TIDMCCEP
RNS Number : 9980E
Coca-Cola Europacific Partners plc
02 November 2022
2 November 2022
This announcement contains inside information
COCA-COLA EUROPACIFIC PARTNERS
Trading update for the third quarter ended 30 September 2022
& interim dividend declaration
Strong third quarter, upgrading FY22 guidance, declaring record
dividend &
raising mid-term objectives
Change vs 2021 Change vs 2021 (Pro
Forma)
===============================================
Revenue Volume Revenue Comparable([2]) Revenue FXN([2]) Revenue Pro Pro Pro Pro
(UC)([1]) per Volume per revenue forma forma forma forma
UC([1]) UC([1], comparable revenue FXN revenue([3])
[5]) volume per revenue([3])
([3]) UC([3])
===== ======= ========== ========= ======= =============== ======= ======== ======= ========== ======= ============ ============
Q3
2022 Europe EUR3,820m 736m EUR5.19 12.0% 5.0% 17.5% 17.5% - - - -
===== ------- ========== ========= ======= =============== ======= ======== ======= ========== ======= ============ ============
API EUR925m 152m EUR5.61 9.5% 11.5% 21.0% 32.0% - - - -
============= ========== ========= ======= =============== ======= ======== ======= ========== ======= ============ ============
CCEP EUR4,745m 888m EUR5.26 11.5% 6.0% 18.0% 20.0% - - - -
============= ========== ========= ======= =============== ======= ======== ======= ========== ======= ============ ============
YTD
2022 Europe EUR10,271m 2,012m EUR5.09 13.5% 4.5% 18.5% 19.0% 13.5% 4.5% 18.5% 19.0%
===== ------- ========== ========= ======= =============== ======= ======== ======= ========== ======= ============ ============
API EUR2,754m 494m EUR5.27 101.5% 5.0% 111.0% 123.5% 8.0% 6.0% 13.5% 20.5%
============= ========== ========= ======= =============== ======= ======== ======= ========== ======= ============ ============
CCEP EUR13,025m 2,506m EUR5.12 24.5% 5.0% 30.0% 32.0% 12.5% 5.0% 17.5% 19.0%
============= ========== ========= ======= =============== ======= ======== ======= ========== ======= ============ ============
Damian Gammell, Chief Executive Officer, said:
"We are pleased to have delivered another strong quarter
following a great first half. We achieved solid top line growth and
value share gains across our markets. Key to this was the continued
recovery of the away from home channel, a return to travel and
tourism for many consumers, great summer weather in Europe and a
resilient home channel. Our focus on core brands, leading in-market
execution, and further price and mix, delivered volume and revenue,
across both channels, ahead of 2019. And we continued to make
progress against our sustainability commitments, globally
recognised as the recipient of the Coca-Cola system's 2021 ESG
award.
"Given our strong year to date performance, we are raising top
line, bottom line and free cash flow guidance for FY22 and
declaring a record dividend. We are confident in the resilience of
our robust categories and the strength of the relationships we have
with our customers, who continue to share in our success, despite a
more uncertain outlook. We are also effectively managing key levers
of pricing* and promotional spend across our broad pack offering,
alongside our focus on efficiency.
"Our success will continue to be determined by our great people,
great service, great beverages, done sustainably. We are a bigger
and better, more diverse and resilient business, enhanced by our
bold and fantastic acquisition last year. Alongside our strong
performance this year, we are today committing to even more
ambitious objectives over the mid-term. In combination with over
EUR5bn of shareholder returns since 2016, this demonstrates the
strength of our business and ability to deliver continued
shareholder value. We have the platform and momentum to go even
further together for a greater future. We look forward to providing
more details at today's Capital Markets Event in London."
