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Coca-Cola European Partners Reports Interim Results for the Six Months Ended 29 June 2018

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Strong Execution in the First Half, Maintaining Full-Year Outlook

Coca-Cola European Partners plc (CCEP) (ticker symbol: CCE) today
announces its interim results for the six months ended 29 June 2018 and
maintains full-year 2018 outlook.

Highlights

  • First-half diluted earnings per share were €0.85 on a reported
    basis or €1.00 on a comparable basis, including a negligible impact
    from currency translation.
  • First-half reported revenue totalled €5.4 billion, flat versus
    prior year, or up 1.0 percent on a comparable and fx-neutral basis.
    Volume decreased 3.5 percent on a comparable basis, partly reflecting
    the impact of recent strategic portfolio and pricing decisions.
  • First-half reported operating profit was €605 million; comparable
    operating profit was €699 million, up 4.5 percent on a comparable
    basis, or up 5.0 percent on a comparable and fx-neutral basis.
  • Second-quarter diluted earnings per share were €0.60 on a reported
    basis or €0.67 on a comparable basis, including a negligible impact
    from currency translation.
  • CCEP affirms full-year guidance for 2018 for comparable and
    fx-neutral diluted earnings per share growth of between 6 percent and
    7 percent when compared to 2017 comparable results.
  • CCEP raises full-year guidance for 2018 free cash flow to a range
    of €900 million to €950 million.
  • CCEP declares quarterly dividend of €0.26 per share.

"We are pleased with our execution and performance in the first half as
we continued to make bold portfolio and pricing decisions. We are
confident that these are the right strategic initiatives for our
business in the long-term, while acknowledging the near-term negative
impact on volume," said Damian Gammell, Chief Executive Officer.

"This strategy is reflected in another quarter of solid growth,
including strong revenue per unit case gains as we focus on improving
our pack and pricing architecture. Overall, we are encouraged by our
first-half performance given business disruption in France owing to
customer negotiations; unfavourable weather in Iberia; and new industry
taxes, notably in Great Britain.

"Given our solid progress in the first half, we have affirmed our 2018
profit outlook. We are committed to implementing our Beverages For Life
strategy; investing in our business; better serving our customers; and
improving our in-market execution," Mr. Gammell said. "Importantly, we
are confident that we have the right strategy and the right team in
place to deliver strong cash generation and ultimately generate
long-term value for our shareholders."

       
Key Financial Measures

Unaudited, fx impact calculated by recasting current year
results at prior year rates

Second-Quarter ended 29 June 2018
€ million     % change
       

As

Reported

    Comparable     Fx-Impact    

As

Reported

    Comparable     Fx-Impact    

Comparable

Fx-Neutral

Revenue 3,057     3,057     (20 ) %     0.5 %     (0.5 )%     1.0 %
Cost of sales 1,850 1,851 (13 ) % % (0.5 )% 0.5 %
Operating expenses 789 746 (5 ) 0.5 % 1.0 % (0.5 )% 1.5 %
Operating profit 418 460 (2 ) 0.5 % 1.0 % (0.5 )% 1.5 %
Profit after taxes 293 327 (1 ) (1.5 )% 1.0 % (0.5 )% 1.5 %
Diluted earnings per share (€)         0.60       0.67             (1.5 )%     1.5 %     %     1.5 %
       
 
Key Financial Measures

Unaudited, fx impact calculated by recasting current year
results at prior year rates

Six months ended 29 June 2018
€ million     % change
       

As

Reported

    Comparable     Fx-Impact    

As

Reported

    Comparable     Fx-Impact    

Comparable

Fx-Neutral

Revenue 5,435     5,435     (44 ) %     %     (1.0 )%     1.0 %
Cost of sales 3,341 3,313 (28 ) 0.5 % (1.0 )% (0.5 )% (0.5 )%
Operating expenses 1,489 1,423 (13 ) 0.5 % 1.0 % (1.0 )% 2.0 %
Operating profit 605 699 (3 ) (4.5 )% 4.5 % (0.5 )% 5.0 %
Profit after taxes 417 489 (2 ) (6.5 )% 5.5 % (0.5 )% 6.0 %
Diluted earnings per share (€)         0.85       1.00             (6.5 )%     5.5 %     %     5.5 %
 
