Strong execution drives another year of growth

RNS Number : 7930P

Coca-Cola HBC AG

14 February 2023

Coca-Cola HBC AG, a growth-focused Consumer Packaged Goods business and strategic bottling partner of The Coca-Cola Company, reports its financial results for the twelve months ended 31 December 2022.

Full-year highlights

· Focus on strategic priorities and excellence in execution delivered another year of strong organic growth ¹ , driven by price, mix and volume

o Organic revenue up 14.2%. Reported revenue up 28.3%

o Excluding Russia and Ukraine organic revenue up 22.7%

o Organic revenue per case up 15.9%, benefitted from pricing and targeted actions to improve mix throughout the year

o Broad-based volume growth outside of Russia and Ukraine, led by our priority categories: Sparkling, Energy and Coffee

o Execution excellence driven by focused channel activations and customer segmentation

o Gaining volume and value share

· Comparable EBIT up 11.9% to €929.7 million with organic EBIT up 1.3% as pricing, mix and cost discipline drive profits despite the challenging inflationary backdrop

o Operating leverage and cost savings enabled operating expenses as a percent of revenue to improve by 50bps

o Continued investment in marketing, increased by 11.5% excluding Russia and Ukraine

o 2021 comparative included €23 million benefit to EBIT from one-off Cyprus property sale

· Continued investment behind strategic priorities to drive profitable, sustainable growth

o Investment behind Sparkling and Energy capacity and capability driving consistent performance

o Increased investment in capabilities to support prioritised opportunities in data, digital commerce, Egypt and Coffee

o Accelerating our sustainability agenda with the opening of €30 million recycled PET (rPET) facility in Italy

· Another year delivering record free cash flow and an increased dividend

o Comparable EPS up 7.7%, impacted by a higher tax rate and finance charges, as expected

o Free cash flow increased by €43.8 million to €645.1 million, due to improved profit generation and effective working capital management

o Issue of first green bond for €500 million

o Board of Directors to propose an ordinary dividend of €0.78 per share, up 9.9% year on year representing a 46% pay-out

Segment highlights

Established and Developing show strong momentum, Emerging impacted by declines in Russia and Ukraine

· Established: Organic revenue increased by 18.6% with well-balanced volume and revenue-per-case expansion. Organic EBIT expanded 1.3%

· Developing: Organic revenue up 29.0%, led by double-digit volume growth across the main markets. Organic EBIT up 12.7%

· Emerging: Organic revenue up 5.5%, with 23.5% growth excluding Russia and Ukraine. Organic EBIT declined 1.1%

Zoran Bogdanovic, Chief Executive Officer of Coca-Cola HBC AG, commented:

"We delivered a strong performance in 2022 against a challenging backdrop, achieving record levels of revenue, comparable EBIT and free cash flow.

The benefits of portfolio prioritisation were clear, with growth led by Sparkling, Energy and Coffee. Consumer demand for our products and in our categories remained good. The power of our portfolio and consistent investment in our capabilities allowed us to balance pricing and mix enhancements, while also achieving another year of strong share gains.

We are making tangible progress towards our Mission 2025 and NetZeroby40 goals, with key milestones including the opening of a new rPET facility in Italy and the issuance of our first green bond.

Our strong performance is testament to the passion and dedication of our people and I would like to thank all our customers, partners and employees for their ongoing commitment and support.

Looking to 2023, our track record, portfolio, capabilities, the diversity of our markets and, above all, our talented people make us confident of achieving another year of strategic and financial progress, accelerating our journey to becoming The Leading 24/7 Beverage Partner."

	Full Year
	2022	2021	% Change Reported	%Change Organic¹
Volume (m unit cases)	2,711.8	2,412.7	12.4%	-1.5%
Net sales revenue (€ m)	9,198.4	7,168.4	28.3%	14.2%
Net sales revenue per unit case (€)	3.39	2.97	14.2%	15.9%
Operating profit (EBIT)² (€ m)	703.8	799.3	-11.9%
Comparable EBIT¹ (€ m)	929.7	831.0	11.9%	1.3%
EBIT margin (%)	7.7	11.2	-350bps
Comparable EBIT margin¹ (%)	10.1	11.6	-150bps	-130bps
Net profit³ (€ m)	415.4	547.2	-24.1%
Comparable net profit^1,3 (€ m)	624.9	578.1	8.1%
Basic earnings per share (EPS) (€)	1.134	1.499	-24.3%
Comparable EPS¹ (€)	1.706	1.584	7.7%
Free cash flow¹ (€ m)	645.1	601.3	7.3%

1For details on APMs refer to 'Alternative Performance Measures' and 'Definitions and reconciliations of APMs' sections.

2 Refer to the condensed consolidated income statement.

3Net Profit and comparable net profit refer to net profit and comparable net profit respectively after tax attributable to owners of the parent.

Business Outlook

We have benefitted from a better-than-expected financial performance in 2022, despite the significant headwinds to our business. While we remain attentive to macroeconomic and geopolitical risks, we have high confidence in our broad portfolio and the opportunities in our diverse markets, amplified by our prioritised capabilities, customer-centric commercial strategy and above all, the talent of our people. We are actively prioritising investments across our categories and geographies to drive sustainable growth.

· In 2023 we expect to generate organic revenue growth at a Group level above our 5-6% average target range.

· We continue to face ongoing inflation and assume COGS/case increases by low teens percent in 2023.

· We expect the impact of translational FX on our Group comparable EBIT to be a €25 - 35 million headwind.

· We expect organic EBIT growth in the range of +3% to -3% in 2023.

Technical guidance

Restructuring: We do not expect significant restructuring initiatives to take place in 2023.

Tax: Considering the dynamics of the evolving mix of profitability in our country portfolio, we continue to

expect our comparable effective tax rate to be in the range between 25% and 27%.

Finance costs: We expect net finance costs for 2023 to be similar to 2022.

Scope: We will benefit from the consolidation of Multon from 11 August 2022 and the acquisition of Three Cents from 21 October 2022.

Group Operational Review

Leveraging our unique 24/7 portfolio

Organic revenue increased by 14.2% driven by price and mix, while reported net sales revenue increased by 28.3%, driven by the acquisition of Egypt, consolidation of Multon as well as favourable currency impact.

Full year organic volume fell by 1.5%, adversely impacted by declines in Russia and Ukraine. Excluding these markets, organic volume growth was up 8.1%, with broad-based increases across segments.

Our focus on the most profitable growth opportunities across our 24/7 portfolio is driving high quality revenue growth.

· Outside of Russia and Ukraine, Sparkling volumes grew by 7.7% overall. Low/ no sugar variants and Adult Sparkling maintained strong momentum with Low/no sugar up 14.3% and Adult Sparkling up 9.5%. Trademark Coca-Cola volumes grew 9.1%, led by ongoing strong performance from Coke Zero , while Fanta grew 3.8% and Sprite 4.7%. Including Russia and Ukraine, overall Sparkling volumes declined by 2.7% with Low/no sugar up 10.3%, a decline in Adult Sparkling and a 4.0% decline in trademark Coca-Cola volumes.

· Energy volumes grew by 16.3%, with strong momentum in most markets, which more than offset declines in Russia and Ukraine.

· Still volumes grew by 0.5%, with growth led by the Established and Developing segments.

· Coffee performed well, up 28.2%, with encouraging share gains driven by both rate of sales and distribution increases. We are making good progress on out-of-home customer recruitment having doubled outlet penetration to 8,000 in a year.

Winning in the marketplace

Organic revenue per case expanded by 15.9%, as pricing and revenue growth management actions in all markets drove improvements throughout the year.

Pricing and mix

Pricing remained a critical lever of growth in 2022. We took a proactive and agile approach, enhanced by a consistent focus on improving mix. We have well-developed plans and scenarios in our markets to guide our pricing decisions in 2023. We continue to benefit from our revenue growth management capabilities, the strength and breadth of our portfolio, as well as data, insights and analytics, to support affordability in a profit-accretive way, while also premiumising to enhance revenue per case.

· Single-serve mix gained 3.5 percentage points, driven by strong growth in the out-of-home channel as well as targeted activation of single-serve package formats across our markets.

· Category mix continued to improve driven by contributions from Sparkling and Energy.

· Channel mix improved due to strong out-of-home channel performance, which benefitted from targeted channel activation plans to capitalise on recovery after the COVID-19 pandemic.

Market share gains

We delivered share gains across the portfolio in 2022 driven by holistic marketing plans and targeted execution across our markets. In NARTD, value share increased by 120 basis points, while Sparkling value share increased by 170 basis points. We remained the number one contributor to retail customers' revenue growth within fast moving consumer goods (FMCG) across our territories.

Cost control, operating profit and margins

Comparable gross profit grew by 21.3%, leading to gross profit margins of 34.2%, a decline of 200 basis points. Inflation headwinds from input costs, energy and production overheads pushed comparable COGS per case higher by 17.7%.

Comparable operating costs as a percent of revenue improved by 50 basis points to 24.6%. We benefitted from good operational leverage by controlling costs as revenue growth accelerated . While maintaining tight control of non-essential costs, we increased marketing spend above pre-pandemic levels, seizing opportunities across our markets.

Comparable EBIT increased by 11.9% on a reported basis to €929.7 million, benefitting from growth across our markets, cost control, currency, the consolidation of the Egypt acquisition from mid-January as well as the consolidation of Multon.

On an organic basis, c omparable EBIT increased by 1.3%, while the comparable EBIT margin was 10.1%, down 130 basis points on an organic basis, as the inflationary pressures in costs, together with the cycling of last year's asset sale, more than offset our pricing and mix actions.

We saw slightly positive translational and transactional currency impact in 2022, as the appreciation of the Russian Rouble during the year was offset by depreciation of the Nigerian Naira.

Net profit and free cash flow

Comparable net profit of €624.9 million and comparable basic earnings per share of €1.706 were 8.1% and 7.7% higher than in the prior year, respectively. Reported net profit and reported basic earnings per share of €415.4 million and €1.134 were 24.1% and 24.3% lower than in the prior year respectively, mainly due to impairment charges relating to our operations in Russia.

Comparable taxes amounted to €224.4 million, representing a comparable tax rate of 26%, at the mid-point of our guided range of 25% to 27%.

Financing costs were €15.1 million higher than the prior year at €82.7 million, driven by the consolidation of Egypt.

Capital expenditure increased by €48.6 million to €589.5 million as we invested behind production capacity in growth products, packages and markets, energy efficient cooler expansion to drive single-serve mix, and our sustainability agenda with the opening of an rPET facility in Italy. Capex as a percentage of revenue was 6.4%, slightly below our targeted range of 6.5% to 7.5%, given discontinued investment in Russia.

Free cash flow was €645.1 million, an increase of €43.8 million compared to the prior year and a record for the business, driven by higher profitability.

Earning our licence to operate

Throughout the year we remained focused on delivering towards our Mission 2025 and NetZeroby40 goals and were pleased to be recognised, for a sixth time, as the world's most sustainable beverage company by the 2022 Dow Jones Sustainability Index.

We continued to prioritise a circular approach to packaging. For example, in Switzerland, we successfully moved our entire, locally produced portfolio to rPET and rolled out label-free bottles for our
carbon-neutral water brand, Valser. In December we began the transition to a 100% rPET portfolio in Austria and Italy for all categories outside of Water.

Also in Italy, this year we repurposed an existing site, building a new plant that can convert up to 30,000 tonnes per annum of plastic into 100% rPET preform bottles, developing our in-house recycling technology capability. These rPET preforms have a carbon footprint up to 70% lower than their virgin plastic equivalents. This investment guarantees a good supply of rPET meeting our total beverage needs in the market. We also established in-house rPET production capability in our facility in Poland, and have further plans for rPET production in Romania for 2023, bringing our total investment in recycling technologies to date to more than €45 million.

In September we issued our first green bond, raising €500 million in support of ambitious sustainability projects that will further accelerate our progress into 2023 and beyond.

Operational Review by Reporting Segment
Established markets
	Full Year
	2022	2021	% Change Reported	% Change Organic
Volume (m unit cases)	643.9	589.9	9.2%	9.1%
Net sales revenue (€ m)	2,974.1	2,479.0	20.0%	18.6%
Net sales revenue per unit case (€)	4.62	4.20	9.9%	8.6%
Operating profit (EBIT) (€ m)	310.4	285.6	8.7%
Comparable EBIT (€ m)	307.1	300.8	2.1%	1.3%
EBIT margin (%)	10.4	11.5	-110bps
Comparable EBIT margin (%)	10.3	12.1	-180bps	-180bps

Net sales revenue grew by 18.6% and 20.0% on an organic and reported basis respectively, as we faced positive foreign currency movements from the Swiss Franc.

Organic growth in net sales revenue per case was 8.6%. We benefitted from price increases in all markets throughout the year, as well as positive package and category mix. A focus on single-serve activation, both in at-home and out-of-home channels, saw a 4.5 percentage point improvement in single-serve mix.

Established markets volume grew 9.1%, with good momentum across markets, driven by our priority categories. Sparkling volumes grew high-single digits benefitting from over 20% volume growth in Adult Sparkling and low-double digit growth in Coke Zero. Stills grew by high-single digits, benefitting from strong execution and improvement in the out-of-home channel. Energy volumes expanded in the mid-twenties despite very tough comparatives.

· In Italy, volumes grew by 9.0%. Growth was driven by strategic priorities in Sparkling: Coke Zero up high-teens and Adult Sparkling up strong double-digits. Energy grew in the thirties, despite tough comparatives. We are seeing positive results from investments in Stills with strong performance from Powerade and FuzeTea.

· Volumes in Greece were up by 9.1%. We saw low-double digit volume growth in Stills, driven by Water, which performed well, as the out-of-home channel recovered. Sparkling grew by high-single digits driven by Coke Zero, Fanta and Adult Sparkling, while Energy grew above 20%.

· In Ireland, volumes grew by 10.0%. Stills delivered mid-teens volume growth driven by successful new premium launches in Hydration. Sparkling volumes grew by high-single digits, driven by Coke Zero, Sprite and Fanta, while Energy grew in the mid-twenties.

· In Switzerland, volumes grew by 8.7%, benefitting from out-of-home recovery and good execution. Still volume was up low-double digits. Sparkling volumes grew high-single digits with a strong performance from Trademark Coke and Fanta.

Comparable EBIT in the Established segment increased by 1.3% and 2.1% on an organic and reported basis respectively, to €307.1 million. Comparable EBIT margin was 10.3%, down 180 basis points on an organic basis, impacted by higher COGS as well as the cycling of last year's property sale in Cyprus.