Note: All footnotes included after the 'About CCEP' section;
*refers to headline pricing
Q3 HIGHLIGHTS([2],[3])
Q3 Reported revenue +20.0%; Fx-neutral revenue +18.0%
-- NARTD YTD value share gains([4]) across measured channels
both in-store (+20bps) & online (+100bps)
-- Comparable volume +11.5%([6]) (+5.5% vs 2019) driven by the
continued recovery of the away from home (AFH) channel, with the
return of tourism & favourable weather supporting volume growth
in Europe & soft comparables in API due to prior year
restrictions (API Q3 2021 volume -2.0% vs 2020)
Strong AFH comparable volume: +16.0% (+2.0% vs 2019) reflecting
the continued recovery of the AFH channel across both Europe
(+16.5% vs 2021) & API (+13.5% vs 2021)
Resilient Home comparable volume: +8.5% (+8.5% vs 2019) driven
by continuing at-home consumption trends & solid in-market
execution
-- Revenue per unit case +6.0%([1],[5]) (+10.0%([7]) vs 2019)
reflecting favourable price realisation across all markets,
including the benefit of additional underlying pricing coming
through in some markets, alongside positive pack & channel mix
led by the continued recovery of the AFH channel
Dividend
-- Declaring second half interim dividend per share of EUR1.12 (to be paid December)
-- Resulting in record full year dividend per share of EUR1.68
(+20.0% vs 2021 & +35.5% vs 2019), maintaining annualised total
dividend payout ratio of approximately 50%([8]) . Equating to a
total absolute dividend of EUR767m
Other
-- Reorientation of the API portfolio to maximise system value
creation to enable greater focus on NARTD, RTD alcohol &
spirits well advanced. Sale of NARTD own brands to The Coca-Cola
Company for A$275m substantially complete. Expected to be fully
complete by the end of the year
-- Innovation highlights: new limited edition Coca-Cola
Creations flavour, Dreamland, Sprite Lemon+ & Monster flavour
extensions (including Monster Ultra Rosa & Monster Reserve
White Pineapple)
-- Sustainability highlights:
Winner of 2021 J. Paul Austin Award, recognising ESG performance
in the Coca-Cola System
Launched sustainability-linked supply chain finance
programme
Achieved 100% renewable electricity commitment three years early
in New Zealand (NZ)
Continued rollout of new attached caps to PET bottles, now in
GB, Germany, Spain, Sweden & the Netherlands
FY22 GUIDANCE([2],[3])
The outlook for FY22 reflects current market conditions. Unless
otherwise stated, guidance is provided on a pro forma comparable
& FX-neutral basis. FX is expected to increase FX-neutral
guidance by approximately 150 basis points for the full year.
Revenue: pro forma comparable growth of 15-16% (previously
11-13%)
-- Weighted towards volume over price/mix reflecting recovery of the AFH channel
Cost of sales per unit case : pro forma comparable growth of
8.5% (previously 7.5%)
-- Stronger volume recovery supporting favourable overhead absorption
-- Commodity inflation expected to be up low twenties (previously high teens)
-- FY22 hedge coverage >95%
Operating profit: pro forma comparable growth of 11-12%
(previously 9-11%)
-- Remain on track to deliver on previously announced efficiency
savings & API combination benefits & continued focus on
optimising discretionary spend
Comparable effective tax rate: 22% (previously 22-23%)
Diluted EPS: pro forma comparable growth of 14-15% based on
actual FX rates
Free cash flow: at least EUR1.8bn (previously at least EUR1.6bn)
reflecting strong year to date performance & working capital
initiatives
FY23 OUTLOOK([2])
Top line
-- Market remaining resilient, mindful of uncertain outlook
-- Annualisation of FY22 second underlying pricing increases
-- NARTD category (retail sales value) expected to grow high
single digit, driven by price & mix
Bottom line
-- Cost of sales
Commodities: expected to be up mid-teens (previously high single
digit); 60% hedge coverage
Concentrate: directly linked to revenue per unit case through
the incidence pricing model
Low overall FX transactional exposure (<10%)
-- Continued delivery of efficiency programmes
UPDATED MID-TERM OBJECTIVES & INVESTOR EVENT HIGHLIGHTS([2])
Updated mid-term objectives
Revenue: growth of 4%([5]) (raised, previously low single
digit)
Comparable operating profit: growth of 7%([5]) (raised,
previously mid single digit)
Free cash flow: EUR1.7bn (raised, previously at least
EUR1.25bn)
Net Debt/Adjusted EBITDA: 2.5X - 3.0X (maintained) & focused
on reaching top end of target leverage range by end of FY23
ROIC: +50bps p.a. (raised, previously +40bps p.a.)
