COCA-COLA EUROPACIFIC
PARTNERS
Results for the six months
ended 28 June 2024
Solid first half, reaffirming FY24 guidance
|
H1 2024 Total CCEP Key Financial
Metrics[1]
|
As
Reported
|
|
Comparable
[1]
|
Change vs H1
2023
|
|
Adjusted
Comparable[4]
|
Change vs H1
2023
|
|
As
Reported
|
Comparable
[1]
|
Comparable
FXN[1]
|
|
Adjusted
Comparable[4]
|
Adjusted Comparable
FXN[4]
|
|
Volume (M
UC)[2]
|
1,856
|
|
1,856
|
13.8 %
|
13.8 %
|
|
|
1,957
|
0.6%
|
|
|
Revenue per UC[2]
(€)
|
|
|
5.32
|
|
|
(3.3) %
|
|
5.19
|
|
2.9%
|
|
Revenue (€M)
|
9,828
|
|
9,828
|
9.5%
|
9.5%
|
10.0 %
|
|
10,096
|
2.9%
|
3.5%
|
|
Operating profit (€M)
|
1,142
|
|
1,296
|
(2.4) %
|
11.2 %
|
11.6 %
|
|
1,306
|
8.7%
|
9.0%
|
|
Diluted EPS (€)
|
1.73
|
|
1.97
|
(6.9) %
|
6.7%
|
7.0%
|
|
|
|
|
|
Comparable free cash flow
(€M)
|
|
|
539
|
|
|
|
|
|
|
|
|
Interim dividend per share
(€)
|
|
0.74
|
|
|
|
|
|
|
|
|
DAMIAN GAMMELL, CHIEF EXECUTIVE
OFFICER, SAID:
"We are really pleased to have
delivered a solid first half performance reflecting great brands
and great execution. I would like to thank our great people,
alongside our customers and brand partners. We delivered solid top
and bottom-line growth, and impressive free cash flow. The great
performance of APS, led by the Philippines, offset softer volumes
in Europe driven by adverse weather. This demonstrates how our
geographic diversification makes us a stronger and more robust
business. We continue to grow share ahead of the market and to
create value for our customers. Our focus on revenue growth
management, headline price and promotion strategy across a broad
pack offering also drove solid gains in revenue per unit
case.
"Looking ahead, we are well placed
operating in categories that remain resilient. We continue to
invest for growth and have strong commercial plans in place for the
rest of this year and beyond to engage customers and consumers. We
remain focused on driving profitable revenue growth, actively
managing our pricing and promotional spend to remain affordable and
relevant to our consumers, alongside our focus on productivity and
free cash flow. In that context, we reaffirm our full year
guidance for 2024.
"We are confident that we
have the right strategy, done sustainably, to deliver on our
mid-term growth objectives. Combined with our first half interim
dividend, this demonstrates the strength of our business, and our
ability to deliver continued shareholder value."
___________________________
Note: All footnotes
included alongside the 'About CCEP' section
|
H1 Financial Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H1 2024 Metric[1]
|
As
Reported
|
|
Comparable[1]
|
Change vs H1
2023
|
|
Adjusted
Comparable[4]
|
Change vs H1
2023
|
|
As
Reported
|
Comparable
[1]
|
Comparable
FXN[1]
|
|
Adjusted
Comparable[4]
|
Adjusted Comparable
FXN[4]
|
|
Total CCEP
|
|
|
|
|
|
|
|
|
|
|
|
Volume (M
UC)[2]
|
1,856
|
|
1,856
|
13.8 %
|
13.8 %
|
|
|
1,957
|
0.6%
|
|
|
Revenue (€M)
|
9,828
|
|
9,828
|
9.5%
|
9.5%
|
10.0 %
|
|
10,096
|
2.9%
|
3.5%
|
|
Cost of sales (€M)
|
6,332
|
|
6,320
|
11.0 %
|
10.9 %
|
11.4 %
|
|
6,534
|
2.5%
|
3.1%
|
|
Operating profit (€M)
|
1,142
|
|
1,296
|
(2.4) %
|
11.2 %
|
11.6 %
|
|
1,306
|
8.7%
|
9.0%
|
|
Profit after taxes (€M)
|
811
|
|
924
|
(5.0) %
|
9.1%
|
9.4%
|
|
|
|
|
|
Diluted EPS (€)
|
1.73
|
|
1.97
|
(6.9) %
|
6.7%
|
7.0%
|
|
|
|
|
|
Revenue per UC[2]
(€)
|
|
|
5.32
|
|
|
(3.3) %
|
|
5.19
|
|
2.9%
|
|
Cost of sales per UC[2]
(€)
|
|
|
3.42
|
|
|
(2.1) %
|
|
3.36
|
|
2.5%
|
|
Comparable free cash flow
(€M)
|
|
|
539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim dividend per
share* (€)
|
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
|
Volume (M
UC)[2]
|
1,270
|
|
1,270
|
(2.8) %
|
(2.8) %
|
|
|
1,270
|
(2.8) %
|
|
|
Revenue (€M)
|
7,279
|
|
7,279
|
2.4%
|
2.4%
|
2.0%
|
|
7,279
|
2.4%
|
2.0%
|
|
Operating profit (€M)
|
882
|
|
979
|
(0.6) %
|
6.0%
|
5.2%
|
|
979
|
6.0%
|
5.2%
|
|
Revenue per UC[2]
(€)
|
|
|
5.71
|
|
|
4.9%
|
|
5.71
|
|
4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APS (Australia, Pacific & Southeast
Asia)
|
|
|
|
|
|
|
|
|
|
Volume (M
UC)[2]
|
586
|
|
586
|
80.9%
|
80.9%
|
|
|
687
|
7.5%
|
|
|
Revenue (€M)
|
2,549
|
|
2,549
|
36.2%
|
36.2%
|
40.6 %
|
|
2,817
|
4.0%
|
7.4%
|
|
Operating profit (€M)
|
260
|
|
317
|
(8.1) %
|
31.5%
|
36.1%
|
|
327
|
17.6%
|
21.6%
|
|
Revenue per UC[2]
(€)
|
|
|
4.49
|
|
|
(22.3) %
|
|
4.24
|
|
0.0%
|
*First half interim dividend per
share of €0.74 (declared at Q1 & paid in May), calculated as
40% of the FY23 dividend
|
H1 & Q2 Revenue
Highlights[1],[4]
|
H1 Revenue: Reported +9.5%; Adjusted Comparable
+3.5%[3],[4]
• Continue to create
value for our customers
• NARTD YTD value share
gains[5] across measured channels both in-store (+30bps)
& online (+10bps)
• Adjusted comparable
volume +0.6%[4],[6]
By geography:
◦ Europe -2.8% reflecting
great in-market execution offset by adverse weather, strategic
de-listings & cycling solid comparables (H1'23 comparable
volume +2.5%)
◦ APS +7.5% reflecting
strong in-market execution:
▪ Australia/Pacific (AP):
continued solid underlying momentum (excl. strategic bulk water
de-listings in Q2 last year)
▪ Southeast Asia (SEA):
double-digit growth driven by solid demand in the
Philippines
By channel: Away from Home (AFH)
+1.9%, Home -0.6%
◦ Europe: AFH -4.4%
cycling strong comparables (H1'23 comparable volume +4.0%), Home
-1.9%
◦ APS: AFH +8.9%, Home
+5.2%
▪ Transactions in line
with volumes in Europe & ahead in APS
▪ Adjusted comparable
revenue per unit case +2.9%[2],[3],[4] reflecting
positive headline pricing, promotional optimisation & brand
mix, partly offset by geographic mix
◦ Europe: +4.9%
reflecting H1'24 headline price increases & H2'23 headline
pricing in GB & Germany
◦ APS: 0.0% reflecting
headline price increases & promotional optimisation in
Australia, offset by geographic mix driven by strong growth in the
Philippines (being at a lower revenue per unit case)
Q2 Revenue: Reported +11.2%; Adjusted Comparable
+1.8%[3],[4]
• Adjusted comparable
volume -0.7%[4],[6]
By geography:
◦ Europe -4.0%
reflecting solid in-market execution offset by adverse weather
& strategic de-listings
◦ APS +6.9%
reflecting strong in-market execution:
▪
AP: continued solid underlying momentum
▪
SEA: double-digit growth driven by solid demand in the
Philippines
By channel: AFH +1.2%, Home
-2.3%
◦ Europe: AFH -4.2%, Home
-3.8%
◦ APS: AFH +7.7%, Home
+5.7%
▪ Adjusted
comparable revenue per unit case +2.5%[2],[3],[4]
reflecting positive headline pricing, promotional optimisation
& brand mix, partly offset by geographic mix
◦ Europe: +4.4%
reflecting H1'24 headline price increases & H2'23 headline
pricing in GB & Germany
◦ APS: -0.4%
reflecting headline price increases & promotional optimisation,
offset by geographic mix driven by strong growth in the
Philippines
|
H1 Operating Profit & Other Highlights & FY24
Guidance[1]
|
|
|
H1 Operating profit: Reported -2.4%; Adjusted Comparable
+9.0%[3],[4]
•
Adjusted comparable cost of sales per unit case
+2.5%[2],[3],[4] reflecting increased revenue per unit
case driving higher concentrate costs, inflation in manufacturing
& tax increase driven by Netherlands, partially offset by the
mix effect from the strong growth in the Philippines
• Adjusted comparable
operating profit of €1,306m, +9.0%[3],[4] reflecting
top-line growth, our efficiency programmes & continuous efforts
on discretionary spend optimisation. Reported operating profit of
€1,142m, -2.4% reflecting higher business transformation costs in
H1'24
• Comparable diluted EPS
of €1.97, +7.0%[3] (reported €1.73, -6.9%)
Other
• Comparable free cash flow: generated solid comparable free
cash flow of €539m reflecting solid performance (net cash flows
from operating activities of €1,122m), supporting our return to our
target leverage range of Net debt: Comparable EBITDA of 2.5x-3x by
the end of FY24 (3.0x at the end of 2023)
• Sustainability
highlights:
◦ Invested in
Airhive energy-efficient direct air capture technology
◦ Investing €40m in
a new production line for refillable glass bottles in
Germany
Reaffirming FY24 guidance[1],[4]
The outlook for FY24 reflects our
current assessment of market conditions. Unless stated otherwise,
guidance is on an adjusted comparable[4] &
FX-neutral basis. Guidance is therefore provided on the basis that
the acquisition of CCBPI occurred on 1 Jan 2023.
• Revenue: comparable growth of
~4%*
◦ More balanced between
volumes & price/mix than FY23
◦ Two extra selling days in
Q4
▪ Cost of sales per UC: comparable growth
of ~3% (previously 3-4%)
◦ Expect broadly flat
commodity inflation (previously low single-digit growth)
◦ FY24 hedge coverage at
~90% (previously 85%)
◦ Taxes increase driven by
Netherlands
◦ Concentrate directly
linked to revenue per UC through incidence pricing
▪ Operating profit: comparable growth of
~7%*
▪ Finance costs: weighted average cost of
net debt of ~2%
▪ Comparable effective tax rate:
~25%
▪ Comparable free cash flow:
~€1.7bn*
▪ Capital expenditure: ~5% of revenue
excluding leases
▪ Dividend payout ratio:
~50%[7] based on comparable EPS
*in line with our mid-term
strategic objectives
|
SECOND QUARTER & FIRST HALF REVENUE PERFORMANCE BY
GEOGRAPHY[1]
|
All values are unaudited and all references to volumes are on
a comparable basis for Europe and Australia / Pacific, and on an
adjusted comparable basis for SEA, total APS and total CCEP. All
changes are versus prior year equivalent period unless stated
otherwise.
|
|
Second
Quarter
|
|
First Half
|
|
|
|
Fx-Neutral
|
|
|
Fx-Neutral
|
|
|
€ million
|
% change
|
% change
|
|
€ million
|
% change
|
% change
|
|
FBN[8]
|
1,383
|
(0.8) %
|
(0.8) %
|
|
2,575
|
1.5%
|
1.7%
|
|
Germany
|
834
|
4.4%
|
4.4%
|
|
1,540
|
5.6%
|
5.6%
|
|
Great Britain
|
870
|
(1.2) %
|
(3.1) %
|
|
1,594
|
1.5%
|
(0.9) %
|
|
Iberia[9]
|
902
|
1.8%
|
1.8%
|
|
1,570
|
1.9%
|
1.9%
|
|
Total Europe
|
3,989
|
0.7%
|
0.3%
|
|
7,279
|
2.4%
|
2.0%
|
|
Australia /
Pacific[11]
|
758
|
2.4%
|
3.5%
|
|
1,612
|
0.2%
|
3.4%
|
|
Southeast
Asia[4],[12]
|
616
|
6.8%
|
10.1 %
|
|
1,205
|
9.5%
|
13.2 %
|
|
Total APS[4]
|
1,374
|
4.3%
|
6.4%
|
|
2,817
|
4.0%
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
Total CCEP[4]
|
5,363
|
1.6%
|
1.8%
|
|
10,096
|
2.9%
|
3.5%
|
FBN[8]
▪ H1 moderate
volume decline in France, Benelux & Nordics driven by adverse
weather & the strategic de-listing of Capri Sun.
▪ The
Netherlands was also impacted by the consumption tax
increase.
▪ Sprite, Energy
& Powerade outperformed in Q2 & H1. Double-digit H1 volume
growth for Fuze Tea in France despite strong
comparables.
▪ H1
revenue/UC[10] growth driven by headline price increases
across the markets (& earlier in France compared to last
year).
Germany
• H1 volume
broadly flat despite adverse weather & strong comparables in
the AFH channel.
• Coca-Cola Zero
Sugar & Monster continued to outperform. Double-digit volume
growth for Powerade in H1.
• H1
revenue/UC[10] growth driven by headline price increase
implemented in Q3 last year.
• Positive pack
& brand mix also contributed to the growth e.g. Monster &
Powerade.
Great Britain
• H1 moderate
volume decline reflects some softness in the AFH channel, adverse
weather & the de-listing of Capri Sun.
• Strong volume
growth for both Coca-Cola Zero Sugar & Powerade in H1. Monster
continued to outperform with high single-digit growth in
H1.
• H1
revenue/UC[10] growth driven by headline price increase
implemented at the end of the second quarter last year.
• Positive mix
also contributed to the growth e.g. Monster & de-listing of
Capri Sun.
Iberia[9]
• Slight volume
decline driven by adverse weather conditions offset by solid in
market execution.
