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RNS Number : 0754Q Coca-Cola Europacific Partners plc 16 February 2023
COCA-COLA EUROPACIFIC PARTNERS
Preliminary unaudited results for the full year ended 31 December 2022
Solid end to a very successful year, well placed for FY23 and beyond
FY 2022 Metric( 1 ) As Reported Comparable ( 1 ) Change vs 2021 Change vs 2021
As Reported Comparable Comparable Fx-Neutral ( 1 ) Pro forma Comparable ( 3 ) Pro forma Comparable Fx-Neutral( 3 )
( 1 )
Total CCEP Volume (M UC)( 2 ) 3,300 3,300 17.5 % 18.0 % 9.5 %
Revenue (€M) 17,320 17,320 26.0 % 26.0 % 24.5 % 17.0 % 15.5 %
Cost of sales (€M) 11,096 11,088 28.0 % 29.0 % 27.5 % 20.0 % 19.0 %
Operating expenses (€M) 4,234 4,094 18.5 % 21.0 % 19.5 % 10.5 % 9.0 %
Operating profit (€M) 2,086 2,138 37.5 % 20.5 % 19.5 % 13.5 % 12.5 %
Profit after taxes (€M) 1,521 1,564 54.0 % 20.0 % 19.0 %
Diluted EPS (€) 3.29 3.39 53.0 % 19.5 % 18.5 % 14.0 % 13.0 %
Revenue per UC( 2 ) (€) 5.20 6.0 % 6.0 %
Cost of sales per UC( 2 ) (€) 3.33 8.5 % 9.0 %
Adjusted Free cash Flow (€M) 1,805
Dividend per share( 4 ) (€) 1.68 Maintained dividend payout ratio of c.50%
Europe Volume (M UC)( 2 ) 2,631 2,631 10.5 % 11.0 % 11.0 %
Revenue (€M) 13,529 13,529 17.0 % 17.0 % 16.5 % 17.0 % 16.5 %
Operating profit (€M) 1,529 1,670 18.0 % 11.5 % 11.5 % 11.5 % 11.5 %
Revenue per UC( 2 ) (€) 5.14 5.5 % 5.5 %
API Volume (M UC)( 2 ) 669 669 57.5 % 57.5 % 5.0 %
Revenue (€M) 3,791 3,791 74.0 % 74.0 % 66.5 % 17.0 % 12.0 %
Operating profit (€M) 557 468 155.5% 72.0 % 64.5 % 21.0 % 16.0 %
Revenue per UC( 2 ) (€) 5.42 6.0 % 7.5 %
DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:
"2022 was a very successful year, our first as Coca-Cola Europacific Partners.
This is testament to the hard work of our colleagues to whom we are extremely
grateful. Our focus on well invested and winning brands across our broad pack
offering, great in-market execution and price and promotion strategy served us
well. We benefited from the continued recovery of the away from home channel
and the return of travel and tourism with further growth in the home channel.
Combined with our ongoing focus on efficiency, this delivered strong top and
bottom-line growth, value share gains and generated solid free cash flow. We
continue to be a great partner for our customers, a great place to work for
our colleagues whilst making further progress against our sustainability
commitments - more of our sites went carbon neutral, we switched logistics to
lower carbon alternatives and invested in recycling facilities.
"A record dividend in FY22 combined with our FY23 guidance and ambitious but
achievable mid-term objectives demonstrate the strength of our business.
Enhanced by our great API business, we are bigger and better, more diverse and
robust, operating in resilient categories. We remain confident in the future,
despite a dynamic outlook, and we continue to invest for the longer-term,
evidenced by the minority buy out of our exciting Indonesian market. Our clear
strategy, strong brand partner relationships and great people will ensure we
continue to create sustainable value for all our stakeholders. We have the
platform and momentum to go even further together for a greater future."
___________________________
Note: All footnotes included after the 'About CCEP' section
FY & Q4 HIGHLIGHTS( 1 , 3 )
Revenue
FY Reported +26.0%; FY Pro forma +15.5%( 5 )
• Reported growth, in addition to the drivers below, reflects the
acquisition of Coca-Cola Amatil (completed 10 May 2021)
• Delivered more revenue growth for our retail customers than any of
our FMCG peers in Europe, & any of our NARTD peers in Australia & New
Zealand( 6 )
• NARTD value share gains across measured channels both in
store( 7 ) (+10bps) including sparkling (+20bps) & online( 8 ) (+80bps)
• Pro forma:
◦ Comparable volume +9.5%( 9 ) (+3.5% vs 2019) driven by solid
recovery of away from home (AFH), & continued growth in Home across our
markets
◦ Comparable volume by channel: AFH +18.5% (broadly flat vs 2019)
reflecting fewer restrictions & increased mobility. The return of tourism
& favourable weather in Europe also supported the strong recovery of
immediate consumption (IC) packs (+23.0%( 10 )). Home +4.0% (+6.5% vs 2019)
supported by recovery of IC packs & sustained growth in key future
consumption packs (e.g. multipack cans +6.0%( 10 ) & +25.0% vs 2019)
◦ Revenue per unit case +6.0%( 2 , 5 ) (+9.0%( 11 ) vs 2019)
reflecting positive pack & channel mix driven by the recovery of AFH,
promotional optimisation & favourable headline price following the
successful implementation of dynamic headline pricing strategies across our
markets
Q4 Reported +10.0%; Q4 Fx-neutral +10.5%( 5 )
• Comparable volume +1.5%( 9 ) (flat vs 2019) despite disruption
related to a customer negotiation in the Home channel & cycling tougher
comparables
◦ AFH comparable volume: +5.5% (-4.5% vs 2019)
◦ Home comparable volume: -1.0% (+3.5% vs 2019)
• Revenue per unit case +9.0%( 2 , 5 ) (+14.0%( 11 ) vs 2019) driven
by favourable price & positive pack & channel mix driven by the
recovery of AFH
• Recent trading indicating no significant change in underlying
consumer demand
Operating profit
FY Reported +37.5%; Pro forma comparable +12.5%( 5 )
• Reported growth, in addition to the drivers below, reflects the
acquisition of Coca-Cola Amatil
• Pro forma cost of sales per unit case +9.0%( 2 , 5 ) reflecting
increased revenue per unit case driving higher concentrate costs, commodity
inflation & adverse mix, partially offset by the favourable recovery of
fixed manufacturing costs given higher volumes
• Comparable operating profit of €2,138m, +12.5%( 3 , 5 )
reflecting increased revenue & the benefit of ongoing efficiency
programmes (over 90% delivered of multi-year ~€375m programme)
• Comparable diluted EPS of €3.39, +13.0%( 3 , 5 ) (reported
+53.0%)
Dividend
• Record full year interim dividend per share of €1.68( 4 ),
+20.0% vs last year & +35.5% vs 2019, maintaining annualised dividend
payout ratio of approximately 50% (in line with our dividend policy). Equating
to total absolute dividend of €763m
Other
• Generated strong adjusted free cash flow( 12 ) of €1,805m
reflecting strong performance & working capital initiatives (net cashflows
from operating activities of €2,932m), supporting our guidance to return to
the top end of our target leverage range by the end of 2023 (Net debt:Adjusted
EBITDA( 1 ) of 2.5x-3x). At the end of 2022, Net debt:Adjusted EBITDA( 1 ) was
3.5x
• ROIC increased by 112bps( 3 ) on a pro forma basis to 9.1% driven
by the increase in comparable profit after tax & continued focus on
capital allocation
• Maximising system value creation with API:
◦ Reorientation of the portfolio to enable greater focus on
NARTD, RTD alcohol & spirits nearing completion:
▪ Previously announced plans to exit the production, sale &
distribution of Australia beer & apple cider products completed( 13 );
minimal EBIT impact
▪ Sale of NARTD own brands to The Coca-Cola Company for A$275m;
substantially complete; annualised EBIT impact of ~A$25m
◦ On 15 February 2023, CCEP completed the purchase of The
Coca-Cola Company's 29.4% minority share in our Indonesia business (Coca-Cola
Bottling Indonesia), increasing CCEP's ownership to 100% for a total
consideration of €282m (including significant cash acquired). Expect
transaction to be EPS accretive (minimal overall impact). This simplifies our
ownership structure & operations whilst demonstrating our commitment to
the future of this exciting market
FY22 SUSTAINABILITY HIGHLIGHTS
• Launched updated commitments & targets to include API
(announced in November 2022, link to presentation here
(https://ir.cocacolaep.com/static-files/69f82655-5d6c-4c06-8ab8-835b0d2be957)
)
• Retained inclusion on Carbon Disclosures Project's A Lists for
Climate & Water & continued to be recognised in MSCI ESG Leaders Index
• Closed 2022 at ~48%( 14 ) recycled plastic (rPET); Europe
~56%( 14 ) & API ~27%( 14 )
◦ Launched tethered closures on our PET bottles in 7 of our
markets
◦ Opened new industry partnership PET recycling facilities in
Australia & Indonesia
• Achieved 6 manufacturing sites as carbon neutral certified
• Retained inclusion on the Bloomberg Gender Equality index
FY23 GUIDANCE & OUTLOOK( 1 )
The outlook for FY23 reflects current market conditions. Unless stated
otherwise, guidance is on a comparable & Fx-neutral basis
Top line
• Revenue: comparable growth of 6-8% driven by price & mix
◦ Dynamic headline pricing & promotional optimisation across
our markets & annualisation of FY22 second headline pricing increases
Bottom line
• Cost of sales per unit case*: comparable growth of ~8%
◦ Expect commodity inflation to be up ~10% (previously
mid-teens)
◦ FY23 hedge coverage at ~85%
◦ Concentrate directly linked to revenue per unit case through
the incidence pricing model
◦ Low overall FX transactional exposure (<10%)
• Operating profit*: comparable growth of 6-7%
◦ Continued focus on delivering efficiency programmes &
optimising discretionary spend
Other
• Comparable effective tax rate: ~23%
• Free cash flow: at least €1.6bn
• Capital expenditure: 4-5% of revenue excluding leases
• Dividend payout ratio: c.50%( 15 )
* We expect the cost of sales per unit case increase to be weighted more to
the first half given the lower comparable from last year as previously
disclosed. Consequently we anticipate low single digit operating profit growth
in the first half of this year(
)
Fourth-quarter & Full-Year Revenue Performance by Geography( 1 )
Fourth-quarter Full Year
Fx-Neutral Fx-Neutral
€ million % change % change € million % change % change
Great Britain 795 13.0 % 16.0 % 3,088 18.0 % 17.5 %
France( 17 ) 504 11.0 % 11.0 % 2,089 15.0 % 15.0 %
Germany 653 7.5 % 7.5 % 2,682 15.0 % 15.0 %
Iberia( 18 ) 693 10.0 % 10.0 % 3,034 21.5 % 21.5 %
Northern Europe( 19 ) 613 10.5 % 12.5 % 2,636 13.0 % 13.5 %
Total Europe 3,258 10.5 % 11.5 % 13,529 17.0 % 16.5 %
API( 16 3 ) 1,037 9.5 % 8.0 % 3,791 17.0 % 12.0 %
Total CCEP ( 3 ) 4,295 10.0 % 10.5 % 17,320 17.0 % 15.5 %
API
• Q4 volume reflects continued trading momentum in Australia
& NZ. Increased mobility, strong trading & navigation of industry-wide
supply constraints in Australia & New Zealand, & a record Ramadan in
Indonesia supported solid FY volume growth.
• Coca-Cola No Sugar & Monster outperformed, with both Q4
& FY volume ahead of 2019.
• FY revenue/UC( 20 ) growth driven by favourable underlying
price, promotional optimisation in Australia, & positive pack &
channel mix.
France
• Q4 volume reflects strong momentum in the AFH channel &
solid trading in the Home channel. The rebound of the AFH channel, supported
by the return of tourism & favourable weather, & growth in the Home
channel supported solid FY volume growth in both channels versus 2019.
• Coca-Cola Zero Sugar, Fuze Tea & Monster outperformed
versus 2019 in both Q4 & FY.
• FY revenue/UC( 20 ) growth driven by positive channel &
pack mix led by the recovery of the AFH channel (e.g. small glass +55.5% &
small PET +25.0%) & favourable underlying price.
Germany
• Q4 volume reflects the ongoing recovery of the AFH channel
& disruption relating to a customer negotiation (now resolved). The
rebound of the AFH channel, favourable weather & solid performance in the
Home channel, supported FY overall volume growth versus 2019.
• Coca-Cola Zero Sugar, Fuze Tea & Monster outperformed
versus 2019 in both Q4 & FY.
• FY revenue/UC( 20 ) growth driven by favourable underlying
price, positive brand mix (e.g. Monster volume +23.0%) & positive pack
& channel mix led by the recovery of the AFH channel.
Great Britain
• Q4 volume reflects sustained trading momentum in the AFH
channel. The solid recovery of this channel, supported by favourable weather
& increased domestic tourism, & further growth in the Home channel
supported double-digit FY volume growth versus 2019.
• Coca-Cola Zero Sugar, Fanta, Monster & Dr Pepper
outperformed versus 2019 in both Q4 & FY.
• FY revenue/UC( 20 ) growth driven by favourable underlying
price & positive pack mix led by the recovery of the AFH channel (e.g.
small glass +20.5% & small PET +15.0%).
Iberia
• Q4 volume reflects the strong recovery of the AFH channel.
Continued trading momentum, the return of tourism & favourable weather
supported FY volume growth versus 2019 in this channel. Despite good trading
in the Home channel, overall FY volume versus 2019 was impacted by the
increased Spanish VAT rate.
• Coca-Cola Zero Sugar & Monster outperformed, with both Q4
& FY volume ahead of 2019.
• FY revenue/UC( 20 ) growth driven by favourable underlying
price & positive channel & pack mix led by the recovery of the AFH
channel (e.g. small glass +33.5% & small PET +29.5%).
Northern Europe
• Q4 volume reflects the ongoing recovery of the AFH channel.
Despite the late removal of restrictions, the rebound of the AFH channel &
further growth in the Home channel supported solid FY overall volume growth
versus 2019.
• Coca-Cola Zero Sugar, Monster & Fuze Tea outperformed
versus 2019 in both Q4 & FY.
• FY revenue/UC( 20 ) growth driven by favourable underlying
price & positive pack & channel mix led by the ongoing recovery of the
AFH channel (e.g. small glass +57.5% & small PET +16.0%).
___________________________
Note: All values are unaudited and all references to volumes are on a
comparable basis. All changes are versus 2021 equivalent period unless stated
otherwise
Fourth-quarter & Full-Year Volume Performance by Category( 1 , 3 , 9 )
Comparable volumes, changes versus equivalent 2021 period.
