12-Sep-2018 Coca-Cola European Partners Plc -...

Corrected Transcript

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12-Sep-2018

Coca-Cola European Partners Plc (CCE)

Capital Markets Day

Coca-Cola European Partners Plc (CCE) Capital Markets Day

Corrected Transcript 12-Sep-2018


2 Copyright © 2001-2018 FactSet CallStreet, LLC

CORPORATE PARTICIPANTS

Damian Paul Gammell Chief Executive Officer & Director, Coca-Cola European Partners Plc

Stephen Lusk VP Commercial, Coca-Cola European Partners Plc

Frank Molthan General Manager Germany Business Unit, Coca-Cola European Partners Plc

Manik H. Jhangiani Chief Financial Officer, Coca-Cola European Partners Plc

Sarah Willett VP Investor Relations, Coca-Cola European Partners Plc

......................................................................................................................................................................................................................................................

MANAGEMENT DISCUSSION SECTION


So, good afternoon, everybody, and herzlich willkommen in Wiesbaden. So we even brought the weather that we

promised you in Barcelona to Germany, so there should be no complaints.

First of all, I want to thank everybody for taking the time to join us. We're very excited to be in Germany and also

obviously to tell you where we're at in our CCEP story, and obviously we'll have plenty of time for Q&A later today.

I would like to just share with you that today obviously does contain some forward-looking statements and

information. So I'd like to draw your attention to our forward-looking statements in terms of governance. In terms

of the agenda, very quickly I'll start off with a quick look back on what has happened since we created CCEP.

Then we'll turn to the most important agenda for today and tomorrow, which is to share with you how we see the

future of our category and of our business.

I'm very pleased that we're joined by Sol, our Chairman and Sol will also take you through her views of the

business a little bit later on today. Tim Brett from The Coca-Cola Company who is responsible for Western

Europe also joins us. And I'm very proud and pleased that we're joined by a number of the CCEP leadership team

who you'll also have a chance to hear from today either in terms of the plenary session but also out in the

breakout groups.

And I would like to emphasize that what you're going to hear today is really down to the efforts of that team, but

more importantly, down to the efforts of about 24,000 people who are not with us today who are thankfully running

the business and selling lots of cases. And clearly, the success we've enjoyed at CCEP is really in the hands of

those 24,000 people. So I'm very proud to share the story. I know my team are, and hopefully, you'll get a flavor of

the talent that exists in our business today and as we build for the future. Frank, who is our host, our GM in

Germany will also do a bit of a deep dive today on our German business, our biggest market and certainly a

market that we're very, very excited by.

So just onto the agenda and apologies some of this maybe some information you already know, but we like it, so

we'd like to share it again. Two years ago, more or less we sat together in Barcelona the creation of CCEP. We

shared our growth agenda and our story. We are now a business generating over €11 billion in revenue, over €2

billion in our EBITDA. We're across 13 markets. We would like to expand that. We'll talk a little bit about that later.





As I mentioned, the business is built on the efforts of 23,000 employees, a lot of them in frontline sales. We'll talk

a little bit about that later. Not only are we one of the world's largest beverages business, we're also one of the

largest CPG companies, not just in Europe but also globally. And we are the largest Coca-Cola bottler by

revenue. So we play a significant role in the growth agenda of The Coca-Cola Company and not just in Europe

but we believe also we contribute obviously to their global agenda around growth and profitable growth for the

future.

When we envisioned CCEP and I'd like to call out Victor, who is over here our Head of Strategy. Obviously, you

saw and you'll hear from later, myself and James Quincey nearly three years ago, I think so, we started to have

conversations about CCEP and creating Europe's largest bottler but also the system's largest bottler. Once we sat

down and looked forward to creating CCEP, we shared with you three objectives that we felt were critically

important in the first phase of our journey.

One was to reset the base for profitable growth; clearly that was a big opportunity in Western Europe. Secondly,

we committed to deliver synergies to the bottom line. And thirdly, and for me most importantly, we took a longer-

term view at this business and start thinking about building for the future and I'll talk about each of these

individually just to share how we feel we did against those commitments.

So in terms of resetting the base, and we have talked a lot about this over the last couple of years, but clearly

we've inherited the business that generally and there were some exceptions, but generally, it was not performing

on the top line. It was not delivering revenue growth, and critically for me it was not delivering revenue per case

growth. Because in the bottling business you start to get your revenue per case growing you can contribute to

long-term sustainable growth.

We started to take a number of initiatives, which you can see on the right hand side, some of the bigger decisions

we took and they did impact volume at the time were to stop very, very deep discounting. And I remember

speaking to a number of you as we came out of 2016 and into 2017 and we saw some volume declines in our

businesses in France, Belgium and GB in particular, and also in Germany where we decided to stop high level

discounting or free bottles, because it wasn't creating value for our business, it wasn't creating value for our

customers, and it wasn't allow us to bid – allowing us to build a bigger business outside of retail.

We also de-listed a number of unprofitable SKUs particularly here in Germany, and we did enter into some

difficult conversations with our customers during that period as we felt the price realization in the market was a

key driver of value for our shareholders, but we also recognize that the category could sustain higher value from

the consumer which ultimately would create more profitability for our customers. Not all of our customers liked

that story at the beginning, but we got through most of those negotiations, and clearly in 2018, we've had a similar

conversation in France that I'm now happy to say we've passed through and our business is now back to where

we'd like to see it in France.

But I think the results are really what is important. As we came out of the merger in the middle of 2016, we started

to see our top line revenue growth returning. As we came into 2017, on the back of some of those decisions and

some headline pricing, we started to see our total revenue grow, but it was really driven by revenue per case

focus, as we really wanted to build back in solid profitability on a unit case level, and that is continued in 2018. So

what you're seeing in our current estimates is a revenue per case growth of about 3% in 2018, very, very solid for

Western Europe, and a revenue growth in absolute of 2.5%.





The delta, if you look at the gap is obviously volume. And when you look at where that volume delta is coming

from, clearly, we've had the sugar tax in GB, which has impacted volume. And secondly, we've had obviously our

discussions in France which has impacted volume. And thirdly, we've had a slightly softer summer in Spain, which

we'll talk about. So – but on a net-net level driven by our unit case performance, we're very pleased with our

revenue performance 2017 and 2018.

The second objective was to deliver the synergies. And again, this is something that we were very transparent

about, which at the time obviously caused us some ongoing discussions around, is it net to the bottom line, is it

net up to the bottom line, are you reinvesting, are you not reinvesting. We were very clear that we wanted to

deliver the net synergy number to the bottom line. The good news is as we exit 2018, we will have delivered a

100% of the run rate. And I think that's something we're very pleased with. I would have to say Nik and I are

particularly pleased that we can move on from a synergy conversation. But we're going to keep that dialogue

going under a very strong competitiveness and productivity initiative at CCEP. So we don't believe that the

synergy capture is the end of us being a competitive organization. We don't believe it's the end of us being able to

be more productive. But clearly, we want to move that agenda to one of competitiveness and productivity as we

look at the future.

In terms of where did the synergies come from, obviously, procurement was our biggest leverage just over €100

million, but as you can see across our supply chain and in our business, we clearly took out cost and drove

productivity. I've recently been in our shared service center in Bulgaria and Sofia, where now we have over 700

employees. And again, that capability has allowed us to leverage a lot of productivity across our back office at

CCEP.

It's amazing facility. It's got lots of very young, very talented, very ambitious people who really want to contribute

to the CCEP future. So that's allowing us to drive some more standardization and harmonization across the back

office. If you look at the synergies in terms of the run rate, obviously, coming out of 2016 was a half year period,

2017 and 2018 were clearly the two years where we did most of the heavy lifting to deliver our synergies. And on

a cumulative level, we get to the €250 million to €275 million level.

In terms of some of the metrics that we've been tracking internally, a key one for us was to reduce our operating

expenses as a percentage of revenue. Again, that's a journey, but we're very pleased with where we've got to.

Clearly, we had a big opportunity both in manufacturing, but critically in distribution sites, which we don't tend to

talk a lot about to rationalize our footprint across Western Europe. You'll hear a little bit more from Frank today on

that part of the story in Germany, which clearly from the manufacturing and distribution opportunity was our

biggest market.

And then finally and the one that I think excites us the most because clearly this is where we can generate

sustainable revenue growth profitably which will flow to the bottom line and create a lot of value for our

shareholders. And that was to reenergize the top line of our business. So no matter how much we could deliver in

synergies mathematically when you start to grow the top line of this business the right way, you really start to

generate a lot of free cash flow and a lot of profitability.

And back in Barcelona, recall that some many areas that we felt from the initial pre-merger work that we did that

we felt that we could really make a difference on. No surprise e-commerce, digital is a big part of our business

today, and it's going to get bigger. We consistently rank very highly with our customers in terms of our e-

commerce and digital capability. In GB, over 12% of our revenue today is going through an online platform. So,

globally, that's one of the highest and we see that accelerating across all of our markets. And we also see strong

growth across our discounter platform.





And I think it's good today, we're in Germany which really was the home of that retail format. They're great

customers. They provide a great consumer experience and are winning, and it's critical for us to keep winning with

them not just in Germany, but across CCEP. And one of the big benefits of putting CCEP together was to start to

work on best practice sharing. And one of the areas that we focused on initially was to leverage the expertise out

of Germany with these customers across our markets. And we're seeing the benefits of that both in terms of

listings, promotions, but in terms of revenue and profit growth, and again that will continue.

We also recognize, and again Germany is a good example, that in some of markets we were underperforming

outside of retail. And there was lots of reasons for that, but a lot of our markets were predominantly retail-focused

markets. And one market that wasn't was Spain where we had a very healthy balance of over 50% of our

business coming from outside retail. That's critically important for us for the future because that's where we build

brands, that's where we generate a lot of margin, and that's where our consumers and customers are prepared to

pay a higher price for our brands. So you'll hear a lot today about a renewed focus around or away-from-home

business, our HoReCa business.

And the final point is when we put our business together, we had over 6,000 frontline commercial people, by far

and away the biggest sales force in Western Europe and the muscle of our business. And as we look forward, we

really want to personalize the interaction with our customers and digitalize the transaction. Because we firmly

believe that our customers value those personal conversations, that interaction with a qualified professional

salesperson, leveraging technology, but you can't replace those face-to-face conversations in outlets store by

store, street by street. And we believe with that 6,000 that's in our current cost base is an amazing opportunity for

us to keep working on that individual interaction. So, they were the four areas that we talked about in Barcelona.

And we believe we're making solid progress across all of them.

We're also continuing to focus on five simple imperatives or priorities in our business. And again, we've shared

these when we created CCEP. First one is, we want to continue to get better at being a very customer-centric and

execution-focused organization. The bottling business lives on execution. Our role in the system is to make sure

that the right brands and the right packs at the right price are pervasively distributed across our territories. That's

what bottlers do. And when bottlers do that really well, they create a whole lot of value for the system and for the

shareholders. This is a journey, in many of our markets; we're at the beginning of trying to roll out that customer-

centric particularly from a digital perspective interaction.

The second priority is top line revenue growth. Again, it comes back to the reason we created CCEP. This is a

great part of the world to do business in. It's a very valuable category in Western Europe, very different to some

other part of the world and it's growing. So for us to create sustainable value, we've got to grow our top line. I'll

talk a little bit about that later because it's focused on two areas.

And thirdly, when we created CCEP, we had in this box with strategic cost management. And that really was our

commitment to deliver the synergies. We've now replaced that with competitiveness because we believe that

going forward, we've got to broaden that lens to be a competitive organization, whether it's in the market, whether

it's in our cost base or whether it's in the way we run our supply chain. So competitiveness is our third priority.

