Q4 2023 Coca-Cola Europacific Partners PLC Earnings Call

Operator: Your telephone must advise you that this conference call is being recorded today. Now I'd like to hand the conference over to Vice President of Investor Relations and Corporate Strategy, Sarah Willett. Please go ahead, Sarah.

I must advise you that this conference call is being recorded today.

Now I'd like to hand, the conference over to Vice President of Investor Relations and corporate strategy separate Willis. Please go ahead Sir.

Sarah Willett: Thank you all for joining us again. I'm here with Damian Gammell, our CEO, and Nick Jhangiani, our CFO. Before we begin, I'd like to give a remark as a reminder of our cautionary statements. This meeting will contain forward-looking management comments and will be recorded for future use.

Willis: Thank you.

Willis: Joining us today, I'm here with Jamie and Governor.

Okay.

Willis: Yes.

Speaker Change: To remind you of our cautionary statement.

Forward looking management comments.

Sarah Willett: Thank you, and other statements reflecting our outlook. These comments should be considered in conjunction with the cautionary language contained today, as well as the detailed cautionary statements found in reports filed with the UK, US, and UK, which is available on our website at www.coca-cola.com. After prepared remarks have been made by Damian and Nick, we will then turn the call over to your questions. Unless otherwise stated, metrics presented today will be on a comparable scale. 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.

Speaker Change: The statements, reflecting our outlook. These comments should be considered in conjunction with the cautionary language contained today as well as the detailed cautionary statements.

Speaker Change: You pay you as such these financial authorities a copy of this information is available on our website at www Dot dot.

Speaker Change: Dot com.

Speaker Change: Paired remarks, you made by Damian Nik, we will then turn the call over to your questions unless otherwise stated metrics.

Speaker Change: It will be on a comparable and FX neutral basis, while 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 let's see yeah Damian.

Damian Nik: Thank you Sarah and good morning, everybody. Many thanks for joining us today.

Damian Paul Gammell: 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 CCP 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.

Damian Nik: Before I begin I just want to take this opportunity to thank all of my great colleagues at TCP.

Damian Nik: The continued hard work and dedication to our customers and our business.

Damian Nik: Obviously today, we welcome our new colleagues joining us from the Philippines.

Damian Nik: Coke market on a Great addition to the CCP story, so welcome and again a big Thank you to everybody at <unk> for your ongoing hard work two.

Damian Paul Gammell: And again, a big thank you to everybody at CCEP for your ongoing hard work. 2023 was another great year for CCP, and 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 TSO speaks for itself.

Damian Nik: 2023 was another great year for CCP.

Damian Nik: Continue to execute on our clear strategy.

Damian Nik: We have an unwavering commitment to stakeholder value creation.

Damian Nik: Retail customers importantly continue to share in our success since 2017, we've created more value for them than any of our peers.

Damian Nik: Indeed, our Tia store speaks for itself.

Damian Paul Gammell: Validated by entering the NASDAQ 100 Index late last year, we paid a record dividend last year and now have returned more than $6 billion to shareholders since 2016. We are clear on the strategic choices we make; we're making the right decisions in 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 CCP family, the acquisition having now formally closed. This creates an even more diverse footprint for CCP, and provides the opportunity to leverage best practice and talent, including supporting our exciting transformation journey in Indonesia. I'll come back to both markets a little bit later.

Damian Nik: David by entering the NASDAQ100 index late last year, we have paid a record dividend last year and now have returned more than $6 billion to shareholders since 2016.

Damian Nik: 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.

Damian Nik: Today as I mentioned, we welcome Coca Cola beverage, Philippines to the CCP family the.

Damian Nik: The acquisition, having now formally closed.

Damian Nik: This creates an even more diverse footprint for CCP provides the opportunity to leverage best practice and talent include.

Damian Nik: Including supporting our exciting transformation journey in Indonesia.

Damian Nik: I'll come back on bolt markets, a little bit later.

Damian Paul Gammell: And, as always, we are supported by our strongly aligned relationship with the Coca-Cola Company and other brand partners. 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 bottom line growth. Value share gains in the market. And, as always, an impressive free cash flow generation. Top-line growth was price mixed lead, but also supported by solid volume growth in Europe and Australia and New Zealand, where we also grew transactions at a volume.

Damian Nik: And as always we are supported by our strongly aligned relationship with the Coca Cola company on the other.

Damian Nik: Our brand partners.

Damian Nik: So now to our full year key messages I'm really pleased with our performance in 2023 delivering on all key metrics.

Damian Nik: We achieved solid top and bottom line growth value share gains in the market.

And as always and impressive free free cash flow generation.

Topline growth was price mix led but also supported by solid volume growth in Europe.

Damian Nik: Australia, and New Zealand, where we also grew transactions ahead of volume.

Damian Paul Gammell: We continue to invest for the long term in our portfolio, our digital journey, our supply chain, sustainability, and, of course, in our people. We are a stronger and better business. We're more diverse, and robust in our categories; they remain resilient despite some of the ongoing macroeconomic and geopolitical volatility.

Damian Nik: We continue to invest for the long term in our portfolio, our digital journey our supply chain.

Damian Nik: Sustainability and of course and our people.

Damian Nik: We are a stronger and better business, we're more diverse.

And robust in our categories. They remain resilient despite some of the ongoing macroeconomic and geopolitical volatility.

Damian Nik: This collectively makes is well placed for full year 2024, and beyond owning our underpinning our commitment to create continued shareholder value.

Damian Paul Gammell: This collectively makes us well-placed for a full year 2024 and beyond, underpinning our commitment to create continued shareholder value. As I've talked about before, we are focused on great people, great service, and great beverages, all done sustainably. So now, let's take a brief look back on last year.

Damian Nik: As I've talked about before we are focused on great people great service great beverages, all done sustainably. So now let's take a brief look back on last year.

Damian Nik: Starting with our great people, we achieved an excellent score and a global engagement survey.

Damian Nik: <unk> comfortably ahead of our industry benchmark group and.

Damian Nik: And we continue to be externally recognized as being a great and diverse place to work.

Damian Nik: This included our 2023 and <unk> entry into the Forbes top 200, world's best employers and the top 100 world's top companies for women.

Damian Paul Gammell: Starting with our great people, we achieved an excellent score in our global engagement survey, positioning us comfortably ahead of our industry benchmark group, and we continue to be externally recognized as being a great and diverse place to work. This included our 2023 inaugural entry into the Forbes Top 200 World's Best Employers and the Top 100 World's Top Companies for Women. Great service and execution are always a key priority at PCP, as we strive to make it even easier for our customers to do business with us. We continue to invest in our supply chain, like new state-of-the-art cannel lines in Australia, Norway, and Great Britain. And we were recognized for our great service in the Advantage survey results, where we ranked number one globally among our top retailers. But that was last year.

Damian Nik: Great service and execution are always a key priority at TCP.

Damian Nik: As we strive to make it even easier for our customers to do business with us.

Damian Nik: We continue to invest in our supply chain like new state of the art kind of lines in Australia, Norway and Great Britain.

And we were recognized for our Great service and the advantage survey results, where we ranked number one globally among our top retailers.

Damian Nik: From last year.

Damian Nik: On our journey to becoming the world's most digitized Butler, we continue to invest in our broader digital capabilities.

Damian Nik: For example around 85% of our volume is now captured digitally including our b to B portals, which represent nearly 15%.

Damian Nik: And finally, our great brands and beverages.

Damian Nik: We are extremely privileged to make move and sell the world's most loved drink brands.

Damian Nik: We continue to invest and innovate to make them, even better and appeal to even more consumers.

In fact in Europe over 75% of households purchased from our <unk> portfolio.

Damian Nik: 70 basis points from the previous year.

Damian Nik: Now, let's look at our sustainability journey, where we continued to make great progress.

Damian Paul Gammell: On our journey to becoming the world's most digitized bottler, we continue to invest in our broader digital capabilities. For example, around 85% of our volume is now captured digitally, including our B2B portals, which represent nearly 15%. And finally, our great brands and beverages. We are extremely privileged to make, move, and sell the world's most loved drink brands. We continue to invest and innovate to make them even better and appeal to even more consumers. In fact, in Europe, over 75% of households purchased from a NARTD portfolio, up 70 basis points from the previous year.

Damian Nik: We've achieved 55% recycled plastic content up from 48% last year.

Damian Nik: Having surpassed a 50% commitment.

Damian Nik: But our efforts and I'll stop there as we remain focused on our ultimate goal of a 100%.

Damian Nik: We continue to invest in sustainability focused technology through our CCT ventures arm.

Damian Nik: We are proud to be part of the Coca Cola system sustainable venture capital Fund.

Damian Nik: A big milestone was the validation of our carbon emissions targets by the science based targets initiative across all of our markets, including API.

Damian Nik: This includes both our 2030, 30% greenhouse gas reduction and.

Damian Nik: Our long term 2040 net zero targets.

Damian Nik: Unimportant Lee we continue to be recognized externally retaining our inclusion on the Cdp's a list for climate.

Damian Paul Gammell: And now we look at a sustainability journey where we continued to make great progress. We achieved 55% recycled plastic content, up from 48% last year. We have surpassed our 50% commitment. But our efforts do not stop there, as we remain focused on our ultimate goal of 100%. We continue to invest in sustainability-focused technology through our CCEP Ventures arm, and we are proud to be part of the Coca-Cola System Sustainable Venture Capital Fund. A big milestone was the validation of our carbon emissions targets by the Science-Based Targets Initiative across all of our markets, including API. This includes both our 2030 30% greenhouse gas reduction and our long-term 2040 net zero target. And importantly, we continue to be recognized externally, retaining our inclusion on the CDP's A-list for climate and maintaining our MSCI AAA ESG rating. So now, turning to our performance highlights.

Damian Nik: Maintaining our MSCI AAA ESG rating.

Speaker Change: So now turning to our performance highlights.

Speaker Change: As I mentioned earlier, we delivered a solid topline performance.

Speaker Change: Solid underlying demand in the developed markets alongside grading.

Speaker Change: Market execution drove volume growth in Europe of 5%. Despite what you will all recall was a very mixed summer in terms of weather excluding.

Speaker Change: Excluding the strategic choices, we've made we saw underlying volume growth in Europe of 1% and in Australia, and New Zealand of 2%.

Speaker Change: In Indonesia.

Speaker Change: We made good progress with our long term transformation journey, which I'll come onto in a bit more detail later.

Speaker Change: Execution of our revenue and margin growth management initiatives, along with our dynamic price and promotion strategies across a broad pack offering drove solid revenue per case growth of eight 5%.

Speaker Change: Headline pricing last year, although ahead of pre pandemic levels was below realized cost inflation as.

Speaker Change: As we continue to buy our ties relevance and affordability for our consumers.

Speaker Change: Now to the any RTD category overall.

Speaker Change: It remains resilient.

Speaker Change: Growing in volume terms by 8% in value terms by 8% in Europe and 9% in API.

Damian Paul Gammell: As I mentioned earlier, we delivered a solid top-line performance. Solid underlying demand in our developed markets, alongside great in-market execution, drove volume growth in Europe of 0.5%, despite what you will all recall was a very mixed summer in terms of weather.

