2015 Integrated Annual Report
FOR IMMEDIATE RELEASE
Coca-Cola HBC AG
Publication of the 2015 Integrated Annual Report
Zug, Switzerland - 17 March 2016 - Coca-Cola HBC AG (Coca-Cola HBC or the Company or the Group) announced today the publication of its integrated annual report for the year ended 31 December 2015 (Annual Report). A copy of the Annual Report will be submitted to the National Storage Mechanism and will be shortly available for inspection at www.morningstar.co.uk/uk/nsm
The Annual Report is also available on the Company's website at:
http://www.coca-colahellenic.com/investorrelations/annualreports
Printed copies of the Annual Report will be available from 11 April 2016 and can be requested by interested shareholders, free of charge, at:
http://www.coca-colahellenic.com/investorrelations/annualreports/orderareport
In accordance with the Disclosure and Transparency Rule (DTR) 6.3.5R and the requirements it imposes as to how to make public annual financial reports, we are required to disclose such information from the Annual Report as is of a type that would be required to be disseminated in compliance with DTR6.3.5R(2). A condensed set of the Company's consolidated financial statements and information on important events that have occurred during the financial year ended 31 December 2015 and their impact on the financial statements were included in the Group's preliminary results announcement released on 19 February 2016. That information, together with the information set out in the Appendix to this announcement, which is extracted from the Annual Report, constitutes the material required by DTR6.3.5R to be communicated to the media in unedited full text through a Regulatory Information Service. Page numbers and notes to the accounts mentioned in the extracts from the Annual Report, refer to page numbers and notes to the accounts in the Annual Report. Terms used, but not otherwise defined in this announcement, have the meanings given to them in the Annual Report. This material is not a substitute for reading the Annual Report in its entirety.
Enquiries
|
Coca‑Cola HBC Group Basak Kotler Investor Relations Director |
Tel: +41 41 726 0143 basak.kotler@cchellenic.com
|
|
Nikos Efstathopoulos Investor Relations Manager |
Tel: +30 210 618 3260 nikos.efstathopoulos@cchellenic.com |
|
International media contact: Teneo Rob Morgan Ben Ullmann Anushka Mathew |
Tel: +44 20 7240 2486 robert.morgan@teneostrategy.com ben.ullmann@teneostrategy.com anushka.mathew@teneostrategy.com |
|
Greek media contact: V+O Communications Argyro Oikonomou |
Tel: +30 211 7501219 |
APPENDIX
1. Principal risks and uncertainties
The principal risks and uncertainties relating to the Company are as set out in the "Risk management" section of the Annual Report, pages 55 to 60.
The following is extracted in full and unedited text from the Annual Report and is repeated here solely for the purpose of complying with DTR6.3.5R:
Defining our principal risks
Our strategic priorities provide the context for guiding us in the management of the risks faced by our business. The most important risk categories are macroeconomic and operational. Macroeconomic risks relate to the external environment and the markets in which we operate. We have less control over these risks than we do over operational risks, such as product quality. The overview of our most important risks does not include all the risks that may ultimately affect our Company. Some risks not yet known to us, or currently believed to be immaterial, could ultimately have an impact on our business or financial performance. We remain constantly vigilant to changes to our economic and regulatory operating environments, to ensure we proactively identify and evaluate new risks. Our enhanced ability to aggregate and analyse risk, together with the enhanced role of the Group Risk Forum which now functions as a strategic "think-tank", coupled with detailed discussions with the Operating Committee and the Board, led us to identify four existing business risks, for elevation to principal risks in 2015. These build on our 2014 principal risks and in summary they address the areas of sustainability, cyber security, business transformation and legal and regulatory compliance.