And they're underpinned by two enablers that we're very passionate about. One is sustainability and the culture of

our business, and we'll talk a lot about that today. There is a lot of conversations around the sustainability of

plastics in our industry. We see that as a key challenge and also an opportunity, and we're very positive that what

makes this business great are really two very simple pillars. Great brands, coming from The Coca-Cola Company,

and great people. When you put those together, it's a winning combination. So we're very much focused on





building talent and capability and you will get a chance to meet a lot of our talented people today and tomorrow.

And all of that and Nik will share with you a little bit later will deliver sustainable shareholder returns.

So that's all you'll hear about the past, because the rest of today and tomorrow is pretty much all about the future.

We're very proud of what we've achieved, but we truly believe we're only at the beginning. And the reason that

The Coca-Cola Company and our shareholders put this business together was there was a bigger, more

compelling vision for Western Europe, and that's what we're going to talk about for the rest of today.

As we think about that we look at it on under a very simple framework. The four areas that are going to drive that

shareholder value at CCEP. The first one is portfolio diversification. So, on the back of the company's total

beverage commitment, offering more brands, more packages, and more categories to our consumers, and that's

something we've a big opportunity to do in Western Europe. We are still predominantly a sparkling business and

within sparkling in many markets, we're still a cola business. So, we have a lot of headroom, which we'll talk about

later.

The second priority is volume. That may surprise some of you, but as we focus a lot on price and mix, as we enter

new categories and new channels, volume starts to play a bigger role in our revenue story. And as we look

forward, we'd expect a third of our revenue growth coming from volume, a third from headline price, and a third

from mix; so a much more balanced revenue growth story going forward. And finally, execution, so driving that

pervasive distribution that I talked about earlier. So, these are the four areas that we believe will steer that

revenue guidance that we've talked about, and at the heart of it is doing it sustainably in terms of our This is

Forward commitment and winning with our customers.

So, to outline the future, I'd like to invite Stephen, who is our Vice President of Commercial just to share with you

the work we've been doing with The Coca-Cola Company to take a longer-term view of the revenue growth

opportunities across our territories. Stephen? ......................................................................................................................................................................................................................................................

Stephen Lusk VP Commercial, Coca-Cola European Partners Plc

Thank you, Damian. Good afternoon, everybody. For those of you that I haven't met, let me introduce myself. I'm

Stephen Lusk. I'm 30 years in the Coke system. I work in Victor's team, core commercial strategy. We work within

CCEP to develop pan-market, above market the portfolio strategy with The Coke Company, and the capability

that we need to deliver to win and the growth strategies for the future. I've spent 15 years with Coke Atlantic. The

last four years I spent in Southeast Asia, running the BIG Bottler business as a CEO in Singapore and Malaysia

for Southeast Asia. And in between, I spent about seven years, eight years in Germany. So, it's great to be back

in Germany again with Frank and the team and great to be in a great business.

So, one of the things I'd like to share with you today is in over the last few months, we've been looking at where

the future holds and what the future holds for CCEP. And one of the things that we will see as we look to the

growth for the next 10 years is we'll see a number of areas that we see. One, we're in a dynamic category in

NARTD. It is growing and it will continue to grow. Two, the categories that we see growing, in sparkling and stills

will continue to accelerate. Thirdly, that's because it's big and it's diversified. And with that diversification, we

believe that we need to get much better segmentation. So, you're going to hear us talking about as we look to

grow and as we look to grow our margin and as we look to grow the business across all of our markets, we're

going to be taking that from a much – [ph] lens (00:19:37) much through the segmentation of how we look at a

diversification of [ph] what we win (00:19:42).





So, that's going to be the messages in the future. And to start with, you all know that NARTD is a great place. It's

growing. You all know that it's growing faster in Western Europe perhaps not that you know against FMCG. And

perhaps what you didn't know as well is that brands are driving in NARTD the growth which is very different to

what's going on in FMCG. So that in its instance is a good place and we continue to see the growth of our brands

driving our NARTD growth over the next future, in the next 10 years.

We also said that it's big and it's diverse. And I think what becomes important is the market is big in NARTD and

growing. It's diverse as well. You have a sparkling portfolio, but you also have a very diverse portfolio in the other

areas of stills, whether that be water, juice, energy and then new categories that are known or not known to us

and that are starting to grow even faster. And within that diversification, you also have a market where it needs to

look at being more segmented and out-of-home where you see retail and out-of-home obviously growing. And the

great thing is that we are positioned well as the number one value creator in NARTD, and NARTD is the third

largest category grower within FMCG. So, good to be growing, good in a diversification and diverse with our

segmentation.

What is also important is as we look to the next 10 years, we see that sparkling will continue to grow off a large

base and, as Damian just said, our business is predominantly sparkling and there are lots of opportunities in that

for us. At the same time, we're very excited about the opportunities that we see in the other categories coming

whether that be in water, tea, energy, or those categories that we're just entering like ready-to-drink coffee or

others like plant based. So, we see the opportunity that again the system would traditionally look at sparkling and

stills, we again [ph] go the lens down (00:21:50) to look at the segmentation of where we need to be winning

within sub-segments and sub-categories. And again, you're going to see good growth over the next 10 years. And

again, good expectation from us as we segment and go into other brands with which we believe we can win at

scale.

And what that means for us obviously was sparkling over the next 10 years is, when I came back to Western

Europe after four years in Asia, I was surprised about a number of things. One, if you look at our flavors business,

traditionally, we would have talked about sparkling and cola and everything else. We're having and wanting to get

into much better segmentation as we look at flavors, cola lights, mixers, adult [ph] straight drinking (00:22:35) and

those areas where we believe we've headroom for growth. So when I came back and we saw that we have a 30%

share in flavors, and if you look at the work that we've done with the Coke Company the last 18 months in Fanta,

we've rejuvenated Fanta, given it new positioning, give it new advertising, give it new packaging, given a new

boost of investment, given a sales force focus, and it's growing at high-single-digit growth.

We see that – [ph] we know winning (00:22:59) share we can do that with other brands. A second example I

would give is, in the Light Cola category, we have a 66% share and probably over the last three years we've been

very focused on Coke and Coke Zero. Yet, if you look at it Coke Light or Diet Coke in GB and Coke Light across

the continent is a huge opportunity. And we see that having two brands winning in Cola Light and Coke Light, Diet

Coke and Coke Zero, we believe as the category shifts more to Light Cola that we're going to be able to win. So

that's another change that we're making in our segmentation and the brand investment that we have. But what's

more important I suppose as well is as bottler, and as Damian says on driving pervasive availability is when you

look at the way in which we sell, and how we sell and where we sell our brands is it becomes important to look at

the retail, but more importantly the out of home and the segments that we look at.

Traditionally, across the system globally the bottlers would often look at the home market and the out-of-home

market. What we are seeing as we diversify and we look at our segmentation, we see that the future in retail is

going to be big box will slow down, but e-commerce, discount, discount value convenience, convenience will





continue to grow. So that means we need to have even greater segmentation as we execute and as we strategize

with the company on what brands we should be putting [indiscernible] (00:24:25).

Secondly, as we look to out-of-home, we look to HoReCa, we look to on the go, we look to at work, we look to

leisure, we look to travel/transportation, all of these segments we believe are going to be the energy for growth

and the future of our business where we can get higher margin and where we have the scale with our sales force

when we get it right as we do in Spain. So, this is a great opportunity for us, and we see that being a key driver in

our segmentation for growth in the channels that we operate outside of home and away from home.

So, it's a big opportunity for us. It's growing dynamically. It's diverse. We need greater segmentation and to do

that, we believe, that with that greater segmentation, we can grow more sustainably and with greater and more

improved margins. So, to do that, we also need to look with the Coke Company at how we segment the

categories and the brands that we play in. So, one of the things we've been doing is we've been looking at the

changes we see coming with our consumers and shoppers and what they're going to be wanting to drink. And as

we see people looking for more healthier drinks, as we see technology changing how people drink, as we see

new influences or sustainability becoming a bigger and more important play, we need to be able to respond to

that in the brands, with the packs, the categories and the channels that we sell.

Among the things that we've continued to do is as our product portfolio diversifies, we're moving into immediate

consumption. That means that smaller households in Western Europe with one to two people, or as we see

smaller baskets where people tend to shop more often or on the go drink more often, that we will be offering new

products and immediate consumption, which means that we will be value-accretive in the margin that we can

place. So, as we move into new categories, you'll see us doing it in small packs, immediate consumption that

ensures that we maintain our margin at or above those that we have in the soft drinks business. This becomes

very important to us.

As we then look with the Coke Company, traditionally we have looked at how consumers and motivations that

they drink and why they drink. And traditionally, you would look at the right hand side of the top box in the

quadrant and say we would play with our sparkling brands as Damian said in Western Europe, a good place and

a role in socializing, fun, enjoyment. But we have not developed a category or a portfolio for the other areas.

And if you look at Western Europe over the next 10 years, you will see that on the bottom right unwind,

harmonizing, you will see the top left self-indulgence, energizing and you'll see nurturing, those motivations are

what consumers are looking more for the future. That means as we look to the bottom right, we'll be introducing

products and categories with scale like tea, where it sits well with the consumer on unwind and harmonize. If you

look to the top left, you'll see us thinking about energizing with our Monster portfolio or even where we think about

self-indulgence and energy where Honest Coffee or other coffee brands may sit.

So again, with the Coke Company, we're looking at how we segment the categories that we play in so that we

have the brand propositions that can win. When we do that, we then also have to make sure that our sales force

can execute that. And so, as a diversified portfolio and a greater home and away-from-home market, we've taken

that lens further and segmented between home and out-of-home with the occasions and the drinking moments as

why people drink, where they drink. This becomes really important because when we want to launch in a category

with a brand in a segmented way with scale, we know where we can go to go after the money.

So, I take the example on the right hand side leisure, socializing/nightlife. Big category for us of around €1 billion

in mixers, in adult mixers, that's where people when they're out in Western Europe they're looking for with-alcohol.





That's why you'll see us entering into new categories with the likes of Royal Bliss in Spain, Schweppes 1783 and

more news to come with other brands.

If you look on the left hand side, you'll see that we have different occasions. For example, breakfast or snacking,

which fits perfectly with others for Western Europe and how people want to look for something a little bit different

from either their juice or a soy drink or a milk and those are the ways in which we are able to then segment with

the sales force and then go after that and make sure that we're executing in the right way.

We already see this happening in the market. So, in Western Europe in the last 12 to 18 months, we can already

see some of these trends happening, whether that be the accelerated of SKUs from NCBs, nearly 70% of

everything that came to the market in the last 12 months was a non-sparkling product or whether that's even in

sustainability, whether it's on packaging, it was presented, nearly half of it launched was a non-PET. So, you'll see

from us as well today many more products in glass, many more products in cans. You'll also see many more of

the SKUs being under 1 Liter, and this becomes really important for the margin, and the margin that we look for,

for the future. So it's happening in the market and we see that, that will continue.

Lastly, I think you know an exciting future also has to come with some realism and pragmatism, and that

realism/pragmatism is that we need to also front up to some of those areas that we see that could be potential

headwinds or challenges to us and that we already see how we want to deal with that. Whether that is as Damian

talked earlier about packaging and the movement on PET and single use and recycling and how we're going to

handle that, the diversification of our portfolio, whether that is in consolidation on customers, where we see

continued consolidation, which will challenge obviously the way in which we do our business, which becomes

even more important as to why we need to have a diversification and a segmentation in out of home or even

where we have competitors as we enter new categories or an existing categories where we have strong

competitor – competition against us.