Developing markets
	Full Year
	2022	2021	% Change Reported	% Change Organic
Volume (m unit cases)	478.8	415.5	15.2%	15.2%
Net sales revenue (€ m)	1,719.7	1,365.6	25.9%	29.0%
Net sales revenue per unit case (€)	3.59	3.29	9.3%	11.9%
Operating profit (EBIT) (€ m)	113.1	104.7	8.0%
Comparable EBIT (€ m)	115.1	106.5	8.1%	12.7%
EBIT margin (%)	6.6	7.7	-110bps
Comparable EBIT margin (%)	6.7	7.8	-110bps	-100bps

Net sales revenue grew by 29.0% and 25.9% on an organic and reported basis respectively, driven by adverse foreign currency movement through the year from the Polish Zloty and Hungarian Forint.

Organic net sales revenue per case increased by 11.9%. The segment benefitted from double-digit volume growth across the main markets as well as from pricing initiatives, and positive package and channel mix.

Developing markets volume grew by 15.2%, with a good performance across all countries and categories. We saw mid-teens volume growth in Sparkling and high-teens growth from Energy and we delivered good results also in Adult Sparkling and Stills.

· Poland volumes increased by 18.5%, with very strong performance in Sparkling, thanks to Trademark Coke and Sprite. The category benefitted from cycling the implementation of the sugar tax and our execution with customers, while we drove significant share gains in Sparkling. Energy grew by high-teens and Stills by low double digits.

· In Hungary, volumes increased by 11.8%, with a strong performance from Sparkling where we saw mid-teens growth, driven by Trademark Coke, Fanta, and Adult Sparkling. Energy continued its strong momentum. Additional pricing was taken to pass on the sugar tax effective July 2022.

· Volume in the Czech Republic grew by 17.8%. We saw mid-teens growth in Sparkling driven by Trademark Coke, Fanta and Adult Sparkling. Water volumes increased significantly due to stronger execution in the out-of-home channel.

Comparable EBIT in the Developing segment increased by 8.1% to €115.1 million, an organic growth rate of 12.7%. Comparable EBIT margin was 6.7%, down 100 basis points on an organic basis, impacted by higher COGS.

Emerging markets
	Full Year
	2022	2021	% Change Reported	% Change Organic
Volume (m unit cases)	1,589.1	1,407.3	12.9%	-10.9%
Net sales revenue (€ m)	4,504.6	3,323.8	35.5%	5.5%
Net sales revenue per unit case (€)	2.83	2.36	20.0%	18.4%
Operating profit (EBIT) (€ m)	280.3	409.0	-31.5%
Comparable EBIT (€ m)	507.5	423.7	19.8%	-1.1%
EBIT margin (%)	6.2	12.3	-610bps
Comparable EBIT margin (%)	11.3	12.7	-150bps	-80bps

Net sales revenue grew by 5.5% on an organic basis, or by 35.5% on a reported basis, due to the consolidation of Egypt from mid-January and Multon from 11 August, as well as the stronger Russian Rouble. Organic net sales revenue grew by 23.5% when excluding Russia and Ukraine.

Net sales revenue per case grew 18.4% organically, benefitting from pricing actions taken throughout the year, including proactively managing the impact of currency devaluation in Egypt and Nigeria.

Emerging markets' volume fell by 10.9% organically and grew 12.9% on a reported basis, which includes the consolidation of Egypt from mid-January and Multon from 11 August. Sparkling volumes declined by low-double digits and Still volumes were down high-single digits, both negatively impacted by Russia and Ukraine. Excluding Russia and Ukraine, organic volumes grew by mid-single digits and Sparkling volumes grew mid-single digits.

· Volume in Nigeria increased by 2.0% on tough comparatives. We consciously drove strong price mix to manage cost inflation and currency devaluation while gaining both value and volume share. Sparkling volumes increased low-single digits, with high-single digit growth in Adult Sparkling. We also benefitted from very strong growth in Energy and share gains in Juice.

· Russia volumes declined by 41.4%. We depleted inventories of The Coca-Cola Company's branded products from 8 March to the end of July. We now sell solely local brands in Russia.

· Ukraine volume fell by 26.3%. After restarting the plant in May, we continued to increase production through the rest of the year, in response to improving demand from customers and consumers. The team continues to manage complex challenges in the operating environment.

· Volume in Romania increased by 0.6%. Sparkling volumes fell slightly, with mid-single digit growth in Adult Sparkling and low-double digit growth in Energy. We saw low-single digit growth in Stills, driven by Water and RTD tea.

· Volumes declined by 7.3% in Egypt, on a tough comparative and a challenging consumer and macroeconomic environment. Integration continues to progress well, with ongoing deployment of our key capabilities in the market, which drove market share gains in Sparkling.

Comparable EBIT in the Emerging segment fell by 1.1% on an organic basis and grew 19.8% on a reported basis, to €507.5 million. Operating profit declined 31.5%, mainly due to impairment charges relating to our operations in Russia. Comparable EBIT margin was 11.3%, down 80 basis points on an organic basis, impacted by higher COGS.

Coca-Cola HBC Group

Coca-Cola HBC is a growth-focused consumer packaged goods business and strategic bottling partner of The Coca-Cola Company. We create value for all our stakeholders by supporting the socio-economic development of the communities in which we operate, and we believe building a more positive environmental impact is integral to our future growth. Together, we and our customers serve 715 million consumers across a broad geographic footprint of 29 countries on three continents. Our portfolio is one of the strongest, broadest and most flexible in the beverage industry, offering consumer-leading beverage brands in the sparkling, juice, water, sport, energy, plant-based, ready-to-drink tea, coffee, adult sparkling and premium spirits categories. These beverages include Coca-Cola, Coca-Cola Zero, Schweppes, Kinley, Costa Coffee, Valser, Römerquelle, Fanta, Sprite, Powerade, FuzeTea, Dobry, Cappy, Monster and Adez. We foster an open and inclusive work environment amongst our 33,000 employees and we are ranked among the top sustainability performers in ESG benchmarks such as the Dow Jones Sustainability Indices, CDP, MSCI ESG and FTSE4Good.

Coca-Cola HBC has a premium listing on the London Stock Exchange (LSE: CCH) and is listed on the Athens Exchange (ATHEX: EEE). For more information, please visit https://www.coca-colahellenic.com .

Financial information in this announcement is presented on the basis of
International Financial Reporting Standards ('IFRS')

Conference call

Coca-Cola HBC's management will host a conference call for investors and analysts on Tuesday, 14 February 2023 at 9:00 am GMT. To join the call, in listen-only mode please join via webcast . If you anticipate asking a question, please click here to register and find dial-in details.

Next event

3 May 2023 2023 First quarter trading update

Enquiries

Coca‑Cola HBC Group

Investors and Analysts:
Joanna Kennedy Head of Investor Relations	Tel: +44 7802 427505 joanna.kennedy@cchellenic.com

Media:
Sonia Bastian Head of Communications	Tel: +41 7946 88054 s onia .b astian @cchellenic.com
Greek media contact: V+O Communications Manos Iatrelis	Tel: + 30 693 742 0246 mi@vando.gr

Special Note Regarding the Information set out herein

Unless otherwise indicated, the condensed consolidated financial statements and the financial and operating data or other information included herein relate to Coca-Cola HBC AG and its subsidiaries ("Coca-Cola HBC" or the "Company" or "we" or the "Group").

Forward-Looking Statements

This document contains forward-looking statements that involve risks and uncertainties. These statements may generally, but not always, be identified by the use of words such as "believe", "outlook", "guidance", "intend", "expect", "anticipate", "plan", "target" and similar expressions to identify forward-looking statements. All statements other than statements of historical facts, including, among others, statements regarding our future financial position and results, our outlook for 2023 and future years, business strategy and the effects of the global economic slowdown, the impact of the sovereign debt crisis, currency volatility, our recent acquisitions, and restructuring initiatives on our business and financial condition, our future dealings with The Coca-Cola Company, budgets, projected levels of consumption and production, projected raw material and other costs, estimates of capital expenditure, free cash flow, effective tax rates and plans and objectives of management for future operations, are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect our current expectations and assumptions as to future events and circumstances that may not prove accurate. Our actual results and events could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in the 2021 Integrated Annual Report for Coca-Cola HBC AG and its subsidiaries .

Although we believe that, as of the date of this document, the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we, nor our directors, employees, advisors nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. After the date of the condensed consolidated financial statements included in this document, unless we are required by law or the rules of the UK Financial Conduct Authority to update these forward-looking statements, we will not necessarily update any of these forward-looking statements to conform them either to actual results or to changes in our expectations .

Alternative Performance Measures

The Group uses certain Alternative Performance Measures ("APMs") in making financial, operating and planning decisions as well as in evaluating and reporting its performance. These APMs provide additional insights and understanding to the Group's underlying operating and financial performance, financial condition and cash flow. The APMs should be read in conjunction with and do not replace by any means the directly reconcilable IFRS line items. For more details on APMs please refer to 'Definitions and reconciliations of APMs' section.

As of 1 January 2022 the Group moved its reporting to organic growth APMs. This is to enable a better understanding of underlying business performance, that is more consistent with how Coca-Cola HBC's peer group reports.

Group Financial Review

Income statement	Full Year
	2022 € million	2021 € million	% Change Reported	% Change Organic
Volume (m unit cases)	2,711.8	2,412.7	12.4%	-1.5%
Net sales revenue	9,198.4	7,168.4	28.3%	14.2%
Net sales revenue per unit case (€)	3.39	2.97	14.2%	15.9%
Cost of goods sold	(6,054.2)	(4,570.2)	32.5%
Comparable cost of goods sold¹	(6,050.6)	(4,574.0)	32.3%
Gross profit	3,144.2	2,598.2	21.0%
Comparable gross profit¹	3,147.8	2,594.4	21.3%
Operating expenses	(2,354.6)	(1,833.3)	28.4%
Comparable operating expenses¹	(2,259.7)	(1,797.8)	25.7%
Exceptional items related to Russia-Ukraine conflict²	(127.4)	-	NM
Share of results of integral equity method investments	41.6	34.4	20.9%
Operating profit (EBIT)²	703.8	799.3	-11.9%
Comparable operating profit (EBIT)¹	929.7	831.0	11.9%	1.3%
Adjusted EBITDA¹	1,343.6	1,151.5	16.7%
Comparable adjusted EBITDA¹	1,371.5	1,183.0	15.9%
Finance costs, net	(82.7)	(67.6)	22.3%
Share of results of non-integral equity method investments	2.5	3.2	-21.9%
Tax	(208.0)	(187.4)	11.0%
Comparable tax¹	(224.4)	(188.2)	19.2%
Net profit³	415.4	547.2	-24.1%
Comparable net profit^1,3	624.9	578.1	8.1%
Basic earnings per share (€)	1.134	1.499	-24.3%
Comparable basic earnings per share (€)¹	1.706	1.584	7.7%

¹ Refer to the ' Alternative Performance Measures' and ' Definitions and reconciliations of APMs' sections.

² Refer to the condensed consolidated income statement.

³ Net Profit and comparable net profit refer to net profit and comparable net profit respectively after tax attributable to owners of the parent.

Net sales revenue grew by 28.3% in 2022, compared to the prior year, driven by the consolidation of Egypt and Multon, as well as pricing initiatives and mix improvements, supported by favourable foreign currency movements. On an organic basis, net sales revenue grew by 14.2% during 2022, compared to the prior year.

Comparable and reported cost of goods sold increased by 32.3% and 32.5% respectively in 2022, compared to the prior year, driven by the consolidation of Egypt and Multon, as well as energy and input cost inflation.

Comparable operating expenses increased by 25.7% in 2022 compared to the prior year mainly driven by higher selling, delivery and administrative expenses and the consolidation of Egypt and Multon; while operating expenses increased by 28.4% in 2022 compared to the prior year further impacted by acquisition and integration costs associated with the business combinations of Egypt and Multon.

Exceptional items related to Russia-Ukraine conflict refer to net impairment losses for property, plant and equipment, equity method investments and goodwill, resulting from the Group's restructuring initiatives in Russia and the deterioration of Russia's macroeconomic environment.

Comparable operating profit grew by 11.9% in 2022, compared to the prior year, reflecting the benefits from the consolidation of Egypt and Multon and mix improvements, which were only partially offset by higher input costs and operating expenses. Operating profit deteriorated by 11.9% in 2022, compared to the prior year period as the aforementioned benefits were more than offset by the exceptional items related to the Russia-Ukraine conflict and acquisition and integration costs associated with the business combinations of Multon and Egypt.

Net finance costs increased by €15.1 million during 2022 compared to the prior year, mainly driven by higher interest expense due to the consolidation of Egypt and increased hedging cost of borrowings in Nigeria as well as higher net foreign exchange losses, which were only partially offset by higher interest income.

On a comparable basis, the effective tax rate was 26.4% for 2022 and 24.5% for 2021. On a reported basis, the effective tax rate was 33.4% for 2022, mainly impacted by the impairment losses relating to the Group's operations in Russia, and 25.5% for 2021, respectively. The Group's effective tax rate varies depending on the mix of taxable profits by territory, the non-deductibility of certain expenses, non-taxable income and other one-off tax items across its territories.

Comparable net profit grew by 8.1% compared to the prior-year period, due to higher operating profitability, while net profit contracted by 24.1%, largely due to the net impairment losses after tax, relating to the Group's operations in Russia, and acquisition and integration costs associated with the business combinations of Egypt and Multon .

Balance Sheet
	As at 31 December
	2022	2021	Change
Assets	€ million	€ million	€ million
Total non-current assets	6,139.5	5,357.4	782.1
Total current assets	3,716.2	3,156.9	559.3
Total assets	9,855.7	8,514.3	1,341.4
Liabilities
Total current liabilities	3,006.7	2,516.4	490.3
Total non-current liabilities	3,463.4	2,880.8	582.6
Total liabilities	6,470.1	5,397.2	1,072.9
Equity
Owners to the parent	3,282.3	3,114.5	167.8
Non-controlling interests	103.3	2.6	100.7
Total equity	3,385.6	3,117.1	268.5
Total equity and liabilities	9,855.7	8,514.3	1,341.4

Net current assets	709.5	640.5	69.0

Total non-current assets increased by €782.1 million during 2022, mainly driven by the consolidation of Egypt, Multon and Three Cents, as well as continued investment in property, plant and equipment, which was only partially offset by impairment losses for property, plant and equipment, goodwill and equity method investments in connection with our operations in Russia and foreign currency translation impact. Net current assets increased by €69.0 million largely driven by the consolidation of Multon, higher investments in financials assets and lower current borrowings, partially offset by higher trade payables. Total non-current liabilities increased by €582.6 million during 2022, mainly due to the new Green bond which was issued in September 2022.

