)

Hydration

-- H1 water -5.5% reflecting continued impact of the pandemic & its exposure to IC across both channels, partially offset by Sports (+15.5%)

-- Q2 Sparkling Water delivered solid growth in Australia (+37.0% vs 2019) driven by the launch of new flavours & new multi-pack can formats

RTD Tea, RTD Coffee, Juices & Other([18])

-- Q2 Juice drinks +46.5%; H1 +15.5% driven by increased on-the-go occasions following the easing of restrictions & solid growth in Capri Sun (H1:+16.5% vs 2019)

   --    H1 Fuze Tea in growth vs 2019 (8.5%([6]) ) & continuing to grow value share in Europe([7]) 
   --    H1 Alcohol delivered strong growth in Australia (+5.0% vs 2019) driven by Spirits & RTD 

___________________________

Note: All references to volumes are on a comparable basis

 
Conference Call (with presentation) 
 
   --       2 September 2021 at 12:30 BST, 13:30 CEST & 7:30 a.m. EDT; via www.cocacolaep.com 
   --       Replay & transcript will be available at www.cocacolaep.com as soon as possible 
 
Financial Calendar 
 
   --       Third-quarter 2021 trading update: 9 November 2021 
   --       Financial calendar available here: https://ir.cocacolaep.com/financial-calendar/ 
 
Contacts 
 

Investor Relations

Sarah Willett Joe Collins Claire Copps

+44 7970 145 218 +44 7583 903 560 +44 7980 775 889

Media Relations

   Shanna Wendt                                     Nick Carter 
   +44 7976 595 168                               +44 7979 595 275 
 
About CCEP 
 

Coca-Cola Europacific Partners is one of the world's leading consumer goods companies. We make, move and sell some of the world's most loved brands - serving 600 million consumers and helping 1.75 million customers across 29 countries grow.

We combine the strength and scale of a large, multi-national business with an expert, local knowledge of the customers we serve and communities we support.

The Company is currently listed on Euronext Amsterdam, the New York Stock Exchange, London Stock Exchange and on the Spanish Stock Exchanges, trading under the symbol CCEP. On 2 September 2021 CCEP announced that it is transferring its US stock exchange listing to The NASDAQ Global Select Market from The New York Stock Exchange. CCEP's shares are expected to begin trading as a NASDAQ-listed security on 13 September 2021, and will continue to trade under the ticker symbol CCEP.

For more information about CCEP, please visit www.cocacolaep.com & follow CCEP on Twitter at @CocaColaEP.

___________________________

1. Refer to 'Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures' for further details and to 'Supplementary Financial Information' for a reconciliation of reported to comparable and reported to pro forma comparable results; Change percentages against prior year equivalent period unless stated otherwise

   2.     A unit case equals approximately 5.678 litres or 24 8-ounce servings 

3. Pro forma figures as if the acquisition of Coca-Cola Amatil Limited occurred at the beginning of the period presented for illustrative purposes only, it is not intended to estimate or predict future financial performance or what actual results would have been. Acquisition completed on 10 May 2021. Prepared on a basis consistent with CCEP accounting policies and include transaction accounting adjustments for the period 1 January to 10 May. Refer to 'Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures' for further details

   4.     Comparable & FX-neutral 

5. Adjusted for 3 extra selling days in Q1; no selling day shift in Q2; CCEP H1 pro forma volume +8.5% vs 2020

   6.     Europe only 

7. NARTD (non-alcoholic ready to drink) Nielsen Global Track YTD Data to w/e IS 20.Jun.21, GB 03.Jul.21, AUS ES PT DE FR BE NL NZ SE & NO 04.Jul.21; Energy = Energy category. Online Data is for available markets YTD to GB 03.Jul.21 (Retailer EPOS+Nielsen), ES FR & NL 04.Jul.21 (Nielsen)

   8.     Management's best estimate 

9. Reflects the timing impact of the acquisition of API which completed on 10 May 2021; based on actual FX rates as at 26 August 2021

   10.    Dividends subject to Board approval 
   11.    Includes Australia, New Zealand & the Pacific Islands, Indonesia & Papua New Guinea 
   12.    Includes France & Monaco 
   13.    Includes Spain, Portugal & Andorra 
   14.    Includes Belgium, Luxembourg, the Netherlands, Norway, Sweden & Iceland 
   15.    Revenue per unit case 
   16.    HoReCa = Hotels, Restaurants & Cafes 

17. Northern Europe revenue per unit case declined in Q2 & H1 as a result of changes to Norwegian Soft Drink Taxes

   18.    RTD refers to Ready to Drink; Other includes Alcohol & Coffee 
 
Forward-Looking Statements 
 

This document contains statements, estimates or projections that constitute "forward-looking statements" concerning the financial condition, performance, results, strategy and objectives of Coca-Cola Europacific Partners plc and its subsidiaries (together "CCEP" or the "Group"). Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "plan," "seek," "may," "could," "would," "should," "might," "will, " "forecast," "outlook," "guidance," "possible," "potential," "predict," "objective" and similar expressions identify forward-looking statements, which generally are not historical in nature.

Forward-looking statements are subject to certain risks that could cause actual results to differ materially from CCEP's historical experience and present expectations or projections, including with respect to the acquisition of Coca-Cola Amatil Limited and its subsidiaries (together "CCL" or "API") completed on 10 May 2021 (the "Acquisition"). As a result, undue reliance should not be placed on forward-looking statements, which speak only as of the date on which they are made. These risks include but are not limited to:

1. those set forth in the "Risk Factors" section of CCEP's 2020 Annual Report on Form 20-F filed with the SEC on 12 March 2021, including the statements under the following headings: Business continuity and resilience (such as the adverse impact that the COVID-19 pandemic and related government restrictions and social distancing measures implemented in many of our markets, and any associated economic downturn, global supply chain pressure, availability of key materials, may have on our financial results, operations, workforce and demand for our products); Packaging (such as refillables and the increased footprint of our packaging in developing markets with limited plastic waste collection and recycling infrastructure); Cyber and social engineering attacks and IT infrastructure; Economic and political conditions (such as the UK's exit from the EU, the EU-UK Trade and Cooperation Agreement, uncertainty about the future relationship between the UK and EU and ongoing economic instability in Papua New Guinea); Market (such as disruption due to customer negotiations, customer consolidation and route to market); Legal, regulatory and tax (such as the development of regulations regarding packaging, taxes and deposit return schemes);Climate change and water (such as net zero emission legislation and regulation, resource scarcity and physical manifestations of climate change in the Australia, Pacific and Indonesia region such as increased temperatures, altered rainfall patterns, more frequent or intense extreme events such as heatwaves, drought, storms and increased frequency of natural disasters); Perceived health impact of our beverages and ingredients, and changing consumer buying trends (such as sugar alternatives and other ingredients); Competitiveness, business transformation and integration (such as reduction of total debt outstanding for the funding of the acquisition); People and wellbeing (such as the risk of serious injury through industrial and traffic accidents, particularly in Indonesia); Relationship with The Coca-Cola Company ("TCCC") and other franchisors; Product quality; and Other risks as updated and supplemented with the additional information set forth in the "Principal Risks and Risk Factors" section of this document (such as in relation to the impacts of the Acquisition, COVID-19, the potential for fraudulent activity to create negative reputational and cultural impacts and the existence of corruption risks, particularly in developing markets such as Indonesia, Papua New Guinea and the Pacific Islands);

2. those set forth in the "Business and Sustainability Risks" section of CCL's 2020 Financial and Statutory Reports including the statements under the following headings: COVID-19 related risks; TCCC and other brand partners relationship risk; Economic and political risks; Cyber risk; Foreign exchange risk; Key personnel risk; Beverage industry risk; Regulatory risk; Corporate social responsibility risk; Climate change risk; Supply chain risk; Litigation and legal disputes risk; Malicious product tampering risk; Workplace Health & Safety ("WHS") risk; Business interruption risk; Product quality risk; Fraud risk; and

3. risks and uncertainties relating to the Acquisition, including the risk that the businesses will not be integrated successfully or such integration may be more difficult, time consuming or costly than expected, which could result in additional demands on CCEP's resources, systems, procedures and controls, disruption of its ongoing business and diversion of management's attention from other business concerns; the possibility that certain assumptions with respect to API or the Acquisition could prove to be inaccurate; burdensome conditions imposed in connection with any regulatory approvals; ability to raise financing; the potential that the Acquisition may involve unexpected liabilities for which there is no indemnity; the potential failure to retain key employees as a result of the Acquisition or during integration of the businesses and disruptions resulting from the Acquisition, making it more difficult to maintain business relationships; the potential for (i) negative reaction from financial markets, customers, regulators, employees and other stakeholders, (ii) litigation related to the Acquisition.

The full extent to which the COVID-19 pandemic will negatively affect CCEP and the results of its operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

Due to these risks, CCEP's actual future results, dividend payments, capital and leverage ratios, growth, market share, tax rate, efficiency savings, and the results of the integration of the businesses following the Acquisition, including expected efficiency and combination savings, may differ materially from the plans, goals, expectations and guidance set out in forward-looking statements (including those issued by CCL prior to the Acquisition). These risks may also adversely affect CCEP's share price. Additional risks that may impact CCEP's future financial condition and performance are identified in filings with the SEC which are available on the SEC's website at www.sec.gov. CCEP does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable rules, laws and regulations. Furthermore, CCEP assumes no responsibility for the accuracy and completeness of any forward-looking statements. Any or all of the forward-looking statements contained in this filing and in any other of CCEP's or CCL's public statements (whether prior or subsequent to the Acquisition) may prove to be incorrect. CCEP does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable rules, laws and regulations. Furthermore, CCEP assumes no responsibility for the accuracy and completeness of any forward-looking statements. Any or all of the forward-looking statements contained in this filing and in any other of CCEP's or CCL's public statements (whether prior or subsequent to the Acquisition) may prove to be incorrect.

 
Note Regarding the Presentation of Pro forma financial information 
 and Alternative Performance Measures 
 

Pro forma financial information

Pro forma financial information has been provided in order to illustrate the effects of the acquisition of Coca-Cola Amatil Limited (CCL or API) on the results of operations of CCEP and allow for greater comparability of the results of the combined group between periods. The Pro forma financial information has been prepared for illustrative purposes only and because of its nature, addresses a hypothetical situation. It is based on information and assumptions that CCEP believes are reasonable, including assumptions as at 1 January 2021 and 1 January 2020 relating to acquisition accounting provisional fair values of API assets and liabilities which are assumed to be equivalent to those that have been provisionally determined as of the acquisition date, on a constant currency basis. The Pro forma information also assumes the interest impact of additional debt financing reflecting the actual weighted average interest rate for Acquisition financing of c.0.40% for all periods presented. Acquisition costs included in 2020 Pro forma financial information are assumed to be equivalent to those incurred in 2021.

The Pro forma financial information does not intend to represent what CCEP's results of operations actually would have been if the acquisition had been completed on the dates indicated, nor does it intend to represent, predict or estimate the results of operations for any future period or financial position at any future date. In addition, it does not reflect ongoing cost savings that CCEP expects to achieve as a result of the acquisition or the costs necessary to achieve these cost savings or synergies. As pro forma information is prepared to illustrate retrospectively the effects of future transactions, there are limitations that are inherent to the nature of pro forma information. As such, had the acquisition taken place on the dates assumed, the actual effects would not necessarily have been the same as those presented in the Pro Forma financial information contained herein .

Alternative Performance Measures

We use certain alternative performance measures (non-GAAP performance measures) to make financial, operating and planning decisions and to evaluate and report performance. We believe these measures provide useful information to investors and as such, where clearly identified, we have included certain alternative performance measures in this document to allow investors to better analyse our business performance and allow for greater comparability. To do so, we have excluded items affecting the comparability of period-over-period financial performance as described below. The alternative performance measures included herein should be read in conjunction with and do not replace the directly reconcilable GAAP measures.

For purposes of this document, the following terms are defined:

"As reported" are results extracted from our condensed consolidated interim financial statements.

"Pro forma " includes the results of CCEP and API as if the Acquisition had occurred at the beginning of the period presented, including acquisition accounting adjustments relating to provisional fair values. Pro forma also includes impact of the additional debt financing costs incurred by CCEP in connection with the Acquisition for all periods presented.

"Comparable" is defined as results excluding items impacting comparability, which include restructuring charges, acquisition and integration related costs, inventory fair value step up related to acquisition accounting, the impact of the closure of the GB defined benefit benefit pension scheme and net tax items relating to rate and law changes. Comparable volume is also adjusted for selling days.

"Pro forma Comparable" is defined as the pro forma results excluding items impacting comparability, as described above.

"Fx-neutral" is defined as period results excluding the impact of foreign exchange rate changes. Foreign exchange impact is calculated by recasting current year results at prior year exchange rates.

"Capex" or "Capital expenditures" is defined as purchases of property, plant and equipment and capitalised software, plus payments of principal on lease obligations, less proceeds from disposals of property, plant and equipment. Capex is used as a measure to ensure that cash spending on capital investment is in line with the Group's overall strategy for the use of cash.

"Free cash flow" is defined as net cash flows from operating activities less capital expenditures (as defined above) and interest paid. Free cash flow is used as a measure of the Group's cash generation from operating activities, taking into account investments in property, plant and equipment and non-discretionary lease and interest payments. Free cash flow is not intended to represent residual cash flow available for discretionary expenditures.

"Adjusted EBITDA" is calculated as Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), after adding back items impacting the comparability of period over period financial performance. Adjusted EBITDA does not reflect cash expenditures, or future requirements for capital expenditures or contractual commitments. Further, adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs, and although depreciation and amortisation are non-cash charges, the assets being depreciated and amortised are likely to be replaced in the future and adjusted EBITDA does not reflect cash requirements for such replacements.

"Net Debt" is defined as the net of cash and cash equivalents less borrowings and adjusted for the fair value of hedging instruments related to borrowings and other financial assets/liabilities related to borrowings. We believe that reporting net debt is useful as it reflects a metric used by the Group to assess cash management and leverage. In addition, the ratio of net debt to adjusted EBITDA is used by investors, analysts and credit rating agencies to analyse our operating performance in the context of targeted financial leverage.

"Dividend payout ratio" is defined as dividends as a proportion of comparable profit after tax.

Additionally, within this document, we provide certain forward-looking non-GAAP financial Information, which management uses for planning and measuring performance. We are not able to reconcile forward-looking non-GAAP measures to reported measures without unreasonable efforts because it is not possible to predict with a reasonable degree of certainty the actual impact or exact timing of items that may impact comparability throughout year.

Unless otherwise stated, percent amounts are rounded to the nearest 0.5%.

 
Supplementary Financial Information - Income Statement - Reported 
 to Comparable 
 

The following provides a summary reconciliation of CCEP's reported and comparable results for the first six months ended 2 July 2021 and 26 June 2020:

 
First Six Months  As Reported                 Items impacting Comparability                   Comparable 
 2021 
                  ===========                                                                ============ 
Unaudited, in        CCEP      Restructuring    Defined     Acquisition  Inventory  Net Tax      CCEP 
millions                          Charges       benefit         and       step up    ([5]) 
of EUR except                      ([1])          plan      Integration    costs 
per                                           closure([2])    related      ([4]) 
share data which                                               costs 
is calculated                                                  ([3]) 
prior 
to rounding 
================  ===========  =============  ============  ===========  =========  =======  ============ 
Revenue                 5,918              -             -            -          -        -       5,918 
Cost of sales           3,840            (4)             3            -       (48)        -       3,791 
================  ===========  =============  ============  ===========  =========  =======  ========== 
Gross profit            2,078              4           (3)            -         48        -       2,127 
Operating 
 expenses               1,558           (88)             6         (40)          -        -       1,436 
================  ===========  =============  ============  ===========  =========  =======  ========== 
Operating profit          520             92           (9)           40         48        -         691 
Total finance 
 costs, 
 net                       64              -             -          (3)          -        -          61 
Non-operating 
 items                      1              -             -            -          -        -           1 
================  ===========  =============  ============  ===========  =========  =======  ========== 
Profit before 
 taxes                    455             92           (9)           43         48        -         629 
Taxes                     209             28             4            1          5    (118)         129 
================  ===========  =============  ============  ===========  =========  =======  ========== 
Profit after 
 taxes                    246             64          (13)           42         43      118         500 
================  ===========  =============  ============  ===========  =========  =======  ========== 
 
Attributable to: 
Shareholders              244             64          (13)           42         42      118         497 
Non-controlling 
 interest                   2              -             -            -          1        -           3 
================  ===========  =============  ============  ===========  =========  =======  ========== 
Profit after 
 taxes                    246             64          (13)           42         43      118         500 
----------------  -----------  -------------  ------------  -----------  ---------  -------  ---------- 
 
Diluted earnings 
 per share (EUR)         0.53           0.14        (0.03)         0.10       0.09     0.26        1.09 
----------------  -----------  -------------  ------------  -----------  ---------  -------  ---------- 
 
 
First Six Months 2020              As Reported        Items impacting Comparability          Comparable 
                                   ===========                                              ============ 
Unaudited, in millions of             CCEP        Mark-to-market    Restructuring  Net Tax      CCEP 
 EUR except share data which                          effects          Charges      ([5]) 
 is calculated prior to rounding                       ([6])            ([1]) 
================================   ===========  ==================  =============  =======  ============ 
Revenue                                  4,837                   -              -        -       4,837 
Cost of sales                            3,168                   -              -        -       3,168 
=================================  ===========  ==================  =============  =======  ========== 
Gross profit                             1,669                   -              -        -       1,669 
Operating expenses                       1,401                 (6)          (124)        -       1,271 
=================================  ===========  ==================  =============  =======  ========== 
Operating profit                           268                   6            124        -         398 
Total finance costs, net                    55                   -              -        -          55 
Non-operating items                          2                   -              -        -           2 
=================================  ===========  ==================  =============  =======  ========== 
Profit before taxes                        211                   6            124        -         341 
Taxes                                       85                   1             33     (37)          82 
=================================  ===========  ==================  =============  =======  ========== 
Profit after taxes                         126                   5             91       37         259 
=================================  ===========  ==================  =============  =======  ========== 
 
Attributable to: 
Shareholders                               126                   5             91       37         259 
Non-controlling interest                     -                   -              -        -           - 
================================   ===========  ==================  =============  =======  ========== 
Profit after taxes                         126                   5             91       37         259 
---------------------------------  -----------  ------------------  -------------  -------  ---------- 
 
Diluted earnings per share 
 (EUR)                                    0.28                0.01           0.20     0.08        0.57 
---------------------------------  -----------  ------------------  -------------  -------  ---------- 
 

_ _________________________

([1]) Amounts represent restructuring charges related to business transformation activities.