 

Operational Review

First-half 2018 diluted earnings per share were €0.85 on a reported
basis, or €1.00 on a comparable basis. Currency translation had a
negligible impact on first-half 2018 comparable diluted earnings per
share. First-half 2018 reported operating profit totalled €605 million,
down 4.5 percent versus prior year. Comparable operating profit was €699
million, up 4.5 percent on a comparable basis, or up 5.0 percent on a
comparable and fx-neutral basis.

Second-quarter 2018 diluted earnings per share were €0.60 on a reported
basis, or €0.67 on a comparable basis. Currency translation had a
negligible impact on second-quarter 2018 comparable diluted earnings per
share. Second-quarter reported operating profit totalled €418 million,
up 0.5 percent versus prior year. Comparable operating profit was €460
million, up 1.0 percent on a comparable basis, or up 1.5 percent on a
comparable and fx-neutral basis.

Key operating profit factors in the first half of 2018 include modest
revenue growth on a comparable and fx-neutral basis driven by strong
revenue per unit case growth. This was offset by a 3.5 percent decline
in volume driven by strategic portfolio and pricing initiatives;
customer disruption in France; unfavourable weather in Iberia; as well
as the impact of new soft drinks taxes, notably in Great Britain.
Operating margins improved as we expanded our gross margin and continued
to realise post-merger synergy benefits.

Revenue

First-half 2018 reported revenue totalled €5.4 billion, flat versus
prior year, or up 1.0 percent on a comparable and fx-neutral basis.
First-half 2018 revenue per unit case grew 5.0 percent on a comparable
and fx-neutral basis benefiting approximately 1.5 percent from the
impact of incremental soft drinks industry taxes. Volume decreased 3.5
percent on a comparable basis.

Second-quarter 2018 reported revenue totalled €3.1 billion, flat versus
prior year. Comparable revenue was up 0.5 percent, or up 1.0 percent on
a comparable and fx-neutral basis. Revenue per unit case was up 6.0
percent on a comparable and fx-neutral basis benefiting from favourable
underlying price, promotion, and package mix, as well as approximately
2.5 percent from the accounting impact of incremental soft drinks
industry taxes. Second-quarter volume decreased 4.5 percent on a
comparable basis, reflecting customer disruption in France; unfavourable
weather in Iberia; the impact of new soft drinks taxes, notably in Great
Britain; and tough comparables.

On a territory basis for the second quarter, Iberia revenues were down
6.0 percent, as unseasonably cold weather in Spain resulted in weak
volumes, particularly in June. Revenue in Germany was up 4.5 percent,
driven by strong revenue per unit case growth reflecting pricing and
promotional plans as well as favourable product mix. Revenue in Great
Britain grew 6.5 percent, supported by underlying gains in revenue per
unit case reflecting improved promotional effectiveness and favourable
package mix, as well as the impact of the new soft drinks industry tax.
Revenue in France was down 9.5 percent, with solid growth in revenue per
unit case more than offset by a sharp decline in volume primarily due to
business disruption from customer negotiations as we focus on price
realisation and the reduction of promotional activity. Revenue in the
Northern European territories (Belgium, Luxembourg, the Netherlands,
Norway, Sweden, and Iceland) was up 6.5 percent driven by both revenue
per unit case and volume gains. Revenue growth was mainly led by Norway,
Belgium and the Netherlands.

