TIDMCCEP
RNS Number : 0408I
Coca-Cola Europacific Partners plc
02 August 2023
COCA-COLA EUROPACIFIC PARTNERS
Results for the six months ended 30 June 2023
Strong first half, raising FY guidance
H1 2023 Metric([1]) As Reported Comparable Change vs H1 2022
([1])
====================== =========== =========== ========== -----------------------------------
As Reported Comparable Comparable
([1]) FXN ([1])
====================== =========== =========== ========== =========== ========== ==========
Total CCEP Volume (M UC)([2]) 1,631 1,631 1.0% 1.0%
---------------------- ----------- ----------- ---------- ----------- ---------- ----------
Revenue (EURM) 8,977 8,977 8.5% 8.5% 10.5%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Cost of sales (EURM) 5,707 5,701 8.0% 7.5% 10.0%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Operating expenses
(EURM) 2,153 2,111 6.5% 9.5% 11.5%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Operating profit
(EURM) 1,170 1,165 21.0% 11.0% 13.0%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Profit after taxes
(EURM) 854 847 26.5% 14.0% 16.5%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Diluted EPS (EUR) 1.86 1.85 27.5% 14.5% 17.0%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Revenue per UC([2])
(EUR) 5.62 10.0%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Cost of sales per
UC([2]) (EUR) 3.57 9.0%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Free cash flow (EURM) 850
================================== =========== =========== ---------- =========== ========== ==========
H1 Interim dividend
per share([3]) (EUR) 0.67
================================== =========== =========== ===============================================
Volume (M UC)([2]) 1,307 1,307 2.5% 2.5%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Revenue (EURM) 7,105 7,105 10.0% 10.0% 12.0%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Operating profit
(EURM) 887 924 19.5% 12.0% 14.0%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Revenue per UC([2])
Europe (EUR) 5.52 9.0%
---------------------- ----------- ----------- ---------- ----------- ---------- ----------
API Volume (M UC)([2]) 324 324 (5.5)% (5.5)%
====================== ----------- =========== ========== ----------- ========== ==========
Revenue (EURM) 1,872 1,872 2.5% 2.5% 7.0%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
Operating profit
(EURM) 283 241 25.0% 6.5% 11.0%
---------------------------------- ----------- =========== ========== ----------- ---------- ----------
Revenue per UC([2])
(EUR) 6.03 13.0%
---------------------------------- ----------- ----------- ---------- ----------- ---------- ----------
DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:
"Today, we are excited to announce the proposed joint
acquisition of Coca-Cola Beverages Philippines, Inc. with Aboitiz
Equity Ventures Inc., one of the leading conglomerates in the local
market. This offers us a great opportunity to acquire an
established, well-run business with attractive profitability and
growth prospects. This would be a natural next step for CCEP,
creating a more diverse footprint within our existing API business
segment, support Indonesia's transformation journey and underpin
our strategic mid-term objectives.
"We are also very pleased to have delivered a great first half,
achieving strong top and bottom-line growth and generating
impressive free cash flow. Our performance reflects great in-market
execution, strong customer relationships allowing our consumers to
continue to enjoy our portfolio of leading brands across a broad
pack offering. This resulted in solid volume growth across our
developed markets, whilst our volume in Indonesia reflected the
execution of our long-term transformation strategy. Our focus on
revenue and margin growth management, along with our price and
promotion strategy, drove solid gains in revenue per unit case with
transactions outpacing volume.
"Looking ahead, we remain confident in the resilience of our
categories, despite the ongoing dynamic outlook. We have fantastic
activation plans to build on our momentum, including the Women's
World Cup, to engage customers and consumers. We also continue to
actively manage our pricing and promotional spend to remain
affordable and relevant to our consumers. Given our strong first
half, we are raising revenue, operating profit and free cash flow
guidance([1]) for FY23. This demonstrates the strength of our
business and ability to deliver continued shareholder value. This
is all underpinned by our progress on sustainability, our talented
and engaged colleagues, and our strong relationships with The
Coca-Cola Company, our other brand partners, and our customers, who
continue to share in our success."
___________________________
Note: All footnotes included after the 'About CCEP' section
H1 & Q2 HIGHLIGHTS([1])
Revenue
H1 Reported +8.5%; H1 Fx-neutral +10.5%([4])
-- Delivered more revenue growth YTD for our retail customers
than any of our FMCG peers in Europe & our NARTD peers in
Australia & New Zealand (NZ)([5])
-- NARTD YTD value share gains([5]) across measured channels
both in-store (+10bps) & online (+90bps)
-- Comparable volume +1.0%([6]) (Europe: +2.5%; API: -5.5%)
driven by good underlying demand in developed markets & solid
in-market execution offset by strategic SKU rationalisation as part
of our long-term transformation in Indonesia
Away from Home (AFH) channel comparable volume: +0.5%([6])
(+0.5% vs 2019) with good underlying demand, ahead of pre-pandemic
levels
Home channel comparable volume: +1.0%([6]) (+8.5% vs 2019)
reflecting resilient growth as at-home occasion trends continue
-- Transactions outpaced volume growth in Europe, Australia & NZ
-- Revenue per unit case +10.0%([2],[4]) (Europe: +9.0%; API:
+13.0%) reflecting the annualisation of last year's headline price
increases, & this year's headline price increases across most
of our markets, alongside favourable pack & brand mix
Q2 Reported +5.5%; Q2 Fx-neutral +8.0%([4])
-- Comparable volume -1.5%([6]) (Europe: +0.5%; API: -11.0%)
reflecting good underlying demand in developed markets & tough
comparables (Q2 22 pro forma comparable volume: +10.5%) offset by
the timing of Ramadan & the strategic SKU rationalisation in
Indonesia
AFH channel comparable volume: -3.0%([6]) reflecting last year's
rebound following the removal of restrictions & recovery of
tourism, & favourable weather in Europe
Home channel comparable volume: -1.0%([6])
-- Revenue per unit case +10.0%([2],[4]) (Europe: +9.5%; API:
+13.0%) driven by positive headline price increases &
promotional optimisation alongside favourable pack & brand
mix
H1 Operating profit
Reported +21.0%; Fx-neutral +13.0%([4])
-- Cost of sales per unit case +9.0%([2],[4]) reflecting
increased revenue per unit case driving higher concentrate costs,
& inflation in commodities & manufacturing
-- Comparable operating profit of EUR1,165m, +13.0%([4])
reflecting strong top-line, our efficiency programmes &
continuous efforts on discretionary spend optimisation
-- Comparable diluted EPS of EUR1.85, +17.0%([4]) (reported +27.5%)
Dividend
-- First half interim dividend per share of EUR0.67([3])
(declared at Q1 & paid in May), calculated as 40% of the FY22
dividend
-- Reaffirming guidance for an annualised total dividend payout
ratio of approximately 50%([7])
Proposal to jointly acquire Coca-Cola Beverages Philippines,
Inc. with Aboitiz Equity Ventures Inc.
-- See separate release on Investors section of our website for more detail (https://ir.cocacolaep.com/financial-reports-and-results/financial-releases)
Other
-- Free cash flow: Generated strong free cash flow of EUR850m
reflecting strong performance (net cashflows from operating
activities of EUR1,307m), supporting our journey to return to our
target leverage range of Net debt:Adjusted EBITDA([1]) of 2.5x-3x.
At the end of 2022, Net debt:Adjusted EBITDA([1]) was 3.5x
-- Strategic portfolio choices:
Australia & NZ Spirits & ARTD([8]) category: CCEP plans
to maximise its extensive knowledge in the attractive & fast
growing ARTD category by launching new scalable offerings aligned
with The Coca-Cola Company. In this context, CCEP & Beam
Suntory will move forward independently. Effective from the date of
contract expiry (30 June 2025 in Australia & 31 December 2025
in NZ)
Capri Sun: Following a successful sales & distribution
partnership in Europe, CCEP & Capri Sun will move forward
independently, consistent with their respective strategies. Will
come into effect during 2024 enabling an orderly transition
Insignificant impact on CCEP volume, revenue & operating
profit([4],[9]) from the above
SUSTAINABILITY HIGHLIGHTS
-- Retained MSCI AAA rating, inclusion on Carbon Disclosure
Project's A Lists for Climate & Water, & inclusion on the
Bloomberg Gender Equality index
-- Progressed our packaging initiatives
Boosted recycled content in Indonesia by switching to 100% rPET
bottles
Installed a PET plastic grinder in Papua New Guinea to support
the supply of rPET
Transitioned Sprite from green to clear bottles across API,
making them easier to recycle
-- Introduced electric trucks in Luxembourg, Belgium & Spain
to reduce carbon emissions from our logistics
-- Partnered with The Coca-Cola Company, other bottlers &
Greycroft, a seed-to-growth venture capital firm, to create a
sustainability-focused venture capital fund
FY23 GUIDANCE & OUTLOOK([1])
The outlook for FY23 reflects our current assessment of market
conditions. Unless stated otherwise, guidance is on a comparable
& FX-neutral basis. FX is expected to decrease FX-neutral
guidance by approximately 200 basis points for the full year
Revenue: comparable growth of 8-9% (previously 6-8%)
-- Headline pricing successfully implemented across most of our
markets without disruption. Germany & the Netherlands to be
implemented in the third quarter
-- Continued focus on promotional optimisation & revenue growth management initiatives
Cost of sales per unit case: comparable growth of 8%
(unchanged)
-- Higher concentrate costs reflecting increased revenue per unit case
-- Commodity inflation expected to be 8% (previously 10%)
-- FY23 hedge coverage at >95%
-- Low overall FX transactional exposure (<10%)
Operating profit: comparable growth of 12-13% (previously
6-7%)
-- Increased top-line performance
-- Continued focus on delivering efficiency programmes & optimising discretionary spend
Comparable effective tax rate: 24% (previously 23%)
-- Primarily due to change of geographic profit mix
Free cash flow: at least EUR1.7bn (previously at least
EUR1.6bn)
Capital expenditure: 4-5% of revenue excluding leases
(unchanged)
Dividend payout ratio: c.50%([7]) (unchanged)
SECOND QUARTER & FIRST HALF REVENUE PERFORMANCE BY GEOGRAPHY([1])
All values are unaudited, changes versus equivalent 2022
period
Second-quarter First-half
--------------------------------- ---------------------------------
Fx-Neutral Fx-Neutral
EUR million % change % change EUR million % change % change
====================== =========== ======== ========== =========== ======== ==========
Great Britain 881 9.5% 12.0% 1,570 7.5% 11.5%
---------------------- ----------- -------- ---------- ----------- -------- ----------
France([10]) 665 20.0% 20.0% 1,200 18.0% 18.0%
---------------------- ----------- -------- ---------- ----------- -------- ----------
Germany 799 8.5% 8.5% 1,458 12.5% 12.5%
---------------------- ----------- -------- ---------- ----------- -------- ----------
Iberia([11]) 886 7.0% 7.0% 1,541 12.5% 12.5%
---------------------- ----------- -------- ---------- ----------- -------- ----------
Northern Europe([12]) 729 1.0% 5.0% 1,336 2.5% 6.0%
---------------------- ----------- -------- ---------- ----------- -------- ----------
Total Europe 3,960 8.5% 10.0% 7,105 10.0% 12.0%
---------------------- ----------- -------- ---------- ----------- -------- ----------
API([13]) 863 (6.5)% 0.5% 1,872 2.5% 7.0%
---------------------- ----------- -------- ---------- ----------- -------- ----------
Total CCEP 4,823 5.5% 8.0% 8,977 8.5% 10.5%
France
-- Q2 volume growth reflects continued strong momentum across
both channels supported by great execution.
-- Coca-Cola Original Taste, Coca-Cola Zero Sugar, Monster &
Flavours performed well. Fuze Tea outperformed, achieving
significant volume growth in both Q2 (+74.0%) & H1
(+57.0%).
-- H1 revenue/UC([14]) growth driven by headline price increase
implemented at the end of the first quarter.
Germany
-- Q2 volume growth reflects solid trading in the Home channel
supported by great execution & evidence of consumers shifting
to Hypermarkets & Discounters. AFH channel volume broadly
flat.