Speaker Change: We gained value share both in store and online and continue to win with our customers supported by some great activation.

Speaker Change: Our strong topline performance together with our continued focus on efficiency as we closed out our full year 'twenty one to 'twenty three efficiency programs.

Speaker Change: <unk> strong operating profit growth of 13, 5%.

Damian Paul Gammell: Excluding the strategic choices we've made, we saw underlying volume growth of 1% in Europe and 2% in Australia and New Zealand and Indonesia. We made good progress with our long-term transformation journey, which I will come on to in a bit more detail later. Execution of our revenue and margin growth management initiatives, along with our dynamic price and promotion strategies across a broad pack offering drove solid revenue per case growth of 8.5%. Headline pricing last year, although ahead of pre-pandemic levels, was below realized cost inflation, as we continue to prioritize relevance and affordability for our consumers. Now to the NARTD category overall.

Speaker Change: This in turn supported impressive comparable free cash flow generation of just over $1 7 billion euros.

Speaker Change: And the return to the top end of our target leverage range as guided.

Speaker Change: I'd now like to hand over to Nick to talk to more detail to the financials over to you Nick.

Nick: Thank you Damian and thank you all for joining US today, let me start by taking you through our financial summary.

Nick: We delivered comparable revenue of $18 3 billion, an increase of 8%, which I'll come back to shortly.

Cogs per unit case increased by seven 5% broadly aligned with our guidance of around 8%.

Nick: This was driven by our increased revenue per unit case, driving higher concentrate costs through our incidence pricing model inflation in manufacturing and commodities.

Nick: High single digit growth in commodities reflected higher sugar and aluminum pricing, partly offset by lower gas and power and recycled pricing.

Manik H. Jhangiani: It remains resilient, growing in value terms by 8% in Europe and 9% in API. We gain value share both in-store and online and continue to win with our customers, supported by some great activation. Our strong top-line performance, together with our continued focus on efficiency, as we close out our full year 21 to 23 efficiency programs, drove strong operating profit growth of 13.5%. This, in turn, supported impressive comparable free cash flow generation of just over 1.7 billion euros and a return to the top end of our target leverage range as guided. I'd now like to hand over to Nick to talk in more detail about the financials. Over to you, Nick.

Nick: This equated to gross margin expansion of around 80 basis points with Europe ahead of that number.

Nick: We delivered comparable operating profit growth of $2 4 billion euros up 13, 5%, reflecting our solid topline growth the benefit of our ongoing efficiency programs and our efforts on managing discretionary spend.

Nick: This equated to operating margin expansion of around 60 basis points, reflecting our focus on returning to our 2019 operating margin baseline.

Nick: 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 years U K tax rate increased to 25%.

Manik H. Jhangiani: 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 euros, an increase of 8%, which I'll come back to shortly. Cogs 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 prices.

Nick: Which comes into full effect.

Nick: The 2020 full calendar year for the full year. This resulted in a comparable diluted earnings per share of $3 71 euros up 12%.

Nick: Free cash flow generation as Damian referenced continues to be a core priority and we delivered an impressive $1 7 billion euros on a comparable basis, which I'll cover in more detail shortly.

Nick: 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 and a continued focus on capital allocation.

Nick: And finally on shareholder returns, we paid a record dividend per share of one year or 84 cents.

Nick: Up nine 5% versus 2022.

Manik H. Jhangiani: This equated to gross margin expansion of around 80 basis points, with Europe ahead of that number. We deliver comparable operating profit growth of 2.4 billion euros, up 13.5%, reflecting our solid top-line growth, the benefit of our ongoing efficiency programs, and our efforts in managing discretionary spend. This equated to operating margin expansion of around 60 basis points, reflecting our focus on returning to our 2019 operating margin basis. 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 UK 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 euros, up 12%.

Nick: Now to our revenue highlights as Damian mentioned the strong growth in our top line was driven by an increase in revenue per case with reported volumes down half a percent for the year. This reflects the strategic choices, we made driven by our SKU rationalization in Indonesia, and the exit of bulk quarter across a number of our mall.

It's mainly in Australia, Germany, and Spain <unk>.

Nick: Excluding these one offs volume overall would have been up around 1%.

Nick: Specifically in the fourth quarter, our volumes were up 1%, reflecting resilient consumer demand supported by great Christmas activation and in market execution.

Nick: Revenue per unit case grew by eight 5% for the full year. This reflects positive headline pricing continued focus on promotional optimization and revenue growth management initiatives.

Nick: We are not complacent.

Nick: Although consumer spending has held up reasonably well, we fully understand that some of our consumers are feeling the pressure.

Nick: And we are seeing some shifting into retailer brands across a few categories less in colas and flavors, but also more shopping and discounters and this channel will and.

Nick: It has and will continue to remain a core focus for CCP, where we continued to grow and gain share.

Manik H. Jhangiani: Free cash flow generation, as Damian referenced, continues to be a core priority, and we delivered an impressive 1.7 billion euros 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 and our continued focus on capital allocation. And finally, on shareholder returns, we paid a record dividend per share of €1.84, up 9.5% versus 2022.

Nick: Our consumer centric approach remains focused on maintaining affordability and relevance for all consumers.

Nick: We have great brands across a broad price pack architecture, which enables shoppers to access our products across a wide spectrum of price points.

Nick: It is essential now more than ever that we continue to balanced premium amortization for those that seek it with more affordable packs for those that needed for example in Spain, we have activated a popular and affordable price point on the iconic 125 liter pack to continue to drive frequency and household penetration.

Nick: Revenue by segment as we referred to here with more detailed commentary by geography in the release.

Manik H. Jhangiani: Now to our revenue highlights. As Damian mentioned, the strong growth in our top line was driven by an increase in revenue per case, with reported volumes down half a percent for the year. This reflects the strategic choices we made driven by our SKU rationalization in Indonesia and the exit of bulk water across a number of our markets, mainly in Australia, Germany, and Spain. Excluding these one-offs, volume overall would have been up around 1%. Specifically, in the fourth quarter, our volumes were up 1%, reflecting resilient consumer demand supported by great Christmas activation and in-market execution. Revenue per unit case grew by 8.5% for the full year.

Nick: As mentioned just now underlying volume growth of around 1% was driven by core brands, where we continue to invest here are a few examples coke zero sugar continued to achieve good share and volume growth across all key markets with volume up 4% as consumer trends for low and no calorie beverages.

Nick: Continue.

Nick: In fact, these now account for approximately 50% of our total volumes.

Nick: In energy Monster continued to outperform driving full year volume growth of 14% fantastic.

Nick: Innovation continues to drive recruitment and distribution, including the launch of Monster Green Zero Sugar, which has had a great start.

Nick: Spot volumes were up 9% with powerade growth across all markets driven by great activation and continued favorable consumer trends in this category.

Nick: We will look to replicate the fantastic Women's World Cup activation in Australia, and New Zealand last year, alongside Coca Cola Zero Sugar as we look ahead to the exciting pipeline of sporting events favoring our European markets. This year.

Manik H. Jhangiani: This reflects positive headline pricing, continued focus on promotional optimization, and revenue growth management initiatives. However, we are not complacent. Although consumer spending has held up reasonably well, we fully understand that some of our consumers are feeling the pressure, and we're seeing some shifting into retail brands across a few categories, less in colas and flavors, but also more shopping and discounters. And this channel will, has, and will continue to remain a core focus for CCEP, where we continue to grow and gain share. Our consumer-centric approach remains focused on maintaining affordability and relevance for all consumers.

Nick: <unk> outperformed with volumes up 23%, reflecting continued growth across Europe, especially in France and Germany.

Nick: And finally, we launched Jack and Coke with very encouraging results in the fast growing <unk>.

Nick: TD drinks category.

Nick: Briefly now to a summary of the strategic choices, we're making to ensure we grow our business profitably and sustainably.

Nick: More choice full about where we want to play as you can see here.

Nick: The Indonesia, 60% SKU rationalization was successfully executed.

Nick: Damian will talk to that in a bit more detail later.

Manik H. Jhangiani: We have great brands across a broad price pack architecture, which enables shoppers to access our products across a wide spectrum of price. It is essential now more than ever that we continue to balance premiumization for those that seek it with more affordable packs for those that need it. For example, in Spain, we've activated a popular and affordable price point on the iconic 1.25 liter pack to continue to drive frequency and household penetration. Revenue by segment is referred to here, with more detailed commentary by geography in the release. As mentioned just now, underlying volume growth of around 1% was driven by core brands where we continue to invest. Here are a few examples.

Nick: We've already touched on the strategic exit of low margin bulk quarter across a number of our markets and this has now largely been cycled through.

Nick: And as we announced alongside our half year results last year, we have made some further strategic choices on our beverage portfolio and partnerships.

Nick: In Australia, and New Zealand, we will maximize our extensive knowledge in the RTD category by launching new scalable offerings aligned with the Coca Cola company in this context, our partnership with beam Suntory will come to an end in the second half of 2025.

Nick: And in Europe, our partnership with Capri Sun will come to an end this year.

Nick: As you can see here neither of these choices will have a significant impact to CCP. They are the right ones for the long term success of our business, enabling a greater focus on priority categories and with two key brand owners, the Coca Cola company and Monster.

Nick: Now on to Opex, Opex and our efficiency programs. We have now closed out delivery of our full year 'twenty one to 'twenty three program, which as I mentioned earlier has supported our operating profit growth in 2023.

Manik H. Jhangiani: Coke Zero and sugar continued to achieve good share and volume growth across all key markets with volume 4% as consumer trends for low and no calorie beverages continue. In fact, these now account for approximately 50% of our total volume. In energy, Monster continued to outperform, driving full-year volume growth of 14%. Fantastic innovation continues to drive recruitment and distribution, including the launch of Monster Green Zero Sugar, which has had a great start. Sports volumes were up 9%, with PowerAid growth across all markets driven by great activation and continued favorable consumer trends in this category. We will look to replicate the fantastic Women's World Cup activation in Australia and New Zealand last year alongside Coca-Cola Zero Sugar as we look ahead to the exciting pipeline of sporting events favoring our European markets this year. Fuse T outperformed, with volumes up 23%, reflecting continued growth across Europe, especially in France and Germany.

Nick: The entire program ultimately amounted to approximately 375 million euros of benefits, adding up to more than 700 million euros in total together with our first post merger efficiency program initiated in 2016.

Nick: At our capital markets day, we announced a new efficiency program aiming to deliver 350 to 400 million euros of incremental savings by full year 2028.

Nick: Overall, yes, its a big number, but we feel very confident in its delivery.

Nick: It will largely be enabled by leveraging digital tools data and analytics.

Nick: Of course this is not an area that's new to US we've been investing in digital capabilities for many years and as Damian said already 85% of our volume is captured digitally.

For this next phase we're moving from four legacy systems that were still operating with today to one system as for Hana.

Nick: That's going to be that's going to enable us to take a huge amount of standardized standardization into our processes and ways of working over the next multiple years.