Capex: 4-5% of revenue([9]) (updated, previously 5% of
revenue([9]) )
Dividend payout ratio: 50%([8]) (maintained)
Other highlights
-- NARTD market is large & growing: estimated at EUR130bn in
2022; CAGR 2023-27 estimated at around 3-4%([17])
-- Announcing new EUR350-400m efficiency programme to be
delivered by the end of FY28 (cash cost to deliver included within
FCF guidance)
-- Sustainability: updating our commitments & targets to include API markets
For more details, the investor event presentation will be made
available at www.cocacolaep.com from 12:30 GMT, 13:30 CET &
8:30 a.m. EDT. For details of the webcast see page 6.
The person responsible for arranging for the release of this
announcement on behalf of the Company is Clare Wardle, Company
Secretary.
Third-Quarter & Year-To-Date Revenue Performance by Geography([2])
All values are unaudited and all references to volumes are on a
comparable basis
Q3 YTD (Pro forma)([3])
----------------------------------------------- ----------------------------------------------
Fx-neutral Fx-neutral
EUR million % change % change EUR million % change % change
=================== ================= ============= ============= ================ ============= =============
Great Britain 830 15.5 % 15.5 % 2,293 20.0 % 18.0 %
------------------- ----------------- ------------- ------------- ---------------- ------------- -------------
France([11]) 568 22.5 % 22.5 % 1,585 16.5 % 16.5 %
------------------- ----------------- ------------- ------------- ---------------- ------------- -------------
Germany 733 15.5 % 15.5 % 2,029 17.5 % 17.5 %
=================== ================= ============= ============= ================ ============= =============
Iberia([12]) 970 22.0 % 22.0 % 2,341 25.5 % 25.5 %
=================== ================= ============= ============= ================ ============= =============
Northern
Europe([13]) 719 13.0 % 13.0 % 2,023 14.0 % 14.0 %
=================== ================= ============= ============= ================ ============= =============
Total Europe 3,820 17.5 % 17.5 % 10,271 19.0 % 18.5 %
=============
API([10]) (Pro
forma)([3]) 925 32.0 % 21.0 % 2,754 20.5 % 13.5 %
=================== ================= ============= ============= ================ ============= =============
Total CCEP (Pro
forma)([3]) 4,745 20.0 % 18.0 % 13,025 19.0 % 17.5 %
=================== ================= ============= ============= ================ ============= =============
API
-- Q3 volume growth reflects solid trading in Australia &
NZ, further supported by the recovery of the AFH channel with soft
comparables in all markets from cycling tough restrictions last
year. Solid strategy & execution to navigate industry-wide
supply constraints in Australia & NZ also supported volume
growth.
-- Coca-Cola No Sugar outperformed in Australia & NZ, & Monster volume grew in all markets.
-- Revenue/UC ([14]) growth driven by positive channel &
pack mix from the recovery of the AFH channel, underlying price
& promotional optimisation in Australia.
France
-- Q3 volume growth reflects strong trading in the AFH channel,
with favourable weather & the recovery of tourism leading to
double-digit volume growth versus 2019. Home channel demand
remained resilient, also achieving double-digit volume growth
versus 2019. Strong overall performance despite industry-wide
supply constraints.
-- Coca-Cola Original Taste & Zero Sugar, Fuze Tea,
Capri-Sun & Monster outperformed, with volume ahead of
2019.
-- Revenue/UC ([14]) growth driven by further underlying price
& positive customer mix from the continued recovery of the AFH
channel.
Germany
-- Q3 volume growth reflects the continued recovery of the AFH
channel, further supported by favourable weather. Continued strong
performance in the Home channel supported by the successful
navigation of industry-wide supply constraints & the border
trade business resulted in volume ahead of 2019.
-- Coca-Cola Zero Sugar, Fuze Tea & Monster outperformed, with volume ahead of 2019.
-- Revenue/UC ([14]) growth driven by underlying price, positive
brand mix (e.g. Monster volume +20.0% in Q3) & pack mix from
the continued recovery of the AFH channel.
Great Britain
-- Q3 volume growth reflects continued strong trading in the AFH
channel, with favourable weather contributing towards double-digit
volume growth vs 2019. Higher at-home consumption trends led to
resilient demand in the Home channel, also achieving double-digit
volume growth versus 2019.