-- Continued strong growth in Coca-Cola Zero Sugar, whilst
Monster, Fuze Tea & Powerade achieved double-digit volume
growth in both Q2 & H1.
-- H1 revenue/UC([14]) growth driven by favourable price from
the annualisation of the second headline price increase last year
& positive brand mix (e.g. Monster volume +30.5%).
Great Britain
-- Q2 volume growth reflects sustained trading momentum across
both channels. Record temperatures in June supported strong volume
growth towards the end of the quarter.
-- Coca-Cola Zero Sugar & Monster realised double-digit volume growth in both Q2 & H1.
-- H1 revenue/UC([14]) growth driven by headline price increase
implemented at the end of the second quarter.
Iberia
-- Q2 volume decline reflects tough comparables, cycling the
rebound of the AFH channel, favourable weather & buy-in ahead
of second headline price increase last year & anticipated
transportation disruption. H1 growth driven by the recovery of the
AFH channel in the first quarter (cycling covid restrictions).
-- Coca-Cola Original Taste, Coca-Cola Zero Sugar & Aquarius
performed well in H1. Monster achieved double-digit volume growth
in both Q2 & H1.
-- H1 revenue/UC([14]) growth driven by headline price,
implemented in the first quarter, & positive channel & pack
mix led by growth in the AFH channel e.g. small glass +6.5%.
Northern Europe
-- Q2 volume decline reflects tough comparables, cycling
double-digit volume growth last year following the late removal of
restrictions. H1 growth driven by continued recovery of the AFH
channel.
-- Fuze Tea, Powerade & Aquarius outperformed achieving double-digit volume growth in H1.
-- H1 revenue/UC([14]) growth driven by headline price increase
implemented during the first half & positive pack mix led by
the recovery of the AFH channel e.g. small glass +7.0%.
API
-- Q2 volume decline reflects phasing of Ramadan, &
strategic SKU rationalisation in Indonesia, with industry-wide
supply constraints early in the quarter in Australia.
-- Coca-Cola Zero Sugar & Monster continued to outperform in both Q2 & H1.
-- H1 revenue/UC([14]) growth driven by headline price increase
implemented across all markets during the first half &
promotional optimisation in Australia.
___________________________
Note: All values are unaudited and all references to volumes are
on a comparable basis.
SECOND QUARTER & FIRST HALF VOLUME PERFORMANCE BY CATEGORY([1],[6])
Comparable volumes, changes versus equivalent 2022 period.
Second-quarter First-half
-------------------------- ----------------------------
% of % Change % of % Change([5])
Total Total
============================================ ============= =========== ============= =============
(1.0)
Sparkling 85.0 % % 85.0 % 1.5 %
(1.0)
Coca-Cola(R) 58.5 % % 58.5 % 1.5 %
(1.5)
Flavours, Mixers & Energy 26.5 % % 26.5 % 1.5 %
(5.0) (3.5)
Stills 15.0 % % 15.0 % %
(8.0) (4.5)
Hydration 7.5 % % 7.5 % %
(1.5) (2.5)
RTD Tea, RTD Coffee, Juices & Other([15]) 7.5 % % 7.5 % %
100.0 (1.5) 100.0
Total % % % 1.0 %
Coca-Cola (R)
Q2: -1.0%; H1: +1.5%
-- Strong underlying demand with tough comparables in the second
quarter, cycling the rebound of the AFH channel & tourism,
& favourable weather in Europe last year.
-- Coca-Cola Zero Sugar continued to grow (+5.5%) across all key
markets in H1 supported by targeted campaigns & innovation.
-- Coca-Cola Zero Sugar gained value share([5]) of Total Cola +20bps.
Flavours, Mixers & Energy
Q2: -1.5%; H1: +1.5%
-- Strong underlying demand with tough comparables in the second
quarter, cycling the rebound of the AFH channel & tourism,
& favourable weather in Europe last year.
-- Fanta Q2: -2.0%; H1: +2.0%, reflecting the above with growth supported by flavour extensions.
-- Energy Q2: +14.5%; H1: +15.0% led by Monster, continuing to
gain share & drive distribution through exciting
innovation.
Hydration
Q2: -8.0%; H1: -4.5%
-- Water Q2: -14.5%; H1: -10.0% as a result of strategic
portfolio choices, with SKU rationalisation in Indonesia, the exit
of Vio large PET in Germany & Mount Franklin bulk pack in
Australia.
-- Sports Q2: +7.0%; H1: +10.5%, with growth in Aquarius &
Powerade driven by continued consumer trends in this category.
RTD Tea, RTD Coffee, Juices & Other([15])
Q2: -1.5%; H1: -2.5%
-- Juice drinks Q2: -5.5%; H1: -6.5% reflecting strategic SKU rationalisation in Indonesia.
-- RTD Tea/Coffee Q2: +4.5%; H1: +3.5% driven by Costa RTD in GB
(+21.5%) & Fuze Tea in Europe (+27.0%).
-- Encouraging start for Jack Daniel's & Coca-Cola now launched in GB, Spain & the Netherlands.
___________________________
Note: All values are unaudited and all references to volumes are
on a comparable basis.
Conference Call (with presentation)
-- 2 August 2023 at 10:30 BST, 11:30 CEST & 5:30 a.m. EDT; accessible via www.cocacolaep.com
-- Replay & transcript will be available at www.cocacolaep.com as soon as possible
Financial Calendar
-- Third quarter 2023 trading update: 1 November 2023
-- Financial calendar available here: https://ir.cocacolaep.com/financial-calendar/
Contacts
Investor Relations
Sarah Willett Awais Khan Claire Copps
+44 7970 145 218 +44 7528 251 830 +44 7980 775 889
Media Relations
ccep@portland-communications.com
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 2 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. Refer to 'Note Regarding the Presentation of Alternative
Performance Measures' for further details & to 'Supplementary
Financial Information' for a reconciliation of reported to
comparable results; Change percentages against prior year
equivalent period unless stated otherwise
2. A unit case equals approximately 5.678 litres or 24 8-ounce servings
3. 25 April 2023 declared first half interim dividend of EUR0.67
dividend per share, paid 25 May 2023
4. Comparable & FX-neutral
5. External data sources: Nielsen & IRI P6 YTD
6. No selling day shift in Q2 or H1; CCEP reported volume +1.0% in H1 & -1.5% in Q2
7. Dividends subject to Board approval
8. ARTD refers to alcohol ready to drink
9. The discontinuance of the relationship between CCEP &
Beam Suntory will trigger a change in the assigned useful economic
life of the intangible assets effective from the second half of
2023, shortening the amortization period. See Note 14 for further
details
10. Includes France & Monaco
11. Includes Spain, Portugal & Andorra
12. Includes Belgium, Luxembourg, the Netherlands, Norway, Sweden & Iceland
13. Includes Australia, New Zealand & the Pacific Islands, Indonesia & Papua New Guinea
14. Revenue per unit case
15. RTD refers to ready to drink; Other includes Alcohol & Coffee
Forward-Looking Statements
This document contains statements, estimates or projections that
constitute "forward-looking statements" concerning the financial
condition, performance, results, guidance and outlook, dividends,
consequences of mergers, acquisitions, joint ventures, and
divestitures, including the proposed joint venture with Aboitiz
Equity Ventures Inc. (AEV) and acquisition of Coca-Cola Beverages
Philippines, Inc. (CCBPI), 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. 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 2022
Annual Report on Form 20-F filed with the SEC on 17 March 2023 and
as updated and supplemented with the additional information set
forth in the "Principal Risks and Risk Factors" section of this
document;
2. risks and uncertainties relating to the global supply chain,
including impact from war in Ukraine and increasing geopolitical
tension including in the Asia Pacific region, 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;
3. 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;
4. 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;
5. risks and uncertainties relating to potential water use
reductions due to regulations by national and regional authorities
leading to a potential temporary decrease in production volume;
and
6. risks and uncertainties relating to the proposed joint
venture with AEV and acquisition of CCBPI, including the risk that
the proposed transactions may not be consummated on the currently
contemplated terms or at all, or that our integration of CCBPI's
business and operations may not be successful or may be more
difficult, time consuming or costly than expected.
Due to these risks, CCEP's actual future financial condition,
results of operations, and business activities, including its
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 recycling initiatives, capital expenditures,
the results of the acquisition of the minority share of our
Indonesian business, our agreements relating to and results of the
proposed joint venture with AEV and acquisition of CCBPI, and
ability to remain in compliance with existing and future regulatory
compliance, may differ materially from the plans, goals,
expectations and guidance set out in forward-looking statements.
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. Any or all of the forward-looking
statements contained in this filing and in any other of CCEP's
public statements may prove to be incorrect.
Note Regarding the Presentation of Alternative Performance Measures
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 condensed
consolidated interim financial statements.
"Comparable" is defined as results excluding items impacting
comparability, which include restructuring charges, income arising
from the ownership of certain mineral rights in Australia, gain on
sale of sub-strata and associated mineral rights in Australia, net
impact related to European flooding and acquisition and integration
related costs. Comparable volume is also adjusted for selling
days.
"Fx-neutral" 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
and short-term investments 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.
"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%.
Supplementary Financial Information - Items impacting comparability
- Reported to Comparable
The following provides a summary of the items impacting
comparability for the first six months ended 30 June 2023 and 1
July 2022:
First Six Months 2023
=============================================================================
Operating Profit Diluted
In millions of EUR except share data profit after taxes earnings
which per share
is calculated prior to rounding (EUR)
==================================== ========================= ========================= =======================
As Reported 1,170 854 1.86
Items impacting comparability
Restructuring charges ([1]) 51 42 0.09
Coal royalties ([2]) (18) (12) (0.03)
European flooding ([4]) (3) (2) -
Sale of sub-strata and associated
mineral
rights ([5]) (35) (35) (0.07)
========================= ========================= =======================
Comparable 1,165 847 1.85
===================================== ========================= ========================= -----------------------
First Six Months 2022
============================================================================
Operating Profit Diluted
In millions of EUR except share data profit after taxes earnings
which per share
is calculated prior to rounding (EUR)
===================================== ======================== ========================= =======================
As Reported 967 675 1.46
Items impacting comparability
Restructuring charges ([1]) 95 76 0.17
Acquisition and Integration related
costs
([3]) 1 1 -
European flooding ([4]) (12) (9) (0.02)
====================================== ======================== ========================= =======================
Comparable 1,051 743 1.61
====================================== ======================== ========================= -----------------------
_ _________________________
([1]) Amounts represent restructuring charges related to
business transformation activities.
([2]) Amounts represent royalty income arising from the
ownership of certain mineral rights in Australia. The royalty
income is recognised as "Other income" in our condensed
consolidated interim income statement as of the six months ended 30
June 2023.
([3]) Amounts represent cost associated with the acquisition and
integration of CCL.
([4]) Amounts represent the incremental expense incurred offset
by the insurance recoveries collected as a result of the July 2021
flooding events, which impacted the operations of our production
facilities in Chaudfontaine and Bad Neuenahr.
([5]) Amounts represent the considerations received relating to
the sale of the sub-strata and associated mineral rights in
Australia. The transaction completed in April 2023 and the proceeds
were recognised as "Other income" in our condensed consolidated
interim income statement as of the six months ended 30 June
2023.
