Forward-looking statements 2 Unless otherwise indicated, the condensed consolidated financial statements and the financial and operating data or other information included herein relate to Coca-Cola HBC AG and its subsidiaries ( Coca-Cola HBC or the Company or we or the Group ). This document contains forward-looking statements that involve risks and uncertainties. These statements may generally, but not always, be identified by the use of words such as believe, outlook, guidance, intend, expect, anticipate, plan, target and similar expressions to identify forward-looking statements. All statements other than statements of historical facts, including, among others, statements regarding our future financial position and results, our outlook for 2014 and future years, business strategy and the effects of the global economic slowdown, the impact of the sovereign debt crisis, currency volatility, our recent acquisitions, and restructuring initiatives on our business and financial condition, our future dealings with The Coca-Cola Company, budgets, projected levels of consumption and production, projected raw material and other costs, estimates of capital expenditure, free cash flow, effective tax rates and plans and objectives of management for future operations, are forward-looking statements. You should not place undue reliance on such forwardlooking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect our current expectations and assumptions as to future events and circumstances that may not prove accurate. Our actual results and events could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in the UK Annual Financial Report and the annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (File No 1-35891) for Coca-Cola HBC AG and its subsidiaries for the year ended 31 December 2013. Although we believe that, as of the date of this document, the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we, nor our directors, employees, advisors nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. After the date of the condensed consolidated financial statements included in this document, unless we are required by law or the rules of the UK Financial Conduct Authority to update these forward-looking statements, we will not necessarily update any of these forward-looking statements to conform them either to actual results or to changes in our expectations.
First quarter highlights Continuing market share gains Increase in currency-neutral revenue per case for the 11 th consecutive quarter Volume decline in a seasonally small quarter Easter phasing in Catholic countries Value-accretive volume initiatives in Poland and the Czech Republic Country-specific issues in Ukraine, Nigeria and Italy Partly offset by continued solid growth in Russia Comparable EBIT impacted by one-off operational expense items and strong FX headwinds Year-on-year reduction in OPEX and working capital balance sheet position Action plan underway to fully mitigate the incremental impact of higher than expected foreign exchange headwind for the year Our expectations for the full year remain unchanged 3
Financial review Michalis Imellos - CFO
Financial performance overview Q1 14 Q1 13 Change Volume (m u.c.) 410 427-4% Net Sales Revenue ( m) 1,331 1,432-7% Currency-neutral Net Sales Revenue per case 3.25 3.19 +2% Comparable Gross Profit Margin % 33.6% 33.7% -10bps Comparable OPEX % NSR 35.7% 33.8% +190bps Comparable EBIT ( m) (26.8) (1) n.m. Comparable EBIT Margin % -2% -0.1% -190bps Comparable Net Profit ( m) (35.9) (15.9) n.m. Comparable EPS ( ) (0.10) (0.04) n.m. Free Cash Flow ( m) (81) (40) n.m. Financial indicators on a comparable basis exclude the recognition of restructuring costs, unrealised commodity hedging results and non-recurring items. 5
Eleventh consecutive quarter of growth in currency-neutral net sales revenue per case Q1 14 Total CCH Volume -4% Currency-neutral revenue per case +2% Established Markets Volume -7% Currency-neutral revenue per case stable Developing Markets Volume -9% Currency-neutral revenue per case +6% Emerging Markets Volume stable Currency-neutral revenue per case +4% 6
Improved input cost environment Currency-neutral input cost per case decreased by mid single digit EU sugar costs decreased year-on-year World sugar costs remained on a downward trend PET resin costs decreased year-on-year Marginally lower aluminium costs in the quarter 7
Improvement in expenses partially offset by one-off items Q1 14 Q1 13 Change Net Sales Revenue ( m) 1,331 1,432-7% Comparable Operating Expenses ( m) (475) (484) -2% Comparable OPEX as % of NSR 35.7% 33.8% +190bps Comparable EBIT Margin (%) -2.0% -0.1% -190bps Financial indicators on a comparable basis exclude the recognition of restructuring costs, unrealized commodity hedging results and specific non-recurring items. 8