• Sprite,
Aquarius, Powerade, Royal Bliss & Tea volumes outperformed in
H1.
• H1
revenue/UC[10] growth driven by headline price
increase.
• Positive brand
mix also contributed to the growth e.g. Monster &
Powerade.
Australia / Pacific[11]
• H1 slight
volume decline reflects strategic bulk water de-listings in
Australia which started in Q2 2023. Excluding de-listings, volume
would have been broadly flat in H1 supported by great
activation.
• Home channel
volume performed slightly ahead of the AFH channel.
• Coca-Cola Zero
Sugar, Fanta & Monster performed well in H1 across all markets
supported by great execution & innovation, including the launch
of Monster Energy Zero Sugar & Fanta Pineapple Zero Sugar in
Australia.
• H1
Revenue/UC[10] solid growth driven by headline price
increases & promotional optimisation.
Southeast Asia[12]
• Solid H1 volume driven by double-digit growth in the
Philippines, reflecting strong underlying market demand, solid
share gains & great execution whilst cycling soft comparables
last year.
• This was
partially offset by a weaker volume performance in Indonesia
impacted by the geopolitical situation in the Middle East.
Encouraging sparkling & transaction growth in unaffected
areas.
• AFH channel
volume grew ahead of the Home channel driven by the Philippines in
H1.
• H1 Coke TM in
double-digit growth, driven by Coca-Cola Classic & supported by
encouraging performance of Coca-Cola Zero Sugar in Indonesia
following its recent launch. Sprite continues to perform
well.
• H1
Revenue/UC[10] growth driven by headline price increases
& promotional optimisation.
|
SECOND QUARTER & FIRST HALF VOLUME PERFORMANCE BY
CATEGORY[1],[4],[6]
|
All values are unaudited and all references to volumes are on
an adjusted comparable basis. All changes are versus prior year
equivalent period unless stated otherwise.
|
|
Second
Quarter
|
|
First Half
|
|
|
% of Total
|
% Change
|
|
% of Total
|
% Change
|
|
Coca-Cola®
|
59.5 %
|
1.1%
|
|
59.0 %
|
1.7%
|
|
Flavours & Mixers
|
21.5 %
|
(2.8) %
|
|
22.1 %
|
-%
|
|
Water, Sports, RTD Tea &
Coffee[13]
|
12.0 %
|
0.6%
|
|
11.7 %
|
0.8%
|
|
Other inc. Energy
|
7.0%
|
(9.8) %
|
|
7.2%
|
(7.3) %
|
|
Total
|
100.0%
|
(0.7)
%
|
|
100.0%
|
0.6%
|
Coca-Cola®
Q2: +1.1%; H1: +1.7%
• H1 Coca-Cola
Classic +3.0% driven by continued strong demand in the Philippines,
partially offset by adverse weather in Europe.
• Q2 Coca-Cola
Zero Sugar +2.8% with growth in both Europe & APS driven by
solid execution & innovation.
• Value share
gains of Coca-Cola Original Taste +80bps[5], led by the
Philippines.
Flavours & Mixers
Q2: -2.8%; H1: Flat
• Sprite H1:
+5.9% driven by solid consumer demand & great execution across
all key markets.
• Fanta H1
slight decline driven by adverse weather & solid comparables
(H1 23: +2.0%[14]) in Europe albeit supported by flavour
extensions e.g. Fanta Exotic.
• Royal Bliss
continues to perform well with double-digit growth in H1 supported
by the launch in Portugal.
Water, Sports, RTD Tea & Coffee[13]
Q2: +0.6%; H1: +0.8%
• H1 water
slight decline driven by strategic water de-listings within Europe
& Australia.
• H1 Sports
+4.8% despite strong comparables (H1'23 +10.5%[14]) with
growth in Powerade driven by continued consumer trends in this
category, great activation & innovation (e.g. launch of
Powerade Mango).
• RTD Tea &
Coffee +1.6% driven by Fuze Tea in Europe.
Other inc. Energy
Q2: -9.8% (+5.1% exc. Juices)
H1: -7.3% (+4.6% exc. Juices)
• Strong growth
in Energy +7.5% in both Q2 & H1 led by Monster despite strong
comparables (H1'23 +15.0%[14]), continuing to gain
distribution (inc. recent category launch in the Philippines) &
share through innovation e.g. Monster Green Zero, Bad Apple &
Peachy Keen.
• Juices decline
resulting from the strategic de-listing of Capri Sun in
Europe.
• Encouraging
early start for Absolut & Sprite following launch in
Europe.
• 7 August 2024 at 12:00
BST, 13:00 CEST & 7:00 a.m. EDT; accessible via
www.cocacolaep.com
• Replay & transcript
will be available at www.cocacolaep.com as soon as
possible
• Third quarter 2024
trading update: 5 November 2024
• Financial calendar
available here:
https://ir.cocacolaep.com/financial-calendar/
Investor Relations
Sarah Willett
Awais Khan
Raj Sidhu
sarah.willett@ccep.com
awais.khan@ccep.com
raj.sidhu@ccep.com
Media Relations
ccep@portland-communications.com
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 nearly 600
million consumers and helping over 4 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 & follow CCEP on LinkedIn @
Coca-Cola Europacific Partners | LinkedIn
___________________________
1.
Refer to 'Note Regarding the Presentation of
Adjusted financial information and Alternative Performance
Measures' for further details & to 'Supplementary Financial
Information' for a reconciliation of reported to comparable and
reported to adjusted 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.
Comparable & FX-neutral
4.
Non-IFRS adjusted comparable financial information as if the
acquisition of Coca-Cola Beverages Philippines, Inc (CCBPI)
occurred at the beginning of the period presented for illustrative
purposes only. 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. Acquisition completed on 23
February 2024. Prepared on a basis consistent with CCEP IFRS
accounting policies and includes provisional acquisition accounting
adjustments for the period 1 January to 23 February. Refer to 'Note
Regarding the Presentation of Adjusted financial information and
Alternative Performance Measures' for further details.
5.
External data sources: Nielsen & IRI Period 6 YTD
6. No
selling day shift in H1; CCEP adjusted comparable volume +0.6% in
H1
7.
Dividends subject to Board approval
8.
Includes France, Monaco, Belgium, Luxembourg, the Netherlands,
Norway, Sweden & Iceland
9.
Includes Spain, Portugal & Andorra
10. Revenue per
unit case
11. Includes
Australia, New Zealand, the Pacific Islands & Papua New
Guinea
12. Includes
Philippines & Indonesia.
13. RTD refers
to ready to drink;
14. Excludes
Philippines
|
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
2023 Annual Report on Form 20-F filed with the SEC on 15 March 2024
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, distribution and sales, 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 water use
reductions due to regulations by national and regional authorities
leading to a potential temporary decrease in production volume;
and
5. 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.
|
Note Regarding the Presentation of Adjusted financial
information and Alternative Performance Measures
|
Adjusted financial information
Non-IFRS adjusted financial
information for selected metrics has been 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 of the period presented 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 acquisition completed on 23
February 2024 and the non-IFRS adjusted financial information
provided reflects the inclusion of CCBPI as if the acquisition had
occurred at the beginning of the period presented. It has been
prepared on a basis consistent with CCEP IFRS accounting policies
and includes provisional transaction accounting adjustments for the
periods presented.
Alternative Performance Measures
We use certain alternative
performance measures (non-IFRS 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 IFRS
measures.
For purposes of this document, the
following terms are defined:
''As reported'' are results
extracted from our condensed consolidated interim financial
statements.
"Adjusted" includes the
results of CCEP as if the CCBPI acquisition had occurred at the
beginning of the period presented, including provisional
acquisition accounting adjustments, accounting policy
reclassifications and the impact of debt financing costs in
connection with the acquisition.
"Comparable'' is defined as
results excluding items impacting comparability, which include
restructuring charges, net impact related to European flooding,
accelerated amortisation charges, expenses related to legal
provisions, inventory fair value step up related to acquisition
accounting, impairment charges, acquisition and integration related
costs, income arising from the ownership of certain mineral rights
in Australia and gain on sale of sub-strata and associated mineral
rights in Australia. Comparable volume is also adjusted for selling
days.
''Adjusted comparable" is
defined as adjusted results excluding items impacting
comparability, as described above.
''Fx-neutral'' or "FXN" is
defined as period results excluding the impact of foreign exchange
rate changes. Foreign exchange impact is calculated by recasting
current year results at prior year exchange rates.
''Capex'' or "Capital expenditures'' is defined as
purchases of property, plant and equipment and capitalised
software, plus payments of principal on lease obligations, less
proceeds from disposals of property, plant and equipment. Capex is
used as a measure to ensure that cash spending on capital
investment is in line with the Group's overall strategy for the use
of cash.
''Comparable free cash flow'' is defined as net cash flows from operating activities less
capital expenditures (as defined above) and net interest payments,
adjusted for items that are not reasonably likely to recur within
two years, nor have occurred within the prior two years. Comparable
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, non-discretionary lease and net
interest payments while excluding the effects of items that are
unusual in nature to allow for better period over period
comparability. Comparable free cash flow reflects an additional way
of viewing our liquidity, which we believe is useful to our
investors, and is not intended to represent residual cash flow
available for discretionary expenditures.
''Comparable 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.
Comparable EBITDA does not reflect cash expenditures, or future
requirements for capital expenditures or contractual commitments.
Further, comparable 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
comparable EBITDA does not reflect cash requirements for such
replacements.
''Net Debt'' is defined as
borrowings adjusted for the fair value of hedging instruments and
other financial assets/liabilities related to borrowings, net of
cash and cash equivalents and short-term investments. 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 comparable 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-IFRS financial
information, which management uses for planning and measuring
performance. We are not able to reconcile forward-looking non-IFRS
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.
|
Supplementary Financial Information - Items impacting
comparability - Reported to Comparable
|
The following
provides a summary reconciliation of the
items impacting comparability for the six months
ended 28 June 2024 and 30 June 2023:
|
First Six Months
2024
|
|
|
|
In millions of € except share data which is calculated prior
to rounding
|
|
Operating
profit
|
Profit after
taxes
|
Diluted earnings per share
(€)
|
|
As Reported
|
|
1,142
|
811
|
1.73
|
|
|
|
|
|
|
|
Items impacting comparability
|
|
|
|
|
|
Restructuring
charges[1]
|
|
95
|
70
|
0.16
|
|
Acquisition and integration
related costs[2]
|
|
11
|
9
|
0.02
|
|
European
flooding[3]
|
|
1
|
1
|
-
|
|
Inventory
step-up[4]
|
|
5
|
3
|
-
|
|
Impairment[5]
|
|
12
|
8
|
0.02
|
|
Litigation[6]
|
|
2
|
2
|
-
|
|
Accelerated
amortisation[7]
|
|
28
|
20
|
0.04
|
|
Comparable
|
|
1,296
|
924
|
1.97
|
|
First Six Months
2023
|
|
|
|
As Reported
|
|
1,170
|
854
|
1.86
|
|
|
|
|
|
|
|
Items impacting comparability
|
|
|
|
|
|
Restructuring
charges[1]
|
|
51
|
42
|
0.09
|
|
Coal
royalties[8]
|
|
(18)
|
(12)
|
(0.03)
|
|
European
flooding[3]
|
|
(3)
|
(2)
|
-
|
|
Sale of sub-strata and associated
mineral rights[9]
|
|
(35)
|
(35)
|
(0.07)
|
|
Comparable
|
|
1,165
|
847
|
1.85
|
__________________________
[1] Amounts represent restructuring charges related to business
transformation activities.
[2]
Amounts represent cost associated with the
acquisition and integration of CCBPI.
[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 production
facilities in Chaudfontaine and Bad Neuenahr.
[4] Amounts represent the non-recurring impact of provisional
fair value step-up of CCBPI inventories.
[5] Amounts represent the impairment in relation to the Feral
brand. The Group is in a process of selling the brand, which has
been classified as an asset held for sale in the Group's condensed
consolidated interim statement of financial position as of
28 June 2024.
[6]
Amounts relate to the increase in a provision
established in connection with an ongoing labour law matter in
Germany.
[7] Amounts represent accelerated amortisation charges associated
with the discontinuation of the relationship between CCEP and Beam
Suntory upon expiration of the current contractual
agreements.
[8] Amounts represent royalty income arising from the ownership
of certain mineral rights in Australia. The royalty income was
recognised as "Other income" in our condensed consolidated interim
income statement as of the six months ended 30
June 2023.
[9] 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.
|
Supplementary Financial Information - Items impacting
comparability - Reported to Adjusted Comparable
|
The following provides a summary
reconciliation for CCEP's reported results and adjusted comparable
financial information for the six months ended 28 June 2024 and 30
June 2023:
|
First Six Months 2024
(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
|
|
9,828
|
-
|
9,828
|
268
|
-
|
10,096
|
|
Cost of sales
|
|
6,332
|
(12)
|
6,320
|
214
|
-
|
6,534
|
|
Operating profit
|
|
1,142
|
154
|
1,296
|
10
|
-
|
1,306
|
|
Total finance costs,
net
|
|
87
|
-
|
87
|
3
|
-
|
90
|
|
Profit after taxes
|
|
811
|
113
|
924
|
5
|
-
|
929
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
Shareholders
|
|
797
|
110
|
907
|
3
|
-
|
910
|
|
Non-controlling
interest
|
|
14
|
3
|
17
|
2
|
-
|
19
|
|
Diluted earnings per share
(€)
|
|
1.73
|
|
1.97
|
|
|
1.98
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
|
|
|
|
|
460
|
|
First Six Months 2023
(unaudited)
|
|
Reported
|
Items impacting
comparability[1]
|
Comparable
|
Adjusted
comparable[2]
|
Transaction accounting
adjustments[3]
|
Adjusted comparable
combined
|
|
|
|
CCEP
|
|
CCEP
|
CCBPI
|
CCEP
|
CCEP
|
|
Revenue
|
|
8,977
|
-
|
8,977
|
836
|
-
|
9,813
|
|
Cost of sales
|
|
5,707
|
(6)
|
5,701
|
673
|
-
|
6,374
|
|
Operating profit
|
|
1,170
|
(5)
|
1,165
|
37
|
-
|
1,202
|
|
Total finance costs,
net
|
|
63
|
-
|
63
|
13
|
14
|
90
|
|
Profit after taxes
|
|
854
|
(7)
|
847
|
18
|
(11)
|
854
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
Shareholders
|
|
854
|
(7)
|
847
|
11
|
(11)
|
847
|
|
Non-controlling
interest
|
|
-
|
-
|
-
|
7
|
-
|
7
|
|
Diluted earnings per share
(€)
|
|
1.86
|
|
1.85
|
|
|
1.85
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
|
|
|
|
|
459
|
__________________________
[1] Amounts represent items affecting the comparability of CCEP's
year-over-year financial performance.