Supplemental Financial Information - Operating Profit - Reported
to Comparable
Revenue
Second-Quarter Ended Six Months Ended
====================== ------------------------- -------------------------
Revenue CCEP 30 June 1 July % Change 30 June 1 July % Change
In millions of 2023 2022 2023 2022
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 4,823 4,571 5.5% 8,977 8,280 8.5%
Adjust: Impact
of fx changes 117 n/a n/a 188 n/a n/a
Fx-neutral 4,940 4,571 8.0% 9,165 8,280 10.5%
Revenue per unit
case 5.73 5.21 10.0% 5.62 5.12 10.0%
Second-Quarter Ended Six Months Ended
====================== ------------------------- -------------------------
Revenue Europe 30 June 1 July % Change 30 June 1 July % Change
In millions of 2023 2022 2023 2022
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 3,960 3,646 8.5% 7,105 6,451 10.0%
Adjust: Impact
of fx changes 50 n/a n/a 106 n/a n/a
Fx-neutral 4,010 3,646 10.0% 7,211 6,451 12.0%
Revenue per unit
case 5.60 5.11 9.5% 5.52 5.06 9.0%
Second-Quarter Ended Six Months Ended
====================== ------------------------- -------------------------
Revenue API 30 June 1 July % Change 30 June 1 July % Change
In millions of 2023 2022 2023 2022
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 863 925 (6.5)% 1,872 1,829 2.5%
Adjust: Impact
of fx changes 67 n/a n/a 82 n/a n/a
Fx-neutral 930 925 0.5% 1,954 1,829 7.0%
Revenue per unit
case 6.35 5.61 13.0% 6.03 5.34 13.0%
Six Months Ended 30 June
2023
================================ ----------------------------------
Revenue by Geography As reported Reported Fx-Neutral
In millions of EUR % change % change
================================ =========== ========= ==========
Great Britain 1,570 7.5% 11.5%
--------------------------------- ----------- --------- ----------
Germany 1,458 12.5% 12.5%
--------------------------------- ----------- --------- ----------
Iberia([1]) 1,541 12.5% 12.5%
--------------------------------- ----------- --------- ----------
France([2]) 1,200 18.0% 18.0%
--------------------------------- ----------- --------- ----------
Belgium/Luxembourg 541 6.0% 6.0%
--------------------------------- ----------- --------- ----------
Netherlands 355 8.0% 8.0%
--------------------------------- ----------- --------- ----------
Norway 193 (7.0)% 5.0%
--------------------------------- ----------- --------- ----------
Sweden 207 (3.0)% 5.5%
--------------------------------- ----------- --------- ----------
Iceland 40 (7.0)% -%
Total Europe 7,105 10.0% 12.0%
--------------------------------- ----------- --------- ----------
Australia 1,162 5.5% 11.0%
--------------------------------- ----------- --------- ----------
New Zealand and Pacific Islands 330 9.5% 14.0%
--------------------------------- ----------- --------- ----------
Indonesia and Papua New Guinea 380 (10.5)% (9.0)%
Total API 1,872 2.5% 7.0%
--------------------------------- ----------- --------- ----------
Total CCEP 8,977 8.5% 10.5%
--------------------------------- ----------- --------- ----------
________________________
([1]) Iberia refers to Spain, Portugal & Andorra.
([2]) France refers to continental France & Monaco.
Volume
Second-Quarter Ended Six Months Ended
====================== ------------------------- -------------------------
Comparable Volume 30 June 1 July % Change 30 June 1 July % Change
- Selling Day 2023 2022 2023 2022
Shift CCEP
In millions of
unit cases, prior
period volume
recast using current
year selling days
====================== ======= ====== ======== ======= ====== ========
Volume 863 878 (1.5)% 1,631 1,618 1.0%
Impact of selling
day shift n/a - n/a n/a - n/a
Comparable volume
- Selling Day
Shift adjusted 863 878 (1.5)% 1,631 1,618 1.0%
Second-Quarter Ended Six Months Ended
====================== ------------------------- -------------------------
Comparable Volume 30 June 1 July % Change 30 June 1 July % Change
- Selling Day 2023 2022 2023 2022
Shift Europe
In millions of
unit cases, prior
period volume
recast using current
year selling days
====================== ======= ====== ======== ======= ====== ========
Volume 717 714 0.5% 1,307 1,276 2.5%
Impact of selling
day shift n/a - n/a n/a - n/a
Comparable volume
- Selling Day
Shift adjusted 717 714 0.5% 1,307 1,276 2.5%
Second-Quarter Ended Six Months Ended
====================== ------------------------- -------------------------
Comparable Volume 30 June 1 July % Change 30 June 1 July % Change
- Selling Day 2023 2022 2023 2022
Shift API
In millions of
unit cases, prior
period volume
recast using current
year selling days
====================== ======= ====== ======== ======= ====== ========
Volume 146 164 (11.0)% 324 342 (5.5)%
Impact of selling
day shift n/a - n/a n/a - n/a
Comparable volume
- Selling Day
Shift adjusted 146 164 (11.0)% 324 342 (5.5)%
Cost of Sales
Six Months Ended
============================================ -------------------------
Cost of Sales 30 June 1 July % change
In millions of EUR, except per case data 2023 2022
which is calculated prior to rounding.
FX impact calculated by recasting current
year results at prior year rates.
============================================ ======= ====== ========
As reported 5,707 5,288 8.0%
Adjust: Total items impacting comparability (6) 12 n/a
Adjust: Restructuring charges ([1]) (9) -
Adjust: European flooding ([2]) 3 12
Comparable 5,701 5,300 7.5%
Adjust: Impact of FX changes 121 n/a n/a
Comparable and FX neutral 5,822 5,300 10.0%
Cost of sales per unit case 3.57 3.28 9.0%
_ _________________________
([1]) Amounts represent restructuring charges related to
business transformation activities.
([2]) Amounts represent the incremental expense incurred offset
by the insurance recoveries collected as a result of the July 2021
flooding events, which impacted the operations of our production
facilities in Chaudfontaine and Bad Neuenahr.
For the six months ending 30 June 2023, reported cost of sales
were EUR5,707 million, up 8.0% versus 2022.
Comparable cost of sales for the same period were EUR5,701
million, up 7.5% versus 2022. Cost of sales per unit case increased
by 9.0% on a comparable and fx-neutral basis, reflecting increased
revenue per unit case driving higher concentrate costs, and
inflation in commodities and manufacturing.
Operating expenses
Six Months Ended
==============================================
Operating Expenses 30 June 1 July % Change
In millions of EUR. FX impact calculated 2023 2022
by recasting current year results at prior
year rates.
============================================== ======= ====== ========
As reported 2,153 2,025 6.5%
Adjust: Total items impacting comparability (42) (96) n/a
Adjust: Restructuring charges ([1]) (42) (95)
Adjust: Acquisition and Integration related
costs ([2]) - (1)
Comparable 2,111 1,929 9.5%
Adjust: Impact of FX changes 42 n/a n/a
Comparable and FX neutral 2,153 1,929 11.5%
_ _________________________
([1]) Amounts represent restructuring charges related to
business transformation activities.
([2]) Amounts represent cost associated with the acquisition and
integration of CCL.
For the six months ending 30 June 2023, reported operating
expenses were EUR2,153 million, up 6.5% versus 2022.
Comparable operating expenses were EUR2,111 million for the same
period, up 9.5% versus 2022, reflecting the impact of inflation and
higher volumes, partially offset by the benefit of ongoing
efficiency programmes and our continuous efforts on discretionary
spend optimisation.
Restructuring charges in operating expenses of EUR42 million
related to various productivity initiatives were recognised in the
six month period ending 30 June 2023.This compares to restructuring
charges of EUR95 million incurred in the six month period ending 1
July 2022, primarily attributable to EUR81 million of expense
recognised in connection with the transformation of the full
service vending operations and related initiatives in Germany.
Operating profit
Six Months Ended
============================================ ----------------------------------------------------------------
Operating Profit CCEP 30 June 1 July % Change
In millions of EUR. FX impact calculated 2023 2022
by recasting current year results at prior
year rates.
============================================ ======================== ======================= =============
As reported 1,170 967 21.0 %
Adjust: Total items impacting comparability (5) 84 n/a
Comparable 1,165 1,051 11.0 %
Adjust: Impact of fx changes 25 n/a n/a
Comparable & fx-neutral 1,190 1,051 13.0 %
Six Months Ended
============================================ ---------------------------------------------------------------
Operating Profit Europe 30 June 1 July % Change
In millions of EUR. FX impact calculated 2023 2022
by recasting current year results at prior
year rates.
============================================ ======================= ======================= =============
As reported 887 741 19.5 %
Adjust: Total items impacting comparability 37 84 n/a
Comparable 924 825 12.0 %
Adjust: Impact of fx changes 15 n/a n/a
Comparable & fx-neutral 939 825 14.0 %
Six Months Ended
============================================ -------------------------
Operating Profit API 30 June 1 July % Change
In millions of EUR. FX impact calculated 2023 2022
by recasting current year results at prior
year rates.
============================================ ======= ====== ========
As reported 283 226 25.0%
Adjust: Total items impacting comparability (42) - n/a
Comparable 241 226 6.5%
Adjust: Impact of fx changes 10 n/a n/a
Comparable & fx-neutral 251 226 11.0%
Supplemental Financial Information - Effective Tax Rate
The effective tax rate was 22% and 25% for the six months ended
30 June 2023 and 1 July 2022, respectively, and 22% for the years
ended 31 December 2022.
For the six months ending 30 June 2023, the effective tax rate
reflects the impact of having operations outside the UK which are
taxed at rates other than the statutory UK rate of 23.5%, and
adjustments made in respect of prior periods.
We expect our full year 2023 comparable effective tax rate to be
approximately 24%.
Six Months Ended
============================================ ----------------------------------------------------
Income tax 30 June 1 July
In millions of EUR 2023 2022
============================================ ========================= =========================
As reported 247 223
Adjust: Total items impacting comparability 2 16
Adjust: Restructuring charges ([1]) 9 19
Adjust: European flooding ([2]) (1) (3)
Adjust: Coal royalties ([3]) (6) -
Comparable 249 239
_ _________________________
([1]) Amounts represent the tax impact of restructuring charges
related to business transformation activities.
([2]) Amounts represent the tax impact of the incremental
expense incurred offset by the insurance recoveries collected as a
result of the July 2021 flooding events, which impacted the
operations of our production facilities in Chaudfontaine and Bad
Neuenahr.
([3]) Amounts represent the tax impact of royalty income arising
from the ownership of certain mineral rights in Australia. The
royalty income is recognised as "Other income" in our condensed
consolidated interim income statement as of the six months ended 30
June 2023.
Supplemental Financial Information - Free Cash Flow
Six Months Ended
================================================= -------------------------------------------------
Free Cash Flow 30 June 1 July
In millions of EUR 2023 2022
================================================= ======================= ========================
Net cash flows from operating activities 1,307 1,653
Less: Purchases of property, plant and equipment (264) (178)
Less: Purchases of capitalised software (40) (22)
Add: Proceeds from sales of property, plant and
equipment 9 6
Less: Payments of principal on lease obligations (74) (80)
Less: Interest paid, net (88) (98)
Free Cash Flow 850 1,281
Supplemental Financial Information - Borrowings
As at
======================== ---------------------------------------------- ============
30 June 31 December Credit Moody's Fitch
2023 2022 Ratings Ratings
Net Debt As of 1
In millions of EUR August 2023
======================== =================== ========================= ============ ======== ============
Long-term
Total borrowings ([4]) 11,757 11,907 rating Baa1 BBB+
Fair value of hedges
related to
borrowings([1]) 44 (83) Outlook Stable Stable
Note: Our credit ratings can
be materially influenced by
a number of factors including,
but not limited to, acquisitions,
investment decisions and working
capital management activities
of TCCC and/or changes in the
credit rating of TCCC. A credit
rating is not a recommendation
to buy, sell or hold securities
Other financial and may be subject to revision
assets/liabilities([1]) 23 25 or withdrawal at any time.
Adjusted total
borrowings 11,824 11,849
Less: cash and cash
equivalents([2] [4]) (1,112) (1,387)
Less: short term
investments([3]) (862) (256)
Net debt 9,850 10,206
______________________
([1]) Net debt includes adjustments for the fair value of
derivative instruments used to hedge both currency and interest
rate risk on the Group's borrowings. In addition, net debt also
includes other financial assets/liabilities relating to cash
collateral pledged by/to external parties on hedging instruments
related to borrowings.
([2]) Cash and cash equivalents as at 30 June 2023 and 31
December 2022 include EUR37 million and EUR102 million of cash in
Papua New Guinea Kina respectively. Presently, there are
government-imposed currency controls which impact the extent to
which the cash held in Papua New Guinea can be converted into
foreign currency and remitted for use elsewhere in the Group.
([3]) Short term investments are term cash deposits held in API
and Europe with maturity dates when acquired of greater than three
months and less than one year. These short term investments are
held with counterparties that are continually assessed with a focus
on preservation of capital and liquidity. Short term investments as
at 30 June 2023 and 31 December 2022 include EUR61 million and
EUR49 million of assets in Papua New Guinea Kina respectively,
subject to the same currency controls outlined above.
