Thank you for joining us. I'm here with Damian Gammell, our CEO; and Nik Jhangiani, our CFO. Before we begin with our opening remarks, reminder of our cautionary statements. This call contains forward-looking management comments and other statements affecting our outlook. These comments should be considered in conjunction with a cautionary language contained today, as well as the detailed cautionary statements found in reports about the UK, US, Dutch, and Spanish authorities. A copy of this information is available on our website at www.cocacolaep.com. Prepared remarks will be made by Damian and Nik, we will then turn the call over to your questions. Unless otherwise stated, metrics presented today will be on a comparable and FX-neutral basis throughout. Following the call, a full transcript will be made available as soon as possible on our website. I will now turn the call over to our CEO, Damian.

Thank you, Sarah, and good morning, everybody, and many thanks for joining us today. Before I begin, I just want to take this opportunity to thank all of my great colleagues at CCEP for their continued hard work and dedication to our customers and our business. And obviously, today, we welcome our new colleagues joining us from the Philippines, a great coke market and a great addition to the CCEP story. So welcome. And again, a big thank you to everybody at CCEP for your ongoing hard work. 2023 was another great year for CCEP. We continue to execute on our clear strategy. We have an unwavering commitment to stakeholder value creation. Our retail customers importantly continue to share in our success since 2017, we've created more value for them than any of our peers. And indeed, our tier store speaks for itself, validated by entering the NASDAQ 100 index late last year, we've paid a record dividend last year and now returned more than $6 billion to shareholders since 2016. We are clear on the strategic choices we make. We're making the right decisions on our portfolio to drive a more efficient business for the long-term. And from today, as I mentioned, we welcome Coca-Cola Beverage Philippines to the CCEP family, the acquisition having now formally closed. This creates an even more diverse footprint for CCEP, provides the opportunity to leverage best practice and talent, including supporting our exciting transformation journey in Indonesia. I'll come back on bulk markets a little bit later. And as always, we are supported by our strongly aligned relationship with the Coca-Cola Company and our other brand partners. So now to our full year key messages. I'm really pleased with our performance in 2023, delivering on all key metrics. We achieved solid top and…

Thank you, Damian, and thank you all for joining us today. Let me start by taking you through our financial summary. We delivered comparable revenue of €18.3 billion, an increase of 8%, which I'll come back to shortly. Cost per unit case increased by 7.5%, broadly aligned with our guidance of around 8%. This was driven by our increased revenue per unit case, driving higher concentrate costs through our incidence pricing model, inflation in manufacturing, and commodities. High single-digit growth in commodities reflected higher sugar and aluminum pricing, partly offset by lower gas and power and recycled PET pricing. This equated to gross margin expansion of around 80 basis points with Europe ahead of that number. We delivered comparable operating profit growth of €2.4 billion, up 13.5%, reflecting our solid top line growth, the benefit of our ongoing efficiency programs, and our efforts on managing discretionary spend. This equated to operating margin expansion of around 60 basis points, reflecting our focus on returning to our 2019 operating margin baseline. In line with our guidance, our comparable effective tax rate increased to 24% from 22% in 2022. This is largely due to the differences in the mix of taxable profits across our different territories and known tax rate increases, such as last year's U.K. tax rate increase to 25%, which comes into full effect in the 2024 calendar year for the full year. This resulted in a comparable diluted earnings per share of €3.71, up 12%. Free cash flow generation, as Damian referenced, continues to be a core priority, and we delivered an impressive €1.7 billion on a comparable basis, which I'll cover in more detail shortly. Our returns on invested capital increased by 120 basis points to 10.3% on a comparable basis, driven by the increase in profit after tax…