Our principal risks
|
Principal Risks |
Risk |
Impact |
Key Mitigations |
Risk Universe |
Strategy |
Risk Status |
|
Breach of laws or regulations
|
Inadvertent non-compliance with the wide-ranging local laws and regulations that exist across our diverse mix of markets
|
- Damage to our corporate reputation - Significant financial penalties - Management time diverted to resolving legal issues
|
- Annual 'tone from the top' messaging - Code of business conduct training and awareness - Anti-bribery policy and compliance training - Internal control assurance programme with local management accountability - Risk-based internal control framework (2015) - Speak Up hotline implemented (2015) - Legal function in constant dialogue with regulators
|
Legal and Regulatory
|
Community Trust
|
New |
|
Change management
|
Failure to effectively execute major business transformations, or performance issues with third-party providers that we deploy as part of our business transformation
|
- Under-delivery of expected transformation results - Disengaged employees - Reduction in profitability - Market confidence in our ability to deliver on strategy is weakened - Corporate reputation is adversely affected
|
- Project plans and change management strategies in place - Board and Operating Committee conduct regular tracking of actual performance against the business case
|
Business Transformation
|
Customer Preference
|
New |
|
Climate, carbon and water
|
Failure to meet our stakeholders' expectations in making a positive contribution to the sustainability agenda, particularly relating to climate change, carbon emissions and water usage
|
- Long-term damage to our corporate reputation - Less influence in shaping the citizenship and sustainability agenda |
- Water stewardship programmes that are reducing our water consumption - Carbon and energy management programmes - Packaging waste management programmes - Partnering with NGOs and INGOs on common issues such as nature conservation - Partnering with local communities to minimise environmental impact - Focus on sustainable procurement
|
Sustainability |
Community Trust |
New |
|
Cyber attacks and system availability
|
Dependence on IT systems and infrastructure in our interaction with our customers, suppliers and consumers together with the protection of the data we have created, or that has been provided to us
|
- Financial loss - Operational disruption - Damage to corporate reputation - Non- compliance with statutory data protection legislation
|
- Monitoring, identification and addressing cyber threats and suspicious internal computer activity - Training on information management and the protection of information - Disaster recovery testing and building resilience into our cyber risk programme
|
Cyber Security |
Customer Preference
|
New |
|
Channel mix |
A continued increase in the concentration of retailers and independent wholesalers on whom we depend to distribute our products. The immediate consumption channel remains under pressure as consumers switch to at-home consumption
|
- Reduced profitability |
- Continued to increase our presence in the discounter channel during 2015 - Collaboration with customers to identify opportunities for joint value creation - Right Execution Daily (RED) strategy continues to support our commitment to operational excellence
|
Commercial and Competition |
Customer Preference
|
No change |
|
Consumer health
|
Failure to adapt to changing consumer health trends and addressing the misconceptions on the health impact of soft drinks |
- Failure to achieve our growth plans - Damage to our brand and corporate reputation - Loss of consumer base |
- Focus on product innovation - Expand our range of low- and no-calorie beverages - Reduce the calorie content of products in the portfolio - Clearer labelling on packaging - Promote active lifestyles through consumer engagement programmes focused on health and wellness
|
Beverage Category Acceptability |
Consumer Relevance
|
Increased |
|
Declining consumer demand
|
Challenging and volatile macroeconomic conditions can affect consumer demand. This includes political and security instability in Russia, Ukraine and Nigeria |
- Eroded consumer confidence affecting spending - Inflationary pressures - Social unrest - Safety of people - Asset security
|
- Seek to offer the right brand, at the right price, in the right package, through the right channel - Robust security practices and procedures to protect people and assets - Crisis response and business continuity strategies |
Political & Security Stability
|
Customer Preference
|
Increased |
|
Foreign exchange |
Foreign exchange exposure arising from changes in exchange rates between the Euro, US Dollar, and other currencies in the markets we serve |
- Negative EBIT impact |
- Treasury policy requires hedging of 25% to 80% of rolling 12 month forecasted transactional exposure - Hedging beyond 12 months if forecast transactions are highly probable - Derivative financial instruments are used, where available and/or appropriate, to reduce net exposure to currency fluctuations
|
Tax & Treasury |
Cost Leadership |
Increased |
|
People and talent |
Inability to attract and retain sufficient numbers of qualified and experienced employees in competitive talent markets and inability to ensure their ongoing engagement and commitment |
- Failure to achieve our growth plans |
- Focus on developing leadership talent - Right people in the right positions across the business - Focus on employee engagement ensuring support for our values - Promote operational excellence - Create shared value with the communities in which we work to ensure we are seen as an attractive employer
|