([4]) Both borrowings and cash and cash equivalents as at 30
June 2023 include EUR188 million in relation to a notional pooling
agreement for which an offsetting agreement is in place which does
not meet the criteria for net presentation on the statement of
financial position.
Supplemental Financial Information - Adjusted EBITDA
Six Months Ended
==================================================== -----------------------------------------------------------
Adjusted EBITDA 30 June 1 July 2022
In millions of EUR 2023
==================================================== ============================= ============================
Reported profit after tax 854 675
Taxes 247 223
Finance costs, net 63 63
Non-operating items 6 6
Reported operating profit 1,170 967
Depreciation and amortisation 377 386
Reported EBITDA 1,547 1,353
Items impacting comparability
Restructuring charges([1]) 47 94
Acquisition and Integration related costs([2]) - 1
European flooding([3]) (3) (12)
Coal royalties([4]) (18) -
Sale of sub-strata and associated mineral
rights([5]) (35) -
Adjusted EBITDA 1,538 1,436
______________________
([1]) Amounts represent restructuring charges related to
business transformation activities, excluding accelerated
depreciation included in the depreciation and amortisation
line.
([2]) Amounts represent cost associated with the acquisition and
integration of CCL.
([3]) Amounts represent the incremental expense incurred offset
by the insurance recoveries collected as a result of the July 2021
flooding events, which impacted the operations of our manufacturing
facilities in Chaudfontaine and Bad Neuenahr.
([4]) Amounts represent royalty income arising from the
ownership of certain mineral rights in Australia. The royalty
income is recognised as "Other income" in our condensed
consolidated interim income statement as of the six months ended 30
June 2023.
([5]) Amounts represent the considerations received relating to
the sale of the sub-strata and associated mineral rights in
Australia. The transaction completed in April 2023 and the proceeds
were recognised as "Other income" in our condensed consolidated
interim income statement as of the six months ended 30 June
2023.
Principal Risks and Risk Factors
The Group faces a number of risks and uncertainties that may
have an adverse effect on its operations, performance and future
prospects and has a robust risk management programme to assess
these and evaluate strategies to manage them. The principal risks
and risk factors in our 2022 Integrated Report on Form 20-F for the
year ended 31 December 2022 ('2022 Integrated Report') (pages 64 to
71 and 223 to 229 respectively) continue to represent our
risks.
Since the publication of the Integrated Report in March, the
macro risk environment remains similar and the reported key control
mitigations continue to be appropriate and effective. Although we
don't foresee in the near term an escalation of current
geopolitical tensions, freight disruptions, shortages and sanctions
would be the consequences and have a significant impact on global
trade. CCEP is working to de-risk its supply chain and put in place
plans to secure commodities in particular with our Asian Pacific
suppliers. We will continue to monitor the developments of the
situation and any other potential impacts.
Economic conditions in our markets remain challenging with
increases in inflation and interest rates expected to continue
through the remainder of 2023. This may lead to affordability
issues for consumers and pricing pressure from retail customers. We
continue to focus on the wellbeing and security of our people and
we are carefully considering the situation and maintaining an open
dialogue and good relations with our social partners. We have not
experienced material impacts on our business from labour
issues.
We continue to monitor the developments of the war in Ukraine,
which has impacted the supply of raw materials, supplies, finished
goods, gas/oil/energy and increased cyber risks.
As part of our risk management governance and routines we
continuously monitor the risk landscape and discuss with business
leaders risk trends every quarter, velocity and actions to be
taken, as well as scanning for future risks. Based on that exercise
we do not intend to change the principal risk ratings included in
our 2022 Integrated Report, but we have identified some trends in
this first half of 2023.
Water scarcity has been an issue in this first half of the year,
in particular in France and Spain, where authorities have issued
contingency plans. In addition to strong water management routines,
a cross functional team has been using scenario planning to assess
the potential impact. As of today we consider the risk low. We
maintain good relations with the local authorities based on the
credibility of our water management strategy and the strict
discipline our demand planning teams apply for SKU prioritisation
and rationalisation.
We have noticed an increase of cyber-attacks to other bottlers
within the Coca-Cola system and suppliers during the first half of
the year. CCEP has responded with increased training and awareness
of phishing and social engineering attacks, increased focus on
remediating technical vulnerabilities as well as increasing the
level of testing and exercising.
We continue to be under pressure from customers and authorities
to keep prices low despite the increase in costs. Our commercial
teams continue to work positively with customers to mitigate this
risk.
When it comes to our products, discussions on potential taxes to
soft drinks and plastic continue in different countries across our
territories including Spain, the Netherlands, Indonesia and Sweden.
Based on our experience we engage in open and collaborative
discussions with authorities and other stakeholders. We are also
evaluating and responding appropriately to recent reports in
relation to sweeteners, considering the risk of regulation,
litigation and reputational damage.
Accordingly, the information provided about our principal risks
and risk factors in the table below and in the Principal Risks and
Risk Factors in our 2022 Integrated Report, and any or all of the
Principal Risks and Risk Factors contained therein may be
exacerbated by developments in the factors identified above and in
our Forward-Looking Statements set out on page 7 of this interim
management report.
The risks described in this report and in our 2022 Integrated
Report are not the only risks facing the Group. Additional risks
and uncertainties not currently known to us or that we currently
deem to be immaterial may also adversely affect our business,
financial condition or future results.
SUMMARY OF OUR PRINCIPAL RISKS
The table below shows our Principal Risks:
Risk change legend: Increased Decreased -> Stayed the
same
Principal Risk Description Causal factors Consequence themes Key control Change vs.
(What is the risk?) themes (What gives (Potential impact of mitigations 2022
rise to the risk?) the risk) (How we manage it) Integrated
Report
Packaging The risks relating -- Stakeholder -- Brand and -- Development of ->
to packaging waste, concern about the reputation damage the packaging
plastic pollution, environmental from not keeping up pillar within our
and single use impacts of single with This is Forward
plastic. use plastic community/customer sustainability
packaging, litter expectations action plan,
and packaging waste -- Financial impact including pack mix,
from increased taxes recycled content
and on the costs of and improvement of
doing business packaging
-- Regulatory and collection. More
compliance impacts information
-- Increased on our packaging
potential for strategy can be
activism and found in our
collective Forward on
litigation packaging section
(including potential on pages 42-45
greenwashing of our 2022
claims) Integrated Report
-- Continued
sustainability
action plan focused
on packaging,
including our
commitments to:
- Ensure that 100%
of our primary
packaging is
recyclable by 2025
- Drive higher
collection rates,
aiming to ensure
that we collect and
recycle a bottle or
a can for each one
we sell by 2030
- 50% recycled
plastic in our PET
bottles by 2023
(Europe) and 2025
(API)
- Stop using
oil-based virgin
plastic in our
bottles by 2030
- Invest in rPET
infrastructure to
help drive
packaging
circularity and
secure access to
recycled
material
-------------------- --------------------- --------------------- -------------------- -----------
Legal, regulatory and The risks -- Manufacturing -- Financial impact -- Continuous ->
tax associated with new activities from new or higher monitoring,
or changing legal, -- Use of certain taxes assessment and
regulatory or tax, ingredients -- Stricter sales appropriate
legislative -- Packaging and marketing implementation of
environment -- Restrictions on controls impacting new or changing
and subsequent sugar and sweeteners margins and market laws
obligations and -- Labelling share and regulations.
compliance requirements -- Punitive action Include pending and
requirements. -- Distribution and from regulators or likely forthcoming
sale activities other legislative regulations in
-- Employment costs bodies decision making
-- Carbon taxes -- Increase to the -- Dialogue with
-- Increase of tech cost of compliance government
and AI to meet stricter or representatives and
new regulatory input to public
requirements consultations on
-- Brand and new or changing
reputation damage regulations
-- Development of
compliance
processes and
training programmes
for employees
-- Communication
with public health
stakeholders to
tell our story on
drinks in
anticipation
of potential
regulatory
pressures
-- Close liaison
with our
franchisors and
checking of public
statements
including labelling
and advertising
-------------------- --------------------- --------------------- -------------------- -----------
Business disruption The risk of -- Cyber attack or -- Disruption to -- Development, ->
prolonged, large IT/operational supply testing and
scale natural technology system chains/operations continual
and/or man made failure -- Safety and improvement of
disruptive events. -- Pandemics wellbeing of our Business Continuity
-- Extreme weather people Planning (BCP)
events (floods, -- Brand and through
fires) reputation damage implementation of
-- Natural disasters -- Financial impact the BCP elements of
-- Civil unrest, war TCCC's Business
and terrorism Resilience
Framework
-- Training and
awareness to build
Business Continuity
and Resilience
capabilities across
our sites and
processes and
improve our
response to
incidents
-- Scenario
planning exercises
and Business Impact
Assessments to
analyse and
identify critical
people (roles),
property,
technology,
equipment and
suppliers (value
chain)
-- Coordination,
continuous
improvement and
testing of our
Incident Management
and Crisis
Response process
-- Ongoing focus on
de-risking
Procurement and
Supply Chain
-------------------- --------------------- --------------------- -------------------- -----------
Cyber and social The risks related -- External -- Financial and -- Established ->
engineering attacks and to the protection attackers seeking to other impacts from cyber strategy with
IT infrastructure of information ransom or disrupt disruption to engagement of the
systems and data systems and data operations ELT and Board
from unauthorised -- Dependency on -- Fines, increased -- Conducting
access, third parties cybersecurity regular training
misuse, disruption, -- Internal misuse protection costs, and awareness on
modification, or (malicious or litigation expense information
destruction. accidental) and increased security and data
-- Security and insurance privacy
maintenance of IT premiums -- Development of
infrastructure and -- Safety and BCP and Disaster
applications privacy of Recovery programmes
employees, customers including regular
or business partners internal and
who may have their external
personal testing of security
information stolen controls to
-- Brand and identify and
reputation damage resolve
vulnerabilities
-- Threat
vulnerability
management and
threat intelligence
-- Implementation
of a hardware
lifecycle
-- Security event
logging and
management through
a Global Security
Operations Centre
operating
24/7 to proactively
monitor cyber
threats and
implement
preventive measures
-- Completion of
third party risk
assessments
-- Established Data
Privacy Office
including data
governance and
information
classification
and handling
-- IT change
management process
-------------------- --------------------- --------------------- -------------------- -----------
Economic and political The risks -- Low economic -- Financial impact -- Diversified ->
conditions associated with growth or recession from reduced demand product portfolio
operating in -- High currency and from consumers and and geographic
volatile and commodity price an increasing cost diversity of
challenging volatility base operations assists
macroeconomic and -- High inflation -- Disruption to in mitigating
geopolitical -- Political supply chains from exposure to
conditions. instability/conflict sanctions or impact localised economic
-- Civil unrest on shipping/trade risk
routes -- Development of a
flexible business
model that allows
us to adapt our
portfolio to suit
our customers'
changing needs
during economic
downturns
-- Regular review
of business results
and cash flows to
rebalance capital
investments where
necessary
-- Monitoring of
macroeconomic,
political and
societal
developments to
ensure that
business
is prepared to
manage emerging
situations
-- Established
hedging policy for
managing financial
risks like FX,
commodity and
interest
rate risks
-- Keeping a strong
level of liquidity
and back up credit
lines at all times
for working capital
purposes as well as
unexpected cash
flow swings
-------------------- --------------------- --------------------- -------------------- -----------
Market The risks to -- New distribution -- Financial impact -- Conducting ->
maintaining the channels and from reduced demand shopper insights
relationships with platforms from consumers and price
our customers and -- Changing customer -- Decreasing elasticity
consumers to meet and consumer habits margins and market assessments
their -- Changes in the share -- Investing in
changing demands, competitive -- Inability to meet pack and product
needs and landscape strategic objectives innovation
expectations. -- Brand and -- Established
reputation damage promotional
strategy
-- Development of
commercial policy
-- Collaborative
category planning
with customers
-- Development of
growth centric
customer investment
policies
-- Established
business
development plans
aligned with our
customers
-- Diversification
of portfolio and
customer base
-- Development of
realistic budgeting
routines and
targets
-- Investment in
key account
development and
category planning
-- Open up new
route to market
opportunities, for
example eB2B and
platforms/direct to
consumer
-------------------- --------------------- --------------------- -------------------- -----------
Climate change and water The risks and -- GHG emissions -- Brand and -- Development of ->
opportunities across our value reputation damage the climate pillar
associated with chain, including from not meeting within our This is
managing the emissions from our sustainability Forward
impacts of climate production targets sustainability
change and water facilities, -- Financial impacts action plan
scarcity across our cold drinks from future carbon including our
value chain. equipment, the taxes and the short-term and
transportation of transition costs to long-term GHG
our products, low GHG emissions emissions reduction
packaging and the -- Regulatory and targets to reduce
ingredients that compliance impacts our absolute
we use, and storage related to TCFD Scope 1, 2 and 3
of our products disclosures GHG emissions by
-- Scarcity of water -- Restrictions on 30% by 2030 (vs
and water quality water use adversely 2019), and to
issues related to affecting costs and achieve Net Zero by
water sources we and ability to 2040.
our suppliers manufacture and Our strategy
rely upon distribute outlines the
-- Regulatory and products management actions
legislative and key mitigations
initiatives aimed at taken to manage
reducing GHG this risk.
emissions More information
-- Changing consumer can be found in our
and investor Forward on climate
preferences section on pages
-- Concern about 38-41 of our 2022
environmental impact Integrated Report
of plastic bottles -- Development of
and other packaging the water pillar
materials within our This is
Forward
sustainability
action plan which
sets out targets
for water
efficiency,
regenerative water
use and water
replenishment and
outlines management
actions and key
mitigations taken
to manage risk.