Cash flow
	Full Year
	2022 € million	2021 € million	% Change
Net cash from operating activities ¹	1,234.6	1,142.2	8.1%
Capital expenditure ¹	(589.5)	(540.9)	9.0%
Free cash flow ¹	645.1	601.3	7.3%

¹ Refer to the 'Definitions and reconciliations of APMs' section.

Net cash from operating activities increased by 8.1% or €92.4 million during 2022, compared to the prior year, mainly due to increased operating profitability excluding non-cash charges.

Capital expenditure increased by 9.0% in 2022, compared to the prior year. In 2022, capital expenditure amounted to €589.5 million of which 53% was related to investment in production equipment and facilities and 20% to the acquisition of marketing equipment. In 2021, capital expenditure amounted to €540.9 million of which 56% was related to investment in production equipment and facilities and 20% to the acquisition of marketing equipment.

In 2022, free cash flow increased by 7.3% or €43.8 million, compared to the prior-year period, driven by the increased cash from operating activities, partially offset by increased capital expenditure.

Definitions and reconciliations of Alternative Performance Measures ("APMs")

1. Comparable APMs ¹

In discussing the performance of the Group, "comparable" measures are used. In 2022 the Group updated the definitions of items which are deducted from the directly reconcilable IFRS measures to calculate comparable APMs so as to provide users more relevant information on its financial performance, considering the impact of one-off events in the period as well as reporting by its peer group. More specifically, comparable measures are calculated by deducting from the directly reconcilable IFRS measures the impact of: the Group's restructuring costs, the mark-to-market valuation of the commodity hedging activity, the acquisition, integration and divestment-related costs, the Russia-Ukraine conflict impact and certain other tax items, which are collectively considered as items impacting comparability, due to their nature. More specifically the following items are considered as items that impact comparability:

1) Restructuring costs

Restructuring costs comprise costs arising from significant changes in the way the Group conducts business, such as significant supply chain infrastructure changes, outsourcing of activities and centralisation of processes. These costs are included within the income statement line "Operating expenses"; however, they are excluded from the comparable results so that the users can obtain a better understanding of the Group's operating and financial performance achieved from underlying activity. Restructuring costs resulting from initiatives driven by the Russia-Ukraine conflict are presented under the "Russia-Ukraine conflict impact" item, to provide users complete information on the financial implications of the conflict.

2) Commodity hedging

The Group has entered into certain commodity derivative transactions in order to hedge its exposure to commodity price risk. Although these transactions are economic hedging activities that aim to manage our exposure to sugar, aluminium, gas oil and plastics price volatility, hedge accounting has not been applied in all cases. In addition, the Group recognises certain derivatives embedded within commodity purchase contracts that have been accounted for as stand-alone derivatives and do not qualify for hedge accounting. The fair value gains and losses on the derivatives and embedded derivatives are immediately recognised in the income statement in the cost of goods sold and operating expenses line items. The Group's comparable results exclude the gains or losses resulting from the mark-to-market valuation of these derivatives to which hedge accounting has not been applied (primarily plastics) and embedded derivatives. These gains or losses are reflected in the comparable results in the period when the underlying transactions occur, to match the profit or loss to that of the corresponding underlying transactions. We believe this adjustment provides useful information related to the impact of our economic risk management activities.

3) Acquisition, integration and divestment-related costs or gains

Acquisition costs comprise costs incurred to effect a business combination such as finder's fees, advisory, legal, accounting, valuation and other professional or consulting fees as well as changes in the fair value of contingent consideration recognised in the income statement. They also include any gain from bargain purchase arising on business combinations, as well as any gain or loss recognised in the income statement from the remeasurement to fair value of previously held interests and the reclassification to the income statement of items of other comprehensive income resulting from step acquisitions. Integration costs comprise direct incremental costs necessary for the acquiree to operate within the Group. Divestment-related costs comprise transaction expenses, including advisory, consulting, and other professional fees to effect the disposal of a subsidiary or equity method investment, any impairment losses or write-downs to fair value less costs to sell recognised in the income statement upon classification as held for sale and any relevant disposal gains / losses or reversals of impairment recognised in the income statement upon disposal. These costs or gains are included within the income statement line "Operating expenses", however, to the extent that they relate to business combinations or divestments that have been completed or are expected to be completed, they are excluded from the comparable results so that the users can obtain a better understanding of the Group's operating and financial performance achieved from underlying activity.

4) Russia-Ukraine conflict impact

As a result of the conflict between Russia and Ukraine, the Group recognised net impairment losses for property, plant and equipment, intangible assets and equity method investments as well as restructuring costs, in connection with the new business model in Russia and adverse changes to the economic environment. The Group also recognised incremental allowance for expected credit losses and write-offs of inventory and property, plant and equipment resulting from the Russia-Ukraine conflict. The aforementioned net impairment losses are included within the income statement line "Exceptional items related to Russia-Ukraine conflict" so as to provide users with enhanced visibility over these items considering their materiality, while remaining costs are included within "Operating expenses" and "Cost of goods sold" lines of the income statement accordingly. Net impairment losses and other costs directly attributable to the Russia-Ukraine conflict are excluded from the comparable results so that the users can obtain a better understanding of the Group's operating and financial performance from underlying activity.

5) Other tax items

Other tax items represent the tax impact of (a) changes in income tax rates affecting the opening balance of deferred tax arising during the year and (b) certain tax related matters selected based on their nature. Both (a) and (b) are excluded from comparable after-tax results so that the users can obtain a better understanding of the Group's underlying financial performance.

The Group discloses comparable performance measures to enable users to focus on the underlying performance of the business on a basis which is common to both periods for which these measures are presented.

¹ Comparable APMs refer to comparable COGS, comparable Gross Profit, comparable Operating expenses, comparable EBIT, comparable EBIT margin, comparable Adjusted EBITDA, comparable tax, comparable net profit and comparable EPS.

The reconciliation of comparable measures to the directly related measures calculated in accordance with IFRS is as follows:

Reconciliation of comparable financial indicators (numbers in € million except per share data)

	Full Year 2022
	COGS	Gross Profit	Operating expenses	EBIT	Adjusted EBITDA	Tax	Net Profit¹	EPS (€)
As reported	(6,054.2)	3,144.2	(2,354.6)	703.8	1,343.6	(208.0)	415.4	1.134
Restructuring costs	-	-	8.0	8.0	7.9	(1.7)	6.3	0.017
Commodity hedging	2.5	2.5	-	2.5	2.5	(0.5)	2.0	0.005
Russia-Ukraine conflict impact	1.1	1.1	7.2	135.7	8.3	(13.8)	121.9	0.333
Acquisition and integration costs	-	-	79.7	79.7	9.2	-	79.7	0.218
Other tax items	-	-	-	-	-	(0.4)	(0.4)	(0.001)
Comparable	(6,050.6)	3,147.8	(2,259.7)	929.7	1,371.5	(224.4)	624.9	1.706
	Full Year 2021
	COGS	Gross Profit	Operating expenses	EBIT	Adjusted EBITDA	Tax	Net Profit¹	EPS (€)
As reported	(4,570.2)	2,598.2	(1,833.3)	799.3	1,151.5	(187.4)	547.2	1.499
Restructuring costs	-	-	21.2	21.2	21.0	(4.6)	16.6	0.045
Commodity hedging	(3.8)	(3.8)	-	(3.8)	(3.8)	0.7	(3.1)	(0.008)
Acquisition costs	-	-	14.3	14.3	14.3	-	14.3	0.039
Other tax items	-	-	-	-	-	3.1	3.1	0.009
Comparable	(4,574.0)	2,594.4	(1,797.8)	831.0	1,183.0	(188.2)	578.1	1.584

¹ Net Profit and comparable net profit refer to net profit and comparable net profit respectively after tax attributable to owners of the parent.

Reconciliation of comparable EBIT per reportable segment (numbers in € million)

	Full Year 2022
	Established	Developing	Emerging	Consolidated
EBIT	310.4	113.1	280.3	703.8
Restructuring costs	(6.1)	(1.5)	15.6	8.0
Commodity hedging	2.5	3.5	(3.5)	2.5
Acquisition and integration costs	0.3	-	79.4	79.7
Russia-Ukraine conflict impact	-	-	135.7	135.7
Comparable EBIT	307.1	115.1	507.5	929.7
	Full Year 2021
	Established	Developing	Emerging	Consolidated
EBIT	285.6	104.7	409.0	799.3
Restructuring costs	14.7	3.4	3.1	21.2
Commodity hedging	(3.0)	(4.3)	3.5	(3.8)
Acquisition costs	3.5	2.7	8.1	14.3
Comparable EBIT	300.8	106.5	423.7	831.0

2. Organic APMs

Organic growth

Organic growth enables users to focus on the operating performance of the business on a basis which is not affected by changes in foreign currency exchange rates from year to year or changes in the Group's scope of consolidation ("consolidation perimeter") i.e. acquisitions, divestments and reorganisations resulting in equity method accounting. Thus, organic growth is designed to assist users in better understanding the Group's underlying performance.

More specifically, the following items are adjusted from the Group's volume, net sales revenue and comparable EBIT in order to derive organic growth metrics:

(a) Foreign Currency impact

Foreign Currency impact in the organic growth calculation reflects the adjustment of prior-year net sales revenue and comparable EBIT metrics for the impact of changes in exchange rates applicable to the current year.

(b) Consolidation perimeter impact

Current year volume, net sales revenue and comparable EBIT metrics, are each adjusted for the impact of changes in the consolidation perimeter. More specifically adjustments are performed as follows:

i. Acquisitions:

For current year acquisitions, the results generated in the current year by the acquired entities are not included in the organic growth calculation. For prior year acquisitions, the results generated in the current year over the period during which the acquired entities were not consolidated in the prior year, are not included in the organic growth calculation.

For current year step acquisitions where the Group obtains control of a) entities over which it previously held either joint control or significant influence and which were accounted for under the equity method, or b) entities which were carried at fair value either through profit or loss or other comprehensive income, the results generated in the current year by the relevant entities over the period during which these entities are consolidated, are not included in the organic growth calculation. For such step acquisitions of entities previously accounted for under the equity method the share of results for the respective period described above, is included in the organic growth calculation of the current year. For such step acquisitions of entities previously accounted for at fair value through profit or loss any fair value gains or losses for the respective period described above, are included in the organic growth calculation. For such step acquisitions in the prior year, the results generated in the current year by the relevant entities over the period during which these entities were not consolidated in the prior year, are not included in the organic growth calculation. However, the share of results or gains or losses from fair value changes of the respective entities, based on their accounting treatment prior to the step acquisition, for the current-year period during which these entities were not consolidated in the prior year are included in the organic growth calculation.

ii. Divestments:

For current year divestments, the results generated in the prior year by the divested entities over the period during which the divested entities are no longer consolidated in the current year, are included in the current year's results for the purpose of the organic growth calculation. For prior-year divestments, the results generated in the prior year by the divested entities over the period during which the divested entities were consolidated, are included in the current year's results for the purpose of the organic growth calculation.

iii. Reorganisations resulting in equity method accounting:

For current year reorganisations where the Group maintains either joint control or significant influence over the relevant entities so that they are reclassified from subsidiaries or joint operations to joint ventures or associates and accounted for under the equity method, the results generated in the current year by the relevant entities over the period during which these entities are no longer consolidated, are included in the current year's results for the purpose of the organic growth calculation. For such reorganisations in the prior year, the results generated in the current year by the relevant entities over the period during which these entities were consolidated in the prior year, are included in the current year's results for the purpose of the organic growth calculation. In addition, the share of results in the current year of the relevant entities, for the respective period as described above, is excluded from the organic growth calculation for such reorganisations.

The calculations of the organic growth and the reconciliation to the most directly related measures calculated in accordance with IFRS are presented in the below tables. Organic growth (%) is calculated by dividing the amount in the row titled "Organic movement" by the amount in the associated row titled "2021 reported" or, where presented, "2021 adjusted". Organic growth for comparable EBIT margin is the organic movement expressed in basis points.

Reconciliation of organic measures

	Full Year 2022
Volume (m unit cases)	Established	Developing	Emerging	Group
2021 reported	589.9	415.5	1,407.3	2,412.7
Consolidation perimeter impact	0.1	-	334.6	334.7
Organic movement	53.9	63.3	-152.8	-35.6
2022 reported	643.9	478.8	1,589.1	2,711.8

Organic growth (%)	9.1%	15.2%	-10.9%	-1.5%

	Full Year 2022
Net sales revenue (€ m)	Established	Developing	Emerging	Group
2021 reported	2,479.0	1,365.6	3,323.8	7,168.4
Foreign currency impact	28.4	-32.5	229.5	225.4
2021 adjusted	2,507.4	1,333.1	3,553.3	7,393.8
Consolidation perimeter impact	0.9	-	755.3	756.2
Organic movement	465.8	386.6	196.0	1,048.4
2022 reported	2,974.1	1,719.7	4,504.6	9,198.4

Organic growth (%)	18.6%	29.0%	5.5%	14.2%

	Full Year 2022
Net sales revenue per unit case (€)¹	Established	Developing	Emerging	Group
2021 reported	4.20	3.29	2.36	2.97
Foreign currency impact	0.05	-0.08	0.16	0.09
2021 adjusted	4.25	3.21	2.52	3.06
Consolidation perimeter impact	-	-	-0.15	-0.16
Organic movement	0.37	0.38	0.46	0.49
2022 reported	4.62	3.59	2.83	3.39

Organic growth (%)	8.6%	11.9%	18.4%	15.9%

	Full Year 2022
Comparable EBIT (€ m)	Established	Developing	Emerging	Group
2021 reported	300.8	106.5	423.7	831.0
Foreign currency impact	5.2	-4.4	37.5	38.3
2021 adjusted	306.0	102.1	461.2	869.3
Consolidation perimeter impact	-2.9	-	51.6	48.7
Organic movement	4.0	13.0	-5.3	11.7
2022 reported	307.1	115.1	507.5	929.7

Organic growth (%)	1.3%	12.7%	-1.1%	1.3%

	Full Year 2022
Comparable EBIT Margin (%)¹	Established	Developing	Emerging	Group
2021 reported	12.1%	7.8%	12.7%	11.6%
Foreign currency impact	0.1%	-0.1%	0.2%	0.2%
2021 adjusted	12.2%	7.7%	13.0%	11.8%
Consolidation perimeter impact	-0.1%	-	-0.9%	-0.3%
Organic movement	-1.8%	-1.0%	-0.8%	-1.3%
2022 reported	10.3%	6.7%	11.3%	10.1%

Organic growth (%)	-180bps	-100bps	-80bps	-130bps

¹ Certain differences in calculations are due to rounding.