Nick: Our large base in Bulgaria, and outsourced service providers will be pivotal.

Nick: Already our capability there has been transitioned from a more traditional shared service center to being a lot more focused around not just reporting but analytics and robotics and.

Manik H. Jhangiani: And finally, we launched Jack and Coke with very encouraging results in the fast-growing ARTD drinks category. Now, a brief summary of the strategic choices we're making to ensure we grow our business profitably and sustainably. We are being more selective about where we want to play, as you can see here.

Nick: And there is a lot more we can do to build out capability beyond finance to people and culture supply chain and the commercial areas of our business, while incorporating our new and established shared services center in Manila that we're very excited about.

Nick: We said when we announced this program that the savings would be multiyear from 2024 through 2028.

Manik H. Jhangiani: The Indonesia 60% SKU rationalization was successfully executed, and Damian will talk about that in a bit more detail later. We've already touched on the strategic exit of low-margin bulk water across a number of our markets, and this has now largely been cycled through. And, as we announced alongside our half-year results last year, we have made some further strategic choices on our beverage portfolio and partners. In Australia and New Zealand, we will maximize our extensive knowledge in the ARTD category by launching new scalable offerings aligned with the Coca-Cola company. In this context, our partnership with Beam Centauri will come to an end in the second half of 2025. And in Europe, our partnership with Capri Sun will come to an end this year. As you can see here, neither of these choices will have a significant impact on CCEP.

Nick: With respect to this year, we anticipate savings of around 60 to 70 million euros.

Which back to the previous slide will help offset inflation.

Nick: And naturally there will be cash costs associates delivered this program. These have been included in our midterm comparable free cash flow guidance of around $1 7 billion euros per year.

Nick: So turning to free cash flow in more detail a hugely important metric for us and I'm sure for you as well we.

Nick: We generated $1 7 billion euros of comparable free cash flow in full year 2023, and this slide lays out the key components, including ongoing restructuring cash costs as I referred to.

Nick: Recognizing the importance of targeted investment we spent around $700 million in capex, excluding leases on supply chain examples, which Damian gave earlier digital and other technologies as well as cold drink equipment.

Nick: And as you know working capital remains a core focus for us and I'm really pleased that we delivered yet another year of significant benefits, taking the cumulative amount to approximately $1 3 billion since 2017.

Manik H. Jhangiani: They are the right ones for the long-term success of our business, enabling a greater focus on priority categories and with our two key brand owners, the Coca-Cola company and Monsanto. Now on to OPEX and our efficiency programs. We've now closed out delivery of our full year 21 to 23 program, which, as I mentioned earlier, supported our operating profit growth in 2023. The entire program ultimately amounted to approximately 375 million euros of benefits, adding up to more than 700 million euros in total together with our first post-merger efficiency program initiated in 2016.

Nick: Finally, you can see our comparable free cash flow excludes the one off receipt of proceeds from the disposal of coal royalties of approximately 90 million euros in Australia related to the acquisition of amatil back in 2021.

Nick: And now for our leverage and balance sheet. We ended 2023 with net debt to comparable EBITDA ratio at three times. This means that we returned to the top end of our target leverage range of two five to three times one year earlier than originally guided thus firmly demonstrating the pace of deleveraging since.

Nick: We closed the Amazon transaction in mid 2021.

Nick: Given the timing of today's closing of the Philippines acquisition does not include that related impact.

Nick: Having said that this will only have a modest modest impact on our leverage and given our strong focus on driving cash and further working capital improvements, we anticipate that we will return to within our target leverage range. During this year.

Manik H. Jhangiani: At our Capital Markets Day, we announced a new efficiency program aiming to deliver 350 to 400 million euros of incremental savings by full year 2020. Overall, yes, it's a big number, but we feel very confident in its delivery. It will largely be enabled by leveraging digital tools, data, and analytics. Of course, this is not an area that's new to us.

Nick: This while remaining fully committed to a strong investment grade ratings.

Nick: Now to a quick reminder of our midterm objectives, which we updated at our last capital markets day, they remain unchanged and here more for context as I come into our full year 'twenty for guidance.

Nick: Which nicely brings me into our full year 'twenty for guidance, which is aligned with these midterm objectives.

Manik H. Jhangiani: We've been investing in digital capabilities for many years, and as Damian said, already 85% of our volume is captured digitally. For this next phase, we're moving from four legacy systems that we're still operating with today to one system for HANA. That's going to enable us to introduce a huge amount of standardization into our processes and ways of working over the next several years. Our large base in Bulgaria and our outsourced service providers will be pivoted.

Nick: The guidance reflects our current view of market conditions and is based on an adjusted and comparable basis, which from a modeling perspective assumes the Philippines was included in our business from the start of last year.

As you may have already seen we did today provide a separate release incorporating fully at 23 adjusted financial information for selected metrics for the Philippines.

Nick: Please note that these growth growth rates are provided on a comparable and FX neutral basis. As it is really too early to provide specific FX guidance of course, we will update you as the year progresses.

Manik H. Jhangiani: Already, our capability there has been transitioned from a more traditional shared service center to being a lot more focused around not just reporting but analytics and robotics. And there's a lot more we can do to build out capability beyond finance to people and culture, supply chain, and the commercial areas of our business, while incorporating our new and established Shared Services Center in Manila that we're very excited about. We said when we announced this program that the savings would be multi-year from 2024 through 2028. With respect to this year, we anticipate savings of around 60 to 70 million euros, which, as we said earlier, will help offset inflation. And naturally, there will be cash costs associated with delivering this program.

Nick: So we expect comparable revenue growth of around 4% and Cogs per unit case growth of around 3% to 4% both of which we will talk to shortly.

With our continued focus on Opex as highlighted earlier, we will look to deliver comparable operating profit growth of around 7%.

Nick: On interest we do expect our underlying interest cost to be broadly flat equating to a weighted average cost of net debt of around one 3%, which clearly reflects a very attractive debt maturity profile.

Nick: The Philippines transaction has been funded through existing liquidity and incremental borrowing with a mix of euro public debt issuance completed in November of 'twenty, three and local peso borrowings.

Nick: Therefore, this newly acquired debt now takes our total weighted average cost of net debt for this year to be expected around still a very attractive level of around 2%.

Nick: As I referred to previously we do anticipate an upward trend on our effective tax rate, reflecting differences in the mix of taxable profits across our markets and known tax rate increases. We therefore expect ETR to increase to around 25% this year up from 24%, including the full.

Manik H. Jhangiani: These have been included in our Minterb comparable free cash flow guidance of around 1.7 billion euros per year. So turning to free cash flow in more detail, a hugely important metric for us, and I'm sure for you as well. We generated 1.7 billion euros of comparable free cash flow in full year 2023.

Nick: Transition to the 25% tax rate in 2025, and 2024 in the U K as I referenced to earlier.

Manik H. Jhangiani: And this slide lays out the key components, including ongoing restructuring cash costs, as I referred. Recognizing the importance of targeted investment, we spent around $700 million in CapEx, excluding leases, on supply chain examples, which Damian gave earlier, digital and other technologies, as well as cold drink equipment. And as you know, working capital remains a core focus for us, and I'm really pleased that we delivered yet another year of significant benefits, taking the cumulative amount to approximately $1.3 billion since 2017. Finally, you can see our comparable free cash flow excludes the one-off receipt of proceeds from the disposal of core royalties of approximately 90 million euros in Australia related to the acquisition of Amatil back in 2020.

We will continue to update you on our expected ETR.

Nick: <unk>, our assessment of any uncertain tax positions during the course of the year.

Nick: On Capex, specifically given the opportunities that lay ahead, we expect our capex guidance to be the top end of our range of 4% to 5% of revenue.

Nick: This largely largely reflects two areas firstly the upgrade to digital investments, we're making and I spoke to that earlier and then also in the context of our new efficiency program, which will clearly be supported through those investments and.

Nick: And secondly, having now closed the Philippine strength transaction, which underpins. These midterm objectives, we plan to invest a bit faster near term in this established and fast growing market to position us for long term success and Damien will touch on that a bit more later.

Given both opportunities are more near term in nature, we anticipate that our capex will be at the top end of our range for the next three years or so and finally, we do expect to deliver comparable free cash flow of around $1 7 billion euros, which will be after the tax costs associated associated with our efficiency programs.

Manik H. Jhangiani: And now for our leverage and balance sheet, we ended 2023 with a net debt to comparable EBITDA ratio of three times. This means that we return to the top end of our target leverage range of two and a half to three times one year earlier than originally guided, thus firmly demonstrating the pace of deleveraging since we closed the AMETL transaction in mid 2021. Given the timing of today's closing of the Philippines acquisition, this does not include that related impact.

Let me provide a bit more color on the Cogs guidance before handing back to Damien to talk topline, Indonesia and the Philippines.

Nick: So on Cogs clearly these comments are based on what we know today, which per unit case, we expect to increase by about 3% to 4%.

Ill concentrate costs are tied to our revenue per unit case growth as you know, albeit much more balanced with volume compared to last year.

Nick: We anticipate low single digit commodity inflation. This reflects significantly higher sugar pricing in part offset by lower pricing in the other commodities.

Manik H. Jhangiani: Having said that, this will only have a modest impact on our leverage, and given our strong focus on driving cash and further work and capital improvements, we anticipate that we will return to within our target leverage range during this year, while remaining fully committed to our strong investment grade rating. Now to a quick reminder of our midterm objectives which we updated at our last Capital Markets Day. They remain unchanged and are here more for context as I come into our full year 24 guidance. Which nicely brings me to our full year 24 guidance, which is aligned with these midterm objectives. The guidance reflects our current view of market conditions and is based on an adjusted and comparable basis, which, from a modeling perspective, assumes the Philippines was included in our business from the start of last year. As you may have already seen, we did today provide a separate release incorporating FULIA 23 adjusted financial information for selected metrics for the Philippines.

Nick: And from a hedging perspective I'm pleased to say that we are now approximately 80% hedged for full year 2024, including the Philippines.

Nick: Of course, we continue to see inflationary pressures in labor within the manufacturing line. However, these will be broadly offset with lower gas and power in our plants and our continued focus on efficiency as I talked to earlier.

Nick: Finally on tax we have the throughput tax impact from the Netherlands change in soft drinks excise tax from eight <unk>.

Nick: To 'twenty six euro cents per litre with the offset obviously within revenue.

Nick: And with that I'll hand back to Damian Damian.

Damian Nik: Now I'd like to spend a bit of time on the revenue opportunities for 2024.

Damian Nik: We expect top line growth this year to be much more balance between volume growth and price mix.

Damian Nik: Compared to last year.

Damian Nik: As Nick 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.

Damian Nik: 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 and a number of our markets for this year.

Manik H. Jhangiani: Please note that these growth rates are all provided on a comparable and FX-neutral basis, as it is really too early to provide specific FX guidance. Of course, we will update you as the year progresses. So we expect comparable revenue growth of around 4% and COGS per unit case growth of around 3% to 4%, both of which we'll talk about shortly. And with our continued focus on OPEX, as highlighted earlier, we will look to deliver comparable operating profit growth of around 7%. On interest, we do expect our underlying interest costs to be broadly flat, equating to a weighted average cost of net debt of around 1.3%, which clearly reflects a very attractive debt maturity profile. The Philippines transaction has been funded through existing liquidity and incremental borrowing with a mix of Euro public debt issuance completed in November of 23 and local peso borrowing.