More information
can
be found in our
Forward on water
section on pages
46-48 of our 2022
Integrated Report
-- Transition to
100% renewable
electricity aiming
to achieve this
across all markets
by 2030
-- Supplier
engagement
programme to
support suppliers
to set their own
reduction targets
and
transition to use
renewable
electricity
-------------------- --------------------- --------------------- -------------------- -----------
Perceived health impact The risks relating -- Legislative -- Financial impacts -- Development of ->
of our beverages to our ability to changes driven by from decline in the drinks pillar
(including ingredients), effectively adapt government or lobby sales volumes and within our This is
and changing customer and respond to groups market share Forward
buying changes in consumer -- External (delisting, demand sustainability
trends preferences and marketing campaigns decrease) action plan
behaviour towards towards alternative -- Increased to support the
our products. ingredients/products regulatory scrutiny recommendation by
-- Publication of -- Increased taxes several leading
guidelines or on our products health authorities,
recommendations -- Damage to brand including WHO, that
related to sugar and reputation people
consumption or should limit their
additives intake of added
by WHO or other sugar to 10% of
health authorities their total calorie
-- Increased media consumption. More
scrutiny and social information
media coverage can be found in our
impacting consumer Forward on drinks
perception section on pages
-- Viability of 53-55 of our 2022
alternatives to Integrated Report
sugar, sweeteners -- Support TCCC, EU
and other or National
ingredients within associations on
our product strong advocacy
portfolio regarding no and
low-calorie
sweeteners and
processed food
-------------------- --------------------- --------------------- -------------------- -----------
Business transformation, The risks relating -- Digital -- Damage to brand -- Solid governance ->
integration and digital to the execution of transformation and reputation model in place
capability our strategic and -- Identification -- Financial impacts leveraging
continuous and execution of from a decline in Competitiveness
improvement supply chain our share price Steering Committee
initiatives. improvements arising from not for enterprise
-- Relationships realising the value wide transformation
with our partners creation from these -- Regular
and franchisors initiatives competitiveness
-- Ineffective -- Industrial action reviews ensuring
coordination between and disruption to effective steering,
BUs and central our operations high visibility and
functions quick
-- Change management decision making
failure -- Dedicated
-- Diversion of programme
management's focus management office
away from our core and effective
business project management
methodology
-- Continuation of
strong governance
routines
-- Regular ELT and
Board reviews and
approvals of
progress and issue
resolution
-- Analysis and
review of
Acquisition-related
activities such as
integration and
business
performance risk
indicators and
capital allocation
risk reviews
-- Building a well
functioning and
resilient workforce
with priority focus
on health and
safety,
and mental
wellbeing
initiatives,
especially in
frontline roles
-------------------- --------------------- --------------------- -------------------- -----------
People and wellbeing The risks relating -- Job design and -- Damage to brand -- Development of ->
to the working conditions and reputation our people
identification, -- Reward and -- Financial impacts strategy, Me@CCEP,
attraction, recognition from a decline in which sets out the
development, and -- Misconduct by employee engagement diversity,
retention of third parties and productivity inclusion,
talent. relating to human -- Industrial action wellbeing
Also risks relating rights and disruption to and human rights
to the wellbeing of our operations targets, management
our people -- Punitive action actions and the key
(including human from regulators or mitigations taken
rights and modern other legislative to manage this
slavery). bodies and potential risk. More
for litigation information can be
found in our
Forward on society
- people section on
pages 58-63
of our 2022
Integrated Report
-- Our Everyone's
Welcome philosophy
sets out our
commitment to
inclusion,
diversity and
equity.
The Everyone's
Welcome playbook is
the blueprint for
countries and
functions to align
campaigns,
training and
tracking mechanisms
-- We have set up a
strong policy
framework, regular
training and
supplier management
to strengthen
our human rights
commitments, such
as modern slavery
-------------------- --------------------- --------------------- -------------------- -----------
Relationships with TCCC The risk of -- Lack of effective -- Damage to brand -- Clear agreements ->
and other franchisors misaligned engagement, and reputation govern the
incentives or communication and/or -- Financial relationships
strategy with TCCC discussion with impacts, including -- Incidence
and/or other franchisors as a result of TCCC pricing agreement
franchisors. or other franchisors with TCCC
acting adversely -- Aligned long
to our interests range planning and
with respect to our annual business
business planning processes
relationship -- Ongoing group
and local routines
between CCEP and
franchisors
-- Regular meetings
and maintenance of
positive
relationships at
all levels
-- Regular contact
and best practice
sharing across the
Coca-Cola system
-------------------- --------------------- --------------------- -------------------- -----------
Product quality The risks relating -- A failure in food -- Physical harm to -- TCCC standards ->
to ensuring the safety, food consumers and audits
wide range of quality, food -- Damage to brand -- Hygiene regimes
products we produce defence or food and reputation at production
are safe for fraud processes -- Financial impacts facilities
consumption from a decline in -- Total quality
and adhere to sales volume and management
strict food safety market share programme
and quality -- Fines and -- Robust
requirements. litigation expense management systems
or increased -- ISO
insurance premiums Certification
-- Internal
governance audits
-- Quality
monitoring
programme
-- Customer and
consumer monitoring
and feedback
-- Incident
management and
crisis resolution
-- Every CCEP
production facility
has:
- a hazard analysis
critical control
points assessment
and mitigation plan
in place
- a quality
monitoring plan
based on risk and
requirements
- a food fraud
vulnerability
assessment and
mitigation plan
based on risk and
requirements
- a food defence
threat assessment
and mitigation plan
based on risk and
requirements
-------------------- --------------------- --------------------- -------------------- -----------
*Change vs 2022 Integrated Report may be as a result of a change
in likelihood or impact.
Related Parties
Related party disclosures are presented in Note 10 of the Notes
to the condensed consolidated interim financial statements
contained in this interim management report.
Going Concern
As part of the Directors' consideration of the appropriateness
of adopting the going concern basis in preparing the condensed
consolidated interim financial statements, the Directors have
considered the Group's financial performance in the period and have
taken into account its current cash position and its access to a
EUR1.95 billion undrawn committed credit facility. Further, the
Directors have considered the current cash flow forecast, including
a downside stress test, which supports the Group's ability to
continue to generate cash flows during the next 12 months.
In addition, the Group expects to complete the acquisition of
60% of Coca-Cola Beverages Philippines, Inc. around the end of 2023
subject to the finalisation of due diligence, signing definitive
agreements and obtaining regulatory approval. The acquisition is
expected to be funded by a combination of existing liquidity and
3rd party borrowing. In making their going concern assessment, the
Directors have considered scenarios for the combined Group.
On this basis, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational
existence for a period of 12 months from the date of signing these
financial statements. Accordingly, the condensed consolidated
interim financial statements have been prepared on a going concern
basis and the Directors do not believe there are any material
uncertainties to disclose in relation to the Group's ability to
continue as a going concern.
Responsibility Statement
The Directors of the Company confirm that to the best of their
knowledge:
-- The condensed consolidated interim financial statements for
the six months ended 30 June 2023 have been prepared in accordance
with International Accounting Standard 34, "Interim Financial
Reporting" as adopted by the European Union, International
Accounting Standard 34, "Interim Financial Reporting", as issued by
the International Accounting Standards Board, UK adopted
International Accounting Standard 34 "Interim Financial Reporting"
and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority (DTR).
-- The interim management report includes a fair review of the
information required by the DTR 4.2.7 R and DTR 4.2.8 R as
follows:
-- DTR 4.2.7 R: (1) an indication of important events that have
occurred during the first six months of the financial year, and
their impact on the condensed set of financial statements, and (2)
a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
-- DTR 4.2.8 R: (1) related parties transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or the
performance of the Group during that period, and (2) any changes in
the related parties transactions described in the last annual
report that could have a material effect on the financial position
or performance of the Group in the first six months of the current
financial year.
A list of current directors is maintained on CCEP's website:
www.cocacolaep.com/about-us/governance/board-of-directors/.