([2]) Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.

([3]) Amounts represent cost associated with the acquisition and integration of API.

([4]) Amounts represent the non-recurring impact of provisional fair value step-up of API finished goods.

([5]) Amounts include the deferred tax impact related to income tax rate and law changes.

([6]) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.

 
Supplementary Financial Information - Income Statement - Reported 
 to Pro forma Comparable 
 

The following provides a summary reconciliation of CCEP's reported and pro forma comparable results for the first six months ended 2 July 2021 and 26 June 2020:

 
                                                     Transaction              Items impacting 
                                        Pro forma     accounting               Comparability 
                                        adjustments   adjustments  Pro forma       ([E])         Pro forma 
First Six Months 2021     As Reported    API ([A])       ([B])      Combined                     Comparable 
                          ===========  ============  ============  =========  ===============  ============= 
Unaudited, in millions       CCEP                                    CCEP                          CCEP 
of EUR except share 
data which is calculated 
prior to rounding 
========================  ===========  ============  ============  =========  ===============  ============= 
Revenue                         5,918         1,056             -      6,974                -        6,974 
Cost of sales                   3,840           616             2      4,458             (49)        4,409 
========================  ===========  ============  ============  =========  ===============  =========== 
Gross profit                    2,078           440           (2)      2,516               49        2,565 
Operating expenses              1,558           323            68      1,949            (186)        1,763 
========================  ===========  ============  ============  =========  ===============  =========== 
Operating profit                  520           117          (70)        567              235          802 
Total finance costs, 
 net                               64            12            13         89              (3)           86 
Non-operating items                 1           (1)             -          -                -            - 
========================  ===========  ============  ============  =========  ===============  =========== 
Profit before taxes               455           106          (83)        478              238          716 
Taxes                             209            28          (23)        214             (61)          153 
========================  ===========  ============  ============  =========  ===============  =========== 
Profit after taxes                246            78          (60)        264              299          563 
========================  ===========  ============  ============  =========  ===============  =========== 
 
Attributable to: 
Shareholders                      244            75          (61)        258              298          556 
Non-controlling interest            2             3             1          6                1            7 
========================  ===========  ============  ============  =========  ===============  =========== 
Profit after taxes                246            78          (60)        264              299          563 
========================  ===========  ============  ============  =========  ===============  =========== 
 
Diluted earnings per 
 share (EUR)                     0.53          0.16        (0.13)       0.56             0.66         1.22 
========================  ===========  ============  ============  =========  ===============  =========== 
 

_ _________________________

([A]) Amounts represent adjustments to include API financial results prepared on a basis consistent with CCEP accounting policies, as if the Acquisition had occurred on 1 January 2021 and excludes API acquisition and integration related costs.

([B]) Amounts represent transaction accounting adjustments for the period 1 January to 10 May as if the Acquisition had occurred on 1 January 2021. These include the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment, the interest impact of additional debt financing reflecting the actual weighted average interest rate for Acquisition financing of c.0.40% and the inclusion of acquisition and integration related costs incurred by API prior to the Acquisition.

 
                                                     Transaction   Pro forma  Items impacting 
                                         Historical   accounting    Combined   Comparability 
                                          adjusted    adjustments                  ([E])         Pro forma 
First Six Months 2020       As Reported   API ([C])      ([D])                                   Comparable 
                            ===========  ==========  ============  =========  ===============  ============= 
Unaudited, in millions         CCEP                                  CCEP                          CCEP 
 of EUR except share 
 data which is calculated 
 prior to rounding 
==========================  ===========  ==========  ============  =========  ===============  ============= 
Revenue                           4,837       1,335             -      6,172                -        6,172 
Cost of sales                     3,168         794            52      4,014             (48)        3,966 
==========================  ===========  ==========  ============  =========  ===============  =========== 
Gross profit                      1,669         541          (52)      2,158               48        2,206 
Operating expenses                1,401         546           111      2,058            (350)        1,708 
==========================  ===========  ==========  ============  =========  ===============  =========== 
Operating profit                    268         (5)         (163)        100              398          498 
Total finance costs, 
 net                                 55          19            21         95              (3)           92 
Non-operating items                   2           7             -          9              (7)            2 
==========================  ===========  ==========  ============  =========  ===============  =========== 
Profit before taxes                 211        (31)         (184)        (4)              408          404 
Taxes                                85         (3)          (35)         47               52           99 
==========================  ===========  ==========  ============  =========  ===============  =========== 
Profit after taxes                  126        (28)         (149)       (51)              356          305 
==========================  ===========  ==========  ============  =========  ===============  =========== 
 
Attributable to: 
Shareholders                        126         (5)         (149)       (28)              330          302 
Non-controlling interest              -        (23)             -       (23)               26            3 
==========================  ===========  ==========  ============  =========  ===============  =========== 
Profit after taxes                  126        (28)         (149)       (51)              356          305 
==========================  ===========  ==========  ============  =========  ===============  =========== 
 
Diluted earnings per 
 share (EUR)                       0.28      (0.01)        (0.33)     (0.06)             0.72         0.66 
==========================  -----------  ----------  ------------  ---------  ---------------  ----------- 
 

__________________________

([C]) Amounts represent adjustments to reflect API financial results as if the Acquisition had occurred on 1 January 2020. The impact of adjustments made to API's historical financial statements in order to present them on a basis consistent with CCEP's accounting policies is provided in Note 1.

([D]) Amounts represent transaction accounting adjustments for the period 1 January to 26 June as if the Acquisition had occurred on 1 January 2020. These include the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment, the non-recurring impact of the provisional fair value step-up of API finished goods, the interest impact of additional debt financing reflecting the actual weighted average interest rate for Acquisition financing of c.0.40% and the inclusion of acquisition related costs.

([E]) Items impacting comparability represents amounts included within Pro forma Combined CCEP affecting the comparability of CCEP's year-over-year financial performance and are set out in the corresponding table below:

 
First Six Months                       Items impacting Comparability 
 2021 
                                                                                           =============== 
Unaudited, in     Restructuring     Defined      Acquisition   Inventory  Net Tax  Other        Total 
millions             Charges        benefit          and        step up    ([5])    ([6])       items 
of EUR except         ([1])          plan        Integration     costs                        impacting 
share                            closure([2])      related       ([4])                      Comparability 
data which is                                       costs 
calculated                                          ([3]) 
prior to 
rounding 
================  =============  =============  =============  =========  =======  ======  =============== 
Revenue                       -              -              -          -        -       -              - 
Cost of sales               (4)              3              -       (48)        -       -           (49) 
================  =============  =============  =============  =========  =======  ======  ============= 
Gross profit                  4            (3)              -         48        -       -             49 
Operating 
 expenses                  (88)              6          (100)          -        -     (4)          (186) 
================  =============  =============  =============  =========  =======  ======  ============= 
Operating profit             92            (9)            100         48        -       4            235 
Total finance 
 costs, 
 net                          -              -            (3)          -        -       -            (3) 
Non-operating 
items                         -              -              -          -        -       -              - 
================  =============  =============  =============  =========  =======  ======  ============= 
Profit before 
 taxes                       92            (9)            103         48        -       4            238 
Taxes                        28              4             19          5    (118)       1           (61) 
================  =============  =============  =============  =========  =======  ======  ============= 
Profit after 
 taxes                       64           (13)             84         43      118       3            299 
================  =============  =============  =============  =========  =======  ======  ============= 
 
Attributable to: 
Shareholders                 64           (13)             84         42      118       3            298 
Non-controlling 
 interest                     -              -              -          1        -       -              1 
================  =============  =============  =============  =========  =======  ======  ============= 
Profit after 
 taxes                       64           (13)             84         43      118       3            299 
================  =============  =============  =============  =========  =======  ======  ============= 
 
Diluted earnings 
 per share (EUR)           0.14         (0.03)           0.19       0.09     0.26    0.01           0.66 
================  =============  =============  =============  =========  =======  ======  ============= 
 
 
First Six Months                            Items impacting Comparability 
 2020 
                                                                                                      =============== 
Unaudited, in     Restructuring  Acquisition  Inventory  Mark-to-market  Net Tax  Impairment  Other        Total 
millions of EUR      Charges         and       step up       effects      ([5])      ([8])     ([6])       items 
except share          ([1])      Integration    costs         ([7])                                      impacting 
data which is                      related      ([4])                                                  Comparability 
calculated prior                    costs 
to rounding                         ([3]) 
================  =============  ===========  =========  ==============  =======  ==========  ======  =============== 
Revenue                       -            -          -               -        -           -       -              - 
Cost of sales                 -            -       (48)               -        -           -       -           (48) 
================  =============  ===========  =========  ==============  =======  ==========  ======  ============= 
Gross profit                  -            -         48               -        -           -       -             48 
Operating 
 expenses                 (124)        (100)          -             (6)        -       (116)     (4)          (350) 
================  =============  ===========  =========  ==============  =======  ==========  ======  ============= 
Operating profit            124          100         48               6        -         116       4            398 
Total finance 
 costs, net                   -          (3)          -               -        -           -       -            (3) 
Non-operating 
 items                        -            -          -               -        -           -     (7)            (7) 
================  =============  ===========  =========  ==============  =======  ==========  ======  ============= 
Profit before 
 taxes                      124          103         48               6        -         116      11            408 
Taxes                        33           19          5               1     (37)          29       2             52 
================  =============  ===========  =========  ==============  =======  ==========  ======  ============= 
Profit after 
 taxes                       91           84         43               5       37          87       9            356 
================  =============  ===========  =========  ==============  =======  ==========  ======  ============= 
 
Attributable 
 to: 
Shareholders                 91           84         42               5       37          62       9            330 
Non-controlling 
 interest                     -            -          1               -        -          25       -             26 
================  =============  ===========  =========  ==============  =======  ==========  ======  ============= 
Profit after 
 taxes                       91           84         43               5       37          87       9            356 
================  =============  ===========  =========  ==============  =======  ==========  ======  ============= 
 
Diluted earnings 
 per share (EUR)           0.20         0.18       0.09            0.01     0.08        0.14    0.02           0.72 
================  -------------  -----------  ---------  --------------  -------  ----------  ------  ------------- 
 

__________________________

([1]) Amounts represent restructuring charges related to business transformation activities.

([2]) Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.

([3]) Amounts represent cost associated with the acquisition and integration of API.

([4]) Amounts represent the non-recurring impact of the provisional fair value step-up of API finished goods. For 2021, these charges are included within the As Reported results. For 2020, these charges are included within Transaction accounting adjustments.

([5]) Amounts include the deferred tax impact related to income tax rate and law changes.

([6]) Amounts represent charges incurred prior to Acquisition classified as non-trading items by API which are not expected to recur.

([7]) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.

([8]) Amounts represent the charges recognised by API relating to the impairment of Indonesia and Fiji during H1 2020.

Note 1: Adjustments to API's financial statements

The financial statements below illustrate the impact of adjustments made to API's financial statements in order to present them on a basis consistent with CCEP's accounting policies.

 
                            Historical  Reclassifications  Adjusted   Historical 
                             API ([1])        ([2])           API      Adjusted 
First Six Months 2020                                                  API ([3]) 
                            ==========  =================  ========  ============ 
Unaudited, in millions of    AUD (A$)       AUD (A$)       AUD (A$)   EUR (EUR) 
 EUR 
==========================  ==========  =================  ========  ============ 
Revenue                              -              2,231     2,231       1,335 
Trading revenue                  2,186            (2,186)         -           - 
Cost of sales                        -            (1,327)   (1,327)       (794) 
Cost of goods sold             (1,329)              1,329         -           - 
Delivery                         (107)                107         -           - 
==========================  ==========  =================  ========  ========== 
Gross profit                       750                154       904         541 
Other revenues                      19               (19)         -           - 
Operating expenses               (789)              (122)     (911)       (546) 
==========================  ==========  =================  ========  ========== 
Operating profit                  (20)                 13       (7)         (5) 
Finance income                      17                  -        17          10 
Finance costs                     (50)                  -      (50)        (29) 
==========================  ==========  =================  ========  ========== 
Total finance costs, net          (33)                  -      (33)        (19) 
Non-operating items                  -               (13)      (13)         (7) 
==========================  ==========  =================  ========  ========== 
Profit before taxes               (53)                  -      (53)        (31) 
Taxes                                -                  5         5           3 
Income tax expense                   5                (5)         -           - 
==========================  ==========  =================  ========  ========== 
Profit after taxes                (48)                  -      (48)        (28) 
==========================  ==========  =================  ========  ========== 
 
Attributable to: 
Shareholders                       (9)                  -       (9)         (5) 
Non-controlling interest          (39)                  -      (39)        (23) 
==========================  ==========  =================  ========  ========== 
Profit after taxes                (48)                  -      (48)        (28) 
==========================  ----------  -----------------  --------  ---------- 
 

__________________________

([1]) Historical income statement previously published by API for the period 1 January 2020 to 26 June 2020.

([2]) Accounting policy and classification adjustments made to API's income statement in order to present on a basis consistent with CCEP.

([3]) API income statement has been translated from Australian Dollars to Euros using the average exchange rate for the period of 0.5985.

 
Supplemental Financial Information - Operating Profit - Reported 
 to Comparable 
 

Revenue

 
                            Second-Quarter Ended            Six Months Ended 
====================== 
Revenue CCEP             2 July   26 June   % Change   2 July  26 June   % Change 
 In millions of           2021      2020                2021     2020 
 EUR, except per 
 case data which 
 is calculated 
 prior to rounding. 
 FX impact calculated 
 by recasting current 
 year results at 
 prior year rates. 
======================  ========  =======  ==========  ======  =======  ========== 
As reported                3,625    2,359    53.5%      5,918    4,837    22.5% 
Adjust: Impact 
 of fx changes              (48)      n/a         n/a    (47)      n/a         n/a 
Fx-neutral                 3,577    2,359    51.5%      5,871    4,837    21.5% 
 
Revenue per unit 
 case                       4.84     4.55     6.5%       4.78     4.65     3.0% 
 
 
                            Second-Quarter Ended            Six Months Ended 
====================== 
Revenue Europe           2 July   26 June   % Change   2 July  26 June   % Change 
 In millions of           2021      2020                2021     2020 
 EUR, except per 
 case data which 
 is calculated 
 prior to rounding. 
 FX impact calculated 
 by recasting current 
 year results at 
 prior year rates. 
======================  ========  =======  ==========  ======  =======  ========== 
As reported                3,092    2,359    31.0%      5,385    4,837    11.5% 
Adjust: Impact 
 of fx changes              (34)      n/a         n/a    (33)      n/a         n/a 
Fx-neutral                 3,058    2,359    29.5%      5,352    4,837    10.5% 
 
Revenue per unit 
 case                       4.84     4.55     6.5%       4.77     4.65     2.5% 
 
 
                              Second-Quarter Ended                Six Months Ended 
====================== 
Revenue API                 2 July 2021      26 June 2020    2 July 2021     26 June 2020 
 In millions of 
 EUR, except per 
 case data which 
 is calculated 
 prior to rounding. 
 FX impact calculated 
 by recasting current 
 year results at 
 prior year rates. 
======================  ===================  ============  ===============  ============== 
As reported                             533             -              533             - 
Adjust: Impact 
 of fx changes                         (14)           n/a             (14)             n/a 
Fx-neutral                              519             -              519             - 
 
Revenue per unit 
 case                                  4.89             -             4.89             - 
 
 
                                         Six Months Ended 2 July 2021 
================================ 
 
Revenue by Geography                As reported    Reported     Fx-Neutral 
 In millions of EUR                                 % change     % change 
================================   =============  ===========  ============ 
Great Britain                              1,192    16.0%          15.0% 
---------------------------------  -------------  ------       -------- 
Germany                                    1,091     7.5%           7.5% 
---------------------------------  -------------  ------       -------- 
Iberia([1])                                1,069    16.5%          16.5% 
---------------------------------  -------------  ------       -------- 
France([2])                                  896    11.0%          11.0% 
=================================  =============  ======       ======== 
Belgium/Luxembourg                           454     6.5%           6.5% 
---------------------------------  -------------  ------       -------- 
Netherlands                                  266     6.5%           6.5% 
=================================  =============  ======       ======== 
Norway                                       200     0.5%         (5.0)% 
---------------------------------  -------------  ------       -------- 
Sweden                                       179    10.5%           5.0% 
---------------------------------  -------------  ------       -------- 
Iceland                                       38     8.5%           8.5% 
Total Europe                               5,385    11.5%          10.5% 
---------------------------------  -------------  ------       -------- 
Australia                                    328          n/a           n/a 
--------------------------------   -------------  -----------  ------------ 
New Zealand and Pacific Islands               85          n/a           n/a 
--------------------------------   -------------  -----------  ------------ 
Indonesia and Papua New Guinea               120          n/a           n/a 
--------------------------------   -------------  -----------  ------------ 
Total API                                    533          n/a           n/a 
Total CCEP                                 5,918    22.5%          21.5% 
 

([1]) Iberia refers to Spain, Portugal & Andorra. ([2]) France refers to continental France & Monaco.