So I think those things we've built into the pragmatism as how we look to the future. But the future still remains

very exciting knowing that those challenges confront us and that we deal with them in a way with which we

already [ph] can see them (00:31:09). So an exciting future, NARTD is growing. The segments with which we're

operating whether it would be sparkling we'll see growth and we're well set up to capture the headroom for that.

Stills and all the other categories that we'll enter is a big opportunity for us with low share. And last, but not least

as we diversify, we're going to go into a segmented way to execute on how we do that.

So thank you, with that I'm going to hand back to Damian who is going to tell us how we're going to do that.

Thanks. ......................................................................................................................................................................................................................................................


It's easy know. So, thank you, Stephen. Just to come back on a couple of points that Stephen touched on that I

think are critically important. We see the category going from about €100 billion to €130 billion of revenue. When

you look at our current position, we're capturing about €0.29 in the euro in terms of value share consolidated. So,

we have a good strong share position that gives us a lot of relevance for our customers. When you break that

share down, it's quite interesting that beyond Classic Cola, which is also we see returning to growth in terms of

transaction and our share is about 80%. Our share drops dramatically to 60% in Lights and we know we've a very

strong good competitor in the Cola Light segment. We're addressing that now two light cola strategy, which is a

big change.





And then you drop even further down to flavors where even with brands like Fanta and Sprite or mezzo mix in

Germany, fantastic brands, we've still only managed to capture 30% of the share and then it really drops. You get

to the Energy category with all of the momentum what we've enjoyed on the back of the Monster portfolio, we're

still only commanding a 20% share in that category, and it's growing and it's dynamic. And then if you move to the

other areas that Stephen highlighted that really are growing very fast in the area of nutrition, nurture, harmony, we

either have no share or we're below 1%.

So, as we look at the category growing and this category will grow with or without us. That is the reality. We are

leading the growth today, but we've got massive share opportunities within the segments that we talked about.

And I just want to talk a little bit about how we want to go after that opportunity. So, for the next 30 minutes or so, I

just want to give you a little bit of context and detail on the plans that we believe will unlock that revenue growth

and then Nik will follow-up to sharing with you how we'll translate that revenue into obviously profit, cash and

shareholder returns.

When you look at it, we talk a lot about winning today to win tomorrow, and that's the mindset that we've adopted

because that is the reality of the markets. I don't believe anybody in this room would give me a hall pass if I said

we're not going to win in 2018 or 2019, we're going to start winning in 2021, please trust us. It doesn't work like

that, and our customers, it doesn't work like that.

So, we are winning today and we believe that gives us the platform to win tomorrow. So, that's the language we're

using internally. To win today, we've got to keep growing from our core. It's a fantastic business. It generates a

whole lot of profit. It generates a whole lot of cash and it's an area that we've got a lot of expertise and we're

getting better. But we also recognize we've got to grow more brands to win tomorrow and that's really the two

areas that we want to focus on today.

So, the first platform is really one we share with the Coca-Cola Company and building on the quality of insights

that Stephen shared with you and believe me we could have spent a whole today sharing with you all of that data

behind the segmentation and diversification. It's extremely rich. And one of the breakout groups you're going to

enjoy today is around data analytics and we've got a wealth of data. We wanted to share with you just of the top

line areas that gets us excited. From that you end up having a great conversation with Tim and the Coca-Cola

Company around how do we continue to broaden our portfolio to address those consumer needs. And we're

looking at that across a range of brands that you're all familiar with I'm sure in terms of reinvigorated sparkling

portfolio that includes Classic Coke. Classic Coke in terms of value creation for our customers is still by far and

away the number one. And we're seeing that brand respond extremely positively to our new packaging formats

and growing transactions and ultimately growing value.

So, we're excited about that in the context of what some people feel is a challenging environment. We're also very

excited about our sugar-free range, which going forward will be in excess of 50% of our sparkling portfolio; it's

already there today in GB. And then we move across the categories where we believe we've got winning brand

platforms. At the higher value-end of the consumer proposition, so generating good margin for ourselves and our

customers, but with a reason to win. We truly believe with the company, we've put propositions to our customers

and consumers that have a reason to win and a good chance to win.

I suppose one great example of that has been our success with Fuze Tea, it was a big brave decision to transition

from Nestea, a brand that's well-established and was a good brand to move to completely new platform called

Fuze Tea. If you look at where we are today across all of our markets, it demonstrates that when we get behind

the brand with the Coke Company, we can really generate a whole lot of value. And again, we've done the same

in energy and we're just starting in the area of ready-to-drink and fruit based beverages.





So we see some encouraging results as we continue on the journey. We are very, very confident about our Coke

Light and Diet Coke proposition. Those of you from North America I think will have heard or experienced a

change that we've seen in the Diet Coke platform there; you'll see pretty much the similar now in Western Europe.

We've taken the work that we've done in North America, brought it back here and we believe that's giving us a

winning platform, particularly on the back of the light flavors.

Fuze Tea, leading in a lot of our markets. Stephen talked about Fanta, a brand that really required a little bit more

attention and a little bit more love. We've seen a lot of innovation around energy, and I'm particularly excited

about the opportunity to continue to premiumize the best brand in the world Coca-Cola. We see consumers in

Western Europe who've got a lot of disposable income responding extremely positively to glass being sold in

retail; four packs, six packs enjoying the most premium beverage experience in our home from a glass bottle. And

honestly, that's something that we've just started to do. So, we're very excited about that. We're also very excited

about mini cans, pick and mix.

So, offering consumers smaller packaging at a premium that they're happy to pay generating more margin for our

customers, but driving a lot more transactions in the Classic Coke category. So, that's the first pillar, and you can

hear a little bit more about that later from Leendert and [ph] Lauren (00:38:41). We've got a lot of those beverages

for you to try.

As a bottling business, quite rightly, I'm going to spend most of my time on the second pillar. So, as you broaden

your portfolio, as you segment your market much more scientifically than we ever did before, as you use digital to

understand what's happening in that market more and more, you have to change the way you run the business.

You have to transform your route to market and your sales capability to match the opportunity. And that's what I'd

like to share with you in a little bit more detail. Putting both of those together, we believe sets us apart to win.

So, how do we think about our journey at CCEP against that revenue growth opportunity? First of all, we believe

we've got best-in-class revenue growth management capability. So, really understanding how we can leverage a

brand/pack proposition. We've got new segmentation. You're going to hear a lot about key accounts, they're a big

part of our business. We've got, as I said, the biggest sales force in Western Europe that gives us a lot of

opportunity. We're trying different routes to market. Some of you may have picked up in the media.

In Germany, we've recently entered into a joint venture with Krombacher and Bitburger two of the biggest beer

companies in Germany to launch a digital platform to allow our customers and their customers purchase all of

their beverages through a combined platform. So, we've just started that trial and it's a learning opportunity for us,

it's been well received in our German business. That's just gives you some examples of how we're trying to be

disruptive in the way that we get our brands and our products to market.

We are investing a lot more in technology. You'll hear a little bit about that later in the breakout groups. And

clearly, sustainability, and I'll talk a little bit about particularly the plastic agenda, which is front and center in

Europe today.

So, revenue growth management again something that I'm sure you're familiar with. But clearly, as a bottler, this

is where we make the difference between a average margin business and a great margin business. And that's

why we put a lot of resource both in terms of technology and talent behind it to make sure that as we grow

revenue, we grow revenue profitably for ourselves and for our customers. It starts with the consumer. So, we've

re-orientated our dialogue much more as a company to the consumer over the last two years, and it's embedded





in what's good for our customers. And both of those coming together, we believe, allows us to provide a

proposition that's good for our consumers, our customers and importantly for our shareholders.

We've looked at all of the occasions that Stephen talked about, we've prioritized them and then we broadened our

package up offering across the business to make sure we can meet them. We've prioritized what we believe are

the 10 biggest consumption occasions. So, again, we've tried to narrow it down, so we can execute against a very

focused agenda. And these reflect the €130 billion worth of value. So, internally across each of these areas, we

can share with you exactly how much value is at play against allocation, we can tell you what our share is today

against allocation, and we can tell you what our competitor share is against allocation. And that's allowing us to

move to much more segmented marketing campaigns with the company and sales execution campaigns.

And this just gives you a flavor of what that can look like for One Brand. So, traditionally in Western Europe, if you

came here four or five years ago, the Diet Coke or cult-like brand pretty much stopped here. You would have

seen a lot of large PET, too much to be asked, and you would have seen a lot of large can packs. And again that

gets back to what we talked about in terms of resetting the base, changing the price/promo strategy.

You'll now experience in Western Europe a very rich range of packaging opportunities that are much more

premium, much more enjoyable and are packages that our customers and consumers are happy to pay a little bit

more for. So, as we expand our product and pack offering, we open up existing strong brands to a much deeper

range of consumers across Europe. That's one example.

Here's a real case in Belgium, a great business, traditionally a strong market for us. But coming into the graze and

CCEP are transactions were declining. Again if you recall back in 2017 on a number of our calls, Nik and I spoke

about making big changes in Belgium around our pack price promotions. We built the business on buy two

multipacks of 1.5-liter get one free, so 18 bottles. Most people can't lift it. And a lot of people can't fit that in their

cars. And we were losing transactions. We may have been growing volume periodically, but we are losing

transactions.

We completely re-orientated our pack pricing and took the money we were spending on large PET promotions

and allocated at a too small or higher value transaction focused packs like the six-pack iconic glass bottle. On top

of that, we completely reset the shelf, so we put the mini packs and the mini cans in the glass right in the middle

of the beverage fixture. And we're seeing sustained results coming out of that and that's something that we're

rolling out across our business.

Another example and Stephen touched on it when we did the segmentation in Spain, traditionally a market that

we would have felt we were very, very strong in and we are. But when we looked at that, we said there's a whole

segment that we're not participating in with just a whole nighttime mixability adult drinking occasion. And again,

with the company, we decided to launch a brand called Royal Bliss exactly against that segmentation.

So, it's an example of going from the insights that Stephen talked about, understanding the value, understanding

the profitability and then having a great discussion with The Coke Company around, well, what brand do we

believe has a right to win in that opportunity. And again, we're very pleased with Royal Bliss and this brand is

being rolled out beyond Spain across CCEP as we go forward. So, you will see that brand playing a role in

markets like Germany and others as we build on the success of Spain. So, two fairly simple examples of taking

three strategic insights into real action.

This is an area that I believe will set us apart as a bottler within the Coco-Cola system. As we've encourage The

Coke Company to expand the brand portfolio and become more segmented, as a bottling business we have to





also segment our sales force. We have to move away from generic groupings of home and away from home into

really being able to deliver segmented execution. And if you want to launch a brand like Royal Bliss, you need to

be strong in bars and nightclubs.

And if your sales force is not structured that way you're not going to be able to get the brand to market. And that's

the simple reality. So, we are now restructuring our business across Europe, to better reflect and again no

surprise the segmentation that Stephen highlighted.

So, as we diversify our portfolio, we also segment our sales force to allow us to have segmented execution

against that €130 billion opportunity. The good news is, we can do this efficiently with the use of technology. So,

from a cost perspective, this is leveraging an existing cost or expense. And you will enjoy hopefully tomorrow the

experience of that technology in the hands of our sales reps. So, very, very segmented. And again, I think, this

will set us apart from our competitors, but also across the coke system.

You don't win in Europe without winning with key accounts. And Stephen mentioned, we expect those key

accounts are going to get bigger through consolidation. We recently did some very exciting work with Bain to

basically benchmark our capability in this area. We felt we had a lot of opportunities. So, we wanted to go outside

and basically score ourselves. And we asked them to score us against what are called Bottlers, and but more

importantly to score us against other suppliers in this area.

And I can look to the number of surveys, they also went into each of our markets at very short notice, which

wasn't challenge for some of our people and on demand said give us your best key account presentation or

document that you believe is the best one you have for one of your big customers in your market. And they took

all aback, and we went through it and we got fantastic insights.