Damian Nik: We have great brands, which are consumers love and on the back of the ongoing investment in innovation and brands product and packaging our category and brands continues to support a solid growth platform for all of our customers. We will continue to invest in Coca Cola zero sugar and pyrite.

Damian Nik: Taking the success from the women's World Cup in Australia.

Damian Nik: With some fantastic activation plan around the key sporting events of the Olympics in France.

Damian Nik: Under euros in Germany.

Damian Nik: We have some exciting innovation plans for the portfolio, including a 11 flavor extension in launch both for Coca Cola original taste.

Damian Nik: Four zero sugar.

Damian Nik: In flavors, we will be launching the new tasting fanta and also Trialing our label free more sustainable sprite Pike in GB.

We will build on the success of Jack Daniels and 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 on sprite.

Damian Nik: Energy will benefit from the wider launch of the very well received Moscow Green Monster Green zero sugar and the launch of new and exciting flavor extensions and rain storm.

Manik H. Jhangiani: Therefore, this newly acquired debt now takes our total weighted average cost of net debt for this year to be expected to remain at a very attractive level of around two percent. However, as I referred to previously, we do anticipate an upward trend in our effective tax rate, reflecting differences in the mix of taxable profits across our markets and known tax rate increases. We therefore expect ETR to increase to around 25% this year, up from 24%, including the full transition to the 25% tax rate in 2024 in the UK, as I referenced earlier.

Damian Nik: On refillable glass remains a focus where we will continue to invest and will become even more relevant with the inclusion of the Philippines for over 45% of our volumes are sold through refillable glass.

Speaker Change: So now onto the Philippines.

Speaker Change: Great strategic move for us the best use of cash.

Speaker Change: And a good deal for our shareholders.

Speaker Change: The transaction creates an even more diverse footprint for CCP within what will now be renamed Aps, Australia Pacific and Southeast Asia.

Speaker Change: The business is established with a proven track record and it operates in a highly attractive and growing market led by a great local team.

Speaker Change: It provides the opportunity to leverage best practice and talent, including supporting Indonesia transformation journey or the sparkling category as we know is much less developed.

Manik H. Jhangiani: We will continue to update you on our expected ETR, including our assessment of any uncertain tax positions during the course of the year. On CapEx specifically, given the opportunities that lay ahead, we expect our CapEx guidance to be the top end of our range of 4-5% of revenue. This largely reflects two areas. Firstly, the up-weighted digital investments we're making. And I spoke to that earlier.

Speaker Change: We very much look forward to working with a likeminded now joint venture partner avoids.

Speaker Change: One of the leading conglomerates in southeast Asia.

There are considerable experience of the market and culture that our mix will no doubt be invaluable to us as we unlock even more potential together for the Philippines business.

Speaker Change: And of course, all aligned with the Coca Cola Company.

Speaker Change: Just by way of reminder, the Philippines operates in a large and attractive any RTD category.

Speaker Change: Currently it's valued at around 8 billion euros.

Speaker Change: And therefore, it takes <unk> addressable market to around 140 billion euros.

Speaker Change: The category is fast growing estimated at around 10% per annum in value terms. So well ahead of Ccp's current group average of 3% to 4%.

Manik H. Jhangiani: And then also in the context of our new efficiency program, which will clearly be supported through those investments. And secondly, having now closed the Philippines transaction, which underpins these midterm objectives, we plan to invest a bit faster in the near term in this established and fast growing market to position us for long-term success. And Damian will touch on that a bit more later.

Speaker Change: The market comes with attractive micros to Philippines is the 13th largest country globally with solid GDP and population growth.

Speaker Change: Importantly, a fast growing middle class.

Speaker Change: All metrics that are clearly ahead of Europe.

Speaker Change: Within in the RTD category sparkling as well established rep.

Speaker Change: Representing around 55% of volume where per caps over four times higher than the average for Asia Pacific.

Manik H. Jhangiani: Given both opportunities are more near-term in nature, we anticipate that our CapEx will be at the top end of our range for the next three years or so. And finally, we do expect to deliver comparable free cash flow of around 1.7 billion euros, which will be after the tax costs associated with our efficiency program. Let me provide a bit more color on the COGS guidance before handing back to Damian to talk about top line Indonesia and the Philippines. So on COGS, clearly, these comments are based on what we know today, which, per unit case, we expect to increase by about three to four. Our concentrate costs are tied to our revenue per unit case growth, as you know, albeit much more balanced with volume compared to last year. We anticipate low single-digit commodity inflation.

Speaker Change: The remains attractive headroom for growth when compared to more developed markets.

Speaker Change: Future opportunities would include low or no sugar.

Speaker Change: Energy.

Speaker Change: <unk>, so loves to aim for and leverage from the rest of the group.

Speaker Change: And it's a very established business last year the business delivered around 655 million unit cases.

Speaker Change: Translating into Aps, representing one third of the total volumes for CCP.

Speaker Change: It generated around $1 7 billion of revenue and 105 million euros of operating profit so already a business with attractive scale and profitability.

Speaker Change: So as you know the trial section completed today.

Speaker Change: As we have acquired a majority 60% stake alongside avoids we will consolidate the business.

Speaker Change: Into our results from an accounting perspective.

Speaker Change: With their minority stake recognized a noncontrolling interest.

Speaker Change: The business delivered solid top and bottom line growth last year.

So some of this did reflect the return to a more normalized performance.

Speaker Change: Following adverse weather in 2022, which affected sugar availability.

Manik H. Jhangiani: This reflects significantly higher sugar pricing, in part offset by lower pricing in the other commodities. And from a hedging perspective, I'm pleased to say that we're now approximately 80% hedged for full year 2024, including the Philippines. Of course, we continue to see inflationary pressures in labor within the manufacturing line. However, these will be broadly offset by lower gas and power prices in our plants and our continued focus on efficiency, as I talked about earlier. Finally, on tax, we have the throughput tax impact from the Netherlands' change in soft drinks excise tax from €0.08 to €0.26 per liter, with the offset obviously within revenue. And with that, I'll hand over to Damian. Damian?

Speaker Change: The transaction is therefore immediately EPS accretive and as Nick said earlier has a modest impact on ccp's leverage in 2024.

Speaker Change: Our strong focus on capital allocation under a long term mindset will ensure we invest in this established business.

To support the market's long term, 10% growth expectation.

Speaker Change: The transaction gives us the opportunity to reset the growth ambitions for this business.

Speaker Change: And so our capital plans today reflect that.

Speaker Change: And lastly, before you ask we will not be talking to specific synergies in relation to the Philippines.

Speaker Change: Within our overall guidance for CCP.

Speaker Change: Of course, just like we did with Amato.

Speaker Change: We see many opportunities to share learnings and best practices in areas, such as digital technology procurement sustainability.

Damian Paul Gammell: Thank you, Nick. 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 make-up compared to last. As Nick said earlier, our main priority is to continue to be 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.

Speaker Change: Indeed shared services given there is already an established capability in that area in Manila.

Speaker Change: So our legacy as I'm confident you would agree we have a strong track record of integrating and driving value creation. So we've already started.

Speaker Change: I look forward to share more with you in due course.

Speaker Change: So from what exciting market to the next I just wanted to close out.

Speaker Change: With an update on where we are with Indonesia.

As you all know we are in the early stages of our long term transformation journey, and we're making good progress.

Speaker Change: Unfortunately as highlighted previously consumer spending remains under pressure.

Speaker Change: Generally impacted by wider market inflation and a reduction in fuel subsidies.

Speaker Change: So clearly that's not helping us right now, but we remain focused on the longer term opportunity.

Speaker Change: As I said earlier, the sparkling category in Indonesia is much less developed than in the Philippines.

Damian Paul Gammell: 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 in brands, products, 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 Pyrite, building on the success of the Women's World Cup in Australia with some fantastic activation plans around the key sporting events of the Olympics in France and the Euros in Germany. We have some exciting innovation plans for the Coca-Cola portfolio, including a lemon flavor extension being launched both for Coca-Cola Original Taste and for Zero Sugar.

Speaker Change: Less than 10% of DNA RTD category.

Speaker Change: We have successfully executed our portfolio plans, we now have a much tighter portfolio, we're focused on winning in sparkling and ready to drink tea.

Speaker Change: Beyond the brand portfolio, we've completed a new price pack channel strategy.

Speaker Change: Which incorporates a deeper understanding of the Indonesian consumer sensitivities and affordability.

Speaker Change: We're working on building out new drinking occasions across the calendar.

Speaker Change: The most when Ramadan period.

Speaker Change: This is a picture of the annual Jacquard affair.

Biggest consumer event in Indonesia, where we executed our biggest activations yet in 2023.

Speaker Change: And alongside the Coca Cola Company, we are focused on younger consumer recruitment.

Speaker Change: We're taking the right decisions to reengineer, both our cost base and our route to market for the longer term.

Speaker Change: We've implemented a comprehensive productivity program, while starting to move our largely direct route to market to a more fit for purpose an indirect model.

Speaker Change: We are starting to see progress a few examples of which I will share on the next slide.

Damian Paul Gammell: In flavors, we will be launching a new tasting Fanta and also trialing a label-free, more sustainable Sprite pack in GB. We will build on the success of Jack Daniels and Coke, already the number one alcohol ready-to-drink value brand in GB, coming with bolder 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 rainstorms. And refillable glass remains a focus, where we will continue to invest and will become even more relevant with the inclusion of the Philippines, where over 45% of the volumes are sold through refillable glass. So now, on to the Philippines. A great strategic move for us. The best use of cash and a good deal for shareholders, the transaction creates an even more diverse footprint for CCP within what will now be renamed APS. Australia, the Pacific, and Southeast Asia.

Speaker Change: Just to talk to a few here.

Speaker Change: Sparkling transactions a key metric are growing ahead of volume and Coke trademark is achieving decade record volumes in what is a traditionally sprite led market.

Speaker Change: As you would expect we are fully aligned with the Coca Cola company on a brown priorities in Indonesia.

Speaker Change: A good example, being the recent launch of Coca Cola Zero Sugar and Sprite zero.

Speaker Change: A really great opportunity for the future and off to a promising start.

Speaker Change: As I said just now we are focused on recruiting younger consumers.

Speaker Change: We step changed our approach to Gen Z incorporating nearly 900 influencers with a combined following of nearly $370 million.

Speaker Change: To me one of which is on the slide here with around $1 3 million followers alone.

Speaker Change: On sustainability, we are owning our circle early journey from day, one through the right partnerships and investments.

Speaker Change: You can see here the significant progress we've already made on recycled content supported by the first to market launch of a 100% recycled bottles in Indonesia.

Speaker Change: Achieved through an industry partnership.

