COCA-COLA EUROPEAN PARTNERS
Results for the six months ended 26 June 2020 & COVID-19 update
Resilient performance despite the challenging backdrop; pandemic impact gradually improving
|H1 2020 Metric||As Reported||Comparable||Change vs H1 2019|
|As Reported||Comparable||Comparable Fx-Neutral|
|Volume (m unit cases)||1,040||(14.5)||%||(14.0)||%|
|Cost of sales (€M)||3,168||3,168||(12.0)||%||(12.0)||%||(11.5)||%|
|Operating expenses (€M)||1,401||1,271||(5.5)||%||(11.5)||%||(11.0)||%|
|Operating profit (€M)||268||398||(63.0)||%||(48.5)||%||(48.0)||%|
|Profit after taxes (€M)||126||259||(75.0)||%||(52.0)||%||(52.0)||%|
|Diluted EPS (€)||0.28||0.57||(74.0)||%||(50.0)||%||(50.0)||%|
|Revenue per unit case (€)||4.68||(2.0)||%|
|Cost of sales per unit case (€)||3.07||3.5||%|
|Free cash flow (€M)||(5)|
DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:
"This crisis has had an unprecedented impact on our business and the communities we serve across Europe. I thank our colleagues who have worked tirelessly to support our customers, consumers and communities throughout these challenging times, while at the same time protecting the long-term health of our business.
"We entered the year with good momentum, and I am proud of the resilience of our business and the speed at which we were able to respond to the challenges we faced as we entered the second quarter. We saw lower demand for immediate consumption and widespread outlet closures in the away from home channel but we quickly adapted, placing greater emphasis on the home channel, including the growth in online and future consumption, and I am particularly pleased that continued to gain overall market share. We are supporting our away from home customers as they start to re-open, and encouragingly, trading improved throughout the quarter as restrictions were lifted. However, many of our customers continue to operate at significantly reduced capacity and on-the-go consumption remains under pressure.
"We are focused on leveraging our solid capabilities to drive a robust second half recovery and we are confident about the future of our business, led by an even stronger sustainability and digital agenda. The pandemic has strengthened our determination to go further and faster in building a better and greener future for our business, for people and for the planet. And as people evolve the way they live, work and shop, our digital capabilities will continue to set us apart. We are advancing at pace and will strive to be the best online partner for retailers and food delivery platforms, and the easiest and most efficient B2B online partner for retailers and food delivery platforms, and the easiest and most efficient B2B online partner for our customers and wholesalers.
"Despite the uncertainty that surrounds us today, we continue to take actions to protect our performance, conserve cash and plan for future growth, all underpinned by a strong balance sheet. Our business is built upon three pillars: great people, great service and great beverages. This foundation gives us the confidence to navigate through this crisis, helping society rebuild and recover, and ultimately build a stronger and even more sustainable business for the future."
 Refer to 'Note Regarding the Presentation of Alternative Performance Measures' for further details
 Unit Case = approximately 5.678 litres or 24 8-ounce servings
|Q2 & H1 HIGHLIGHTS|
Q2 Revenue (-26.0%)
• Comparable volume -22.0% driven by the impact of the COVID-19 pandemic across our markets
• Immediate consumption (IC) & small priority packs significantly impacted (affecting both away from home (AFH) & home channels)
• Sharp declines in AFH volumes (-50%) reflecting varying lockdown measures
• Home channel also impacted (-3.5%) given exposure to IC packs, however offset by future consumption (FC) packs performing better (e.g. more large PET & multipack cans)
• Sequential improvement in volumes across the quarter as lockdown measures gradually lifted (April -36%; May -26%; June -9%); July volumes in line with June
• Revenue per unit case -5.0%, reflecting negative geographic, channel & pack mix, driven by AFH closures
H1 Revenue (-16.0%)
• NARTD value share gains across measured channels
• Comparable volume -14.0% driven by Q2 (see above) alongside some customer disruption as a result of our planned pricing strategy partially offset by innovation (particularly Monster & Fuze Tea)
• Revenue per unit case -2.0%, reflecting positive momentum in Q1 (+1.5%) benefiting from favourable price & promotions offset by Q2 (see above)
H1 Comparable Operating Profit -48.0% (Reported Operating Profit -63.0%)
• Cost of sales per unit case +3.5%, reflects under-recovery of fixed manufacturing costs given lower volumes, offset by the decline in revenue per unit case driving lower concentrate costs
• Comparable operating profit of €398m, -48.0% reflecting the revenue decline & higher cost of sales per unit case offset by a reduction in discretionary spend
• Comparable diluted EPS of €0.57, -50.0% (Reported -74.0%)
• Dividend: FY19 dividend of €1.24 per share fully paid during 2019. The Board continues to recognise the importance of cash returns to shareholders. Given the continued uncertainty of the effect of the ongoing pandemic, the Board has determined to defer consideration of the 2020 FY dividend, in lieu of two interim dividends, until Q3 when visibility will have improved and in line with normal cadence
• Share buyback: repurchased c.€130m (3m shares) of the €1bn programme announced Feb 2020 (suspended until further notice as previously announced)
• Sweden became first 100% recycled PET market, eliminating the use of 3,500 tons of virgin plastic per year. Launched 2020 long-term incentive plan incorporating inaugural GHG reduction target
 Refer to "Note Regarding the Presentation of Alternative Performance Measures" for further details Comparable and FX-neutral  Adjusted for selling day shift. No selling day shift in Q2, reported H1 volume -14.5%  A unit case equals approximately 5.678 litres or 24 8-ounce servings  NARTD (non-alcoholic ready to drink) Nielsen Data to w/e IS 14.06.20, GB 27.06.20, ES PT DE FR BE NL SE & NO 28.06.20 Comparable  GHG = greenhouse gas; 15% of the 2020 long-term incentive award will be based on the extent to which CCEP reduces its greenhouse gas emissions over the next 3 years?Note: Comparisons are against equivalent 2019 period.
Full and original press release in PDF
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