And we were and are doing a lot of good things. But clearly with key accounts, we've got to get a lot better in

Western Europe, they're getting bigger and they're getting more demanding. So, we have moved our agenda

obviously to beverages for life being a scene versus just a sparkling conversation. But clearly, we've also moved

our agenda to an area that Nik and I are excited about which was net margin and cash.

So, as a lot of you will recall, we changed their incentive plans to include free cash flow, which completely

changed the dynamic at CCEP, and Nik will share with you the results of that going forward. But as we were

having a conversation about cash internally, it's not a surprise that that conversation started to go external. And

along that journey someone said, well, that's amazing how much cash we make with customer A. I wonder how

much cash they make from us. So that project quite naturally evolved into a conversation about cash flow

generation for our customers.

And when you sit with a customer in Europe and you have a conversation about the amount of cash our brands

make, it's a very different conversation than just profit, margin or investments. So, a much richer agenda, and

we're investing behind capability building with our people to make sure they have the skills and the insights to

drive that.

The other area that we are very focused on is driving distribution. So, as we look at that segmentation, clearly if

you walk around Berlin, Paris, London, you'll probably find a Coca-Cola, you'll probably find a Coke Zero or Coke

Life, but in a lot of outlets you may not find a Fanta, and you may not find a Sprite, and as we evolve our portfolio,

your chances maybe finding a Fuze Tea or an Honest Tea may even start to drop a bit more.





We have good distribution but when we step back and look at the opportunity, it is an area that in some of our

markets was not invested enough over a number of years for a lot of different reasons. We're focusing on growing

distribution. We're focusing on growing coverage. We're changing the number of visits per day, all on the back of

a salesforce.com platform. So, when we created CCEP in Barcelona, we shared with you initially our thinking

around the sales force automation tool that's now two years on and maturing nicely, and we're also investing a lot

in coolers. So, as we build our portfolio that those brands have the space in the market. So, four areas that we

believe will drive that frontline execution capability.

I mentioned Germany and our trial with the beer companies, as a bottler we clearly want to own the relationship

with the customer. We clearly want to personalize that interaction and then digitalize the transaction. And clearly,

we want to work across a number of route-to-market options. Today at CCEP, we're trialing direct online

distribution. We're trialing beer collaboration in Germany where we partner with brewers. We've got a spirits

partnership in Belgium, which allows us to transform our route-to-market. We're working with wholesalers who are

there on air, IT platforms and we're doing transfer orders. So, we're working across a range of options. So, when

we get the right brands, we get the sales force coverage that we can get those brands to market. And we've got

some principles obviously that will drive margin for our wholesalers, but more importantly for the business going

forward.

In the guidance that we talked about going forward, we have called out a significant investment in CapEx as part

of NSR. There're three areas to that. One is obviously supply chain. So, as we innovate packaging that requires

Ron and his team to deliver more capability inside our plants.

The second, which I mentioned, is coolers. So, about a third of our CapEx is going into cold drink equipment and

a third is going into this area. And you're going to hear more about this today, but we honestly believe that

investing in IT, beyond that maintenance level is something that will set us apart in Western Europe in terms of

digital, in terms of automation and in terms of productivity.

So, we are putting a lot of efforts behind this. We also have convened a digital advisory board. So, as we look at

the journey that we need to make in technology and digital and we looked at our internal capabilities, we said we

really need to build out a network of people to support us. So, we went to the market and said, we're setting up a

digital circle. We'd like to have five or six industry leaders from outside of beverages to sit in that circle, is there

anybody interested.

Today, we've got directors from Ocado [indiscernible] (00:52:30), from one of the largest banks globally who sit

with us five times a year and challenge our agenda on digital and on technology. And that's really externalizing

CCEP to a much more creative conversation around digital and technology.

We're also working on that external agenda beyond technology. So, we recently had a suppliers, our second

suppliers conference in Berlin where we brought in over 100 of our suppliers. We pretty much shared within the

growth agenda that we're sharing with you today. Obviously, they're a big part of that journey.

We spend a lot more time with people like you across the globe to hear what you expect from a business like

CCEP, and how you feel about our company going forward. We're a big part of the industry group now with

UNESDA. So, we're leveraging a broader industry coalition in Western Europe. So, across a number of areas

we're trying to externalize the conversations, and we believe that's giving us better thinking. It's challenging us a

lot more because a lot of these stakeholders have a different view of our business, but allows us to move forward

with a more external agenda.





That's also clearly allowing us to sell and communicate what our new brands can do for our customers a lot more.

And all of that ends up in a more digitally enabled business, and you will experience some of that in the break of

groups later.

So, finally, against that growth agenda and those enablers, there are two areas that we believe are going to

continue to challenge our business. I think Stephen, in his last slide, put it very well. We are very excited about

the growth opportunity, but we're also very pragmatic about some of the headwinds that are going to continue to

challenge our category. In some ways a lot of our dialogue last year was about sugar tax. In GB that sugar tax is

now in the market. And so, when you're seeing results of our GB business and the whole conversation is now

move the plastics, packaging and PET.

In 2017, we made some very bold commitments as a company, under the 'this is forward' commitments along with

The Coke Company. There were six in total. I just called at two this afternoon. One was obviously on the back of

the debate around sugar and calories, and we have a strong commitment to provide sugar-free options across all

of our portfolio. We're doing that. We're reducing sugar in our products that's underway. And we continue to offer

our consumers more choice in terms of the sugar or calories they'd like to enjoy with their beverages.

We also made some bold commitments around packaging. So, 97% of our packaging is recyclable. That is not

the case for a lot of industries. 25% of our PET that we use is recycled. We want to increase that up to 50%. And

we've made a commitment to take back 100% of our packaging in Europe. And we're currently in strong dialogue

in GB and Leonard can share that with you, one of the breakouts with the government on a scheme that will

encourage consumers to return all of the packaging whether it's cans or PET, so that can be recycled and reused.

But we also know that the agenda is continuing to move fast. So, we're very committed to our packaging

commitments, but we're also realistic that this conversation is continuing to move at pace.

And finally, I just wanted to share with you how we work at CCEP. We've had a fantastic start as a business. I'll

talk a little bit about how we operate the company in terms of our operating model. But pretty much what we

focused on when we created CCEP was not to get stuck into a whole lot of conversations around what our values

are, our vision, mission. We spoke to a lot of our people and they just kind of said, now that sounds like 10 years

ago. We said, well, what do you want to talk about? And they said, well, how do we want to work at CCEP?

When you work in our company, what is the tree like? And these are the five areas that guide us internally in our

business. So, a relentless focus on the customers on frontline that's reflected in the way we run the business. We

want to make the decisions as close to the customer and consumer as possible. We want to execute with speed

and agility. I think if you look at the innovation we brought to our customers and the number of new brands and

packs we've launched in the last 18 months, it was more than we launched in the previous five years. So, we are

moving a lot, lot faster.

We empower our people to win together. We've reduced our spans and layers dramatically, a big part of the

synergies that we delivered in the business was by simplifying our operating model and simplifying our

organizational structure to allow our people to win together. We've just conducted our first engagement survey. At

CCEP, we had a response rate of around 65%, which was quite high and our engagement score was at 69%.

So, again, a lot of work to do to move it up, but again I think a good sign that our people are engaged and they

are committed to our CCEP project. And finally, and I think you get that feeling for what we're talking about today,

we firmly believe if you've got a passion for growth, this is a great place to work, because there's growth

opportunities on every street, in every store, in every market. So, passion for growth for us underpins everything

we do at CCEP.





So that's how we're taking that landscape of opportunity that we heard about from Stephen forward, relentless

focus on the market and more balanced growth agenda on revenue between volume, price and mix. So, back to a

third a third a third over the medium-term and working very hard with the Coca-Cola Company to drive that

portfolio diversification. All of it while remain very close to our customers and recognizing that our stakeholders

are going to demand a lot more from our business and from our category in the areas of packaging energy and

water.

I talk a lot about the Coca-Cola Company. And obviously, as a bottler, it's very hard to separate the role we both

play in the system. As I said, Tim has joined us and we'll have an opportunity for some Q&A with Tim later. But

clearly, by creating CCEP, we also had a chance to reset the relationship with The Coke Company in Western

Europe. And that's underpinned by, what we believe, are somewhat unique within The Coca-Cola Bottling

Systems and principles that we agreed on. We have got a shared vision. So, as we sit down with The Coke

Company, we talk about the same revenue growth opportunities and we align that against our annual business

plans. We've aligned financial incentives, so the company's profit and revenue stream is directly linked to CCEP.

So, when we talk about price mix, when we talk about smaller packaging, we're pushing an open door to Coca-

Cola Company, and we believe that's a big, big change. We have got a new profit sharing model, particularly

around NPD, because as we move into new categories, you've got to be comfortable to take risks. Potentially,

you've got to be comfortable that not all of these initiatives are going to work. And it's a lot easier to take those

brave decisions when you're sharing both the upside and potentially the downside. And that new model is

allowing us to move a lot faster because traditionally we got stuck in conversations around who took the risk, and

that's allowing us to drive a lot of that innovation that I talked about earlier.

We are a big part of The Coke Company's future. We contribute around 25% of their global profitability. So, when

you listen to James and the ambition he has for The Coca-Cola System, clearly CCEP being successful is an

integral part of that journey. It's very difficult for the math to work at The Coca-Cola Company if it doesn't work in

Western Europe. We're simply too big and we're profitable and we're growing.

And finally, we've got them on our board. They have an 18% shareholding in CCEP and they've got two directors

on the board. So, a very, I would say, integrated way of working with the company, built on some very, very solid

principles and foundations. And we've done a very clear role sort. So, who does what, so we avoid duplication,

and we can put all of that resource and effort into the market where it makes the most return.

So, in summary, why are we so excited about the CCEP journey, why do we believe we're just at the beginning

despite, I would say, two very successful years behind us? One, we've got scale. And when you look across

Western Europe, our leadership position in most of our markets is significant, and we believe we can grow scale

even more. And that scale will come from a bigger portfolio of brands. So, we start to get into new categories or

get bigger, and we've got scale in the marketplace, 6,000 frontline commercial people gives us scale, and we've

got scale in terms of supply chain. So, pretty much un-matched in Western Europe.

We have a realistic view of the future. The growth that Stephen shared with you, we believe, is going to potentially

become even more segmented and diverse. And we're also realistic about some of the challenges, whether that's

customer consolidation, whether it's a faster move to online digital, or whether it's our competitors, who in some

categories have done a better job than we have done over the last number of years. So, we're ambitious and

we're also, we believe, realistic of the challenges.





We have been investing. So, since we created CCEP, Nik and I have been very clear, we want to deliver the net

synergy number, but the opportunity will not wait for us to invest. So, we have taken some decisions in 2016,

2017, and 2018 to get us more prepared for the future. And we believe that's the right thing to do to deliver long-

term shareholder value. We are more aligned with The Coke Company. We still have very good debates around

what they believe we're not doing well enough and what we believe they're not doing well enough, and that's the

beauty of this system. But it's done against those principles, so it allows us to grow together.

And I'm very pleased as the CEO of the business that the talent that we have, not just in this room, but across

CCEP is fantastic. They love our business. They love our brands. They love our customers and are very, very

excited about the growth agenda. And there's not many companies in Western Europe who are having those

positive growth conversations with their customers or with their employees, and that frankly inspires them as we

move forward.