Fourth-quarter Full Year
% of Total % Change % of Total % Change( 5 )
Sparkling 85.5 % 2.0 % 84.5 % 9.0 %
Coca-Cola(TM) 60.0 % 2.5 % 58.5 % 8.0 %
Flavours, Mixers & Energy 25.5 % 1.0 % 26.0 % 11.5 %
Stills 14.5 % (1.0) % 15.5 % 11.5 %
Hydration 7.5 % 1.0 % 8.0 % 16.0 %
RTD Tea, RTD Coffee, Juices & Other( 21 ) 7.0 % (3.5) % 7.5 % 7.0 %
Total 100.0 % 1.5 % 100.0 % 9.5 %
Coca-Cola(TM)
• Q4 Original Taste +2.5%; Lights +2.5%
• FY Original Taste +9.5%; Lights +6.5% driven by the rebound of
the AFH channel & outperformance of Coca-Cola Zero Sugar (+10.0%)
• FY Coca-Cola Zero Sugar +23.5% growth vs 2019
• Coca-Cola Zero Sugar gained value share( 7 ) of Total Cola
+60bps
Flavours, Mixers & Energy
• Q4 Fanta +3.0%; Sprite -0.5%
• FY Fanta +15.5%; Sprite +11.5% driven by the rebound of the
AFH channel
• Q4 Energy +14.0% with continued momentum in both channels led
by Monster
• FY Energy +18.5%, (+60.5% vs 2019) supported by solid
distribution & exciting innovation including Juice & Ultra flavour
extensions
Hydration
• Q4 Water -4.0%; Sports +16.0%
• FY Water +13.5% reflecting its exposure to IC across both
channels, with the rebound of the AFH channel & increased mobility
• FY Sports +23.0% with growth in both Europe & API
RTD Tea, RTD Coffee, Juices & Other( 21 )
• Q4 Juice drinks -7.0% reflecting SKU rationalisation in
Indonesia
• Fuze Tea solid growth vs 2019 (Q4: +31.0%( 10 ); FY:
+39.5%( 10 )) & continuing to grow value share in Europe( 7 )
• Alcohol continued to deliver solid growth in Australia driven
by Spirits & RTD (Q4: +2.0%; FY: +11.0% vs 2019)
___________________________
Note: All references to volumes are on a comparable basis. All changes are
versus 2021 equivalent period unless stated otherwise
Conference Call (with presentation)
• 16 February 2023 at 12:00 GMT, 13:00 CET & 7:00 a.m.EST;
accessible via www.cocacolaep.com (https://www.cocacolaep.com/)
• Replay & transcript will be available at
www.cocacolaep.com (https://www.cocacolaep.com/) as soon as possible
Financial Calendar
• Integrated Report and form 20-F for 2022 publication: 17 March
2023
• First-quarter 2023 trading update: 25 April 2023
• Financial calendar available here:
https://ir.cocacolaep.com/financial-calendar/
(https://ir.cocacolaep.com/financial-calendar)
Contacts
Investor Relations
Sarah
Willett
Claire
Michael
Claire Copps
+44 7970 145 218
+44 7528 251 033
+44 7980 775 889
Media Relations
Shanna
Wendt
Nick
Carter
+44 7976 595 168
+44 7976 595 275
About CCEP
Coca-Cola Europacific Partners is one of the world's leading consumer goods
companies. We make, move and sell some of the world's most loved brands -
serving 600 million consumers and helping 1.75 million customers across 29
countries grow.
We combine the strength and scale of a large, multi-national business with an
expert, local knowledge of the customers we serve and communities we support.
The Company is currently listed on Euronext Amsterdam, the NASDAQ Global
Select Market, London Stock Exchange and on the Spanish Stock Exchanges,
trading under the symbol CCEP.
For more information about CCEP, please visit www.cocacolaep.com & follow
CCEP on Twitter at @CocaColaEP.
___________________________
1. Refer to 'Note Regarding the Presentation of Pro forma financial
information and Alternative Performance Measures' for further details and to
'Supplementary Financial Information' for a reconciliation of reported to
comparable and reported to pro forma comparable results; Change percentages
against prior year equivalent period unless stated otherwise
2. A unit case equals approximately 5.678 litres or 24 8-ounce
servings
3. Comparative pro forma figures as if the acquisition of Coca-Cola
Amatil Limited occurred at 1 January 2021 presented for illustrative purposes
only, it is not intended to estimate or predict future financial performance
or what actual results would have been. Acquisition completed on 10 May 2021.
Prepared on a basis consistent with CCEP accounting policies for the period 1
January to 10 May 2021. Refer to 'Note Regarding the Presentation of Pro forma
financial information and Alternative Performance Measures' for further
details
4. 27 April 2022 declared first half interim dividend of €0.56
dividend per share, paid 26 May 2022; 2 November 2022 declared second half
interim dividend of €1.12 dividend per share, paid 7 December 2022
5. Comparable & FX-neutral
6. External data source: Europe: NielsenIQ Strategic Planner FY22
data: Countries: GB, BE, DE, ES, FR, NL, NO, PT & SE data to 01.01.23,
API: NielsenIQ Global Track FY22 Data; Countries: NZ & IND data to
01.01.23; IRI FY22 data: Country; AUS data to 01.01.23
7. External data source: Combined NARTD (non-alcoholic ready to drink)
Nielseniq Data ES, PT, DE, FR, BE, NL, SE, NO to 01.01.23, GB to WE 31.12.22,
IND to WE 31.12.22, NZ to WE 01.01.23. IRI Data AUS to WE 01.01.23
8. External data source: Online Data is for available markets FY22 GB
to 01.Jan.23 (Retailer data+NielsenIQ), ES, FR, NL & SE to 01.Jan.23
(NielsenIQ), AUS to 01.Jan.23 (Retailer Data)
9. No selling day shift in Q4; FY 2022 adjusted for 1 less selling day
in Q1; FY 2022 pro forma volume +9.5%
10. Europe only
11. Management's best estimate
12. Adjusted Free Cash Flow excludes cash proceeds related to a
historical VAT dispute refund in Spain
13. As previously announced (Q1 2022 Trading update on 27 April 2022),
CCEP will retain ownership of Feral craft brewery
14. Unassured & provisional
15. Dividends subject to Board approval
16. Includes Australia, New Zealand & the Pacific Islands, Indonesia
& Papua New Guinea
17. Includes France & Monaco
18. Includes Spain, Portugal & Andorra
19. Includes Belgium, Luxembourg, the Netherlands, Norway, Sweden &
Iceland
20. Revenue per unit case
21. 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 and divestitures, 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 2021 Annual Report
on Form 20-F filed with the SEC on 15 March 2022 and as updated and
supplemented with the additional information set forth in the "Principal Risks
and Risk Factors" section of the H1 2022 Half-year Report filed with the SEC
on 4 August 2022;
2. the extent to which COVID-19 will continue to affect CCEP and the results
of its operations, financial condition and cash flows will depend on future
developments that are highly uncertain and cannot be predicted, including the
scope and duration of the pandemic and actions taken by governmental
authorities and other third parties in response to the pandemic;
3. risks and uncertainties relating to the global supply chain, including
impact from war in Ukraine, such as the risk that the business will not be
able to guarantee sufficient supply of raw materials, supplies, finished
goods, natural gas and oil and increased state-sponsored cyber risks;
4. risks and uncertainties relating to the global economy and/or a potential
recession in one or more countries, including risks from elevated inflation,
price increases, price elasticity, disposable income of consumers and
employees, pressure on and from suppliers, increased fraud, and the perception
or manifestation of a global economic downturn; and
5. 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.
Due to these risks, CCEP's actual future results, dividend payments, capital
and leverage ratios, growth, including growth in revenue, cost of sales per
unit case and operating profit, free cash flow, market share, tax rate,
efficiency savings, achievement of sustainability goals, including net zero
emissions, capital expenditures, the results of the acquisition of the
minority share of our Indonesian business, and the results of the integration
of the businesses following the acquisition of Coca-Cola Amatil, including
expected efficiency and combination savings, 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 Pro forma financial information and
Alternative Performance Measures
Pro forma financial information
Pro forma financial information has been provided in order to illustrate the
effects of the acquisition of Coca-Cola Amatil Limited (the Acquisition;
referred to as CCL pre acquisition, API post acquisition) on the results of
operations of CCEP in 2021 and allow for greater comparability of the results
of the combined group between periods. The pro forma financial information for
2021 has been prepared for illustrative purposes only and because of its
nature, addresses a hypothetical situation. It is based on information and
assumptions that CCEP believes are reasonable, including assumptions as at 1
January 2021 relating to acquisition accounting provisional fair values of API
assets and liabilities which are assumed to be equivalent to those that have
been provisionally determined as of the acquisition date and included in the
financial statements for the year ended 31 December 2021, on a constant
currency basis. The pro forma information for 2021 also assumes the interest
impact of additional debt financing reflecting the actual weighted average
interest rate for acquisition financing of c.0.40% for 2021.
The pro forma financial information does not intend to represent what CCEP's
results of operations actually would have been if the acquisition had been
completed on the dates indicated, nor does it intend to represent, predict or
estimate the results of operations for any future period or financial position
at any future date. In addition, it does not reflect ongoing cost savings that
CCEP expects to achieve as a result of the acquisition or the costs necessary
to achieve these cost savings or synergies. As pro forma information is
prepared to illustrate retrospectively the effects of future transactions,
there are limitations that are inherent to the nature of pro forma
information. As such, had the acquisition taken place on the dates assumed,
the actual effects would not necessarily have been the same as those presented
in the pro forma financial information contained herein.