3. Other APMs

Adjusted EBITDA

Adjusted EBITDA is calculated by adding back to operating profit the depreciation and net impairment of property, plant and equipment, the amortisation and net impairment of intangible assets, the net impairment of equity method investments, the employee share option and performance share costs and items, if any, reported in line "Other non-cash items" of the condensed consolidated cash flow statement. Adjusted EBITDA is intended to provide useful information to analyse the Group's operating performance excluding the impact of operating non-cash items as defined above. The Group also uses comparable Adjusted EBITDA, which is calculated by deducting from Adjusted EBITDA the impact of: the Group's restructuring costs, the acquisition, integration and divestment-related costs, the mark-to-market valuation of the commodity hedging activity and the impact from the Russia-Ukraine conflict. Comparable Adjusted EBITDA is intended to measure the level of financial leverage of the Group by comparing comparable Adjusted EBITDA to Net debt.

Adjusted EBITDA and comparable Adjusted EBITDA are not measures of profitability and liquidity under IFRS and have limitations, some of which are as follows: Adjusted EBITDA and comparable Adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; Adjusted EBITDA and comparable Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; although depreciation and amortisation are non-cash charges, the assets being depreciated and amortised will often have to be replaced in the future, and Adjusted EBITDA and comparable Adjusted EBITDA do not reflect any cash requirements for such replacements. Because of these limitations, Adjusted EBITDA and comparable Adjusted EBITDA should not be considered as measures of discretionary cash available to us and should be used only as supplementary APMs.

Free cash flow

Free cash flow is an APM used by the Group and defined as cash generated by operating activities after payments for purchases of property, plant and equipment net of proceeds from sales of property, plant and equipment and including principal repayments of lease obligations. Free cash flow is intended to measure the cash generation from the Group's business, based on operating activities, including the efficient use of working capital and taking into account its net payments for purchases of property, plant and equipment. The Group considers the purchase and disposal of property, plant and equipment as ultimately non‑discretionary since ongoing investment in plant, machinery, technology and marketing equipment, including coolers, is required to support the day‑to‑day operations and the Group's growth prospects. The Group presents free cash flow because it believes the measure assists users of the financial statements in understanding the Group's cash generating performance as well as availability for interest payment, dividend distribution and own retention. The free cash flow measure is used by management for its own planning and reporting purposes since it provides information on operating cash flows, working capital changes and net capital expenditure that local managers are most directly able to influence.

Free cash flow is not a measure of cash generation under IFRS and has limitations, some of which are as follows: Free cash flow does not represent the Group's residual cash flow available for discretionary expenditures since the Group has debt payment obligations that are not deducted from the measure; free cash flow does not deduct cash flows used by the Group in other investing and financing activities and free cash flow does not deduct certain items settled in cash. Other companies in the industry in which the Group operates may calculate free cash flow differently, limiting its usefulness as a comparative measure.

Capital expenditure

The Group uses capital expenditure as an APM to ensure that the cash spending is in line with its overall strategy for the use of cash. Capital expenditure is defined as payments for purchases of property, plant and equipment plus principal repayments of lease obligations less proceeds from sale of property, plant and equipment.

The following table illustrates how Adjusted EBITDA, Free Cash Flow and Capital Expenditure are calculated:

	Full Year
	2022	2021
	€ million	€ million
Operating profit (EBIT)	703.8	799.3
Depreciation and impairment of property, plant and equipment, including right-of-use assets	484.9	336.3
Amortisation and impairment of intangible assets	15.1	1.0
Employee performance shares	16.5	14.9
Impairment of equity method investments	52.8	-
Other non-cash items included in operating profit¹	70.5	-
Adjusted EBITDA	1,343.6	1,151.5
Share of results of integral equity method investments	(41.6)	(34.4)
Loss / (Gain) on disposals of non-current assets	1.5	(28.4)
Cash generated from working capital movements	126.8	195.8
Tax paid	(195.7)	(142.3)
Net cash from operating activities	1,234.6	1,142.2
Payments for purchases of property, plant and equipment²	(531.8)	(513.6)
Principal repayments of lease obligations	(65.2)	(63.1)
Proceeds from sales of property, plant and equipment	7.5	35.8
Capital expenditure	(589.5)	(540.9)
Free cash flow	645.1	601.3

¹ Other non-cash items included in operating profit for 2022 relate to the net loss recognised in the income statement from the remeasurement to fair value of the previously held interest, the reclassification to the income statement of items of other comprehensive income and the gain from bargain purchase arising due to the change in control of Multon Z.A.O. group of companies ('Multon'), For more details, refer to Note 15 of the 'Condensed consolidated financial statements for the six months and the year ended 31 December 2022' section.

² Payments for purchases of property, plant and equipment for 2022 include €8.4 million (2021: €7.1 million) relating to repayment of borrowings undertaken to finance the purchase of production equipment by the Group's subsidiary in Nigeria, classified as 'Repayments of borrowings' in the condensed consolidated cash flow statement.

Net debt

Net debt is an APM used by management to evaluate the Group's capital structure and leverage. Net debt is defined as current borrowings plus non-current borrowings less cash and cash equivalents and financial assets (time deposits, treasury bills and money market funds), as illustrated below:

	As at 31 December
	2022	2021
	€ million	€ million
Current borrowings	337.0	381.7
Non-current borrowings	3,082.9	2,555.7
Other financial assets	(1,026.7)	(834.9)
Cash and cash equivalents	(719.9)	(782.8)
Net debt	1,673.3	1,319.7

Condensed consolidated financial statements for the six months and the year ended

31 December 2022

Condensed consolidated income statement (unaudited)

		Six months ended 31 December
	Note	2022	2021
	Note	€ million	€ million
Net sales revenue	3	4,988.5	3,920.5
Cost of goods sold		(3,294.5)	(2,521.8)
Gross profit		1,694.0	1,398.7

Operating expenses		(1,339.3)	(969.8)
Exceptional items related to Russia-Ukraine conflict	4	56.2	-
Share of results of integral equity method investments		17.2	20.3
Operating profit	3	428.1	449.2

Finance costs, net	6	(40.0)	(32.9)
Share of results of non-integral equity method investments		1.1	1.4
Profit before tax		389.2	417.7

Tax	7	(126.0)	(103.6)
Profit after tax		263.2	314.1

Attributable to:
Owners of the parent		262.5	314.1
Non-controlling interests		0.7	-
		263.2	314.1

Basic and diluted earnings per share (€)	8	0.72	0.86

Condensed consolidated statement of comprehensive income (unaudited)

	Six months ended 31 December
	2022	2021
	€ million	€ million
Profit after tax	263.2	314.1

Other comprehensive income:
Items that may be subsequently reclassified to income statement:
Valuation gain on available-for-sale assets	-	-
Cost of hedging	(3.2)	(1.7)
Net gain of cash flow hedges	10.1	27.4
Foreign currency translation losses / (gains)	(388.5)	53.6
Share of other comprehensive (loss) / income of equity method
investments	(10.1)	7.4
Reclassification of share of other comprehensive income of equity method investments to the income statement arising from business combination (Note 15)	145.2	-
Income tax relating to items that may be subsequently reclassified
to income statement	-	(3.3)
	(246.5)	83.4
Items that will not be subsequently reclassified to income statement:
Actuarial (losses) / gains	(13.2)	1.6
Income tax relating to items that will not be subsequently
reclassified to income statement	2.9	(6.4)
	(10.3)	(4.8)
Other comprehensive (loss) / income for the period, net of tax	(256.8)	78.6
Total comprehensive income for the period	6.4	392.7

Total comprehensive income attributable to:
Owners of the parent	12.5	392.7
Non-controlling interests	(6.1)	-
	6.4	392.7

Condensed consolidated income statement (unaudited)

		Year ended 31 December
	Note	2022	2021
	Note	€ million	€ million
Net sales revenue	3	9,198.4	7,168.4
Cost of goods sold		(6,054.2)	(4,570.2)
Gross profit		3,144.2	2,598.2

Operating expenses		(2,354.6)	(1,833.3)
Exceptional items related to Russia-Ukraine conflict	4	(127.4)	-
Share of results of integral equity method investments		41.6	34.4
Operating profit	3	703.8	799.3

Finance costs, net	6	(82.7)	(67.6)
Share of results of non-integral equity method investments		2.5	3.2
Profit before tax		623.6	734.9

Tax	7	(208.0)	(187.4)
Profit after tax		415.6	547.5

Attributable to:
Owners of the parent		415.4	547.2
Non-controlling interests		0.2	0.3
		415.6	547.5

Basic earnings per share (€)	8	1.13	1.50
Diluted earnings per share (€)	8	1.13	1.49

Condensed consolidated statement of comprehensive income (unaudited)

	Year ended 31 December
	2022	2021
	€ million	€ million
Profit after tax	415.6	547.5
Other comprehensive income:
Items that may be subsequently reclassified to income statement:
Cost of hedging	(3.5)	(2.7)
Net gain of cash flow hedges	34.6	69.5
Foreign currency translation (losses) / gains	(252.6)	73.6
Share of other comprehensive income of equity method investments	34.2	14.6
Reclassification of share of other comprehensive income of equity method investments to the income statement arising from business combination (Note 15)	145.2	-
Income tax relating to items that may be subsequently reclassified
to income statement	(3.9)	(9.5)
	(46.0)	145.5
Items that will not be subsequently reclassified to income statement:
Valuation loss on equity investments at fair value through other
comprehensive income	(0.1)	-
Actuarial gains	26.0	16.1
Income tax relating to items that will not be subsequently
reclassified to income statement	1.8	(6.1)
	27.7	10.0
Other comprehensive (loss) / income for the year, net of tax	(18.3)	155.5
Total comprehensive income for the year	397.3	703.0

Total comprehensive income attributable to:
Owners of the parent	406.1	702.7
Non-controlling interests	(8.8)	0.3
	397.3	703.0

Condensed consolidated balance sheet (unaudited)

		As at 31 December
		As at 31 December
		2022	2021
	Note	€ million	€ million
Assets
Intangible assets	9	2,542.5	2,043.3
Property, plant and equipment	9	3,266.3	2,830.9
Other non-current assets		330.7	483.2
Total non-current assets		6,139.5	5,357.4

Inventories		770.0	519.8
Trade, other receivables and assets		1,162.4	975.3
Other financial assets	11	1,063.8	878.9
Cash and cash equivalents	11	719.9	782.8
		3,716.1	3,156.8
Assets classified as held for sale		0.1	0.1
Total current assets		3,716.2	3,156.9
Total assets		9,855.7	8,514.3

Liabilities
Borrowings	11	337.0	381.7
Other current liabilities		2,669.7	2,134.7
Total current liabilities		3,006.7	2,516.4

Borrowings	11	3,082.9	2,555.7
Other non-current liabilities		380.5	325.1
Total non-current liabilities		3,463.4	2,880.8
Total liabilities		6,470.1	5,397.2

Equity
Owners of the parent		3,282.3	3,114.5
Non-controlling interests		103.3	2.6
Total equity		3,385.6	3,117.1
Total equity and liabilities		9,855.7	8,514.3

Condensed consolidated statement of changes in equity (unaudited)

	Attributable to owners of the parent
	Share capital € million	Share premium € million	Group reorganisation reserve € million	Treasury shares € million	Exchange equalisation reserve € million	Other reserves € million	Retained earnings € million	Total € million	Non-controlling interests € million	Total equity € million


Balance as at 1 January 2021	2,014.4	3,321.4	(6,472.1)	(155.5)	(1,242.1)	266.7	4,897.9	2,630.7	2.6	2,633.3
Shares issued to employees
exercising stock options (Note 12)	7.9	11.7	-	-	-	-	-	19.6	-	19.6
Share-based compensation:
Performance shares	-	-	-	-	-	15.1	-	15.1	-	15.1
Movement in shares held for equity compensation plan	-	-	-	-	-	(0.1)	-	(0.1)	-	(0.1)
Appropriation of reserves (Note 12)	-	-	-	8.9	-	(9.0)	0.1	-	-	-
Dividends (Note 14)	-	(235.8)	-	-	-	-	2.2	(233.6)	(0.3)	(233.9)
Transfer of cash flow hedge reserve, including cost of hedging
to inventories, net of tax⁽¹⁾	-	-	-	-	-	(19.9)	-	(19.9)	-	(19.9)
	2,022.3	3,097.3	(6,472.1)	(146.6)	(1,242.1)	252.8	4,900.2	2,411.8	2.3	2,414.1
Profit for the year, net of tax	-	-	-	-	-	-	547.2	547.2	0.3	547.5
Other comprehensive income
for the year, net of tax	-	-	-	-	88.1	57.4	10.0	155.5	-	155.5
Total comprehensive income
for the year, net of tax⁽²⁾	-	-	-	-	88.1	57.4	557.2	702.7	0.3	703.0
Balance as at 31 December 2021	2,022.3	3,097.3	(6,472.1)	(146.6)	(1,154.0)	310.2	5,457.4	3,114.5	2.6	3,117.1

⁽¹⁾ The amount included in other reserves of €19.9 million gain for 2021 represents the cash flow hedge reserve, including cost of hedging, transferred to inventories of €24.0 million gain, and the deferred tax expense thereof amounting to €4.1 million.

⁽²⁾ The amount included in the exchange equalisation reserve of €88.1 million gain for 2021 represents the exchange gain attributed to the owners of the parent, primarily related to the Swiss Franc and the Russian Rouble, including €14.5 million gain relating to the share of other comprehensive income of equity method investments.

The amount of other comprehensive income net of tax included in other reserves of €57.4 million gain for 2021 consists of cash flow hedges gain of €66.8 million, share of other comprehensive income of equity method investments of €0.1 million gain and the deferred tax expense thereof amounting to €9.5 million.

The amount of €557.2 million gain attributable to owners of the parent for 2021 comprises profit for the year, net of tax of €547.2 million, actuarial gains of €16.1 million and the deferred tax expense thereof amounting to€6.1 million.

The amount of €0.3 million gain included in non-controlling interests for 2021 represents the share of non-controlling interests in profit for the year, net of tax.