I just want to close before I hand over to Frank, I know a number of times people have asked me how does the

business operate, what's your operating model at CCEP. If you go back to the original synergies commitments we

made, we talked about having a very lean center. So, we changed the way the business was run or the way the

biggest business was run and effectively downsized the center. We closed our operations in Atlanta pretty quickly

after the deal and we pushed accountability and ownership back out to the market. So, that leaves us with a lean

center and a very efficient shared services operation in Bulgaria.

We took a leadership decision that frankly we thought was common sense. But if you believe that the closer the

decision is made to the consumer or the customer, the better chance it is to be right and we firmly believe that.

So, we've empowered our business units a lot more. We changed our incentives, and so Nik and I were very

passionate about paying down our debt quicker than people expected and being able to do what we announced

this morning by generating a whole lot more free cash flow. And what gets measured gets done, we know that. So

we changed our incentive plans, obviously to keep profitability, obviously to include revenue because revenue

growth is a long-term objective, but critically to include free cash flow.

So, no one in this room on our team gets an incentive if we don't deliver what we committed to in free cash flow,

and that's just one example of how we're trying to continuously align the long-term objectives with our incentive

plans. We spend a lot of time sharing best practice, next week, most of us are in Amsterdam where we've got the

top 100 commercial leaders of CCEP coming together again to share experience around what's working and

what's not commercially. And that's leading to better conversations whether it's around learning from HoReCa in

Spain, discounters in Germany, or the work we're doing in GB Online. So, we continue to foster best practice, and

that's a trade-off to having a lean center.

If you have a lean center and you still want people to share, you've got to get them together. Otherwise, you build

a massive center and their job is to share across all units and generally nothing ever happens. And we've got a

great talent pool. So, we operate the business under five BUs: Great Britain; France; Iberia, obviously which

includes Spain and Portugal; Germany, where we are today; and Northern Europe. And Stephen is here from

Northern Europe, Leendert's here from GB and obviously Frank is here from Germany. And coincidentally those

three business units are having a great year. So, that's why they look happy.

So, now to Germany, so let me just share a little bit about Germany before I hand over to Frank. So, certainly a

market I know well. It's a market I'm very passionate about. It's also good that Frank is doing a better job running

it than I did. So, that's also good to know. It is the largest market in Europe. It is a Coke market. Our business in

Germany is over 85 years. It reminds me a lot of Spain. When you walk the market in Germany, you see a lot of

people drinking Coca-Cola. It's a brand that has got a lot of brand love and a lot of heritage in Germany.





We are growing revenue, margin, and free cash flow, and Frank's going to tell you that story. It is not a

complicated business anymore. We have over a number of years, done a wonderful job simplifying our business

in Germany, and we are seeing the benefits of that in our results. That's simplifying it from reducing some of those

unprofitable brands and SKUs that we talked about earlier, simplifying our manufacturing footprint and

warehousing, and simplifying our route to market. So, we have taken a lot of complexity out of our German

business.

It is a business that is helping us at CCEP [indiscernible] (01:07:10) winners. So, it's no coincidence that the

biggest driver of our revenue outside of Germany and other markets this year has been our discounters. And it's

profitable growth and that comes on the back of learning from what we did in Germany, and we are leading the

category. We are leading the category in terms of value creation, and recently, I think last week, the year-to-date

numbers for the Retail segment in Germany put CCEP as the number one driver of customer value again in

Germany. So, we're very well relevant to our customers.

So, we've got big plans for Germany, and I'd like to hand over to Frank now who is going to share with you a little

bit more context on our German business. Thank you, Frank. No pressure. ......................................................................................................................................................................................................................................................

Frank Molthan General Manager Germany Business Unit, Coca-Cola European Partners Plc

Thank you very much, Damian. Good afternoon, everybody. Welcome in my own country. I met a few two years

ago in Spain when we presented our discount story, but to introduce me, I'm Frank Molthan, 30 years with The

Coke System in Germany. I have a finance background. I worked seven years to run the key accounts. I was

running field sales, four years I was the Head of HR, mainly responsible for the challenges and changes with our

[indiscernible] (01:08:30), I'm going to come to that later. And now, two and half years responsible here in

Germany as the GM.

I'm really proud about the success we achieved in Germany the last two years. Let me highlight three things. The

first thing is, we achieved financial turnaround in Germany. We are gaining NSR growth, we are gaining OI

growth, we took out complexity, we took out cost, and been generating cash, a strong success in Germany to

highlight, as number one.

Number two, we started the journey value before volume, and we take pricing, we work on mix, and we work on

growth across all areas, channel and packages. And third thing, we have a lot of opportunities, in the still business

and the NCB business, as well in Away From Home and I will also show that the next minutes on a few examples.

It's an exciting country. It's a really exciting place to work in Germany, and I want to highlight one number we are

the largest economy in Europe, the fourth largest in the world and it's growing. So, it's a really good place to be in

currently, that's base for our success the last two years and also good base for the coming years. We have €2.2

billion revenue in Germany from CCEP and roughly 20% of total CCEP, and we're the largest country and the

largest BU volume-wise.

On the slides, you see we are really strong dominated by CSDs, and as Damian said before, we have a strong

Coke market as well. We have strong opportunities still to grow Coke. We have two large brands with Coke Light

and Coke Zero to drive volume growth and revenue growth, and our sugar-free variances, and as well huge

opportunities in flavor as well.





Similar to Stephen's slide, we have huge opportunities and a clear focus currently and as well [Technical

Difficulty] (01:10:35) on to grow our portfolio in NCBs and in Stills, and as well have a stronger focus on Away

From Home business. We have two really good examples, Spain and GB. We can learn a lot, we are sharing best

practice and we're going really forward to drive that business. So, clear share gains in Stills, NCBs, as well in

Away From Home is one of our key focus areas, in a €33 billion value market we are operating in.

To summarize the few success results in the finance perspective, you can see, we are growing NSR from €3.12 in

2016 to €3.43. The main achievement in 2017, we took really pricing and we changed our promotion strategy with

our key customers. This year we're having a good mix story as well, so we are driving our small packs and we are

creating again strong pricing with our customer and a very good mix story on top to that. And that brought us to

€3.43 in total. In the same time, we took out complexity and cost, and we took 5 points lower OpEx and our total

cost base in the last two and half years. And our margin is roughly coming from 8% to low double-digit as an

estimate for end of this year. So, a clear, strong value and profit story in Germany.

And on the right side, you can see we're generating a lot of cash, and I'll show it in more details on a few slides,

where we did it. All our current success and as well as the future is reflected in these four areas: Profitable

growth, cost base, revenue growth and aligned portfolio strategy and as well Away From Home footprint.

Let's go through the three things. First thing, as Damian and Stephen said, we are reducing number of SKUs.

We're coming from roughly 700 SKUs in Germany, currently we are on 450. So, we took out 250 SKUs in the

German business. Less complexity and far more profit. We have a strong way. We took out 11 million unit cases

unprofitable water business with Bonaqa, with all consequences, much of drive volume, much of drive value and

revenue. Second example, our largest package is the 1 liter crate, roughly 118 million unit cases in Germany. And

we had the promo price three years ago of €6.49 in the market for 12 bottles in a crate plus two bottles free. So,

we stopped that whole debate to go in the right direction and today and tomorrow when you are in the market, our

current promo price is €8.49, about €2 higher and no bottles free, a clear value story for our customer, as well for

our business and well-executed in the market together with our partners.

And the third example, we are really growing and dominating the discount business, and you will see tomorrow in

the market and we entered Aldi, six, seven years ago. We have three pallet places only for one package, the 1.25

liter and 5 SKUs. Tomorrow, you will see 6 pallet places in all Aldis, in all 6,000 Aldis, North and South in

Germany. The [ph] IC share (01:13:48) in Aldi is above 25% and we are creating value with Aldi in a growing

market and we're creating value for our business, a strong success and half of all pallet place you see tomorrow is

now small [ph] IC packages (01:14:03) with Aldi. And Damian mentioned before, [ph] regards to results (01:14:06)

last week, we have 6.1% growth, the strongest value driver in Germany, and also we were number two last year

and number one two years ago.

So, in the long row, we are really the strongest value creator for our partnership in Germany. Then, similar to the

example Damian showed for Coke Light, we are increasing our portfolio mainly on small packages, with a strong

focus on small cans, 0.15, 0.25, 0.3; as well RGB¸ 0.2 and 0.33 glass, and we are growing 7% with these small

packages [ph] this year (01:14:41) and we are growing 40% of our total revenue with the small packs. So, again,

a strong value story for Germany.

Second, we took out complexity and cost. 2012, we had roughly 30 plants in Germany. Today we have 16. We

have two water plants, one in [indiscernible] (01:15:03). We have aseptic line for our Fuze and Powerade

business [indiscernible] (01:15:13), and we have a strong reduction of complexity plant-wise. At the same time,

we had roughly 60, 70 distribution centers in Germany. Today we have 30. So, we reduced it by 50%, coming





from more than 100 10 years ago in Germany when we have a fragmented bottling business, so strong

improvement to take out cost and complexity.

We are working very strong on our inventory days, we reduced it to 6, and as well on the whole cash

management with payable days and receivable days as well. So, again, a strong value story before volume and

totally different what we did years ago.

Portfolio management, you saw that as well in Stephen's presentation and highlighted by Damian. [ph] We

(01:15:52) still a strong CSD market in Germany. We are growing Coke, we're growing Coke trademark, as well

Zero and Light. We increased our portfolio in water, our Smartwater, you will see tomorrow in the market. With

Fuze, we are very, very strong and very successful. Over years we have built the brand Nestea, and when we

changed the business early this year to Fuze, we have roughly 39,000, 40,000 customers for Nestea end of last

year.

Today we have more than 43,000 customers for Fuze. So, a strong value and volume story with our customer and

very strong success, and we're still studying the honest business similar as Leendert did in GB with that brand.

And again, we are successful with Monster in a partnership in Germany and we started the business with [ph]

AdeZ (01:16:39) in the portfolio as well. Expanding footprint in Away From Home similar to the strategy Damian

and also Stephen showed you, we have roughly 1,000 salespeople in Germany. We're allocating resources in the

last 18 months. We took salespeople from home market and put it in Away From Home, the right people against

the right potential in the market. And we have today more than 700 people in Away From Home in the fragmented

new structure as you saw as well as the one and half hours. And we're going forward to deliver what's expected

and with the alliance strategy between all 13 countries.

We increased coverage, we increased calls per day, and we also increased the cooler placements in the last two

years and as well in the coming years.

In the interest of time, I could not touch these four areas, I want to highlight two. The first one is sustainability.

Maybe you heard a lot about returnable and fillable in one ways in Germany and you will see it tomorrow in the

market. We can deal with that complexity and the right thing to do. We have roughly 40% returnable, refillable in

Germany, and all packages in Germany are with deposits. So, we're getting all packages back. We have 40%

returnable, refillable, refilled and we have 60% packages, they are also coming back and we are recycling all

these packages. So, more than 99.5% of all packages are coming back and that was deposited in Germany. So,

good place to deal with.

A second example is collaboration. As you saw with all the changes in distribution center, in plants as well with

less people, we really work strong on the collaboration with our union and works council, and that builds the base

for the challenges and changes we achieved the last four years, and we have all the flexibility as well for the

coming years to go in the right direction and to execute what's needed with all the trends and also ways to change

our business.

And the last point to highlight on World Class Key Account, Stephen showed that in detail, we have as Edeka the

largest customer, roughly 130 million, 140 million unit cases in Germany. So the tool for key customer, Aldi, Lidl,

Rewe, and Edeka, are responsible for more than 80% of our total trade business. And they are growing with us,

they're driving value and we are also driving value with them together. So a strong key account story as well for

the business.