Volume

 
                             Second-Quarter Ended            Six Months Ended 
======================  ------------------------------  --------------------------- 
     Comparable Volume   2 July    26 June   % Change   2 July  26 June   % Change 
         - Selling Day     2021      2020                2021     2020 
            Shift CCEP 
 
        In millions of 
     unit cases, prior 
         period volume 
  recast using current 
     year selling days 
======================  =========  =======  ==========  ======  =======  ========== 
Volume                        738      519    42.0%      1,227    1,040    18.0% 
Impact of selling 
 day shift                    n/a        -         n/a     n/a       23         n/a 
Comparable volume 
 - Selling Day 
 Shift adjusted               738      519    42.0%      1,227    1,063    15.5% 
 
 
                             Second-Quarter Ended            Six Months Ended 
                        ------------------------------  --------------------------- 
     Comparable Volume   2 July    26 June   % Change   2 July  26 June   % Change 
         - Selling Day     2021      2020                2021     2020 
          Shift Europe 
 
        In millions of 
     unit cases, prior 
         period volume 
  recast using current 
     year selling days 
                        =========  =======  ==========  ======  =======  ========== 
Volume                        632      519    22.0%      1,121    1,040    8.0% 
Impact of selling 
 day shift                    n/a        -         n/a     n/a       23         n/a 
Comparable volume 
 - Selling Day 
 Shift adjusted               632      519    22.0%      1,121    1,063    5.5% 
 
 
                             Second-Quarter Ended            Six Months Ended 
======================  ------------------------------  -------------------------- 
     Comparable Volume   2 July    26 June   % Change   2 July   26 June  % Change 
         - Selling Day     2021      2020                 2021     2020 
             Shift API 
 
        In millions of 
     unit cases, prior 
         period volume 
  recast using current 
     year selling days 
======================  =========  =======  ==========  =======  =======  ======== 
Volume                        106        -         n/a      106        -       n/a 
Impact of selling 
 day shift                    n/a        -         n/a      n/a        -       n/a 
Comparable volume 
 - Selling Day 
 Shift adjusted               106        -         n/a      106        -       n/a 
 

Cost of Sales

 
                                                    Six Months Ended 
                                               --------------------------- 
Cost of Sales                                  2 July  26 June   % Change 
 In millions of EUR, except per case data       2021     2020 
 which is calculated prior to rounding. 
 FX impact calculated by recasting current 
 year results at prior year rates. 
                                               ======  =======  ========== 
As reported                                     3,840    3,168    21.0% 
Adjust: Total items impacting comparability      (49)        -         n/a 
Comparable                                      3,791    3,168    19.5% 
Adjust: Impact of fx changes                     (29)      n/a         n/a 
Comparable & fx-neutral                         3,762    3,168    19.0% 
 
Cost of sales per unit case                      3.07     3.05     0.5% 
 

For the six months ending 2 July 2021, reported cost of sales were EUR3,840 million, up 21.0% versus 2020, and include the impact of a EUR48 million acquisition accounting fair value step up to API finished goods at the time of the Acquisition that were sold during May and June.

Comparable cost of sales for the same period were EUR3,791 million, up 19.5% versus 2020. Cost of sales per unit case increased by 0.5% on a comparable and fx-neutral basis, reflecting the impact of the newly acquired API operations, increased revenue per unit case driving higher concentrate costs, emerging commodity inflation and adverse mix, partially offset by the favourable recovery of fixed manufacturing costs given higher volumes.

Operating expenses

 
                                                    Six Months Ended 
                                               --------------------------- 
Operating Expenses                             2 July  26 June   % Change 
 In millions of EUR. FX impact calculated       2021     2020 
 by recasting current year results at prior 
 year rates. 
                                               ======  =======  ========== 
As reported                                     1,558    1,401    11.0% 
Adjust: Total items impacting comparability     (122)    (130)         n/a 
Comparable                                      1,436    1,271    13.0% 
Adjust: Impact of fx changes                      (8)      n/a         n/a 
Comparable & fx-neutral                         1,428    1,271    12.5% 
 

For the six months ending 2 July 2021, reported operating expenses were EUR1,558 million, up 11.0% versus 2020.

Comparable operating expenses were EUR1,436 million for the same period, up 13.0% versus 2020, reflecting the impact of the newly acquired API operations and higher volumes, partially offset by the benefit of on-going efficiency programmes & our continuous efforts on discretionary spend optimisation.

Restructuring charges of EUR92 million were incurred in the six month period ending 2 July 2021, which principally relate to proposals announced in Iberia relating to productivity initiatives for which EUR50 million of severance costs have been recorded. This compares to restructuring charges of EUR124 million incurred in the six month period ending 26 June 2020, related to the closure of German distribution centres and a commerical restructuring initiative related to vending operations and sales functions.

Acquisition and integration related costs of EUR43 million were incurred in the six month period ending 2 July 2021 associated with the acquisition of API, primarily related to brokerage and advisory fees.

Operating profit

 
                                                     Six Months Ended 
                                               ---------------------------- 
Operating Profit CCEP                          2 July   26 June   % Change 
 In millions of EUR. FX impact calculated        2021     2020 
 by recasting current year results at prior 
 year rates. 
                                               =======  =======  ========== 
As reported                                        520      268    94.0% 
Adjust: Total items impacting comparability        171      130         n/a 
Comparable                                         691      398    73.5% 
Adjust: Impact of fx changes                      (10)      n/a         n/a 
Comparable & fx-neutral                            681      398    71.0% 
 
 
                                                     Six Months Ended 
                                               ---------------------------- 
Operating Profit Europe                        2 July   26 June   % Change 
 In millions of EUR. FX impact calculated        2021     2020 
 by recasting current year results at prior 
 year rates. 
                                               =======  =======  ========== 
As reported                                        505      268      88.5 % 
Adjust: Total items impacting comparability        126      130         n/a 
Comparable                                         631      398    58.5% 
Adjust: Impact of fx changes                       (7)      n/a         n/a 
Comparable & fx-neutral                            624      398    57.0% 
 
 
                                                               Six Months Ended 
                                                          -------------------------- 
Operating Profit API                                        2 July 2021     26 June 
 In millions of EUR. FX impact calculated by recasting                        2020 
 current year results at prior year rates. 
                                                          ===============  ========= 
As reported                                                            15        - 
Adjust: Total items impacting comparability                            45        - 
Comparable                                                             60        - 
Adjust: Impact of fx changes                                          (3)        - 
Comparable & fx-neutral                                                57        - 
 
 
Supplemental Financial Information - Operating Profit - Reported 
 to Pro forma Comparable 
 

Revenue

 
                            Second-Quarter Ended            Six Months Ended 
======================  -----------------------------  --------------------------- 
Pro forma Revenue        2 July   26 June   % Change   2 July  26 June   % Change 
 CCEP                     2021      2020                2021     2020 
 In millions of 
 EUR, except per 
 case data which 
 is calculated 
 prior to rounding. 
 FX impact calculated 
 by recasting current 
 year results at 
 prior year rates. 
======================  ========  =======  ==========  ======  =======  ========== 
As reported and 
 comparable                3,625    2,359    53.5%      5,918    4,837    22.5% 
Add: Pro forma 
 adjustments                 259      597         n/a   1,056    1,335         n/a 
Pro forma Comparable       3,884    2,956    31.5%      6,974    6,172    13.0% 
Adjust: Impact 
 of fx changes              (67)      n/a         n/a    (81)      n/a         n/a 
Pro forma Comparable 
 and fx-neutral            3,817    2,956    29.0%      6,893    6,172    11.5% 
 
Pro forma Revenue 
 per unit case              4.81     4.54     6.0%       4.78     4.64     3.0% 
 
 
                            Second-Quarter Ended            Six Months Ended 
====================== 
Pro forma Revenue        2 July   26 June   % Change   2 July  26 June   % Change 
 API                      2021      2020                2021     2020 
 In millions of 
 EUR, except per 
 case data which 
 is calculated 
 prior to rounding. 
 FX impact calculated 
 by recasting current 
 year results at 
 prior year rates. 
======================  ========  =======  ==========  ======  =======  ========== 
As reported and 
 comparable                  533        -         n/a     533        -         n/a 
Add: Pro forma 
 adjustments                 259      597         n/a   1,056    1,335         n/a 
Pro forma Comparable         792      597    32.5%      1,589    1,335    19.0% 
Adjust: Impact 
 of fx changes              (33)      n/a         n/a    (48)      n/a         n/a 
Pro forma Comparable 
 and fx-neutral              759      597    27.0%      1,541    1,335    15.5% 
 
Pro forma Revenue 
 per unit case              4.69     4.50     4.5%       4.80     4.61     4.0% 
 
 
                              Second-Quarter Ended 2 July                   Six Months Ended 2 July 
                                          2021                                        2021 
                                                                   ----------------------------------------- 
 
Pro forma revenue       Pro forma      Pro forma      Pro forma     Pro forma     Pro forma      Pro forma 
 by Geography           comparable     comparable     Fx-Neutral    comparable    comparable     Fx-Neutral 
 In millions of                         % change       % change                    % change       % change 
 EUR 
Europe                        3,092     31.0%           29.5%            5,385      11.5%          10.5% 
Australia                       481     37.5%           27.5%              997      24.0%          16.5% 
--------------------  -------------  -------   ---  --------       -----------  --------       -------- 
New Zealand and 
 Pacific Islands                124     32.0%           24.5%              263      21.0%          17.0% 
--------------------  -------------  -------   ---  --------       -----------  --------       -------- 
Indonesia and Papua 
 New Guinea                     187     22.0%           28.0%              329       4.5%          12.0% 
Total API                       792     32.5%           27.0%            1,589      19.0%          15.5% 
Total CCEP                    3,884     31.5%           29.0%            6,974      13.0%          11.5% 
 

Volume

 
                             Second-Quarter Ended            Six Months Ended 
======================  ------------------------------  --------------------------- 
     Comparable Volume   2 July    26 June   % Change   2 July  26 June   % Change 
         - Selling Day     2021      2020                2021     2020 
            Shift CCEP 
 
        In millions of 
     unit cases, prior 
         period volume 
  recast using current 
     year selling days 
======================  =========  =======  ==========  ======  =======  ========== 
Volume                        738      519    42.0%      1,227    1,040    18.0% 
Impact of selling 
 day shift                    n/a        -         n/a     n/a       23         n/a 
Comparable volume 
 - Selling Day 
 Shift adjusted               738      519    42.0%      1,227    1,063    15.5% 
Pro forma impact([1])          55      133         n/a     215      297         n/a 
Pro forma comparable 
 volume                       793      652    21.5%      1,442    1,360     6.0% 
 
 
                             Second-Quarter Ended             Six Months Ended 
======================  ------------------------------  ---------------------------- 
     Comparable Volume   2 July    26 June   % Change   2 July   26 June   % Change 
         - Selling Day     2021      2020                 2021     2020 
             Shift API 
 
        In millions of 
     unit cases, prior 
         period volume 
  recast using current 
     year selling days 
======================  =========  =======  ==========  =======  =======  ========== 
Volume                        106        -         n/a      106        -         n/a 
Impact of selling 
 day shift                    n/a        -         n/a      n/a        -         n/a 
Comparable volume 
 - Selling Day 
 Shift adjusted               106        -         n/a      106        -         n/a 
Pro forma impact([1])          55      133         n/a      215      297         n/a 
Pro forma comparable 
 volume                       161      133    21.0%         321      297    8.0% 
 
 

([1]) Pro forma API volume for the six months ended 26 June 2020 is 289 million unit cases. Including the impact of the Q1 selling day shift (8 million unit cases), pro forma comparable API volume is 297 million unit cases.

 
                                  Second-Quarter Ended                       Six Months Ended 
=======================  ---------------------------------------  --------------------------------------- 
                          2 July 2021     26 June      % Change    2 July 2021     26 June      % Change 
                                            2020                                     2020 
 
Pro forma Comparable      % of Total     % of Total                % of Total     % of Total 
 Volume by Brand 
 Category CCEP 
 Adjusted for selling 
 day shift 
=======================  =============  ============              =============  ============ 
Sparkling                    84.5%          87.0%       18.5%         84.5%          84.5%        6.0% 
  Coca-Cola(TM)              58.5%          61.5%       16.0%         59.0%          60.0%        4.5% 
  Flavours, Mixers 
   & Energy                  26.0%          25.5%       24.5%         25.5%          24.5%       10.0% 
Stills                       15.5%          13.0%       45.0%         15.5%          15.5%        5.5% 
  Hydration                   7.5%           6.5%       45.0%          7.5%           8.0%      (1.0)% 
  RTD Tea, RTD Coffee, 
   Juices & Other([1])        8.0%           6.5%       45.0%          8.0%           7.5%       13.0% 
Total                       100.0%         100.0%       21.5%        100.0%         100.0%        6.0% 
 

________________________

([1]) RTD refers to Ready-To-Drink.

Cost of Sales

 
                                                    Six Months Ended 
                                               --------------------------- 
Pro forma Cost of Sales                        2 July  26 June   % Change 
 In millions of EUR, except per case data       2021     2020 
 which is calculated prior to rounding. 
 FX impact calculated by recasting current 
 year results at prior year rates. 
                                               ======  =======  ========== 
As reported                                     3,840    3,168    21.0% 
Add: Pro forma adjustments                        616      794         n/a 
Adjust: Acquisition accounting                      2       52 
Adjust: Total items impacting comparability      (49)     (48) 
Pro forma Comparable                            4,409    3,966    11.0% 
Adjust: Impact of fx changes                     (47)      n/a         n/a 
Pro forma Comparable & fx-neutral               4,362    3,966    10.0% 
 
Cost of sales per unit case                      3.02     2.98     1.5% 
 

Pro forma Comparable cost of sales for the six months ending 2 July 2021 were EUR4,409 million, up 11.0% versus 2020. Cost of sales per unit case increased by 1.5% on a comparable and fx-neutral basis, driven by an increase in concentrate in line with our incidence model reflecting the improvement in revenue per unit case. There was also upward pressure on commodities and adverse mix, partially offset by the favourable recovery of fixed manufacturing costs given higher volumes.

Operating Expenses

 
                                                    Six Months Ended 
                                               --------------------------- 
Pro forma Operating Expenses                   2 July  26 June   % Change 
 In millions of EUR. FX impact calculated       2021     2020 
 by recasting current year results at prior 
 year rates. 
                                               ======  =======  ========== 
As reported                                     1,558    1,401    11.0% 
Add: Pro forma adjustments                        323      546         n/a 
Adjust: Acquisition accounting                     68      111 
Adjust: Total items impacting comparability     (186)    (350) 
Pro forma Comparable                            1,763    1,708     3.0% 
Adjust: Impact of fx changes                     (19)      n/a         n/a 
Pro forma Comparable & fx-neutral               1,744    1,708     2.0% 
 

Pro forma Comparable operating expenses for the six months ending 2 July 2021 were EUR1,763 million, up 3.0% versus 2020, reflecting higher volumes, partially offset by the benefit of on-going efficiency programmes & further supported by a reduction in discretionary spend, implemented to protect the business in response to the pandemic in areas such as trade marketing, procurement, travel & meetings.

Operating Profit

 
                                                    Six Months Ended 
                                               --------------------------- 
Pro forma Operating Profit CCEP                2 July  26 June   % Change 
 In millions of EUR. FX impact calculated       2021     2020 
 by recasting current year results at prior 
 year rates. 
                                               ======  =======  ========== 
As reported                                       520      268    94.0% 
Add: Pro forma adjustments                        117      (5)         n/a 
Adjust: Acquisition accounting                   (70)    (163) 
Adjust: Total items impacting comparability       235      398 
Pro forma Comparable                              802      498    61.0% 
Adjust: Impact of fx changes                     (15)      n/a         n/a 
Pro forma Comparable & fx-neutral                 787      498    58.0% 
 
 
                                                    Six Months Ended 
                                               --------------------------- 
Pro forma Operating Profit API                 2 July  26 June   % Change 
 In millions of EUR. FX impact calculated       2021     2020 
 by recasting current year results at prior 
 year rates. 
                                               ======  =======  ========== 
As reported                                        15        -         n/a 
Add: Pro forma adjustments                        117      (5)         n/a 
Adjust: Acquisition accounting                   (70)    (163) 
Adjust: Total items impacting comparability       109      268 
Pro forma Comparable                              171      100    71.0% 
Adjust: Impact of fx changes                      (8)      n/a         n/a 
Pro forma Comparable & fx-neutral                 163      100    63.0% 
 
 
Supplemental Financial Information - Effective Tax Rate 
 

The effective tax rate was 46% and 40% for the six months ended 2 July 2021 and 26 June 2020, respectively, and 28% for the years ended 31 December 2020.

For the six months ending 2 July 2021, the effective tax rate includes a EUR118 million impact related to the revaluation of deferred tax positions due to an increase in the UK statutory income tax rate from 19% to 25% effective from 1 April 2023 that was enacted during the first half of 2021.

We expect our full year 2021 comparable effective tax rate to be approximately 20% (2020: 24%). The expected reduction from 2020 is largely due to the utilisation of previously unrecognised losses and reassessment of uncertain tax positions.