Alternative Performance Measures
We use certain alternative performance measures (non-GAAP performance
measures) to make financial, operating and planning decisions and to evaluate
and report performance. We believe these measures provide useful information
to investors and as such, where clearly identified, we have included certain
alternative performance measures in this document to allow investors to better
analyse our business performance and allow for greater comparability. To do
so, we have excluded items affecting the comparability of period-over-period
financial performance as described below. The alternative performance measures
included herein should be read in conjunction with and do not replace the
directly reconcilable GAAP measures.
For purposes of this document, the following terms are defined:
''As reported'' are results extracted from our consolidated financial
statements.
''Pro forma'' includes the results of CCEP and API as if the Acquisition had
occurred at the beginning of 2021, including acquisition accounting
adjustments relating to provisional fair values. Pro forma also includes
impact of the additional debt financing costs incurred by CCEP in connection
with the Acquisition for all periods presented.
"Comparable'' is defined as results excluding items impacting comparability,
which include restructuring charges, acquisition and integration related
costs, inventory fair value step up related to acquisition accounting, the
impact of the closure of the GB defined benefit pension scheme, net impact
related to European flooding, income arising from the favourable court ruling
pertaining to the ownership of certain mineral rights in Australia, impact of
a defined benefit plan amendment arising from legislative changes in respect
of the minimum retirement age and net tax items relating to rate and law
changes. Comparable volume is also adjusted for selling days.
''Pro forma Comparable'' is defined as the pro forma results excluding items
impacting comparability, as described above.
''Fx-neutral'' 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 free cash flow'' is defined as Free cash flow (as defined above)
adjusted for items that are not reasonably likely to recur within two years,
nor have occurred within the prior two years. Adjusted free cash flow is not
intended to represent residual cash flow available for discretionary
expenditures. Refer to page 19 for additional information.
''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.
''ROIC" or "Return on invested capital" is defined as comparable operating
profit after tax attributable to shareholders divided by the average of
opening and closing invested capital for the year. Invested capital is
calculated as the addition of borrowings and equity attributable to
shareholders less cash and cash equivalents and short term investments. ROIC
is used as a measure of capital efficiency and reflects how well the Group
generates comparable operating profit relative to the capital invested in the
business.
''Dividend payout ratio'' is defined as dividends as a proportion of
comparable profit after tax.
Additionally, within this document, we provide certain forward-looking
non-GAAP financial Information, which management uses for planning and
measuring performance. We are not able to reconcile forward-looking non-GAAP
measures to reported measures without unreasonable efforts because it is not
possible to predict with a reasonable degree of certainty the actual impact or
exact timing of items that may impact comparability throughout year.
Unless otherwise stated, percent amounts are rounded to the nearest 0.5%.
Supplementary Financial Information - Income Statement - Reported to
Comparable
The following provides a summary reconciliation of CCEP's reported and
comparable results for the full-year ended 31 December 2022 and 31 December
2021:
Full year 2022 As Reported Items impacting Comparability Comparable
Unaudited, in millions of € except per share data which is calculated prior CCEP Restructuring Charges ( 1 ) Acquisition and Integration related costs ( 2 ) European flooding ( 3 ) Defined benefit plan amendment ( 4 ) Coal royalties ( 5 ) CCEP
to rounding
Revenue 17,320 - - - - - 17,320
Cost of sales 11,096 (19) - 11 - - 11,088
Gross profit 6,224 19 - (11) - - 6,232
Operating expenses 4,234 (144) (3) - 7 - 4,094
Other income 96 - - - - (96) -
Operating profit 2,086 163 3 (11) (7) (96) 2,138
Total finance costs, net 114 - - - - - 114
Non-operating items 15 - - - - - 15
Profit before taxes 1,957 163 3 (11) (7) (96) 2,009
Taxes 436 42 - (3) (1) (29) 445
Profit after taxes 1,521 121 3 (8) (6) (67) 1,564
Attributable to:
Shareholders 1,508 121 3 (8) (6) (67) 1,551
Non-controlling interest 13 - - - - - 13
Profit after taxes 1,521 121 3 (8) (6) (67) 1,564
Diluted earnings per share (€) 3.29 0.27 0.01 (0.02) (0.01) (0.15) 3.39
Full year 2021 As Reported Items impacting Comparability Comparable
Unaudited, in millions of € except share data which is calculated prior to CCEP Restructuring Charges ( 1 ) DB plan closure ( 6 ) Total Acquisition Related Costs ( 2 ) Inventory step up costs ( 7 ) European flooding( 3 ) Net Tax ( 8 ) CCEP
rounding
Revenue 13,763 - - - - - - 13,763
Cost of sales 8,677 (17) 3 - (48) (9) - 8,606
Gross profit 5,086 17 (3) - 48 9 - 5,157
Operating expenses 3,570 (136) 6 (49) - (6) - 3,385
Operating profit 1,516 153 (9) 49 48 15 - 1,772
Total finance costs, net 129 - - (4) - - - 125
Non-operating items 5 - - - - - - 5
Profit before taxes 1,382 153 (9) 53 48 15 - 1,642
Taxes 394 43 4 10 13 3 (127) 340
Profit after taxes 988 110 (13) 43 35 12 127 1,302
Attributable to:
Shareholders 982 109 (13) 43 34 12 127 1,294
Non-controlling interest 6 1 - - 1 - - 8
Profit after taxes 988 110 (13) 43 35 12 127 1,302
Diluted earnings per share (€) 2.15 0.24 (0.03) 0.09 0.07 0.03 0.28 2.83
__________________________
( 1 ) Amounts represent restructuring charges related to business
transformation activities.
( 2 ) Amounts represent cost associated with the acquisition and integration
of CCL.
( 3 ) Amounts represent the incremental expense incurred offset/partially
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 the impact of a plan amendment arising from
legislative changes in respect of the minimum retirement age.
( 5 ) Amounts represent other income arising from the favourable court ruling
pertaining to the ownership of certain mineral rights in Australia.
( 6 ) Amounts represent the impact of the closure of the GB defined benefit
pension scheme to future benefits accrual on 31 March 2021.
( 7 ) Amounts represent the non-recurring impact of the fair value step-up of
API finished goods.
( 8 ) Amounts include the deferred tax impact related to income tax rate and
law changes.
Supplementary Financial Information - Income Statement - Reported to Pro forma
Comparable
The following provides a summary reconciliation of CCEP's reported and pro
forma comparable results for the full-year ended 31 December 2021:
Full Year 2021 As Reported Pro forma adjustments CCL ( A ) Transaction accounting adjustments ( B ) Pro forma Items impacting Comparability ( C ) Pro forma Comparable
Combined
Unaudited, in millions of € except share data which is calculated prior to CCEP CCEP CCEP
rounding
Revenue 13,763 1,056 - 14,819 - 14,819
Cost of sales 8,677 616 - 9,293 (71) 9,222
Gross profit 5,086 440 - 5,526 71 5,597
Operating expenses 3,570 323 68 3,961 (250) 3,711
Operating profit 1,516 117 (68) 1,565 321 1,886
Total finance costs, net 129 12 9 150 (4) 146
Non-operating items 5 (1) - 4 - 4
Profit before taxes 1,382 106 (77) 1,411 325 1,736
Taxes 394 29 (20) 403 (36) 367
Profit after taxes 988 77 (57) 1,008 361 1,369
Attributable to:
Shareholders 982 74 (58) 998 359 1,357
Non-controlling interest 6 3 1 10 2 12
Profit after taxes 988 77 (57) 1,008 361 1,369
Diluted earnings per share (€) 2.15 0.16 (0.13) 2.18 0.79 2.97
__________________________
( A ) Amounts represent adjustments to include CCL financial results prepared
on a basis consistent with CCEP accounting policies, as if the Acquisition had
occurred on 1 January 2021 and excludes CCL acquisition and integration
related costs.