Damian Paul Gammell: The business is established with a proven track record, and it operates in a highly attractive and growing market led by a great local team. It provides the opportunity to leverage best practice and talent, including supporting Indonesia's transformation journey, where the sparkling category, as we know, is much less developed. We very much look forward to working with a like-minded, now joint venture partner, Aboit, one of the leading conglomerates in Southeast Asia. Their considerable experience of the market and cultural dynamics will no doubt be invaluable to us as we unlock even more potential together for the Philippines business, and, of course, all aligned with the Coca-Cola Company. Just by way of reminder, the Philippines operates in a large and attractive NARTD category. Currently, it's valued at around 8 billion euros, and therefore takes CCP's addressable market to around 140 billion euros.

Speaker Change: Recycling facility just outside of Jakarta.

Speaker Change: Unimportant <unk>. Despite all of the change are currently colleagues are highly engaged.

Speaker Change: And the fact that head of CCP average, which is great to see.

Speaker Change: So we remain confident in our future in Indonesia.

Speaker Change: And as always look forward to updating you more in due course.

Speaker Change: So finally to our closing remarks as I said at the start 2023 was another great year for CCP delivering on all key metrics.

Speaker Change: We continue to execute on our clear strategy.

We continue to invest for the long term and our portfolio.

Speaker Change: Our digital journey supply chain sustainability and of course and our people.

Speaker Change: We are a stronger and better business more diverse.

Now, including the great market of the Philippines.

Speaker Change: And robust on our categories remain resilient, despite ongoing macroeconomic and geopolitical volatility.

Speaker Change: This collectively makes is well placed for the.

Damian Paul Gammell: The category is fast-growing, estimated at around 10% per annum in value terms, so well ahead of CCP's current group average of 3 to 4%. The market comes with attractive macros. The Philippines is the 13th largest country globally, with solid GDP and population growth, and importantly, a fast-growing middle class, all metrics that are clearly ahead of Europe.

Speaker Change: The full year 2024, and beyond underpinning our commitment to create continued shareholder value.

Speaker Change: To close I would particularly like to thank our customers our brand partners.

Speaker Change: And again, our colleagues, whose hard work and commitment we were able to go further together for all of our stakeholders.

Speaker Change: So again, thank you very much Nick and I will now be happy to take your questions. So over to you operator.

Speaker Change: We will now begin the question and answer session. As a reminder, we conduct a question only one question Pamela.

Damian Paul Gammell: Within the NARTD category, sparkling is well established, representing around 55% of volume, perhaps over four times higher than the average for Asia-Pacific. There remains a tractive headwind for growth when compared to more developed markets; future opportunities would include low and low sugar, energy, and ARTD.

Speaker Change: I would like to ask a question. Please press star one and one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press the hash key once again. Please press star one on one if you wish to ask a question. Please.

Speaker Change: Please standby, while we compile the Q&A queue. This will only take a few moments.

Damian Paul Gammell: So lots to aim for and leverage from the rest of the group. And it's a very established business. Last year, the business delivered around 655 million unicases, translating into APS representing one-third of the total volumes for CCEP. It generated around 1.7 billion euros of revenue and 105 million euros of operating profit.

Speaker Change: Thank you we will now take our first question. Please standby.

Speaker Change: First question is from the line of Edward Mundy from Jefferies. Please go ahead.

Edward Mundy: Morning or afternoon actually.

Edward Mundy: Damian and Nik Sarah.

Edward Mundy: The guide of 4% I appreciate it's pretty early days, some consumers are feeling a bit of pressure, but could you provide perhaps a bit more color on some of your assumptions on volumes I think youre talking to a better balance between volume and price mix I think implied some volume growth I.

Damian Paul Gammell: So already a business with attractive scale and profitability. And as you know, the transaction was completed today. As we've acquired a majority 60% stake alongside a voice, we will consolidate the business into our results from an accounting perspective, with their minority stake recognized as a non-controlling interest. The business delivered solid top and bottom line growth last year, although some of this did reflect the return to a more normalized performance following adverse weather in 2022 which affected sugar availability. The transaction is therefore immediately EPS-decretive and, as Nick said earlier, has a modest impact on CCP's leverage in 2024.

Speaker Change: I think on the price piece look, it's clearly going to taper, but you do have a bit of a carryover from pricing taken Germany Q3, GBS Q2 mix has been a really good driver.

2023, and should continue to 'twenty four you've got these ready mixed some of what Commscope Olympic football Philippines.

Speaker Change: Growing ahead of group what are we missing.

Speaker Change: You're not missing anything.

Alright.

Speaker Change: 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.

Damian Paul Gammell: Our strong focus on capital allocation and our long-term mindset will ensure we invest in this established business to support the market's long-term 10% growth expectation. The transaction gives us the opportunity to redefine the growth ambitions for this business. And so our capital plans today reflect that. And lastly, before you ask, we will not be talking about specific synergies in relation to the Philippines. They sit within our overall guidance for CCP, Of course, just like we did with Amatil.

Speaker Change: Coming back and it was good that we exited the year with volume growth and again.

Speaker Change: Keep in mind 2023 underlying with these.

Speaker Change: Sure.

Speaker Change: Strategic choices and exits.

Speaker Change: Clearly plays through.

Speaker Change: So when you go into 2020 for I would say youre looking at off that 4%.

Speaker Change: At least the third plus coming from volume Alright, 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 optimization. So clearly.

Damian Paul Gammell: We see many opportunities to share learnings and best practices in areas such as digital, technology, procurement, sustainability, and indeed shared services, given there's already an established capability in that area in Manila. To our legacy, as I'm confident you would agree, we have a strong track record of integrating and driving value creation. So we've already started, and I look forward to sharing more with you in due course.

Speaker Change: Looking at volume growth.

Speaker Change: If you look at that carryover that pricing you're absolutely right. We have two of those markets that came through in the second half.

Speaker Change: So there's a carryover impact of that and then clearly as we've seen inflation moderating that I called called out you will obviously see more balanced 2023 24 pricing.

Speaker Change: Most of which that has happened in Q1 that we've actually been able to land.

Damian Paul Gammell: So from one exciting market to the next, I just wanted to close out with an update on where we are with Indonesia. As you all know, we are in the early stages of our long-term transformation journey, and we are making good progress. However, unfortunately, as highlighted previously, consumer spending remains under pressure.

Speaker Change: So far without any disruption, which is positive on the mix one it's a good point that you raised.

Speaker Change: 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.

Damian Paul Gammell: Generally impacted by wider market inflation and the reduction in fuel subsidies. So clearly, that's not helping us right now, but we remain focused on the longer-term opportunity. As I said earlier, the sparkling category in Indonesia is much less developed than in the Philippines, at less than 10% of the NARTD category.

Speaker Change: The lower revenue per case coming in from the Philippines, and then your votes about that impact of the Netherlands tax that I called out.

Speaker Change: So again.

Speaker Change: Again, we'll continue to update you on that but I think very much volume led.

Speaker Change: With good pricing carryover and some more moderate pricing into this year as well and again supported by what we wanted to do on the promo side as well to balance that affordability.

Damian Paul Gammell: We've successfully executed our portfolio plans. We now have a much tighter portfolio. We're focused on winning and sparkling and ready-to-drink tea. Beyond the brand portfolio, we've completed a new price pack channel strategy, which incorporates a deeper understanding of Indonesian consumer sensitivities and affordability. We're working on building out new drinking occasions across the calendar, beyond the must-win Ramadan period.

Speaker Change: And just to clarify.

Speaker Change: The 8% revenue per case within Europe, I think you mentioned that prices running below inflation inflation, probably running five and half with six so you're probably getting a third of your your benefit and revenue per case from mix is that broadly right and is that one of the reasons why you're confident that your brands remain affordable and you're not going to get the same.

Speaker Change: That's just the impact youre seeing across other parts of staples.

Yes, I think Thats fair, Ed I mean, I think if you look at our Q4 volumes and I will just talk Europe, Australia, New Zealand I think they were very solid so I think we've been very focused on.

Damian Paul Gammell: This is a picture of the annual Jakarta Fair, the biggest consumer event in Indonesia where we executed our biggest activations yet in 2023. And alongside the Coca-Cola company, we are focused on younger consumer recruitment. We're taking the right decisions to re-engineer both our cost base and our route to market for the longer term. We implemented a comprehensive productivity program while starting to move our largely direct route to market to a more fit-for-purpose and indirect model. We are starting to see progress, a few examples of which I will share on the next slide. But I just want to talk to a few here.

Speaker Change: <unk> shoppers and consumers because as you know if you lose them the cost of getting them back is always a lot higher.

Speaker Change: So very pleased coming out of Q3, where we had some tough weather comps in Q4, we saw volume growth return in our developed markets of Europe.

Speaker Change: Zealand in Australia, So I think that balance is serving us well, it's what we built into 2004 I think as Nick called out on top of that we've got some you called out actually better than we could.

Speaker Change: We've got some great brand innovation boost some great assets, particularly in Europe with the Olympics in euros.

Speaker Change: And clearly as we move into Q3 on the summer hopefully, we will get a normalized somewhere in Europe, but who knows over the last year, but yes. So that's <unk>.

Damian Paul Gammell: Sparkling Transactions, a key metric, are growing ahead of volume, and Coke Trademark is achieving decade-record volumes in what is a traditionally Sprite-led market. As you would expect, we are fully aligned with the Coca-Cola company on our brand priorities in Indonesia, a good example being the recent launch of Coca-Cola Zero Sugar and Sprite Zero.

Speaker Change: Pretty much a good balance between enough price.

Speaker Change: But not too much to really derail what's been a great consumer story for many years in Europe in particular.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: We will now take our next question.

Speaker Change: And this is from the line of Matthew <unk> from BNP Paribas. Please go ahead.

Matthew: Thank you Hi, Nick Hi, Damien.

My question is just on the on the Philippines now it is all completed and you're able to kind of a business.

Matthew: Properly when you think about the first year.

Matthew: In the businesses, which areas do you think you can see get much traction on.

Matthew: We'll kind of fully in control there where do you see the most low hanging fruit I think you mentioned that.

Damian Paul Gammell: A really great opportunity for the future and off to a promising start. As I said just now, we are focused on recruiting younger consumers. We have completely changed our approach to Gen Z, incorporating nearly 900 influencers with a combined following of nearly 370 million, that's more than me, one of whom is on the slide here with around 1.3 million followers alone.

Matthew: Sure.

Matthew: But.

Matthew: If you're able to kind of speak about.

Matthew: What is going to be the focus for the next kind of 12 months.

Speaker Change: Yes, Thanks, Matt I mean, we've been we've been really excited about this opportunity.

Speaker Change: Presented itself and we've been working.

Matt: Very very hard with the team <unk> team locally in our team to have a great day, one which is upon us. So that's 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.

Matt: We fully also expect to learn as well as to bring ideas to that business.

Matt: Initially I think areas.

Matt: We've talked with the team about where some of the capabilities from CCP could add value certainly in key accounts.

