REG - Coca-Cola EP PLC - Completion of joint acquisition of CCBPI
23/02/2024 07:00
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RNS Number : 1874E Coca-Cola Europacific Partners plc 23 February 2024
23 February 2024
Coca-Cola Europacific Partners (CCEP) today confirms it has, together with
Aboitiz Equity Ventures Inc. (AEV), completed the acquisition of Coca-Cola
Beverages Philippines, Inc. (CCBPI) from The Coca-Cola Company (KO)
• Further to the announcements on 2 August 2023, 20 November 2023
and 30 January 2024 (see links below), CCEP today announces it has, together
with AEV, completed the acquisition to jointly acquire 100% of CCBPI from KO
• The key terms of the Share Purchase Agreement comprise:
◦ 60:40 ownership structure between CCEP and AEV with comprehensive
governance arrangements in place
◦ Valuation of 100% of CCBPI at $1.8 billion on a debt-free,
cash-free basis
• To aid comparability, FY23 adjusted financial information for
selected metrics is provided in this release
The acquisition builds on CCEP's successful expansion into Australia, Pacific
& Indonesia (API) in 2021, further strengthens its partnership with KO and
supports its long-term growth strategy and focus on driving shareholder value.
CCEP's acquisition of CCBPI, with AEV, one of the leading conglomerates in the
local market, is a great opportunity to co-own an established, well-run
business with attractive profitability and growth prospects.
The transaction is thus immediately EPS accretive and creates an even more
diverse footprint for CCEP within its existing API business segment, from now
on renamed APS (Australia, Pacific & South East Asia). It provides the
opportunity to leverage best practice and talent, including supporting
Indonesia's transformation journey. It is therefore aligned with CCEP's aim of
driving sustainable and stronger growth through diversification and scale, and
underpins the company's mid-term strategic objectives.
As CCEP will control the majority (60%) of CCBPI, it will consolidate CCBPI as
of the acquisition date and establish a non-controlling interest representing
AEV's minority interest (40%). CCBPI delivered ~$1.9(1) billion (~€1.7
billion(1)) of Revenue and ~$115(1) million (~€105 million(1)) of Operating
Profit in FY23.
The transaction consideration has been funded through existing liquidity and
incremental borrowing. It will have a modest impact on CCEP's leverage, having
closed FY23 at the top end of its mid-term guided range of 3.0 times Net Debt
to Comparable EBITDA(2).
( 1 ) Amounts represent CCBPI's unaudited results prepared in accordance with
Philippine Financial Reporting Standards (PFRS) which will be filed with the
registrar in due course. These unaudited results have been presented as if the
acquisition had occurred on 1 January 2023 and have been adjusted for
provisional acquisition accounting adjustments, CCEP IFRS accounting policy
reclassifications and the impact of debt financing costs in connection with
the acquisition, excluding items impacting comparability. CCBPI translated
from Euros to US Dollars using the average exchange rate for the period of
1.09.
( 2 ) Adjusted for items impacting comparability. For further details, refer
to our unaudited results for the fourth quarter and full year ended 31
December 2023, issued on 23 February 2024, which details our non-IFRS
performance measures and reconciles, where applicable, our 2023 and 2022
results as reported under IFRS to the non-IFRS performance measures included
in this document.
Adjusted financial information
The following non-IFRS adjusted financial information for selected metrics is
provided in order to illustrate the effects of the acquisition of CCBPI on the
results of operations of CCEP and to allow for greater comparability of the
results of the combined group between periods. The adjusted financial
information has been prepared for illustrative purposes only, and because of
its nature addresses a hypothetical situation. It does not intend to represent
the results had the acquisition occurred at the dates indicated, or project
the results for any future dates or periods. It is based on information and
assumptions that CCEP believe are reasonable, including assumptions as at 1
January 2023 relating to provisional transaction accounting adjustments. No
cost savings or synergies were contemplated in these provisional adjustments.
The non-IFRS adjusted financial information has not been prepared in
accordance with the requirements of Regulation S-X Article 11 of the US
Securities Act of 1933 or any generally accepted accounting standards, may not
necessarily be comparable to similarly titled measures employed by other
companies and should be considered supplemental to, and not a substitute for,
financial information prepared in accordance with generally accepted
accounting standards.
The adjusted financial information provided below is on a full year basis for
FY23, assuming the acquisition occurred on 1 January 2023. It includes
revenues and volumes, and is updated to include the expected cost of
financing.
Supplementary Financial Information - Reported to Adjusted comparable
The following provides a summary reconciliation of CCEP's reported and
adjusted comparable results for the full year ended 31 December 2023.