-- Coca-Cola Zero Sugar, Fanta, Sprite & Monster outperformed, with volume ahead of 2019.
-- Revenue/UC ([14]) growth driven by underlying price &
promotional optimisation, alongside positive pack mix led by IC
packs e.g. small PET volume +13.5% in Q3.
Iberia
-- Q3 volume growth reflects momentum in the AFH channel
recovery, achieving volume ahead of 2019 levels, supported by the
continued recovery of tourism & favourable weather. The
increased Spanish VAT rate continued to impact volume within the
Home channel.
-- Coca-Cola Zero Sugar & Monster both outperformed, with volume ahead of 2019.
-- Revenue/UC([14]) growth driven by further underlying price
& positive pack & channel mix led by the on-going recovery
of the AFH channel e.g. small glass volume +12.0% in Q3.
Northern Europe
-- Q3 volume growth reflects continued trading momentum in the
AFH channel. Continued strong demand in the Home channel supported
overall volume growth ahead of 2019.
-- Coca-Cola Zero Sugar, Fanta & Monster all outperformed, with volume ahead of 2019.
-- Revenue/UC ([14]) growth driven by underlying price,
alongside positive pack & channel mix from the continued
recovery of the AFH channel e.g. small glass volume +16.5% in
Q3.
Third-Quarter & Year-To-Date Volume Performance by Category([2],[3],[6])
All values are unaudited and all references to volumes are on a
comparable basis
Q3 YTD (Pro forma)([3])
% of % Change % of % Change
Total Total
============================================ =============== ============= =============== =============
Sparkling 83.0 % 10.5 % 84.0 % 11.5 %
Coca-Cola(R) 57.5 % 8.5% 58.0 % 10.0 %
============================================ =============== ============= =============== =============
Flavours, Mixers & Energy 25.5 % 15.0 % 26.0 % 15.5 %
============================================ =============== ============= =============== =============
Stills 17.0 % 16.5 % 16.0 % 16.0 %
Hydration 9.0% 24.5 % 8.0% 21.0 %
============================================ =============== ============= =============== =============
RTD Tea, RTD Coffee, Juices & Other([15]) 8.0% 8.5% 8.0% 11.0 %
============================================ =============== ============= =============== =============
Total 100.0% 11.5% 100.0% 12.5%
============================================ =============== ============= =============== =============
Coca-Cola(R)
-- Q3 Original Taste +11.0%; Lights +5.5% driven by solid
trading in both channels, supported by the continued recovery of
the AFH channel & on-going solid performance of the
reformulated & rebranded Coca-Cola Zero Sugar (+11.0%; +25.0%
vs 2019)
-- Coca-Cola Zero Sugar gained value share([4]) of Total Cola +60bps
Flavours, Mixers & Energy
-- Q3 Fanta +20.0% driven by solid trading in both channels,
supported by the continued recovery of the AFH channel
-- Q3 Energy +25.5% vs 2021 & +55.5% vs 2019 led by Monster;
gaining +140bps of value share([4]) .
-- Solid growth supported by exciting innovation & solid in-market execution
Hydration
-- Q3 Water +24.5% reflecting the continued recovery of the AFH channel & increased mobility
-- Q3 Water in decline vs 2019 (-20.0%), partially offset by
Sports (+17.5%) following a post pandemic resurgence
RTD Tea, RTD Coffee, Juices & Other([15])
-- Q3 Juice drinks in decline -2.5% vs 2019 driven by SKU
rationalisation in Indonesia. Continued growth in Europe led by
Capri-Sun (+18.0% vs 2021 & +33.5% vs 2019)
-- Q3 RTD Tea in growth vs 2019, led by Fuze Tea (+41.0%([16]) )
& continuing to grow value share in Europe([4],[16])
-- Q3 Alcohol delivered strong growth in Australia (+9.5% vs
2021 & +8.5% vs 2019) driven mainly by RTD Alcohol
Investor Event Webcast
-- 2 November 2022 at 12:30 GMT, 13:30 CET & 8:30 a.m. EDT; accessible via www.cocacolaep.com
-- Broadcast, replay & transcript will be available at www.cocacolaep.com as soon as possible
Dividend
-- The CCEP Board of Directors declared a second-half interim dividend of EUR1.12 per share
The interim dividend is payable 7 December 2022 to those
shareholders of record on 18 November 2022
CCEP will pay the interim dividend in euros to holders of shares
on Euronext Amsterdam, the Spanish Stock Exchanges & London
Stock Exchange
Other publicly held shares will be converted into an equivalent
US dollar amount using exchange rates issued by WM/Reuters taken at
16:00 GMT on 2 November 2022. This translated amount will be posted
on our website here:
https://ir.cocacolaep.com/shareholder-information-and-tools/dividends
Financial Calendar
-- Preliminary unaudited full-year 2022 results: 16 February 2023
-- Financial calendar available here: https://ir.cocacolaep.com/financial-calendar/
Contacts
Investor Relations
Sarah Willett Claire Michael Claire Copps
+44 7970 145 218 +44 7528 251 033 +44 7980 775 889
Media Relations
Shanna Wendt Nick Carter
+44 7976 595 168 +44 7976 595 275
About CCEP
Coca-Cola Europacific Partners is one of the world's leading
consumer goods companies. We make, move and sell some of the
world's most loved brands - serving 600 million consumers and
helping 1.75 million customers across 29 countries grow.