Mixed segmental trends in comparable operating profit million Euros Q1 comparable EBIT Q1 14 Q1 13 Total CCH -26-27 -1 Established -17-6 +11 Developing 6-9 -15 Emerging -14-12 +3 Financial indicators on a comparable basis exclude the recognition of restructuring costs, unrealised commodity hedging results and specific non-recurring items Certain differences in sums are due to rounding 9
Restructuring update Q1 recap We incurred 6.8m in pre-tax restructuring costs in the first quarter Restructuring focus predominantly on Established markets FY 2014 targets We remain on track to deliver our full-year target Total pre-tax restructuring charges will amount to 35m in 2014 Benefits from 2014 restructuring initiatives expected at 25m on an annualised basis Total benefits in 2014 (from 2013 and 2014 initiatives) are expected at approximately 33m 10
Free cash outflow in the quarter in million Euros Q1 14 Q1 13 Abs. change EBITDA 65 83 (18) Change in Working Capital (87) (57) (30) Net Capital Expenditure (47) (52) +5 Free Cash Flow (81) (40) (41) * Differences in the absolute year-on-year change are due to rounding 11
Diversified financial profile Debt maturity portfolio in million Repaid Jan 2014 600 800 317 $400 January 2014 September 2015 November 2016 June 2020 12
2014 Financial outlook Currency-neutral net sales revenue per case expected to grow year-on-year at a higher rate than 2013 Currency-neutral input costs per case expected to decline by low single digits year-on-year Adverse FX impact is now estimated to be in the region of 90m - 100m Comparable effective tax rate in the range of 24% - 26% Annual capital expenditure in the range of 5.5% - 6.5% of net sales revenue Free cash flow expectation of approximately 1.3bn for the 2013-2015 period Financial indicators on a comparable basis exclude the recognition of restructuring costs, unrealised commodity hedging results and specific non-recurring items 13
Operational review and strategy Dimitris Lois - CEO
Emerging markets continued to outperform 427m u.c. 410m u.c. -7% -9% Stable Q1 13 Established Developing Emerging Q1 14 15
We continued to win in the marketplace 16
Juice, Water and Energy key category drivers for Q1 % y-o-y growth Q1 14 Sparkling -6% Trademark Coca-Cola -7% Coca-Cola Zero 9% Juice 2% Multon 10% Water 1% Energy 2% Tea -3% 17
Established markets slow start to the year Italy Volume declined by low teens in the quarter Challenging underlying macroeconomic and trading environment, Easter phasing and customer de-stocking Trademark Coca-Cola -10% Coca-Cola Zero +4% RTD-Tea Tea -13% +4% Greece Volume grew by mid single digits, cycling highteens decline Sequential improvement in the rate of decline in Sparkling Positive volume growth in all other categories Switzerland Volume declined by high single digits, cycling Easter-related promotions in the organised trade Increased activation and improved distribution supported growth in Fanta and Sprite Volume -7% Currency-neutral net sales revenue per case Marginally negative 18
Developing markets continued challenging environment Poland Volume declined by high single digits Easter phasing, challenging trading conditions and value-accretive volume initiatives contributed to the decline Sparkling package mix improved by 2.5pp Trademark Coca-Cola -11% Coca-Cola Zero +8% RTD-Tea Water -13% +2% Hungary Volume declined marginally Coca-Cola Zero was the key outperformer growing by double digits for another quarter Volume -9% Czech Rep Volume declined across all key categories with the exception of Juice and Energy Coca-Cola Zero grew by 14% Currency-neutral net sales revenue per case +6% 19
Emerging markets stable performance Russia Volume grew by high single digits, cycling high single-digit growth Growth in all key categories with a marginal decline in Energy Multon juice business grew by low double digits - 9 th consecutive quarter of growth Trademark Coca-Cola stable RTD-Tea Juice -13% +4% Water +3% Water +5% Nigeria Volume declined by low single digits, cycling a high-teens growth rate Decline was mainly due to temporary disruptions related to SAP implementation Underlying demand remains robust Romania Volume declined by high single digits, mainly due to a difficult macroeconomic environment Juice grew strongly, leading to share gains Volume stable Currency-neutral net sales revenue per case +4% 20
Looking ahead Prevailing economic and trading conditions are expected to remain unchanged in most of our territories We have been consistently executing on our strategic priorities We are mitigating the ongoing headwinds in some of our markets Easter phasing and other one-off items are expected to subside Our expectations for the full year remain unchanged
Q&A
Long-term growth drivers Most known brands in the world Diverse geographic footprint with strong emerging market exposure Low per capita consumption with great potential to grow Solid track record of winning in the marketplace Strong focus on cost leadership and history of solid cash generation 23