1. European Union integration. Challenges and Opportunities Costin Mandrea Coca-Cola HBC 18 th of March

2. CCHBC – Integrated European business

3. 26 countries in 3 continents 21 Supply Chain Clusters 80 plants with 222 filling lines 77 warehouses and 278 distribution centres 33,000 employees 20+ toll-fillers in use A large number of suppliers 500mln consumers 1.4 mln+ customers

4. Consumer Huge market opening Purchasing power goes up Affordability will increase New categories/higher diversification New consumer behaviour – “European behavior” More demanding will lead to higher rate of innovations Potential constraints on promotions from EU legislation EU integration – Impact areas

5. 15 member states at the time 377 million citizens Poland, Hungary, Czech Republic, Slovakia, Slovenia, Malta, Cyprus, Estonia, Latvia, Lithuania 75 million additional citizens from 1 May 2004 EU integration – 2004 wave

6. CountryPeople, million GDP, € billion GDP per cap, € % of EU New members 7540412 00053 EU 153768 82723 180100 EU 254519 23121 32092 EU integration – 2004 wave

7. GDP per capita vs EU members High discrepancies between the old and new members

8. Strong Real GDP per Capita growth in accession countries 200220032004200520062007 5yr CAGR Poland 4,400 4,500 4,700 4,900 5,100 5,3004.2% Hungary 5,700 6,000 6,300 6,500 6,700 6,9003.9% Czechia 5,700 5,900 6,200 6,500 6,800 7,1004.7% Slovakia 4,500 4,700 5,000 5,300 5,500 5,8005.1% Source: DRI-WEFA EU integration – 2004 wave

9. CCHBC’s split The market 32% 36% Low double digit High single digit Low single digit Our growth potential 32% CSDsOther non-CSDsWater Wider consumer choice

10. Customer Higher consolidation of retailers Increasing the demand Price comparison between countries Possibility for cluster/European activations Higher efficiencies opportunity Transshipment EU integration – Impact areas

11. Transportation price

12. Competition Easier access to new markets for small players Economies of scale Increasing competitiveness will facilitate innovation and advance National monopolies will go away Level playing field EU integration – Impact areas

14. EU regulations - Impact

15. Corporate Corporate income tax Accounting treatments Supply chain opportunities Plant network optimization Labor code Labor cost Antitrust regulations Environmental Strategic pricing EU integration – Impact areas

16. Concentrate (TCCC) Sugar & HFS PET Resin & preforms Cans & Ends Production Equipment Cold Drink Equipment Closures & Crowns Promotion items Juices, flavours (non-TCCC) Glass bottles the top ten other big ticket items EU integration – Impact areas Freight Marketing items I.S. h/ware, s/ware; services Electricity Fuel Advertising POP material Production spares

17. High impact on Romanian operations profitability EU integration – Raw materials Sugar price Romania [index vs 2000] Sugar price Europe

18. Total hourly labour cost in EUR EU integration – Labor cost

19. Poland sulphur content of liquid fuels until 2006 emissions of volatile organic compounds from storage of petrol until 2005 recovery and recycling of packaging waste until 2007 waste landfills until 2012 (instead of 2009 for Member States) shipment of waste until 2007 treatment of urban waste water until 2015 discharges of dangerous substances into surface water until 2007 integrated pollution prevention and control until 2010 (instead of 2007 for Member States) air pollution from large combustion plants until 2017 EU integration – Environment

20. EU integration – Infrastructure optimization

21. Aseptic NRPET – why regional approach ? Expensive technology > €10 Mio. Highly sensitive on quality – trained people Change-overs need to be strictly limited – 8h sanitation cycles Lower volume products only on one line EU integration – Infrastructure optimization

22. THANK YOU Ευχαριστώ Multumesc