We combine the strength and scale of a large, multi-national
business with an expert, local knowledge of the customers we serve
and communities we support.
The Company is currently listed on Euronext Amsterdam, the
NASDAQ Global Select Market, London Stock Exchange and on the
Spanish Stock Exchanges, trading under the symbol CCEP.
For more information about CCEP, please visit www.cocacolaep.com
& follow CCEP on Twitter at @CocaColaEP.
___________________
1. A unit case equals approximately 5.678 litres or 24 8-ounce servings
2. Refer to 'Note Regarding the Presentation of Pro forma
financial information and Alternative Performance Measures' for
further details and to 'Supplementary Financial Information' for a
reconciliation of reported to comparable and reported to pro forma
comparable results; Change percentages against prior year
equivalent period unless stated otherwise
3. Comparative pro forma figures as if the acquisition of
Coca-Cola Amatil Limited occurred at 1 January 2021 presented for
illustrative purposes only, it is not intended to estimate or
predict future financial performance or what actual results would
have been. Acquisition completed on 10 May 2021. Prepared on a
basis consistent with CCEP accounting policies for the period 1
January to 10 May 2021. Refer to 'Note Regarding the Presentation
of Pro forma financial information and Alternative Performance
Measures' for further details
4. Combined NARTD (non-alcoholic ready to drink) NielsenIQ
Global Track YTD data for BE, DE, ES, FR, NL, NO, PT & SE to
28.Aug.22; GB to 27.Aug.22; NZ to 11.Sep.22; IND to 15.Aug.22;
NARTD IRI data for AUS to 28.Aug.22. Online Data is for available
markets YTD GB to 13.Aug.22 (Retailer data) + 27.Aug.22
(NielsenIQ), ES, FR, NL & SE to 28.Aug.22 (NielsenIQ), AUS to
28.Aug.22 (Retailer Data)
5. Comparable & Fx-neutral
6. No selling day shift in Q3; YTD adjusted for 1 less selling
day in Q1; YTD pro forma volume +12.0%
7. Management's best estimate
8. Dividends subject to Board approval
9. Excluding payments of principal on lease obligations
10. Includes Australia, New Zealand & the Pacific Islands, Indonesia & Papua New Guinea
11. Includes France & Monaco
12. Includes Spain, Portugal & Andorra
13. Includes Belgium, Luxembourg, the Netherlands, Norway, Sweden & Iceland
14. Revenue per unit case
15. RTD refers to Ready to Drink; Other includes Alcohol & Coffee
16. Europe only
17. CCEP internal estimates based on Global Data 2023-2027
Forward-Looking Statements
This document contains statements, estimates or projections that
constitute "forward-looking statements" concerning the financial
condition, performance, results, strategy and objectives of
Coca-Cola Europacific Partners plc and its subsidiaries (together
CCEP or the Group). Generally, the words "ambition", "target",
"aim", "believe", "expect", "intend", "estimate", "anticipate",
"project", "plan", "seek", "may", "could", "would", "should",
"might", "will", "forecast", "outlook", "guidance", "possible",
"potential", "predict", "objective" 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,
including with respect to the acquisition of Coca-Cola Amatil
Limited and its subsidiaries (together "CCL" or "API") completed on
10 May 2021 (the "Acquisition"). 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 include but are not
limited to:
1. those set forth in the "Risk Factors" section of CCEP's 2021
Annual Report on Form 20-F filed with the SEC on 15 March 2022 and
as updated and supplemented with the additional information set
forth in the "Principal Risks and Risk Factors" section of the H1
2022 Half-year Report filed with the SEC on 4 August 2022;
2. risks and uncertainties relating to the Acquisition,
including the risk that the businesses will not be integrated
successfully or such integration may be more difficult, time
consuming or costly than expected, which could result in additional
demands on CCEP's resources, systems, procedures and controls,
disruption of its ongoing business and diversion of management's
attention from other business concerns;
3. the extent to which COVID-19 will continue to affect CCEP and
the results of its operations, financial condition and cash flows
will depend on future developments that are highly uncertain and
cannot be predicted, including the scope and duration of the