( B ) Amounts represent transaction accounting adjustments for the period 1
January to 10 May as if the Acquisition had occurred on 1 January 2021. These
include the depreciation and amortisation impact relating to provisional fair
values for intangibles and property plant and equipment, the interest impact
of additional debt financing reflecting the actual weighted average interest
rate for Acquisition financing of c.0.40% and the inclusion of acquisition and
integration related costs incurred by CCL prior to the Acquisition.
( C ) Items impacting comparability represents amounts included within pro
forma Combined CCEP affecting the comparability of CCEP's year-over-year
financial performance and are set out in the following table:
Full year 2021 Items impacting Comparability
Unaudited, in millions of € except share data which is calculated prior to Restructuring Charges ( 1 ) Defined benefit plan closure( 2 ) Acquisition and Integration related costs ( 3 ) Inventory step up costs ( 4 ) European flooding( 5 ) Net Tax ( 6 ) Other ( 7 ) Total items impacting Comparability
rounding
Revenue - - - - - - - -
Cost of sales (17) 3 - (48) (9) - - (71)
Gross profit 17 (3) - 48 9 - - 71
Operating expenses (136) 6 (110) - (6) - (4) (250)
Operating profit 153 (9) 110 48 15 - 4 321
Total finance costs, net - - (4) - - - - (4)
Non-operating items - - - - - - - -
Profit before taxes 153 (9) 114 48 15 - 4 325
Taxes 43 4 27 13 3 (127) 1 (36)
Profit after taxes 110 (13) 87 35 12 127 3 361
Attributable to:
Shareholders 109 (13) 87 34 12 127 3 359
Non-controlling interest 1 - - 1 - - 2
Profit after taxes 110 (13) 87 35 12 127 3 361
Diluted earnings per share (€) 0.24 (0.03) 0.19 0.07 0.03 0.28 0.01 0.79
_________________________
( 1 ) Amounts represent restructuring charges related to business
transformation activities.
( 2 ) Amounts represent the impact of the closure of the GB defined benefit
pension scheme to future benefits accrual on 31 March 2021.
( 3 ) Amounts represent cost associated with the acquisition and integration
of CCL.
( 4 ) Amounts represent the non-recurring impact of the provisional fair value
step-up of API finished goods. For 2021, these charges are included within the
As Reported results.
( 5 ) Amounts represent the incremental net costs incurred as a result of the
July 2021 flooding events, which impacted the operations of our
manufacturing facilities in Chaudfontaine and Bad Neuenahr.
( 6 ) Amounts include the deferred tax impact related to income tax rate and
law changes.
( 7 ) Amounts represent charges incurred prior to Acquisition classified as
non-trading items by CCL which are not expected to recur.
(
)
Supplemental Financial Information - Operating Profit - Reported to Comparable
Revenue
Revenue CCEP Fourth-Quarter Ended Year Ended
In millions of €, except per case data which is calculated prior to
rounding. FX impact calculated by recasting current year results at prior year
rates.
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
As reported 4,295 3,896 10.0 % 17,320 13,763 26.0 %
Adjust: Impact of fx changes 19 n/a n/a (172) n/a n/a
Fx-neutral 4,314 3,896 10.5 % 17,148 13,763 24.5 %
Revenue per unit case 5.43 4.99 9.0 % 5.20 4.91 6.0 %
Revenue Europe Fourth-Quarter Ended Year Ended
In millions of €, except per case data which is calculated prior to
rounding. FX impact calculated by recasting current year results at prior year
rates.
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
As reported 3,258 2,950 10.5 % 13,529 11,584 17.0 %
Adjust: Impact of fx changes 32 n/a n/a (6) n/a n/a
Fx-neutral 3,290 2,950 11.5 % 13,523 11,584 16.5 %
Revenue per unit case 5.31 4.91 8.0 % 5.14 4.87 5.5 %
Revenue API Fourth-Quarter Ended Year Ended
In millions of €, except per case data which is calculated prior to
rounding. FX impact calculated by recasting current year results at prior year
rates.
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
As reported 1,037 946 9.5 % 3,791 2,179 74.0 %
Adjust: Impact of fx changes (13) n/a n/a (166) n/a n/a
Fx-neutral 1,024 946 8.0 % 3,625 2,179 66.5 %
Revenue per unit case 5.86 5.25 11.5 % 5.42 5.12 6.0 %
Revenue by Geography Year ended 31 December 2022
In millions of €
As reported Reported Fx-Neutral
% change % change
Great Britain 3,088 18.0 % 17.5 %
Germany 2,682 15.0 % 15.0 %
Iberia( 1 ) 3,034 21.5 % 21.5 %
France( 2 ) 2,089 15.0 % 15.0 %
Belgium and Luxembourg 1,042 12.5 % 12.5 %
Netherlands 682 22.5 % 22.5 %
Norway 404 3.5 % 2.5 %
Sweden 421 12.5 % 17.5 %
Iceland 87 10.0 % 4.0 %
Total Europe 13,529 17.0 % 16.5 %
Australia 2,339 72.0 % 65.5 %
New Zealand and Pacific Islands 649 72.0 % 69.5 %
Indonesia and Papua New Guinea 803 81.5 % 65.5 %
Total API 3,791 74.0 % 66.5 %
Total CCEP 17,320 26.0 % 24.5 %
( 1 ) Iberia refers to Spain, Portugal & Andorra.
( 2 ) France refers to continental France & Monaco.
Volume
Comparable Volume - Selling Day Shift CCEP Fourth-Quarter Ended Year Ended
In millions of unit cases, prior period volume recast using current year
selling days
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
Volume 794 781 1.5 % 3,300 2,804 17.5 %
Impact of selling day shift n/a - n/a n/a (7) n/a
Comparable volume - Selling Day Shift adjusted 794 781 1.5 % 3,300 2,797 18.0 %
Comparable Volume - Selling Day Shift Europe Fourth-Quarter Ended Year Ended
In millions of unit cases, prior period volume recast using current year
selling days
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
Volume 619 601 3.0 % 2,631 2,379 10.5 %
Impact of selling day shift n/a - n/a n/a (7) n/a
Comparable volume - Selling Day Shift adjusted 619 601 3.0 % 2,631 2,372 11.0 %
Comparable Volume - Selling Day Shift API Fourth-Quarter Ended Year Ended
In millions of unit cases, prior period volume recast using current year
selling days
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
Volume 175 180 (3.0) % 669 425 57.5 %
Impact of selling day shift n/a - n/a n/a - n/a
Comparable volume - Selling Day Shift adjusted 175 180 (3.0) % 669 425 57.5 %
Cost of Sales
Cost of Sales Year Ended
In millions of €, except per case data which is calculated prior to
rounding. FX impact calculated by recasting current year results at prior year
rates.
31 December 2022 31 December 2021 % Change
As reported 11,096 8,677 28.0 %
Adjust: Total items impacting comparability (8) (71) n/a
Comparable 11,088 8,606 29.0 %
Adjust: Impact of fx changes (107) n/a n/a
Comparable & fx-neutral 10,981 8,606 27.5 %
Cost of sales per unit case 3.33 3.07 8.5 %
For the year ending 31 December 2022, reported cost of sales were €11,096
million, up 28.0% versus 2021, reflecting the full year impact of the API
operations acquired in 2021, higher volumes and increased cost of sales per
case.
Comparable cost of sales for the same period were €11,088 million, up 29.0%
versus 2021. Cost of sales per unit case increased by 8.5% on a comparable and
fx-neutral basis, reflecting increased revenue per unit case driving higher
concentrate costs, commodity inflation & adverse mix, partially offset by
the favourable recovery of fixed manufacturing costs as a result of higher
volumes.
Operating expenses
Operating Expenses Year Ended
In millions of €. FX impact calculated by recasting current year results at
prior year rates.
31 December 2022 31 December 2021 % Change
As reported 4,234 3,570 18.5 %
Adjust: Total items impacting comparability (140) (185) n/a
Comparable 4,094 3,385 21.0 %
Adjust: Impact of fx changes (45) n/a n/a
Comparable & fx-neutral 4,049 3,385 19.5 %
For the year ending 31 December 2022, reported operating expenses were
€4,234 million, up 18.5% versus 2021.