Thank you, Nik. And now I'd like to spend a bit of time on the revenue opportunities for 2024. We expect top line growth this year to be much more balanced between volume growth and price mix compared to last year. As Nik said earlier, our main priority is to continue to remain affordable and relevant to the consumer. And as such, we continue to manage the business for the longer term with our overall realized pricing tracking below inflation to date. We are, however, still seeing some inflationary pressures across the industry, albeit lower than last year. To that end, we've already closed pricing negotiations in a number of our markets for this year. We have great brands, which our consumers love. And on the back of the ongoing investment and innovation brands, product and packaging, our category and brands continue to support a solid growth platform for all of our customers. We will continue to invest in Coca-Cola, Zero Sugar and Powerade, taking the success from the Women's World Cup in Australia with some fantastic activation plans around the key sporting events of the Olympics and France and the euros in Germany. We have some exciting innovation plans for the Coke portfolio, including a lemon-flavor extension being launched both for Coca-Cola original taste and for Zero Sugar. In Flavors, we will be launching a new tasting Fanta and also driving a label-free more sustainable Sprite pack in GB. We will build on the success of Jack Daniel's & Coke, already the number one alcohol ready-to-drink value brand in GB, coming with all our packaging this year alongside the launch of Absolute and Sprite. Energy will benefit from the wider launch of the very well-received Monster Green Zero Sugar and the launch of new and exciting flavor extensions and…

Thank you. [Operator Instructions] Thank you. We will now take our first question. Please standby. First question is from the line of Edward Mundy from Jefferies. Please go ahead.

Morning or afternoon, actually, Damian, Nik and Sarah. So just on the guide of 4%, I appreciate it's pretty early days and some consumers are feeling a bit of pressure, but could you provide perhaps a bit more color on some of your assumptions? I mean, on volumes, I think you're talking about a balance between volumes and price mix, which I think implies some volume growth. I think on the price piece, look it's clearly going to start to taper, but you do have a bit of a carryover from price and taken. Germany Q3, GBN's Q2. Mix has been a really good driver through most of 2023 and should continue to 2024. You've got these very mixed summer weather comps. You've got the Olympics, you've got the football, you've got the Philippines. I guess, growing ahead of group. What are we missing?

You're not missing anything. You've kind of covered it all, so it's a great summary. We should just have recorded you and played you back. But I think let's start with your point on volume. So we clearly see volume coming back and it was good that we exited the year with volume growth. And again, keep in mind 2023 underlying with these strategic choices and exits clearly plays through. So when you go into 2024, I would say you're looking at off that 4%, at least a third plus coming from volume. All right. So we see that momentum, which is good. And it comes back to what Damian and I have both said on the call. We will continue to balance that in terms of what we see from an angle of the affordability and continued focus on premiumization. So clearly looking at volume growth. If you look at that carryover of that pricing, you're absolutely right. We have two of those markets that came through in the second half. So there's a carryover impact of that. And then clearly as we've seen inflation moderating that I called out, you will obviously see more balanced 2024 pricing, most of which that has happened in Q1 that we've actually been able to land so far without any disruption, which is positive. On the mixed one, it's a good point that you raised, clearly on our business, we've continued to have good mix and we will continue to see that into 2024. Keep in mind, these numbers include the Philippines, which is at a much lower revenue per case. And so effectively that mix benefit that we continue to see gets wiped out as we rebase with the lower revenue per case coming in from the Philippines. And then you've also got that impact of the Netherlands tax that I called out. So again we'll continue to update you on that, but I think very much volume led with good pricing carryover and some more moderate pricing into this year as well. And again supported by what we want to do on the promo side as well to balance that affordability.

And just to clarify on the 8% revenue per case within Europe, I think you mentioned that price is running below inflation, inflation probably running 5.5% or 6%. So you're probably getting one-third of your benefit in revenue per case from mix. Is that math broadly right? I mean, is that one of the reasons why you're confident that your brands remain affordable and you're not going to get the same elasticity impact you're seeing across other parts of staples?

Yeah, I think that's fair Ed. I mean, I think if you look at our Q4 volumes and I'll just talk Europe, Australia, New Zealand, I think they are very solid. So I think we've been very focused on retaining shoppers and consumers because as you know if you lose them, the cost of getting them back is always a lot higher. So I’m very pleased coming out of Q3 where we had some tough weather comps. Q4 we saw volume growth return in our developed markets of Europe, New Zealand and Australia. So I think that balance is serving us well. It's what we've built into 2024. I think as Nik called out on top of that we've got some -- as you called out actually better than we could. We've got some great brand innovation. We have some great assets particularly in Europe with the Olympics and the EUROS. And clearly as we move into Q3 and the summer hopefully, we will get a normalized somewhere in Europe but who knows are for last year. But, yeah, so that's pretty much a good balance between enough price, but not too much to really derail what's been a great consumer story for many years in Europe in particular.