pandemic and actions taken by governmental authorities and other
third parties in response to the pandemic;
4. risks and uncertainties relating to the global supply chain,
including impact from war in Ukraine, such as the risk that the
business will not be able to guarantee sufficient supply of raw
materials, supplies, finished goods, natural gas and oil and
increased state-sponsored cyber risks;
5. risks and uncertainties relating to the global economy and/or
a potential recession in one or more countries, including risks
from elevated inflation, price increases, price elasticity,
disposable income of consumers and employees, pressure on and from
suppliers, increased fraud, and the perception or manifestation of
a global economic downturn; and
6. risks and uncertainties relating to potential global energy
crisis, with potential interruptions and shortages in the global
energy supply, specifically the natural gas supply in our
territories. Energy shortages at our sites, our suppliers and
customers could cause interruptions to our supply chain and
capability to meet our production and distribution targets. The
impacts, including potential increases in energy prices, are
expected to be exacerbated during the approaching colder months of
the year.
Due to these risks, CCEP's actual future results, dividend
payments, capital and leverage ratios, growth, including growth in
revenue, cost of sales per unit case and operating profit, free
cash flow, market share, tax rate, efficiency savings, achievement
of sustainability goals, including net zero emissions, and the
results of the integration of the businesses following the
Acquisition, including expected efficiency and combination savings,
may differ materially from the plans, goals, expectations and
guidance set out in forward-looking statements (including those
issued by CCL prior to the Acquisition). These risks may also
adversely affect CCEP's share price. Additional risks 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.
Furthermore, 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 or CCL's public statements (whether prior or
subsequent to the Acquisition) may prove to be incorrect.
Note Regarding the Presentation of Pro forma financial information
and Alternative Performance Measures
Pro forma financial information
Pro forma financial information has been provided in order to
illustrate the effects of the acquisition of Coca-Cola Amatil
Limited (referred to as CCL pre acquisition, API post acquisition)
on the results of operations of CCEP in 2021 and allow for greater
comparability of the results of the combined group between periods.
The pro forma financial information for 2021 has been prepared for
illustrative purposes only and because of its nature, addresses a
hypothetical situation. It is based on information and assumptions
that CCEP believes are reasonable. For further information, refer
to our 2021 Annual Report on Form 20-F filed with the SEC on 15
March 2022, which provides further details on our non-GAAP
performance measures and reconciles, where applicable, our results
as reported under IFRS to Pro forma financial information and
non-GAAP performance measures.
The Pro forma financial information presented in this document
reflects the inclusion of API revenue as if the acquisition had
occurred at 1 January 2021 and prepared on a basis consistent with
CCEP accounting policies.
The pro forma financial information does not intend to represent
what CCEP's results of operations actually would have been if the
acquisition had been completed on the dates indicated, nor does it
intend to represent, predict or estimate the results of operations
for any future period or financial position at any future date. In
addition, it does not reflect ongoing cost savings that CCEP
expects to achieve as a result of the acquisition or the costs
necessary to achieve these cost savings or synergies. As pro forma
information is prepared to illustrate retrospectively the effects
of future transactions, there are limitations that are inherent to
the nature of pro forma information. As such, had the acquisition
taken place on the dates assumed, the actual effects would not
necessarily have been the same as those presented in the Pro Forma
financial information contained herein.