[2] Amounts represent unaudited results of CCBPI as if the
acquisition had occurred on 1 January, 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.
[3] Amounts represent provisional transaction accounting
adjustments for the 6 months ending 30 June
2023 as if the acquisition had occurred on 1 January 2023
comprising finance costs from CCEP acquisition financing. Tax rate
used is 22%, in line with the Group's effective tax rate for the 6
months ended 30 June 2023. For 2024, these
finance costs are included within CCEP reported results. 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
provisional acquisition accounting adjustments.
|
First Six Months 2023
(unaudited)
|
|
|
|
|
|
|
|
|
In € millions
|
|
Historical
CCBPI[1]
|
Reclassifications[2]
|
Historical adjusted
CCBPI
|
Transaction accounting
adjustments[3]
|
Items impacting
comparability[4]
|
Adjusted
comparable
|
|
Revenue
|
|
837
|
-
|
837
|
-
|
(1)
|
836
|
|
Cost of sales
|
|
672
|
(5)
|
667
|
12
|
(6)
|
673
|
|
Operating profit
|
|
42
|
-
|
42
|
(20)
|
15
|
37
|
|
Total finance costs,
net
|
|
-
|
(2)
|
(2)
|
14
|
1
|
13
|
|
Profit after taxes
|
|
30
|
2
|
32
|
(25)
|
11
|
18
|
[1] Historical unaudited CCBPI results for the period 1 January
2023 to 30 June 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 6 months ending 30 June
2023 as if the acquisition had occurred on 1 January 2023,
and mainly include incremental depreciation and amortisation impact
relating to provisional fair values for intangibles and property
plant and equipment, inventory step up costs, an increase in total
finance costs as a result of local financing in the Philippines
related to the acquisition and the inclusion of acquisition and
integration related costs.
[4] Amounts represent one-time items identified by CCBPI which
are not expected to recur, and mainly include inventory step up
costs, acquisition and integration related costs and the impact
from the reversal of certain provisions.
The following provides a summary
reconciliation of CCEP's reported and adjusted comparable financial
information for the full year ended 31 December 2023, assuming the
acquisition occurred on 1 January 2023. Following the announcement
of the acquisition on 23 February 2024, the adjusted financial
information has been updated to reflect changes in the provisional
acquisition accounting adjustments.
|
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
|
1,382
|
-
|
12,958
|
|
Operating profit
|
|
2,339
|
34
|
2,373
|
100
|
-
|
2,473
|
|
Total finance costs,
net
|
|
120
|
-
|
120
|
28
|
26
|
174
|
|
Profit after taxes
|
|
1,669
|
32
|
1,701
|
51
|
(19)
|
1,733
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
Shareholders
|
|
1,669
|
32
|
1,701
|
31
|
(19)
|
1,713
|
|
Non-controlling
interest
|
|
-
|
-
|
-
|
20
|
-
|
20
|
|
Diluted earnings per share
(€)
|
|
3.63
|
|
3.71
|
|
|
3.73
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
|
|
|
|
|
459
|
[1] Amounts represent items affecting the comparability of CCEP's
year-over-year financial performance.
[2] Amounts represent unaudited results of CCBPI as if the
acquisition had occurred on 1 January, 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.
[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.
|
Supplemental Financial Information - Operating Profit -
Reported to Comparable
|
Revenue
|
Revenue CCEP
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.
|
Second Quarter
Ended
|
|
Six Months
Ended
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
As reported
|
5,363
|
4,823
|
11.2
%
|
|
9,828
|
8,977
|
9.5%
|
|
Adjust: Impact of fx
changes
|
11
|
n/a
|
n/a
|
|
48
|
n/a
|
n/a
|
|
Fx-neutral
|
5,374
|
4,823
|
11.4
%
|
|
9,876
|
8,977
|
10.0
%
|
|
|
|
|
|
|
|
|
|
|
Revenue per unit case
|
5.23
|
5.59
|
(6.4)
%
|
|
5.32
|
5.51
|
(3.3)
%
|
|
Revenue Europe
|
|
|
|
|
|
|
|
|
As reported
|
3,989
|
3,960
|
0.7%
|
|
7,279
|
7,105
|
2.4%
|
|
Adjust: Impact of fx
changes
|
(16)
|
n/a
|
n/a
|
|
(35)
|
n/a
|
n/a
|
|
Fx-neutral
|
3,973
|
3,960
|
0.3%
|
|
7,244
|
7,105
|
2.0%
|
|
|
|
|
|
|
|
|
|
|
Revenue per unit case
|
5.78
|
5.53
|
4.4%
|
|
5.71
|
5.44
|
4.9%
|
|
Revenue APS
|
|
|
|
|
|
|
As reported
|
1,374
|
863
|
59.2%
|
|
2,549
|
1,872
|
36.2%
|
|
Adjust: Impact of fx
changes
|
27
|
n/a
|
n/a
|
|
83
|
n/a
|
n/a
|
|
Fx-neutral
|
1,401
|
863
|
62.3%
|
|
2,632
|
1,872
|
40.6%
|
|
|
|
|
|
|
|
|
|
|
Revenue per unit case
|
4.13
|
5.89
|
(29.9)
%
|
|
4.49
|
5.78
|
(22.3)
%
|
|
Revenue by Geography
In millions of €
|
|
Six Months Ended 28 June
2024
|
|
|
|
As
reported
|
Reported
% change
|
Fx-Neutral
% change
|
|
|
|
Great Britain
|
|
1,594
|
1.5%
|
(0.9) %
|
|
|
Germany
|
|
1,540
|
5.6%
|
5.6%
|
|
|
Iberia[1]
|
|
1,570
|
1.9%
|
1.9%
|
|
|
France[2]
|
|
1,219
|
1.6%
|
1.6%
|
|
|
Belgium/Luxembourg
|
|
526
|
(2.8) %
|
(2.8) %
|
|
|
Netherlands
|
|
380
|
7.0%
|
7.0%
|
|
|
Norway
|
|
204
|
5.7%
|
6.7%
|
|
|
Sweden
|
|
207
|
-%
|
0.5%
|
|
|
Iceland
|
|
39
|
(2.5) %
|
(2.5) %
|
|
|
Total Europe
|
|
7,279
|
2.4%
|
2.0%
|
|
|
Australia
|
|
1,169
|
0.6%
|
3.5%
|
|
|
New Zealand and Pacific
Islands
|
|
326
|
(1.2) %
|
1.2%
|
|
|
Indonesia and Papua New
Guinea
|
|
352
|
(7.4) %
|
(1.8) %
|
|
|
Philippines
|
|
702
|
n/a
|
n/a
|
|
|
Total APS
|
|
2,549
|
36.2
%
|
40.6
%
|
|
|
Total CCEP
|
|
9,828
|
9.5%
|
10.0
%
|
|
____________________
[1] Iberia refers to Spain, Portugal & Andorra.
[2] France refers to continental France & Monaco.
Volume
|
Comparable Volume - Selling Day Shift CCEP
In millions of unit cases, prior period volume recast using
current year selling days
|
Second Quarter
Ended
|
|
Six Months
Ended
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
Volume
|
1,027
|
863
|
19.0 %
|
|
1,856
|
1,631
|
13.8 %
|
|
Impact of selling day
shift
|
n/a
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
|
Comparable volume - Selling Day Shift
adjusted
|
1,027
|
863
|
19.0
%
|
|
1,856
|
1,631
|
13.8
%
|
|
Comparable Volume - Selling Day Shift Europe
|
|
|
|
|
|
|
Volume
|
688
|
717
|
(4.0) %
|
|
1,270
|
1,307
|
(2.8) %
|
|
Impact of selling day
shift
|
n/a
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
|
Comparable volume - Selling Day Shift
adjusted
|
688
|
717
|
(4.0)
%
|
|
1,270
|
1,307
|
(2.8)
%
|
|
Comparable Volume - Selling Day Shift APS
|
|
|
|
|
|
|
Volume
|
339
|
146
|
132.2%
|
|
586
|
324
|
80.9 %
|
|
Impact of selling day
shift
|
n/a
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
|
Comparable volume - Selling Day Shift
adjusted
|
339
|
146
|
132.2%
|
|
586
|
324
|
80.9
%
|
Cost of Sales
|
Cost of Sales
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.
|
Six Months
Ended
|
|
28 June
2024
|
30 June
2023
|
% change
|
|
As reported
|
6,332
|
5,707
|
11.0
%
|
|
Adjust: Total items impacting
comparability
|
(12)
|
(6)
|
n/a
|
|
Adjust: Restructuring
charges[1]
|
(5)
|
(9)
|
|
Adjust:
Litigation[2]
|
(1)
|
-
|
|
Adjust: European
flooding[3]
|
(1)
|
3
|
|
Adjust: Inventory
step-up[4]
|
(5)
|
-
|
|
Comparable
|
6,320
|
5,701
|
10.9
%
|
|
Adjust: Impact of FX
changes
|
30
|
n/a
|
n/a
|
|
Comparable and Fx-neutral
|
6,350
|
5,701
|
11.4
%
|
|
|
|
|
|
|
Cost of sales per unit case
|
3.42
|
3.50
|
(2.1)
%
|
__________________________
[1] Amounts represent restructuring charges related to business
transformation activities.
[2] Amounts relate to the increase in a provision established in
connection with an ongoing labour law matter in Germany.
[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 production
facilities in Chaudfontaine and Bad Neuenahr.
[4] Amounts represent the non-recurring impact of provisional
fair value step-up of CCBPI inventories.
For the six months ending 28 June
2024, reported cost of sales were €6,332 million, up 11.0% versus
2023. Comparable cost of sales for the same period were €6,320
million, up 10.9% versus 2023. Cost of sales per unit case
decreased by 2.1% on a comparable and fx-neutral basis, reflecting
the impact of the newly acquired CCBPI operations, partly offset by
increased revenue per unit case driving higher concentrate costs,
inflation in manufacturing and tax increase driven by the
Netherlands.
Operating expenses
|
Operating Expenses
In millions of €. FX impact calculated by recasting current
year results at prior year rates.
|
Six Months
Ended
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
As reported
|
2,354
|
2,153
|
9.3%
|
|
Adjust: Total items impacting
comparability
|
(142)
|
(42)
|
n/a
|
|
Adjust: Restructuring
charges[1]
|
(90)
|
(42)
|
|
Adjust: Acquisition
and Integration related costs[2]
|
(11)
|
-
|
|
Adjust:
Impairment[3]
|
(12)
|
-
|
|
Adjust:
Litigation[4]
|
(1)
|
-
|
|
Adjust: Accelerated
amortisation[5]
|
(28)
|
-
|
|
Comparable
|
2,212
|
2,111
|
4.8%
|
|
Adjust: Impact of FX
changes
|
14
|
n/a
|
n/a
|
|
Comparable and Fx-neutral
|
2,226
|
2,111
|
5.4%
|
__________________________
[1] Amounts represent restructuring charges related to business
transformation activities.
[2]
Amounts represent cost associated with the
acquisition and integration of CCBPI.
[3] Amounts represent the impairment in relation to the Feral
brand. The Group is in a process of selling the brand, which has
been classified as an asset held for sale in the Group's condensed
consolidated interim statement of financial position as of
28 June 2024.
[4] Amounts relate to the increase in a provision established in
connection with an ongoing labour law matter in Germany.
[5] Amounts represent accelerated amortisation charges associated
with the discontinuation of the relationship between CCEP and Beam
Suntory upon expiration of the current contractual
agreements.
For the six months ending 28 June
2024, reported operating expenses were €2,354 million, up 9.3%
versus 2023.
Comparable operating expenses were
€2,212 million for the same period, up 4.8% versus 2023, reflecting
the impact of the newly acquired CCBPI operations, inflation and
higher volumes, partially offset by the benefit of ongoing
efficiency programmes and our continuous efforts on discretionary
spend optimisation.
In November 2022, the Group
announced a new efficiency programme to be delivered by the end of
2028. This programme focusses on further supply chain efficiencies,
leveraging global procurement and a more integrated shared service
centre model, all enabled by next generation technology including
digital tools and data and analytics. During the first half of
2024, as part of this efficiency programme, the Group announced
restructuring proposals resulting in €90 million of operating
expenses primarily related to expected severance payments. This
compares to €42 million of restructuring charges within operating
expenses incurred in the six month period ending 30 June 2023,
related to various productivity initiatives.
Acquisition and integration
related costs of €11 million were recognised within reported
operating expenses for the six months ending 28 June 2024
associated with the acquisition of CCBPI, primarily brokerage and
advisory fees.