 
Supplemental Financial Information - Free Cash Flow 
 
 
                                                      Six Months Ended 
=================================================   -------------------- 
Free Cash Flow                                       2 July     26 June 
 In millions of EUR                                    2021       2020 
=================================================   =========  ========= 
Net cash flows from operating activities                  908      353 
Less: Purchases of property, plant and equipment        (115)    (241) 
Less: Purchases of capitalised software                  (42)     (33) 
Less: Interest paid, net                                 (58)     (59) 
Add: Proceeds from sales of property, plant and 
 equipment                                                 20       35 
Less: Payments of principal on lease obligations         (65)     (60) 
Free Cash Flow                                            648      (5) 
 
 
Supplemental Financial Information - Borrowings 
 
 
                                          As at 
=================================  -------------------- 
                                   2 July   31 December  Credit Ratings  Moody's  Fitch Ratings 
                                     2021       2020      As of 1 
Net Debt                                                  September 
 In millions of EUR                                       2021 
=================================  =======  ===========                  =======  ============= 
                                                         Long-term 
Total borrowings                    13,558        7,187   rating            Baa1           BBB+ 
Fair value asset/liability 
 of hedges related 
 to borrowings ([1])                    20           36  Outlook          Stable         Stable 
                                                         Note: Our credit ratings can 
                                                          be materially influenced by 
                                                          a number of factors including, 
                                                          but not limited to, acquisitions, 
                                                          investment decisions and working 
                                                          capital management activities 
                                                          of TCCC and/or changes in the 
                                                          credit rating of TCCC. A credit 
                                                          rating is not a recommendation 
                                                          to buy, sell or hold securities 
                                                          and may be subject to revision 
Other financial liabilities([1])        39            -   or withdrawal at any time. 
Adjusted total borrowings           13,617        7,223 
Less: cash and cash 
 equivalents([2])                  (1,824)      (1,523) 
Net debt                            11,793        5,700 
 

______________________

([1]) Following the acquisition of CCL, Net Debt includes adjustments for the fair value of derivative instruments used to hedge both currency and interest rate risk on the Group's borrowings. As at 31 December 2020, the Group did not hold interest rate hedging instruments and adjusted Net Debt only for currency impacts. In addition, Net Debt also includes other financial liabilities relating to cash collateral pledged by external parties on hedging instruments related to borrowings.

([2]) The cash and cash equivalents as at 2 July 2021 includes EUR82 million of cash assets in Papua New Guinea Kina, Presently, there are government-imposed currency controls which impact the extent to which the cash held in Papua New Guinea can be converted into foreign currency and remitted for use elsewhere in the Group.

 
Supplemental Financial Information - Adjusted EBITDA 
 
 
                                                        Six Months Ended 
===============================================   ----------------------------- 
Adjusted EBITDA                                    2 July 2021    26 June 2020 
 In millions of EUR 
===============================================   =============  ============== 
Reported profit after tax                                   246           126 
Taxes                                                       209            85 
Finance costs, net                                           64            55 
Non-operating items                                           1             2 
Reported operating profit                                   520           268 
Depreciation and amortisation([1])                          342           332 
Reported EBITDA                                             862           600 
 
Items impacting comparability 
Mark-to-market effects([2])                                   -             6 
Restructuring charges([3])                                   71            95 
Defined benefit plan closure([4])                           (9)             - 
Acquisition and Integration related costs([5])               40             - 
Inventory step up costs([6])                                 48             - 
Adjusted EBITDA                                           1,012           701 
 

______________________

([1]) Includes the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment.

([2]) Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.

([3]) Amounts represent restructuring charges related to business transformation activities, excluding accelerated depreciation included in the depreciation and amortisation line.

([4]) Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.

([5]) Amounts represent cost associated with the acquisition and integration of API.

([6]) Amounts represent the non-recurring impact of the provisional fair value step-up of API finished goods.

 
                                                       Six Months Ended 
===============================================   --------------------------- 
Pro forma Adjusted EBITDA                         2 July 2021   26 June 2020 
 In millions of EUR 
===============================================   ===========  ============== 
Reported profit after tax                                 246           126 
Taxes                                                     209            85 
Finance costs, net                                         64            55 
Non-operating items                                         1             2 
Reported operating profit                                 520           268 
Pro forma adjustments API([1])                            117             - 
Historical adjusted API([2])                                -           (5) 
Transaction accounting adjustments([3])                  (70)         (163) 
Pro forma Combined operating profit                       567           100 
Depreciation and amortisation([4])                        418           454 
Pro forma EBITDA                                          985           554 
 
Items impacting comparability 
Mark-to-market effects([5])                                 -             6 
Restructuring charges([6])                                 71            95 
Defined benefit plan closure ([7])                        (9)             - 
Acquisition and Integration related costs([8])            100           100 
Inventory step up costs([9])                               48            48 
Impairment([10])                                            -           116 
Other([11])                                                 4             4 
Pro forma adjusted EBITDA                               1,199           923 
 

______________________

([1]) Amounts represent adjustments to include API financial results prepared on a basis consistent with CCEP accounting policies, as if the Acquisition had occurred on 1 January 2021 and excludes API acquisition and integration related costs.

([2]) Amounts represent adjustments to reflect API financial results as if the Acquisition had occurred on 1 January 2020. The impact of adjustments made to API's historical financial statements in order to present them on a basis consistent with CCEP's accounting policies is provided in Note 1.

([3]) Amounts represent transaction accounting adjustments for the period 1 January to 10 May as if the Acquisition had occurred on 1 January 2021.

([4]) Includes the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment.

([5]) Amounts represent the net out-of-period mark-to-market impact of non-designated commodity hedges.

([6]) Amounts represent restructuring charges related to business transformation activities, excluding accelerated depreciation included in the depreciation and amortisation line.

([7]) Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.

([8]) Amounts represent costs associated with the acquisition and integration of API.

([9]) Amounts represent the non-recurring impact of the provisional fair value step-up of API finished goods.

([10]) Amounts represent the charges recognised by API relating to the impairment of Indonesia and Fiji during H1 2020.

([11]) Amounts represent charges incurred prior to Acquisition classified as non-trading items by API which are not expected to recur.

 
Principal Risks and Risk Factors 
 

The principal risks and risk factors in our 2020 Integrated Report on Form 20-F for the year ended 31 December 2020 ('2020 Integrated Report') (pages 44 to 50 and 188 to 197 respectively) continue to represent our risks. On 10 May 2021, we completed the acquisition of Coca-Cola Amatil, expanding our geographic footprint into territories in Australia, Pacific and Indonesia ('API'). We have reassessed our risk profile following the acquisition and, while there are no changes to CCEP's Principal Risks, there are additional Risk Factors to consider now that we operate in the API region, including our exposure to the consequences of changing climatic conditions, limited plastic waste collection and recycling infrastructure in developing markets, and workplace health and safety risks (particularly in relation to traffic accidents in Indonesia). In addition, COVID-19 and the related response measures continue to cause disruption in our markets, particularly in Indonesia where confirmed infections remain high. In response to the pandemic, our operational resilience has strengthened and we have demonstrated our ability to continue our operations through the pandemic. However, the reliance on the effectiveness and take-up of vaccines to mitigate the impact of living with COVID, including in Australia and New Zealand, and risk of further waves or new variants of the virus remains. Accordingly, the information and the changes to our principal risks and risk factors shown below update and supplement the Principal Risks and Risk Factors in our 2020 Integrated Report, and any or all of the Principal Risks and Risk Factors contained therein may be exacerbated by further developments in the COVID-19 pandemic.

The risks described in this report and in our 2020 Integrated Report are not the only risks facing the Group. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or future results.

Acquisition of Coca-Cola Amatil

On 10 May 2021, CCEP successfully acquired Coca-Cola Amatil. The acquisition adds new geographic footprint to our business across Australia, New Zealand, Indonesia, Papua New Guinea (PNG) and 12 islands in the Pacific, including Fiji and Samoa. These territories together form the API business unit. General risks that may impact the API business are consistent with the broader CCEP principal risks and risk factors.

The risk factors set forth in our 2020 Integrated Report (pages 188 to 197) are updated and supplemented with the additional information set forth below. The risks described herein should be carefully considered together with the risks described in our 2020 Integrated Report.

   1.     Packaging 

Waste and pollution, and the legal and regulatory responses to these issues, could adversely impact our business.

New recycling technologies may not work or may not be developed quickly enough

Reducing the impact our packaging has on the environment is at the heart of our packaging strategy. CCEP now operates in developing markets with limited plastic waste collection and recycling infrastructure which has the potential to increase the footprint of our packaging in those markets, which could result in higher packaging costs, damage to corporate reputation or investor confidence and a reduction of consumer acceptance of our products and packaging.

   2.     Economic and political conditions 

The deterioration of global and local economic conditions could adversely affect CCEP's business performance and share price.

Political instability could negatively impact our operations and profits.

Ongoing economic instability in PNG has the potential to impact both (i) CCEP's ability to access funds held in PNG, where foreign currency availability may inhibit CCEP's ability to access these funds promptly, and (ii) the valuation of those funds. In the event that circumstances lead to the PNG government requiring assistance from the International Monetary Fund for the funding of its budget deficit, the Papua New Guinean Kina may be devalued, which could impact CCEP's financial position.

   3.     Climate change and water` 

Global issues such as climate change, resource and water scarcity, and the legal and regulatory responses to these issues, could adversely impact our business.

The physical manifestations of climate change relating to changing climatic conditions have the potential to impact CCEP in the API region. Climate change effects that have the potential to impact API include changes in weather patterns, such as increased temperatures, altered rainfall patterns, and more frequent or intense extreme events such as heatwaves, drought, storms and increased frequency of natural disasters. These may cause major business disruption, increased energy costs, and key input scarcity (such as water, sugar, and other agricultural ingredients), which could adversely affect our financial condition, results of operations, or brand reputation.

   4.     People and wellbeing 

Our people could be injured in the course of their work relating to our operations, exposing us to the risk of lost-time injuries and litigation.

While CCEP has historically experienced low levels of lost-time injuries, the risk of serious injury through industrial and traffic accidents, particularly in Indonesia, remains in all markets due to the nature of the manufacturing and distribution business. Serious or numerous injuries experienced by our employees or as a result of our operations could result in increased costs, including costs resulting from lost time as well as potential litigation and regulatory compliance costs, and reputational harm.

   5.     Competitiveness and Business Transformation 

We may not be able to reduce our total net debt within the timeframe to which we have committed following the acquisition of Coca-Cola Amatil, or at all.

We funded the acquisition cost of Coca-Cola Amatil through bond issuances, which has increased our debt leverage from approximately 3 times net debt to adjusted EBITDA at 31 December 2020 to approximately 5 times on closure of the transaction. CCEP may be downgraded by the ratings agencies, Moody's and Fitch, if its operating performance does not show improvement in 2021, and/or if it deviates from its deleveraging commitment and does not return to its medium term target leverage range of 2.5 to 3 times within 3 years. In the event that our debt rating is downgraded, we may not be able to access capital on acceptable terms or at all.

   6.     Other risks 

Fraud, bribery and corruption have the potential to harm our reputation and culture.

Fraudulent activity in our business and operations has the potential to create negative reputational and cultural impacts. While the company believes its management and compliance framework is vigilant in discouraging and preventing fraudulent activity, bribery and corruption risks exist in all CCEP's markets, and particularly in our developing markets (Indonesia and PNG). If we are unsuccessful in detecting and preventing fraudulent activity, we may face increased costs, including compliance and legal costs, and reputational harm.

COVID-19 Pandemic

The impacts of the COVID-19 pandemic and related response measures have had and may continue to have an adverse effect on global economic conditions, as well as on our business, results of operations, cash flows and financial condition. While some restrictions have eased in certain of our markets, vaccination programmes are in place, and certain of our markets have started to open, we still see volatility in many of our territories, particularly in relation to the imposition of further lockdowns and outlet restrictions. It also has negatively impacted and may continue to impact our suppliers and customers.

Since the onset of the COVID-19 pandemic in March 2020, the scale and magnitude of the pandemic and related response measures have decreased but remain subject to change, often on short notice, and differ significantly among our markets. To date, the impacts on our business from the COVID-19 pandemic and related response measures have included, and continue to include, but are not limited to, social distancing measures (including the closure of away from home channels such as hotels, bars and restaurants, and restrictions on large events or gatherings) having been introduced in most of our markets in 2020 and reintroduced at various times since, leading to a negative impact on sales; travel restrictions imposed by many countries resulting in a steep drop in passenger numbers and a significant decline in tourism; regulatory restrictions, safety protocols and heightened sanitation measures resulting in reductions in levels of activity at certain of our production sites and offices; and disruptions in supply chains and routes to market, or those of our suppliers and/or distributors, which could result in an increase in our costs of production and distribution.

Regions that are beginning to experience business recovery or the scaling back of response measures may experience further impacts from COVID-19 or suffer a resurgence of COVID-19 cases, including due to the increasing prevalence of new variants of COVID-19, and economic activity in those regions may not recover quickly or at all, which may materially adversely impact our business. This could in turn lead to a further decline in discretionary spending by consumers. The impacts of the COVID-19 pandemic and related response measures, in particular with respect to expectations of future cash flows, may result in our recognition of material write-downs or impairments in future periods.

The impact of the COVID-19 pandemic on global economic conditions has impacted and may continue to impact the proper functioning of financial and capital markets, as well as foreign currency exchange rates, commodity and energy prices and interest rates. Responses to the COVID-19 pandemic may also result in both short-term and long-term changes to fiscal and monetary policies in impacted jurisdictions, including increases in tax rates. Although our cash position is strong at the end of the first half of 2021 after successful bond issuances of approximately EUR6 billion relating to the acquisition of Coca-Cola Amatil, with a committed bank facility of EUR1.95 billion and access to other funding resources to enhance our liquidity (including commercial paper, bilateral bank facilities and accessing the bond market), there is no guarantee that our existing arrangements or any future arrangements will provide sufficient liquidity to support our operations and business plan over the course of the COVID-19 pandemic. We may take other actions to enhance our liquidity, including entering into new committed bank facilities, but there is no guarantee that our existing arrangements or any future arrangements will provide sufficient liquidity over the course of the COVID-19 pandemic to support our operations and business plan. As a result, the impacts of the COVID-19 pandemic and related response measures may adversely impact our liquidity or financial position. In particular, a continuation or worsening of the levels of market disruption and volatility seen early in the pandemic could have an adverse effect on our ability to access, or costs of, capital or borrowings, our liquidity, and our financial position.

Normal business operations after the disruptions caused by the COVID-19 pandemic may be delayed or constrained by its lingering effects on our business, customers, consumers, suppliers and third-party service providers. COVID-19 has also caused significant stress on the global supply chain, which has placed increased pressure on CCEP's ability to source key goods and services at advantageous prices and on a timely basis. In addition, we may experience reputational harm as a result of our response to the COVID-19 pandemic, including with respect to our ability to fulfill contractual obligations.

Any of these negative impacts, alone or in combination with others, may have a material adverse effect on our results of operations, financial condition and cash flows. The full extent to which the COVID-19 pandemic will affect our results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

SUMMARY OF OUR PRINCIPAL RISKS

The following is a summary of the Group's updated Principal Risks in alphabetical order:

Risk change legend: Increased Decreased -> Stayed the same

 
     Principal              Definition and impact                     Key Mitigation                 Change 
        Risk                                                                                         vs 2020 
                                                                                                    Integrated 
                                                                                                      Report 
===================  ===================================  =======================================  =========== 
Business             Our business is vulnerable           -- Continually updating                      -> 
 continuity           to a range of risks that             our response to the situation 
 and resilience       may materialise and cause            and our people's needs 
                      disruption. These include            -- Customers: working closely 
                      threats and risks such               with suppliers, partners 
                      as physical attacks (e.g.            and The Coca-Cola Company 
                      terrorism) and cyber attacks,        (TCCC) to ensure we best 
                      IT system outages and                serve our customers and 
                      supplier failure as well             respond to their needs 
                      as natural hazards such              -- Communities: working 
                      as fire, flood, severe               closely with TCCC to support 
                      weather and pandemics.               our communities 
                      Working with teams across            -- Governance: strong frameworks, 
                      the business, we develop             business continuity plans, 
                      business continuity plans            incident management teams, 
                      and resilience arrangements          strategic business continuity 
                      to ensure the delivery               scenario testing, risk reassessments 
                      of our products and services         used in business planning, 
                      no matter what the cause             increased frequency of reviews 
                      of disruption. This is               with country leadership 
                      to protect our people,               teams, Board and TCCC incorporating 
                      our environment, our reputation      learnings from the Coca-Cola 
                      and our overall financial            system 
                      condition. In some cases,            -- Effective management 
                      such as the current COVID-19         of liquidity, costs and 
                      pandemic, health, economic           discretionary spend 
                      and legal effects could              -- Operational, technology 
                      have a direct or indirect            and strategic resilience 
                      impact on our ability                towers developed as part 
                      to operate                           of our newly created business 
                                                           continuity and resilience 
                                                           strategy to enable further 
                                                           resilience and risk mitigation 
                                                           for CCEP 
                                                           -- Training and awareness 
                                                           to build Business Continuity 
                                                           and Resilience (BCR) capabilities 
                                                           throughout CCEP to improve 
                                                           buy in and skills when it 
                                                           comes to preparing for and 
                                                           responding to incidents 
                                                           -- Business impact analysis 
                                                           (BIA) to analyse and identify 
                                                           critical people (roles), 
                                                           property, technology, equipment 
                                                           and suppliers (value chain) 
                                                           across CCEP and their associated 
                                                           maximum acceptable outages, 
                                                           recovery time objectives 
                                                           and recovery point objectives 
                                                           -- Scenario planning exercise 
                                                           with stakeholders across 
                                                           facilities and functions 
                                                           to determine scenarios that 
                                                           could lead to the unavailability 
                                                           of critical dependencies 
                                                           identified in the BIA and 
                                                           the associated impacts if 
                                                           the scenarios were to occur 
                                                           -- Business Continuity Plan(BCP) 
                                                           development with colleagues 
                                                           across the business to mitigate 
                                                           risks identified during 
                                                           the BIA, scenario planning 
                                                           and risk assessment and 
                                                           having them available to 
                                                           use in following waves 
                                                           -- Risk assessments to identify 
                                                           the likelihood and impact 
                                                           of identified scenarios 
                                                           occurring, enabling BCPs 
                                                           to be developed in a targeted, 
                                                           meaningful way 
                                                           -- Testing and exercising 
                                                           to validate BCPs are effective, 
                                                           giving teams capabilities 
                                                           to respond to incidents 
                                                           that may occur, through 
                                                           table top and live simulated 
                                                           exercises with stakeholders 
                                                           across CCEP, within sites 
                                                           and functions 
===================  ===================================  =======================================  =========== 
Climate change       Political and scientific             -- Set science based carbon                  -> 
 and water            consensus indicates that             reduction targets for our 
                      increased concentrations             core business operations 
                      of carbon dioxide and                and our value chain 
                      other Greenhouse Gases               -- Carbon reduction plans 
                      (GHGs) are causing climate           for our production facilities, 
                      change and exacerbating              distribution and Cold Drink 
                      water scarcity. Such GHG             Equipment (CDE) 
                      emissions occur across               -- Supplier carbon footprint 
                      our entire value chain               reduction programme launched 
                      including our production             in support of CCEP's 2040 
                      facilities, cold drink               net zero ambition with focus 
                      equipment and transportation.        on suppliers setting Science 
                      GHG emissions also occur             Based Targets initiative 
                      as a result of the packaging         (Science Based Targets initiative 
                      we use and ingredients               SBTi) targets and using 
                      we rely on. Our ingredients          100% renewable electricity 
                      and production facilities            by 2023 
                      also rely heavily on the             -- Transition to 100% renewable 
                      availability of water.               electricity 
                      This exposes us to the               -- External policy leadership 
                      risk of negative impacts             and advocacy to support 
                      related to our ability               a transition to a low-carbon 
                      to produce or distribute             economy 
                      our products, or the availability    -- Life cycle analysis to 
                      and price of agricultural            assess carbon footprint 
                      ingredients and raw materials        of packaging formats 
                      as a result of increased             -- Use of recycled materials 
                      water scarcity.                      for our packaging, which 
                      Failure to address these             have a lower carbon footprint 
                      risks may cause damage               -- Source Vulnerability 
                      to our corporate reputation          Assessments (SVAs) to protect 
                      or investor confidence,              future sustainability of 
                      a reduction in consumer              local water sources and 
                      acceptance of our products           Facility Water Vulnerability 
                      and potential disruption             Assessments (FAWVA) and 
                      to our operations.                   water management plans 
                                                           -- Supplier engagement on 
                                                           carbon reduction and sustainable 
                                                           water use 
                                                           -- Assessment on climate 
                                                           related risks and future 
                                                           climate scenario planning 
                                                           -- Comprehensive disclosure 
                                                           of GHG emissions across 
                                                           our value chain in line 
                                                           with GHG Protocol 
===================  ===================================  =======================================  =========== 
Competitiveness      We are continuing our                -- Regular competitiveness                   -> 
 business             strategy of assessing                reviews ensuring effective 
 transformation       potential opportunities              steering, high visibility 
 and integration      for continuous improvements          and quick decision making 
                      that would enable us to              -- Dedicated programme management 
                      stay competitive in the              office and effective project 
                      future. The impact of                management methodology 
                      COVID-19 has accelerated             -- Continuation and strengthening 
                      the urgency for assessing            of governance routines 
                      potential opportunities              -- Regular Executive Leadership 
                      and taking appropriate               Team (ELT) and Board reviews 
                      action. This includes                and approvals of progress 
                      technology transformation,           and issue resolution 
                      including to support increased       -- Analysis and review of 
                      working from home, continuous        acquisition related activities 
                      supply chain improvements            such as integration and 
                      and improvements in the              business performance risk 
                      way we work with our partners        indicators and capital allocation 
                      and franchisors, and more            risk reviews 
                      recently our acquisition             -- Support our employees 
                      of CCL. This exposes us              with wellbeing initiatives 
                      to the risk of ineffective           to manage change fatigue 
                      coordination between BUs 
                      and central functions, 
                      change fatigue in our 
                      people and social unrest. 
                      As a result, we may not 
                      create the expected value 
                      from these initiatives 
                      or execute our business 
                      plans effectively. We 
                      may also experience damage 
                      to our corporate reputation, 
                      a decline in our share 
                      price, industrial action 
                      and disruption to our 
                      operations 
===================  ===================================  =======================================  =========== 
Cyber and            We rely on a complex IT              -- Proactive monitoring                      -> 
 social engineering   landscape, using both                of cyber threats and implementing 
 attacks and          internal and external                preventive measures 
 IT infrastructure    systems, including some              -- Business awareness and 
                      systems that are outside             training on information 
                      our direct control where             security and data privacy 
                      employees work from home.            -- Business continuity and 
                      These systems are potentially        disaster recovery programmes 
                      vulnerable to adversarial            -- A programme to identify 
                      and accidental security              and resolve vulnerabilities 
                      and cyber threats, as                -- Third party risk assessments 
                      well as user behaviour.              -- Corporate security business 
                      This threat profile is               intelligence 
                      dynamically changing,                -- Appropriate investment 
                      including as a result                in updating system 
                      of the COVID-19 pandemic,            -- Hardware lifecycle process 
                      as potential attackers'              in place 
                      skills and tools advance. 
                      This exposes us to the 
                      risk of unauthorised data 
                      access, compromised data 
                      accuracy and confidentiality, 
                      the loss of system operation 
                      or fraud. As a result, 
                      we could experience disruption 
                      to operations, financial 
                      loss, regulatory intervention, 
                      or damage to our reputation. 
===================  ===================================  =======================================  =========== 
Economic             Our industry is sensitive            -- Diversified product portfolio 
 and political        to economic conditions               and the geographic diversity 
 conditions           such as commodity and                of our operations assist 
                      currency price volatility,           in mitigating our exposure 
                      inflation, political instability     to any localised economic 
                      (for example, Brexit),               risk 
                      lack of liquidity and                -- Our flexible business 
                      funding resources, widening          model allows us to adapt 
                      of credit risk premiums,             our portfolio to suit our 
                      unemployment and furlough,           customers' changing needs 
                      and consumer confidence              during economic downturns 
                      or the impact of the widespread      -- We regularly review our 
                      outbreak of infectious               business results and cash 
                      disease such as COVID-19.            flows and, where necessary, 
                      This exposes us to the               rebalance capital investments 
                      risk of an adverse impact            -- Following the Brexit 
                      on CCEP and our consumers,           deal on the 24 December 
                      driving a reduction of               2020, which took effect 
                      spend within our category            from 11pm GMT on 31 December 
                      or a change in consumption           2020, we continue to monitor 
                      channels and packs. As               developments to ensure the 
                      a result, we could experience        business is prepared to 
                      reduced demand for our               manage emerging situations 
                      products, fail to meet               -- Monitoring of societal 
                      our growth priorities                developments 
                      and our reputation could             -- Hedging programmes 
                      be adversely impacted. 
                      Adverse economic conditions 
                      could also lead to increased 
                      customer and supplier 
                      delinquencies and bankruptcies, 
                      while restrictions on 
                      the movement of goods 
                      in response to economic, 
                      political or other conditions, 
                      such as COVID-19, could 
                      affect our supply chain. 
===================  ===================================  =======================================  =========== 
Legal, regulatory    Our daily operations are             -- Continuous monitoring 
 and tax change       subject to a broad range             of new changing regulations 
                      of regulations at EU and             and appropriate implementation 
                      national level. These                of adequate mitigations 
                      include regulations covering         -- Dialogue with government 
                      manufacturing, the use               representatives and input 
                      of certain ingredients,              to public consultations 
                      packaging, labelling requirements,   on new or changing regulations 
                      and the distribution and             -- Effective compliance 
                      sale of our products.                programmes and training 
                      This exposes us to the               for employees 
                      risk of legal, regulatory            -- Measures set out elsewhere 
                      or tax changes that may              in this table in relation 
                      adversely impact our business.       to legal, regulatory and 
                      As a result, we could                tax changes with respect 
                      face new or higher taxes,            to any of the other principal 
                      higher labour and other              risks, and in particular 
                      costs, stricter sales                in relation to packaging, 
                      and marketing controls,              perceived health impact 
                      or punitive or other actions         of our beverages and ingredients, 
                      from regulators or legislative       and changing consumer preferences 
                      bodies that negatively               -- Increasing recycled content 
                      impact our financial results,        level in specific countries 
                      business performance or              to mitigate tax impact 
                      licence to operate. COVID-19 
                      has resulted in both short-term 
                      and long-term changes 
                      to legislation and regulation. 
                      It may also lead to future 
                      increases in taxes to 
                      finance the cost of government 
                      responses to COVID-19. 
                      In addition to the changes 
                      that took immediate effect 
                      from 11pm GMT on 31 December 
                      2020, we expect Brexit 
                      could, over time, lead 
                      to increased diversity 
                      of regulation and consequent 
                      costs of compliance including 
                      inability to or difficulties 
                      in standardising product 
                      and process between the 
                      UK and CCEP's other markets. 
===================  ===================================  =======================================  =========== 
Market               Our success in the market            -- Shopper insights and                      -> 
                      depends on a number of               price elasticity assessments 
                      factors. These include               -- Pack and product innovation 
                      actions taken by our competitors,    -- Promotional strategy 
                      route to market, our ability         -- Commercial policy 
                      to build strong customer             -- Collaborative category 
                      relationships and create             planning with customers 
                      value together (which                -- Growth centric customer 
                      could be affected by customer        investment policies 
                      consolidation, buying                -- Business development 
                      groups, and the changing             plans aligned with our customers 
                      customer landscape) and              -- Diversification of portfolio 
                      government actions, including        and customer base 
                      those introduced as a                -- Realistic budgeting routines 
                      result of COVID-19 such              and targets 
                      as social distancing,                -- Investment in key account 
                      the forced closure of                development and category 
                      some of our customer channels,       planning 
                      restricted tourism and               -- Continuous evaluation 
                      restrictions on large                and updating of mitigation 
                      gatherings. This exposes             Plans 
                      us to the risk that market           -- Responded to COVID-19 
                      forces may limit our ability         by developing and investing 
                      to execute our business              in new routes to market, 
                      plans effectively. As                for example, online channel, 
                      a result, it may be more             so our products remain available 
                      challenging to expand                to consumers 
                      margins, increase market 
                      share, or negotiate with 
                      customers effectively, 
                      and COVID-19 may also 
                      further adversely impact 
                      the market in previously 
                      unforeseen ways. 
===================  ===================================  =======================================  =========== 
Packaging            Due to concerns, and those           -- Continued sustainability                  -> 
                      of our stakeholders about            action plan focused on packaging, 
                      the environmental impacts            including our commitments 
                      of litter and GHG emissions,         to: 
                      our packaging (especially            - Ensure that 100% of our 
                      single use plastic packaging)        primary packaging is recyclable 
                      is under increasing scrutiny         or refillable 
                      from regulators, consumers,          - Drive higher collection 
                      customers, and Non-Governmental      rates, aiming to ensure 
                      Organisations (NGOs).                that 100% of our packaging 
                      As a result, we may have             is collected for reuse or 
                      to change our packaging              recycling 
                      strategy and mix over                - Ensure that by 2023 at 
                      both the short and long              least half of the material 
                      term. This could result              we use for our PET bottles 
                      in a reduction in the                comes from recycled plastic, 
                      use of single use plastic            achieving 100% by 2030 
                      packaging and the introduction       -- Work with TCCC to explore 
                      of new pack formats such             alternative sources of rPET 
                      as dispensed and refillable          and innovative new packaging 
                      packaging, and we may                materials 
                      be liable for increased              -- Work with TCCC to encourage 
                      costs related to the design,         consumers to recycle their 
                      collection, recycling                packaging using existing 
                      and littering of our packaging.      collection infrastructure 
                      We may be unable to respond          -- Cross functional Sustainable 
                      in a cost effective manner           Packaging Office (SPO) with 
                      and our reputation may               a dedicated focus on packaging 
                      be adversely impacted.               collection and to ensure 
                                                           all sustainable packaging 
                                                           strategies are implemented 
                                                           on time 
                                                           -- Support for well-designed 
                                                           Deposit Return Scheme (DRS) 
                                                           across our markets as a 
                                                           route to 100% collection 
                                                           and increased availability 
                                                           of rPET 
                                                           -- Work to expand delivery 
                                                           mechanisms that do not rely 
                                                           on single use packaging, 
                                                           for example refillable packaging 
                                                           and dispensed delivery 
                                                           -- Investment in enhanced 
                                                           recycling technology 
                                                           -- We continue to develop 
                                                           the business models for 
                                                           packaging-less solutions 
                                                           (such as Freestyle) to provide 
                                                           an alternative offering 
                                                           for customers who do not 
                                                           want to use packaging 
                                                           -- We also continue to develop 
                                                           the business models for 
                                                           refillable packaging to 
                                                           provide an alternative offering 
                                                           for customers who want fully 
                                                           circular alternatives to 
                                                           single use packaging 
                                                           -- Increase use of recycled 
                                                           content in films 
                                                           -- Moving from hard to recycle 
                                                           plastic shrink to sustainable 
                                                           board for multi packs 
===================  ===================================  =======================================  =========== 
People and           The direct and indirect              -- CCEP Code of Conduct                      -> 
 wellbeing            effects of the nature                (CoC) 
                      our business operations              -- Regular communication 
                      and COVID-19 may impact              -- Employee Assistance Programme 
                      our people, their health             (EAP) 
                      and wellbeing and working            -- Flexible working 
                      conditions. Our response             -- Working from home 
                      may affect the perception            -- Safety measures 
                      of CCEP as an employer               -- Appropriate incentivisation 
                      and our ability to attract,          -- Talent reviews 
                      retain and motivate existing         -- Tools for employees to 
                      and future employees,                take ownership of careers 
                      which exposes us to the              -- People related training 
                      risk of not having the               and reskilling, risk assessments, 
                      right talent, required               action plans and compliance 
                      technical skillset, or               -- Manager training to help 
                      expected levels of productivity.     identify stress 
                      As a result, we could                -- Wellbeing material available 
                      fail to achieve our strategic        to managers and employees 
                      objectives and could experience      via CCEP platforms to support 
                      a decline in employee                our employees 
                      engagement, industrial               -- Human rights policy 
                      action, suffer from reputational 
                      damage or litigation. 
                      CCEP is committed to ensuring 
                      that everyone working 
                      throughout our operations 
                      and within our supply 
                      chain is treated with 
                      dignity and respect. 
===================  ===================================  =======================================  =========== 
Perceived            We make and distribute                  -- Reducing the sugar content             -> 
 health impact        products containing sugar               of our soft drinks, through: 
 of our beverages     and alternative sweeteners.             - Product and pack innovation 
 and ingredients,     Healthy lifestyle campaigns,            and reformulation 
 and changing         increased media scrutiny                - Managing our product mix 
 consumer             and social media have                   to increase low and no calorie 
 buying trends        led to an increasingly                  products 
                      negative perception of                  -- Making it easier for 
                      these ingredients among                 consumers to cut down on 
                      consumers. This exposes                 sugar by providing straightforward 
                      us to the risk that we                  product information and 
                      will be unable to evolve                smaller pack sizes 
                      our product and packaging               -- EU wide soft drink industry 
                      choices quickly enough                  calorie reduction commitment 
                      to satisfy changes in                   with the Union of European 
                      consumer preferences.                   Soft Drinks Associations 
                      We will also face new                   (UNESDA) 
                      pressure from the EU Commission         -- Adopting calorie and 
                      with the Farm to Fork                   sugar reduction commitments 
                      Strategy, at the heart                  at country level 
                      of the European Green                   -- Dialogue with government 
                      Deal, aiming to make food               representatives, NGOs, local 
                      systems fair, healthy                   communities and customers 
                      and environmentally friendly.           -- Employee communication 
                      As a result, we could                   and education 
                      experience sustained decline            -- Responsible sales and 
                      in sales volume, which                  marketing codes 
                      could impact our financial              -- Proactive introduction 
                      results and business performance.       of colour coded front of 
                                                              pack guideline daily amount 
                                                              labelling as a fact based 
                                                              and non-discriminatory way 
                                                              of informing consumers in 
                                                              an understandable way 
                                                              -- Provide a serious alternative 
                                                              to other labelling schemes, 
                                                              including the French NutriScore 
                                                              scheme, encouraging the 
                                                              European Commission to evaluate 
                                                              and develop EU harmonised 
                                                              guidance, to address potential 
                                                              unfair targeting of the 
                                                              sparkling soft drinks industry 
                                                              -- Work with International 
                                                              Sweeteners Association to 
                                                              promote and protect the 
                                                              reputation of alternative 
                                                              sweeteners and, through 
                                                              UNESDA, working with the 
                                                              European food safety authority 
                                                              on their opinions that will 
                                                              inform EU and national government 
                                                              action 
===================  ===================================  =======================================  =========== 
 Product             We produce a wide range                 -- TCCC standards and audits              -> 
  quality             of products, all of which               -- Hygiene regimes at production 
                      must adhere to strict                   facilities 
                      food safety requirements.               -- Total quality management 
                      This exposes us to the                  programme 
                      risk of failing to meet,                -- Robust management systems 
                      or being perceived as                   -- ISO certification 
                      failing to meet, the necessary          -- Internal governance audits 
                      standards, which could                  -- Quality monitoring programme 
                      lead to compromised product             -- Customer and consumer 
                      quality. As a result,                   monitoring and feedback 
                      our brand reputation could              -- Incident management and 
                      be damaged and our products             crisis resolution 
                      could become less popular               -- Every CCEP production 
                      with consumers.                         facility has: 
                                                              - a hazard analysis critical 
                                                              control points assessment 
                                                              and mitigation plan in place 
                                                              - a quality monitoring plan 
                                                              based on risk and requirements 
                                                              - a food fraud vulnerability 
                                                              assessment and mitigation 
                                                              plan based on risk and requirements 
                                                              - a food defence threat 
                                                              assessment and mitigation 
                                                              plan based on risk and requirement 
===================  ===================================  =======================================  =========== 
Relationships        We conduct our business              -- Clear agreements govern                   -> 
 with TCCC            primarily under agreements           the relationships 
 and other            with TCCC and other franchisors.     -- Incidence pricing agreement 
 franchisors          This exposes us to the               with TCCC 
                      risk of misaligned incentives        -- Aligned long-range planning 
                      or strategy, particularly            and annual business planning 
                      during periods of low                processes 
                      category growth or crisis            -- Ongoing pan-European 
                      such as COVID-19. As a               and local routines between 
                      result, TCCC or other                CCEP and franchise partners 
                      franchisors could act                -- Increased frequency of 
                      adversely to our interests           meetings and maintenance 
                      with respect to our business         of positive relationships 
                      relationship.                        at all levels 
                                                           -- Regular contact and best 
                                                           practice sharing across 
                                                           the Coca-Cola System 
                                                           -- Improve visibility and 
                                                           ways of working with TCCC 
 

*Change vs 2020 Integrated Report may be as a result of a change in likelihood or impact.