Damian Paul Gammell: On sustainability, we are owning our circularity journey from day one to the right partnerships and investments. You can see here the significant progress we've already made on recycled content, supported by the first-to-market launch of 100% recycled PET bottles in Indonesia, achieved through an industry partnership recycling facility just outside of Jakarta. And importantly, despite all of the change, our colleagues are highly engaged, as evidenced by the fact they had a CCP average, which is great to see. So we remain confident in our future in Indonesia and, as always, look forward to updating you more in due course. So finally, to our closing remarks. As I said at the start, 2023 was another great year for CCP, delivering on all key metrics.

Matt: 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.

Matt: Clearly.

Matt: We operate a very large supply chain.

Matt: So we certainly believe that a lot of our expertise in that space is an area that we could bring to.

Matt: To help improve customer service levels and drive stock availability a bit more.

Matt: We are also committed with our partners to invest in that business. So some of the burner.

Matt: Benefits, we bring as capital.

Matt: Uncertainty stepping up some of the investments as we see the growth outlook, even stronger going forward. So.

Matt: It's an area that we'll continue to learn.

Matt: I'm confident in those areas, we've got capability I'm also.

Matt: 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 they are availability, obviously the category relevance.

Damian Paul Gammell: We continue to execute on our clear strategy. We continue to invest for the long term in our portfolio, our digital journey, supply chain, sustainability, and, of course, in our people. We are a stronger and better business, more diverse, now including the great market of the Philippines, and robust, and our categories remain resilient despite ongoing macroeconomic and some geopolitical volatility. This collectively makes us well-placed for the full year 2024 and beyond, underpinning our commitment to create continued shareholder value. To close, I would particularly like to thank our customers, our brand partners, and, again, our colleagues, whose hard work and commitment mean we're able to go further together for all our stakeholders. So again, thank you very much. Nick and I will now be happy to take your questions. So, over to you, operator.

Matt: They've managed affordability extremely well on refillable, 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 will get value from that team into our other businesses.

Matt: 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.

Speaker Change: Thank you very much.

Speaker Change: Thank you, we'll now take our next question.

Speaker Change: Okay.

Speaker Change: This is from the line of Lauren Lieberman from Barclays. Please go ahead.

Lauren R. Lieberman: Great. Thank you good morning, guys.

Lauren R. Lieberman: Just curious you talked a lot more about affordability pressures, particularly in Europe, and you mentioned the discount channel and I know that in our forecast.

Lauren R. Lieberman: For the team for a very long time, but what's true you could update us maybe a little bit on how much of your.

Speaker Change: And Hello to answer.

Speaker Change: Roughly speaking how much of your volume discount.

Speaker Change: A discount channel, where you stand in terms of.

Speaker Change: Category exposure, there or is there opportunity to expand and the categories that are representative channel anything particular gain a new pack sizes and so on.

Operator: Thank you. We will now begin the question and answer session. As a reminder, we kindly request only one question per answer. If you would like to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the hash key.

Speaker Change: More importantly, and then things are able to leverage from your discount our experience.

Speaker Change: Success into more mainstream channels as we go through this period of tougher consumer okay.

Speaker Change: Yes, thanks Laurence.

I think we've been in that environment for over a year now I think if you look back at our commentary during 2023, we've talked a lot about maintaining relevance and affordability. So I think that supported our volume growth and it's something we'll continue in 'twenty four.

Operator: Once again, please press stars 1 and 1 if you wish to ask a question. Please stand by while we compile the Q&A queue; this will only take a few moments. Thank you. We will now take our first question. Please stand by. The first question is from the line of Edward Mundy from Jeffreys, please go ahead. Morning or afternoon, actually, Damian, Nick, and Sarah.

Speaker Change: Youre, absolutely right I mean, our shoppers come under a little bit of pressure.

Speaker Change: We do see the discount channel performing extremely well.

Speaker Change: Candidly that's been a story in Europe for a long long time now as you know.

Speaker Change: Particularly in our markets like Germany.

Speaker Change: But really broadly across our retail and also now in Australia.

Edward Mundy: 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 perhaps provide perhaps a bit more color on some of your assumptions? I mean, on volumes, I think you're talking about a better 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, GB end of Q2. Mix, you know, has been a really good driver through most of 2023 and should continue to do so to 24.

Speaker Change: We see the discount.

Channel being a key partner for our growth.

Speaker Change: Within that we've got two categories, we're prioritizing which is really our core sparkling portfolio in energy.

Speaker Change: Both of those are performing very well with those customers in Europe.

Speaker Change: We're very conscious about pack size on for mining as you know we've had a one five liter.

Speaker Change: Pack to hit a price point that we felt was more relevant for their shoppers.

Speaker Change: We continue to work with them on technology.

Speaker Change: In Australia, I'm very pleased we've got some cold drink.

Speaker Change: <unk> from the store so as we try and bring a mix benefit into that channel as it grows.

Speaker Change: So there's a lot happening on them.

Speaker Change: We're also leveraging with our other customers some of those insights because I think that that affordability mindset goes beyond discounters I think all retailers now continue to be focused on maintaining relevance. There obviously, they obviously are conscious better on market share.

Damian Paul Gammell: You've got these very mixed summer weather competitions. You've got the Olympics, you've got the football, you've got the Philippines, I guess, you know, growing ahead of the group. What are we missing? You're not missing anything. You've covered it all, so it's a great summary. We should just have recorded you and played you back.

Speaker Change: So a lot of what we're doing in terms of pack pricing.

Speaker Change: Beyond just that.

Speaker Change: Discount channel as you call it to broader retail.

Speaker Change: Great supply chain efficiencies.

Speaker Change: So very attractive in terms of cost of doing business for us.

Manik H. Jhangiani: But, you know, I think I'll 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 that 2023 underlying, with these, you know, strategic choices and exits, clearly plays through. So when you go into 2024, I would say you're looking at, you know, off that 4 percent, at least a third plus coming from volume. All right.

Which clearly supports our margin expansion on our profit growth so.

Speaker Change: Yes, very pleased with how we're doing as I mentioned, that's built on many many years of experience I think when we first created CCP one of our call outs was to leverage the success of our German business with Aldi and Lidl in particular across what was then the legacy <unk> business and if you look back.

Speaker Change: That's been a big big driver of our growth so more to come but as you rightly called out they are that's a winning channel in retail where.

Manik H. Jhangiani: 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 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.

Speaker Change: Winning with them and we want to continue to do so.

Speaker Change: And the only thing I would add is it doesn't change our focus on the premium amortization piece and what continues to be.

Speaker Change: How 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're getting small packs and we've got coolers in Germany. So it's all kind of.

Manik H. Jhangiani: We have two of those markets that, you know, came through in the second half. So there's a carryover impact from that. And then clearly, as we've seen inflation moderating that I called called out, you will obviously see more balanced twenty, twenty three, twenty four pricing, most of which 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 raise.

<unk> in a way in a positive.

Speaker Change: Erection.

Speaker Change: Thank you.

Speaker Change: We will now take our next question.

Speaker Change: And this is from the line of Sanjay <unk> from UBS. Please go ahead.

Sanjay: Hey, Nick Damian and Tara just coming back to the Philippines, Ts you spoke a little bit about 2022 being held back by a lack of a sugar availability.

Sanjay: <unk> has had.

Sanjay: The full.

Sanjay: Benefits concerning 2023, so you've got really a clean base on which to work for them or is there more to come in 2024.

Manik H. Jhangiani: You know, clearly in our business, we've continued to have a 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 mixed 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 call.

Sanjay: I think the disclosures margins that are around 6% of any structural structural factors.

Holding that that margin back do you expect.

Sanjay: That to get back into double digit bright with a few years ago at the time.

Maybe Tony.

Tony: I'll talk on the first piece and then hand over to Nick.

Manik H. Jhangiani: So, you know, again, we'll continue to update you on that, but I think it is very volume-led, with good pricing carryover and some more moderate pricing into the season, and again supported by what we want to do on the promotion side as well to balance that affordability. And just to clarify, on the 8% revenue per case within Europe, I think you mentioned that prices are running below inflation; inflation is probably running, you know, 5.5% or 6%. So you're probably getting a third of your benefit and revenue per case from mix. Is that the math broadly right? And is that one of the reasons why you're confident that your brands will 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.

Damian Paul Gammell: So I think 2023 was a more normalized year, so I think the business.

Damian Paul Gammell: <unk> out of what was a very challenging 2022, both from a weather perspective, leading to.

Damian Paul Gammell: Basically a shortage of sugar, which the team then had to allocate across the portfolio. So.

Damian Paul Gammell: They did a great job that was pretty much done by the end of 'twenty. Two so 2023, you could look as.

Damian Paul Gammell: Our normalized base in terms of availability of sugar, we could talk about the cost of sugar Thats a different debate.

Damian Paul Gammell: It has got a high cost relative.

Damian Paul Gammell: The speaking, we know that from a availability perspective definitely a more normalized year on.

Damian Paul Gammell: While margins Nick do you want to yes, sure I mean, I think part of it just comes back to what Damian set. So firstly just reiterating the points 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.

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 clear.

Damian Paul Gammell: I mean, I think if you look at our Q4 volumes, and I'll just talk about, you know, Europe, Australia, New Zealand, I think they were very solid. So I think we've been very focused on, you know, retaining shoppers and consumers, because, as you know, if you lose them, the cost of getting them back is always a lot higher. So very pleased coming out of Q3 where, you know, we had some tough weather come.

Damian Paul Gammell: Clearly from a margin perspective.

Speaker Change: 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.

Speaker Change: There's a lot of work that the teams continued to do locally to see what can be influenced keeping 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.

Damian Paul Gammell: In 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 24.

Speaker Change: And then it started coming off when there was more latitude in terms of imports et cetera. So that 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 new category.

Damian Paul Gammell: I think, as Nick 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 with 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 summer in Europe, but who knows after last year?

Or is that just launched into energy they've just launched Tds. So.

Speaker Change: All of that will continue to support that margin growth story and as Damian referred to earlier clearly theres some opportunities as they come in greatly won business with great leadership team, but they will clearly be some opportunities from a best practice sharing both ways.

Damian Paul Gammell: 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, team. We will now take our next question, and this is from the line of Matthew Ford from BNP Paribas. Please go ahead, about the first.

Speaker Change: As we.

Speaker Change: Welcome them into our family.

Speaker Change: And just to close out puzzle will probably come up on Capex, because we talked a little bit about capex.

Matthew Ford: Yeah, thanks, Matt. 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, that's a milestone.

Speaker Change: In our release.

Clearly, we do see opportunities in the Philippines around capital unlocking Maher.

Speaker Change: Margin over time, particularly on supply chain and building a more efficient supply chain and we're also curious about the role some of our technology platforms complained to Philippines. So that kind of plays back to that Capex number that Nick talked about earlier.

Speaker Change: And I think that's not a one year journey, let's be clear.

Damian Paul Gammell: As we've been looking at that business, I mean, clearly, it stands out within that region as a great Coca-Cola business. So, we fully expect to learn as well as to bring ideas to that business. Initially, I think areas that you know we've talked with the team about where some of the capabilities from CCP could add value, certainly in key accounts, our world-class key account management program, and the analytics tools that we've been using on pricing and price elasticity in Europe. Our digital journey around the frontline capabilities can add value.