And to finalize again, we are still going forward with our value before volume story, we will take pricing, we will

work on mix and we will grow volume overall, these are the three pillars as the base. Second, we will take out cost

and complexity. We have the flexibility with the contract [ph] we have this in (01:19:23) union to achieve what's

needed and certainly it will increase our portfolio as well our away-from-home footprint in line with our strategy for

total CCEP. And with that, I would hand over to Nik and big thank you to you. Nik? ......................................................................................................................................................................................................................................................

Manik H. Jhangiani Chief Financial Officer, Coca-Cola European Partners Plc

[audio gap] (01:19:40 – 01:22:10)

...off that cash as opposed to just moving and not making those right decisions for the business. Clearly, if we do

both those right, that generates a ton of cash. And we'll talk about that and it's great to hear everybody in the

business talk about free cash flow. As Damian said when we pull the company together and we started talking

about the metrics, operating working capital we saw as a big opportunity. But I remember having a conversation

with the board, Damian and I both positioning with them. This is not a finance initiative. This is a business

initiative. And as long as everybody understands that and we keep it simple, we will drive change. So, it was very

simple things that I'll talk about that we were able to do to be able to achieve that.

Clearly that free cash flow generation coupled with our balance sheet optionality that we have. We have a solid

balance sheet and I'll go through that in a moment, but clearly one that a lot would envy. But that balance sheet

optionality continues to give us along with that free cash flow generation, the ability to do the right things for the

business, but for all our shareowners as well.

So again just looking back, I know Damian said we're not going to dwell on the past, but it is nice to put up a

couple of charts just to remind you of where we've been and where we came from. So clearly, we grew EPS 13%

and we've indicated that we will grow 7% to 8% this year. Very proud of what we – what we collectively have been

able to achieve from a free cash flow perspective. And you can see the working capital improvements that we've

had. We've improved our payable days i.e., we're paying our suppliers later by about seven days. This is not just

about squeezing them. This is looking at the market practices, looking at our competitors and being able to see

where do we have those opportunities and actually balancing that price and that terms conversation as well.

We've been able to at the same time reduce our receivables by nine days. So that's a great achievement in two

years to be able to get down to what was a big pain point for us and partly a lot of this has been achieved without

necessarily going out in renegotiating terms and conditions with the customers because that's tough. When we're

trying to get price, when we're trying to get mix, when we're trying to get assortment in there, we also would love

to get better terms from them, but that's a challenge. So we've got to figure out where the trade-offs are. So a lot

of this was around internal housekeeping, invoicing accuracy, collecting on time, making sure disputes were

timely resolved.

So a nine-day reduction there. Today, I think we're pretty good when we look across our markets because we're

trending at about just under 50 days receivables term and then, we've reduced our inventories by six days as well.

So really pay our suppliers a little later without squeezing them. Definitely collect our money a lot faster and at the

same time, work with a lot less inventory. That coupled with everything that we're doing on the operating side

coupled with what we're doing on the CapEx and investment side still has allowed us to generate over a €1 billion

of free cash flow for 2017 and we've guided towards a €1 billion for this year. We've raised that twice. And quite

honestly, the second time has really come from improvement in operating metrics, but also working capital. The

first time was really from better working capital. So strong, strong focus on that and there will be more

opportunities going forward as well.





When we look at our dividends, clearly, we started out this business and we had talked about a 30% to 40%

dividend payout ratio. We were at 35% in 2016, took that up to 40%, took that up to 45% in 2018 and just

announced this morning that we would be raising that to 50% as of the Q4 period. That is the intent that

management has. We will recommend that to the board, but of course, the board has to approve that.

And then, if we look at the focus on de-levering, clearly, you can see a 3.5 times net debt-to-EBITDA at the time

of the transaction have come down and we will exit 2.5 times this year, which includes the €500 million of share

repo that we will be doing in 2018. So clearly we still have opportunity if we look at that leverage range of 2.5

times to 3 times and I'll talk about that capacity that we continue to have going forward.

So again, if we now look at the opportunities going forward, you've heard from Steven, you've heard from Damian

around the big opportunity across our markets, €30 billion of revenue opportunity across our markets over the

next 10 years and we clearly believe there is an opportunity for us to get not just our fair share, I think a

disproportionately higher share. Why? Because you know if we look at the NARTD category and we are a big part

of that today, today we only have about 28% of that. We have an opportunity to grow our share within that

category. That category is growing faster than FMCG and we're very well-positioned as one of the top

manufacturers and one of the top value creators for our customers to be able to get our fair share of that growth.

We clearly have the scale, we've talked about that in supply chain, we've talked about that in terms of sales force.

So that scale is what we need to continue leveraging as we build out our brands, portfolio in the market. A great

example of that is Fuze Tea.

We launched that this year and already we're doing significantly better from a weighted average distribution

perspective in a number of markets than what we had with Nestea, which was the brand we had for several years

within the system.

So with the power behind a brand like Fuze jointly with the Coca-Cola Company and ourselves the size and scale

of our workforce in terms of our sales, sales people, the muscle and the might that we put behind it and the focus

that we put behind it, we can have success. And clearly those are the things we will continue to replicate across

as we continue to build out our portfolio of brands. We've reset our base, we've made some tough decisions,

we've got flagged from a number of you guys, concerns around the volume drops, et cetera. But those were the

right things that we have to do for the business. I think 2019 will continue to be a bit more of a resetting, right.

We've seen the large bulk of that happen. There will be the tales of some of that continuing to happen into 2019,

but clearly we feel then on we have a great growth trajectory ahead of us. And then clearly we believe that will all

help us with that low-single digit revenue growth.

When we look at that and Damian touched upon this, we've laid this out very simply to say there will be a return to

volume growth. The volume is going to come from a couple of different angles; one, SSDs are still growing. Okay.

And I think there's a lot of concern around the fact that sparkling doesn't grow. Sparkling is growing from a

revenue perspective. Transactions are growing and we'll talk about that in a moment. So we have an opportunity

to grow transactions in red Coke, mop immunization, smaller packs that's higher revenue. We have an opportunity

in lights.

Today, we are definitely at a much lower percentage relative to our full sugar portfolio in terms of the lights

portfolio and there's some great things that we're doing with the dual brand strategy that we have with Coke Zero

as well as Diet and Coke Light, it's a great opportunities there. Sparkling flavors. We are very under-indexed when

we look at that relative to the market. All right. We did a great investment around Fanta in the last couple of years.





This year we've been growing Fanta in the high single digits, okay. That's after 10 plus years of probably no

growth. We're doing a similar thing with Sprite going forward.

And then adult mixers are a big opportunity for us where again we're under-index. So, I'm not necessarily saying

we're going to get Netflix type of growth, but clearly, we are going to get growth in the Sparkling category. Add to

that then we're growing from a very low base in the broader NCBs or stills category whether it is energy, whether

it is tea, whether it's ready-to-drink coffee, whether it's plant-based products, those are growing from a very small

base for us and clearly as you've seen, 70% of the growth is coming from those NCBs. So we will get our fair

share of that. So we clearly see volume playing at least a third of that mix on an average annual basis going

forward.

The other piece will come from price, because we do believe we continue to have headline pricing, but it's not just

about headline pricing, we've talked about opportunities that we have reset in some markets, but there's more to

go after. Frank gave you a great example of the 12 plus 2 that we were doing at €6.49, now at €8.49. All of that

wasn't just headline price, part of that was also pulling back on the promotional mechanics, right. So, better

promotional mechanics, depth and frequency of those is what's going to help us as well.

And then thirdly, mix, you've heard a lot about what we're trying to do from a small pack perspective, from a

convenience perspective, glass, small cans, small PET, all those will contribute positively to mix. So, I think again

volume growth coming from NCBs, volume growth coming from the – the sparkling categories that were under

indexed in today, clearly price opportunities in terms of headline, as well as promo efficiencies and then mix from

both a channel, brand and a pack perspective coming forward as well. So, we feel confident that we can deliver

that low-single digit revenue growth going forward.

And we've got some very early proof points but I think these are great proof points just to demonstrate our focus

and how we've been doing that consistently over the last eight quarters. So we start out with the away-from-home

business where we're under-indexed today, right. Roughly, our business is 60/40, the market is the opposite way,

right. So it's – we're 60/40 home – away-from-home, the market is 60% away-from-home, 40% home.

We have been focused on trying to grow our away-from-home business. That does not mean we are ignoring our

home business, we have a very profitable business in the home market across our territories. It is making sure we

protect and grow that, but at the same time outpace that growth with what we can get from the away-from-home.

So quarter after quarter, if you look at this since 2017, we have been growing our away-from-home faster than our

home business.

Damian touched upon this and we'll be talking a lot more about transactions going forward as opposed to just the

volume element of that revenue equation, but our transaction growth has been outpacing our volume growth

quarter after quarter. We have six datas as of this information, so we don't have that. But so it's new, but clearly

we will continue to be focused on this. And then, if we look at the premiumization piece around packs, that's a

very important part of what we're talking about from a mix perspective. So our smaller premium packs are

outpacing the PET packs. So small PET in this instance is growing faster than the large PET and that's exactly

what we want from what the consumers want, but also what is great for us from a margin and a profitability

perspective.

If we then look at our glass, our glass is growing faster than our PET and that's again where we want to be

focused, it's about premiumization, it's about better revenue realization and clearly better margins as well.





And then finally, cans are growing faster than PET. So, again all proof points when we pulled this together around

some really good signs of our focus and how that's paying off for the business. Another set of proof points from an

angle of that consistent revenue per case growth. Damian touched upon this earlier, it was very important given

what we were going to be trying to achieve from a revenue perspective, we needed to get our pricing per case

right, and I'm not saying we're there, but we've made a tremendous progress.

But a lot of that has by – has come from what we've been doing in terms of diversification. Diversification both in

terms of our portfolio, but diversification also into smaller packs in the away-from-home. So again just to explain

this chart real quick, if we're at 100% index as average CCEP, you can see large PET clearly from a profitability

revenue perspective is lower on a per case basis. And then you can see small glass, mini cans and cans are

obviously higher. So that supports our whole focus around what we're trying to do to drive some of those smaller

packs.

And at the same time when you look outside of water all the other categories are also significantly higher in terms

of revenue per case realization versus the average of the group, and obviously where we have a large part of our

business in large PET. So hopefully these are both great proof points that we will continue to demonstrate to you

what we're trying to do across categories, across brands, across transactions to be able to drive that positive mix

and revenue realization for this business.

So moving down the P&L, clearly there's a big opportunity from a cost rationalization perspective. When we pulled

the transaction together, if you recall, we talked about the synergies of €315 million to €340 million. We did

reference to the fact that 40% of those were coming from what was, people trying to understand what was this

inflight synergy capture piece that we were talking about versus what were the combo synergies. The inflight

piece was really things that each of the businesses were doing independent of us coming together that allowed

them to drive productivity that we should be doing on an ongoing basis, right.

So, if you think about that and think about the opportunities going forward, that 40% that we highlighted was

largely focused around Germany, and largely focused around Germany because of what they had in the pipeline

from an angle of rationalization of their supply chain network primarily. So, we knew that was out and committed.

It was just about realizing that to the P&L.

But I think beyond just rationalization of supply chain from a facilities perspective, there is a big opportunity for

simplification of our network and that is something you will see going forward coming into what we will be talking

about. A good example of that is what we're doing actually in GB with the plant closure that we announced in

Milton Keynes. That's a great example of simplifying our network and you'll see more of that coming.

There's great opportunities when we think about procurement. There's a lot that we've done from a direct

procurement perspective. There's lots that we've done an indirect piece, but we've just put into place a buying

desk. We're cataloging things and we're driving people towards much more consistent buying patterns that we

can measure and track and ensure that we're getting the best price. So, there's opportunities from a procurement

perspective going forward. There's opportunities from enhancing our route-to-market. There's opportunities from a

flexible labor perspective, so there is a lot that we continue to do in supply chain areas led by Ron and the team

that is truly going to deliver some great results for us as we look at the next three to five years.