Alternative Performance Measures
We use certain alternative performance measures (non-GAAP
performance measures) to make financial, operating and planning
decisions and to evaluate and report performance. We believe these
measures provide useful information to investors and as such, where
clearly identified, we have included certain alternative
performance measures in this document to allow investors to better
analyse our business performance and allow for greater
comparability. To do so, we have excluded items affecting the
comparability of period-over-period financial performance as
described below. The alternative performance measures included
herein should be read in conjunction with and do not replace the
directly reconcilable GAAP measures.
For purposes of this document, the following terms are
defined:
"As reported" are results extracted from our consolidated
financial statements.
"Pro forma" includes the results of CCEP and API as if the
Acquisition had occurred at the beginning of 2021. In this
document, the Pro forma financial information adjustments reflect
the inclusion of API revenue as if the acquisition had occurred at
the beginning of 2021 and prepared on a basis consistent with CCEP
accounting policies.
"Comparable" is defined as results excluding items impacting
comparability, which include restructuring charges, acquisition and
integration related costs, inventory fair value step up related to
acquisition accounting, the impact of the closure of the GB defined
benefit pension scheme, net impact related to European flooding and
net tax items relating to rate and law changes. Comparable volume
is also adjusted for selling days.
"Pro forma Comparable" is defined as the pro forma results
excluding items impacting comparability, as described above.
"Fx-neutral" or "FXN" is defined as period results excluding the
impact of foreign exchange rate changes. Foreign exchange impact is
calculated by recasting current year results at prior year exchange
rates.
"Capex" or "Capital expenditures" is defined as purchases of
property, plant and equipment and capitalised software, plus
payments of principal on lease obligations, less proceeds from
disposals of property, plant and equipment. Capex is used as a
measure to ensure that cash spending on capital investment is in
line with the Group's overall strategy for the use of cash.
"Free cash flow" is defined as net cash flows from operating
activities less capital expenditures (as defined above) and
interest paid. Free cash flow is used as a measure of the Group's
cash generation from operating activities, taking into account
investments in property, plant and equipment and non-discretionary
lease and interest payments. Free cash flow is not intended to
represent residual cash flow available for discretionary
expenditures.
"Adjusted EBITDA" is calculated as Earnings Before Interest,
Tax, Depreciation and Amortisation (EBITDA), after adding back
items impacting the comparability of period over period financial
performance. Adjusted EBITDA does not reflect cash expenditures, or
future requirements for capital expenditures or contractual
commitments. Further, adjusted EBITDA does not reflect changes in,
or cash requirements for, working capital needs, and although
depreciation and amortisation are non-cash charges, the assets
being depreciated and amortised are likely to be replaced in the
future and adjusted EBITDA does not reflect cash requirements for
such replacements.
"Net Debt" is defined as the net of cash and cash equivalents
less borrowings and adjusted for the fair value of hedging
instruments related to borrowings and other financial
assets/liabilities related to borrowings. We believe that reporting
net debt is useful as it reflects a metric used by the Group to
assess cash management and leverage. In addition, the ratio of net
debt to adjusted EBITDA is used by investors, analysts and credit
rating agencies to analyse our operating performance in the context
of targeted financial leverage.
"ROIC" or "Return on invested capital" is defined as comparable
operating profit after tax attributable to shareholders divided by
the average of opening and closing invested capital for the year.
Invested capital is calculated as the addition of borrowings and
equity attributable to shareholders less cash and cash equivalents
and short term investments. ROIC is used as a measure of capital
efficiency and reflects how well the Group generates comparable
operating profit relative to the capital invested in the
business.
"Dividend payout ratio" is defined as dividends as a proportion
of comparable profit after tax.
Additionally, within this document, we provide certain
forward-looking non-GAAP financial Information, which management
uses for planning and measuring performance. We are not able to
reconcile forward-looking non-GAAP measures to reported measures
without unreasonable efforts because it is not possible to predict
with a reasonable degree of certainty the actual impact or exact
timing of items that may impact comparability throughout year.
Unless otherwise stated, percent amounts are rounded to the
nearest 0.5%.
Supplemental Financial Information - Revenue - Reported to Pro Forma
Comparable
All pro forma measures presented below relate only to the nine
months ended 1 October 2021.