Great. Thank you.

Thank you. We'll now take our next question, and this is from the line of Matthew Ford from BNP Paribas. Please go ahead.

Thank you. Hi, Nik. Hi, Damian. My question is just on the Philippines. Now it's all completed and you're able to look at the business properly. When you think about the first year in the business, which areas do you think you can see -- get most traction on, now you're kind of fully in control there? Where do you see the most low-hanging fruit? I think you mentioned no and low sugar and energy, but if you're able to speak about what's going to be the focus for the next 12 months?

Yeah. Thanks, Matt. I mean, we've been really excited about this opportunity since it presented itself. And we've been working very, very hard with the team Garrett's, team locally and our team to have a great day one, which is upon us. So that's a milestone. As we've been looking at that business, I mean clearly it stands out within that region has been a great Coca-Cola business. So we fully also expect to learn, as well as to bring ideas to that business. Initially I think areas that we've talked with the team about where some of the capabilities from CCEP could add value, certainly in key accounts, our world-class key account management program, the analytics tools that we've been using on pricing and price elasticity in Europe. Our digital journey around the frontline capabilities we believe that can add value. Clearly we operate a very large supply chain. So we certainly believe that a lot of our expertise in that space is an area that we could bring to help improve customer service levels and drive stock availability a bit more. We are also committed with our partners to invest in that business. So some of the benefits we bring is capital and certainly stepping up some of the investments as we see the growth outlook even stronger going forward. So it's an area that we'll continue to learn. I'm confident in those areas we've got capability. I'm also really excited about the learnings we'll get from the team in the Philippines particularly to continue to support our journey in Indonesia. I think their availability, obviously, the category relevance they've managed affordability extremely well on refillables. That's an area that we've always been looking at in Indonesia. So I think it's a great example of -- we'll bring value, we'll get value from that team into our other businesses, and obviously that's a story we'll update you as we go. I think it will be an exciting conversation on our next Capital Markets Day.

Brilliant. Thank you very much.

Thank you. We'll now take our next question. This is from the line of Lauren Lieberman from Barclays. Please go ahead.

Great. Thanks. Good morning, guys. Just curious you talked a lot more about affordability, consumer pressures particularly in Europe. And you mentioned discount channel. I know that's been a focus for the team for a very long time. But I was curious if you could update us maybe a little bit on how much of your - I know some of the answer, but -- roughly speaking how much of your volume goes through the discount channel where you stand in terms of category exposure there? Is there opportunity to expand the categories that are represented discount channel? Anything particularly you're doing on new pack sizes and so on as it becomes more important? And then things you're able to leverage from your discounter experience and success into more mainstream channels as we go through this period of tougher consumer confidence?

Yes. Thanks, Lauren. I think we've been in that environment for over one year now. I think if you look back at our commentary during 2023 we talked a lot about maintaining relevance and affordability. So I think that supported our volume growth and it's something we'll continue in 2024. You're absolutely right. I mean as shoppers come under a little bit of pressure we do see the discount channel performing extremely well. Candidly that's been a story in Europe for a long, long time now as you know particularly in our markets like Germany, but really broadly across retail and also now in Australia. We see the discount channel being a key partner for our growth. Within that we've got two categories we're prioritizing, which is really our core Sparkling portfolio and Energy. Both of those are performing very well with those customers in Europe. We're very conscious about pack size and formatting. As you know we've had a 1.25 liter pack to hit a price point that we felt was more relevant for their shoppers. We continue to work with them on technology. In Australia, I'm very pleased we've got some cold drink trials front of store so as we try and bring a mix benefit into that channel as it grows. So there's a lot happening. And I think we're also leveraging with our other customers some of those insights because I think that affordability mindset goes beyond discounters. I think all retailers now continue to be focused on maintaining relevance. They obviously are conscious about their own market share. So a lot of what we're doing in terms of pack pricing goes beyond just that discount channel as you call it to broader retail. Great supply chain efficiencies. So, very attractive in terms of cost of doing business for us which clearly supports our margin expansion and our profit growth. So, yes, very pleased with how we're doing. And as I mentioned it's built on many, many years of experience. I think when we first created CCEP, one of our call-outs was to leverage the success of our German business with Aldi & Lidl, in particular across what was then the legacy CCE business. And if you look back that's been a big, big driver of our growth. So, more to come. But as you rightly call out, they are -- that's a winning channel in retail and we're winning with them and we want to continue to do so.