Operating profit
|
Operating Profit CCEP
In millions of €. FX impact calculated by recasting current
year results at prior year rates.
|
|
Six Months
Ended
|
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
As reported
|
|
1,142
|
1,170
|
(2.4)
%
|
|
Adjust: Total items impacting
comparability
|
|
154
|
(5)
|
n/a
|
|
Comparable
|
|
1,296
|
1,165
|
11.2
%
|
|
Adjust: Impact of fx
changes
|
|
4
|
n/a
|
n/a
|
|
Comparable & Fx-neutral
|
|
1,300
|
1,165
|
11.6
%
|
|
Operating Profit Europe
|
|
|
|
|
|
As reported
|
|
882
|
887
|
(0.6)
%
|
|
Adjust: Total items impacting
comparability
|
|
97
|
37
|
n/a
|
|
Comparable
|
|
979
|
924
|
6.0%
|
|
Adjust: Impact of fx
changes
|
|
(7)
|
n/a
|
n/a
|
|
Comparable & Fx-neutral
|
|
972
|
924
|
5.2%
|
|
Operating Profit APS
|
|
|
|
|
|
As reported
|
|
260
|
283
|
(8.1)
%
|
|
Adjust: Total items impacting
comparability
|
|
57
|
(42)
|
n/a
|
|
Comparable
|
|
317
|
241
|
31.5
%
|
|
Adjust: Impact of fx
changes
|
|
11
|
n/a
|
n/a
|
|
Comparable & Fx-neutral
|
|
328
|
241
|
36.1
%
|
|
Supplemental Financial Information - Operating Profit -
Reported to Adjusted Comparable
|
Revenue
|
Adjusted Revenue CCEP
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.
|
Second Quarter
Ended
|
|
Six Months
Ended
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
As reported
|
5,363
|
4,823
|
11.2
%
|
|
9,828
|
8,977
|
9.5%
|
|
Add: Adjusted revenue
impact[1]
|
-
|
455
|
n/a
|
|
268
|
837
|
n/a
|
|
Adjust: Total items impacting
comparability
|
-
|
(1)
|
n/a
|
|
-
|
(1)
|
n/a
|
|
Adjusted Comparable
|
5,363
|
5,277
|
1.6%
|
|
10,096
|
9,813
|
2.9%
|
|
Adjust: Impact of fx
changes
|
11
|
n/a
|
n/a
|
|
56
|
n/a
|
n/a
|
|
Adjusted Comparable and Fx-neutral
|
5,374
|
5,277
|
1.8%
|
|
10,152
|
9,813
|
3.5%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue per unit case
|
5.23
|
5.11
|
2.5%
|
|
5.19
|
5.04
|
2.9%
|
|
Adjusted Revenue APS
|
|
|
|
|
|
|
As reported
|
1,374
|
863
|
59.2
%
|
|
2,549
|
1,872
|
36.2
%
|
|
Add: Adjusted revenue
impact[1]
|
-
|
455
|
n/a
|
|
268
|
837
|
n/a
|
|
Adjust: Total items impacting
comparability
|
-
|
(1)
|
n/a
|
|
-
|
(1)
|
n/a
|
|
Adjusted Comparable
|
1,374
|
1,317
|
4.3%
|
|
2,817
|
2,708
|
4.0%
|
|
Adjust: Impact of fx
changes
|
27
|
n/a
|
n/a
|
|
91
|
n/a
|
n/a
|
|
Adjusted Comparable and Fx-neutral
|
1,401
|
1,317
|
6.4%
|
|
2,908
|
2,708
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue per unit case
|
4.13
|
4.15
|
(0.4)
%
|
|
4.24
|
4.24
|
-%
|
[1] The adjusted revenue impact reflects the inclusion of
Philippines revenue as if the acquisition had occurred at the
beginning of the period presented and prepared on a basis
consistent with CCEP accounting policies.
Volume
|
Adjusted Comparable Volume - Selling Day Shift
CCEP
In millions of unit cases, prior period volume recast using
current year selling days
|
Second Quarter
Ended
|
|
Six Months
Ended
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
Volume
|
1,027
|
863
|
19.0 %
|
|
1,856
|
1,631
|
13.8 %
|
|
Impact of selling day
shift
|
n/a
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
|
Comparable volume - Selling Day Shift
adjusted
|
1,027
|
863
|
19.0
%
|
|
1,856
|
1,631
|
13.8
%
|
|
Add: Adjusted volume
impact[1]
|
-
|
171
|
n/a
|
|
101
|
315
|
n/a
|
|
Adjusted comparable volume
|
1,027
|
1,034
|
(0.7)
%
|
|
1,957
|
1,946
|
0.6%
|
|
Adjusted Comparable Volume - Selling Day Shift
APS
|
|
|
|
|
|
|
Volume
|
339
|
146
|
132.2%
|
|
586
|
324
|
80.9 %
|
|
Impact of selling day
shift
|
n/a
|
n/a
|
n/a
|
|
n/a
|
n/a
|
n/a
|
|
Comparable volume - Selling Day Shift
adjusted
|
339
|
146
|
132.2%
|
|
586
|
324
|
80.9
%
|
|
Add: Adjusted volume
impact[1]
|
-
|
171
|
n/a
|
|
101
|
315
|
n/a
|
|
Adjusted comparable volume
|
339
|
317
|
6.9%
|
|
687
|
639
|
7.5%
|
[1] The adjusted volume impact reflects the inclusion of
Philippines volume as if the acquisition had occurred at the
beginning of the period presented. No selling day shift in Q1 &
Q2 2024.
Cost of Sales
|
Adjusted Cost of Sales
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.
|
|
Six Months
Ended
|
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
As reported
|
|
6,332
|
5,707
|
11.0%
|
|
Add: Adjusted cost of sales
impact[1]
|
|
213
|
667
|
n/a
|
|
Adjust: Acquisition
accounting[2]
|
|
1
|
12
|
|
Adjust: Total items impacting
comparability
|
|
(12)
|
(12)
|
|
Adjust: Restructuring
charges[3]
|
|
(5)
|
(9)
|
|
Adjust: European
flooding[4]
|
|
(1)
|
3
|
|
Adjust: Inventory
step-up[5]
|
|
(5)
|
(5)
|
|
Adjust:
Litigation[6]
|
|
(1)
|
-
|
|
Adjust:
Other[7]
|
|
-
|
(1)
|
|
Adjusted Comparable
|
|
6,534
|
6,374
|
2.5%
|
|
Adjust: Impact of fx
changes
|
|
36
|
n/a
|
n/a
|
|
Adjusted Comparable & Fx-neutral
|
|
6,570
|
6,374
|
3.1%
|
|
|
|
|
|
|
|
Adjusted cost of sales per unit case
|
|
3.36
|
3.28
|
2.5%
|
__________________________
[1] Amounts represent unaudited cost of sales of CCBPI as if the
acquisition had occurred on 1 January, including provisional
acquisition accounting adjustments and CCEP IFRS accounting policy
reclassifications.
[2] Amounts represent transaction accounting adjustments as if
the acquisition had occurred on 1 January. These include the
depreciation impact relating to provisional fair values for
property plant and equipment and the non-recurring impact of the
provisional fair value step-up of CCBPI finished goods.
[3] Amounts represent restructuring charges related to business
transformation activities.
[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 non-recurring impact of provisional
fair value step-up of CCBPI inventories.
[6] Amounts relate to the increase in a provision established in
connection with an ongoing labour law matter in Germany.
[7] 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.
Adjusted comparable cost of sales
for the six months ending 28 June 2024 were €6,534 million, up 2.5%
versus 2023. Cost of sales per unit case increased by 2.5% on an
adjusted 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 manufacturing costs and increased tax driven by the
Netherlands, partially offset by the mix effect from the strong
growth in the Philippines.
Operating Expenses
|
Adjusted Operating Expenses
In millions of €. FX impact calculated by recasting current
year results at prior year rates.
|
|
Six Months
Ended
|
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
As reported
|
|
2,354
|
2,153
|
9.3%
|
|
Add: Adjusted operating expenses
impact[1]
|
|
43
|
128
|
n/a
|
|
Adjust: Acquisition
accounting[2]
|
|
1
|
8
|
|
Adjust: Total items impacting
comparability
|
|
(142)
|
(52)
|
|
Adjust: Restructuring
charges[3]
|
|
(90)
|
(42)
|
|
Adjust: Acquisition
and Integration related costs[4]
|
|
(11)
|
(11)
|
|
Adjust:
Litigation[5]
|
|
(1)
|
-
|
|
Adjust:
Impairment[6]
|
|
(12)
|
-
|
|
Adjust: Accelerated
amortisation[7]
|
|
(28)
|
-
|
|
Adjust:
Other[8]
|
|
-
|
1
|
|
Adjusted Comparable
|
|
2,256
|
2,237
|
0.8%
|
|
Adjust: Impact of fx
changes
|
|
16
|
n/a
|
n/a
|
|
Adjusted Comparable & Fx-neutral
|
|
2,272
|
2,237
|
1.6%
|
__________________________
[1] Amounts represent unaudited operating expenses of CCBPI as if
the acquisition had occurred on 1 January, including provisional
acquisition accounting adjustments and CCEP IFRS accounting policy
reclassifications.
[2] Amounts represent transaction accounting adjustments as if
the acquisition had occurred on 1 January. These include the
depreciation and amortisation impact relating to provisional fair
values for intangibles and property plant and equipment and
acquisition and integration related costs.
[3] Amounts represent restructuring charges related to business
transformation activities.
[4]
Amounts represent cost associated with the
acquisition and integration of CCBPI.
[5] Amounts relate to the increase in a provision established in
connection with an ongoing labour law matter in Germany.
[6] Amounts represent the impairment in relation to the Feral
brand. The Group is in a process of selling the brand, which has
been classified as an asset held for sale in the Group's condensed
consolidated interim statement of financial position as of
28 June 2024.
[7] Amounts represent accelerated amortisation charges associated
with the discontinuation of the relationship between CCEP and Beam
Suntory upon expiration of the current contractual
agreements.
[8] 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.
Adjusted comparable operating
expenses for the six months ending 28 June 2024 were €2,256
million, up 0.8% versus 2023, reflecting inflation and higher
volumes, 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
|
Adjusted Operating Profit CCEP
In millions of €. FX impact calculated by recasting current
year results at prior year rates.
|
|
Six Months
Ended
|
|
|
28 June
2024
|
30 June
2023
|
% Change
|
|
As reported
|
|
1,142
|
1,170
|
(2.4)
%
|
|
Add: Adjusted operating profit
impact
|
|
12
|
42
|
n/a
|
|
Adjust: Acquisition
accounting
|
|
(2)
|
(20)
|
|
Adjust: Total items impacting
comparability
|
|
154
|
10
|
|
Adjusted Comparable
|
|
1,306
|
1,202
|
8.7%
|
|
Adjust: Impact of fx
changes
|
|
4
|
n/a
|
n/a
|
|
Adjusted Comparable & Fx-neutral
|
|
1,310
|
1,202
|
9.0%
|
|
Adjusted Operating Profit APS
|
|
|
|
|
|
As reported
|
|
260
|
283
|
(8.1)
%
|
|
Add: Adjusted operating profit
impact
|
|
12
|
42
|
n/a
|
|
Adjust: Acquisition
accounting
|
|
(2)
|
(20)
|
|
Adjust: Total items impacting
comparability
|
|
57
|
(27)
|
|
Adjusted Comparable
|
|
327
|
278
|
17.6
%
|
|
Adjust: Impact of fx
changes
|
|
11
|
n/a
|
n/a
|
|
Adjusted Comparable & Fx-neutral
|
|
338
|
278
|
21.6
%
|
|
Supplemental Financial Information - Effective Tax
Rate
|
The effective tax rate was 22% for
the six months ended 28 June 2024 and 30 June 2023, respectively,
and 24% for the year ended 31 December 2023.
For the six months ending 28 June
2024, 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 25%, and adjustments made in respect of prior
periods.
We expect our full year 2024
comparable effective tax rate to be approximately 25%.
|
Income tax
In millions of €
|
Six Months
Ended
|
|
28 June
2024
|
30 June
2023
|
|
As reported
|
234
|
247
|
|
Adjust: Total items impacting
comparability
|
41
|
2
|
|
Adjust: Restructuring
charges[1]
|
25
|
9
|
|
Adjust: Acquisition
and Integration related costs[2]
|
2
|
-
|
|
Adjust: Inventory
step-up[3]
|
2
|
-
|
|
Adjust:
Impairment[4]
|
4
|
-
|
|
Adjust: Accelerated
amortisation[5]
|
8
|
-
|
|
Adjust: European
flooding[6]
|
-
|
(1)
|
|
Adjust: Coal
royalties[7]
|
-
|
(6)
|
|
Comparable
|
275
|
249
|
__________________________
[1] Amounts represent the tax impact of restructuring charges
related to business transformation activities.
[2]
Amounts represent the tax impact of costs
associated with the acquisition and integration of
CCBPI.
[3] Amounts represent the tax impact of the non-recurring impact
of provisional fair value step-up of CCBPI inventories.
[4] Amounts represent the tax impact of the impairment in
relation to the Feral brand. The Group is in a process of selling
the brand, which has been classified as an asset held for sale in
the Group's condensed consolidated interim statement of financial
position as of 28 June 2024.
[5] Amounts represent the tax impact of accelerated amortisation
charges associated with the discontinuation of the relationship
between CCEP and Beam Suntory upon expiration of the current
contractual agreements.
[6] 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.
[7] Amounts represent the tax impact of royalty income arising
from the ownership of certain mineral rights in Australia. The
royalty income was recognised as "Other income" in our condensed
consolidated interim income statement as of the six months ended
30 June 2023.
|
Supplemental Financial Information - Comparable Free Cash
Flow
|
|
Comparable Free Cash Flow
In millions of €
|
|
Six Months
Ended
|
|
|
28 June
2024
|
|
30 June
2023
|
|
Net cash flows from operating activities
|
|
1,122
|
|
1,307
|
|
Less: Purchases of property, plant
and equipment
|
|
(390)
|
|
(264)
|
|
Less: Purchases of capitalised
software
|
|
(42)
|
|
(40)
|
|
Add: Proceeds from sales of
property, plant and equipment
|
|
2
|
|
9
|
|
Less: Payments of principal on
lease obligations
|
|
(77)
|
|
(74)
|
|
Less: Net interest
payments
|
|
(88)
|
|
(88)
|
|
Adjust: Items impacting
comparability[1]
|
|
12
|
|
(89)
|
|
Comparable Free Cash Flow
|
|
539
|
|
761
|
[1] During the six months ended 30 June
2023, the Group received net of tax cash proceeds of
€89 million in connection with the royalty
income arising from the ownership of certain mineral rights in
Australia. During the six months ended 28 June
2024, the Group paid a further €12
million of cash taxes in connection with those proceeds. The
cash impacts associated with those specific events have been
included within the Group's net cash flows from operating
activities for the six months ended 28 June
2024 and 30 June 2023,
respectively. Given the unusual nature and to allow for better
period to period comparability, our comparable free cash flow
measure excludes the cash impact related to those items.