On behalf of the Board
Damian Gammell Manik Jhangiani
Chief Executive Officer Chief Financial Officer
2 August 2023
INDEPENT REVIEW REPORT TO COCA-COLA EUROPACIFIC PARTNERS PLC
Conclusion
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2023 which comprises the Condensed
Consolidated Interim Income Statement, Condensed Consolidated
Interim Statement of Comprehensive Income, Condensed Consolidated
Interim Statement of Financial Position, Condensed Consolidated
Interim Statement of Cash Flows, Condensed Consolidated Interim
Statement of Changes in Equity and the related explanatory notes 1
- 14. We have read the other information contained in the half
yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2023 is not prepared, in all material respects, in accordance
with International Accounting Standard 34, "Interim Financial
Reporting", as issued by the International Accounting Standards
Board, International Accounting Standard 34, "Interim Financial
Reporting" as issued by the European Union, U.K. adopted
International Accounting Standard 34, "Interim Financial Reporting"
and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements 2410 (UK) "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with U.K. adopted International
Accounting Standards, International Financial Reporting Standards
("IFRS") as adopted by the European Union and International
Financial Reporting Standards as issued by the International
Accounting Standards Board ("IASB"). The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34,
"Interim Financial Reporting", as issued by the International
Accounting Standards Board, International Accounting Standard 34,
"Interim Financial Reporting" as issued by the European Union, and
U.K. adopted International Accounting Standard 34, "Interim
Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis of Conclusion
section of this report, nothing has come to our attention to
suggest that management have inappropriately adopted the going
concern basis of accounting or that management have identified
material uncertainties relating to going concern that are not
appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with this ISRE, however future events or conditions may
cause the entity to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
In preparing the half-yearly financial report, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statements in the half-yearly financial report. Our
conclusion, including our Conclusions Relating to Going Concern,
are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK) "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London
2 August 2023
Coca-Cola Europacific Partners plc
Condensed Consolidated Interim Income Statement (Unaudited)
Six Months Ended
--------------------------------------------
30 June 1 July
2023 2022
Note EUR million EUR million
------------------------------------------------- ---- --------------------- ---------------------
Revenue 2 8,977 8,280
Cost of sales (5,707) (5,288)
--------------------- ---------------------
Gross profit 3,270 2,992
Selling and distribution expenses (1,522) (1,410)
Administrative expenses (631) (615)
Other income 13 53 -
--------------------- ---------------------
Operating profit 1,170 967
Finance income 31 30
Finance costs (94) (93)
--------------------- ---------------------
Total finance costs, net (63) (63)
Non-operating items (6) (6)
--------------------- ---------------------
Profit before taxes 1,101 898
Taxes 11 (247) (223)
--------------------- ---------------------
Profit after taxes 854 675
===================== =====================
Profit attributable to shareholders 854 667
Profit attributable to non-controlling interests - 8
--------------------- ---------------------
Profit after taxes 854 675
===================== =====================
Basic earnings per share (EUR) 3 1.86 1.46
Diluted earnings per share (EUR) 3 1.86 1.46
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
Coca-Cola Europacific Partners plc
Condensed Consolidated Interim Statement of Comprehensive Income
(Unaudited)
Six Months Ended
--------------------------------------------
30 June 1 July
2023 2022
EUR million EUR million
--------------------- ---------------------
Profit after taxes 854 675
--------------------- ---------------------
Components of other comprehensive income/(loss):
Items that may be subsequently reclassified to the
income statement:
Foreign currency translations:
Pretax activity, net (280) 98
Tax effect - -
--------------------- ---------------------
Foreign currency translation, net of tax (280) 98
Cash flow hedges:
Pretax activity, net (38) 8
Tax effect 7 (3)
--------------------- ---------------------
Cash flow hedges, net of tax (31) 5
Other reserves:
Pretax activity, net 13 (2)
Tax effect (3) -
--------------------- ---------------------
Other reserves, net of tax 10 (2)
--------------------- ---------------------
Items that may be subsequently reclassified to the
income statement (301) 101
Items that will not be subsequently reclassified
to the income statement:
Pension plan remeasurements:
Pretax activity, net 13 53
Tax effect (4) (16)
--------------------- ---------------------
Pension plan adjustments, net of tax 9 37
--------------------- ---------------------
Items that will not be subsequently reclassified
to the income statement: 9 37
--------------------- ---------------------
Other comprehensive income/(loss) for the period,
net of tax (292) 138
--------------------- ---------------------
Comprehensive income for the period 562 813
===================== =====================
Comprehensive income attributable to shareholders 562 798
Comprehensive income attributable to non-controlling
interests - 15
--------------------- ---------------------
Comprehensive income for the period 562 813
===================== =====================
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
Coca-Cola Europacific Partners plc
Condensed Consolidated Interim Statement of Financial Position
(Unaudited)
30 June 31 December
2023 2022
Note EUR million EUR million
------------------------------------------------ ---- ----------------------- -----------------------
ASSETS
Non-current:
Intangible assets 4 12,319 12,505
Goodwill 4 4,483 4,600
Property, plant and equipment 5 5,077 5,201
Non-current derivative assets 7 134 191
Deferred tax assets 32 21
Other non-current assets 292 252
----------------------- -----------------------
Total non-current assets 22,337 22,770
----------------------- -----------------------
Current:
Current derivative assets 7 233 257
Current tax assets 50 85
Inventories 1,714 1,380
Amounts receivable from related parties 10 88 139
Trade accounts receivable 2,930 2,466
Other current assets 415 479
Assets held for sale 6 54 94
Short term investments 862 256
Cash and cash equivalents 1,112 1,387
----------------------- -----------------------
Total current assets 7,458 6,543
----------------------- -----------------------
Total assets 29,795 29,313
======================= =======================
LIABILITIES
Non-current:
Borrowings, less current portion 8 9,332 10,571
Employee benefit liabilities 110 108
Non-current provisions 12 39 55
Non-current derivative liabilities 7 227 187
Deferred tax liabilities 3,448 3,513
Non-current tax liabilities 71 82
Other non-current liabilities 42 37
----------------------- -----------------------
Total non-current liabilities 13,269 14,553
----------------------- -----------------------
Current:
Current portion of borrowings 8 2,425 1,336
Current portion of employee benefit liabilities 8 8
Current provisions 12 113 115
Current derivative liabilities 7 102 76
Current tax liabilities 269 241
Amounts payable to related parties 10 373 485
Trade and other payables 5,476 5,052
----------------------- -----------------------
Total current liabilities 8,766 7,313
----------------------- -----------------------
Total liabilities 22,035 21,866
======================= =======================
EQUITY
Share capital 5 5
Share premium 265 234
Merger reserves 287 287
Other reserves (808) (507)
Retained earnings 8,011 7,428
Total equity 7,760 7,447
----------------------- -----------------------
Total equity and liabilities 29,795 29,313
======================= =======================
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
Coca-Cola Europacific Partners plc
Condensed Consolidated Interim Statement of Cash Flows
(Unaudited)
Six Months Ended
--------------------------------------------
30 June 1 July
2023 2022
Note EUR million EUR million
--------------------------------------------------------- ---- --------------------- ---------------------
Cash flows from operating activities:
Profit before taxes 1,101 898
Adjustments to reconcile profit before tax to
net cash flows from operating activities:
Depreciation 5 324 336
Amortisation of intangible assets 4 53 50
Share-based payment expense 29 12
Gain on sale of sub-strata and associated mineral
rights 13 (35) -
Finance costs, net 63 63
Income taxes paid (212) (162)
Changes in assets and liabilities:
Increase in trade and other receivables (385) (429)
Increase in inventories (353) (245)
Increase in trade and other payables 564 936
Increase in net payable receivable from related
parties 223 180
Increase/(decrease) in provisions (18) 59
Change in other operating assets and liabilities (47) (45)
--------------------- ---------------------
Net cash flows from operating activities 1,307 1,653
--------------------- ---------------------
Cash flows from investing activities:
Purchases of property, plant and equipment (264) (178)
Purchases of capitalised software (40) (22)
Proceeds from sales of property, plant and equipment 9 6
Proceeds from sales of intangible assets 37 143
Proceeds from the sale of sub-strata and associated
mineral rights 13 35 -
Investments in equity instruments (1) (2)
Proceeds from the sale of equity instruments - 13
Net proceeds/(payments) of short term investments (638) (181)
Other investing activity, net 1 (1)
--------------------- ---------------------
Net cash flows used in investing activities (861) (222)
--------------------- ---------------------
Cash flows from financing activities:
Changes in short-term borrowings 8 543 237
Repayments on third party borrowings 8 (706) (834)
Payments of principal on lease obligations (74) (80)
Interest paid, net (88) (98)
Dividends paid 9 (308) (256)
Exercise of employee share options 31 5
Acquisition of non-controlling interest 10 (282) -
Other financing activities, net (9) (8)
--------------------- ---------------------
Net cash flows used in financing activities (893) (1,034)
--------------------- ---------------------
Net change in net cash and cash equivalents (447) 397
--------------------- ---------------------
Net effect of currency exchange rate changes on
cash and cash equivalents (16) 15
Net cash and cash equivalents at beginning of
period 1,387 1,407
--------------------- ---------------------
Net cash and cash equivalents at end of period 924 1,819
===================== =====================
Net cash and cash equivalents consist of:
Cash and cash equivalents 1,112 1,819
Bank overdrafts 8 (188) -
--------------------- ---------------------
Net cash and cash equivalents at end of period 924 1,819
===================== =====================
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
Coca-Cola Europacific Partners plc
Condensed Consolidated Interim Statement of Changes in Equity
(Unaudited)
Share Share Merger Other Retained Non-controlling Total
capital premium reserves reserves earnings Total interest equity
------------- ------------- ----------- ------------ ------------- -------------- --------------- --------------
EUR EUR EUR EUR EUR EUR EUR EUR
Note million million million million million million million million
--------------- ---- ------------- ------------- ----------- ------------ ------------- -------------- --------------- --------------
Balance as at
31
December 2021 5 220 287 (156) 6,677 7,033 177 7,210
Profit after
taxes - - - - 667 667 8 675
Other
comprehensive
income - - - 94 37 131 7 138
------------- ------------- ----------- ------------ ------------- -------------- --------------- --------------
Total
comprehensive
income - - - 94 704 798 15 813
Issue of shares
during the
period - 5 - - - 5 - 5
Equity-settled
share-based
payment
expense - - - - 12 12 - 12
Dividends 9 - - - - (257) (257) - (257)
Balance as at 1
July 2022 5 225 287 (62) 7,136 7,591 192 7,783
============= ============= =========== ============ ============= ============== =============== ==============
Balance as at
31
December 2022 5 234 287 (507) 7,428 7,447 - 7,447
Profit after
taxes - - - - 854 854 - 854
Other
comprehensive
income - - - (301) 9 (292) (292)
------------- ------------- ----------- ------------ ------------- -------------- --------------- --------------
Total
comprehensive
income - - - (301) 863 562 - 562
Issue of shares
during the
period - 31 - - - 31 - 31
Equity-settled
share-based
payment
expense - - - - 29 29 - 29
Dividends 9 - - - - (309) (309) - (309)
Balance as at
30
June 2023 5 265 287 (808) 8,011 7,760 - 7,760
============= ============= =========== ============ ============= ============== =============== ==============
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
Notes to the Condensed Consolidated Interim Financial
Statements
Note 1
GENERAL INFORMATION AND BASIS OF PREPARATION
Coca-Cola Europacific Partners plc (the Company) and its
subsidiaries (together CCEP, or the Group) are a leading consumer
goods group in Western Europe and the Asia Pacific region, making,
selling and distributing an extensive range of primarily
non-alcoholic ready to drink beverages.
The Company has ordinary shares with a nominal value of EUR0.01
per share (Shares). CCEP is a public company limited by shares,
incorporated under the laws of England and Wales with the
registered number in England of 09717350. The Group's Shares are
listed and traded on Euronext Amsterdam, the NASDAQ Global Select
Market, London Stock Exchange and on the Spanish Stock Exchanges.
The address of the Company's registered office is Pemberton House,
Bakers Road, Uxbridge, UB8 1EZ, United Kingdom.
These condensed consolidated interim financial statements do not
constitute statutory accounts as defined by Section 434 of the
Companies Act 2006. They have been reviewed but not audited by the
Group's auditor. The statutory accounts for the Company for the
year ended 31 December 2022, which were prepared in accordance with
U.K. adopted International Accounting Standards, International
Financial Reporting Standards (IFRS) as adopted by the European
Union and International Financial Reporting Standards as issued by
the International Accounting Standards Board (IASB), have been
delivered to the Registrar of Companies. The auditor's opinion on
those accounts was unqualified and did not contain a statement made
under section 498 (2) or (3) of the Companies Act 2006.
Basis of Preparation and Accounting Policies
The condensed consolidated interim financial statements of the
Group have been prepared in accordance with the U.K. adopted
International Accounting Standard 34, "Interim Financial Reporting"
and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority, the International Accounting
Standard 34, "Interim Financial Reporting" as adopted by the
European Union, the International Accounting Standard 34, "Interim
Financial Reporting" as issued by the International Accounting
Standards Board and should be read in conjunction with our 2022
consolidated financial statements. The annual financial statements
of the Group for the year ended 31 December 2023 will be prepared
in accordance with U.K. adopted International Accounting Standards,
International Financial Reporting Standards (IFRS) as adopted by
the European Union and International Financial Reporting Standards
as issued by the International Accounting Standards Board
(IASB).
Except as described below, the accounting policies applied in
these interim condensed consolidated financial statements are
consistent with those followed in the preparation of the Group's
consolidated financial statements as at and for the year ended 31
December 2022. The policy for recognising income taxes in the
interim period is consistent with that applied in previous interim
periods and is described in Note 11.
International Tax Reform - Pillar Two Model Rules (Amendments to
IAS 12)
On 12 May 2023, the International Accounting Standards Board (
"the IASB") issued International Tax Reform - Pillar Two Model
Rules - Amendments to IAS 12 ("the Amendments"). The Amendments
apply with immediate effect and introduce a mandatory temporary
exception from the recognition and disclosure of deferred taxes
arising from the implementation of the OECD's Pillar Two Model
Rules. On 20 June 2023, Finance (No.2) Act 2023 was substantively
enacted in the UK, introducing a global minimum effective tax rate
of 15%. The legislation implements a domestic top-up tax and a
multinational top-up tax, effective for accounting periods starting
on or after 31 December 2023. The Group has applied the exception
under the IAS 12 amendment to recognising and disclosing
information about deferred tax assets and liabilities related to
top-up income in preparing its condensed consolidated interim
financial statements as of the six month period ended 30 June
2023.
Other amendments and interpretations also apply for the first
time in 2023, but do not have a material impact on the condensed
consolidated interim financial statements of the Group.