And Lauren the only thing I would add is it doesn't change our focus on the premiumization piece and what continues to be a whole ladder of pricing opportunities for our shoppers and consumers to enjoy whether in traditional retail and actually more so even in some of the discounters where we are getting small packs in. We've got coolers in Germany. So, it's all kind of merging in a way in a positive direction.

Thank you. We'll now take our next question. And this is from the line of Sanjeet Aujla from UBS. Please go ahead.

Hey, Nik, Damian and Sarah. Just coming back to the Philippines please. You spoke a little bit about 2022 being held back by lack of the sugar availability. Has the full benefits concerning 2023? So, is that really a clean base on which to work from? Or is there more to come in 2024? And I think the disclosures margins there are around 6%. Are there any structural factors holding that margin back? Or would you expect that to get back into double-digit where it was a few years ago over time?

Maybe Sanjeet I'll talk on the first piece and then hand over to Nik. Yes, so I think 2023 was a more normalized year. So, I think the business cycled out of what was a very challenging 2022 both from a weather perspective leading to basically a shortage of sugar which the team then had to allocate across the portfolio. So, they did a great job. That was pretty much done by the end of 2022. So, 2023 you could look as a normalized base in terms of availability of sugar. We can talk about the cost of sugar, that's a different debate. It has got a high cost relatively speaking but -- we know that, but from an availability perspective definitely a more normalized year. On margins Nik do you want to?

Yes sure. I mean I think part of it just comes back to what Damian said. So, firstly, just reiterating the point in terms of 2023, when you look at the performance and you can see the growth, clearly 2022, growth was held back by those shortage issues and hence that's played out very nicely when you look at both the top line, but very importantly the operating profit growth year-on-year. So, good base. Clearly, from a margin perspective, there's -- if you talk about structural issues, I would say the main one really comes back to some of the cost of that commodity in particular relative to where the world market is. And there's a lot of work that the teams continue to do locally to see what can be influenced. Keep in mind, obviously, if you go back to Europe for instance, if you remember, it was quite a protected industry for a number of years and then it started coming off when there was more latitude in terms of imports, et cetera. So that will -- that is something clearly that will support it. And then I think the team is doing a great job in terms of more packaging options that will continue to drive margins, looking at newer categories. They just launched into energy. They've just launched ARTDs. So all that will continue to support that margin growth story. And as Damian referred to earlier, clearly, there are some opportunities as they come in, greatly run business with great leadership team, but there will clearly be some opportunities for best practice sharing, both ways as we welcome them into our family.

And just to close out, it will probably come up on CapEx because we talked a little bit about CapEx in our release. Clearly, we do see opportunities in the Philippines around capital unlocking margin over time, both particularly on supply chain and building a more efficient supply chain. And we're also curious about the role some of our technology platforms can play in the Philippines. So that kind of plays back to that CapEx number that Nick talked about earlier. And I think that's not a one-year journey, let's be clear. But as we do look at it, we do think investing a bit more in the Philippines will over time allow us to get margins that we feel are more representative of a business with that scale of that market. So more to come on that.

Yes. And that will support the growth aspirations that we have in that market. And very importantly, it's built into our free cash flow guidance as well.

Great. Thank you for the color.

Thank you. We'll now take our next question. This is from the line of Eric Serotta from Morgan Stanley. Please go ahead.

Great. Good afternoon everyone. Damian, you mentioned landing pricing in a number of markets year-to-date. Just wondering if you could expand on that? Which markets? Where did you get pricing? And certainly, there have been some headlines related to competitors about retailer pushback and delistings in certain European markets. Any color you could provide on the state of retailer discussions and pushback and delistings would be helpful. Thank you.