Full year 2023 (unaudited)
In € millions except per share data which is calculated prior to rounding Reported Items impacting comparability( 1 ) Comparable Adjusted comparable( 2 ) Transaction accounting adjustments( 3 ) Adjusted comparable combined
CCEP CCEP CCBPI CCEP CCEP
Revenue 18,302 - 18,302 1,744 - 20,046
Cost of sales 11,582 (6) 11,576 1,380 - 12,956
Operating profit 2,339 34 2,373 105 - 2,478
Total finance costs, net 120 - 120 28 26 174
Profit after taxes 1,669 32 1,701 57 (20) 1,738
Attributable to:
Shareholders 1,669 32 1,701 34 (20) 1,715
Non-controlling interest - - - 23 - 23
Diluted earnings per share (€) 3.63 3.71 3.74
Diluted weighted average shares outstanding 459
( 1 ) Amounts represent items affecting the comparability of CCEP's
year-over-year financial performance. Refer to our unaudited results for the
fourth quarter and full year ended 31 December 2023, issued on 23 February
2024, for further details on our non-IFRS performance measures and a
reconciliation of CCEP's reported to comparable
results.
( 2 ) Amounts represent unaudited results of CCBPI as if the acquisition had
occurred on 1 January 2023, including provisional acquisition accounting
adjustments, CCEP IFRS accounting policy reclassifications and the impact of
debt financing costs in connection with the acquisition, excluding items
impacting comparability. Total finance costs include a net finance income of
€3 million for the year ended 31 December 2023.
( 3 ) Amounts represent provisional transaction accounting adjustments for the
12 months ending 31 December 2023 as if the acquisition had occurred on 1
January 2023 comprising finance costs from CCEP acquisition financing. Tax
rate used is 24%, in line with the Group's effective tax rate for the year
ended 31 December 2023. Separate financing adjustment is included within CCBPI
Adjusted
comparable.
The table below illustrates the impact of adjustments made to CCBPI in order
to present them on a basis consistent with CCEP's accounting policies and
including acquisition accounting adjustments.
Full year 2023 (unaudited)
In € millions Historical CCBPI( 1 ) Reclassifications( 2 ) Historical adjusted CCBPI Transaction accounting adjustments( 3 ) Items impacting comparability( 4 ) Adjusted comparable
Revenue 1,757 (1) 1,756 - (12) 1,744
Cost of sales 1,380 (2) 1,378 15 (13) 1,380
Operating profit 123 (3) 120 (7) (8) 105
Total finance costs, net - (3) (3) 31 - 28
Profit after taxes 90 (1) 89 (29) (3) 57
( 1 ) Historical unaudited CCBPI results for the period 1 January 2023 to 31
December 2023.
( 2 ) Accounting policy and classification adjustments made to CCBPI in order
to present on a basis consistent with CCEP IFRS accounting.
( 3 ) Amounts represent provisional transaction accounting adjustments for the
12 months ending 31 December 2023 as if the acquisition had occurred on 1
January 2023, and mainly include inventory step up costs and an increase in
total finance costs as a result of local financing in the Philippines related
to the acquisition.
( 4 ) Amounts represent one-time items identified by CCBPI which are not
expected to recur, and mainly include the impact from the reversal of certain
provisions partially offset by charges related to business transformation
activities.
Supplementary Financial Information - Adjusted Revenue & Volume
2023 Adjusted Comparable Revenue by Geography Q1 Q2 Q3 Q4 HY1 HY2 FY
In € millions
Iberia( 1 ) 655 886 1,029 755 1,541 1,784 3,325
Germany 659 799 800 760 1,458 1,560 3,018
Great Britain 689 881 853 812 1,570 1,665 3,235
France( 2 ) 535 665 586 535 1,200 1,121 2,321
Northern Europe( 3 ) 607 729 688 630 1,336 1,318 2,654
Total Europe 3,145 3,960 3,956 3,492 7,105 7,448 14,553
Australia 631 531 562 661 1,162 1,223 2,385
Pacific( 4 ) 175 155 150 199 330 349 679
Indonesia and Papua New Guinea 203 177 139 166 380 305 685
Philippines( 5 ) 382 453 424 485 835 909 1,744
Total APS 1,391 1,316 1,275 1,511 2,707 2,786 5,493
Total CCEP (adjusted) 4,536 5,276 5,231 5,003 9,812 10,234 20,046
Revenue per unit case( 6 )
Total Europe 5.42 5.60 5.65 5.54 5.52 5.60 5.56
API 5.77 6.35 6.74 6.44 6.03 6.58 6.30
Philippines( 5 ) 2.70 2.86 2.81 2.80 2.78 2.80 2.79
Total APS 3.63 3.47 3.67 3.65 3.55 3.66 3.61
Total CCEP (adjusted) 4.79 4.95 5.06 4.87 4.87 4.96 4.92
( 1 ) Iberia refers to Spain, Portugal and
Andorra.
( 2 ) France refers to continental France and Monaco.
( 3 ) Includes Belgium, Luxembourg, the Netherlands, Norway, Sweden and
Iceland.