Reporting periods
Results are presented for the interim period from 1 January 2023
to 30 June 2023.
The Group's financial year ends on 31 December. For half-yearly
reporting convenience, the first six month period closes on the
Friday closest to the end of the interim calendar period. There is
no change in selling days between the six months ended 30 June 2023
versus the six months ended 1 July 2022, and there will be equal
selling days in the second six months of 2023 versus the second six
months of 2022 (based upon a standard five-day selling week).
The following table summarises the number of selling days, for
the years ended 31 December 2023 and 31 December 2022 (based on a
standard five-day selling week):
Half Full
year year
------- ----- -----
2023 130 260
2022 130 260
----- -----
Change - -
===== =====
Comparability
Operating results for the first half of 2023 may not be
indicative of the results expected for the year ended 31 December
2023 as sales of the Group's products are seasonal. In Europe, the
second and third quarters typically account for higher unit sales
of the Group's products than the first and fourth quarters. In the
Group's Asia Pacific territories, the fourth quarter would
typically reflect higher sales volumes in the year. The seasonality
of the Group's sales volume, combined with the accounting for fixed
costs such as depreciation, amortisation, rent and interest
expense, impacts the Group's results for the first half of the
year. Additionally, year-over-year shifts in holidays, selling days
and weather patterns can impact the Group's results on an annual or
half-yearly basis.
Exchange rates
The Group's reporting currency is the Euro. CCEP translates the
income statements of non-Euro functional currency subsidiary
operations to the Euro at average exchange rates and the balance
sheets at the closing exchange rate as at the end of the
period.
The principal exchange rates used for translation purposes in
respect of one Euro were:
Average for the six
month period ended Closing as at
-------------------------------------------------------- ----------------------------------------------------------
30 June 30 June 31 December
2023 1 July 2022 2023 2022
------------ --------------------------- --------------------------- --------------------------- -----------------------------
British Pound 1.14 1.19 1.16 1.13
US Dollar 0.92 0.91 0.91 0.94
Norwegian
Krone 0.09 0.10 0.09 0.10
Swedish Krone 0.09 0.10 0.08 0.09
Icelandic
Krone 0.01 0.01 0.01 0.01
Australian
Dollar 0.63 0.66 0.61 0.64
Indonesian
Rupiah([1]) 0.06 0.06 0.06 0.06
New Zealand
Dollar 0.58 0.61 0.56 0.60
Papua New
Guinean Kina 0.26 0.26 0.26 0.27
([1]) Indonesian Rupiah is shown as 1000 IDR versus 1 EUR.
Note 2
OPERATING SEGMENTS
Description of segments and principal activities
The Group derives its revenues through a single business
activity, which is making, selling and distributing an extensive
range of primarily non-alcoholic ready to drink beverages. The
Group's Board continues to be its Chief Operating Decision Maker
(CODM), which allocates resources and evaluates performance of its
operating segments based on volume, revenue and comparable
operating profit. Comparable operating profit excludes items
impacting the comparability of period over period financial
performance.
The following table provides a reconciliation between reportable
segment operating profit and consolidated profit before tax:
Six Months Ended 30 Six Months Ended 1 July
June 2023 2022
Europe API Total Europe API Total
EUR million EUR million EUR million EUR million EUR million EUR million
------------------- ------------------ ------------------ -------------------- ------------------ ------------------ --------------------
Revenue 7,105 1,872 8,977 6,451 1,829 8,280
Comparable
operating
profit([1]) 924 241 1,165 825 226 1,051
Items impacting
comparability([2]) 5 (84)
-------------------- --------------------
Reported operating
profit 1,170 967
Total finance
costs,
net (63) (63)
Non-operating items (6) (6)
-------------------- --------------------
Reported profit
before
tax 1,101 898
==================== ====================
([1]) Comparable operating profit includes comparable
depreciation and amortisation of EUR272 million and EUR101 million
for Europe and API respectively, for the six months ended 30 June
2023. Comparable depreciation and amortisation charges for the six
months ended 1 July 2022 totalled EUR273 million and EUR114
million, for Europe and API respectively.
([2]) Items impacting the comparability of period-over-period
financial performance for 2023 primarily include EUR53 million of
other income related to the royalties arising from the ownership of
certain mineral rights in Australia (EUR18 million) and the
proceeds from the sale of sub-strata and associated mineral rights
(EUR35 million), partially offset by restructuring charges of EUR51
million. Items impacting the comparability for 2022 primarily
include restructuring charges of EUR95 million, partially offset by
net insurance recoveries received of EUR12 million arising from the
July 2021 flooding events.
No single customer accounted for more than 10% of the Group's
revenue during the six months ended 30 June 2023 and 1 July
2022.
Revenue by geography
The following table summarises revenue from external customers
by geography, which is based on the origin of the sale:
Six Months Ended
30 June 1 July
2023 2022
Revenue EUR million EUR million
-------------------------------- ------------------- -------------------
Great Britain 1,570 1,463
Germany 1,458 1,296
Iberia([1]) 1,541 1,371
France([2]) 1,200 1,017
Belgium/Luxembourg 541 511
Netherlands 355 329
Norway 193 208
Sweden 207 213
Iceland 40 43
------------------- -------------------
Total Europe 7,105 6,451
Australia 1,162 1,102
New Zealand and Pacific Islands 330 302
Indonesia and Papua New Guinea 380 425
Total API 1,872 1,829
------------------- -------------------
Total CCEP 8,977 8,280
=================== ===================
([1]) Iberia refers to Spain, Portugal & Andorra.
([2]) France refers to continental France & Monaco.
Note 3
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing profit after
taxes by the weighted average number of Shares in issue and
outstanding during the period. Diluted earnings per share is
calculated in a similar manner, but includes the effect of dilutive
securities, principally share options, restricted stock units and
performance share units. Share-based payment awards that are
contingently issuable upon the achievement of specified market
and/or performance conditions are included in the diluted earnings
per share calculation based on the number of Shares that would be
issuable if the end of the period was the end of the contingency
period.
The following table summarises basic and diluted earnings per
share calculations for the periods presented:
Six Months Ended
30 June 1 July
2023 2022
-------------------------------------------------------- -------------------- --------------------
Profit after taxes attributable to equity shareholders
(EUR million) 854 667
Basic weighted average number of Shares in issue([1])
(million) 458 457
Effect of dilutive potential Shares([2]) (million) 1 1
Diluted weighted average number of Shares in issue([1])
(million) 459 458
Basic earnings per share (EUR) 1.86 1.46
Diluted earnings per share (EUR) 1.86 1.46
([1]) As at 30 June 2023 and 1 July 2022, the Group had
458,846,191 and 456,789,240 Shares, respectively, in issue and
outstanding.
([2]) For the six months ended 30 June 2023 and 1 July 2022,
there were no outstanding options to purchase Shares excluded from
the diluted earnings per share calculation. The dilutive impact of
the remaining options outstanding, unvested restricted stock units
and unvested performance share units was included in the effect of
dilutive securities.
Note 4
INTANGIBLE ASSETS AND GOODWILL
The following table summarises the movement in net book value
for intangible assets and goodwill during the six months ended 30
June 2023:
Intangible
assets Goodwill
EUR million EUR million
-------------------------------------- --------------------- -------------------
Net book value as at 31 December 2022 12,505 4,600
Additions 40 -
Amortisation expense (53) -
Disposals - -
Transfers and reclassifications (1) -
Currency translation adjustments (172) (117)
--------------------- -------------------
Net book value as at 30 June 2023 12,319 4,483
===================== ===================
Note 5
PROPERTY, PLANT AND EQUIPMENT
The following table summarises the movement in net book value
for property, plant and equipment during the six months ended 30
June 2023:
Total
---------------------------------------
EUR million
--------------------------------------- --------------------
Net book value as at 31 December 2022 5,201
Additions 279
Disposals (16)
Depreciation expense (324)
Transfers and reclassifications 1
Currency translation adjustments (64)
--------------------
Net book value as at 30 June 2023([1]) 5,077
====================
([1]) The net book value of property, plant and equipment
includes right of use assets of EUR662 million.
Note 6
ASSETS HELD FOR SALE
Assets classified as held for sale as at 30 June 2023 and 31
December 2022 were EUR54 million and EUR94 million, respectively.
The decrease is due to the completion of the remaining portion of
the sale of certain non-alcoholic ready to drink beverage brands to
TCCC (See Note 10 for further details).
Note 7
FAIR VALUES AND FINANCIAL RISK MANAGEMENT
Fair Value Measurements
All assets and liabilities for which fair value is measured or
disclosed in the condensed consolidated interim financial
statements are categorised in the fair value hierarchy as described
in our 2022 consolidated financial statements.
The fair values of the Group's cash and cash equivalents, short
term investments, trade accounts receivable, amounts receivable
from related parties, trade and other payables, and amounts payable
to related parties approximate their carrying amounts due to their
short-term nature.
The fair values of the Group's borrowings are estimated based on
borrowings with similar maturities and credit quality and current
market interest rates. These are categorised in Level 2 of the fair
value hierarchy as the Group uses certain pricing models and quoted
prices for similar liabilities in active markets in assessing their
fair values. The total fair value of borrowings as at 30 June 2023
and 31 December 2022, was EUR10.6 billion and EUR10.5 billion,
respectively. This compared to the carrying value of total
borrowings as at 30 June 2023 and 31 December 2022 of EUR11.8
billion and EUR11.9 billion, respectively. Refer to Note 8 for
further details regarding the Group's borrowings.
The Group's derivative assets and liabilities are carried at
fair value, which is determined using a variety of valuation
techniques, depending on the specific characteristics of the
hedging instrument taking into account credit risk. The fair value
of our derivative contracts (including forwards, options,
cross-currency swaps and interest rate swaps) are determined using
standard valuation models. The significant inputs used in these
models are readily available in public markets or can be derived
from observable market transactions and, therefore, the derivative
contracts have been classified as Level 2. Inputs used in these
standard valuation models include the applicable spot, forward, and
discount rates. The standard valuation model for the option
contracts also includes implied volatility, which is specific to
individual options and is based on rates quoted from a widely used
third-party resource. As at 30 June 2023 and 31 December 2022, the
total value of derivative assets was EUR367 million and EUR448
million, respectively. As at 30 June 2023 and 31 December 2022, the
total value of derivative liabilities was EUR329 million and EUR263
million, respectively. During the period, EUR38 million of losses
have been recorded within Other Comprehensive Income, primarily
related to decreases in fair value on commodity related hedging
instruments.
For assets and liabilities that are recognised in the condensed
consolidated interim financial statements on a recurring basis, the
Group determines whether transfers have occurred between levels in
the hierarchy by re-assessing categorisation at the end of each
reporting period. There have been no transfers between levels
during the periods presented.
During the six month period ending 30 June 2023, the Group
implemented a new gas and power hedging program to manage its
exposure to changes in commodity prices in relation to its
purchases of power and gas, by entering into financial swaps
designated in a cash flow hedge relationship. As at 30 June 2023
the notional value of the swaps was EUR139 million and amounts of
EUR1 million and EUR18 million were included in derivative assets
and derivative liabilities respectively.
Financial Instruments Risk Management Objectives and
Policies
The Group's activities expose it to several financial risks
including market risk, credit risk, and liquidity risk. Financial
risk activities are governed by appropriate policies and procedures
to minimise the uncertainties these risks create over the Group's
future cash flows. Such policies are developed and approved by the
Group's Treasury and Commodities Risk Committee through the
authority provided to it by the Group's Board of Directors. There
have been no changes in the risk management policies since the year
end.
Note 8
BORROWINGS AND LEASES
Borrowings Outstanding
The following table summarises the carrying value of the Group's
borrowings as at the dates presented:
30 June 31 December
2023 2022
EUR million EUR million
------------------------------------------------- -------------------------- ------------------------------
Non-current:
Euro denominated bonds([3]) 7,689 8,176
Foreign currency bonds (swapped into Euro)([1]) 455 1,074
Australian dollar denominated bonds 337 422
Foreign currency bonds (swapped into Australian
dollar or New Zealand dollar)([1]) 329 364
Lease obligations 522 535
-------------------------- ------------------------------
Total non-current borrowings 9,332 10,571
========================== ==============================
Current:
Euro denominated bonds 850 350
Foreign currency bonds (swapped into Euro)([1],
[2]) 594 797
Australian dollar denominated bonds 62 -
Foreign currency bonds (swapped into New Zealand
dollar)([1]) 46 48
Euro commercial paper([4]) 543 -
Bank overdrafts([5]) 188 -
Lease obligations 142 141
-------------------------- ------------------------------
Total current borrowings 2,425 1,336
========================== ==============================
([1]) Cross currency swaps are used by the Group to swap foreign
currency bonds into the required local currency.