Employee Engagement & Retention |
Community Trust
|
No change |
|
Quality |
The occurrence of quality issues, or the contamination of our products |
- Reduction in volume and net sales revenue - Damage to brand and corporate reputation - Loss of consumer trust
|
- Stringent quality processes in place to minimise the occurrence of quality issues - Early warning systems (consumer information centres and social media monitoring) that enable issue identification - Robust response processes and systems to address quality issues, ensuring customers and consumers retain confidence in our products
|
Product Quality & Food Safety |
Consumer Relevance |
No change |
|
Strategic stakeholder relationships |
We rely on our strategic relationships and agreements with The Coca-Cola Company, Monster Energy and our premium spirits partners |
- Termination of agreements, or less favourable renewal terms than currently experienced, could adversely affect profitability |
- Management focus on effective day-to-day interaction with our strategic partners - Working together as effective partners for growth - Engagement in joint projects and business planning with a focus on strategic issues - Participation in 'Top to Top' senior management forums
|
Stakeholder Relationships
|
Community Trust |
No change |
|
Taxation |
Regulations on consumer health and the risk of the targeting of our products for discriminatory tax and packaging waste recovery |
- Reduction in profitability |
- Proactively work with governments and regulatory authorities to ensure that the facts are clearly understood and that our products are not singled out unfairly - Shape sustainability agenda relating to packaging and waste recovery - Engage with stakeholders, including NGOs and the communities in which we operate, on strategies to protect the environment
|
Legal and Regulatory
|
Community Trust |
Increased |
New: Business risk elevated in 2015 to a principal risk via robust evaluation process
2. Directors' responsibility statement
The following statement relates to and is extracted from the Annual Report, page 104. It is repeated here solely for the purpose of complying with DTR6.3.5R. It is not connected to the extracted information presented in this announcement or in the Company's results announcement published on 19 February 2016.
Statement of Directors' Responsibilities
The Directors, whose names and functions are set out on pages 64 to 65 confirm to the best of their knowledge that:
(a) The Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.
(b) The consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards, as issued by the IASB, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation of the Group taken as a whole.
(c) The Annual Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidated Coca-Cola HBC Group taken as a whole, together with a description of the principal risks and uncertainties that they face.
(d) The Directors are responsible for preparing the Annual Report, including the consolidated financial statements, and the Corporate Governance Report including the Remuneration Report and the Strategic Report, in accordance with applicable law and regulations.
(e) The activities of the Group, together with the factors likely to affect its future development, performance, the financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Strategic Report (pages 1 to 61). In addition, notes 7 "Financial instruments", 14 "Borrowings", 17 "Share capital, share premium and Group reorganisation reserve" and 28 "Financial risk management" to the financial statements include the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk. The Group has considerable financial resources together with long-term contracts with a number of customers and suppliers across different countries. The Directors have also assessed the principal risks and the other matters discussed in connection with the viability statement on page 61. The Directors considered it appropriate to adopt the going concern basis of accounting in preparing the annual financial statements and have not identified any material uncertainties to the Group's ability to continue to do so over a period of at least 12 months from the date of approval of these financial statements.
By order of the Board
Dimitris Lois
Chief Executive Officer
17 March 2015
About Coca‑Cola HBC
Coca-Cola HBC is a leading bottler of The Coca-Cola Company with a sales volume of more than 2 billion unit cases. It has a broad geographic footprint with operations in 28 countries serving a population of approximately 590 million people. Coca-Cola HBC offers a diverse range of non-alcoholic ready to drink beverages in the sparkling, juice, water, sport, energy, tea and coffee categories. Coca-Cola HBC is committed to promoting sustainable development in order to create value for its business and for society. This includes providing products that meet the beverage needs of consumers, fostering an open and inclusive work environment, conducting its business in ways that protect and preserve the environment and contribute to the socio-economic development of the local communities. Coca-Cola HBC is ranked beverage industry leader in the Dow Jones Sustainability World and Europe Indices, and is also included in the FTSE4Good Index.
Coca-Cola HBC has a premium listing on the London Stock Exchange (LSE: CCH) and its shares are listed on the Athens Exchange (ATHEX: EEE). For more information, please visit http://www.coca-colahellenic.com.
This information is provided by RNS
Latest directors dealings
- 16 hours ago Savannah Energy
- 17 hours ago Buccaneer Energy PLC
- 17 hours ago Savannah Energy
- 18 hours ago Carclo
- 18 hours ago Schroder Japan Growth Fund