Comparable operating expenses were €4,094 million for the same period, up
21.0% versus 2021, reflecting the full year impact of the API operations
acquired in 2021, higher volumes and inflation, partially offset by the
benefit of ongoing efficiency programmes and our continuous efforts on
discretionary spend optimisation.
Restructuring charges of €144 million were recognised within reported
operating expenses for the year ending 31 December 2022, which are primarily
attributable to €82 million of expense recognised in connection with the
transformation of the full service vending operations and related initiatives
in Germany.
Restructuring charges of €136 million were recognised within reported
operating expenses for the year ending 31 December 2021, related principally
to the continuation of the Accelerate Competitiveness programme announced in
October 2020. This programme relates to initiatives across Europe aimed at
improving productivity through the use of technology enabled solutions.
Restructuring charges in 2021 include €51 million of severance costs related
to productivity initiatives within the commercial organisation in Iberia.
Operating profit
Operating Profit CCEP Year Ended
In millions of €. FX impact calculated by recasting current year results at
prior year rates.
31 December 2022 31 December 2021 % Change
As reported 2,086 1,516 37.5 %
Adjust: Total items impacting comparability 52 256 n/a
Comparable 2,138 1,772 20.5 %
Adjust: Impact of fx changes (20) n/a n/a
Comparable & fx-neutral 2,118 1,772 19.5 %
Operating Profit Europe Year Ended
In millions of €. FX impact calculated by recasting current year results at
prior year rates.
31 December 2022 31 December 2021 % Change
As reported 1,529 1,298 18.0 %
Adjust: Total items impacting comparability 141 202 n/a
Comparable 1,670 1,500 11.5 %
Adjust: Impact of fx changes - n/a n/a
Comparable & fx-neutral 1,670 1,500 11.5 %
Operating Profit API Year Ended
In millions of €. FX impact calculated by recasting current year results at
prior year rates.
31 December 2022 31 December 2021 % Change
As reported 557 218 155.5 %
Adjust: Total items impacting comparability (89) 54 n/a
Comparable 468 272 72.0 %
Adjust: Impact of fx changes (20) - n/a
Comparable & fx-neutral 448 272 64.5 %
Supplemental Financial Information - Operating Profit - Reported to Pro forma
Comparable
All pro forma measures presented below relate only to the full year ended 31
December 2021.
Revenue
Pro forma Revenue CCEP Fourth-Quarter Ended Year Ended
In millions of €, except per case data which is calculated prior to
rounding. FX impact calculated by recasting current year results at prior year
rates.
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
As reported and comparable 4,295 3,896 10.0 % 17,320 13,763 26.0 %
Add: Pro forma adjustments - - n/a 1,056 n/a
Pro forma Comparable 4,295 3,896 10.0 % 17,320 14,819 17.0 %
Adjust: Impact of fx changes 19 n/a n/a (172) n/a n/a
Pro forma Comparable and fx-neutral 4,314 3,896 10.5 % 17,148 14,819 15.5 %
Pro forma Revenue per unit case 5.43 4.99 9.0 % 5.20 4.91 6.0 %
Pro forma Revenue API Fourth-Quarter Ended Year Ended
In millions of €, except per case data which is calculated prior to
rounding. FX impact calculated by recasting current year results at prior year
rates.
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
As reported and comparable 1,037 946 9.5 % 3,791 2,179 74.0 %
Add: Pro forma adjustments - - n/a - 1,056 n/a
Pro forma Comparable 1,037 946 9.5 % 3,791 3,235 17.0 %
Adjust: Impact of fx changes (13) n/a n/a (166) n/a n/a
Pro forma Comparable and fx-neutral 1,024 946 8.0 % 3,625 3,235 12.0 %
Pro forma Revenue per unit case 5.86 5.25 11.5 % 5.42 5.05 7.5 %
Pro forma revenue by Geography Fourth-Quarter Ended 31 December 2022 Year ended 31 December 2022
In millions of €
Pro forma comparable Pro forma comparable % change Pro forma Fx-Neutral Pro forma comparable Pro forma comparable % change Pro forma Fx-Neutral
% change % change
Europe 3,258 10.5 % 11.5 % 13,529 17.0 % 16.5 %
Australia 654 11.0 % 10.0 % 2,339 15.5 % 11.0 %
New Zealand and Pacific Islands 193 11.5 % 14.0 % 649 17.0 % 15.0 %
Indonesia and Papua New Guinea 190 4.0 % (2.0) % 803 23.0 % 12.5 %
Total API 1,037 9.5 % 8.0 % 3,791 17.0 % 12.0 %
Total CCEP 4,295 10.0 % 10.5 % 17,320 17.0 % 15.5 %
Volume
Comparable Volume - Selling Day Shift CCEP Fourth-Quarter Ended Year Ended
In millions of unit cases, prior period volume recast using current year
selling days
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
Volume 794 781 1.5 % 3,300 2,804 17.5 %
Impact of selling day shift n/a - n/a n/a (7) n/a
Comparable volume - Selling Day Shift adjusted 794 781 1.5 % 3,300 2,797 18.0 %
Pro forma impact( 1 ) - - n/a - 212 n/a
Pro forma comparable volume 794 781 1.5 % 3,300 3,009 9.5 %
Comparable Volume - Selling Day Shift API Fourth-Quarter Ended Year Ended
In millions of unit cases, prior period volume recast using current year
selling days
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
Volume 175 180 (3.0) % 669 425 57.5 %
Impact of selling day shift n/a - n/a n/a - n/a
Comparable volume - Selling Day Shift adjusted 175 180 (3.0) % 669 425 57.5 %
Pro forma impact( 1 ) - - n/a - 212 n/a
Pro forma comparable volume 175 180 (3.0) % 669 637 5.0 %
( 1 ) Pro forma API volume for the year ended 31 December 2021 is 640 million
unit cases. Including the impact of the Q1 selling day shift (3 million unit
cases), pro forma comparable API volume is 637 million unit cases.
Pro forma Comparable Volume by Brand Category CCEP Fourth-Quarter Ended Year Ended
Adjusted for selling day shift
31 December 2022 31 December 2021 % Change 31 December 2022 31 December 2021 % Change
% of Total % of Total % of Total % of Total
Sparkling 85.5 % 85.0 % 2.0 % 84.5 % 84.5 % 9.0 %
Coca-Cola(TM) 60.0 % 59.5 % 2.5 % 58.5 % 59.0 % 8.0 %
Flavours, Mixers & Energy 25.5 % 25.5 % 1.0 % 26.0 % 25.5 % 11.5 %
Stills 14.5 % 15.0 % (1.0) % 15.5 % 15.5 % 11.5 %
Hydration 7.5 % 7.5 % 1.0 % 8.0 % 7.5 % 16.0 %
RTD Tea, RTD Coffee, Juices & Other( 1 ) 7.0 % 7.5 % (3.5) % 7.5 % 8.0 % 7.0 %
Total 100.0% 100.0% 1.5% 100.0% 100.0% 9.5%
________________________
( 1 ) RTD refers to Ready-To-Drink.
Cost of Sales
Pro forma Cost of Sales Year Ended
In millions of €, except per case data which is calculated prior to
rounding. FX impact calculated by recasting current year results at prior year
rates.
31 December 2022 31 December 2021 % Change
As reported 11,096 8,677 28.0 %
Add: Pro forma adjustments - 616 n/a
Adjust: Total items impacting comparability (8) (71)
Pro forma Comparable 11,088 9,222 20.0 %
Adjust: Impact of fx changes (107) n/a n/a
Pro forma Comparable & fx-neutral 10,981 9,222 19.0 %
Cost of sales per unit case 3.33 3.05 9.0 %
Comparable cost of sales for the year ending 31 December 2022 were €11,088
million, up 20.0% versus 2021 on a pro forma comparable basis. Cost of sales
per unit case increased by 9.0% on a pro forma comparable and fx-neutral
basis, driven by an increase in concentrate in line with our incidence model
reflecting the improvement in revenue per unit case. There was also upward
pressure on commodities and adverse mix, partially offset by the favourable
recovery of fixed manufacturing costs given higher volumes.
Operating Expenses
Pro forma Operating Expenses Year Ended
In millions of €. FX impact calculated by recasting current year results at
prior year rates.