If the Acquisition had occurred on
1 January 2024, adjusted comparable free cash flow for the six
months ended 28 June 2024 is estimated to approximate the
comparable free cash flow in the table above.
|
Supplemental Financial Information -
Borrowings
|
|
Net Debt
In millions of €
|
As at
|
|
Credit Ratings
As of 6 August 2024
|
|
|
|
|
|
28 June
2024
|
|
31 December
2023
|
|
|
Moody's
|
|
Fitch
Ratings
|
|
Total
borrowings[4]
|
12,152
|
|
11,396
|
|
Long-term rating
|
|
Baa1
|
|
BBB+
|
|
Fair value of hedges related to
borrowings[1]
|
91
|
|
28
|
|
Outlook
|
|
Stable
|
|
Stable
|
|
Other financial
assets/liabilities[1]
|
18
|
|
20
|
|
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
|
12,261
|
|
11,444
|
|
|
Less: cash and cash
equivalents[2],[4]
|
(1,610)
|
|
(1,419)
|
|
|
Less: short term
investments[3]
|
(272)
|
|
(568)
|
|
|
Net debt
|
10,379
|
|
9,457
|
|
______________________
[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 28 June
2024 and 31 December 2023
include €78 million and
€42 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 28 June 2024 and 31
December 2023 include €16 million and €33 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
28 June 2024 and 31
December 2023 include €334 million
and €0 million respectively
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 - Comparable
EBITDA
|
|
Comparable EBITDA
In millions of €
|
|
Six Months
Ended
|
|
|
28 June
2024
|
|
30 June
2023
|
|
Reported profit after tax
|
|
811
|
|
854
|
|
Taxes
|
|
234
|
|
247
|
|
Finance costs, net
|
|
87
|
|
63
|
|
Non-operating items
|
|
10
|
|
6
|
|
Reported operating profit
|
|
1,142
|
|
1,170
|
|
Depreciation and
amortisation
|
|
448
|
|
377
|
|
Reported EBITDA
|
|
1,590
|
|
1,547
|
|
|
|
|
|
|
|
Items impacting comparability
|
|
|
|
|
|
Restructuring
charges[1]
|
|
87
|
|
47
|
|
Acquisition and Integration
related costs[2]
|
|
11
|
|
-
|
|
Inventory
step-up[3]
|
|
5
|
|
-
|
|
European
flooding[4]
|
|
1
|
|
(3)
|
|
Coal
royalties[5]
|
|
-
|
|
(18)
|
|
Sale of sub-strata and associated
mineral rights[6]
|
|
-
|
|
(35)
|
|
Impairment[7]
|
|
12
|
|
-
|
|
Litigation[8]
|
|
2
|
|
-
|
|
Comparable EBITDA
|
|
1,708
|
|
1,538
|
______________________
[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 CCBPI.
[3] Amounts represent the non-recurring impact of provisional fair
value step-up of CCBPI inventories.
[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
manufacturing facilities in Chaudfontaine and Bad
Neuenahr.
[5] Amounts represent royalty income arising from the ownership
of certain mineral rights in Australia. The royalty income was
recognised as "Other income" in our condensed consolidated interim
income statement as of the six months ended 30
June 2023.
[6] 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.
[7] Amounts represent the impairment in relation to the Feral
brand. The Group is in a process of selling the brand, which has
been classified as an asset held for sale in the Group's condensed
consolidated interim statement of financial position as of
28 June 2024.
[8] Amounts relate to the increase in a provision established in
connection with an ongoing labour law matter in Germany.
|
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 2023
Integrated Report on Form 20-F for the year ended 31 December 2023
('2023 Integrated Report' pages 68 to 78 and 243 to 251
respectively) continue to represent our 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 trends included in our 2023 Integrated Report, but
we have identified some developments this first half of
2024.
Since the publication of the
Integrated Report in March, the macro risk environment remains
similar and we believe that the reported key control mitigations
continue to be appropriate and effective. If current geopolitical
tensions escalate, we foresee that freight disruptions, shortages
and sanctions could be the consequences and have a significant
impact on global trade.
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. CCEP has been working to de-risk its supply
chain and put in place plans to secure commodities in particular
with our Asian Pacific suppliers due to geopolitical tensions in
the region. We have noticed a weaker volume performance in
Indonesia impacted by the geopolitical situation in the Middle
East. We continue to monitor the developments of the situation and
any other potential impacts. We monitor and assess potential shifts
and changes in regulations and policies as a consequence of the
elections in the EU, GB, US and other geographies relevant for
CCEP.
The macroeconomic outlook is still
very uncertain and volatile although we started seeing inflation
easing down in major economies like US, UK, Eurozone, Australia.
Central Banks started or are about to start cutting interest rates,
but the timing and the pace of it is very data dependent, which is
creating volatility. Geopolitical problems and elections in major
economies also create uncertainty and keep the volatility high.
However, stock markets and financing environment have been very
resilient so far which is an indication of a soft rather than a
hard landing, and we are cautiously optimistic about the second
half of the year since inflation seems to be controlled and growth
is still positive.
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. 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.
At CCEP we are embracing the
technological advancements made in recent years and are increasing
our technical footprint through transformation projects and
acquisitions. We have noticed an increase in identity-based attacks
through Social Engineering, Phishing or even AI-driven scams. CCEP
has responded with increased focus on improving our global Training
& Awareness program, increased focus on process- and control
harmonisation and continued focus on technological advancements
that might impact CCEP.
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,
France, and Indonesia. 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, as well as the
developments in regard to the implementation of Deposit Return
Systems and waste collection solutions.
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 2023
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 8 of this interim management report.
The risks described in this report
and in our 2023 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
(What is the risk?)
|
Causal factors themes (What gives rise to the
risk?)
|
Consequence themes (Potential impact of the
risk)
|
Key control mitigations
(How we manage it)
|
Change vs. 2023 Integrated
Report
|
|
Business Disruption
|
The risk of prolonged, large scale
natural and/or man made disruptive events.
|
• Cyber attack or IT/operational
technology system failure
• Pandemics
• Extreme weather events (floods,
fires)
• Natural disasters
• Civil unrest, war and
terrorism
|
• Disruption to supply
chains/operations
• Safety and wellbeing of our
people
• Brand and reputation
damage
• Financial impact
|
• TCCC Business Resilience
Framework
• CCEP BCR Governance
Framework
• CCEP Incident Management and
Crisis Response (IMCR) process
|
→
|
|
Packaging
|
The risks relating to packaging
waste and plastic pollution, and
single use plastic.
|
• Stakeholder concern about the
environmental impacts of single use plastic packaging, litter and
packaging waste
|
• Brand and reputation damage from
not keeping up with community/customer expectations
• Financial impact from increased
taxes and on the costs of doing business
• Regulatory and compliance
impacts
• Increased potential for activism
and litigation
|
• rPET roadmap
• Advocacy to support container
deposit and return schemes
• Test, trial and learn approach
to refillable packaging in multiple markets
• Innovation on dispensed delivery
solutions
• Packaging design and
innovation
• CCEP Ventures investment in new
recycling technologies
• Industry
collaboration
|
→
|
|
Legal, Regulatory and Tax
|
The risks associated with new or
changing legal, regulatory or tax, legislative environment and
subsequent obligations and compliance requirements.
|
• Increased regulation on business
activities
• Use of regulated
ingredients
• Increased packaging
regulation
• Commercial and marketing
restrictions on sugar, sweeteners and energy ingredients
• Labelling requirements
• Distribution and sale
regulations
• Employment regulation
• Sugar & low and no calorie
sweetener, energy drinks ingredients, packaging and carbon
taxes
• Regulation of new technology
including AI
|
• Financial impact from new or
higher taxes
• Stricter sales and marketing
controls impacting margins and market share
• Punitive action from regulators
or other legislative bodies
• Increase to the cost of
compliance to meet stricter or new regulatory
requirements
• Brand and reputation
damage
|
• Continuous monitoring,
assessment and appropriate implementation of new or changing laws
and regulations
• Dialogue with government
representatives and input to public consultations on new or
changing regulations and in anticipation of potential regulatory
pressures on drinks, carbon and packaging
• Development of compliance
processes and training programmes for employees
|
→
|
|
Cyber and IT Resilience
|
The risks related to the protection
of information systems and data from unauthorised access, misuse,
disruption, modification, or destruction.
|
• External attackers seeking
to ransom or disrupt systems and data
• Dependency on third
parties
• Internal misuse (malicious or
accidental)
• Security and maintenance of IT
infrastructure and applications
• Change programmes
|
• Financial impact from disruption
to operations or fines
• Safety and wellbeing of
employees, customers or business partners who may have their
personal information stolen
• Brand and reputation
damage
|
• Cyber strategy
• Information Security
Policy
• Information security and data
privacy training and awareness
• BCP and disaster recovery
programmes
• Threat vulnerability management
and threat intelligence
• Hardware lifecycle
programme
• Global Security Operations
Centre
• Third party risk
assessments
• Data Privacy
Programme
• IT change management
process
|
→
|
|
Economic and political conditions
|
The risks associated with operating
in volatile and challenging macroeconomic and geopolitical
conditions.
|
• Low economic growth or
recession
• High currency and commodity
price volatility
• High inflation
• Political
instability/conflict
• Civil unrest
|
• Financial impact from reduced
demand from consumers and an increasing cost base
• Disruption to supply chains from
sanctions or impact on shipping/trade routes
|
• Hedging Policy
• Keeping a strong level of
liquidity and backup credit lines at all times for working capital
purposes as well as unexpected changes in cash flow
• Supply risk and contingency
process
• Risk sensing
technology
• Cross Enterprise Procurement
Group (CEPG) to leverage global collaboration
|
→
|
|
Market
|
The risks to maintaining the
relationships with our customers and consumers to meet their
changing demands, needs and expectations.
|
• New distribution channels and
platforms
• Changing customer and consumer
habits
• Changes in the competitive
landscape
• Legislative and regulatory
changes
|
• Financial impact from reduced
demand from consumers
• Decreasing margins and market
share
• Inability to meet strategic
objectives
• Brand and reputation
damage
|
• Shopper insights
• Pack and product
innovation
• International marketing service
agreement guidelines
• Affordability plan
• Business development plans
aligned with our customers
• Key account development and
category planning
• New route to market
opportunities, for example eB2B and platforms/direct to
consumer
|
→
|
|
Climate change and water
|
The risks and opportunities
associated with managing the impacts of climate change and water
scarcity across our value chain.
|
• GHG emissions across our value
chain, including emissions from our production facilities, CDE, the
transportation of our products, packaging and the ingredients that
we use, and storage of our products
• Scarcity of water and water
quality issues related to water sources we and our suppliers rely
upon
• Regulatory and legislative
initiatives aimed at reducing GHG emissions
• Water usage restrictions that
may be mandatory at a local level during scarcity peaks
• Changing consumer and investor
preferences
|
• Brand and reputation damage from
not meeting sustainability targets
• Financial impacts from future
carbon taxes and the transition costs to low GHG
emissions
• Regulatory and compliance
impacts related to TCFD disclosures
• The disruption of water supply
to our production sites and key suppliers
|
• Target and roadmap to reduce GHG
emissions by 30% versus 2019 and reach Net Zero emissions by
2040
• Climate transition
plan
• CCEP ventures - investment
platform for sustainability initiatives
• Supplier GHG emissions reduction
targets and engagement programme
• Investment in renewable and
low-carbon energy projects
• Packaging GHG emission reduction
initiatives
• Responsible Sourcing
Policy
• Transport GHG emission reduction
initiatives
• CDE emission reduction
initiatives
• Customer and stakeholder
engagement
• Enterprise water risk
assessment
• The Coca-Cola Company's Facility
Risk Assessment and - Source Vulnerability Assessments
• Water efficiency and
replenishment initiatives
• Investment in wastewater
treatment technology
• ISO14001
certification
|
→
|
|
Changes in customer and consumer buying
trends
and category
perception
|
The risks relating to our ability
to effectively adapt and respond to changes in consumer preferences
and behaviour towards our products.
|
• Legislative changes driven by
government or lobby groups
• External marketing campaigns
towards alternative ingredients/products
• Publication of guidelines or
recommendations related to sugar consumption, energy drinks or
additives by WHO or other health authorities
• Increased media scrutiny and
social media coverage impacting consumer perception on ingredients
and packaging
• Viability of alternatives to
sugar, sweeteners and other ingredients within our product
portfolio
• Consumer lifestyle
|
• Financial impacts from decline
in sales volumes and market share (delisting, demand
decrease)
• Increased regulatory
scrutiny
• Commercial, marketing and
labelling restrictions
• Increased taxes on our
products
• Damage to brand and
reputation
|
• Support TCCC, EU or national
associations on strong advocacy regarding low and no calorie
sweeteners and processed food as well as in innovation
efforts
|
→
|
|
Business transformation, integration and digital
capability
|
The risks relating to the execution
of our strategic and continuous improvement initiatives.
|
• Digital
transformation
• Identification and execution of
supply chain improvements
• Relationships with our partners
and franchisors
• Ineffective coordination between
BUs and central functions
• Change management
failure
• Diversion of management's focus
away from our core business
|
• Damage to brand and
reputation
• Financial impacts from a decline
in our share price arising from not realising the value creation
from these initiatives
• Industrial action and disruption
to our operations
|
• Competitiveness Steering
Committee and governance model for enterprise wide
transformation
• CCEP project management
methodology and dedicated programme management office
• Analysis and review of
acquisition-related activities including enterprise valuation and
capital allocation, acquisition due diligence, business performance
risk indicators and integration planning
|
→
|
|
People and wellbeing
|
The risks relating to the
identification, attraction, development, and retention of
talent. Also risks relating to the wellbeing of our people
(including human rights and modern slavery).
|
• Job design and working
conditions
• Reward and
recognition
• Misconduct by third parties
relating to human rights
|
• Damage to brand and
reputation
• Financial impacts from a decline
in employee engagement and productivity
• Industrial action and disruption
to our operations
• Punitive action from regulators
or other legislative bodies and potential for litigation
|
• Community investment
programmes
• Employee volunteering
policy
• Business for societal impact
framework
• Anti-harassment and ID&E
Policy
• Recruitment: Candidate
Charter
• Employee development
• Wellbeing strategy
• Safety strategy
• Annual Modern Slavery Statement
and country specific human rights risk assessments in Germany and
Norway
• CoC
• ESPP
|
→
|
|
Relationships with TCCC and other
franchisors
|
The risk of misaligned incentives
or strategy with TCCC and/or other franchisors.
|
• Lack of effective engagement,
communication and/or discussion with franchisors
|
• Damage to brand and
reputation
• Financial impacts, including as
a result of TCCC or other franchisors acting adversely to our
interests with respect to our business relationship
|
• Clear agreements govern the
relationships
• Long range planning and annual
business planning processes
• Routine meetings between CCEP
and franchisors
|
→
|
|
Product quality
|
The risks relating to ensuring the
wide range of products we produce are safe for consumption and
adhere to strict food safety and quality requirements.
|
• A failure in food safety, food
quality, food defence or food fraud processes
|
• Consumer health and safety
concerns
• Reputation damage and loss of
consumer trust
• Regulatory and legal
consequences
• Financial losses
|
• Franchisor standards and
governance
• ISO 9001 and FSSC 22000
Certification
• Customer and consumer complaint
management
• Incident management and crisis
resolution
|
→
|
*Change vs 2023 Integrated Report
may be as a result of a change in likelihood or impact.