Yes. Thanks, Eric. I mean just to kind of step back a little bit, I think we've kind of taken a multiyear approach to pricing. I think I commented on that actually this time last year that when we look at pricing, we're looking beyond the calendar year, because we think it's a more strategic conversation. And we have been pricing slightly behind some of our competitors and as we talked about, slightly behind inflation. And we recognize our retailers as much as our consumers are also under some pressure around offering affordability in the cost living kind of backdrop that we have. Just to echo something Nick called on, we are fortunate that despite that, we've got a lot of premium packaging that we've listed over a number of years, mini-cans, glass and retail. So I think we're playing a good balance of allowing consumers who want to spend a bit more on our products and brands to do so, while also making sure that consumers who have that affordability mindset remain in our franchise. So to that end, we've been managing pricing for 2024 well back in 2023. I suppose to kind of pull in practical terms, all of our markets have the pricing in place that we expected coming into 2024. Two markets in Europe will probably come a bit later in the year, which would be GB in Germany. But beyond that, we've landed in a pretty good place, both in terms of headline price and promotional pricing. And again, it's a topic that's sensitive for our retailers. We respect that. We're proud that, we're delivering a lot of value growth for them year-on-year more than anybody else. So, I think we're in a good place on pricing, which kind of comes back to what we've been talking about. And I think back to Ed's point we see volume as being a bigger part of that story than in 2024 which I think is great.

Great. Thank you.

Thank you. We'll now take our next question. And this is from the line of Charlie Higgs from Redburn Atlantic. Please go ahead.

Yeah. Hi, Damian and Nik. Hope you are well, and congrats on the Philippines acquisition. I wanted to drill a bit more into the Philippines, but particularly on the margin point and how you see balancing margin expansion in the country but also the need to be very cognizant of ESG? For example, I think you said refillable was 45% of the mix today. Like does that have to come down over time to drive margin expansion in the Philippines? And how does that all play in with things like the extended producer responsibility on single-serve plastic for example in Philippines?

Hi, Charlie. No -- I mean, straight answer is no we don't see the need for refillables to come down. Actually, on a normalized level our gross margin on refillable is usually pretty strong, given the reusable nature of the bottle. So the challenges in the Philippines really go beyond any one pack size. Obviously, affordability is key. So we've got a pricing strategy there that recruits and retains consumers or GB is a big part of that. We've called out that on a gross margin level, clearly, we've had a headwind on sugar. It's more expensive there in reality. So it's not really a pack specific conversation. We see refillable as a big part of our future there. We also see a part of our future in Indonesia. We believe that will support margin expansion. I think it comes back down to what we kind of talked about a bit earlier which is we see opportunities for efficiency and productivity in the supply chain. We see opportunities to bring some smarter RGM thinking particularly in key accounts. As we grow volume, we expect to get leverage on the P&L in the Philippines that will support margin expansion. We have got maybe a midterm opportunity around Zero Sugar. We've been pleasantly surprised at the success of that in Indonesia. So that's something we're going to bring into the conversation with the team in the Philippines. So overall I think the margin story will evolve but it's certainly not an RGB issue. And we are clearly committed to our sustainability goals. So yeah, no plans to reduce RGB . We believe it's going to be part of that margin story going forward. As I said generally it's got a better gross margin profile due to the refillable nature of the pack. So that will stay.

Yeah. And Charlie, there's a bit of a technical or mathematical issue because in 2018 there was an excise tax introduced in the Philippines and that's continued to increase. Remember, how we account for that that's grossed up in revenue and grossed up in your COGS. So as that increases year-on-year it's purely mathematical that your absolute gross profit will grow. But in margin percentage terms it just comes down, because of the fact that your revenue is higher and hence you get a mathematical element. Clearly, if you normalize for that, if you're looking at performance over the years, there'd be almost a 500 to 700 bps improvement in that margin, if you start normalizing for that. But that's the reality of the way we have to account for it. So just keep that in mind as you look forward as well.

But 6 is a good place.

There you go. That's on the operating profit, yes.

Should be glad. Operating profit. Thank you.

Thank you. We'll now take our next question. And this is from the line of Simon Hales from Citi. Please go ahead.