Damian touched upon the business capability program and I think that's going to be a critical game changer for us

as we continue to make the right investments from a perspective of revenue enhancing, revenue creative

activities and you'll see a lot of that in the breakouts today. It's about those data driven insights that we can

actually have, take actions on right away, and get the benefits to our P&L.





That investment is going to help drive rationalization of the way we've got our business set up today. Not being –

not going to be able to go into a lot more details about that, just given what we need to be protective of in terms of

workers councils, et cetera, but clearly that has a big opportunity.

And then the third piece is really leveraging more what we've got in shared services. I think what we've set up

today with the 700 people is largely a finance transactions processing workshop. We've got a great team there

young and motivated as Damian said but we have just started building out some of the capabilities on HR and IT.

But again, we're still operating either through towers of order to cash or source to pay or operating in silos across

functions. We've got to change that and move much more towards end-to-end processes. End-to-end processes

will allow us to ultimately get to a global business solution.

Things that we're doing today are eliminating a lot of the work that we were doing there. We're standardizing a lot

of what we were doing, we're simplifying a lot of what we're doing and then we're automating as well. Robotics

today we've developed an in-house robotics team and Sofia, that's driving some great automations for us in 24

areas, that 12 months ago, frankly we didn't have. So those are great examples of things that we will continue to

do to be able to leverage that cost base and be able to drive more productivity and quite honestly, it's not just

productivity, it's allowing us to be competitive for the future as well, so we've got to stay ahead of the curve in that

space. So when you pull that altogether, you know, clearly we've delivered some great results in terms of our

operating margin. We've had 90 basis points of improvement in 2017 guiding for approximately a 30 basis point

improvement in 2018 as well.

Clearly supported by the top line growth and also supported by the synergy capture. We talked about the low

single-digit revenue growth going forward, strong focus around cost control, Damian put up a chart that talked

about our OpEx coming down as a percentage of our revenue, clearly that's an indication of a trend that you will

see continue. You've seen that in Germany in terms of what they've been able to achieve. So you will see a lot

more of that going forward as well. That will give us that low single-digit – that mid-single digit OI growth and we

are committing with that confidence that we will be able to deliver at least about a 20-basis point improvement

year-on-year in our operating margins.

So going forward, you will continue to see an improvement coming through that as well. And this will be across

the board in terms of the different territories having a different mix towards that, but clearly an opportunity in every

one of our markets.

Free cash flow, clearly very proud of that in terms of what we've been able to achieve and that's been able to give

us the confidence in terms of with a de-levered balance sheet being able to go out and announce the program

today and I'll come back and talk about that in a moment.

CapEx will continue at that circa 4.5% of NSR rate. It will be in the three areas that Damian talked about.

Remember we did talk about the fact that as we were doing this transaction, there were some investments that

we were making ahead of the curve, particularly as we restructured plants, optimized our networks, we needed to

enhance what we were putting into new lines. And so, you will see about a third going into each of those areas

going forward.

We expect that we can generate at least that €1 billion of free cash flow on a year-on-year basis, and I'll come

back and talk about that in a moment.





The optimal capital structure, clearly we've de-levered. I talked about the fact that if we didn't announce a share

buyback program today, we would actually had been under that 2.5 times at year-end, just given how strong our

free cash flow generation was.

So we discussed with the board and given the fact that we don't necessarily see today or have a line of sight of

visibility around any potential acquisitions. We figured if something was to happen, it's still going to be in 2019,

announcing a share buyback program continues to give us the flexibility to be able to pause, rethink, pull back as

appropriate depending on the types of opportunities that are out there. But we have committed to doing the €500

million in 2018 or I should say up to on the €500 million subject to trading. Liquidity and what we can buy back,

but we think we should be able to achieve that.

So with that, we will then end the year at about 2.5 times, again at the low end of our range. 2019, clearly we've

indicated a program of €1.5 billion, there could be some more that could come in 2019, more to come in February

when we assess what's going on from an external market perspective, what's going on within the system, how our

plans look and we'll update you on that as well.

We've got a great debt maturity profile. If we look at our debt, in no given year, do we have a maturity that is over

our free cash flow generation. So while we've got a very strong revolving credit facility to draw upon €1.5 billion,

clearly our free cash flow generation can service the debt that we need to be able to repay in the event that we

don't go out and refinance that, for whatever reason in terms of the market availability of that.

We've got a 75-25 fixed floating mix, which is also great because we can take advantage of some of the lower

rates, but we've locked in pretty well into a great structure right now. We are committed to maintaining an

investment grade rating, but remember, our investment grade is today sitting pretty much at the top end of a BBB

plus and an A3 with S&P and Moody's.

When we've done some work trying to assess what our debt capacity is, clearly maintaining those ratings at the

levels that we're currently at gives us a debt capacity of at least €2.5 billion. So clearly we have opportunities from

an acquisition horsepower perspective to be able to go out and do something without impacting our leverage. If

we still wanted to stay investment grade and depending on how S&P and Moody's treated us, clearly we see that,

that range still at an investment grade, giving us capacity of €8 billion to €10 billion. So clearly the power that we

have in terms of our balance sheet structure at that leverage level with those – that commitment to the investment

grade debt rating gives us a lot of horsepower to go out and do the right things for the business.

And again, the 2.5 to 3 times is in no way locked out in stone. We will continue to assess that depending on the

economic and market conditions upwards or downwards, as well as what's happening from an M&A and a

landscape perspective.

We have been very disciplined around making our investments, I think as we look at our framework, we've laid out

a very clear framework to the business, we have IRRs, we have paybacks. And we're typically looking at ones

that are pretty low risk type of investment opportunities, having to deliver just a little bit north of our weighted

average cost of capital which is in that 7% to 7.5% type of range. But then clearly the returns that we're looking at

as we go on to medium and higher risk projects, with higher risk of execution might be in the mid-teens.

So clearly we're very disciplined with how we look at that but at the same time we're also focused around

ensuring that we're assessing each of our investments around alternative uses, including returning back to

shareowners.





I touched upon geographic expansion, quite honestly we continue to be interested in expanding our territory

footprint, we're across 13 markets. We've talked a lot about what the opportunities might be, what we might be

interested in. We are interested in growing in Western Europe, and clearly that's where our focus is. But we can't

sit around and wait. So we will continue to give ourselves the optionality and the flexibility and hopefully I've

demonstrated that we have that ability with what we've announced, but also our balance sheet strength.

We will look at other adjacencies [indiscernible] (01:47:56) is a great example of that. I think you'll see more of

those coming along in terms of investments and route-to-market in terms of capabilities to be able to partner up

where appropriate. As well as what we will continue to do in terms of portfolio expansion. I think The Coke

Company has a great stable of brands that we're building on and leveraging. But there are a pocket of brands

across our European markets that we see that we might have the joint opportunity to go out and acquire.

We have a quarterly meeting between Damian and Tim and a few of us in this room, Victor and myself included,

and that's where we'll discuss those. And we assess those opportunities and see if they're the right fit and how we

might be able to leverage it not just across one market, but perhaps across CCEP or across the broader coke

network and system. We've done a great job in terms of managing those investments. And hence our returns on

invested capital over the last 2 years, 2.5 years since the merger have improved by 180 basis points. So that's a

significant improvement. And we're committing again with having that disciplined approach going forward, we will

see an improvement of at least 40 basis points in our ROIC year-on-year.

So, just pulling that back altogether, quality profit growth that we talked about, we're talking about 4% to 5% of the

mid-single digit OI growth, that gives us about a 20-basis-point improvement in our operating margins year-on-

year. We're talking about free cash flow generation of at least €1 billion with those disciplined investments that we

will make, about a 40-basis-point improvement in our ROIC and maintaining our optimal capital structure 2.5 to 3

times.

We did announce the intent to increase our dividend as I highlighted earlier, and you'll hear more about that in

October depending on the approval from the board. So, when we then looked at what we had laid out as our long-

term growth algorithm, we wanted to bring it a little bit into the mid-term, and hopefully give you the confidence

with what we've been able to lay out for your that, the revenue growth of low-single digit is achievable, and it's

going to be a balanced mix from volume, price and mix.

The operating margin expansion of 20 basis points, free cash flow, we talked about the capital ratios, ROIC and

the diluted EPS growth of mid-single digit. Clearly, depending on how we continue to use cash that will have an

impact on our EPS. Clearly, if we are able to do more share buybacks that will clearly have a positive impact on

the EPS as well. I talked about the CapEx, and I talked about the dividend payout ratio as well.

And then if we look at 2018, we have taken our guidance up. We've given clarity in terms of what we see on the

revenue growth line of 2% to 2.5% revenue growth, and that is excluding the gross up impact from the sugar tax.

We will exit 2018 with just over 80% of the synergies realized and at 100% run rate. I'm officially declaring, so

don't ask us on the call again, that we are closing down the synergy capture program at the end of this year, all

right. So, you've heard it here and that's what stays. We will talk about what the tale will be in terms of our

realized synergies for 2019 when we provide our guidance for 2019, but this will close out the synergy discussion,

hopefully move us to a much more of a normalized business going forward.

Our weighted average cost of debt is enviable. We're actually at about 1.7%. So, we've got a great weighted

average cost of debt that comes from those maturities that we have, but also the mix of the fixed and floating ratio

that we've pulled together.





We remain committed to the effective tax rate of about 25%. And then we've taken up the operating profit

guidance to the top end of our 6% to 7% range, and we've taken up the EPS guidance from 6% to 7% to 7% to

8%. Talked about the intent of the dividend payout increase, our ROIC improvement for this year we're guiding

towards that 80 basis points, which is built into that 180 basis points that I positioned and showed you earlier.

We do expect even with the higher free cash flow generation as a higher level of CapEx, so we've guided towards

that being towards the top end of the €525 million to the €575 million. So, again, clearly operating performance as

well as our working capital benefits are paying off. And then, we've talked about working capital benefits of about

€200 million. We will execute the share buyback program actually starting tomorrow if all goes well and all the

documents are signed.

So, with that, I would just say, again, great category that we see ourselves playing in, clearly a bigger opportunity

versus what we see as broader FMCG growth. Great diversification when we look at the brands and the portfolio

piece, but great diversification when we look at the home and the away-from-home business. Our scale gives us a

great and well-advantage position within that growth curve opportunity. We've set the midterm objectives very

much in line with what we laid out. And then we will continue focusing on driving shareowner returns.

So with that, Sarah, is going to come up. She's trying to remind me, don't forget, you need to call me up. So,

Sarah's going to come up to wrap up with Damian and myself. ......................................................................................................................................................................................................................................................


Is it working? Yeah, it's cool. Hi. It's not long now until you get a break. And there's a good reason why I'm doing

this, because Stephen and Frank mentioned earlier they've been in the business 30 years, I've been in the

business, it does begin with a three, but it's three months. Okay?

And as we started to build this presentation couple of months ago now, and certainly as part of my induction, I've

been sort of canvasing external perspectives on CCEP. And the following three questions really were at top of

mind for us in terms of what we needed to address. So, there are a little bit of a test as to whether these three key

takeaways actually address those external perspectives I've gathered, and I'm going to put them to Nik and

Damian to answer.





QUESTION AND ANSWER SECTION

Sarah Willett VP Investor Relations, Coca-Cola European Partners Plc A So, without further ado, so we talked a lot about uncertainty about 10-year view. We heard that in a lot of detail

from Stephen earlier on, that you see a bright sustainable future for NARTD, but can CCEP really participate in

that growth opportunity? ......................................................................................................................................................................................................................................................