On a brand basis for the second quarter, sparkling brands were down 4.0
percent. Coca-Cola trademark brands decreased 5.5 percent, with over 7.0
percent Coca-Cola Zero Sugar growth, while Coca-Cola Classic volume
declined in a high single-digit range due to several factors, notably
the impact of new soft drinks industry taxes and customer disruption in
France. Sparkling flavours and energy were broadly flat supported by
solid performances from Schweppes, Mezzo Mix, and energy brands. Still
brands declined 9.5 percent underpinned by an 8.0 percent fall in water
and a decline of 10.5 percent in juices, isotonics and other. This
reflects portfolio decisions in the ready-to-drink tea and water
categories, as well as a decline in the sports category mainly due to
unfavourable weather in Iberia. Fuze Tea, Vio and Smartwater all saw
solid volume growth in the quarter.

Cost of Sales

First-half 2018 reported cost of sales were €3,341 million, up 0.5
percent. Comparable cost of sales were €3,313 million, down 1.0 percent
on a comparable basis, or down 0.5 percent on a comparable and
fx-neutral basis. First-half 2018 cost of sales per unit case increased
3.5 percent on a comparable and fx-neutral basis, including
approximately 2.5 percent from the impact of incremental soft drinks
industry taxes.

Second-quarter 2018 reported cost of sales were €1,850 million, flat
versus prior year. Comparable cost of sales were €1,851 million, with no
change on a comparable basis, or up 0.5 percent on a comparable and
fx-neutral basis. Second-quarter cost of sales per unit case increased
5.5 percent on a comparable and fx-neutral basis, including
approximately 4.5 percent from the impact of incremental soft drinks
industry taxes.

Operating Expenses

First-half 2018 reported operating expenses were €1.5 billion, up 0.5
percent. Comparable operating expenses were €1.4 billion, up 1.0 percent
on a comparable basis, or up 2.0 percent on a comparable and fx-neutral
basis.

Second-quarter 2018 reported operating expenses were €789 million, up
0.5 percent. Comparable operating expenses were €746 million, up 1.0
percent on a comparable basis, or up 1.5 percent on a comparable and
fx-neutral basis. This reflects expense timing and select investments
partially offset by synergy benefits and a continued focus on managing
expenses.

Restructuring Charges

During the first-half of 2018, we recognised restructuring charges
totalling €96 million. These charges relate to restructuring activities
under the CCEP Integration and Synergy programme, supply chain site
consolidation in Great Britain and other restructuring programmes.

Outlook

For 2018, CCEP affirms prior guidance, including revenue growth in a low
single-digit range, with both operating profit and earnings per share
growth of between 6 percent and 7 percent. Each of these growth figures
is on a comparable and fx-neutral basis when compared to 2017 comparable
results. This revenue growth guidance excludes the accounting impact of
incremental soft drinks industry taxes. These taxes are expected to add
approximately 2 percent to 3 percent to revenue growth and approximately
4 percent to cost of goods growth. At recent rates, currency translation
would have a negligible impact on 2018 full-year diluted earnings per
share.

CCEP now expects 2018 free cash flow* in the range of €900 million to
€950 million, including the expected benefit from improved working
capital offset by the impact of restructuring and integration costs.
Capital expenditures are expected to be in the range of €525 million to
€575 million, including approximately €75 million of capital
expenditures related to synergies. Weighted average cost of debt is
expected to be approximately 2 percent. The comparable effective tax
rate for 2018 is expected to be approximately 25 percent.

CCEP remains on track to achieve pre-tax run-rate savings of €315
million to €340 million through synergies by mid-2019. Further, CCEP
expects to have realised at least 80 percent of the target by year-end
2018. Restructuring cash costs to achieve these synergies are expected
to be approximately 2 1/4 times expected savings and includes cash costs
associated with pre-transaction close accruals. Given these factors,
currency exchange rates, and our outlook for 2018, CCEP expects year end
net debt to adjusted EBITDA* for 2018 to be towards the low-end of our
target range of 2.5 to 3 times. As a result, during 2018, CCEP expects
to continue to evaluate returning incremental cash to shareholders.

* Refer to ‘Note Regarding the Presentation of Alternative
Performance Measures' for further details about these measures.