Thank you. Hi, all. I wonder if I could just ask a little bit more about the efficiency program that's kicking in this year. You flagged the €60 million to €70 million of benefits in 2024. How do you think about the timing of that? Is it going to be a little bit more perhaps H2 weighted, given the changes you're making? And then as we look forward into the remainder of the program, how do we think about modeling this going forward? Will it be linear delivery for the following sort of four years? Or is it fair to assume it'll be a bit more front-end loaded to 2025 and 2026?

So to 2024, yes, it will be more second half weighted, the numbers that we've given you. As Damian said, we continue to look at ways to continue to drive efficiency and some of that obviously, does mean we just have to look at the way we do things today. Then as you go into 2025, 2026, 2027, I would say it is probably going to be more linear because there will be phasing of bringing in some of those programs and part of that will also be linked to our drive towards standardization and more digitization with the S/4 HANA implementation. So I would call currently that's more linear but we'll continue to give you more updates as we finalize the program.

Okay. Thanks.

Thank you. And we'll take our next question. This is from the line of Bonnie Herzog from Goldman Sachs. Please go ahead.

Hi, thank you. Hi, everyone. I actually had a couple of quick follow-ups from earlier questions. First on volumes. Just curious to hear how they trended during Q4 and then so far this year? And then second, could you comment on consumer elasticities? And if you've seen any changes of late, given either the challenging macro backdrop or maybe from some of the pricing you've put through? And then finally, maybe just a little bit more color on your business away from home versus at home and sort of how you guys see that evolving this year? Thank you.

Thanks, Bonnie. So quite a few follow-ups you got in there. That's not bad for one question and as always. So volumes as you saw in the release improved in Q4. And I think if you strip out some of the one-offs that Nik alluded to held up really well. I think particularly compared to other categories. So I think we've enjoyed good volume performance. It has been a similar environment for the consumer over not just the last quarter or even in this quarter I think it's been – we talked a lot about 2023 that that affordability mindset and cost of living pressure has existed. So we're well into it. Volumes are holding up. For 2024, I would say it started in line with expectations. I think we're excited about a couple of events earlier in the year this year Ramadan, particularly in Indonesia starting earlier and Eastern – and Western Europe is earlier. So I think that's going to give us good momentum coming out of Q1. We're well set up for both of those big festivals and events. And then clearly as we look through the year, we know that as I mentioned few times, we have got an opportunity to hopefully enjoy a more reasonable summer in Northern Europe and that will certainly help on volume as we go through the second half of the year. That also plays into your last question. I mean, I think we see strong revenue growth in away-from-home and home. We see volumes holding up in home market. I think depending on the country you're in, I think away-from-home volumes were a little bit under more pressure based on, obviously weather coming out of Q3. What we've seen away-from start strongly particularly in markets like Spain. I have just been there recently and very, very strong growth in away-from-home. So we'd expect that to continue through the summer in Europe. And obviously, as we look at Australia and New Zealand again, coming out we also see strong volume growth as well. So yeah, Nik I don't know if you want to add anything?

No. I would just remind you Bonnie, a lot of the work that we did, during and post-COVID realizing for a period of time we were just going to be a home business is how do we improve the profitability both for our customers and for ourselves in the home channel as well. So to Damian's point, while we see good growth in both channels from a profitability perspective, that's in some ways fairly neutral to us, which is a good thing, because we just want to grow where the consumer wants to be and where we can offer them a full range of great brands and packs.

Okay. Thank you.

Thanks, Bonnie.

Thank you. I would now like to hand the conference back over to Damian Gammell, for his closing remarks. Damian, please go ahead.

Well, thank you, operator. And again, thank you everybody for joining us. I know it's a little bit earlier than usual for those of you in the US, so I appreciate you getting up a bit earlier, but for good reason, to hear about a great 2023. And on the back of that I just want to again, thank, all of my colleagues and our customers. As Nik pointed out, and as we've talked about today, we will continue to invest for the long-term growth of our business, both in terms of volume, revenue and in terms of the sustainability journey we're on. We've got a lot to look forward to. It's going to be a busy year at CCEP, both with the Philippines and some of those big sporting events that I talked to across all of our markets this year and the ongoing transformation in Indonesia. We are well placed for 2024 and beyond. And now, as we've talked about our new family member the Philippines taking the number of markets we operate within to 31. So Nik and I, look forward to talking to you again next time, which will be to update you on our Q1 performance. Thank you very much.