Condensed consolidated statement of changes in equity (unaudited)

	Attributable to owners of the parent
	Share capital € million	Share premium € million	Group reorganisation reserve € million	Treasury shares € million	Exchange equalisation reserve € million	Other reserves € million	Retained earnings € million	Total € million	Non-controlling interests € million	Total equity € million


Balance as at 1 January 2022	2,022.3	3,097.3	(6,472.1)	(146.6)	(1,154.0)	310.2	5,457.4	3,114.5	2.6	3,117.1
Shares issued to employees
exercising stock options (Note 12)	2.0	2.7	-	-	-	-	-	4.7	-	4.7
Share-based compensation:
Performance shares	-	-	-	-	-	16.6	-	16.6	-	16.6
Movement in shares held for
equity compensation plan	-	-	-	-	-	1.2	-	1.2	-	1.2
Appropriation of reserves (Note 12)	-	-	-	15.4	-	(21.1)	5.7	-	-	-
Non-controlling interests on business combinations (Note 15)	-	-	-	-	-	-	-	-	259.6	259.6
Purchase of shares held by non-controlling interests (Note 15)	-	-	-	-	-	-	40.9	40.9	(149.8)	(108.9)
Dividends (Note 14)	-	(262.6)	-	-	-	-	2.4	(260.2)	(0.3)	(260.5)
Transfer of cash flow hedge reserve,
including cost of hedging to
inventories, net of tax⁽³⁾	-	-	-	-	-	(41.5)	-	(41.5)	-	(41.5)
	2,024.3	2,837.4	(6,472.1)	(131.2)	(1,154.0)	265.4	5,506.4	2,876.2	112.1	2,988.3
Profit for the year, net of tax	-	-	-	-	-	-	415.4	415.4	0.2	415.6
Other comprehensive loss
for the year, net of tax	-	-	-	-	(64.2)	27.1	27.8	(9.3)	(9.0)	(18.3)
Total comprehensive income
for the year, net of tax⁽⁴⁾	-	-	-	-	(64.2)	27.1	443.2	406.1	(8.8)	397.3
Balance as at 31 December 2022	2,024.3	2,837.4	(6,472.1)	(131.2)	(1,218.2)	292.5	5,949.6	3,282.3	103.3	3,385.6

⁽³⁾ The amount included in other reserves of €41.5 million gain for 2022 represents the cash flow hedge reserve, including cost of hedging, transferred to inventories of €51.4 million gain, and the deferred tax expense thereof amounting to €9.9 million.

⁽⁴⁾ The amount included in the exchange equalisation reserve of €64.2 million loss for 2022 represents the exchange loss attributed to the owners of the parent, mainly related to the Egyptian Pound, including €34.8 million gain relating to the share of other comprehensive income of equity method investments and €144.6 million gain relating to reclassification of share of other comprehensive income of equity method investments to the income statement arising from business combination (Note 15).

The amount of other comprehensive income net of tax included in other reserves of €27.1 million gain for 2022 consists of cash flow hedges gain of €31.1 million, share of other comprehensive income of equity method investments of €0.6 million loss, valuation losses of €0.1 million on equity investments at fair value through other comprehensive income, €0.6 million gain relating to reclassification of share of other comprehensive income of equity method investments to the income statement arising from business combination (Note 15), and the deferred tax expense thereof amounting to €3.9 million.

The amount of €443.2 million gain attributable to owners of the parent for 2022 comprises profit for the year, net of tax of €415.4 million, actuarial gains of €26.0 million and the deferred tax income thereof amounting to €1.8 million.

The amount of €8.8 million losses included in non-controlling interests for 2022, represents the exchange loss attributed to the non-controlling interests of €9.0 million, and the share of non-controlling interests in profit for the year, net of tax of €0.2 million.

Condensed consolidated cash flow statement (unaudited)

		Year ended 31 December
	Note	2022	2021
	Note	€ million	€ million
Operating activities
Profit after tax for the year		415.6	547.5
Finance costs, net	6	82.7	67.6
Share of results of non-integral equity method investments		(2.5)	(3.2)
Tax charged to the income statement		208.0	187.4
Depreciation and impairment of property, plant and equipment, including right-of-use assets		484.9	336.3
Employee performance shares		16.5	14.9
Amortisation and impairment of intangible assets	4,9	15.1	1.0
Impairment of equity method investments	4	52.8	-
Other non-cash items	15	70.5	-
		1,343.6	1,151.5
Share of results of integral equity method investments		(41.6)	(34.4)
Loss / (gain) on disposals of non-current assets		1.5	(28.4)
Increase in inventories		(241.1)	(114.5)
Increase in trade and other receivables		(104.7)	(109.0)
Increase in trade and other payables		472.6	419.3
Tax paid		(195.7)	(142.3)
Net cash inflow from operating activities		1,234.6	1,142.2
Investing activities
Payments for purchases of property, plant and equipment		(523.4)	(506.5)
Proceeds from sales of property, plant and equipment		7.5	35.8
Payment for integral equity-method investment	16	(4.0)	-
Payments for non-integral equity method investments		(6.5)	(87.0)
Payment for acquisition of joint operation		-	(0.9)
Receipts from integral equity method investments	16	9.7	47.8
Receipts from non-integral equity method investments	16	1.8	1.9
Net payments for investments in financial assets at amortised cost		(333.4)	(102.8)
Net proceeds from / (payments for) investments in financial assets at fair value through profit or loss		142.6	(640.6)
Loans to related parties		(0.4)	(0.9)
Repayments of loans by related parties		2.0	-
Interest received / (paid)		7.2	(0.3)
Payment for business combinations, net of cash acquired	15	(399.2)	(5.6)
Proceeds from settlement of derivatives relating to business combination	15	13.0	-
Net cash outflow from investing activities		(1,083.1)	(1,259.1)
Financing activities
Proceeds from shares issued to employees, exercising stock options	12	4.7	19.6
Payments for shares held by non-controlling interests	15	(108.9)	-
Proceeds from borrowings		650.0	129.3
Repayments of borrowings		(358.6)	(133.8)
Principal repayments of lease obligations		(65.2)	(63.1)
Dividends paid to owners of the parent		(260.2)	(233.6)
Dividends paid to non-controlling interests		(0.2)	(0.2)
Proceeds from settlement of derivatives regarding financing activities		0.1	4.9
Interest paid		(60.4)	(45.5)
Net cash outflow from financing activities		(198.7)	(322.4)

Net decrease in cash and cash equivalents		(47.2)	(439.3)
Movement in cash and cash equivalents
Cash and cash equivalents at 1 January		782.8	1,215.8
Net decrease in cash and cash equivalents		(47.2)	(439.3)
Effect of changes in exchange rates		(15.7)	6.3
Cash and cash equivalents at 31 December		719.9	782.8

The accompanying notes form an integral part of these condensed consolidated financial statements

Selected explanatory notes to the condensed consolidated financial statements (unaudited)

1. Basis of preparation and accounting policies

Basis of preparation

These condensed consolidated financial statements are prepared in accordance with International Accounting Standard ('IAS') 34, 'Interim Financial Reporting', as adopted by the European Union ('EU'), and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. These condensed consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2021.

Going concern

As part of the consideration of whether to adopt the going concern basis in preparing the consolidated financial statements, management has considered the Group's financial performance in the year, as well as a quantitative viability exercise, including the performance of various stress tests that consider the Group's principal risks, including that relating to climate change, and confirms the Group's ability to generate cash in 12 months from the date of approval of the condensed consolidated financial statements and beyond. Management has also considered the events involving Ukraine and Russia and no impact has been identified on the Group's ability to continue as a going concern. Therefore, it is deemed appropriate that the Group continues to adopt the going concern basis for the preparation of the condensed consolidated financial statements.

Accounting policies

The accounting policies used in the preparation of the condensed consolidated financial statements of Coca-Cola HBC AG ('Coca-Cola HBC', the 'Company' or the 'Group') are consistent with those used in the 2021 annual financial statements , except for the adoption of applicable amendments to accounting standards effective as of 1 January 2022 and presentation of exceptional items related to Russia-Ukraine conflict (Note 4). The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Amended standards adopted by the Group

The below amendments to the standards became applicable as of 1 January 2022 and were adopted by the Group. The adoption of these amendments did not have a significant impact on the Group's condensed consolidated financial statements.

Amendments to IAS 16 - Proceeds before intended use: This amendment prohibits an entity from deducting from the cost of an item of property, plant and equipment any proceeds received from selling items produced while the entity is preparing the asset for its intended use. Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss. The financial performance of the asset is not relevant to this assessment. Entities must disclose separately the amounts of proceeds and costs relating to items produced that are not an output of the entity's ordinary activities.

Amendments to IAS 37 - Onerous Contracts, Cost of Fulfilling a Contract: This amendment clarifies that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and an allocation of other costs directly related to fulfilling contracts. Before recognising a separate provision for an onerous contract, the entity recognises any impairment loss that has occurred on assets used in fulfilling the contract.

Amendments to IFRS 3 - Reference to the Conceptual Framework: Minor amendments were made to IFRS 3 Business Combinations to update the references to the Conceptual Framework for Financial Reporting without changing its requirement and add an exception for the recognition of liabilities and contingent liabilities within the scope of IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' and Interpretation 21 'Levies'. The amendments also confirm that contingent assets should not be recognised at the acquisition date.

Annual improvements 2018-2020 cycle: Minor amendments to the following standards were made:

· IFRS 9 Financial Instruments: the amendment clarifies which fees should be included in the 10% test for derecognition of financial liabilities. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf.

· IFRS 16 Leases: the amendment removes the illustration of payments from the lessor relating to leasehold improvements in Illustrative Example 13 accompanying IFRS 16, in order to remove potential confusion regarding the treatment of lease incentives when applying IFRS 16.

Amendments to IFRS 16 - COVID-19 related rent concessions beyond 30 June 2021: As a result of the COVID-19 pandemic, rent concessions have been granted to lessees. In May 2020, the IASB published an amendment to IFRS 16 that provided an optional practical expedient for lessees from assessing whether a rent concession related to COVID-19 is a lease modification. On 31 March 2021, the IASB published an additional amendment to extend the date of the practical expedient from 30 June 2021 to 30 June 2022. Lessees can elect to account for such rent concessions in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concession as variable lease payments in the period(s) in which the event or condition that triggers the reduced payment occurs.

2. Foreign currency and translation

The Group's reporting currency is the Euro (€). Coca-Cola HBC translates the income statements of foreign operations to the Euro at average exchange rates and the balance sheets at the closing exchange rates on 31 December. The principal exchange rates used for translation purposes in respect of one Euro are:

	Average rate for the year ended		Closing rate as at
	31 December 2022	31 December 2021	31 December 2022	31 December 2021
US Dollar	1.05	1.18	1.06	1.13
UK Sterling	0.85	0.86	0.88	0.84
Polish Zloty	4.68	4.56	4.69	4.60
Nigerian Naira	448.99	484.31	493.61	481.32
Hungarian Forint	390.36	358.49	401.54	370.08
Swiss Franc	1.01	1.08	0.99	1.04
Russian Rouble	74.01	87.23	79.23	83.87
Romanian Leu	4.93	4.92	4.94	4.95
Ukrainian Hryvnia	33.92	32.30	38.94	30.78
Czech Koruna	24.56	25.64	24.21	24.95
Serbian Dinar	117.47	117.57	117.30	117.56
Egyptian Pound	20.09	-	26.35	-

3. Segmental analysis

The Group has essentially one business, being the production, sale and distribution of ready-to-drink, primarily non-alcoholic, beverages. The Group operates in 29 countries which are aggregated in reportable segments as follows:

Established markets:	Austria, Cyprus, Greece, Italy, Northern Ireland, the Republic of Ireland and Switzerland.
Developing markets:	Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia.
Emerging markets:	Armenia, Belarus, Bosnia and Herzegovina, Bulgaria, Egypt, Moldova, Montenegro, Nigeria, North Macedonia, Romania, the Russian Federation, Serbia (including the Republic of Kosovo) and Ukraine.

a) Volume and net sales revenue

The Group sales volume in million unit cases¹for the six months and the years ended 31 December was as follows:

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
Established	338.2	315.6	643.9	589.9
Developing	248.4	224.6	478.8	415.5
Emerging	795.0	745.8	1,589.1	1,407.3
Total volume	1,381.6	1,286.0	2,711.8	2,412.7

¹ One unit case corresponds to approximately 5.678 litres or 24 servings, being a typically used measure of volume. For Premium Spirits volume, one unit case also corresponds to 5.678 litres. For biscuits volume, one unit case corresponds to 1 kilogram. For coffee one unit case corresponds to 0.5 kilograms or 5.678 litres. Volume data is derived from unaudited operational data.

Net sales revenue per reportable segment for the six months and the years ended 31 December is presented below:

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
	€ million	€ million	€ million	€ million
Established	1,589.9	1,329.2	2,974.1	2,479.0
Developing	928.1	764.0	1,719.7	1,365.6
Emerging	2,470.5	1,827.3	4,504.6	3,323.8
Total net sales revenue	4,988.5	3,920.5	9,198.4	7,168.4

In addition to non-alcoholic ready-to-drink beverages as well as coffee ("NARTD"), the Group sells and distributes Premium Spirits. An analysis of volume and net sales revenue per product type for the six months and the years ended 31 December is presented below:

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
	€ million	€ million	€ million	€ million
Volume in million unit cases¹
NARTD	1,379.6	1,284.0	2,708.4	2,409.3
Premium spirits	2.0	2.0	3.4	3.4
Total volume	1,381.6	1,286.0	2,711.8	2,412.7
Net sales revenue (€ million)
NARTD	4,846.4	3,784.2	8,956.0	6,944.5
Premium spirits	142.1	136.3	242.4	223.9
Total net sales revenue	4,988.5	3,920.5	9,198.4	7,168.4

b) Other income statement items

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
	€ million	€ million	€ million	€ million
Operating profit
Established	163.0	175.0	310.4	285.6
Developing	56.2	69.0	113.1	104.7
Emerging	208.9	205.2	280.3	409.0
Total operating profit	428.1	449.2	703.8	799.3
Reconciling items
Finance costs, net	(40.0)	(32.9)	(82.7)	(67.6)
Tax	(126.0)	(103.6)	(208.0)	(187.4)
Share of results of non-integral
equity method investments	1.1	1.4	2.5	3.2
Non-controlling interests	(0.7)	-	(0.2)	(0.3)
Profit after tax attributable
to owners of the parent	262.5	314.1	415.4	547.2

4. Russia-Ukraine conflict impact

4.1 Exceptional items related to Russia-Ukraine conflict

The conflict between Russia and Ukraine has affected the Group's business in those countries resulting in significant non-recurring costs. More specifically, the Group has incurred significant net impairment losses for property, plant and equipment, intangible assets and equity method investments in Russia. These losses have been presented in a separate line 'Exceptional items related to Russia-Ukraine conflict' in the condensed consolidated income statement, to provide users with enhanced visibility over these items, considering their materiality.

a) Operations in Russia

Recoverability of individual assets in Russia

The Coca-Cola Company ('TCCC') announced in March 2022 the suspension of its business in Russia, following the Russia-Ukraine conflict. In response to this decision, the Group implemented a restructuring plan in connection with its Russian operation and transitioned to a self-sufficient business model focusing on local brands. This resulted in pre-tax impairment losses related to buildings, production and cold drink equipment of €102.1 million during the first half of 2022, that were recorded based on a value-in-use exercise, reported in line 'Exceptional items related to Russia-Ukraine conflict' of the condensed consolidated interim income statement and included under Emerging markets for segmental reporting purposes.