Speaker Change: Clear.

Speaker Change: But as we do look at it we do think investing a bit more of the Philippines will over time allow us to get margins that we feel are more representative.

Speaker Change: Of a business of that scale I love that market, so more to come on that 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.

Speaker Change: Alright, thank you for the color.

Speaker Change: Sure.

Speaker Change: Thank you.

Speaker Change: We'll now take our next question.

Speaker Change: This is from the line of Eric <unk> from Morgan Stanley. Please go ahead.

Eric: Great Good afternoon, everyone.

Eric: Damian you mentioned landing pricing and a number of markets year to date.

Eric: Just wondering if you could expand on that which markets where did you get pricing.

Damian Paul Gammell: You know, clearly, we operate a very large supply chain, and 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 investing 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, you know, it's an area that we'll continue to learn. But, you know, I'm confident in those areas we've got the capability. I'm also, you know, 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.

Eric: Certainly there have been some headlines related to competitors about retailer pushback.

Eric: G listings in.

Eric: Certain European markets.

Eric: Any color you could provide.

Eric: Steve.

Speaker Change: Retailer discussions and pushback and de listings will be helpful. Thank you.

Steve: Yes, Thanks, Eric.

Steve: I mean, just to kind of step back a little bit I think we've we've kind of taken a multiyear approach to pricing I think I commented on that actually this time last year.

Steve: When we look at pricing, we're looking beyond the calendar year, because we think.

Steve: It's a more strategic conversation and we have been pricing slightly behind some of our competitors.

Steve: And as we talked about slightly behind inflation.

Steve: And we recognize our retailers as much as our consumers are also under some pressure around offering affordability and the cost of living kind of backdrop that we have.

Damian Paul Gammell: That's an area that we've always been looking at in Indonesia. So I think it's a great example of, you know, we'll bring value and we'll get value from that team into our other businesses. And obviously, that's a story we'll update you on as we go.

Speaker Change: Just to Echo something Nick called on we are fortunate that despite that we've got a lot of premium packaging.

Speaker Change: We've listed over number of years mini cans glass and retail.

Speaker Change: 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, we made in our franchise.

Lauren R. Lieberman: I think it'll be an exciting conversation on our next capital market stage. Thank you. I'll take our next question. This is from the line of Lauren Lieberman from Barclays. Please go ahead. Great, thank you. Good morning, guys.

Speaker Change: To that end, we've been managing pricing for 24, well back in 2023.

Speaker Change: I suppose to kind of put it in practical terms.

Speaker Change: All of our markets.

Speaker Change: Have the pricing in place that we expected coming into 2024.

Damian Paul Gammell: I'm just curious, you talked a lot more about affordability, consumer pressures, particularly in Europe, and you mentioned discount channel, and I know that's been a focus for the team for a very long time, but was curious if you could update us maybe a little bit on how much of your, I may or I can tell them the answer, but roughly speaking, how much of your volume goes... Discount Channel, where you stand in terms of category exposure there, you know, is there opportunity to expand the categories that are represented in Discount Channel, anything particular, doing a new pack size and so on as it becomes more important, and then things you're able to leverage from your discount or experience and success into more quote mainstream channels as we go through this period of tougher consumer. Yeah, thanks, Lauren. I think we've been in that environment for over a year now.

Speaker Change: Two markets in Europe will probably come a bit later in the year, which would be GB in Germany.

Speaker Change: Beyond that we've landed in a pretty good place both in terms of headline price.

Speaker Change: On promotional pricing on again.

Speaker Change: It's a topic that's sensitive for our retailers we respect that.

Speaker Change: We're proud that we're delivering a lot of value growth for them year on year more than anybody else.

Speaker Change: So I think we're in a good place on pricing, which kind of comes back to what we've been talking about them.

Speaker Change: 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.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: We will take our next question.

Speaker Change: And this is from the line of Charlie Higgs from Redburn Atlantic. Please go ahead.

Charlie Higgs: Yes, Hi, Damian Nik hope, you're well and congrats on the Philippines acquisition.

Charlie Higgs: To drill a bit more into the Philippines, there, particularly on the margin point and how you see balancing margin expansion in the country, but also the need to be.

Damian Paul Gammell: 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.

Charlie Higgs: Cognizant of ESG for example, I think you said reached a level of 45%.

Charlie Higgs: The mix today.

Charlie Higgs: Does that have to come down over time to drive margin expansion, Philippines, and how does that play with things by the extended producer responsibility.

Damian Paul Gammell: 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. And we see the discount channel being a key, key partner for our growth. Within that, we've got two categories we're prioritizing, which are really our core sparkling portfolio and energy. Both of those are performing very well with customers in Europe. We're very conscious about pack size and formatting.

Charlie Higgs: On the single serve plastic for example for the teams.

Speaker Change: Thanks, Charlie No straight answer is no we don't see the need for refillable to come down actually.

Charlie Higgs: On a normalized level of gross margin on refillable is usually pretty strong given the reusable nature of the debacle. So.

Charlie Higgs: The challenges in the Philippines really.

Charlie Higgs: <unk> beyond any wound pack size.

Charlie Higgs: Obviously affordability is key so we've got our pricing strategy there.

Charlie Higgs: Recruits and retains consumers RGB is a big part of that we've called out that on the gross margin level clearly we've had a headwind on sugar.

Charlie Higgs: It's more expensive there in reality.

So it's not really a pack specific conversation, we see refillable is a big part of our future. There. We also see a part of our future in Indonesia.

Damian Paul Gammell: 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 from the store.

Charlie Higgs: 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.

Charlie Higgs: We see opportunities to bring some smarter or GM thinking, particularly in key accounts.

Damian Paul Gammell: So as we try and bring a mixed benefit into that channel as it grows, so there's a lot going on. And then, you know, I think we're also leveraging some of those insights with our other customers some of those insights, because I think that that affordability mindset goes beyond discounters. I think all retailers now continue to be focused on maintaining relevance. They're obviously, they're obviously conscious about their own market share.

Charlie Higgs: 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 mid term opportunity around zero sugar.

Charlie Higgs: We've been pleasantly surprised is the success of that in Indonesia.

Charlie Higgs: So that's something we're going to bring into the conversation with the team in the Philippines.

Charlie Higgs: So overall I think the margin story.

Charlie Higgs: Will evolve, but it's certainly not an <unk> issue.

Damian Paul Gammell: So a lot of what we're doing in terms of pack pricing goes beyond just that. The Discount Channel, as you call it, to broader retail. Great supply chain efficiencies. So very attractive in terms of the cost of doing business for us, which clearly supports our margin expansion and our profit growth. Yeah, 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 CCP, one of our challenges was to leverage the success of our German business with Aldi and Lidl, in particular, across what was then the legacy CCE business.

Charlie Higgs: And we are clearly committed to our sustainability goals.

Charlie Higgs: So no plans to reduce or GB, we believe it's going to be part of the 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'll state.

Speaker Change: Yes, I'm, sorry, there's a bit of a technical or mathematical issue.

Speaker Change: Because in 2018, there was an excise tax introduced in the Philippines, and Thats continued to increase to remember how we account for that Thats grossed up in revenue and gross tapping your cogs, so as that increases year on year, it's purely mathematical that your absolute gross profit.

Damian Paul Gammell: 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, that's the winning channel in retail. And we're winning with them, and we want to continue to do so.

Speaker Change: We'll grow but in margin percentage terms. It just comes down because of the fact that your revenue is higher.

Speaker Change: And hence you get a mathematical element clearly if you normalized for that if youre looking at performance over the years, there would be almost a five to seven.

Manik H. Jhangiani: And Lauren, the only thing I would add is it doesn't change our focus on the premiumization piece. And, you know, 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're getting small packs in. We've got coolers in Germany. So it's all kind of, you know, merging in a way in a positive direction. Thank you. We will now take our next question. This is from the line of Sanjeet Aujla from UBS. Please go ahead.

Speaker Change: 100 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.

Speaker Change: But <unk> is a good place to start.

Speaker Change: That's all that's on the operating profit yet.

Speaker Change: That's very helpful. Thank you.

Speaker Change: Yes.

Speaker Change: Thank you, we'll now take our next question.

Speaker Change: And this is from the line of Simon Hales from Citi. Please go ahead.

Simon Hales: Thank you.

Simon Hales: No.

Simon Hales: I Wonder if could just ask a little bit more about the efficiency program that is kicking in this year you flagged the 60 to 70 million euros of benefits in 2024, how do we think about the timing of that is going to be a little bit more perhaps H two weighted given the changes youre, making and then as we look forward into the remainder of the program how do we think about.

Sanjeet Aujla: Hey Nick, Damian, and Sarah, just going back to the Philippines, please. You spoke a little bit about 2022 being held back by the lack of sugar availability. Have the full benefits come through in 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 disclosure's margins are around 6%; are there any structural factors holding that margin back, or would you expect that to get back into double digits where it was a few years ago? Yeah. I'll maybe tell you, I'll talk on the first piece and then hand it over to Nick.

Simon Hales: <unk> this going forward will it be linear delivery for the following sort of full year, though is it fair to assume you'd be a bit.

Simon Hales: More front end loaded to 2025 and 2026.

Simon Hales: So through 2024, yes, it will be more second half weighted the numbers that we've given you.

Simon Hales: As Damian said, we continue to look at ways to continue to drive efficiency and some of that obviously it does mean, we just have to look at the way we do things today.

Damian Paul Gammell: Yeah, 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 22.

Simon Hales: Then as you go into 'twenty five 'twenty six 'twenty seven I would say to you is probably going to be more linear.

Simon Hales: 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 as for Hana implementation.

Simon Hales: I would call currently that's more linear but we'll continue to give you more updates as we finalize the program.

Damian Paul Gammell: So 2023 could look like a normalized base in terms of the availability of sugar. We can talk about the cost of sugar, but that's a different debate.

Speaker Change: Alright, Thanks, Nick.

Damian Paul Gammell: Thank you.

Speaker Change: And we will take our next question.

Speaker Change: This is from the line of Bonnie Herzog from Goldman Sachs. Please go ahead.

Damian Paul Gammell: It has got a high cost relative to Lee speaking, but we we know that, but from an availability perspective, definitely a more normalized year. On margins, Nick, do you want to?

Bonnie Herzog: Alright, Thank you hi, everyone I actually.

Bonnie Herzog: <unk> had a couple of quick follow ups from earlier questions.

Bonnie Herzog: First on volumes.

Curious to hear how they trended.

Manik H. Jhangiani: Yeah, sure. I think part of it just comes back to what Damian said. First of all, just reiterating the point about 2023. When you look at the performance, you can see the growth clearly in 2022 was held back by those shortage issues, and hence that's played out very nicely when you look at both the top line and, very importantly, the operating profit growth year on year. So, a good base. Clearly, from a margin perspective, you know 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, you know, there's a lot of work that the teams continue to do locally to see what can be influenced. You know, 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, you know, coming off when there was more latitude in terms of imports, et cetera.

Bonnie Herzog: During Q4, and then so far this year and then second could you comment on the consumer last his season.