([2]) In May the Group repaid on maturity the outstanding amount
related to the US$850 million 0.50% Notes 2023.
([3]) Some bonds are designated in full or partially in a fair
value hedge relationship.
([4]) During the 6 month period ending 30 June 2023, the Group
issued EUR3,914 million and repaid EUR3,371 million Euro commercial
paper. During the 6 month period ending 1 July 2022, the Group
issued EUR2,394 million and repaid EUR2,157 million Euro commercial
paper. The issuance net of repayments of Euro commercial paper is
presented as changes in short-term borrowings in our condensed
consolidated interim statement of cash flows.
([5]) Included within bank overdrafts is EUR188 million in
relation to a notional pooling arrangement for which an offsetting
agreement is in place but does not meet the criteria for net
presentation on the condensed consolidated interim statement of
financial position. A corresponding amount is also shown in cash
and cash equivalents.
Note 9
EQUITY
Share Capital
As at 30 June 2023, the Company had issued and fully paid
458,846,191 Shares. Shares in issue have one voting right each and
no restrictions related to dividends or return of capital. The
share capital increased during the six months ended 30 June 2023
from the issue of 1,739,738 Shares, following the exercise of
share-based payment awards.
Dividends
During the first six months of 2023, the Board declared a first
half dividend of EUR0.67 per share, which was paid on 25 May 2023.
During the first six months of 2022, the Board declared a first
half dividend of EUR0.56 per share, which was paid on 26 May
2022.
Note 10
RELATED PARTY TRANSACTIONS
For the purpose of these condensed consolidated interim
financial statements, transactions with related parties mainly
comprise transactions between subsidiaries of the Group and the
related parties of the Group.
Transactions with The Coca-Cola Company (TCCC)
The principal transactions with TCCC are for the purchase of
concentrate, syrup and finished goods. The following table
summarises the transactions with TCCC that directly impacted the
condensed consolidated interim income statement for the periods
presented:
Six Months Ended
30 June 2023 1 July 2022
EUR million EUR million
-------------------------------------------- ------------------------------- -------------------------------
Amounts affecting revenue([1]) 68 51
Amounts affecting cost of sales([2]) (2,099) (1,910)
Amounts affecting operating expenses([3]) 5 1
------------------------------- -------------------------------
Total net amount affecting the consolidated
income statement (2,026) (1,858)
=============================== ===============================
([1]) Amounts principally relate to fountain syrup and packaged
product sales.
([2]) Amounts principally relate to the purchase of concentrate,
syrup, mineral water and juice as well as funding for marketing
programmes.
([3]) Amounts principally relate to costs associated with new
product development initiatives and reimbursement of certain
marketing expenses.
The following table summarises the transactions with TCCC that
impacted the consolidated statement of financial position as at the
dates presented:
31 December
30 June 2023 2022
EUR million EUR million
----------------------- ------------------------------ -----------------------------
Amount due from TCCC 75 130
Amount payable to TCCC 333 442
During the first half of 2023, the Group completed the remaining
portion of the sale of certain non-alcoholic ready to drink
beverage brands that were acquired as part of the business
combination transaction consummated on 10 May 2021. The sale price
approximated the fair value of the brands assessed at the
acquisition. These brands were classified as assets held for sale
in our consolidated statement of financial position as at 31
December 2022.
On 15 February 2023, the Group completed the acquisition of the
remaining 29.4% ownership interest of its subsidiary, PT Coca-Cola
Bottling Indonesia, for a total consideration of EUR282
million.
Transactions with Cobega companies
The principal transactions with Cobega are for the purchase of
juice concentrate and packaging materials. The following table
summarises the transactions with Cobega that directly impacted the
condensed consolidated interim income statement for the periods
presented:
Six Months Ended
30 June 2023 1 July 2022
EUR million EUR million
-------------------------------------------- ------------------------------- -------------------------------
Amounts affecting revenues([1]) 1 2
Amounts affecting cost of sales([2]) (40) (32)
Amounts affecting operating expenses([3]) (9) (8)
------------------------------- -------------------------------
Total net amount affecting the consolidated
income statement (48) (38)
=============================== ===============================
([1]) Amounts principally relate to packaged product sales.
([2]) Amounts principally relate to the purchase of packaging
materials and concentrate.
([3]) Amounts principally relate to maintenance and repair
services and transportation.
The following table summarises the transactions with Cobega that
impacted the consolidated statement of financial position as at the
dates presented:
31 December
30 June 2023 2022
EUR million EUR million
------------------------- ------------------------------- -------------------------------
Amount due from Cobega 8 3
Amount payable to Cobega 31 24
Transactions with Other Related Parties
For the six months ended 30 June 2023 and 1 July 2022 the Group
recognised charges in cost of sales of EUR88 million and EUR83
million, respectively, in connection with transactions that have
been entered into with joint ventures, associates and other related
parties predominantly for the purchase of resin as well as
container deposit scheme charges in Australia.
Transactions with joint ventures, associates and other related
parties that impacted the condensed consolidated interim statement
of financial position as at 30 June 2023 include EUR5 million in
amounts receivable from related parties and EUR9 million in amounts
payable to related parties, respectively. As at 31 December 2022
amounts receivable from related parties and amounts payable to
related parties included EUR6 million and EUR19 million
respectively related to transactions with joint ventures,
associates and other related parties.
Note 11
TAXES
Taxes on income in interim periods are accrued using the tax
rate that would be applicable to the expected total annual profit
or loss.
The effective tax rate (ETR) was 22% and 25% for the six months
ended 30 June 2023 and 1 July 2022, respectively, and 22% for the
year ended 31 December 2022. The ETR has been calculated by
applying the weighted average annual ETR, excluding discrete items,
of 25% to the profit before tax for the six months ended 30 June
2023 and 1 July 2022, respectively.
The ETR of 22% which is lower than statutory UK rate of 23.5%
reflects the impact of having operations outside the UK which are
taxed at rates other than the statutory UK rate and adjustments
made in respect of prior periods.
The following table summarises the major components of income
tax expense for the periods presented:
30 June 1 July
2023 2022
EUR million EUR million
------------------------------------------------------------ -------------------- --------------------
Current income tax:
Current income tax charge 278 228
Adjustment in respect of current income tax from
prior periods (9) 8
-------------------- --------------------
Total current tax 269 236
Deferred tax:
Relating to the origination and reversal of temporary
differences (2) (4)
Adjustment in respect of deferred income tax from
prior periods (20) (9)
Relating to changes in tax rates or the imposition
of new taxes - -
-------------------- --------------------
Total deferred tax (22) (13)
-------------------- --------------------
Income tax charge per the consolidated income statement 247 223
==================== ====================
Tax Provisions
The Group is routinely under audit by tax authorities in the
ordinary course of business. Due to their nature, such proceedings
and tax matters involve inherent uncertainties including, but not
limited to, court rulings, settlements between affected parties
and/or governmental actions. The probability of outcome is assessed
and accrued as a liability and/or disclosed, as appropriate. The
Group maintains provisions for uncertainty related to these tax
matters that it believes appropriately reflect its risk. As at 30
June 2023, EUR147 million (1 July 2022: EUR154 million) of these
provisions is included in current tax liabilities and the remainder
is included in non-current tax liabilities.
The Group reviews the adequacy of these provisions at the end of
each reporting period and adjusts them based on changing facts and
circumstances. Due to the uncertainty associated with tax matters,
it is possible that at some future date, liabilities resulting from
audits or litigation could vary significantly from the Group's
provisions. When an uncertain tax liability is regarded as
probable, it is measured on the basis of the Group's best
estimate.
The Group has received tax assessments in certain jurisdictions
for potential tax related to the Group's purchases of concentrate.
The value of the Group's concentrate purchases is significant, and
therefore, the tax assessments are substantial. The Group strongly
believes the application of tax has no technical merit based on
applicable tax law, and its tax position would be sustained.
Accordingly, the Group has not recorded a tax liability for these
assessments and is vigorously defending its position against these
assessments.
Note 12
PROVISIONS, COMMITMENTS AND CONTINGENCIES
The following table summarises the movement of provisions for
the periods presented:
Restructuring Other
Provision Provisions([1]) Total
EUR million EUR million EUR million
-------------------------------------- -------------------- -------------------- --------------------
Balance as at 31 December 2022 137 33 170
Charged/(credited) to profit or loss:
Additional provisions recognised 37 7 44
Unused amounts reversed (3) (3) (6)
Utilised during the period (54) (2) (56)
Balance as at 30 June 2023 117 35 152
==================== ==================== ====================
([1]) Other provisions primarily relate to decommissioning
provisions, property tax assessment provisions and legal
reserves.
Guarantees
During the 1st half of 2023, the Group has issued approximately
EUR505 million of financial guarantees related to various tax
matters. These guarantees have various terms and the amounts
represent the maximum potential future payments we could be
required to make under the guarantees. No significant additional
liabilities requiring financial statement recognition are expected
to arise from the guarantees issued.
Commitments
There have been no significant changes in the commitments of the
Group since 31 December 2022.
Contingencies
There have been no significant changes in contingencies since 31
December 2022.
Refer to Note 23 of the 2022 consolidated financial statements
for further details about the Group's guarantees, commitments and
contingencies.
Note 13
OTHER INCOME
Other income for the six months ended 30 June 2023 totalled
EUR53 million (1 July 2022: EUR0 million). The balance is
attributable to the following activities.
The Group recognised EUR18 million of royalty income arising
from the ownership of mineral rights in Queensland, Australia. On 7
March 2023 the Group entered into an agreement to sell the
sub-strata and associated mineral rights. Upon regulatory approval,
the transaction was consummated in April 2023. The total
consideration approximated EUR35 million.
Note 14
EVENTS AFTER THE REPORTING PERIOD
On 7 July 2023, the Group completed the sale of property in
Germany for a total consideration of EUR80 million. The property is
classified as assets held for sale in our condensed consolidated
interim statement of financial position as at 30 June 2023.
On 2 August 2023, the Group announced that CCEP and Beam Suntory
will discontinue their relationship effective 1 July 2025
(Australia) and 1 January 2026 (New Zealand). CCEP will remain the
exclusive manufacturing, sales and distribution partner for Beam
Suntory in Australia and New Zealand through the end of the current
contractual terms set to expire on 30 June 2025 and 31 December
2025, respectively. As at 30 June 2023, finite-lived intangible
assets of EUR127 million were reflected in the condensed
consolidated interim statement of financial position related to the
Beam Suntory distribution rights, primarily attributable to those
available in Australia. The discontinuance of the relationship will
trigger a change in the assigned useful economic life of the
intangible assets effective from the second half of 2023,
shortening the amortization period.
On 2 August 2023, the Group announced that it has entered into a
non-binding Letter of Intent with Aboitiz Equity Ventures Inc. and
The Coca-Cola Company (TCCC) for the joint acquisition of 100% of
the entire existing issued share capital of
Coca-Cola Beverages Philippines, Inc. (CCBPI), a wholly owned
subsidiary of TCCC, for a total cash consideration of $1.8 billion
on a debt- and cash-free basis. The transaction is expected to be
completed around the end of 2023, subject to the finalisation of
due diligence, signing definitive agreements and obtaining
regulatory approval. Upon completion, CCEP will pay 60% of the
total cash consideration commensurate with the proposed 60:40
ownership structure of CCBPI.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR UUUVROAUWRRR
(END) Dow Jones Newswires
August 02, 2023 02:02 ET (06:02 GMT)
Coca-cola Europacific Pa... (LSE:CCEP)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Coca-cola Europacific Pa... (LSE:CCEP)
Gráfica de Acción Histórica
De May 2023 a May 2024