Following June 2022, whilst uncertainty levels remain high in Russia, the Group experienced more stable market conditions and demand than initially anticipated. As a result, an updated value-in-use exercise was performed for the Russian operation's property, plant and equipment, which resulted in a partial reversal of pre-tax impairment losses recognised in June 2022, amounting to €42.8 million, considering also foreign currency translation impact. Net impairment loss amounted to €59.3 million for 2022, relating to buildings, production and cold drink equipment, which was reported in line 'Exceptional items related to Russia-Ukraine conflict' of the condensed consolidated income statement and included under Emerging markets for segmental reporting purposes. Following this, property, plant and equipment of the Russian operation (excluding Multon, the Group's juice business in Russia), represented approximately 8% of the Group's total property, plant and equipment as at 31 December 2022.

Recoverability of the Russian cash-generating unit

During the first half of 2022, there were worsening macroeconomic factors in Russia, as sanctions and other regulations had an adverse impact in the country's economic environment, resulting in a material deterioration of the discount rate used to determine the recoverable amount of the Group's Russian cash-generating unit. The Group performed an interim impairment test of the Russian cash generating unit's recoverable amount, including goodwill, in June 2022 as part of its condensed consolidated interim financial statements. As part of that exercise, the recoverable amount was determined based on value-in-use calculations consistent with those performed for the 2021 annual impairment test methodology, updated to consider management's revised best estimates of expected cash flow projections and a higher discount rate, reflective of the macroeconomic uncertainty in Russia. This exercise resulted in a pre-tax impairment charge to goodwill and property, plant and equipment of €13.7 million and €15.0 million respectively, which was recorded in line 'Exceptional items related to Russia-Ukraine conflict' of the condensed consolidated income statement and included under Emerging markets for segmental reporting purposes .

Considering the relative uncertainty in connection with its new business model in Russia and volatility in the market, the Group also updated the impairment test of its Russian cash generating unit's recoverable amount based on value-in-use calculations consistent with its 2022 annual impairment test methodology, using management's updated best estimates of expected cash flow projections, considering actual performance of the new business in the year and relevant market developments as described above. As a result of this exercise, it was identified that the recoverable amount exceeded the carrying amount of the Russian cash-generating unit, resulting in the reversal of €13.4 million pre-tax impairment charge to property, plant and equipment recognised in June 2022, considering also foreign currency translation impact. The reversal of the impairment charge was accordingly recorded in line 'Exceptional items related to Russia-Ukraine conflict' in the condensed consolidated income statement and included under Emerging markets for segmental reporting purposes.

The following table sets out the key assumptions used in the impairment assessment of the Russian cash-generating unit for 2022 and 2021, as well as 2022 interim results:

	2022	2022 interim	2021

Growth rate in perpetuity	4.0%	4.0%	3.0%
Discount rate	14.9%	26.5%	6.5%

The Group applies post-tax discount rates to post-tax cash flows, as the valuation calculated using this method closely approximates to applying pre-tax discount rates to pre-tax cash flows. The increase in discount rate used in the 2022 interim results compared to 2021, was mainly driven by higher bond yield spreads due to fears of potential default on the back of the imposed sanctions, which subsided in the second half of the year, thus resulting in a lower discount rate for 2022 compared to the first half of the year, still higher than 2021.

Recoverability of equity method investments

The impact of the Russia-Ukraine conflict on the macroeconomic environment of Russia as described above, was also considered an impairment indicator by the Group under IAS 36 'Impairment of assets', in connection with its integral, joint venture investment in Multon A.O. group of companies ('Multon'). Multon is engaged in the production and distribution of juices in Russia and was jointly controlled by the Group and TCCC. The Group performed an interim impairment test in connection with its investment in Multon in June 2022 as part of its condensed consolidated interim financial statements. The recoverable amount of the investment was determined based on a fair value exercise, considering management's best estimates of expected cash flow projections for a period of five years. Cash flows beyond the five-year period were extrapolated using the following estimated growth and discount rates:

	2022 interim
Growth rate in perpetuity	4.0%
Post-tax discount rate	28.6%

The recoverable amount of the Group's investment in Multon resulting from this exercise, which was classified as a Level 3 fair value measurement, amounted to €174.2 million. This resulted in a pre-tax impairment charge of €52.8 million, which is recorded in line 'Exceptional items related to Russia-Ukraine conflict' in the condensed consolidated income statement and included under Emerging markets for segmental reporting purposes.

In August 2022, TCCC unilaterally waived certain of its governance rights in connection with its 50% interest in Multon. Following this waiver and considering the criteria set out in IFRS 10 'Consolidated financial statements', the Group has concluded that it controls Multon and has been accordingly consolidating its financial performance effective 11 August 2022 (Note 15).

b) Operations in Ukraine

As a result of the Russia-Ukraine conflict, operations of the Group's Ukrainian subsidiary were temporarily suspended for the period March-April 2022. During May 2022, the Group resumed production and distribution of products in Ukraine, where safe to do so. Non-current assets of Ukraine represented approximately 1% of the Group's total non-current assets as at 31 December 2022. An impairment test of the Ukrainian cash-generating unit, based on a value-in-use exercise consistent with the Group's annual impairment testing methodology was performed both for the purposes of the Group's condensed consolidated interim financial statements and condensed consolidated financial statements for 2022, as it was considered that, whilst operations have resumed, significant changes in the relevant market with an adverse effect in the cash-generating unit had taken place during the period. No impairment was identified as a result of this impairment testing. The Group's carrying amount of goodwill and other indefinite-lived intangibles for its Ukrainian cash-generating unit was €nil as at 31 December 2022 and 2021.

An amount of €4.4 million (€4.2 million for the six months ended 1 July 2022) losses directly attributable to the Russia-Ukraine conflict, primarily related to inventory and property, plant and equipment write-offs, have been incurred by the Group's Ukrainian subsidiary during 2022, of which €3.3 million (€3.1 million for the six months ended 1 July 2022) have been recorded in line 'Operating expenses' and €1.1 million (€1.1 million for the six months ended 1 July 2022) in line 'Cost of goods sold' of the condensed consolidated income statement.

4.2 Foreign-currency risk

The Group is exposed to the effect of foreign currency risk on future transactions, recognised monetary assets and liabilities that are denominated in currencies other than the local entity's functional currency, as well as net investments in foreign operations. As described in the 2021 Integrated Annual Report, the Group actively manages its foreign currency risk. The Russia-Ukraine conflict has, among other things, resulted in increased volatility in currency markets, especially in connection with the Russian Rouble.

The following tables present details of the Group's sensitivity to reasonably possible increases and decreases in the Euro and US Dollar against the Russian Rouble and Ukrainian Hryvnia. In determining reasonable possible changes, the historical volatility over a 12-month period of the respective foreign currencies in relation to the Euro and the US Dollar has been considered. The sensitivity analysis determines the potential gains and losses in the income statement or equity arising from the Group's foreign exchange positions as a result of the corresponding percentage increases and decreases in the Group's main foreign currencies relative to the Euro and the US Dollar. The sensitivity analysis includes outstanding foreign-currency-denominated monetary items, external loans, and loans between operations within the Group where the denomination of the loan is in a currency other than the functional currency of the local entity.

2022 exchange risk sensitivity to reasonably possible changes in the Euro against Russian Rouble and Ukrainian Hryvnia

		Euro strengthens against		Euro weakens against
		local currency		local currency
	% historical	(Gain) / loss		Loss / (gain)
	volatility over a	in income	(Gain) / loss	in income	Loss / (gain)
	12-month	statement	in equity	statement	in equity
	period	€ million	€ million	€ million	€ million
Russian Rouble	54.5%	(9.4)	(0.1)	31.9	0.2
Ukrainian Hryvnia	12.5%	2.9	-	(3.8)	-

2022 exchange risk sensitivity to reasonably possible changes in the US Dollar against Russian Rouble and Ukrainian Hryvnia

		US Dollar strengthens against		US Dollar weakens against
		local currency		local currency
	% historical	(Gain) / loss		Loss / (gain)
	volatility over a	in income	(Gain) / loss	in income	Loss / (gain)
	12-month	statement	in equity	statement	in equity
	period	€ million	€ million	€ million	€ million
Russian Rouble	53.0%	(18.7)	-	61.0	-
Ukrainian Hryvnia	4.1%	(0.1)	-	0.1	-

4.3 Other topics

As a result of sanctions and other regulations implemented in 2022, there have been changes in required regulatory approvals, potentially impacting the transfer and usage of cash outside of Russia. Cash and cash equivalents held by the Group's operations in Russia amounted to €155.3 million equivalent in Russian Rouble, US Dollar and Euro as at 31 December 2022. The aforementioned changes restrict the usage of cash held in Russia outside the country, however, are not expected to have a material impact on the Group's liquidity, as the cash and cash equivalents held in Russia are expected to be used in the forthcoming financial periods primarily for working capital purposes in the Russian operations.

The Group is continuously monitoring performance of its Russian and Ukrainian operations as well as the developments in the region, to ensure timely actions and initiatives are undertaken to minimize potential adverse impact for the Group.

5. Restructuring costs

As part of the effort to optimise its cost base and sustain competitiveness in the marketplace, the Group undertakes restructuring initiatives. Restructuring mainly concerns employees' termination benefits, which are included within operating expenses. Restructuring costs per reportable segment for the six months and years ended 31 December are presented below:

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
	€ million	€ million	€ million	€ million
Established	(1.1)	15.1	(6.1)	14.7
Developing	(1.5)	2.5	(1.5)	3.4
Emerging	8.5	3.1	19.5	3.1
Total restructuring costs	5.9	20.7	11.9	21.2

6. Finance costs, net

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
	€ million	€ million	€ million	€ million
Interest income	(9.3)	(3.0)	(13.2)	(5.3)
Finance costs	38.9	35.3	79.9	68.8
Net foreign exchange losses	10.4	0.6	16.0	4.1
Finance costs, net	40.0	32.9	82.7	67.6

7. Tax

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
	€ million	€ million	€ million	€ million
Profit before tax	389.2	417.7	623.6	734.9
Tax	(126.0)	(103.6)	(208.0)	(187.4)
Effective tax rate	32.4%	24.8%	33.4%	25.5%

The Group's effective tax rate for 2022 may differ from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities. This difference can be a consequence of a number of factors, the most significant of which are the application of statutory tax rates of the countries in which the Group operates, the non-deductibility of certain expenses, the non-taxable income and one-off tax items.

8. Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to the owners of the parent by the weighted average number of shares outstanding during the period (full year of 2022: 366,351,704; full year of 2021: 365,011,304, six months ended 31 December 2022: 366,539,951, six months ended 31 December 2021: 365,500,180). Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive ordinary shares arising from exercising employee stock options.

9. Intangible assets and property, plant and equipment

	Intangible	Property, plant
	assets	and equipment
	€ million	€ million
Net book value as at 1 January 2022 excluding right-of-use assets	2,043.3	2,668.3
Additions	-	580.7
Arising from business combinations (Note 15)	671.2	342.4
Reclassified to assets held for sale	-	(0.1)
Reclassified from right-of-use assets	-	12.5
Disposals	-	(14.1)
Depreciation, impairment and amortisation	(15.1)	(422.7)
Foreign currency translation	(156.9)	(104.6)
Net book value as at 31 December 2022 excluding right-of-use assets	2,542.5	3,062.4
Net book value as at 1 January 2022 of right-of-use assets	-	162.6
Right-of-use asset movement	-	41.3
Net book value as at 31 December 2022 of right-of-use assets	-	203.9
Net book value as at 31 December 2022	-	3,266.3

Impairment losses recognised in connection with intangible assets amounted to €13.7 million in 2022 (2021: €nil) (Note 4). Refer to Note 4 for information on net impairment losses recognised in 2022, in connection with property, plant and equipment of the Russian cash-generating unit.

Right-of-use assets arising from business combinations amounted to €40.1 million.

10. Financial risk management and financial instruments

The Group's activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and commodity price risk), credit risk, liquidity risk and capital risk. There have been no material changes in the risk management policies since the previous year end.

As described in the 2021 Integrated Annual Report, the Group actively manages its liquidity risk. The Group maintains its healthy liquidity position and is able to meet its liabilities as they fall due. As at 31 December 2022, the Group has net debt of €1.7 billion (Note 11). In addition, as at 31 December 2022, the Group has cash and cash equivalents and other financial assets of €1.7 billion, an undrawn Revolving Credit Facility of €0.8 billion, an uncommitted Money Market Loan agreement of €0.2 billion, as well as €0.8 billion available out of the €1.0 billion Commercial Paper Programme. None of our debt facilities are subject to any financial covenants that would impact the Group's liquidity or access to capital. The Group's Standard & Poor's and Moody's credit ratings as disclosed in the 2021 Integrated Annual Report were reaffirmed in March and May 2022 respectively, however Standard and Poor's changed the outlook from stable to negative.

The Group's financial instruments recorded at fair value are included in Level 1, Level 2 and Level 3 within the fair value hierarchy as described in the 2021 Integrated Annual Report.

The fair value of bonds and notes payable applying the clean market price, as at 31 December 2022, was €2,595.6 million compared to their book value of €2,883.4 million, as at the same date. The money market funds recorded at fair value are included in Level 1 within the fair value hierarchy. As at 31 December 2022, the fair value of the money market funds amounted to €497.2 million (€638.8 million as at 31 December 2021).

As at 31 December 2022, the total derivatives included in Level 2 were financial assets of €30.1 million and financial liabilities of €33.5 million.

The Group uses derivatives to mitigate the commodity price risk related to plastics. As the valuation of these derivatives uses prices that are not observable in the market, it is classified within Level 3. The fair value of the derivatives related to plastics as at 31 December 2022 amounted to a financial asset of €2.1 million and financial liability of €5.9 million.

The Group uses foreign currency derivatives to mitigate the currency risk related to Nigerian Naira. As the valuation technique of these derivatives incorporates greater use of unobservable inputs, their fair value is classified within Level 3. The fair value of these derivatives as at 31 December 2022 were financial assets of €3.9 million and financial liabilities of €6.2 million.

There were no transfers between Levels 1, 2 and 3 during the year ended 31 December 2022.

11. Net debt

	As at 31 December
	2022	2021
	€ million	€ million
Current borrowings	337.0	381.7
Non-current borrowings	3,082.9	2,555.7
Less: Cash and cash equivalents	(719.9)	(782.8)
-Financial assets at amortised cost	(529.5)	(196.1)
-Financial assets at fair value through profit or loss	(497.2)	(638.8)
Less: Other financial assets	(1,026.7)	(834.9)
Net debt	1,673.3	1,319.7

In September 2022 the Group completed the issue of a €500 million Euro-denominated fixed rate Green bond maturing in September 2025 with a coupon rate of 2.75%.