( 4 ) Pacific refers to New Zealand and the Pacific
Islands.
( 5 ) Acquisition of Coca-Cola Beverages Philippines, Inc (CCBPI) completed on
23 February 2024. CCBPI full year comparable revenue measures for 2023
provided by CCBPI management. Revenue includes preliminary adjustments to
present on a basis consistent with CCEP IFRS accounting policies and has been
adjusted for items impacting period over period comparability. Adjusted as if
the acquisition of CCBPI occurred on 1 January 2023 for illustrative purposes
only. It is not intended to estimate or predict future financial performance
or what actual results would have
been.
( 6 ) Comparable and Fx-neutral.
2023 Adjusted Volumes by Reporting Segment Q1 Q2 Q3 Q4 HY1 HY2 FY
In millions of Unit cases( 1 )
Total Europe 590 717 705 632 1,307 1,337 2,644
API 178 146 141 170 324 311 635
Philippines( 2 ) 144 171 162 178 315 340 655
Total APS 322 317 303 348 639 651 1,290
Total CCEP (adjusted) 912 1,034 1,008 980 1,946 1,988 3,934
( 1 ) A unit case equals approximately 5.678 litres or 24 8-ounce servings.
( 2 ) CCBPI volumes on an adjusted basis as if the acquisition occurred on 1
January 2023.
Note: volumes on a comparable basis; no selling day shift in FY23.
Further information
For more information on the transaction, please see our website
www.cocacolaep.com (http://www.cocacolaep.com)
-
https://ir.cocacolaep.com/static-files/0e2aab54-4883-4518-bb2b-c1a5b4d55c2c
(https://ir.cocacolaep.com/static-files/0e2aab54-4883-4518-bb2b-c1a5b4d55c2c)
(2 August 2023)
-
https://ir.cocacolaep.com/news-releases/news-release-details/coca-cola-ep-plc-update-re-acquisition-ccbpi
(https://ir.cocacolaep.com/news-releases/news-release-details/coca-cola-ep-plc-update-re-acquisition-ccbpi)
(20 November 2023)
-
https://ir.cocacolaep.com/news-releases/news-release-details/coca-cola-ep-plc-pcc-approval-received-jointly-acquire-ccbpi
(https://ir.cocacolaep.com/news-releases/news-release-details/coca-cola-ep-plc-pcc-approval-received-jointly-acquire-ccbpi)
(30 January 2024)
About CCEP (LEI 549300LTH67W4GWMRF57)
CCEP is one of the leading consumer goods companies in the world. We make,
move and sell some the world's most loved brands - serving 600 million
consumers and helping more than 2 million customers across 31 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, NASDAQ (and a
constituent of the Nasdaq 100), London Stock Exchange and on the Spanish Stock
Exchanges, trading under the symbol CCEP.
For more information about CCEP, please visit www.cocacolaep.com
(https://www.cocacolaep.com/) & follow CCEP on LinkedIn @ Coca-Cola
Europacific Partners | LinkedIn
(https://uk.linkedin.com/company/coca-cola-europacific-partners)
About AEV
AEV is one of the leading conglomerates in the Philippines with over 100 years
of business history. It has major investments in power, banking and financial
services, food, infrastructure, land, and data science and artificial
intelligence. AEV is recognized as one of the best-managed companies in the
Philippines and the region, consistently cited for its commitment to good
corporate governance and sustainability. Currently, the company is on its
Great Transformation journey to become the Philippines' first Techglomerate as
it continues to drive change for a better world by advancing business and
communities.
AEV is a member of the United Nations Global Compact, Global Compact Network
Philippines Board of Trustees, the APEC Business Advisory Council and the
Council for Inclusive Capitalism, and helps champion sustainability
initiatives on a regional level through policies, advocacies, and initiatives
that contribute to the United Nations Sustainable Development Goals (UN SDGs).
With a clear focus on ESG, the company is implementing its
#OneAboitizSustainability Synergy model which transforms its life-essential
businesses to improve sustainable practices and continue to create a positive
impact on society and the environment.
Link to AEV's website and release:
https://aboitiz.com/investor-relations/disclosure/
(https://aboitiz.com/investor-relations/disclosure/)
Enquiries
General Counsel and Company Secretary: Clare Wardle; secretariat@ccep.com
Investor Relations: Sarah Willett; sarah.willett@ccep.com
Media: ccep@portland-communications.com
(mailto:ccep@portland-communications.com)
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 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 the H1 2023 Half-year Report filed with the SEC
on 2 August 2023;
2. risks and uncertainties relating to the global supply chain and
distribution, including impact from war in Ukraine and increasing geopolitical
tensions and conflicts including in the Middle East and 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 integration and operation of the
joint venture with AEV and acquisition of CCBPI, including the risk 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, our agreements
relating to and results of the 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.
End
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