Bonnie Herzog: If you've seen any changes of late you know Kevin either the challenging macro backdrop are you know maybe from some of the pricing you've put through and then.

Bonnie Herzog: 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.

Speaker Change: Thanks Bonnie.

Speaker Change: So quite a few follow up as you got in there.

So far for one question.

Speaker Change: As always at.

Speaker Change: So volumes as you saw in our release improved in Q4.

Speaker Change: If you strip out some of the.

Speaker Change: One offs that Nick alluded to.

Speaker Change: <unk> held up really well I think particularly compared to other categories. So I think we've enjoyed good volume.

Speaker Change: Performance It has been a similar environment for the consumer over.

Speaker Change: Not just the last quarter or even in this quarter I think it's been we.

Talked a lot about 2023% of that affordability.

Speaker Change: Mine seven cost of living pressure has existed so we're well into it.

Manik H. Jhangiani: So that will that is something clearly that will support it. And then I think the team's doing a great job in terms of more packaging options that will continue to drive margins. Looking at newer categories, they've just launched into energy. They've just launched ARTDs.

Speaker Change: Volumes are holding up for 2020 for I would say it started in line with expectations.

Speaker Change: We're excited about a couple of events earlier in the year this year Ramadan, particularly in Indonesia, starting earlier on Easter in Western Europe as earlier, so I think thats going to give us.

Manik H. Jhangiani: 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 as a greatly run business with a great leadership team. But there'll clearly be some opportunities for more best practice sharing both ways as we welcome them into our family.

Speaker Change: Good momentum coming out of Q1, we're well set up for both of those.

Speaker Change: Big festivals and events.

Speaker Change: Clearly as we look through the year, we know that as I mentioned, a few times, we have got an opportunity to hopefully enjoy a more reasonable somewhere in northern Europe.

Speaker Change: 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.

Damian Paul Gammell: And just to close out, because it'll 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, you know, margin over time, particularly in the 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, you know, that's not a one year journey.

Speaker Change: We see volumes holding open home market.

Speaker Change: Depending on the country you are in I think away from home.

Speaker Change: Williams were little bit under more pressure based on obviously weather coming out of Q3.

Speaker Change: What we've seen away from start strongly particularly in markets like Spain.

Speaker Change: I've 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.

Damian Paul Gammell: 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 of that scale. I love that market. So more to come on that.

Speaker Change: And obviously as we look at Australia, New Zealand again coming coming out we also see strong volume growth as well so.

Speaker Change: Yes.

Speaker Change: Nick I don't know if you want add anything no I would just remind you Bonnie a lot of the work that we did.

Damian Paul Gammell: Yeah, and that will support the growth aspirations that we have in that market. And, very importantly, it's built into our free cash flow guide. Great, thank you for the color.

Speaker Change: During and post Covid.

Speaker Change: Realizing for a period of time, we were just going to be home business is how do we improve the profitability both for our customers and for ourselves in the home channel as well so.

Eric Adam Serotta: 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.

Speaker Change: Damien's point, while we see good growth in both channels from a profitability perspective.

Damian Paul Gammell: Damian, you mentioned landing price. Another participant asked which markets there were premiums after the Jerry Satan's Cause event. One attendee told us that it will be heading into the early early next week over the reasons linked to pre-release videos for the museum's collection of red scrolls.

That in some ways selling 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 Av.

Damian Paul Gammell: Any color you could provide on the state of retailer discussions back in the U.S. would be helpful. Thanks. Yeah, thanks, Eric. I mean, just to kind of step back a little bit, I think we've kind of taken a multi-year approach to pricing. I think I commented on that actually this time last year that when we look at pricing, we're looking beyond, you know, the calendar year because we think, you know, 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 that our retailers, as much as our consumers, are also under some pressure around offering affordability in the cost of living kind of backdrop that we have.

Speaker Change: Great brands and packs.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks Bonnie.

Bonnie Herzog: Thank you I would now like to hand, the conference back over to Damian Gammell for his closing remarks Damien. Please go ahead.

Damian Paul Gammell: Well, thank you operator.

Damian Paul Gammell: Again, thank you everybody for joining us and also a little bit earlier than usual for.

Damian Paul Gammell: For those of you in the U S. So appreciate you getting up a bit earlier.

Damian Paul Gammell: 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 Nick pointed out and as we've talked about today, we will continue to invest for.

Damian Paul Gammell: But our 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 its going to be a busy year CCP, both with the Philippines on some of those big sporting events that I talked to across all of our markets. This year and the ongoing transformation in Indonesia.

Damian Paul Gammell: Just to echo something Nick called on, and we are fortunate that, you know, despite that, we've got a lot of premium packaging that we've listed over a number of years, minicameras, 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, you know, we'd be managing pricing for 24 well back in 2023. I suppose to kind of put it 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, you know, 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.

Damian Paul Gammell: Yep.

We are well placed for 'twenty four and beyond.

Damian Paul Gammell: And now as we've talked about our new family member to Philippines taken a number of markets we operate within to 31.

Speaker Change: So Nick 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.

Speaker Change: Thank you that concludes the conference for today. Thank you for participating you may all disconnect.

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Damian Paul Gammell: 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. I think back to Ed's point, you know, we see volume as being a bigger part of that story than in 2024, which I think is great. Okay, thank you.

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Damian Paul Gammell: Thank you. We will now take our next question. And this is from the line of Charlie Hicks from Redburn Atlantic. Please go ahead.

Charlie Hicks: Yeah, hi Damian, Nick, hope you're 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 consistent, you know, cognizant of ESG, for example. I think you said refillable, the 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 Set Plastic, for example, in the Philippines?

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Damian Paul Gammell: Thank you. Thanks, Charlie. No, I mean straight answers.

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Damian Paul Gammell: No, we don't see the need for refillable 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.

Damian Paul Gammell: Obviously, affordability is key. So we've got a pricing strategy there that recruits and retains consumers. RGB is a big part of that. We've called out that at a gross margin level, clearly we've had a headwind on sugar. You know, it's more expensive there in reality. So, you know, it's not really a PAC-specific conversation.

Speaker Change: Yes.

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Damian Paul Gammell: We see refillables as a big part of our future there. We also see them as part of our future in Indonesia. And we believe that will support margin expansion. I think it comes back to what we kind of talked about a bit earlier, which is that we see opportunities for efficiency and productivity in the supply chain. We see opportunities to bring some smarter RGM thinking, particularly in key accounts. You know, as we grow volume, we expect to get leverage on the P&L in the Philippines, and that will support margin expansion. And we have got, maybe, a midterm opportunity around zero sugar.

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Damian Paul Gammell: You know, 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, you know, 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.

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Manik H. Jhangiani: So that will stay. Yeah, and Charlie, there's a bit of a technical or mathematical issue here. Because in 2018, there was an excise tax introduced in the Philippines, and that's continued to increase.

Speaker Change: Okay.

Manik H. Jhangiani: Remember how we account for that. That's grossed up in revenue and grossed up in your carbs. 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, you know, your revenue is higher, and hence you get a mathematical element. Clearly, if you normalize for that, if you're looking at, you know, performance over the years, there'd be almost a five to seven hundred basis points improvement in that margin if you start normalizing for that. But that's the reality of the way we have to account for it.

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Manik H. Jhangiani: So just keep that in mind as you look forward. But six is a good place to start. There you go. That's on the operating profit, yeah.

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Damian Paul Gammell: This is great, that's very useful, thank you. Yeah. Thank you. We'll now take our next question. And this is from the line of Simon Hales from Citi. Please go ahead.

Speaker Change: Okay.

Simon Hales: Thank you, afternoon 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 to 70 million euros of benefits in 2024. How do we think about the timing of that? Is it going to be a little bit more, perhaps H2, weighted given the changes you're making?

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Manik H. Jhangiani: And then as we look forward into the remainder of the program, how should we think about modeling this going forward? Will it be linear delivery for the following 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.

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Manik H. Jhangiani: 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 to you it's probably going to be more linear because there will be a 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 S4HANA implementation. So, I would call it currently more linear, but we'll continue to give you more updates as we finalize the program. Thanks. Thank you. And we'll take our next question. From the line of Bonnie Herzog from Goldman Sachs, "please go ahead."

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Bonnie Herzog: All right. Thank you. Hi everyone.

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Damian Paul Gammell: I actually had a couple of quick follow-up questions from earlier questions. First, on volumes, you know, just curious to hear how they've trended, you know, during Q4 and then so far this year, and then second, could you comment on, you know, consumer elasticities and, you know, if you've seen any changes of late, you know, given either the challenging macro backdrop or, you know, maybe from some of the pricing you've put through. And then, Finally, maybe just a little Thank you. Thanks, Bonnie. So, quite a few follow-ups you got in there. That's not bad for one question, as always.

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Damian Paul Gammell: So, volumes, as you saw in the release, improved in Q4, and I think if you strip out some of the one-offs that Nick alluded to, you know, 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, you know, it's been, and we talked a lot about it in 2023, that affordability mindset and cost-of-living pressure has existed. So, we're well into it, volumes are holding up, and 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, starts earlier, and Easter in Western Europe is earlier.

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Damian Paul Gammell: 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 a few times, we have got an opportunity to hopefully enjoy a more reasonable summer in Northern Europe, and that will certainly help with volume as we go through the second half of the year. That also plays into your last question.

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Damian Paul Gammell: I mean, I think we see strong revenue growth in away from home and home. We see volumes holding up in the 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 the weather coming out of Q3.

Speaker Change: Okay.

Damian Paul Gammell: But we've seen, you know, away from home start strongly, particularly markets like Spain. I've just been there recently, and there was very, very strong growth away from home. So we'd expect that, you know, to continue through the summer in Europe. And obviously, as we look at Australia and New Zealand, again, coming out, we also see, you know, strong volume growth as well. So, yeah. Nick, I don't know if you want to add anything. No, I would just remind you, Bonnie, of a lot of the work that we did during and post-COVID, realizing for a period of time that we were just going to be a home business. How do we improve the profitability both for our customers and for ourselves in the home channel as well? So, you know, to Damian's point, while we see good growth in both channels, from a profitability perspective, you know, 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.

Sure.

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Manik H. Jhangiani: 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.

Damian Paul Gammell: 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.

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Damian Paul Gammell: And on the back of that, I just want to again thank all of my colleagues and our customers. As Nick 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 and 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 CCP, both with the Philippines and some of those big sporting events that I talked about across all of our markets this year and the ongoing transformation in Indonesia. We are well placed for 24 and beyond. And now, as we've talked about, our new family member, the Philippines, takes the number of markets we operate within to 31. So Nick and I look forward to talking to you again next time, which will be to update you on our Q1 performance.

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Damian Paul Gammell: Thank you very much... Thank you. That concludes the conference for today. Thank you for participating. You may all disconnect, www.globalonenessproject.org www.globalonenessproject.org www.globalonenessproject.org www.globalonenessproject.org www.globalonenessproject.org www.globalonenessproject.org ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? © The Bulletproof Executive 2013 Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music, www.

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Operator: Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com www. Flydreamers.com ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? © The Ultimate Parody Site!

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