In December 2019 the Group established a loan facility of US$ 85.0 million to finance the purchase of production equipment by the Group's subsidiary in Nigeria. The facility has been partially drawn down by Nigerian Bottling Company Ltd ("NBC") over the course of 2020 and 2021 and matures in 2027 as disclosed in the 2021 Integrated Annual Report. The obligations under this facility are guaranteed by Coca-Cola HBC AG. As at 31 December 2022, the outstanding liability amounted to €59.3 million (€63.2 million as at 31 December 2021).

Cash and cash equivalents include an amount of €120.9 million equivalent in Nigerian Naira. This includes an amount of €10.6 million equivalent in Nigerian Naira, which relates to the outstanding balance held for the repayment of NBC's former minority shareholders, following the 2011 acquisition of non-controlling interests.

The financial assets at amortised cost comprise of time deposits amounting to €529.5 million (31 December 2021: €189.9 million) and also include an amount of €nil (31 December 2021: €6.2 million) equivalent in Nigerian Naira invested in Treasury Bills related to the outstanding balance of the bank account held for the repayment of NBC's former minority shareholders as described above. The financial assets at fair value through profit or loss are related to money market funds. Included in 'Other financial assets' of the condensed consolidated balance sheet are derivative financial instruments of €35.3 million (31 December 2021: €39.2 million) and related party loans receivable of €1.8 million (31 December 2021: €4.8 million).

12. Share capital, share premium and treasury shares

	Number of shares	Share	Share
	(authorised	capital	premium
	and issued)	€ million	€ million
Balance as at 1 January 2021	370,512,597	2,014.4	3,321.4
Shares issued to employees exercising
stock options	1,282,821	7.9	11.7
Dividends (Note 14)	-	-	(235.8)
Balance as at 31 December 2021	371,795,418	2,022.3	3,097.3
Shares issued to employees exercising
stock options	290,677	2.0	2.7
Dividends (Note 14)	-	-	(262.6)
Balance as at 31 December 2022	372,086,095	2,024.3	2,837.4

In 2022, the share capital of Coca-Cola HBC increased by the issuance of 290,677 (2021: 1,282,821) new ordinary shares following the exercise of stock options pursuant to the Coca-Cola HBC AG's employees' stock option plan. Total proceeds from the issuance of the shares under the stock option plan amounted to €4.7 million (2021: €19.6 million).

An amount of €15.4 million in 2022 (2021: €8.9 million) relates to treasury shares provided to employees in connection with vested performance share awards under the Company's employee incentive scheme, which was reflected as an appropriation of reserves between 'Treasury shares' and 'Other reserves' in the condensed consolidated statement of changes in equity.

Following the above changes, on 31 December 2022 the share capital of the Group amounted to €2,024.3 million and comprised 372,086,095 shares with a nominal value of CHF 6.70 each.

13. Leases

The leases which are recorded on the consolidated balance sheet are principally in respect of vehicles and buildings. The Group's right-of-use assets and lease liability are presented below:

	2022	2021
	€ million	€ million
Land and buildings	82.7	63.2
Plant and equipment	121.2	99.4
Total right-of-use assets	203.9	162.6

Current lease liabilities	53.9	50.9
Non-current lease liabilities	152.1	109.4
Total lease liability	206.0	160.3

14. Dividends

On 22 June 2021, the shareholders of Coca-Cola HBC AG at the Annual General Meeting approved a dividend distribution of 0.64 euro per share. The total dividend amounted to €235.8 million and was paid on 3 August 2021. Of this an amount of €2.2 million related to shares held by the Group.

The shareholders of Coca-Cola HBC AG approved a dividend distribution of 0.71 euro per share at the Annual General Meeting held on 21 June 2022. The total dividend amounted to €262.6 million and was paid on 2 August 2022. Of this an amount of €2.4 million related to shares held by the Group.

The Board of Directors will propose a 0.78 euro dividend per share in respect of 2022. If approved by the shareholders of Coca-Cola HBC AG, this dividend will be paid in 2023.

15. Business combinations

Acquisition of Coca-Cola Bottling Company of Egypt S.A.E.

On 12 August 2021, the Group entered into a sale and purchase agreement to acquire approximately 52.7% of Coca-Cola Bottling Company of Egypt S.A.E. ("CCBCE"), the bottling partner of TCCC in Egypt, from MAC Beverages Limited and certain of its affiliated entities ("MBL acquisition"). The MBL acquisition was completed on 13 January 2022 and resulted in the Group obtaining control over CCBCE.

The acquisition of CCBCE expands the Group's existing footprint on the African continent and further increases its exposure to high-growth markets, as it provides access to one of the largest non-alcoholic ready-to-drink markets by volume in Africa. In addition, sharing of the Group's proven capabilities, experience and best practices with CCBCE, is expected to unlock growth opportunities, creating value for all stakeholders.

The operating results and assets and liabilities of CCBCE have been consolidated from 14 January 2022.

The fair value of the consideration for the MBL acquisition consisted of US Dollar 303.7 million (€264.9 million), which was transferred on acquisition, and an additional payment of US Dollar 124.0 million (€119.1 million), based on CCBCE's past performance, net financial position and working capital movement, which was transferred in October 2022. Foreign exchange loss arising on settlement of the consideration payable for the MBL acquisition amounted to €11.3 million and was presented in line 'Payment for business combinations, net of cash acquired' of the condensed consolidated cash flow statement, while proceeds from settlement of derivatives used to hedge the relevant foreign currency risk amounted to €13.0 million and were presented in line 'Proceeds from settlement of derivatives relating to business combination' of the condensed consolidated cash flow statement.

As part of the MBL acquisition completion, a convertible loan which had been granted to CCBCE from a wholly-owned affiliate of TCCC, one of its major shareholders, was also transferred to the Group for a consideration of €19.1 million. This was equal to the outstanding principal amount of the convertible loan and the unpaid interest at the time of its transfer and was presented in line 'Repayments of borrowings' in the condensed consolidated cash flow statement. The loan was convertible at its original maturity in March 2022 into new CCBCE shares at fair market value, however the conversion option was not subsequently exercised. The loan was eliminated upon consolidation of CCBCE.

Details of the MBL acquisition with regards to the determined fair values of the net assets acquired, non-controlling interests and goodwill are presented in the below table.

			Fair Value
			€ million
Franchise agreements			367.7
Property, plant and equipment			318.7
Inventories			59.3
Trade, other receivables and assets			64.5
Cash and cash equivalents			15.9
Borrowings			(217.0)
Trade and other payables			(129.6)
Net deferred tax liabilities			(122.7)
Net identifiable assets acquired			356.8
Less: Non-controlling interests			(168.9)
Add: Goodwill arising on acquisition			196.1
Net assets acquired			384.0

No significant changes to net identifiable assets acquired have been identified compared to the relevant amounts disclosed as part of the Group's 2021 Integrated Annual Report.

The goodwill is attributable to CCBCE's strong market position and growth potential. Line 'Borrowings' in the above table includes the convertible loan as well as third party loans of €122.7 million, which have been repaid and replaced with intragroup borrowings. The Group has chosen to recognise the non-controlling interests at their proportionate share of the fair value of CCBCE's net identifiable assets acquired.

The Group incurred acquisition and integration costs of €8.8 million in 2022 (2021: €13.9 million) regarding the acquisition of CCBCE, which were included in operating expenses.

On 12 August 2021, the Group entered into an additional sale and purchase agreement to acquire approximately 42% of CCBCE, from a wholly-owned affiliate of TCCC ("TCCC acquisition"). The TCCC acquisition was completed on 25 January 2022.

The fair value of the consideration paid for the TCCC acquisition amounted to US Dollar 122.7 million (€108.9 million). The transaction was treated as separate to the MBL acquisition, considering that whilst the transactions above were entered into at the same time and in contemplation of each other, they are separate from a commercial and contractual perspective and as such they are treated as two separate transactions. The TCCC acquisition was accordingly accounted for as an equity transaction.

Following the completion of both the transactions, the Group holds a 94.7% interest in CCBCE.

The fair value of trade, other receivables and assets acquired includes trade receivables with a fair value of €28.3 million. The gross contractual amount for trade receivables acquired was €42.0 million, of which €13.7 million was considered to be uncollectible.

Multon A.O. group of companies ("Multon")

The Group holds a 50% interest in Multon, which is engaged in the production and distribution of juices in Russia and was jointly controlled by the Group and TCCC. On 8 March 2022, as a result of the Russia-Ukraine conflict, TCCC announced that it was suspending its business in Russia.

On 10 August 2022, TCCC unilaterally waived certain of its governance rights in connection with its 50% interest in Multon, while retaining consent rights in respect of certain limited board and shareholder reserved matters that are protective in nature (the 'Waiver'). The waived rights include, among others, TCCC's appointment rights over Multon's board and management, TCCC's approval rights over Multon's financial budgets and rights to receive any dividends or other distributions declared or paid by Multon, which were accordingly assumed by the Group. The Waiver is irrevocable for a 2-year period, while there was no consideration transferred in connection with the Waiver. For the duration of the Waiver period, TCCC waives any rights to receive any dividends or other distributions declared or paid by Multon.

Given that TCCC waived the aforementioned rights, the Group has power over Multon, exposure to variable returns and the ability to use its power to affect its returns from Multon. Moreover, the irrevocable period of the Waiver is considered long enough so as not to prevent control by the Group. Hence, considering the criteria set out in IFRS 10 'Consolidated financial statements', the Group concluded that, effective 11 August 2022 it controlled Multon. The change in control of Multon was accounted for as a business combination achieved in stages in line with IFRS 3 'Business combinations' requirements.

The fair value of the Group's previously held interest in Multon, following TCCC unilaterally waiving certain of its governance rights, amounted to approximately €250 million and was estimated based on discounted forecasted cash flows of the business, using a discount rate of 27.8%. As a result of the change in control of Multon, a net loss of €74.4 million relating to the remeasurement of the previously held interest and the reclassification to the income statement of amounts relating to the Group's share of Multon's other comprehensive income was recognised within 'Operating expenses' line of the condensed consolidated income statement, included under Emerging markets for segmental reporting purposes and within 'Other non-cash items' line of the condensed consolidated cash flow statement.

Information on the fair values of the net assets acquired, non-controlling interests and gain from bargain purchase arising on the business combination is presented in the below table.

					Fair value € million
Trademarks					60.8
Property, plant and equipment					63.6
Inventories					37.5
Trade, other receivables and assets					212.4
Cash and cash equivalents					24.2
Borrowings					(1.2)
Trade and other payables					(50.1)
Net deferred tax liability					(2.7)
Net identifiable assets acquired					344.5
Less: Non-controlling interests					(90.7)
Less: Gain from bargain purchase arising on business combination					(3.9)
Net assets acquired					249.9

The cash and cash equivalents acquired amounting to €24.2 million was presented in line 'Payment for business combinations, net of cash acquired' in the condensed consolidated cash flow statement. Trade balances between the Group and Multon were effectively settled on acquisition, with no gain or loss recognised on the settlement, as the balances were effectively settled at the recorded amount.

The gain from bargain purchase arises mainly due to the deferred tax asset recognised on the economic obsolescence attributed to Multon's machinery and equipment and was presented in line 'Operating expenses' in the condensed consolidated income statement and line 'Other non-cash items' in the condensed consolidated cash flow statement. More specifically, the business enterprise value, which was estimated based on discounted forecasted cash flows of the business, was lower than the estimated fair value of the net identifiable assets acquired, using the cost of depreciated replacement to new methodology for the machinery and equipment of Multon. The Group considered that a market participant would not be willing to buy the net assets of the business at the estimated fair value, as described above, if the utility of the same, measured by the discounted forecasted cash flows of the business is smaller. Therefore, a downward adjustment of €39.8 million was made on the fair value of the identifiable assets as economic obsolescence in connection with Multon's machinery and equipment, representing the difference between the business enterprise value and the fair value of net identifiable assets. This in turn resulted in the recognition of a deferred tax asset, which is considered recoverable based on the future economic performance of Multon and was included in the value of net identifiable assets acquired.

The Group has chosen to recognise the non-controlling interests in Multon (TCCC's 50% share) at their fair value. This was determined based on discounted forecasted cash flows of the business and a scenario-based approach altering the potential dates at which TCCC could potentially reinstate its rights in Multon, based on the terms of the unilateral Waiver described above. Discount rate used in discounting the forecasted cash flows was 27.8%.

More specifically, the Group has considered the following scenarios:

• a Waiver ranging from 2-years to 8-years with an exit (of the agreement) in each of the years; and

• a perpetuity Waiver of rights.

In addition to the exit-year range for the revocability of the Waiver, the Group assigned a set of probabilities to each of the years in which the Waiver could be revoked within this range, including a probability for the indefinite Waiver scenario. Both the range for the revocability of the Waiver and the associated probabilities assigned were established based on management's best estimate regarding TCCC resuming its business in Russia, considering also outcomes of historical cases of sanctions.

As described above, following the Waiver, TCCC effectively has no entitlement over Multon's profit or loss generated in the ordinary course of business as it has contractually waived its rights over dividend or other distributions made by Multon. As a result Multon's net profit or loss will not be allocated to non-controlling interests during the period of the Waiver.

Acquisition of Three Cents

On 21 October 2022, the Group acquired 100% of the issued shares of ESM Effervescent Sodas Management Limited and its subsidiary Three Cents Hellas Single Member S.A. (together "Three Cents"), the owner of the super-premium adult sparkling beverage and mixer product line under the Three Cents brand, for a consideration of €45.9 million. The acquisition complements and further premiumises the Group's existing adult sparkling beverage portfolio and will better position the Group to address a wider range of consumer tastes and segments.

Details of the acquisition with regards to the provisionally determined fair values of the net assets acquired and goodwill are presented in the table below:

					Fair Value
					€ million
Trademarks					22.6
Property, plant and equipment					0.2
Trade, other receivables and assets					1.9
Cash and cash equivalents					1.9
Borrowings					(0.1)
Trade and other payables					(1.9)
Net deferred tax liabilities					(2.7)
Net identifiable assets acquired					21.9
Add: Goodwill arising on acquisition					24.0
Net assets acquired					45.9

The acquisition resulted in the Group recording €24.0 million of goodwill and €22.6 million of trademarks in its Established segment. The goodwill arising is attributable to the brand's growth potential across the Group's markets. Acquisition-related costs of €0.3 million were included in the 2022 operating expenses, as a result of the above acquisition.

The fair value of trade, other receivables and assets acquired includes trade receivables with a fair value of €0.8 million, while there was no significant amount of trade receivables acquired considered to be uncollectible.