31 December 2022 31 December 2021 % Change
As reported 4,234 3,570 18.5 %
Add: Pro forma adjustments - 323 n/a
Adjust: Transaction accounting adjustments - 68
Adjust: Total items impacting comparability (140) (250)
Pro forma Comparable 4,094 3,711 10.5 %
Adjust: Impact of fx changes (45) n/a n/a
Pro forma Comparable & fx-neutral 4,049 3,711 9.0 %
Comparable operating expenses for the year ending 31 December 2022 were
€4,094 million, up 10.5% versus 2021 on a pro forma comparable basis,
reflecting higher volumes and inflation, partially offset by the benefit of
on-going efficiency programmes and our continuous efforts on discretionary
spend optimisation in areas such as trade marketing, travel and meetings.
Operating Profit
Pro forma Operating Profit CCEP Year Ended
In millions of €. FX impact calculated by recasting current year results at
prior year rates.
31 December 2022 31 December 2021 % Change
As reported 2,086 1,516 37.5 %
Add: Pro forma adjustments - 117 n/a
Adjust: Transaction accounting adjustments - (68)
Adjust: Total items impacting comparability 52 321
Pro forma Comparable 2,138 1,886 13.5 %
Adjust: Impact of fx changes (20) n/a n/a
Pro forma Comparable & fx-neutral 2,118 1,886 12.5 %
Pro forma Operating Profit API Year Ended
In millions of €. FX impact calculated by recasting current year results at
prior year rates.
31 December 2022 31 December 2021 % Change
As reported 557 218 155.5 %
Add: Pro forma adjustments - 117 n/a
Adjust: Transaction accounting adjustments - (68)
Adjust: Total items impacting comparability (89) 119
Pro forma Comparable 468 386 21.0 %
Adjust: Impact of fx changes (20) n/a n/a
Pro forma Comparable & fx-neutral 448 386 16.0 %
Supplemental Financial Information - Effective Tax Rate
The reported effective tax rate was 22% and 29% for the year ended 31 December
2022 and 31 December 2021, respectively.
The decrease in the reported effective tax rate to 22% in 2022 (2021: 29%) is
largely due to the remeasurement of deferred tax positions following the
enactment of tax rate changes in the United Kingdom, Netherlands and Indonesia
in the prior period.
The comparable effective tax rate was 22% and 21% for the years ended 31
December 2022 and 31 December 2021, respectively.
Supplemental Financial Information - Free Cash Flow
Free Cash Flow Year Ended
In millions of €
31 December 2022 31 December 2021
Net cash flows from operating activities 2,932 2,117
Less: Purchases of property, plant and equipment (500) (349)
Less: Purchases of capitalised software (103) (97)
Add: Proceeds from sales of property, plant and equipment 11 25
Less: Payments of principal on lease obligations (153) (139)
Less: Interest paid, net (130) (97)
Free Cash Flow ( 1 ) 2,057 1,460
Less: Proceeds received from Spanish VAT dispute (252) -
Adjusted Free Cash Flow ( 2 ) 1,805 1,460
( 1 ) If the Acquisition had occurred on 1 January 2021, free cash flow for
the year ended 31 December 2021 is estimated to be €85 million lower.
( 2 ) In connection with the ongoing dispute in Spain regarding the refund of
historical VAT amounts related to the period 2013-2016, during the year ended
31 December 2022, €252 million of cash proceeds were received from the
regional tax authorities of Bizkaia (Basque Region). These proceeds are
included within Group's net cash flows from operating activities for the year.
Given the unusual nature of this item, and to allow for better period over
period comparability of our free cash flow measure, adjusted free cash flow
excludes the cash proceeds received from the Bizkaia tax authorities during
this year.
( )
Supplemental Financial Information - Borrowings
Net Debt As at Credit Ratings
In millions of € As of 16 February 2023
31 December 2022 31 December 2021 Moody's Fitch Ratings
Total borrowings 11,907 13,140 Long-term rating Baa1 BBB+
Fair value of hedges related to borrowings( 1 ) (83) (110) Outlook Stable Stable
Other financial assets/liabilities( 1 ) 25 42 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
and may be subject to revision or withdrawal at any time.
Adjusted total borrowings( 1 ) 11,849 13,072
Less: cash and cash equivalents( 2 ) (1,387) (1,407)
Less: short term investments( 3 ) (256) (58)
Net debt 10,206 11,607
___________________
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 31 December 2022 and 31 December 2021
includes €102 million and €45 million respectively of cash in Papua New
Guinea Kina. 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 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 term investments as
at 31 December 2022 and 31 December 2021 includes €49 million and €44
million respectively of assets in Papua New Guinea Kina, subject to the same
currency controls outlined above.
( )
Supplemental Financial Information - Adjusted EBITDA
( )
Adjusted EBITDA Year Ended
In millions of €
31 December 2022 31 December 2021
Reported profit after tax 1,521 988
Taxes 436 394
Finance costs, net 114 129
Non-operating items 15 5
Reported operating profit 2,086 1,516
Depreciation and amortisation( 1 ) 816 782
Reported EBITDA 2,902 2,298
Items impacting comparability
Restructuring charges( 2 ) 119 97
Defined benefit plan closure( 3 ) - (9)
Acquisition and Integration related costs( 4 ) 3 49
Inventory step up costs( 5 ) - 48
European flooding( 6 ) (11) 15
Defined benefit plan amendment( 7 ) (7) -
Coal royalties( 8 ) (96) -
Adjusted EBITDA 2,910 2,498
Net debt to EBITDA 3.5 5.1
Net debt to adjusted EBITDA 3.5 4.7
______________________
( 1 ) Includes the depreciation and amortisation impact relating to
provisional fair values for intangibles and property plant and equipment as at
31 December 2021.
( 2 ) Amounts represent restructuring charges related to business
transformation activities, excluding accelerated depreciation included in the
depreciation and amortisation line.
( 3 ) Amounts represent the impact of the closure of the GB defined benefit
pension scheme to future benefits accrual on 31 March 2021.
( 4 ) Amounts represent cost associated with the acquisition and integration
of CCL.
( 5 ) Amounts represent the non-recurring impact of the fair value step-up of
API finished goods.
( 6 ) Amounts represent the incremental expense incurred offset/partially
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.
( 7 ) Amounts represent the impact of a plan amendment arising from
legislative changes in respect of the minimum retirement age.
( 8 ) Amounts represent other income arising from the favourable court ruling
pertaining to the ownership of certain mineral rights in Australia.
( )
( )
Pro forma measures presented below relate only to 2021.
Pro forma Adjusted EBITDA Year Ended
In millions of €
31 December 2022 31 December 2021
Reported profit after tax 1,521 988
Taxes 436 394
Finance costs, net 114 129
Non-operating items 15 5
Reported operating profit 2,086 1,516
Pro forma adjustments CCL( 1 ) - 117
Transaction accounting adjustments( 2 ) - (68)
Pro forma Combined operating profit 1,565
Depreciation and amortisation( 3 ) 816 858
Reported EBITDA 2,902 2,423
Items impacting comparability
Restructuring charges( 4 ) 119 97
Defined benefit plan closure ( 5 ) - (9)
Acquisition and Integration related costs( 6 ) 3 110
Inventory step up costs( 7 ) - 48
European flooding( 8 ) (11) 15
Defined benefit plan amendment( 9 ) (7) -
Coal royalties( 10 ) (96) -
Other( 11 ) - 4
Pro forma adjusted EBITDA 2,910 2,688
Net debt to Pro forma adjusted EBITDA 3.5 4.3
______________________
( 1 ) Amounts represent adjustments to include CCL financial results prepared
on a basis consistent with CCEP accounting policies, as if the Acquisition had
occurred on 1 January 2021 and excludes CCL acquisition and integration
related costs.
( 2 ) Amounts represent transaction accounting adjustments for the period 1
January to 10 May as if the Acquisition had occurred on 1 January 2021.
( 3 ) Includes the depreciation and amortisation impact relating to
provisional fair values for intangibles and property plant and equipment as if
the Acquisition had occurred on 1 January 2021.