Dividends

The CCEP Board of Directors declared a regular quarterly dividend of
€0.26 per share. The dividend is payable on 6 September 2018 to those
shareholders of record on 22 August 2018. The Company is pursuing
arrangements to pay the dividend in euros to shares held within
Euroclear Netherlands. Other publicly held shares will be converted into
an equivalent US dollar amount using exchange rates issued by WM/Reuters
taken at 16:00 BST on 9 August 2018. This translated amount will be
posted on our website, www.ccep.com,
under the Investor/Shareowner Information section.

Conference Call

CCEP will host a conference call with investors and analysts today at
15:00 BST, 16:00 CEST and 10:00 a.m. EDT. The call can be accessed
through the Company's website at www.ccep.com.

Financial Details

Financial details can be found in our first-half 2018 filing, available
within the next 24 hours at www.morningstar.co.uk/uk/NSM
(located under effective date 29 June 2018) and available immediately on
our website, www.ccep.com,
under the Investors tab.

About CCEP

Coca-Cola European Partners plc is a leading consumer goods company in
Western Europe, selling, making and distributing an extensive range of
nonalcoholic ready-to-drink beverages and is the world's largest
independent Coca-Cola bottler based on revenue. Coca-Cola European
Partners serves a consumer population of over 300 million across Western
Europe, including Andorra, Belgium, continental France, Germany, Great
Britain, Iceland, Luxembourg, Monaco, the Netherlands, Norway, Portugal,
Spain and Sweden. The Company is listed on Euronext Amsterdam, the New
York Stock Exchange, Euronext London and on the Spanish stock exchanges,
and trades under the symbol CCE. For more information about CCEP, please
visit our website at www.ccep.com
and follow CCEP on Twitter at @CocaColaEP.

Forward-Looking Statements

This document may contain statements, estimates or projections that
constitute "forward-looking statements" concerning the financial
condition, performance, results, strategy and objectives of Coca-Cola
European Partners plc and its subsidiaries (together "CCEP" or the
"Group"). Generally, the words "believe," "expect," "intend,"
"estimate," "anticipate," "project," "plan," "seek," "may," "could,"
"would," "should," "might," "will," "forecast," "outlook," "guidance,"
"possible," "potential," "predict" and similar expressions identify
forward-looking statements, which generally are not historical in nature.

Forward-looking statements are subject to certain risks that could
cause actual results to differ materially from CCEP's historical
experience and present expectations or projections. As a result, undue
reliance should not be placed on forward-looking statements, which speak
only as of the date on which they are made. These risks and
uncertainties include but are not limited to those set forth in the
"Risk Factors" section of the 2017 Annual Report on Form 20-F, including
the statements under the following headings: Risks Relating to Consumer
Preferences and the Health Impact of Soft Drinks; Risks Relating to
Legal and Regulatory Intervention (such as the impact of sugar taxes
being implemented in a number of countries in 2018 and the development
of regulations regarding packaging); Risks Relating to Business
Integration and Synergy Savings; Risks Relating to Cyber and Social
Engineering Attacks; Risks Relating to the Market (such as customer
consolidation); Risks Relating to Economic and Political Conditions
(such as continuing developments in relation to the UK's exit from the
EU); Risks Relating to the Relationship with TCCC and Other Franchisors;
Risks Relating to Product Quality (such as shortages of raw materials);
and Other Risks.

Due to these risks and uncertainties, CCEP's actual future results,
dividend payments, and capital and leverage ratios may differ materially
from the plans, goals, expectations and guidance set out in CCEP's
forward-looking statements. Additional risks and uncertainties that may
impact CCEP's future financial condition and performance are identified
in filings with the SEC which are available on the SEC's website at
www.sec.gov.
CCEP does not undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as required under applicable rules,
laws and regulations. CCEP assumes no responsibility for the accuracy
and completeness of any forward-looking statements. Any or all of the
forward-looking statements contained in this filing and in any other of
CCEP's respective public statements may prove to be incorrect.

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