 
Related Parties 
 

Related party disclosures are presented in Note 10 of the Notes to the condensed consolidated interim financial statements contained in this interim management report.

 
Going Concern 
 

As part of the Directors' consideration of the appropriateness of adopting the going concern basis in preparing the condensed consolidated interim financial statements, a review was performed on a range of potential COVID-19 scenarios. The Directors also considered the Group's response to the COVID-19 disruption and the ability to continue to generate strong operating cashflows. The Directors have taken into account the Group's current cash position, its access to a EUR1.95 billion undrawn committed credit facility and also considered the range of mitigation actions available to the Group if required, such as reducing discretionary spend. On the basis of these reviews, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of 12 months from the date of signing these accounts. Accordingly, the condensed consolidated interim financial statements have been prepared on a going concern basis and the Directors do not believe there are any material uncertainties to disclose in relation to the Group's ability to continue as a going concern.

 
Responsibility Statement 
 

The Directors of the Company confirm that to the best of their knowledge:

-- The Condensed Consolidated Interim Financial Statements for the six months ended 2 July 2021 have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board, UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority (DTR).

-- The interim management report includes a fair review of the information required by the DTR 4.2.7 R and DTR 4.2.8 R as follows:

-- DTR 4.2.7 R: (1) an indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements, and (2) a description of the principal risks and uncertainties for the remaining six months of the financial year; and

-- DTR 4.2.8 R: (1) related parties transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period, and (2) any changes in the related parties transactions described in the last annual report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year.

The Directors of the Company are shown on pages 66-70 in the 2020 Integrated Report and Form 20-F for the year ended 31 December 2020, save for the following changes:

   --       Irial Finan stepped down as a Director at the end of the AGM on 26 May 2021 

-- Manuel "Manolo" Arroyo was appointed as a Director with effect from the end of the AGM on 26 May 2021

A list of current directors is maintained on CCEP's website: www.cocacolaep.com/about-us/governance/board-of-directors/.

On behalf of the Board

 
Damian Gammell           Manik Jhangiani 
Chief Executive Officer  Chief Financial Officer 
 

2 September 2021

Independent Review Report to Coca-Cola Europacific Partners plc

Conclusion

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 2 July 2021 which comprises the condensed consolidated interim income statement, condensed consolidated interim statement of comprehensive income, condensed consolidated interim statement of financial position, condensed consolidated interim statement of cash flows, condensed consolidated interim statement of changes in equity and the related explanatory notes 1 - 13. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 2 July 2021 is not prepared, in all material respects, in accordance with International Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board, UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 1, the annual financial statements of the group will be prepared in accordance with IFRS as issued by the International Accounting Standards Board and UK adopted International Accounting Standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board and UK adopted International Accounting Standard 34, "Interim Financial Reporting".

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statement in the half-yearly financial report. Our conclusion, based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Ernst & Young LLP

London

2 September 2021

Coca-Cola Europacific Partners plc

Condensed Consolidated Interim Income Statement (Unaudited)

 
                                                              Six Months Ended 
                                                         -------------------------- 
                                                           2 July        26 June 
                                                             2021          2020 
                                                   Note  EUR million   EUR million 
-------------------------------------------------  ----  -----------  ------------- 
Revenue                                                        5,918        4,837 
Cost of sales                                                (3,840)      (3,168) 
                                                         -----------  ----------- 
Gross profit                                                   2,078        1,669 
Selling and distribution expenses                            (1,033)        (961) 
Administrative expenses                                        (525)        (440) 
                                                         -----------  ----------- 
Operating profit                                                 520          268 
Finance income                                                    14           17 
Finance costs                                                   (78)         (72) 
                                                         -----------  ----------- 
Total finance costs, net                                        (64)         (55) 
Non-operating items                                              (1)          (2) 
                                                         -----------  ----------- 
Profit before taxes                                              455          211 
Taxes                                                          (209)         (85) 
                                                         -----------  ----------- 
Profit after taxes                                               246          126 
                                                         ===========  =========== 
 
Profit attributable to shareholders                              244          126 
Profit attributable to non-controlling interests                   2            - 
                                                         -----------  ----------- 
Profit after taxes                                               246          126 
                                                         ===========  =========== 
 
Basic earnings per share (EUR)                      4           0.54         0.28 
Diluted earnings per share (EUR)                    4           0.53         0.28 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Coca-Cola Europacific Partners plc

Condensed Consolidated Interim Statement of Comprehensive Income (Unaudited)

 
                                                             Six Months Ended 
                                                        -------------------------- 
                                                          2 July        26 June 
                                                            2021          2020 
                                                        EUR million   EUR million 
-----------------------------------------------------   -----------  ------------- 
Profit after taxes                                              246          126 
                                                        -----------  ----------- 
Components of other comprehensive income/(loss): 
Items that may be subsequently reclassified to the 
 income statement: 
Foreign currency translations: 
   Pretax activity, net                                          58        (159) 
   Tax effect                                                     -            - 
                                                        -----------  ----------- 
Foreign currency translation, net of tax                         58        (159) 
Cash flow hedges: 
   Pretax activity, net                                         223         (54) 
   Tax effect                                                  (48)           15 
                                                        -----------  ----------- 
Cash flow hedges, net of tax                                    175         (39) 
Other reserves: 
  Pretax activity, net                                            6            - 
  Tax effect                                                    (1)            - 
                                                        -----------  ----------- 
Other reserves, net of tax                                        5            - 
                                                        -----------  ----------- 
                                                                238        (198) 
                                                        -----------  ----------- 
 
Items that will not be subsequently reclassified 
 to the income statement: 
Pension plan adjustments: 
   Pretax activity, net                                         149        (162) 
   Tax effect                                                  (24)           36 
                                                        -----------  ----------- 
Pension plan adjustments, net of tax                            125        (126) 
                                                        -----------  ----------- 
                                                                125        (126) 
                                                        -----------  ----------- 
Other comprehensive income/(loss) for the period, 
 net of tax                                                     363        (324) 
                                                        -----------  ----------- 
Comprehensive income for the period                             609        (198) 
                                                        ===========  =========== 
 
Comprehensive income attributable to shareholders               604        (198) 
Comprehensive income attributable to non-controlling 
 interests                                                        5            - 
                                                        -----------  ----------- 
Comprehensive income for the period                             609        (198) 
                                                        ===========  =========== 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Coca-Cola Europacific Partners plc

Condensed Consolidated Interim Statement of Financial Position (Unaudited)

 
                                                  2 July     31 December     26 June 
                                                    2021         2020          2020 
                                          Note  EUR million  EUR million   EUR million 
----------------------------------------  ----  -----------  -----------  ------------- 
ASSETS 
Non-current: 
Intangible assets                          5         12,706        8,414        8,395 
Goodwill                                   5          4,579        2,517        2,514 
Property, plant and equipment              6          5,315        3,860        4,030 
Non-current derivative assets                           139            6            4 
Deferred tax assets                                      22           27           10 
Other non-current assets                                399          337          313 
                                                -----------  -----------  ----------- 
    Total non-current assets                         23,160       15,161       15,266 
                                                -----------  -----------  ----------- 
Current: 
Current derivative assets                               121           40            9 
Current tax assets                                       22           19           13 
Inventories                                           1,236          681          795 
Amounts receivable from related parties    10           109          150           95 
Trade accounts receivable                             2,457        1,439        1,776 
Other current assets                                    241          224          216 
Cash and cash equivalents                             1,824        1,523          893 
                                                -----------  -----------  ----------- 
    Total current assets                              6,010        4,076        3,797 
                                                -----------  -----------  ----------- 
    Total assets                                     29,170       19,237       19,063 
                                                ===========  ===========  =========== 
LIABILITIES 
Non-current: 
Borrowings, less current portion           8         11,806        6,382        6,343 
Employee benefit liabilities                            156          283          350 
Non-current provisions                     12            56           83           54 
Non-current derivative liabilities                       63           15           34 
Deferred tax liabilities                              3,507        2,134        2,122 
Non-current tax liabilities                             128          131          261 
Other non-current liabilities                            38           44           45 
                                                -----------  -----------  ----------- 
    Total non-current liabilities                    15,754        9,072        9,209 
                                                -----------  -----------  ----------- 
Current: 
Current portion of borrowings              8          1,752          805          762 
Current portion of employee benefit 
 liabilities                                             12           13           15 
Current provisions                         12           157          154          172 
Current derivative liabilities                           32           62           63 
Current tax liabilities                                 230          171           81 
Amounts payable to related parties         10           307          181          232 
Trade and other payables                              4,131        2,754        2,697 
                                                -----------  -----------  ----------- 
    Total current liabilities                         6,621        4,140        4,022 
                                                -----------  -----------  ----------- 
    Total liabilities                                22,375       13,212       13,231 
                                                ===========  ===========  =========== 
EQUITY 
Share capital                                             5            5            5 
Share premium                                           210          192          184 
Merger reserves                                         287          287          287 
Other reserves                                        (386)        (537)        (647) 
Retained earnings                                     6,454        6,078        6,003 
Equity attributable to shareholders                   6,570        6,025        5,832 
Non-controlling interest                   9            225            -            - 
                                                -----------  -----------  ----------- 
    Total equity                                      6,795        6,025        5,832 
                                                -----------  -----------  ----------- 
    Total equity and liabilities                     29,170       19,237       19,063 
                                                ===========  ===========  =========== 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Coca-Cola Europacific Partners plc

Condensed Consolidated Interim Statement of Cash Flows (Unaudited)

 
                                                                      Six Months Ended 
                                                                   2 July        26 June 
                                                                     2021          2020 
                                                           Note  EUR million   EUR million 
---------------------------------------------------------  ----  -----------  ------------- 
Cash flows from operating activities: 
Profit before taxes                                                      455          211 
Adjustments to reconcile profit before tax to 
 net cash flows from operating activities: 
    Depreciation                                            6            300          303 
    Amortisation of intangible assets                       5             42           29 
    Share-based payment expense                                            4            - 
    Finance costs, net                                                    64           55 
    Income taxes paid                                                   (58)         (79) 
Changes in assets and liabilities: 
    (Increase) in trade and other receivables                          (384)        (144) 
    (Increase) in inventories                                          (144)         (83) 
    Increase in trade and other payables                                 503           41 
    Increase/(decrease) in net payable receivable 
     from related parties                                                121          (5) 
    (Decrease)/increase in provisions                                   (23)           32 
    Change in other operating assets and liabilities                      28          (7) 
                                                                 -----------  ----------- 
Net cash flows from operating activities                                 908          353 
                                                                 -----------  ----------- 
Cash flows from investing activities: 
    Acquisition of bottling operations, net of cash 
     acquired                                                        (5,145)            - 
    Purchases of property, plant and equipment                         (115)        (241) 
    Purchases of capitalised software                                   (42)         (33) 
    Proceeds from sales of property, plant and equipment                  20           35 
    Investments in equity instruments                                      -          (3) 
    Other investing activity, net                                         16            - 
                                                                 -----------  ----------- 
Net cash flows used in investing activities                          (5,266)        (242) 
                                                                 -----------  ----------- 
Cash flows from financing activities: 
    Proceeds from borrowings, net                           8          4,877          855 
    Proceeds from short-term borrowings                     8            305           94 
    Repayments on third party borrowings                    8          (468)        (227) 
    Payments of principal on lease obligations                          (65)         (60) 
    Interest paid, net                                                  (58)         (59) 
    Purchase of own shares under share buyback programme                   -        (129) 
    Exercise of employee share options                                    18            6 
    Other financing activities, net                                        4          (1) 
                                                                 -----------  ----------- 
Net cash flows from financing activities                               4,613          479 
                                                                 -----------  ----------- 
Net change in cash and cash equivalents                                  255          590 
                                                                 -----------  ----------- 
Net effect of currency exchange rate changes on 
 cash and cash equivalents                                                46         (13) 
Cash and cash equivalents at beginning of period                       1,523          316 
                                                                 -----------  ----------- 
Cash and cash equivalents at end of period                             1,824          893 
                                                                 ===========  =========== 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Coca-Cola Europacific Partners plc

Condensed Consolidated Interim Statement of Changes in Equity (Unaudited)

 
                    Share    Share    Merger    Other    Retained           Non-controlling    Total 
                   capital  premium  reserves  reserves  earnings   Total       interest       equity 
                   -------  -------  --------  --------  --------  -------  ---------------  ---------- 
                     EUR      EUR      EUR       EUR       EUR       EUR                        EUR 
                   million  million   million   million   million  million    EUR million      million 
----------------   -------  -------  --------  --------  --------  -------  ---------------  ---------- 
Balance as at 31 
 December 
 2019                    5      178       287     (449)     6,135    6,156                -     6,156 
Profit after 
 taxes                   -        -         -         -       126      126                -       126 
Other 
 comprehensive 
 expense                 -        -         -     (198)     (126)    (324)                -     (324) 
                   -------  -------  --------  --------  --------  -------  ---------------  -------- 
Total 
 comprehensive 
 income                  -        -         -     (198)         -    (198)                -     (198) 
Issue of shares 
 during 
 the period              -        6         -         -         -        6                -         6 
Share-based 
 payment tax 
 effects                 -        -         -         -       (3)      (3)                -       (3) 
Own shares 
 purchased under 
 share buyback 
 programme               -        -         -         -     (129)    (129)                -     (129) 
                   -------  -------  --------  --------  --------  -------  ---------------  -------- 
Balance as at 26 
 June 2020               5      184       287     (647)     6,003    5,832                -     5,832 
                   =======  =======  ========  ========  ========  =======  ===============  ======== 
 
 
Balance as at 31 
 December 
 2020                    5      192       287     (537)     6,078    6,025                -     6,025 
Profit after 
 taxes                   -        -         -         -       244      244                2       246 
Other 
 comprehensive 
 income                  -        -         -       235       125      360                3       363 
                   -------  -------  --------  --------  --------  -------  ---------------  -------- 
Total 
 comprehensive 
 income                  -        -         -       235       369      604                5       609 
Non-controlling 
 interests 
 recognised 
 relating to 
 business 
 combination             -        -         -         -         -        -              220       220 
Cash flow hedge 
 gains 
 transferred 
 to goodwill 
 relating to 
 business 
 combination             -        -         -      (84)         -     (84)                -      (84) 
Issue of shares 
 during 
 the period              -       18         -         -         -       18                -        18 
Equity-settled 
 share-based 
 payment expense         -        -         -         -         4        4                -         4 
Share-based 
 payment tax 
 effects                 -        -         -         -         3        3                -         3 
Balance as at 2 
 July 2021               5      210       287     (386)     6,454    6,570              225     6,795 
                   =======  =======  ========  ========  ========  =======  ===============  ======== 
 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Notes to the Condensed Consolidated Interim Financial Statements

Note 1

GENERAL INFORMATION AND BASIS OF PREPARATION

On 10 May 2021, Coca-Cola European Partners plc acquired Coca-Cola Amatil Limited (CCL or API), and subsequently changed its name to Coca-Cola Europacific Partners plc (the Company, or Parent Company). The Company and its subsidiaries (together CCEP, or the Group) are a leading consumer goods group in Western Europe and the Asia Pacific region, making, selling and distributing an extensive range of primarily non-alcoholic ready to drink beverages.

Refer to Note 2 for further details about the acquisition of API.

The Company has ordinary shares with a nominal value of EUR0.01 per share (Shares). CCEP is a public company limited by shares, incorporated under the laws of England and Wales with the registered number in England of 09717350. The Group's Shares are listed and traded on Euronext Amsterdam, the New York Stock Exchange, London Stock Exchange and on the Spanish Stock Exchanges. The address of the Company's registered office is Pemberton House, Bakers Road, Uxbridge, UB8 1EZ, United Kingdom.

These condensed consolidated interim financial statements do not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. They have been reviewed but not audited by the Group's auditor. The statutory accounts for the Company for the year ended 31 December 2020, which were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS as adopted pursuant to Regulation (EC) No 1606/2002 as it applies within the European Union (EU) and in accordance with international accounting standards in conformity with the provisions of the UK Companies Act 2006, have been delivered to the Registrar of Companies. The auditor's opinion on those accounts was unqualified and did not contain a statement made under section 498 (2) or (3) of the Companies Act 2006.

Impact of COVID-19 pandemic

The COVID-19 pandemic and related response measures have had and may continue to have an adverse effect on global economic conditions, as well as our business, results of operations, cash flows and financial condition. At this time, we cannot predict the degree to which, or the time period over which, our business will continue to be affected by COVID-19 and the related response measures. These impacts limit the comparability of these condensed consolidated interim financial statements with prior periods.

In addition, as part of the preparation of these condensed consolidated interim financial statements, we have considered the impact of Covid-19 on our accounting policies and judgements and estimates. The key accounting impacts and considerations for the Group are included in the relevant notes herein.

Basis of Preparation and Accounting Policies

The condensed consolidated interim financial statements of the Group have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board, UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority and should be read in conjunction with our 2020 Consolidated Financial Statements. The annual financial statements of the group for the year-ended 31 December 2021 will be prepared in accordance with IFRS as issued by the International Accounting Standards Board and UK adopted International Accounting Standards.