( 4 ) Amounts represent restructuring charges related to business
transformation activities, excluding accelerated depreciation included in the
depreciation and amortisation line.
( 5 ) Amounts represent the impact of the closure of the GB defined benefit
pension scheme to future benefits accrual on 31 March 2021.
( 6 ) Amounts represent costs associated with the acquisition and integration
of CCL.
( 7 ) Amounts represent the non-recurring impact of the fair value step-up of
API finished goods.
( 8 ) Amounts represent the incremental expense incurred offset/partially
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.
( 9 ) Amounts represent the impact of a plan amendment arising from
legislative changes in respect of the minimum retirement age.
( 10 ) Amounts represent other income arising from the favourable court ruling
pertaining to the ownership of certain mineral rights in Australia
( 11 ) Amounts represent charges incurred prior to Acquisition classified as
non-trading items by CCL which are not expected to recur.
( )
( )
( )
Supplemental Financial Information - Return on invested capital
( )
ROIC Year Ended
In millions of €
31 December 2022 31 December 2021 31 December 2021
Pro forma( 3 )
Comparable operating profit( 1 ) 2,138 1,886 1,772
Taxes( 2 ) (474) (399) (367)
Non-controlling interest (13) (12) (8)
Comparable operating profit after tax attributable to shareholders 1,651 1,475 1,397
Opening borrowings less cash and cash equivalents and short term 11,675 12,498 5,664
investments( 3 )
Opening equity attributable to shareholders( 3 ) 7,033 5,911 6,025
Opening Invested Capital 18,708 18,409 11,689
Closing borrowings less cash and cash equivalents and short term investments 10,264 11,675 11,675
Closing equity attributable to shareholders 7,447 7,033 7,033
Closing Invested Capital 17,711 18,708 18,708
Average Invested Capital 18,210 18,559 15,199
ROIC 9.1 % 8.0 % 9.2 %
____________________
( 1 ) Reconciliation from reported operating profit to comparable operating
profit and to pro forma comparable operating profit is included in
Supplementary Financial Information - Income Statement section.
( 2 ) Tax rate used is the comparable effective tax rate for the year (2022:
22.2%; 2021 pro forma: 21.1%; 2021: 20.7%).
( 3 ) In light of the CCL acquisition and in order to provide investors with a
more meaningful measure of capital efficiency for 2021, a pro forma ROIC
measure has been presented. To derive this pro forma measure, opening
borrowings, cash and cash equivalents and short term investments, and equity
attributable to shareholders have been extracted from the unaudited pro forma
condensed combined statement of financial position as of 31 December 2020
prepared in connection with proposed financing of the CCL acquisition and
furnished on Form 6-K on 20 April 2021, and adjusted for any associated
acquisition accounting fair value adjustments in the period through to 31
December 2021. These adjustments include an increase in borrowings of €38
million and a decrease in equity attributable to shareholders of €18
million.
( )
( )
( )
Coca-Cola Europacific Partners plc
Consolidated Income Statement (Unaudited)
Year Ended
31 December 2022 31 December 2021
€ million € million
Revenue 17,320 13,763
Cost of sales (11,096) (8,677)
Gross profit 6,224 5,086
Selling and distribution expenses (2,984) (2,496)
Administrative expenses (1,250) (1,074)
Other Income 96 -
Operating profit 2,086 1,516
Finance income 67 43
Finance costs (181) (172)
Total finance costs, net (114) (129)
Non-operating items (15) (5)
Profit before taxes 1,957 1,382
Taxes (436) (394)
Profit after taxes 1,521 988
Profit attributable to shareholders 1,508 982
Profit attributable to non-controlling interests 13 6
Profit after taxes 1,521 988
Basic earnings per share (€) 3.30 2.15
Diluted earnings per share (€) 3.29 2.15
The financial information presented in the unaudited consolidated income
statement, consolidated statement of financial position and consolidated
statement of cash flows within this document does not constitute statutory
accounts as defined in section 434 of the Companies Act 2006. This financial
information has been extracted from CCEP's consolidated financial statements
which will be delivered to the Registrar of Companies in due course.
Coca-Cola Europacific Partners plc
Consolidated Statement of Financial Position (Unaudited)
31 December 2022 31 December 2021
€ million € million
ASSETS
Non-current:
Intangible assets 12,505 12,639
Goodwill 4,600 4,623
Property, plant and equipment 5,201 5,248
Non-current derivative assets 191 226
Deferred tax assets 21 60
Other non-current assets 252 534
Total non-current assets 22,770 23,330
Current:
Current derivative assets 257 150
Current tax assets 85 46
Inventories 1,380 1,157
Amounts receivable from related parties 139 143
Trade accounts receivable 2,466 2,305
Other current assets 479 271
Assets held for sale 94 223
Short term investments 256 58
Cash and cash equivalents 1,387 1,407
Total current assets 6,543 5,760
Total assets 29,313 29,090
LIABILITIES
Non-current:
Borrowings, less current portion 10,571 11,790
Employee benefit liabilities 108 138
Non-current provisions 55 48
Non-current derivative liabilities 187 47
Deferred tax liabilities 3,513 3,617
Non-current tax liabilities 82 110
Other non-current liabilities 37 37
Total non-current liabilities 14,553 15,787
Current:
Current portion of borrowings 1,336 1,350
Current portion of employee benefit liabilities 8 10
Current provisions 115 86
Current derivative liabilities 76 19
Current tax liabilities 241 181
Amounts payable to related parties 485 210
Trade and other payables 5,052 4,237
Total current liabilities 7,313 6,093
Total liabilities 21,866 21,880
EQUITY
Share capital 5 5
Share premium 234 220
Merger reserves 287 287
Other reserves (507) (156)
Retained earnings 7,428 6,677
Equity attributable to shareholders 7,447 7,033
Non-controlling interest 177
Total equity 7,447 7,210
Total equity and liabilities 29,313 29,090
Coca-Cola Europacific Partners plc
Consolidated Statement of Cash Flows (Unaudited)
Year Ended
31 December 2022 31 December 2021
€ million € million
Cash flows from operating activities:
Profit before taxes 1,957 1,382
Adjustments to reconcile profit before tax to net cash flows from operating
activities:
Depreciation 715 693
Amortisation of intangible assets 101 89
Share-based payment expense 33 16
Finance costs, net 114 129
Income taxes paid (415) (306)
Changes in assets and liabilities:
(Increase)/decrease in trade and other receivables (282) (242)
(Increase)/decrease in inventories (244) (1)
Increase in trade and other payables 885 507
Increase/(decrease) in net payable receivable from related parties (15) 8
(Decrease)/increase in provisions 37 (116)
Change in other operating assets and liabilities* 46 (42)
Net cash flows from operating activities 2,932 2,117
Cash flows from investing activities:
Acquisition of bottling operations, net of cash acquired - (5,401)
Purchases of property, plant and equipment (500) (349)
Purchases of capitalised software (103) (97)
Proceeds from sales of property, plant and equipment 11 25
Proceeds from sales of intangible assets 143 -
Net proceeds/(payments) of short term investments (207) 198
Investments in equity instruments (2) (4)
Proceeds from sale of equity instruments 13 25
Other investing activity, net - (2)
Net cash flows used in investing activities (645) (5,605)
Cash flows from financing activities:
Proceeds from borrowings, net - 4,877
Changes in short-term borrowings (285) 276
Repayments on third party borrowings (938) (950)
Payments of principal on lease obligations (153) (139)
Interest paid, net (130) (97)
Dividends paid (763) (638)
Purchase of own shares under share buyback programme - -
Exercise of employee share options 13 28
Transactions with non-controlling interests - (73)
Other financing activities, net (20) 5
Net cash flows from financing activities (2,276) 3,289
Net change in cash and cash equivalents 11 (199)
Net effect of currency exchange rate changes on cash and cash equivalents (31) 83
Cash and cash equivalents at beginning of period 1,407 1,523
Cash and cash equivalents at end of period 1,387 1,407
*Amounts include €252 million in cash proceeds received in December 2022
from the regional tax authorities in Bizkaia (Basque Region) in connection
with an ongoing dispute regarding historical VAT amounts related to the period
2013-2016. Refer to page 19 for additional information.
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