Related party disclosures are
presented in Note 12 of the Notes to the condensed consolidated
interim financial statements contained in this interim management
report.
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 €1.8 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.
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.
The Directors of the Company
confirm that to the best of their knowledge:
• The condensed
consolidated interim financial statements for the six months ended
28 June 2024 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
|
Ed Walker
|
|
Chief Executive Officer
|
Chief Financial Officer
|
7 August 2024
INDEPENDENT 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 28 June 2024
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 - 15. 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 28 June 2024 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" (ISRE) 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 for 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
7
August 2024
Coca-Cola Europacific Partners
plc
Condensed Consolidated Interim
Income Statement (Unaudited)
|
|
|
|
Six Months
Ended
|
|
|
|
|
28 June
2024
|
|
30 June
2023
|
|
|
Note
|
|
€ million
|
|
€ million
|
|
Revenue
|
3
|
|
9,828
|
|
8,977
|
|
Cost of sales
|
|
|
(6,332)
|
|
(5,707)
|
|
Gross profit
|
|
|
3,496
|
|
3,270
|
|
Selling and distribution
expenses
|
|
|
(1,610)
|
|
(1,522)
|
|
Administrative expenses
|
|
|
(744)
|
|
(631)
|
|
Other income
|
15
|
|
-
|
|
53
|
|
Operating profit
|
|
|
1,142
|
|
1,170
|
|
Finance income
|
|
|
42
|
|
31
|
|
Finance costs
|
|
|
(129)
|
|
(94)
|
|
Total finance costs, net
|
|
|
(87)
|
|
(63)
|
|
Non-operating items
|
|
|
(10)
|
|
(6)
|
|
Profit before taxes
|
|
|
1,045
|
|
1,101
|
|
Taxes
|
13
|
|
(234)
|
|
(247)
|
|
Profit after taxes
|
|
|
811
|
|
854
|
|
|
|
|
|
|
|
|
Profit attributable to
shareholders
|
|
|
797
|
|
854
|
|
Profit attributable to
non-controlling interests
|
|
|
14
|
|
-
|
|
Profit after taxes
|
|
|
811
|
|
854
|
|
|
|
|
|
|
|
|
Basic earnings per share (€)
|
4
|
|
1.73
|
|
1.86
|
|
Diluted earnings per share (€)
|
4
|
|
1.73
|
|
1.86
|
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
|
|
|
|
28 June
2024
|
|
30 June
2023
|
|
|
|
€ million
|
|
€ million
|
|
Profit after taxes
|
|
811
|
|
854
|
|
Components of other comprehensive
income/(loss):
|
|
|
|
|
|
Items that may be subsequently
reclassified to the income statement:
|
|
|
|
|
|
Foreign currency
translations:
|
|
|
|
|
|
Pretax activity,
net
|
|
44
|
|
(280)
|
|
Tax
effect
|
|
-
|
|
-
|
|
Foreign currency translation, net
of tax
|
|
44
|
|
(280)
|
|
Cash flow hedges:
|
|
|
|
|
|
Pretax activity,
net
|
|
35
|
|
(38)
|
|
Tax
effect
|
|
(8)
|
|
7
|
|
Cash flow hedges, net of
tax
|
|
27
|
|
(31)
|
|
Other reserves:
|
|
|
|
|
|
Pretax activity,
net
|
|
(6)
|
|
13
|
|
Tax effect
|
|
2
|
|
(3)
|
|
Other reserves, net of
tax
|
|
(4)
|
|
10
|
|
Items that may be subsequently reclassified to the income
statement
|
|
67
|
|
(301)
|
|
Items that will not be subsequently
reclassified to the income statement:
|
|
|
|
|
|
Pension plan
remeasurements:
|
|
|
|
|
|
Pretax activity,
net
|
|
23
|
|
13
|
|
Tax
effect
|
|
(6)
|
|
(4)
|
|
Pension plan adjustments, net of
tax
|
|
17
|
|
9
|
|
Items that will not be subsequently reclassified to the income
statement:
|
|
17
|
|
9
|
|
Other comprehensive income/(loss) for the period, net of
tax
|
|
84
|
|
(292)
|
|
Comprehensive income for the period
|
|
895
|
|
562
|
|
|
|
|
|
|
|
Comprehensive income attributable
to shareholders
|
|
882
|
|
562
|
|
Comprehensive income attributable
to non-controlling interests
|
|
13
|
|
-
|
|
Comprehensive income for the period
|
|
895
|
|
562
|
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)
|
|
|
|
28 June
2024
|
|
31 December
2023
|
|
|
Note
|
|
€ million
|
|
€ million
|
|
ASSETS
|
|
|
|
|
|
|
Non-current:
|
|
|
|
|
|
|
Intangible assets
|
5
|
|
12,889
|
|
12,395
|
|
Goodwill
|
5
|
|
4,791
|
|
4,514
|
|
Property, plant and
equipment
|
6
|
|
6,382
|
|
5,344
|
|
Investment property
|
7
|
|
76
|
|
-
|
|
Non-current derivative
assets
|
9
|
|
91
|
|
100
|
|
Deferred tax assets
|
|
|
1
|
|
1
|
|
Other non-current
assets
|
|
|
353
|
|
295
|
|
Total non-current assets
|
|
|
24,583
|
|
22,649
|
|
Current:
|
|
|
|
|
|
|
Current derivative
assets
|
9
|
|
87
|
|
161
|
|
Current tax assets
|
|
|
54
|
|
58
|
|
Inventories
|
|
|
1,914
|
|
1,356
|
|
Amounts receivable from related
parties
|
12
|
|
129
|
|
123
|
|
Trade accounts
receivable
|
|
|
2,954
|
|
2,547
|
|
Other current assets
|
|
|
455
|
|
351
|
|
Assets held for sale
|
8
|
|
43
|
|
22
|
|
Short term investments
|
|
|
272
|
|
568
|
|
Cash and cash
equivalents
|
|
|
1,610
|
|
1,419
|
|
Total current assets
|
|
|
7,518
|
|
6,605
|
|
Total assets
|
|
|
32,101
|
|
29,254
|
|
LIABILITIES
|
|
|
|
|
|
|
Non-current:
|
|
|
|
|
|
|
Borrowings, less current
portion
|
10
|
|
10,131
|
|
10,096
|
|
Employee benefit
liabilities
|
|
|
188
|
|
191
|
|
Non-current provisions
|
14
|
|
69
|
|
45
|
|
Non-current derivative
liabilities
|
9
|
|
194
|
|
169
|
|
Deferred tax
liabilities
|
|
|
3,565
|
|
3,378
|
|
Non-current tax
liabilities
|
|
|
19
|
|
75
|
|
Other non-current
liabilities
|
|
|
48
|
|
46
|
|
Total non-current liabilities
|
|
|
14,214
|
|
14,000
|
|
Current:
|
|
|
|
|
|
|
Current portion of
borrowings
|
10
|
|
2,021
|
|
1,300
|
|
Current portion of employee
benefit liabilities
|
|
|
7
|
|
8
|
|
Current provisions
|
14
|
|
174
|
|
114
|
|
Current derivative
liabilities
|
9
|
|
60
|
|
99
|
|
Current tax liabilities
|
|
|
310
|
|
253
|
|
Amounts payable to related
parties
|
12
|
|
450
|
|
270
|
|
Trade and other
payables
|
|
|
5,856
|
|
5,234
|
|
Total current liabilities
|
|
|
8,878
|
|
7,278
|
|
Total liabilities
|
|
|
23,092
|
|
21,278
|
|
EQUITY
|
|
|
|
|
|
|
Share capital
|
|
|
5
|
|
5
|
|
Share premium
|
|
|
287
|
|
276
|
|
Merger reserves
|
|
|
287
|
|
287
|
|
Other reserves
|
|
|
(770)
|
|
(823)
|
|
Retained earnings
|
|
|
8,717
|
|
8,231
|
|
Equity attributable to shareholders
|
|
|
8,526
|
|
7,976
|
|
Non-controlling
interest
|
11
|
|
483
|
|
-
|
|
Total equity
|
|
|
9,009
|
|
7,976
|
|
Total equity and liabilities
|
|
|
32,101
|
|
29,254
|
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
|
|
|
|
|
28 June
2024
|
|
30 June
2023
|
|
|
Note
|
|
€ million
|
|
€ million
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Profit before taxes
|
|
|
1,045
|
|
1,101
|
|
Adjustments to reconcile profit
before tax to net cash flows from operating activities:
|
|
|
|
|
|
|
Depreciation
|
6
|
|
360
|
|
324
|
|
Amortisation of intangible
assets
|
5
|
|
88
|
|
53
|
|
Impairment
|
|
|
12
|
|
-
|
|
Share-based payment
expense
|
|
|
20
|
|
29
|
|
Gain on sale of sub-strata and
associated mineral rights
|
15
|
|
-
|
|
(35)
|
|
Finance costs, net
|
|
|
87
|
|
63
|
|
Income taxes paid
|
|
|
(243)
|
|
(212)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Increase in trade and other
receivables
|
|
|
(347)
|
|
(385)
|
|
Increase in inventories
|
|
|
(338)
|
|
(353)
|
|
Increase in trade and other
payables
|
|
|
308
|
|
564
|
|
Increase in net payable receivable
from related parties
|
|
|
113
|
|
223
|
|
Increase/(decrease) in
provisions
|
|
|
42
|
|
(18)
|
|
Change in other operating assets
and liabilities
|
|
|
(25)
|
|
(47)
|
|
Net cash flows from operating activities
|
|
|
1,122
|
|
1,307
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Acquisition of bottling
operations, net of cash acquired
|
2
|
|
(1,528)
|
|
-
|
|
Purchases of property, plant and
equipment
|
|
|
(390)
|
|
(264)
|
|
Purchases of capitalised
software
|
|
|
(42)
|
|
(40)
|
|
Proceeds from sales of property,
plant and equipment
|
|
|
2
|
|
9
|
|
Proceeds from sales of intangible
assets
|
|
|
-
|
|
37
|
|
Proceeds from the sale of
sub-strata and associated mineral rights
|
15
|
|
-
|
|
35
|
|
Investments in equity
instruments
|
|
|
(3)
|
|
(1)
|
|
Net proceeds/(payments) of short
term investments
|
|
|
296
|
|
(638)
|
|
Interest received
|
|
|
37
|
|
-
|
|
Other investing activity,
net
|
|
|
6
|
|
1
|
|
Net cash flows used in investing activities
|
|
|
(1,622)
|
|
(861)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from borrowings,
net
|
10
|
|
382
|
|
-
|
|
Proceeds received from a
non-controlling shareholder relating to the acquisition of bottling
operations
|
2
|
|
468
|
|
-
|
|
Changes in short-term
borrowings
|
10
|
|
1,133
|
|
543
|
|
Settlement of debt-related cross
currency swaps
|
|
|
66
|
|
-
|
|
Repayments on third party
borrowings
|
10
|
|
(1,167)
|
|
(706)
|
|
Payments of principal on lease
obligations
|
|
|
(77)
|
|
(74)
|
|
Interest paid
|
|
|
(125)
|
|
(88)
|
|
Dividends paid
|
11
|
|
(343)
|
|
(308)
|
|
Exercise of employee share
options
|
|
|
11
|
|
31
|
|
Acquisition of non-controlling
interest
|
|
|
-
|
|
(282)
|
|
Other financing activities,
net
|
|
|
(16)
|
|
(9)
|
|
Net cash flows used in financing activities
|
|
|
332
|
|
(893)
|
|
Net change in net cash and cash equivalents
|
|
|
(168)
|
|
(447)
|
|
Net effect of currency exchange
rate changes on cash and cash equivalents
|
|
|
25
|
|
(16)
|
|
Net cash and cash equivalents at beginning of
period
|
|
|
1,419
|
|
1,387
|
|
Net cash and cash equivalents at end of
period
|
|
|
1,276
|
|
924
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents consist of:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
1,610
|
|
1,112
|
|
Bank overdrafts
|
10
|
|
(334)
|
|
(188)
|
|
Net cash and cash equivalents at end of
period
|
|
|
1,276
|
|
924
|
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
capital
|
|
Share
premium
|
|
Merger
reserves
|
|
Other
reserves
|
|
Retained
earnings
|
|
Total
|
|
Non-controlling
interest
|
|
Total
equity
|
|
|
Note
|
€ million
|
|
€ million
|
|
€ million
|
|
€ million
|
|
€ million
|
|
€ million
|
|
€ million
|
|
€ million
|
|
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
|
11
|
-
|
|
-
|
|
-
|
|
-
|
|
(309)
|
|
(309)
|
|
-
|
|
(309)
|
|
Balance as at 30 June 2023
|
|
5
|
|
265
|
|
287
|
|
(808)
|
|
8,011
|
|
7,760
|
|
-
|
|
7,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 31 December 2023
|
|
5
|
|
276
|
|
287
|
|
(823)
|
|
8,231
|
|
7,976
|
|
-
|
|
7,976
|
|
Profit after taxes
|
|
-
|
|
-
|
|
-
|
|
-
|
|
797
|
|
797
|
|
14
|
|
811
|
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
68
|
|
17
|
|
85
|
|
(1)
|
|
84
|
|
Total comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
68
|
|
814
|
|
882
|
|
13
|
|
895
|
|
Non-controlling interest
established in connection with the Acquisition
|
11
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
468
|
|
468
|
|
Non-controlling interest as part of
Acquisition
|
2
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2
|
|
2
|
|
Cash flow hedge (gains)/losses
transferred to goodwill relating to business combination
|
|
-
|
|
-
|
|
-
|
|
2
|
|
-
|
|
2
|
|
-
|
|
2
|
|
Cash flow hedge (gains)/losses
transferred to cost of inventories
|
|
-
|
|
-
|
|
-
|
|
(24)
|
|
-
|
|
(24)
|
|
-
|
|
(24)
|
|
Tax effect on cash flow hedge
(gains)/losses transferred to cost of inventories
|
|
-
|
|
-
|
|
-
|
|
7
|
|
-
|
|
7
|
|
-
|
|
7
|
|
Issue of shares during the
period
|
|
-
|
|
11
|
|
-
|
|
-
|
|
-
|
|
11
|
|
-
|
|
11
|
|
Purchase of own shares during the
period
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(8)
|
|
(8)
|
|
-
|
|
(8)
|
|
Equity-settled share-based payment
expense
|
|
-
|
|
-
|
|
-
|
|
-
|
|
20
|
|
20
|
|
-
|
|
20
|
|
Share-based payments tax
effects
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
1
|
|
-
|
|
1
|
|
Dividends
|
11
|
-
|
|
-
|
|
-
|
|
-
|
|
(341)
|
|
(341)
|
|
-
|
|
(341)
|
|
Balance as at 28 June 2024
|
|
5
|
|
287
|
|
287
|
|
(770)
|
|
8,717
|
|
8,526
|
|
483
|
|
9,009
|
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.