The 2020 Consolidated Financial Statements include a full description of the Group's accounting policies. The same accounting policies and methods of computation have been used as described in the 2020 Consolidated Financial Statements, with the exception of taxes on income. Taxes on income in interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

During the period, we performed an interim review and revaluation of certain pension schemes and recorded a pension remeasurement adjustment, primarily relating to changes in certain financial assumptions for our GB Scheme. These changes resulted in a EUR129 million reduction to the employment benefit liability and a corresponding credit to Other Comprehensive Income.

Several amendments and interpretations apply for the first time in 2021, but do not have a material impact on the condensed consolidated interim financial statements of the Group.

Reporting periods

Results are presented for the interim period from 1 January 2021 to 2 July 2021.

The Group's financial year ends on 31 December. For half-yearly reporting convenience, the first six month period closes on the Friday closest to the end of the interim calendar period. There were three more selling days in the six months ended 2 July 2021 versus the six months ended 26 June 2020, and there will be four fewer selling days in the second six months of 2021 versus the second six months of 2020 (based upon a standard five-day selling week).

The following table summarises the number of selling days, for the years ended 31 December 2021 and 31 December 2020 (based on a standard five-day selling week):

 
          Half year  Full year 
-------   ---------  --------- 
2021            131        261 
2020            128        262 
          ---------  --------- 
Change            3         -1 
          =========  ========= 
 

Trading seasonality

In addition to the impact of the COVID-19 pandemic outlined above, operating results for the first half of 2021 may not be indicative of the results expected for the year ended 31 December 2021 as sales of the Group's products are seasonal. In Europe, the second and third quarters typically account for higher unit sales of the Group's products than the first and fourth quarters. In the Group's Asia Pacific territories, the fourth quarter would typically reflect higher sales volumes in the year. The seasonality of the Group's sales volume, combined with the accounting for fixed costs such as depreciation, amortisation, rent and interest expense, impacts the Group's results for the first half of the year. Additionally, year-over-year shifts in holidays, selling days and weather patterns can impact the Group's results on an annual or half-yearly basis.

Exchange rates

The Group's reporting currency is the Euro. CCEP translates the income statements of non-Euro functional currency subsidiary operations to the Euro at average exchange rates and the balance sheets at the closing exchange rate as at the end of the period.

The principal exchange rates used for translation purposes in respect of one Euro were:

 
                              Average for the period 
                                     ended([1])                         Closing as at 
                          -------------------------------  ---------------------------------------- 
                                                                        31 December 
                             2 July 2021     26 June 2020  2 July 2021      2020      26 June 2020 
-----------------------   -----------------  ------------  -----------  -----------  -------------- 
UK Sterling                            1.15          1.15         1.16         1.11          1.10 
US Dollar                              0.83          0.91         0.84         0.81          0.89 
Norwegian Krone                        0.10          0.09         0.10         0.10          0.09 
Swedish Krone                          0.10          0.09         0.10         0.10          0.10 
Icelandic Krone                        0.01          0.01         0.01         0.01          0.01 
Australian Dollar                      0.64           n/a         0.63          n/a             n/a 
Indonesian Rupiah([2])                 0.06           n/a         0.06          n/a             n/a 
New Zealand 
 Dollar                                0.59           n/a         0.59          n/a             n/a 
Papua New Guinean 
 Kina                                  0.24           n/a         0.24          n/a             n/a 
 

([1]) For current year period European rates and US dollar are calculated as average for the period 1 January 2021 to 2 July 2021. Asia Pacific rates are calculated as average for the period from 10 May 2021 to 2 July 2021.

([2]) Indonesian Rupiah is shown as 1000 IDR versus 1 EUR.

Note 2

BUSINESS COMBINATIONS

API was one of the largest bottlers and distributors of ready to drink non-alcoholic and alcoholic beverages and coffee in the Asia Pacific region and was the authorised bottler and distributor of The Coca-Cola Company's (TCCC) beverage brands in Australia, New Zealand and Pacific Islands, Indonesia and Papua New Guinea.

In November 2020, CCEP and API entered into a binding Scheme Implementation Deed (the Scheme) for the acquisition of 69.2% of the entire existing issued share capital of API, which was held by shareholders other than TCCC. CCEP also entered into a Co-operation and Sale Deed with TCCC with respect to the acquisition of TCCC's 30.8% interest in API (the Co-operation agreement), conditional upon the implementation of the Scheme. During H1 2021, the required shareholder, regulatory and court approvals were obtained and on, 10 May 2021 the Company acquired 100% of the issued and outstanding shares of API (the Acquisition).

Shareholders other than TCCC received A$13.32 per share in cash, totalling cash consideration paid of A$6,673 million. TCCC received A$9.39 and A$10.57 per share for 10.8% and 20%, respectively, of the remaining API shares held by TCCC. Cash consideration paid to TCCC was A$893 million and USD1,046 million. The fair value of the consideration transferred at the acquisition date was EUR5,752 million.

The business combination is being accounted for under IFRS 3, "Business Combinations", using the acquisition method, with CCEP considered as the accounting acquirer. The operations of the acquired businesses are extensive and complex, and the initial accounting for the Acquisition is provisional at the end of the current reporting period. The Company is in the process of finalising the fair values for certain acquired assets, including intangible assets, property, plant and equipment, right of use assets, and inventory. In addition, the Company is still gathering information about income taxes, deferred taxes, liabilities and provisions based on facts that existed as at the date of the Acquisition. Accordingly, the Company has recognised provisional amounts for these items. During the measurement period, which will not extend beyond 9 May 2022, the Company will adjust the provisional amounts recognised at the acquisition date to reflect new information obtained about facts and circumstances that existed as at the acquisition date that, if known, would have affected the measurement of the amounts recognised as at that date.

The following table details the Euro equivalent consideration and provisional fair values of assets and liabilities acquired:

 
                                                               EUR million 
 
 
Intangible assets                                                  4,302 
Property, plant and equipment                                      1,620 
Non-current derivative assets                                         70 
Deferred tax assets                                                    5 
Other non-current assets                                              56 
Current derivative assets                                             24 
Current tax assets                                                    19 
Inventories                                                          457 
Amounts receivable from related parties                               34 
Trade accounts receivable                                            603 
Other current assets                                                  54 
Cash and cash equivalents                                            523 
Borrowings, less current portion                                 (1,253) 
Employee benefit liabilities                                        (37) 
Non-current derivative liabilities                                  (72) 
Deferred tax liabilities                                         (1,228) 
Non-current tax liabilities                                          (6) 
Current portion of borrowings                                      (384) 
Current portion of employee benefit liabilities                     (45) 
Current provisions                                                   (9) 
Current derivative liabilities                                      (35) 
Current tax liabilities                                             (12) 
Amounts payable to related parties                                  (77) 
Trade and other payables                                           (804) 
-----------------------------------------------------------  ----------- 
Net identifiable assets acquired                                   3,805 
Non-controlling interest                                           (220) 
Cash flow hedge gains transferred to goodwill relating to 
 business combination                                                 84 
Goodwill                                                           2,083 
-----------------------------------------------------------  ----------- 
Fair value of consideration                                        5,752 
 

Intangible assets include both indefinite life and definite life intangible assets. Indefinite life intangible assets mainly include bottling agreements with TCCC, which provide the Company with the exclusive rights to prepare, package, distribute and sell TCCC branded products in the territories in which it operates. Definite life intangible assets include distribution agreements with other brand partners, customer relationships and capitalised software.

Bottling agreements with TCCC, distribution agreements with other brand partners and customer relationships have been provisionally valued using a multi-period excess earnings model, whereby the value of a specific intangible asset is estimated from the excess earnings after fair returns on all other assets employed have been deducted from the business's after-tax operating earnings. Brand assets have been provisionally valued based on a payment relief method, estimating the value of future foregone payments to a brand owner over the life of the asset by virtue of owning the asset. Capitalised software has been valued using a replacement cost approach, representing the current cost to replace the existing asset in its current state.

Whilst the bottling agreements with TCCC contain no automatic right of renewal, the Company believes that the interdependent relationship with TCCC and the substantial cost and disruption to TCCC that would be caused by non-renewals ensures that these agreements will continue to be renewed and, therefore, are essentially perpetual. After evaluating the contractual provisions of the bottling agreements, the mutually beneficial relationship with TCCC and history of renewals, the Company has assigned indefinite lives to all such intangible assets. Refer to Note 5 for further details about the Company's intangible assets and goodwill.

Goodwill of EUR2,083 million has been recognised in connection with the Acquisition, representing the excess of consideration transferred over the provisional fair values of the net identifiable assets acquired and non-controlling interests, less the cash flow hedge gains of EUR84 million. The cash flow hedge gains relate to the deal contingent foreign currency forwards which were reclassified from the cash flow hedge reserves and included in goodwill upon settlement.

The goodwill is attributable to new growth opportunities, workforce and synergies of the combined business operations, and it is not expected to be deductible for tax purposes.

Property, plant and equipment has been provisionally valued using a variety of valuation techniques depending on the local market and the highest and best use of each asset. These techniques include capitalisation of comparable net market income, depreciated replacement cost and sales comparison approach. Included within Property, plant and equipment are right of use assets which have been provisionally valued at EUR315 million. A corresponding lease liability of EUR310 million is included within Borrowings.

Inventory has been provisionally valued based on estimated sales value less cost of disposal. The Company recorded a fair value adjustment to increase the carrying value of finished goods on hand at the time of the Acquisition by EUR48 million. This adjustment is included within cost of sales in the Condensed Consolidated Interim Income Statement for the six months ended 2 July 2021 as the inventory was sold during the period.

The fair value of acquired trade accounts receivable, net is EUR603 million. The gross contractual amount related to these receivables is EUR618 million, of which EUR15 million is expected to be uncollectible.

Included within Cash and cash equivalents at the acquisition date are Papua New Guinea cash assets of EUR79 million denominated in local currency (Kina). Government-imposed currency controls impact the extent to which the cash held in Papua New Guinea can be converted into foreign currency and remitted for use elsewhere in the Group. As at 2 July 2021, EUR82 million remains subject to these restrictions.

At the acquisition date, the Group has elected to measure components of non-controlling interests in API at fair value. The fair value of non-controlling interests represents the fair value of TCCC's 29.4% ownership interest in PT Coca-Cola Bottling Indonesia, plus non-controlling interests with respect to Paradise Beverages (Fiji) Group and Samoa Breweries Limited. Fair value has been derived primarily using applicable enterprise value based on discounted future cash flow projections.

From acquisition, API contributed revenue of EUR533 million and profit before tax of EUR9 million to the Group for the period to 2 July 2021. If the Acquisition had taken place at the beginning of the year, pro forma revenue and profit before tax for CCEP for the six months ended 2 July 2021 would have been EUR7.0 billion and EUR478 million, respectively.

Acquisition-related costs of EUR40 million and EUR3 million are included in administrative expenses and finance costs, respectively, in the Condensed Consolidated Interim Income Statement for the six months ended 2 July 2021. Cash payments for acquisition-related exceptional costs are included in operating cash flows in the Condensed Consolidated Interim Statement of Cash Flows.

Note 3

OPERATING SEGMENTS

Description of segments and principal activities

Following the acquisition of API, the Group reevaluated its segment reporting under IFRS 8, "Operating Segments". The Group continues to derive its revenues through a single business activity, which is making, moving and selling ready to drink beverages, primarily non-alcoholic beverages. The acquisition of API has broadened the Group's geographic footprint which now includes Australia, New Zealand and Pacific Islands, Indonesia and Papua New Guinea. These territories collectively make up the Australia, Pacific and Indonesia (API) segment. Based on the governance structure of the Group, including decision making authority and oversight, the Group's Board continues to be its Chief Operating Decision Maker (CODM), and the Group now has two operating segments, Europe, representing the pre-acquisition territories of CCEP, and API. The Board, as the CODM, allocates resources and evaluates performance of its operating segments based on volume, revenue and comparable operating profit. Comparable operating profit excludes items impacting the comparability of period over period financial performance.

 
                             Six Months Ended 2 July                    Six Months Ended 26 June 
                                       2021                                       2020 
                        Europe          API         Total          Europe           API          Total 
                      EUR million   EUR million  EUR million    EUR million     EUR million   EUR million 
-------------------  -------------  -----------  -----------  ----------------  -----------  ------------- 
Revenue([1])                 5,385          533        5,918             4,837            -        4,837 
Operating profit 
 (comparable)([1])             631           60          691               398            -          398 
    Including 
     depreciation 
     and 
     amortisation 
     (comparable)            (285)         (36)        (321)             (303)            -        (303) 
Items impacting 
 comparability([2])                                    (171)                                       (130) 
                                                 -----------                                 ----------- 
Total reported 
 operating 
 profit                                                  520                                         268 
Total finance 
 costs, 
 net                                                    (64)                                        (55) 
Non-operating items                                      (1)                                         (2) 
                                                 -----------                                 ----------- 
Profit before Tax                                        455                                         211 
                                                 ===========                                 =========== 
 

([1]) If the acquisition of API had taken place at the beginning of the year, pro forma revenue and operating profit (comparable) for API for the six months ended 2 July 2021 would have been EUR1,589 million and EUR171 million, respectively.

([2]) Items affecting the comparability of period-over-period financial performance including restructuring charges, acquisition and integration related costs, inventory fair value step up related to acquisition accounting and impact of the closure of the GB defined benefit pension scheme. Refer to pages 7-9 for further detail.

No single customer accounted for more than 10% of the Group's revenue during the six months ended 2 July 2021 and 26 June 2020.

Revenue by geography

The following table summarises revenue from external customers by geography, which is based on the origin of the sale:

 
                                        Six Months Ended 
                                     2 July        26 June 
                                       2021          2020 
Revenue                            EUR million   EUR million 
--------------------------------   -----------  ------------- 
Great Britain                            1,192        1,026 
Germany                                  1,091        1,014 
Iberia([1])                              1,069          917 
France([2])                                896          808 
Belgium/Luxembourg                         454          426 
Netherlands                                266          250 
Norway                                     200          199 
Sweden                                     179          162 
Iceland                                     38           35 
Australia                                  328            - 
New Zealand and Pacific Islands             85            - 
Indonesia and Papua New Guinea             120            - 
                                   -----------  ----------- 
Total revenue                            5,918        4,837 
                                   ===========  =========== 
 

([1]) Iberia refers to Spain, Portugal & Andorra.

([2]) France refers to continental France & Monaco.

Note 4

EARNINGS PER SHARE

Basic earnings per share is calculated by dividing profit after taxes attributable to equity shareholders by the weighted average number of Shares in issue and outstanding during the period. Diluted earnings per share is calculated in a similar manner, but includes the effect of dilutive securities, principally share options, restricted stock units and performance share units. Share-based payment awards that are contingently issuable upon the achievement of specified market and/or performance conditions are included in the diluted earnings per share calculation based on the number of Shares that would be issuable if the end of the period was the end of the contingency period.

The following table summarises basic and diluted earnings per share calculations for the periods presented:

 
                                                             Six Months Ended 
                                                             2 July     26 June 
                                                              2021        2020 
--------------------------------------------------------   ----------  --------- 
Profit after taxes attributable to equity shareholders 
 (EUR million)                                                    244      126 
Basic weighted average number of Shares in issue([1]) 
 (million)                                                        455      455 
Effect of dilutive potential Shares([2]) (million)                  2        2 
Diluted weighted average number of Shares in issue([1]) 
 (million)                                                        457      457 
Basic earnings per share (EUR)                                   0.54     0.28 
Diluted earnings per share (EUR)                                 0.53     0.28 
 

([1]) As at 2 July 2021 and 26 June 2020, the Group had 455,853,051 and 454,163,561 Shares, respectively, in issue and outstanding.

([2]) For the six months ended 2 July 2021 and 26 June 2020, there were no outstanding options to purchase Shares excluded from the diluted earnings per share calculation. The dilutive impact of the remaining options outstanding, unvested restricted stock units and unvested performance share units was included in the effect of dilutive securities.

Note 5

INTANGIBLE ASSETS AND GOODWILL

The following table summarises the movement in net book value for intangible assets and goodwill during the six months ended 2 July 2021:

 
                                         Intangible 
                                            assets      Goodwill 
                                         EUR million   EUR million 
--------------------------------------   -----------  ------------- 
Net book value as at 31 December 2020          8,414        2,517 
Acquisition of API                             4,302        2,083 
Additions                                         42            - 
Amortisation expense                            (42)            - 
Currency translation adjustments                (10)         (21) 
                                         -----------  ----------- 
Net book value as at 2 July 2021              12,706        4,579 
                                         ===========  =========== 
 

For the Group's Iberia CGU, the headroom in the 2020 impairment analysis was approximately 25%. Whilst the Iberian business has continued to be impacted by COVID-19 during 2021, trading is in line with the projections used in the 2020 impairment analysis. We continue to expect the impact of COVID-19 to be temporary and for the Iberia CGU to return to pre COVID-19 profitability levels in the near term.

Note 6

PROPERTY, PLANT AND EQUIPMENT

The following table summarises the movement in net book value for property, plant and equipment during the six months ended 2 July 2021:

 
                                             Total 
-------------------------------------- 
                                          EUR million 
--------------------------------------   ------------- 
Net book value as at 31 December 2020          3,860 
Acquisition of API                             1,620 
Additions                                        148 
Disposals                                       (22) 
Depreciation expense                           (300) 
Currency translation adjustments                   9 
                                         ----------- 
Net book value as at 2 July 2021([1])          5,315 
                                         =========== 
 

([1]) The net book value of property, plant and equipment includes right of use assets of EUR661 million, of which EUR315 million was acquired as part of the Acquisition.

Note 7

FAIR VALUES AND FINANCIAL RISK MANAGEMENT

Fair Value Measurements

All assets and liabilities for which fair value is measured or disclosed in the condensed consolidated interim financial statements are categorised in the fair value hierarchy as described in our 2020 Consolidated Financial Statements.