Stephen Lusk VP Commercial, Coca-Cola European Partners Plc A To me? That's a Damian. ......................................................................................................................................................................................................................................................

Sarah Willett VP Investor Relations, Coca-Cola European Partners Plc A That is for Damian. ......................................................................................................................................................................................................................................................

Damian Paul Gammell Chief Executive Officer & Director, Coca-Cola European Partners Plc A Okay. Thanks, Sarah. Before I answer the question, I mean, first of all, there was a lot of information in the last

hour and 30, 40 minutes. We have given you a copy of everything. We were quite deliberate to try and be as

transparent and open in all the detail, but not keep you here for three days. So, I hope you appreciate that we

have shared a lot. You'll have a lot of chance to ask questions later. And obviously, we'd be together today and

tomorrow. So, I'm sure we're going to get more questions in the three we're answering now. So I suppose that's

my point and we're quite happy to deal with them.

So, I think the way I think about this question is, we are actually not just participating today, but we are driving the

growth across NARTD. So, when you look at not just in Germany, I think Frank showed a picture where we're the

number one driver of value growth in the category, but that's pretty much true across our market. So, I think not

only we're participating, but we feel accountability and ownership to drive value in the category. And that's

something that we commit to our customers, something we commit to The Coca-Cola Company and it's

something we commit to the board. So we believe that as the largest player with the brands that we have and with

our scale, if the category doesn't grow and shame on us. So, we are doing it and we believe we will lead it.

There are clearly segments that we've missed like mixers and we've missed that. And Tim and I have had long

conversations about how did that happen particularly with the brand like Schweppes, which is frustrating. And

there are categories that are merging that we don't today have a brand in. I suppose what gives me confidence is

the level of detail that you saw from Stephen. And the way we're really trying to understand consumer trends and

segmentation, part of existing categories but also of the future. I believe are much better set up as a business

now to spot those opportunities earlier. And obviously if we spot them there, we can participate a lot earlier.

And I would like to highlight a point that Nik made, we're quite entrepreneurial about how we'll participate but with

the company but also through M&A. And we have scanned all of our markets to look for potential diamonds that

are not there yet, but in our system could really grow. So, you will probably hear a little bit more around the

entrepreneurial M&A in market where we look at the category, look at the opportunity to the land Stephen shared,

and clearly we figure out that the best way to participate is potentially to buy into a business.





So, I think having those tools available with the balance sheet we have and gives me the confidence that we

cannot just participate, but we can actually lead to growth. We're also to emphasize quite pragmatic about some

of the headwinds. So, all of the growth figures that we shared with you today in that forecast, we have thought

about sugar taxes in more markets than GB. We have thought about potentially deposit systems in more markets

than Germany. So, we've also you know put what we thought was a fairly sober view on some of the headwinds

that are there today, and frankly, will be there tomorrow. And I think that also that pragmatism gives us a bit more

confidence. ......................................................................................................................................................................................................................................................

Sarah Willett VP Investor Relations, Coca-Cola European Partners Plc A Thank you. I think next question's question is actually for Nik. So, in light of that growth that you see outside of

sparkling, how do you profitably grow post the merger synergies that we're going to talk about after this year? ......................................................................................................................................................................................................................................................

Manik H. Jhangiani Chief Financial Officer, Coca-Cola European Partners Plc A Aha! So, Sarah has already got, I hope the rest of you did. We're not going to talk about synergies. But you know

quite honestly I think we've laid out a number of initiatives and this has again led under Victor who has both

strategy as well as the whole transformation initiatives of the business reporting [indiscernible] (01:58:54) small

team there that helps drive looking at some of those initiatives that will help us drive better productivity.

They will come with some cost, but we factored that cost into our cash flow guidance. But those are clearly some

of the things that I outlined and laid out for you, there's clearly an opportunity when we look at our supply chain

network in terms of simplification. We're terming some changes that we're piloting across some of our markets, so

in one of our markets called supply chain of the future, where we're really looking at what are the things that we

can simplify, what are the things that we need to digitize, where are the opportunities in terms of enhancing our

route to market, our logistics, our distribution network.

So, those are continued opportunities that don't just stop because synergy capture is complete. I talked about the

shared services center. I'm really proud about what we've been able to do and what our 700 people there have

been able to do, but they – we have a continuous improvement team in Sofia, led by one of my very high talented

individuals within the finance organization and they're continuing to look at productivity opportunities within the

Shared Services Center to be able to pull out 10%, 20% from efficiency every year, right. So, that means we can

do things a lot more effectively faster, better customer service, right.

The whole invoicing project was led out with the business units out of Sofia to be able to drive that invoicing

accuracy. When we started out that project we were at under 90% in terms of invoicing accuracy, today we're at

97%, right. That has huge efficiency gains in terms of making sure that the invoice goes out correctly the first time

and you don't need to do three more credit notes. But it also had a huge positive implication on our working

capital as I outlined.

So, we've touched upon a lot of things today on the surface for ourselves within CCEP that we see great

opportunities on. I think in five years, potentially we have a great global business services solution that is not

necessarily out of Sofia. I don't know we might have three locations. You know we're going to [ph] determine

(02:01:11) that. But clearly there's a lot more that we can be doing there than what we're doing today. And I think

the proof points are there, several of our board members have been out there, pretty much every member of our

executive leadership team has been out there and come back completely blown away, right, in terms of that

opportunity that we have.





So, those are just some of the examples that continue to be out there in our cost base that we will continue to

attack diligently and systematically to be able to drive that leverage to the P&L. But don't forget the leverage is not

just coming from our cost base, the leverage is also going to come from our top line in terms of what we're going

to get from pricing, promotional efficiencies and better mix.

Stephen laid out for you every one of the categories that we're looking at is a higher revenue per case in terms of

that opportunity and I laid out that for you in some of the charts. That will help us drive some of that leverage

through the P&L as well. So, I think there's a dual approach in terms of making sure we get it from the top line, but

also an unrelenting focus on attacking our cost base diligently and sustainably. ......................................................................................................................................................................................................................................................

Sarah Willett VP Investor Relations, Coca-Cola European Partners Plc A Very good. Thank you. And my last question to Damian please. Actually I think you just started to touch on this

just now, so you do face structural headwinds and I hear a lot about this in terms of concerns, particularly around

sugar, plastic, and customer consolidation would be a good example. How do you feel that you are diversifying

these risks? ......................................................................................................................................................................................................................................................

Damian Paul Gammell Chief Executive Officer & Director, Coca-Cola European Partners Plc A Can I comment on Nik's answer first, am I allowed? ......................................................................................................................................................................................................................................................

Manik H. Jhangiani Chief Financial Officer, Coca-Cola European Partners Plc A Am I being graded? ......................................................................................................................................................................................................................................................

Damian Paul Gammell Chief Executive Officer & Director, Coca-Cola European Partners Plc A Yeah no, no. I think, we've had a lot of questions on when you take your underlying revenue growth, add the

synergies and our declared OI growth. Why is it not sometimes a bit higher, I think we've heard that question a

few times. ......................................................................................................................................................................................................................................................

Manik H. Jhangiani Chief Financial Officer, Coca-Cola European Partners Plc A Few times. ......................................................................................................................................................................................................................................................

Damian Paul Gammell Chief Executive Officer & Director, Coca-Cola European Partners Plc A Few times. And I think one of the things that some times we've talked about, but isn't factored in is we have taken

in the first two years of our business some bold decisions that in a given year have held back some of that growth

because some of the decision resulted in short term volume loss. We had that in 2017 with our promotional reset,

and we've had that in 2018, particularly in France.

So, I think there is a tendency on the bullish side just to look at the build without really understanding that some of

the right decisions in a 12 month calendar can pare back some of that OI growth. So, we expect most of them to

be through our business now but clearly they've been a big part of our story over the last two years. So, we are





facing a lot of headwinds in some areas. So, I think on sugar if you would ask us when we were together in

Barcelona that you're going to face the sugar tax in GB, a change of the sugar tax in France, and some of the

Nordics where would our business be, I think we would have been very proud to be where we are today. I think

the reformulation that we've achieved, the move of our mix to over 50% out of sugar in some of our markets; I

believe is helping us deal with the sugar challenge. It's not gone away. We believe in offering choice and I

personally believe that nothing beats taste and beverages. So, and as long as we offer consumers choice on

sugar I think we're in a good place and we're doing that and all of our innovation have low or no-cal variance.

I think on customer consolidation this will continue. I think if you look at retailer margins in Europe, primarily due to

market oversupply in retail they've pretty much halved in the last five to 10 years. So retailers in Europe have

significantly come under profit pressure, and you've seen that in the results, that will continue to lead to

consolidation. What's interesting is the consolidation is moving beyond like-for-like consolidation to cross-channel

consolidation, so Tesco buying Booker. A large retailer buying a large wholesaler, so there is some new dynamics

coming up.

We're also seeing more collaboration. Tesco talked about collaborating more with other retailers and we're seeing

buying groups. So, that is part of our future. And I think a lot of what we spoke about today in terms of capability,

building so to engage with those bigger customers better is clearly something that we have to do. But in parallel

we do need to diversify our revenues, so as there is consolidation the more revenue we have in other channels

protects our P&L, protects our growth agenda and protects our margin.

So that segmentation that we talked about earlier is a critical enabler to win when the market in – and let's says

big retail continues to consolidate. So for sure we see that coming. And we're looking at – through actually

analytics, looking at what risk does that potentially create in our financials and our analytics tools allowing us to

learn a lot quicker. I think the big one is plastic. It's very difficult to sell a coke without a package. And that's the

reality. You can sell lots of cokes with or without sugar. In some ways the plastic debate has made us move on a

lot quicker from the sugar debate.

And I think it's something that we're very conscious of. We've made a lot of commitments around recyclability. We

lead the industry in that, we made a lot of commitments around reusing plastic in our packaging, we're leading the

industry with that. And we've made a bold commitment to take back all our packaging, but clearly that's not

enough. And so if you go back through a lot of what you've heard today, you'll hear a lot around glass, you'll hear

a lot around cans. So, as we look at the plastic challenge, we believe it's a sensible move to diversify our

packaging the way we talk about diversifying our channels.

So we are consciously making decisions around NPD and existing brands having a bigger role in cans and glass,

that does not mitigate the challenge on our existing plastic footprint. We are also looking at moving shrink to card,

so on a number of our markets, starting with France, we're looking at removing the plastic shrink from cans and

moving it to cardboard. We've also looked at the technology that I'm sure a lot of you heard about from Carlsberg,

where you can have cans that effectively are glued together with a small [ph] dot of (02:07:35) plastic and that's

something that Ron and the team are also exploring. But we need to have scalable solutions.

We believe that whatever we do in this arena, it's got to apply on a scale of the level. I don't think we're going to

get a whole lot of credit from the people who really matter our consumers, if we do one small thing and one small

market, and try and make it a big deal. At the end of the day, everything that we're committed to do in plastic and

packaging, we believe is scalable across our markets. But it is something that you're going to hear a lot more for

most about in the coming months and years. I think it is the right debate. Ironically, we've already started to

deemphasize plastic when we created CCEP through our PET strategy on promotions. That was very much a





financial-driven objective, but it has in some ways, set us up to be better prepared for this challenge. So that's

something that I know our board and sol and I talk a lot about that we are concerned about. And we think we need

to do more and we probably need to do a bit faster, and that's something that we're committed to. ......................................................................................................................................................................................................................................................


Great. Thank you very much. Now, those are my three questions. Now, you did have the opportunity right now to

ask questions. That will come later is as Damian said. Now, this is just move to the external audience listening

into this. This is the first of two webcasts. Just to say that we are aiming to the second webcast to start as

planned. And 5:15 that's Central European Standard Time.

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