On 23 February 2024, the Group
together with Aboitiz Equity Ventures Inc. (AEV) jointly acquired
100% of Coca-Cola Beverages Philippines, Inc. (CCBPI) (the
Acquisition), a wholly owned subsidiary of The Coca-Cola Company
(TCCC). Refer to Note 2 for further details about the acquisition
of CCBPI.
The Company has ordinary shares
with a nominal value of €0.01 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 9717350. 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 (the Act). They
have been reviewed but not audited by the Group's auditor. The
statutory accounts for the Company for the year ended 31 December
2023, 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 for England and Wales. The
auditor's opinion on those accounts was unqualified and did not
contain a statement made under section 498 (2) or 498 (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 2023 consolidated financial
statements. The annual financial statements of the Group for the
year ended 31 December 2024 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).
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 2023. The Group has not early adopted any amendments to
accounting standards that have been issued but are not yet
effective. The policy for recognising income taxes in the interim
period is consistent with that applied in previous interim periods
and is described in Note 13.
Several amendments apply for the
first time in 2024, but do not have a material impact on the
condensed consolidated interim financial statements of the
Group.
The condensed consolidated interim
financial statements have been prepared on a going concern basis
(refer to the "Going Concern" paragraph on page
29).
Reporting periods
Results are presented for the
interim period from 1 January 2024 to 28 June 2024.
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 28 June 2024 versus the six months ended 30 June 2023,
and there will be two more selling days in the second six months of
2024 versus the second six months of 2023 (based upon a standard
five-day selling week).
The following table summarises the
number of selling days, for the half/full years ended 31 December
2024 and 31 December 2023 (based on a standard five-day selling
week):
|
|
|
Half year
|
|
Full year
|
|
2024
|
|
130
|
|
262
|
|
2023
|
|
130
|
|
260
|
|
Change
|
|
-
|
|
2
|
Comparability
Operating results for the first
half of 2024 may not be indicative of the results expected for the
year ended 31 December 2024 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
|
|
|
|
28 June
2024
|
|
30 June
2023
|
|
28 June
2024
|
|
31 December
2023
|
|
British pound
|
|
1.169
|
|
1.140
|
|
1.182
|
|
1.151
|
|
US dollar
|
|
0.925
|
|
0.925
|
|
0.935
|
|
0.905
|
|
Norwegian krone
|
|
0.087
|
|
0.089
|
|
0.088
|
|
0.089
|
|
Swedish krona
|
|
0.088
|
|
0.088
|
|
0.088
|
|
0.090
|
|
Icelandic krona
|
|
0.007
|
|
0.007
|
|
0.007
|
|
0.007
|
|
Australian dollar
|
|
0.609
|
|
0.626
|
|
0.622
|
|
0.615
|
|
Indonesian
rupiah[1]
|
|
0.058
|
|
0.061
|
|
0.057
|
|
0.059
|
|
New Zealand dollar
|
|
0.563
|
|
0.578
|
|
0.570
|
|
0.571
|
|
Papua New Guinean kina
|
|
0.245
|
|
0.262
|
|
0.243
|
|
0.243
|
|
Philippine
peso[2]
|
|
0.016
|
|
n/a
|
|
0.016
|
|
n/a
|
[1] Indonesian Rupiah is shown as 1000 IDR versus 1
EUR.
[2] For the six month period ended 28 June 2024, the Philippine
peso average rate is calculated as average from 23 February 2024 to
28 June 2024.
Note 2
BUSINESS COMBINATIONS
In November 2023, the Group
together with Aboitiz Equity Ventures Inc. (AEV) entered into a
definitive agreement with The Coca-Cola Company (TCCC) to jointly
acquire 100% of CCBPI, a wholly owned subsidiary of
TCCC.
The Acquisition was effected
through the establishment of a special purpose vehicle, CCEP
Aboitiz Beverages Philippines, Inc. (CABPI), which is owned and
funded 60% by CCEP
and 40% by AEV,
commensurate with the effective 60:40 ownership structure of
CCBPI.
On 23 February 2024, CABPI
acquired 100% of the beneficial ownership of Coca-Cola Beverages
Philippines, Inc. (CCBPI) for a total consideration of
US$1.68 billion (€1.55 billion), all of which was settled
in cash upon completion. CABPI is determined to have economic
substance and is identified as the accounting acquirer of
CCBPI.
CCBPI is the authorised bottler
and distributor of The Coca-Cola Company's (TCCC) beverage brands
in the Philippines. The Acquisition is a further step for the Group
to create a more diverse footprint within its existing Australia,
Pacific and Indonesia business segment. The transaction is aligned
with the Group's aim of driving sustainable growth through
diversification and building scale.
The transaction is being accounted
for under IFRS 3, "Business Combinations", using the acquisition
method. The initial accounting for the Acquisition is provisional
at the end of the current reporting period. The Group is in a
process of finalising the fair values for certain acquired assets,
and is still gathering information about certain assumed
liabilities based on facts that existed as at the date of
acquisition. Accordingly, the Group has recognised provisional
amounts for these items. During the measurement period, which will
not extend beyond 22 February 2025, the Group will adjust the
provisional amounts recognised at the acquisition date to reflect
new information obtained about facts and circumstances that existed
as at the acquisition date that, if known, would have affected the
measurement of the amounts recognised as at that date.
The following table details the
Euro equivalent consideration and provisional fair values of assets
acquired and liabilities assumed:
|
|
|
Total
|
|
|
€ million
|
|
Intangible assets
|
|
478
|
|
Property, plant and
equipment
|
|
1,089
|
|
Investment property
|
|
46
|
|
Other non-current assets
|
|
47
|
|
Inventories
|
|
228
|
|
Amounts receivable from related
parties
|
|
22
|
|
Trade accounts
receivable
|
|
75
|
|
Other current assets
|
|
58
|
|
Cash and cash
equivalents
|
|
19
|
|
Borrowings, less current
portion
|
|
(7)
|
|
Employee benefit
liabilities
|
|
(15)
|
|
Non-current provisions
|
|
(16)
|
|
Deferred tax liabilities
|
|
(173)
|
|
Other non-current
liabilities
|
|
(17)
|
|
Current portion of
borrowings
|
|
(61)
|
|
Current provisions
|
|
(29)
|
|
Current tax liabilities
|
|
(27)
|
|
Amounts payable to related
parties
|
|
(55)
|
|
Trade and other payables
|
|
(383)
|
|
Net identifiable assets acquired
|
|
1,279
|
|
Non-controlling interest
|
|
(2)
|
|
Goodwill
|
|
270
|
|
Fair value of consideration
|
|
1,547
|
Intangible assets include both
indefinite life and finite life intangible assets. Indefinite life
intangible assets consist of the bottling agreement with TCCC
(€440 million), which provide the Company with the exclusive
rights to prepare, package, distribute and sell TCCC branded
products in the territories in which it operates. Finite life
intangible assets are comprised primarily of customer
relationships.
The bottling agreement with TCCC
and customer relationships have been provisionally valued using a
multi-period excess earnings model, whereby the value of a specific
intangible asset is estimated from the excess earnings after fair
returns on all other assets employed have been deducted from the
business's after-tax operating earnings.
Goodwill of €270 million has
been recognised in connection with the Acquisition, representing
the excess of consideration transferred over the provisional fair
values of the net identifiable assets acquired.
The goodwill is attributable to
new growth opportunities, workforce and synergies of the combined
business operations, and it is not expected to be deductible for
tax purposes.
Property, plant and equipment has
been provisionally valued using a variety of valuation techniques
depending on the local market and considering the highest and best
use of each asset. These techniques include capitalisation of
comparable net market income, depreciated replacement cost and
sales comparison approach. Included within Property, plant and
equipment are right of use assets which have been provisionally
valued at €9 million. A corresponding lease liability of
€10 million is included within Borrowings.
The fair value of acquired trade
accounts receivable, net is €75 million. The gross contractual
amount related to these receivables is €77 million, of which
€2 million is expected to be uncollectible.
From acquisition, CCBPI
contributed revenue of €702 million and profit before tax of
€41 million to the Group for the period to 28 June 2024. If
the Acquisition had taken place at the beginning of the year,
adjusted comparable revenue and profit before tax for CCEP for the
six months ended 28 June 2024 would have been €970 million and
€48 million, respectively.
Deal and integration costs of
€11 million are included in administrative expenses in the
Condensed Consolidated Interim Income Statement for the six months
ended 28 June 2024. Cash payments for deal and integration costs
are included in operating cash flows in the Condensed Consolidated
Interim Statement of Cash Flows.
Note 3
OPERATING SEGMENTS
Description of segments and principal
activities
Following the acquisition of
CCBPI, the Group reevaluated its segment reporting under IFRS 8,
"Operating Segments". The Group continues to derive 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 acquisition of CCBPI has broadened the Group's
geographic footprint which now includes the Philippines, within its
existing API business segment, from now on renamed APS (Australia,
Pacific & South East Asia). 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 28 June
2024
|
|
Six Months Ended 30 June
2023
|
|
|
Europe
|
APS
|
Total
|
|
Europe
|
APS
|
Total
|
|
|
€ million
|
€ million
|
€ million
|
|
€ million
|
€ million
|
€ million
|
|
Revenue
|
7,279
|
2,549
|
9,828
|
|
7,105
|
1,872
|
8,977
|
|
Comparable operating
profit[1]
|
979
|
317
|
1,296
|
|
924
|
241
|
1,165
|
|
Items impacting
comparability[2]
|
|
|
(154)
|
|
|
|
5
|
|
Reported operating profit
|
|
|
1,142
|
|
|
|
1,170
|
|
Total finance costs, net
|
|
|
(87)
|
|
|
|
(63)
|
|
Non-operating items
|
|
|
(10)
|
|
|
|
(6)
|
|
Reported profit before tax
|
|
|
1,045
|
|
|
|
1,101
|
[1] Comparable operating profit includes comparable depreciation
and amortisation of €290 million and €123 million for Europe and
APS respectively, for the six months ended 28 June 2024. Comparable
depreciation and amortisation charges for the six months ended 30
June 2023 totalled €272 million and €101 million, for
Europe and APS respectively.
[2] Items impacting the comparability of period-over-period
financial performance for 2024 primarily include restructuring
charges of €95 million, €11 million of deal and
integration costs related to the Acquisition, impairment charges of
€12 million, and accelerated amortisation charges of
€28 million. Items impacting the comparability for 2023
primarily include €53 million of other income related to the
royalties arising from the ownership of certain mineral rights in
Australia (€18 million) and the proceeds from the sale of
sub-strata and associated mineral rights (€35 million),
partially offset by restructuring charges of
€51 million.
No single customer accounted for
more than 10% of the Group's revenue during the six months ended 28
June 2024 and 30 June 2023.
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
|
|
|
|
28 June
2024
|
|
30 June
2023
|
|
Revenue
|
|
€ million
|
|
€ million
|
|
Great Britain
|
|
1,594
|
|
1,570
|
|
Germany
|
|
1,540
|
|
1,458
|
|
Iberia[1]
|
|
1,570
|
|
1,541
|
|
France[2]
|
|
1,219
|
|
1,200
|
|
Belgium/Luxembourg
|
|
526
|
|
541
|
|
Netherlands
|
|
380
|
|
355
|
|
Norway
|
|
204
|
|
193
|
|
Sweden
|
|
207
|
|
207
|
|
Iceland
|
|
39
|
|
40
|
|
Total Europe
|
|
7,279
|
|
7,105
|
|
Australia
|
|
1,169
|
|
1,162
|
|
New Zealand and Pacific
Islands
|
|
326
|
|
330
|
|
Indonesia and Papua New
Guinea
|
|
352
|
|
380
|
|
Philippines
|
|
702
|
|
-
|
|
Total APS
|
|
2,549
|
|
1,872
|
|
Total CCEP
|
|
9,828
|
|
8,977
|
[1] Iberia refers to Spain, Portugal & Andorra.
[2] France refers to continental France & Monaco.
Note 4
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
|
|
|
|
28 June
2024
|
|
30 June
2023
|
|
Profit after taxes attributable to
equity shareholders (€ million)
|
|
797
|
|
854
|
|
Basic weighted average number of
Shares in issue[1] (million)
|
|
460
|
|
458
|
|
Effect of dilutive potential
Shares[2] (million)
|
|
-
|
|
1
|
|
Diluted weighted average number of
Shares in issue[1] (million)
|
|
460
|
|
459
|
|
Basic earnings per share
(€)
|
|
1.73
|
|
1.86
|
|
Diluted earnings per share
(€)
|
|
1.73
|
|
1.86
|
[1] As at 28 June 2024 and 30 June 2023, the Group had 460,371,583
and 458,846,191 Shares, respectively, in issue and
outstanding.
[2] For the six months ended 28 June 2024 and 30 June 2023, 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 5
INTANGIBLE ASSETS AND GOODWILL
The following table summarises the
movement in net book value for intangible assets and goodwill
during the six months ended 28 June 2024:
|
|
|
Intangible
assets
|
|
Goodwill
|
|
|
|
€ million
|
|
€ million
|
|
Net book value as at 31 December 2023
|
|
12,395
|
|
4,514
|
|
Acquisition of CCBPI
|
|
478
|
|
270
|
|
Additions
|
|
68
|
|
-
|
|
Amortisation expense
|
|
(88)
|
|
-
|
|
Impairment
|
|
(10)
|
|
-
|
|
Transfers and
reclassifications
|
|
(5)
|
|
-
|
|
Currency translation
adjustments
|
|
51
|
|
7
|
|
Net book value as at 28 June 2024
|
|
12,889
|
|
4,791
|
During the first half of 2024, the
Group recognized €10 million of impairment in relation to the Feral
brand. The Group is in the process of selling the brand, which has
been classified as an asset held for sale in the Group's condensed
consolidated interim statement of financial position as of 28 June
2024. The sale is expected to be consummated before the end of the
year.
As part of its half year
impairment indicators review, the Group reassessed the value in use
assumptions for the Indonesia CGU. The Group estimates that a 1.1%
reduction in the terminal growth rate or a 0.8% increase in the
discount rate in this CGU, each in isolation, would eliminate
existing headroom.