Revenue
Third-Quarter Ended Nine Months Ended
================= --------------------------------------------------------------
Pro forma Revenue 30 Sept 1 Oct % Change 30 Sept 1 Oct % Change
CCEP 2022 2021 2022 2021
In millions of
EUR, except per
case data which
is calculated
prior to
rounding.
FX impact
calculated
by recasting
current
year results at
prior year rates.
================= ======================= ====================== ============= ====================== ====================== =============
As reported and
comparable 4,745 3,949 20.0 % 13,025 9,867 32.0 %
Add: Pro forma
adjustments([1]) - - n/a - 1,056 n/a
Pro forma
Comparable 4,745 3,949 20.0 % 13,025 10,923 19.0 %
Adjust: Impact
of fx changes (77) n/a n/a (191) n/a n/a
Pro forma
Comparable
and fx-neutral 4,668 3,949 18.0 % 12,834 10,923 17.5 %
Pro forma Revenue
per unit case 5.26 4.96 6.0% 5.12 4.88 5.0%
Third-Quarter Ended Nine Months Ended
================= -------------------------------------------------------------- ---------------------------------------------------------------
Pro forma Revenue 30 Sept 1 Oct % Change 30 Sept 1 Oct % Change
API 2022 2021 2022 2021
In millions of
EUR, except per
case data which
is calculated
prior to
rounding.
FX impact
calculated
by recasting
current
year results at
prior year rates.
================= ======================= ====================== ============= ====================== ====================== ===============
As reported and
comparable 925 700 32.0 % 2,754 1,233 123.5%
Add: Pro forma
adjustments([1]) - - n/a - 1,056 n/a
Pro forma
Comparable 925 700 32.0 % 2,754 2,289 20.5 %
Adjust: Impact
of fx changes (77) n/a n/a (153) n/a n/a
Pro forma
Comparable
and fx-neutral 848 700 21.0 % 2,601 2,289 13.5 %
Pro forma Revenue
per unit case 5.61 5.03 11.5 % 5.27 4.97 6.0%
([1]) The Pro forma financial information for 2021 reflects the
inclusion of API revenue as if the acquisition had occurred at 1
January 2021 and prepared on a basis consistent with CCEP
accounting policies.
Volume
Third-Quarter Ended Nine Months Ended
============ ------------------------------------------------------------- ---------------------------------------------------------------
Comparable 30 Sept 1 Oct % Change 30 Sept 1 Oct % Change
Volume 2022 2021 2022 2021
- Selling
Day
Shift CCEP
In millions
of
unit cases,
prior
period
volume
recast using
current
year selling
days
============ ====================== ====================== ============= ====================== ======================== =============
Volume 888 796 11.5 % 2,506 2,023 24.0 %
Impact of
selling
day shift n/a - n/a n/a (7) n/a
Comparable
volume
- Selling
Day
Shift
adjusted 888 796 11.5 % 2,506 2,016 24.5 %
Pro forma
impact([1]) - - n/a - 212 n/a
Pro forma
comparable
volume 888 796 11.5 % 2,506 2,228 12.5 %
Third-Quarter Ended Nine Months Ended
============ --------------------------------------------------------- ---------------------------------------------------------------
Comparable 30 Sept 1 Oct % Change 30 Sept 1 Oct % Change
Volume 2022 2021 2022 2021
- Selling
Day
Shift API
In millions
of
unit cases,
prior
period
volume
recast using
current
year selling
days
============ ====================== ====================== ========= ====================== ====================== ===============
Volume 152 139 9.5% 494 245 101.5%
Impact of
selling
day shift n/a - n/a n/a - n/a
Comparable
volume
- Selling
Day
Shift
adjusted 152 139 9.5% 494 245 101.5%
Pro forma
impact([1]) - - n/a - 212 n/a
Pro forma
comparable
volume 152 139 9.5% 494 457 8.0%
([1]) Pro forma API volume for the nine months ended 1 Oct 2021
is 460 million unit cases. Including the impact of the Q1 selling
day shift (3 million unit cases), pro forma comparable API volume
is 457 million unit cases.
This information is provided by RNS, the news service of the
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END
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November 02, 2022 03:01 ET (07:01 GMT)
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