The fair values of the Group's cash and cash equivalents, trade accounts receivable, amounts receivable from related parties, trade and other payables, and amounts payable to related parties approximate their carrying amounts due to their short-term nature.

The fair values of the Group's borrowings are estimated based on borrowings with similar maturities and credit quality and current market interest rates. These are categorised in Level 2 of the fair value hierarchy as the Group uses certain pricing models and quoted prices for similar liabilities in active markets in assessing their fair values. The total fair value of borrowings as at 2 July 2021 and 31 December 2020, was EUR13.9 billion and EUR7.6 billion, respectively. This compared to the carrying value of total borrowings as at 2 July 2021 and 31 December 2020 of EUR13.6 billion and EUR7.2 billion, respectively. Refer to Note 8 for further details regarding the Group's borrowings.

The Group's derivative assets and liabilities are carried at fair value, which is determined using a variety of valuation techniques, depending on the specific characteristics of the hedging instrument taking into account credit risk. The fair value of our derivative contracts (including forwards, options, cross-currency swaps and interest rate swaps) are determined using standard valuation models. The significant inputs used in these models are readily available in public markets or can be derived from observable market transactions and, therefore, the derivative contracts have been classified as Level 2. Inputs used in these standard valuation models include the applicable spot, forward, and discount rates. The standard valuation model for the option contracts also includes implied volatility, which is specific to individual options and is based on rates quoted from a widely used third-party resource. As at 2 July 2021 and 31 December 2020, the total value of derivative assets was EUR260 million and EUR46 million, respectively. As at 2 July 2021 and 31 December 2020, the total value of derivative liabilities was EUR95 million and EUR77 million, respectively. During the period, EUR139 million of gains have been recorded within Other Comprehensive Income, primarily related to increases in fair value on commodity related hedging instruments.

For assets and liabilities that are recognised in the condensed consolidated interim financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation at the end of each reporting period. There have been no transfers between Level 1 and Level 2 during the periods presented.

Financial Instruments Risk Management Objectives and Policies

The Group's activities expose it to several financial risks including market risk, credit risk, and liquidity risk. Financial risk activities are governed by appropriate policies and procedures to minimise the uncertainties these risks create over the Group's future cash flows. Such policies are developed and approved by the Group's Treasury and Commodities Risk Committee through the authority provided to it by the Group's Board of Directors. There have been no changes in the risk management policies since the year end.

Note 8

BORROWINGS AND LEASES

Borrowings Outstanding

The following table summarises the Group's borrowings as at the dates presented:

 
                                                                 31 December 
                                                   2 July 2021       2020 
                                                   EUR million   EUR million 
------------------------------------------------   -----------  ------------- 
Non-current: 
Euro denominated bonds                                   8,643        6,113 
Foreign currency bonds (swapped into Euro)([1])          1,674            - 
Australian dollar denominated bonds([2])                   530            - 
Foreign currency bonds (swapped into Australian 
 Dollar)([1,2])                                            436            - 
Lease obligations                                          523          269 
                                                   -----------  ----------- 
Total non-current borrowings                            11,806        6,382 
                                                   ===========  =========== 
 
Current: 
Commercial paper                                           305            - 
Euro denominated bonds                                   1,051          350 
Foreign currency bonds (swapped into Euro)([1])              -          359 
Australian dollar denominated bonds([2])                   242            - 
Foreign currency bonds (swapped into Australian 
 Dollar)([1,2])                                             23            - 
Bank overdrafts                                              2            - 
Lease obligations                                          129           96 
                                                   -----------  ----------- 
Total current borrowings                                 1,752          805 
                                                   ===========  =========== 
 

([1]) Cross currency swaps are used by the Group to swap foreign currency bonds into the required local currency.

([2]) Included within the Group's borrowings as at 2 July 2021 are the bonds acquired as part of the acquisition of API. These bonds are either denominated in A$ or swapped back to A$ using cross currency swaps.

During the period, and in connection with the Acquisition, the Group received net proceeds from new borrowings in the period of EUR4,877 million. The proceeds are included within Euro denominated bonds and Foreign currency bonds (swapped into Euro) as follows: EUR800 million 0% Notes due 2025, EUR700 million 0.5% Notes due 2029, EUR1,000 million 0.875% Notes due 2033, EUR750 million 1.5% Notes due 2041 and $850 million 0.5% Notes due 2023, $650 million 0.8% Notes due 2024, $500 million 1.5% Notes due 2027, respectively.

Separately, during the period, the Group repaid prior to maturity the following Foreign currency bonds: $248 million 4.5% Notes due September 2021 and $192 million 3.25% Notes due August 2021.

During the period, and in connection with the Acquisition, the amount available under the Group's multi currency credit facility was increased from EUR1.5 billion to EUR1.95 billion. The facility was undrawn at 2 July 2021.

The Group's borrowings as at 2 July 2021 include borrowings issued by Coca-Cola Amatil Limited, Coca-Cola Amatil (NZ) Limited and Coca-Cola Amatil (Aust) Pty Ltd prior to the Acquisition. All borrowings issued by Coca-Cola Amatil Limited, Coca-Cola Amatil (NZ) Limited and Coca-Cola Amatil (Aust) Pty Ltd have been fully and unconditionally guaranteed on an unsecured basis by Coca-Cola Europacific Partners plc.

Note 9

EQUITY

Share Capital

As at 2 July 2021, the Company had issued and fully paid 455,853,051 Shares. Shares in issue have one voting right each and no restrictions related to dividends or return of capital. The share capital increased during the six months ended 2 July 2021 from the issue of 1,207,541 Shares, following the exercise of share-based payment awards.

Dividends

No dividends were declared or paid in the first six months of both 2021 and 2020.

Non-controlling interests

As part of the Acquisition, non-controlling interests (NCI) of EUR220 million have been recognised at fair value at the acquisition date with respect to PT Coca-Cola Bottling Indonesia, Paradise Beverages (Fiji) Group and Samoa Breweries Limited, of which EUR216 million relates to TCCC's 29.4% ownership interest in PT Coca-Cola Bottling Indonesia. The Group will record changes in NCI based upon post-Acquisition results for the year and movements in reserves.

As at 2 July 2021, Paradise Beverages (Fiji) Group and Samoa Breweries Limited have numerous investors as non-controlling interest shareholders owning 9.9% and 6.1%, respectively. TCCC's 29.4% ownership interest in PT Coca-Cola Bottling Indonesia remains unchanged.

Note 10

RELATED PARTY TRANSACTIONS

For the purpose of these condensed consolidated interim financial statements, transactions with related parties mainly comprise transactions between subsidiaries of the Group and the related parties of the Group.

Transactions with The Coca-Cola Company (TCCC)

During the period, CCEP entered into a Co-operation and Sale Deed with TCCC with respect to the acquisition of TCCC's 30.8% interest in API. Refer to Note 2 for further detail on the acquisition of API.

TCCC exhibits significant influence over the Group, as defined by IAS 24, "Related Party Disclosures". As at 2 July 2021, 19.3% of the total outstanding Shares in the Group were owned by European Refreshments, a wholly owned subsidiary of TCCC. The Group is a key bottler of TCCC products and has entered into bottling agreements with TCCC to sell, make and distribute products of TCCC in the Group's territories. The Group purchases concentrate from TCCC and also receives marketing funding to help promote the sale of TCCC products. Bottling agreements with TCCC for each of the Group's territories extend through 28 May 2026, with terms of 10 years, with each containing the right for the Group to request a 10-ear renewal. Additionally, two of the Group's 17 Directors were nominated by TCCC, one of whom is also an employee of TCCC.

The principal transactions with TCCC are for the purchase of concentrate, syrup and finished goods. The following table summarises the transactions with TCCC that directly impacted the Condensed Consolidated Interim Income Statement for the periods presented:

 
                                                    Six Months Ended 
                                               2 July 2021   26 June 2020 
                                               EUR million   EUR million 
--------------------------------------------   -----------  -------------- 
Amounts affecting revenue([1])                          22            22 
Amounts affecting cost of sales([2])               (1,438)       (1,240) 
Amounts affecting operating expenses([3])                4           (2) 
                                               -----------  ------------ 
Total net amount affecting the Consolidated 
 Income Statement                                  (1,412)       (1,220) 
                                               ===========  ============ 
 

([1]) Amounts principally relate to fountain syrup and packaged product sales.

([2]) Amounts principally relate to the purchase of concentrate, syrup, mineral water and juice as well as funding for marketing programmes.

([3]) Amounts principally relate to costs associated with new product development initiatives and support funding.

The following table summarises the transactions with TCCC that impacted the Consolidated Statement of Financial Position as at the dates presented:

 
                                        31 December 
                          2 July 2021       2020 
                          EUR million   EUR million 
-----------------------   -----------  ------------- 
Amount due from TCCC               90          146 
Amount payable to TCCC            282          167 
 

As part of the Acquisition of API, non-controlling interests of EUR216 million have been recognised which relates to TCCC's 29.4% ownership interest in PT Coca-Cola Bottling Indonesia (refer to Note 9).

Transactions with Cobega companies

Cobega exhibits significant influence over the Group, as defined by IAS 24, "Related Party Disclosures". Cobega S.A. indirectly owned 36.4% of the total outstanding Shares of the Group as at 2 July 2021 through its ownership interest in Olive Partners S.A. Additionally, five of the Group's 17 Directors, including the Chairman, were nominated by Olive Partners S.A., three of whom are affiliated with Cobega S.A.

The principal transactions with Cobega are for the purchase of juice concentrate and packaging materials. The following table summarises the transactions with Cobega that directly impacted the Condensed Consolidated Interim Income Statement for the periods presented:

 
                                                     Six Months Ended 
                                               2 July 2021    26 June 2020 
                                               EUR million    EUR million 
Amounts affecting cost of sales([1])                   (21)          (21) 
Amounts affecting operating expenses([2])               (5)           (4) 
                                               ------------  ------------ 
Total net amount affecting the Consolidated 
 Income Statement                                      (26)          (25) 
                                               ============  ============ 
 

([1]) Amounts principally relate to the purchase of packaging materials.

([2]) Amounts principally relate to certain costs associated with maintenance, repair services and rent.

The following table summarises the transactions with Cobega that impacted the Consolidated Statement of Financial Position as at the dates presented:

 
                                          31 December 
                            2 July 2021       2020 
                            EUR million   EUR million 
-------------------------   -----------  ------------- 
Amount due from Cobega                5            4 
Amount payable to Cobega             17           14 
 

Transactions with Other Related Parties

In connection with the Acquisition, a number of API investments in joint ventures, associates and other related parties were acquired. The fair value of these investments at acquisition date has been provisionally valued at EUR35 million and included within other non-current assets.

The joint venture investments relate to interests in Australian Beer Company Pty Ltd, a manufacturer of alcoholic beverages,

Container Exchange (Services) Pty Ltd, a service provider supporting the operation of container refund schemes in certain Australian states and Mahija Parahita Nusantara Foundation & PT Amandina Bumi Nusantara, a PET recycling plant in Indonesia.

The associate investments relate to interests in Exchange for Change (NSW) Pty Ltd, Exchange for Change (ACT) Pty Ltd and Exchange for Change (Australia) Pty Ltd, scheme coordinators and a holding company of container deposit schemes in certain Australian states and territories.

The other related parties relate to Container Exchange (Qld) Ltd and WA Return Recycle Renew Ltd, scheme coordinators of container despot schemes in certain Australian states over which significant influence is held.

Charges in the period of EUR28 million relating to joint ventures, associates and other related parties were recorded in cost of sales and principally related to the purchase of finished product and container deposit scheme charges in Australia.

A 45% ownership interest in each of Made (Aust) Pty Ltd, Made Manufacturing Pty Ltd and Made Brands Pty Ltd, included as part of the Acquisition, was sold during the period to the controlling shareholders for total cash consideration of EUR21 million. No gain or loss was recognised on the transaction.

All transactions with these related parties are conducted under normal commercial terms and conditions. Receivable and payable balances at period end are unsecured and settlement occurs in cash.

Note 11

TAXES

The same accounting policies and methods of computation have been applied as described in the 2020 Consolidated Financial Statements, with the exception of taxes on income. Taxes on income in interim periods are accrued using the tax rate that would be applicable to the expected total annual profit or loss.

The effective tax rate (ETR) was 46% and 40% for the six months ended 2 July 2021 and 26 June 2020, respectively, and 28% for the year ended 31 December 2020. The ETR has been calculated by applying the weighted average annual ETR excluding discrete items of 22% and 24% to the profit before tax for the six months ended 2 July 2021 and 26 June 2020, respectively. The weighted average annual ETR includes utilisation of previously unrecognised losses and reassessment of uncertain tax positions.

For the six months ended 2 July 2021, the effective tax rate includes a EUR118 million impact related to the revaluation of deferred tax liabilities due to an increase in the UK statutory income tax rate from 19% to 25% effective from 1 April 2023 that was enacted during the first half of 2021. The revaluation increased the tax rate by 26%.

The following table summarises the major components of income tax expense for the periods presented:

 
                                                                 2 July        26 June 
                                                                   2021          2020 
                                                               EUR million   EUR million 
------------------------------------------------------------   -----------  ------------- 
Current income tax: 
      Current income tax charge                                        125           74 
      Adjustment in respect of current income tax from 
       prior periods                                                  (13)            5 
                                                               -----------  ----------- 
Total current tax                                                      112           79 
Deferred tax: 
      Relating to the origination and reversal of temporary 
       differences                                                    (25)         (24) 
      Adjustment in respect of deferred income tax from 
       prior periods                                                     4          (7) 
      Relating to changes in tax rates or the imposition 
       of new taxes                                                    118           37 
                                                               -----------  ----------- 
Total deferred tax                                                      97            6 
                                                               -----------  ----------- 
Income tax charge per the Consolidated Income Statement                209           85 
                                                               ===========  =========== 
 

Tax Provisions

The Group is routinely under audit by taxing authorities in the ordinary course of business. Due to their nature, such proceedings and tax matters involve inherent uncertainties including, but not limited to, court rulings, settlements between affected parties and/or governmental actions. The probability of outcome is assessed and accrued as a liability and/or disclosed, as appropriate. The Group maintains provisions for uncertain tax positions that it believes appropriately reflect its risk. As at 2 July 2021, EUR139 million of these provisions are included in current tax liabilities and the remainder is included in non-current tax liabilities. There has been no material change in tax provisions since 31 December 2020.

The Group reviews the adequacy of these provisions at the end of each reporting period and adjusts them based on changing facts and circumstances. Due to the uncertainty associated with tax matters, it is possible that at some future date, liabilities resulting from audits or litigation could vary significantly from the Group's provisions.When an uncertain tax liability is regarded as probable, it is measured on the basis of the Group's best estimate.

The Group has received tax assessments in certain jurisdictions for potential tax related to the Group's purchases of concentrate. The value of the Group's concentrate purchases is significant, and therefore, the tax assessments are substantial. The Group strongly believes the application of tax has no technical merit based on applicable tax law, and its tax position would be sustained. Accordingly, the Group has not recorded a tax liability for these assessments and is vigorously defending its position against these assessments.

Note 12

PROVISIONS, COMMITMENTS AND CONTINGENCIES

The following table summarises the movement of provisions for the periods presented:

 
                                         Restructuring       Other 
                                           Provision     Provisions([1])      Total 
                                          EUR million     EUR million      EUR million 
--------------------------------------   -------------  ----------------  ------------- 
Balance as at 31 December 2020                     208                29          237 
Acquisition of API                                   9                 -            9 
Charged/(credited) to profit or loss: 
Additional provisions recognised                    73                 3           76 
Unused amounts reversed                            (9)                 -          (9) 
Utilised during the period                       (102)                 -        (102) 
Translation                                          1                 1            2 
                                         -------------  ----------------  ----------- 
Balance as at 2 July 2021                          180                33          213 
                                         =============  ================  =========== 
 

______________________

([1]) Other provisions primarily relate to decommissioning provisions, property tax assessment provisions and legal reserves.

As part of the Accelerate Competitiveness programme, the Group announced further proposals during the first half of 2021, including certain productivity initiatives in Iberia. Restructuring charges of EUR50 million associated with these initiatives have been recorded during the six months ended 2 July 2021 related to expected severance costs.

Commitments

Other than additional commitments of EUR0.1 billion related to API, as at 2 July 2021, there have been no significant changes in the commitments of the Group since 31 December 2020. Refer to Note 22 of the 2020 Consolidated Financial Statements for further details about the Group's commitments.

Contingencies

Other than disclosed below, there have been no significant changes in contingencies since 31 December 2020. Refer to Note 22 of the 2020 Consolidated Financial Statements for further details about the Group's contingencies.

In relation to API, on 24 July 2020, a subsidiary 'Associated Products & Distribution Proprietary Limited' (APD), was joined to proceedings in the Supreme Court of Queensland between a Glencore joint venture and the State of Queensland, whereby APD's entitlement to royalties, from its sub-surface strata and associated mineral rights, has been challenged by the State of Queensland. Since 2014, the Group has received approximately EUR50 million in royalties. Since the proceedings commenced in 2020, royalty payments have been paid directly to court.

The proceedings remain ongoing and the Group intends to defend the matter robustly.

Note 13

EVENTS AFTER THE REPORTING PERIOD

During July 2021, heavy rainfall and flash flooding in Belgium and Germany caused significant damage to our manufacturing facilities in Chaudfontaine and Bad Neuenahr. The Group has incurred, and expects to continue to incur, incremental costs related to these severe weather events as well as lost revenues from business interruption, particularly in Chaudfontaine. The Group's insurance policies provide coverage for such events, and we are currently working with our insurer on the related claims. At this point, the Group does not expect the net impact of the flooding and related insurance claims to have a material impact on its financial position or results from operations.

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