Note 6
PROPERTY, PLANT AND EQUIPMENT
The following table summarises the
movement in net book value for property, plant and equipment during
the six months ended 28 June 2024:
|
|
|
Total
|
|
|
€ million
|
|
Net book value as at 31 December 2023
|
|
5,344
|
|
Acquisition of CCBPI
|
|
1,089
|
|
Additions
|
|
388
|
|
Disposals
|
|
(7)
|
|
Impairment
|
|
(2)
|
|
Transfers to assets held for
sale
|
|
(19)
|
|
Transfers to investment
property
|
|
(33)
|
|
Depreciation expense
|
|
(360)
|
|
Other transfers and
reclassifications
|
|
5
|
|
Currency translation
adjustments
|
|
(23)
|
|
Net book value as at 28 June
2024[1]
|
|
6,382
|
[1] The net book value of property, plant and equipment includes
right of use assets of €680 million of which €9 million
was acquired as
part of the
Acquisition.
Note 7
INVESTMENT PROPERTY
Investment property consists of
land and buildings held primarily for earning rental income,
capital appreciation, or both. These properties are not used by the
Group in the ordinary course of business. The Group applies the
cost model for measuring investment property. Under the cost model,
investment properties are initially recognized at cost.
Subsequently, they are depreciated on a straight-line basis over
their useful life (consistent with owner-occupied
property).
The following table summarises the
movement in net book value for investment property during the six
months ended 28 June 2024:
|
|
|
Total
|
|
|
€ million
|
|
Net book value as at 31 December 2023
|
|
-
|
|
Acquisition of CCBPI
|
|
46
|
|
Transfers from property, plant and
equipment
|
|
33
|
|
Currency translation
adjustments
|
|
(3)
|
|
Net book value as at 28 June 2024
|
|
76
|
As of 28 June 2024, and 31
December 2023, investment property values were €76 million and nil,
respectively. The increase is primarily due to the properties
acquired as part of the CCBPI business combination transaction (€46
million) and the transfer of some properties in APS and Great
Britain from Property, plant & equipment to Investment property
(€33 million).
No impairments were recognized
during the first half of 2024.
Note 8
ASSETS HELD FOR SALE
Assets classified as held for sale
as at 28 June 2024 and 31 December 2023 were €43 million and €22
million, respectively. These assets primarily consist of properties
expected to be sold in the near future.
Note 9
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 2023 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 28 June 2024 and 31 December
2023, was €11.2 billion and €10.6 billion, respectively. This
compared to the carrying value of total borrowings as at 28 June
2024 and 31 December 2023 of €12.2 billion and €11.4 billion,
respectively. Refer to Note 10 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) is
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 28 June 2024
and 31 December 2023, the total value of
derivative assets was €178 million and €261 million, respectively.
As at 28 June 2024 and 31 December 2023, the total value of derivative liabilities
was €254 million and €268 million, respectively. During the period,
€35 million of gains have been recorded within Other Comprehensive
Income, primarily related to changes in fair value of commodity
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.
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 10
BORROWINGS AND LEASES
Borrowings Outstanding
The following table summarises the
carrying value of the Group's borrowings as at the dates
presented:
|
|
|
28 June
2024
|
|
31 December
2023
|
|
|
|
€ million
|
|
€ million
|
|
Non-current:
|
|
|
|
|
|
Euro denominated
bonds[4]
|
|
8,076
|
|
8,428
|
|
Foreign currency bonds (swapped
into Euro)[1]
|
|
466
|
|
451
|
|
Australian dollar denominated
bonds
|
|
340
|
|
338
|
|
Foreign currency bonds (swapped
into Australian dollar or New Zealand dollar)[1],
[4]
|
|
328
|
|
337
|
|
PHP Term loan due
2034[5]
|
|
373
|
|
-
|
|
Lease obligations
|
|
548
|
|
542
|
|
Total non-current borrowings
|
|
10,131
|
|
10,096
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
Euro denominated
bonds[2]
|
|
350
|
|
500
|
|
Foreign currency bonds (swapped
into Euro)[1], [3]
|
|
-
|
|
588
|
|
Australian dollar denominated
bonds
|
|
-
|
|
62
|
|
PHP 3.5 billion 6% Loan
2025[6]
|
|
56
|
|
-
|
|
Euro commercial
paper[7]
|
|
1,133
|
|
-
|
|
Bank
overdrafts[8]
|
|
334
|
|
-
|
|
Lease obligations
|
|
148
|
|
150
|
|
Total current borrowings
|
|
2,021
|
|
1,300
|
[1] Cross currency swaps are used by the Group to swap foreign
currency bonds into the required local currency.
[2] In May 2024, the Group repaid on maturity the outstanding
amount related to the €500 million 1.125% Notes
2024.
[3]
In May 2024, the Group repaid on maturity the
outstanding amount related to the $650 million 0.8% Notes due
2024.
[4]
Some bonds are designated in full or partially in
a fair value hedge relationship.
[5] In February 2024, in connection with the Acquisition, the
Group entered into a term loan facility agreement with the Bank of
Philippine Islands. A term loan facility in an aggregate amount of
US$500 million was made available under the agreement to be
utilised in PHP. On 20 February 2024, the Group drew down a PHP
23.5 billion (US$420 million) loan under the facility
with a maturity date of 20 February 2034. The vast majority of the
balance (90% of the total principal amount) is repayable in full
upon maturity. In April 2024, the remaining undrawn portion of this
facility was subsequently cancelled.
[6] Included within the Group's borrowings as at 28 June 2024 is a
short term loan denominated in PHP assumed as part of the
Acquisition.
[7] During the 6 month period ending 28 June 2024, the Group
issued €4,778 million and repaid €3,645 million Euro commercial
paper. During the 6 month period ending 30 June 2023, the Group
issued €3,914 million and repaid €3,371 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.
[8] Included within bank overdrafts is €334 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 11
EQUITY
Share Capital
As at 28 June 2024, the Company
had issued and fully paid 460,371,583 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 28 June 2024 from the issue of 1,170,765 Shares,
following the exercise of share-based payment awards.
Dividends
During the first six months of
2024, the Board declared a first half dividend of €0.74 per share,
which was paid on 23 May 2024. During the first six months of 2023,
the Board declared a first half dividend of €0.67 per share, which
was paid on 25 May 2023.
Non-controlling interests
Non-controlling interests are
primarily comprised of the following event:
A non-controlling interest (NCI)
of €468 million has been recognized in connection with Aboitiz
Equity Ventures Inc. (AEV) 40% ownership of CCEP Aboitiz Beverages
Philippines, Inc. (CABPI), the accounting acquirer of CCBPI (refer
to Note 2 for further details). The Group measured the
non-controlling interest in CABPI based on their proportionate
share of net assets. The Group recognises changes in NCI based upon
post-Acquisition results of the year and movements in
reserves.
Note 12
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
|
|
|
|
28 June
2024
|
|
30 June
2023
|
|
|
|
€ million
|
|
€ million
|
|
Amounts affecting
revenue[1]
|
|
68
|
|
68
|
|
Amounts affecting cost of
sales[2]
|
|
(2,332)
|
|
(2,099)
|
|
Amounts affecting operating
expenses[3]
|
|
(1)
|
|
5
|
|
Total net amount affecting the consolidated income
statement
|
|
(2,265)
|
|
(2,026)
|
[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 certain 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:
|
|
|
28 June
2024
|
|
31 December
2023
|
|
|
|
€ million
|
|
€ million
|
|
Amount due from TCCC
|
|
116
|
|
101
|
|
Amount payable to TCCC
|
|
415
|
|
229
|
Acquisition of Coca-Cola Beverages Philippines, Inc.
(CCBPI)
On 23 February 2024, the joint
acquisition of CCBPI was successfully consummated for a total
consideration of US$1.68 billion (€1.55 billion), all of
which was settled in cash upon completion. The Group's share of the
total consideration was US$1.0 billion (€930 million),
commensurate with the effective 60:40
ownership structure of CCBPI. The transaction has
been accounted for under IFRS 3 "Business Combinations", using the
acquisition method of accounting. Refer to Note 2 for further
detail on the acquisition of CCBPI.
Refer to Note 14 for details
regarding commitments made to TCCC.
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
|
|
|
|
28 June
2024
|
|
30 June
2023
|
|
|
|
€ million
|
|
€ million
|
|
Amounts affecting
revenues[1]
|
|
1
|
|
1
|
|
Amounts affecting cost of
sales[2]
|
|
(35)
|
|
(40)
|
|
Amounts affecting operating
expenses[3]
|
|
(6)
|
|
(9)
|
|
Total net amount affecting the consolidated income
statement
|
|
(40)
|
|
(48)
|
[1] Amounts principally relate to packaged product
sales.
[2] Amounts principally relate to the purchase of packaging
materials.
[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:
|
|
|
28 June
2024
|
|
31 December
2023
|
|
|
|
€ million
|
|
€ million
|
|
Amount due from Cobega
|
|
8
|
|
16
|
|
Amount payable to Cobega
|
|
25
|
|
22
|
Transactions with Other Related Parties
For the six months ended 28 June
2024 and 30 June 2023 the Group recognised charges in cost of sales
of €104 million and €88 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 28 June
2024 include €5 million in amounts receivable from related parties
and €10 million in amounts payable to related parties,
respectively. As at 31 December 2023 amounts receivable from
related parties and amounts payable to related parties included €6
million and €19 million respectively related to transactions with
joint ventures, associates and other related parties.
Following CCBPI acquisition, there
are two post-employment defined benefit plan entities (Coca-Cola
Bottlers Philippines, Inc. Retirement plan and Philippine Beverage
Partners, Inc. Retirement Plan) that are considered related parties
to the Group. There are no material transactions for the six months
ended 28 June 2024 and no material balances as at as at 28 June
2024.
Note 13
TAXES
Income Tax expense
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% for the six months ended 28 June 2024 and 30 June 2023,
respectively, and 24% for the year ended 31 December 2023. The ETR
has been calculated by applying the weighted average annual ETR,
excluding discrete items, of 27% and 25% to the profit before tax
for the six months ended 28 June 2024 and 30 June 2023,
respectively.
The ETR of 22% which is lower than
statutory UK rate of 25% 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:
|
|
|
28 June
2024
|
|
30 June
2023
|
|
|
|
€ million
|
|
€ million
|
|
Current income tax:
|
|
|
|
|
|
Current income tax
charge
|
|
289
|
|
278
|
|
Adjustment in respect of current
income tax from prior periods
|
|
(47)
|
|
(9)
|
|
Total current tax
|
|
242
|
|
269
|
|
Deferred tax:
|
|
|
|
|
|
Relating to the origination and
reversal of temporary differences
|
|
(12)
|
|
(2)
|
|
Adjustment in respect of deferred
income tax from prior periods
|
|
-
|
|
(20)
|
|
Relating to changes in tax rates or
the imposition of new taxes
|
|
4
|
|
-
|
|
Total deferred tax
|
|
(8)
|
|
(22)
|
|
Income tax charge per the consolidated income
statement
|
|
234
|
|
247
|
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 28 June 2024, €240 million
(31 December 2023: €175 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.
Global Minimum Top-Up Tax
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 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.
Pillar Two legislation was enacted
in the UK on 11 July 2023, under Finance (No 2) Act 2023, and was
effective from 1 January 2024.
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 tax in preparing its condensed consolidated interim
financial statements as of the six-month period ended 28 June
2024.
The Group is in scope of the
Pillar Two tax legislation and expects to be subject to top-up tax
in relation to its operations in a few countries. Based on a
preliminary assessment, no material liability has been recognised
in these financial statements.
Note 14
PROVISIONS, COMMITMENTS AND CONTINGENCIES
The following table summarises the
movement of provisions for the periods presented:
|
|
|
Restructuring
Provision
|
|
Other
Provisions[1]
|
|
Total
|
|
|
|
€ million
|
|
€ million
|
|
€ million
|
|
Balance as at 31 December 2023
|
|
116
|
|
43
|
|
159
|
|
Acquisition of CCBPI
|
|
3
|
|
42
|
|
45
|
|
Charged/(credited) to profit or
loss:
|
|
|
|
|
|
|
|
Additional provisions
recognised
|
|
80
|
|
5
|
|
85
|
|
Unused amounts reversed
|
|
(3)
|
|
(4)
|
|
(7)
|
|
Utilised during the
period
|
|
(36)
|
|
(3)
|
|
(39)
|
|
Balance as at 28 June 2024
|
|
160
|
|
83
|
|
243
|
[1] Other provisions primarily relate to decommissioning
provisions, property tax assessment provisions and legal
reserves.
Restructuring programmes
In November 2022, the Group
announced a new efficiency programme to be delivered by the end of
2028. This programme focusses on further supply chain efficiencies,
leveraging global procurement and a more integrated shared service
centre model, all enabled by next generation technology including
digital tools and data and analytics.
During the first half of 2024, as
part of this efficiency programme, the Group announced
restructuring proposals resulting in €95 million of recognised
costs primarily related to expected severance payments.
Guarantees
As of 28 June 2024, the Group has
issued guarantees to third parties of €875 million (31 December
2023: €1,164 million), primarily relating to ongoing litigations
and tax matters in certain territories. No significant additional
liabilities in the accompanying condensed consolidated interim
financial statements are expected to arise from the guarantees
issued.
Commitments
As a result of the Acquisition,
the Group assumed €27 million related to non-cancellable purchase
agreements with various suppliers that are enforceable and legally
binding, and that specify a fixed or minimum quantity that we must
purchase. In addition, the Group also assumed outstanding capital
expenditure purchase orders of approximately €29 million related to
the Acquisition.
During the first half of 2024, the
Group made a commitment to TCCC to invest €167 million with
Microsoft for Azure cloud migration services over a 6 years term. A
further €25 million has been committed to Infosys, who will act as
a supporting partner. In addition, the Group committed to €141
million of third party warehouse logistics investment in
GB.
There have been no other
significant changes in commitments since 31 December
2023.
Contingencies
As a result of the Acquisition,
the Group recognised a provision of €42 million related to various
legal proceedings, measured on a provisional basis.
There have been no other
significant changes in contingencies since 31 December
2023.
Refer to Note 22 of the 2023
consolidated financial statements for further details about the
Group's guarantees, commitments and contingencies.
Note 15
OTHER INCOME
For the six months ended 28 June
2024 and 30 June 2023, other income totalled nil and €53 million,
respectively.
During the first half of 2023, the
Group recognised €18 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 €35 million.