16. Related party transactions

a) The Coca-Cola Company

As at 31 December 2022 , TCCC and its subsidiaries indirectly owned 2 1 .1% (31 December 2021: 21.0%) of the issued share capital of Coca-Cola HBC. The below table summarises transactions with TCCC and its subsidiaries:

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
	€ million	€ million	€ million	€ million
Purchases of concentrate, finished products
and other items	845.5	821.1	1,808.7	1,598.8
Net contributions received for marketing and
promotional incentives	56.0	51.5	108.6	83.1
Sales of finished goods and raw materials	2.2	2.6	4.2	4.5
Other income	6.6	1.5	8.6	2.8
Other expenses	2.5	2.1	4.7	4.2

As at 31 December 2022, the Group was owed €45.3 million (€52.8 million as at 31 December 2021) by TCCC, and owed €226.9 million (€223.1 million as at 31 December 2021) to TCCC.

Refer to Note 15 for payments to TCCC during 2022 regarding purchase of convertible loan and acquisition of non-controlling interests in the context of the acquisition of Coca-Cola Bottling Company of Egypt S.A.E.

b) Frigoglass S.A. ("Frigoglass"), Kar-Tess Holding and AG Leventis (Nigeria) Plc

Frigoglass, a company listed on the Athens Exchange, is a manufacturer of coolers, cooler parts, glass bottles, crowns and plastics. Truad Verwaltungs AG currently indirectly owns 48.4% of Frigoglass and 99.3% of AG Leventis (Nigeria) Plc (31 December 2021: 48.6% and 99.3% respectively) and also indirectly controls Kar Tess Holding, which holds approximately 23.0% (31 December 2021: 23.0%) of Coca-Cola HBC's total issued capital. Frigoglass has a controlling interest in Frigoglass Industries (Nigeria) Limited, in which Coca-Cola HBC has a 23.9% effective interest (31 December 2021: 23.9%), through its subsidiary Nigerian Bottling Company Ltd.

The table below summarises transactions with Frigoglass, Kar-Tess Holding and AG Leventis (Nigeria) Plc:

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
	€ million	€ million	€ million	€ million
Purchases of coolers and other equipment, raw and other materials	42.3	56.8	115.9	126.9
Maintenance, rent and other expenses	17.6	16.4	33.2	28.7

Frigoglass Industries (Nigeria) Limited is guarantor under the amended banking facilities and notes issued by the Frigoglass Group, as part of the debt restructuring of the latter. The Group has no direct exposure arising from this guarantee arrangement, but the Group's investment ‎ in this associate, which stood at €21.1 million as at 3 1 December 2022 (31 December 2021: €25.2 million), would be at potential risk if there was a default under the terms of the amended banking facilities or the notes and the Frigoglass Group (including the guarantor) were unable to meet their obligations thereunder. During the six months and year ended 31 December 2022, the Group received dividends of €1.2 million from Frigoglass Industries (Nigeria) Limited (€1.4 million in the respective prior-year periods), which are included in the line 'Receipts from non-integral equity method investments' of the condensed consolidated cash flow statement.

As at 31 December 2022, Coca-Cola HBC owed € 30.9 million (€14.9 million as at 31 December 2021) to and was owed € 4.4 million including dividend receivable of €3.7 million (€0.8 million and €nil as at 31 December 2021 respectively) from Frigoglass and its subsidiaries. As at 31 December 2022, Coca-Cola HBC owed € 2.7 million (€0.9 million as at 31 December 2021) and had a lease liability of € 4.2 million (€6.0 million as at 31 December 2021) to AG Leventis (Nigeria) Plc. Capital commitments to Frigoglass and its subsidiaries as at 31 December 2022, amounted to €25.5 million (€33.5 million as at 31 December 2021) including the Group's share of its joint ventures' capital commitments to Frigoglass.

c) Other related parties

During the six months and full year ended 31 December 2022, the Group incurred other expenses of € 7.9 million and €15.5 million (€7.8 million and €15.1 million in the respective prior-year periods) mainly related to maintenance services for cold drink equipment and installations of coolers, fountains, vending and merchandising equipment as well as subsequent expenditure for fixed assets of €1.8 million and €3.0 million (€0.7 million and €1.5 million in the respective prior-year periods) from other related parties. In addition, during the six months and year ended 31 December 2022, the Group purchased inventory of €4.2 million and €5.5 million (€nil in the respective prior year period) from other related parties. As at 31 December 2022, the Group owed € 3.7 million (€0.6 million as at 31 December 2021) to other related parties and was owed €1.5 million dividend receivable (€0.9 million loans receivable as at 31 December 2021) from other related parties.

During the six months and the year ended 31 December 2022, the Group received dividends of €nil and €0.6 million from other related parties (€nil and €0.5 million in the respective prior-year periods), which are included in line `Receipts from non-integral equity method investments' of the condensed consolidated cash flow statement and paid €nil and €5.7 million respectively in connection with capital increase of other related parties (€nil in the respective prior-year periods), which is included in line 'Payments for non-integral equity method investments' of the condensed consolidated cash flow statement. Furthermore, during the six months and the year ended 31 December 2022, €nil and €1.3 million respectively regarding loans receivable from other related parties were converted to equity.

d) Joint ventures

The below table summarises transactions with joint ventures:

	Six months ended 31 December		Year ended 31 December
	2022	2021	2022	2021
	€ million	€ million	€ million	€ million
Purchases of inventory	19.5	2.5	26.0	5.2
Sales of finished goods and raw materials	3.0	2.7	9.2	4.8
Other income	8.3	9.0	15.8	16.2
Other expenses	5.4	7.4	15.7	13.4

As at 31 December 2022, the Group owed € 4.4 million including loans payable of € nil million (€149.8 million as at 31 December 2021 including loans payable of €63.2 million) to and was owed € 9.6 million including loans receivable of €4 .3 million (€13.9 million as at 31 December 2021 including loans receivable of €7.1 million) from joint ventures. During the six months and year ended 31 December 2022, the Group received dividends of €7.7 million and €9.7 million from integral joint ventures (dividends from integral joint ventures of €41.3 million and €47.8 million in the respective prior-year periods), which were included in line `Receipts from integral equity method investments' of the condensed consolidated cash flow statement . During the six months and year ended 31 December 2022, the Group paid €4.0 million (€nil in the respective prior-year periods) in connection with capital increase of joint ventures, which was included in line 'Payments for integral equity method investments' of the condensed consolidated cash flow statement.

e) Directors

There have been no transactions between Coca-Cola HBC and the Directors and senior management except for remuneration for both the six months and years ended 31 December 2022 and 2021.

17. Contingencies

In relation to the Greek Competition Authority's decision of 25 January 2002, one of Coca-Cola Hellenic Bottling Company S.A.'s competitors had filed a lawsuit against Coca-Cola Hellenic Bottling Company S.A. claiming damages in an amount of €7.7 million. The court of first instance heard the case on 21 January 2009 and subsequently rejected the lawsuit. The plaintiff appealed the judgement and on 9 December 2013 the Athens Court of Appeals rejected the plaintiff's appeal. On 19 April 2014, the same plaintiff filed a new lawsuit against Coca-Cola Hellenic Bottling Company S.A. (following the spin-off, Coca-Cola HBC Greece S.A.I.C.) claiming payment of €7.5 million as compensation for losses and moral damages for alleged anti-competitive commercial practices of Coca-Cola Hellenic Bottling Company S.A. between 1994 and 2013. On 21 December 2018, the plaintiff served their withdrawal from the lawsuit. However, on 20 June 2019, the same plaintiff filed a new lawsuit against Coca-Cola HBC Greece S.A.I.C. claiming payment of €10.1 million as compensation for losses and moral damages again for alleged anti-competitive commercial practices of Coca-Cola Hellenic Bottling Company S.A. for the same period between 1994 and 2013. On 16 July 2021, the Athens Multimember Court of First Instance issued its judgment number 1929/2021 (hereinafter the "Judgment"), which adjudicates that Coca-Cola HBC Greece S.A.I.C. is obliged to pay to the plaintiff an amount of circa €0.9 million plus interest as of 31 December 2003. Both Coca-Cola HBC Greece S.A.I.C and the plaintiff have appealed against this decision to the court of appeals. Both appeals were heard on 19 January 2023. The decision is pending to be issued. Management believes that any liability to the Group that may arise as a result of these pending legal proceedings will not have a material adverse effect on the results of operations, cash flows, or the financial position of the Group taken as a whole.

With respect to the investigation of the Greek Competition Commission initiated on 6 September 2016, regarding Coca-Cola HBC Greece S.A.I.C.'s operations in certain commercial practices in the non-alcoholic beverages market, the Rapporteur of the Greek Competition Commission appointed for this case issued her Statement of Objections on 5 July 2021 , alleging that Coca-Cola HBC Greece S.A.I.C. undertook a series of anti-competitive practices in the market of instant consumption, thereby excluding competitors and limiting their growth potential.

Coca-Cola HBC Greece S.A.I.C. has vigorously defended its commercial practices, in rebuttal of the allegations set out in the Statement of Objections. The hearing of the case, before the plenary session of the Greek Competition Commission, was concluded on 29 November 2021 and the supplementary briefs of the parties were submitted on 16 December 2021. On 3 November 2022, the Hellenic Competition Commission notified Coca-Cola HBC Greece S.A.I.C. of its ruling on the case, according to which Coca-Cola HBC Greece S.A.I.C. allegedly abused its dominant position in the Greek immediate consumption market segment. The Hellenic Competition Commission ruling imposed on Coca-Cola HBC Greece S.A.I.C. a fine of €10.3 million, as well as a behavioural remedy in relation to beverage coolers valid until end of 2024. Coca-Cola HBC Greece S.A.I.C. has fully provided for the amount of the fine. Coca-Cola HBC Greece S.A.I.C. strongly disagrees with this ruling and has challenged it before the competent Court of Appeal. The hearing date of the case is not yet set.

In 1992, our subsidiary NBC acquired a manufacturing facility in Nigeria from Vacunak, a Nigerian company. In 1994, Vacunak filed a lawsuit against NBC, alleging that a representative of NBC had orally agreed to rescind the sale agreement and instead enter into a lease agreement with Vacunak. As part of its lawsuit, Vacunak sought compensation for rent and loss of business opportunities. NBC discontinued all use of the facility in 1995. On 19 August 2013, NBC received the written judgment of the Nigerian court of first instance issued on 28 June 2012 providing for damages of approximately €16.7 million. The Appeal Court dismissed NBC's appeal and Vacunak's cross-appeal and affirmed the judgement of the first instance court. NBC has filed an appeal against the judgment before the Supreme Court . Based on advice from NBC's outside legal counsel, we believe that it is unlikely that NBC will suffer material financial losses from this case. We have consequently not provided for any losses in relation to this case.

In May 2021, the European Commission sent CCH a questionnaire, initiating a preliminary investigation into a possible infringement by a CCH subsidiary, Coca-Cola European Partners and The Coca-Cola Company of EU competition rules through the granting of conditional rebates to "off-trade" customers capable of foreclosing competition from other suppliers. CCH's subsidiary will vigorously defend its commercial practices and is actively cooperating with the European Commission. The fact that the European Commission is carrying out a preliminary investigation does not mean that it will open formal proceedings. It is not possible to predict how long the investigation will take and its ultimate outcome.

The tax filings of the Group and its subsidiaries are routinely subjected to audit by tax authorities in most of the jurisdictions in which the Group conducts business. These audits may result in assessments of additional taxes. The Group provides for additional tax in relation to the outcome of such tax assessments, to the extent that a liability is probable and estimable.

The Group is also involved in various other legal proceedings. Management believes that any liability to the Group that may arise as a result of these pending legal proceedings will not have a material adverse effect on the results of operations, cash flows, or the financial position of the Group taken as a whole.

Considering the above, there have been no significant adverse changes in contingencies since 31 December 2021 (as described in our 2021 Integrated Annual Report available on the Coca-Cola HBC's web site: www.coca-colahellenic.com ).

18. Commitments

As at 31 December 2022 the Group had capital commitments including commitments for leases and the share of its joint ventures' capital commitments amounting to €210.5 million (31 December 2021: €166.1 million), which mainly relate to plant and machinery equipment.

19. Number of employees

The average number of full-time equivalent employees in 2022 was 33,043 ( 2021: 26,787 ).

20. Subsequent events

In January 2023 the Egyptian Pound depreciated against the Euro by approximately 23%. This resulted in a foreign exchange loss of approximately € 5 million for the Group. We are continuously monitoring the situation to ensure that timely actions are undertaken as needed to minimise any adverse impact from the devaluation to the business in Egypt.

Volume by country for 2022 and 2021
			% change
Unit cases (million)⁽¹⁾	2022	2021	2022 vs 2021

Established Markets
Austria	86.4	79.4	9%
Cyprus	15.9	14.3	11%
Greece	112.8	103.4	9%
Italy	277.4	254.5	9%
Republic of Ireland and Northern Ireland	83.0	75.4	10%
Switzerland	68.4	62.9	9%
Total	643.9	589.9	9%

Developing Markets
Baltics	37.0	33.1	12%
Croatia	31.9	28.1	14%
Czech Republic	60.2	51.1	18%
Hungary	102.7	91.9	12%
Poland	213.4	180.0	19%
Slovakia	24.5	23.2	6%
Slovenia	9.1	8.1	12%
Total	478.8	415.5	15%

Emerging Markets
Armenia	15.5	14.0	11%
Belarus	43.7	41.1	6%
Bosnia and Herzegovina	23.6	21.3	11%
Bulgaria	68.5	62.6	9%
Moldova	9.0	8.4	7%
Nigeria	408.3	400.4	2%
Romania	203.7	202.5	1%
Russian Federation	266.1	373.3	-29%
Serbia (including the Republic of Kosovo)	162.1	146.4	11%
Ukraine	101.2	137.3	-26%
Egypt	287.4	-	NM
Total	1,589.1	1,407.3	13%

Total Coca-Cola HBC	2,711.8	2,412.7	12%

⁽¹⁾ One unit case corresponds to approximately 5.678 litres or 24 servings, being a typically used measure of volume. For Premium Spirits volume, one unit case also corresponds to 5.678 litres. F or biscuits volume, one unit case corresponds to 1 kilogram. For coffee, one unit case corresponds to 0.5 kilograms or 5.678 litres. Volume data is derived from unaudited operational data.

- Our joint venture with Heineken in North Macedonia generated volume of 26.5 million unit cases in 2022 (2021: 25.2 million unit cases), increased by 5% compared to the prior year.

- Multon, our Russian juice business, generated volume of 36.7 million unit cases in 2022 (2021: 69.9 million unit cases), prior to the change in control effected 11 August 2022 (Note 15) which is not included in the performance of the Russian Federation.

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