TIDMCCEP
RNS Number : 6951O
Coca-Cola European Partners plc
11 February 2021
COCA-COLA EUROPEAN PARTNERS
Preliminary Unaudited Results for the Full-Year Ended 31
December 2020
Resilient performance despite the challenging backdrop;
well-positioned for a digital & green led future
FY 2020 Metric ([1]) As Reported Comparable Change vs 2019
================================= ------------------------------------------
As Reported Comparable Comparable
Fx-Neutral
================================= ============= ============ =============
Volume (m unit cases)([2]) 2,277 2,277 (9.5)% (10.0)%
================================= ----------- ---------- -------- -------- -------------
Revenue (EURM) 10,606 10,606 (11.5)% (11.5)% (11.0)%
--------------------------------- ----------- ---------- -------- -------- ---------
Cost of sales (EURM) 6,871 6,809 (7.5)% (8.5)% (7.5)%
--------------------------------- ----------- ---------- -------- -------- ---------
Operating expenses (EURM) 2,922 2,603 (4.0)% (11.0)% (10.0)%
--------------------------------- ----------- ---------- -------- -------- ---------
Operating profit (EURM) 813 1,194 (47.5)% (29.0)% (28.5)%
--------------------------------- ----------- ---------- -------- -------- ---------
Profit after taxes (EURM) 498 821 (54.5)% (30.5)% (30.5)%
--------------------------------- ----------- ---------- -------- -------- ---------
Diluted EPS (EUR) 1.09 1.80 (53.0)% (29.0)% (28.5)%
--------------------------------- ----------- ---------- -------- -------- ---------
Revenue per unit case (EUR) 4.69 (1.5)%
--------------------------------- ----------- ---------- ------------- ------------ ---------
Cost of sales per unit case(EUR) 3.01 2.5%
--------------------------------- ----------- ---------- ------------- ------------ ---------
Free cash flow (EURM) 924
================================= =========== ========== ============= ============ =============
Capital Returns:
--------------------------------- ----------- ---------- ------------- ------------ -------------
Maintained dividend payout
Dividend per share([3]) (EUR) 0.85 ratio of c.50%
--------------------------------- ----------- ----------
2020 Share buyback (EURM) c.130
--------------------------------- ----------- ---------- ------------- ------------ -------------
DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:
"2020 was a challenging year like no other, and I am very proud
of how well we have managed through such a rapidly changing
environment. That is down to the extraordinary work and commitment
of our colleagues, supporting each other as well as our customers
and communities, and to all of whom, I am sincerely grateful.
"The crisis also reinforced the power of our relationship with
The Coca-Cola Company and our other brand partners. Our collective
belief in continuing to invest in our core brands has served us
well, gaining share([4]) both in the home channel and online. We
also took meaningful actions to protect our performance, ending the
year with strong free cash flow([1]) and a solid balance sheet.
This enabled us to continue to return cash to shareholders, as
evidenced by the dividend paid in December.
"While our business continues to face significant restrictions,
which we confidently continue to navigate, the crisis has
strengthened our determination to move further and faster towards a
stronger and even more sustainable future. We protected the
short-term without compromising the longer-term by continuing to
invest, particularly in digital, sustainability and our portfolio.
These investments enabled us to provide exceptional service and
support for our customers and colleagues, to progress faster
towards our 2040 net zero carbon ambition and to seed future
revenue streams like Costa, Tropico and Topo Chico. We also
adjusted our cost base to a new reality with more to come.
"So, we are confident about the future, built upon three
pillars: great people, great service and great beverages. We are
making a difference and believe we have the right foundation,
alongside the exciting Coca-Cola Amatil acquisition, to drive
sustainable growth and deliver increased shareholder value."
___________________________
[1] Refer to 'Note Regarding the Presentation of Alternative
Performance Measures' for further details
[2] Unit Case = approximately 5.678 litres or 24 8-ounce
servings
[3] 25 October 2020 declared EUR0.85 dividend per share, paid 1
December 2020
[4] Source: NARTD (non-alcoholic ready to drink) Nielsen Global
Track Data for ES, PT, DE, GB, FR, BE, NL, SE, NO to YE
27.12.20
FULL-YEAR & Q4 2020 HIGHLIGHTS([1])
FY Revenue (-11.0%) ([2])
-- FY NARTD value share gains across measured channels both in
store([3]) (+40pts) & online([3]) (+140pts)
-- Comparable volume -10.0%([4]) driven by the impact of the
COVID-19 pandemic & some customer disruption as a result of our
planned pricing strategy (resolved in August) partially offset by
growth in Monster & Coca-Cola Zero Sugar
Adverse away from home (AFH) volumes (-27.5%) reflecting outlet
closures & restrictive measures, partially offset by growth in
the home channel (+1.5%) supported by growth in online grocery([5])
(+44%)
Immediate consumption (IC) volumes (-24.5%) significantly
impacted in both AFH & home channels reflecting lower consumer
mobility. Future consumption (FC) volumes outperformed (-2.0%)
-- Revenue per unit case -1.5% ([2]) with positive momentum in
Q1 (+1.5%) & Q3 (+1.0%) offset by Q2 (-5.0%) & Q4 (-3.5%)
reflecting the varying extent of restrictions during the year
Q4 Revenue ( -10.5%) ([2])
-- Comparable volume -9.5% driven by continued impact of the
COVID-19 pandemic across our markets reflecting renewed restrictive
measures
Decline in AFH volumes (-32.0%) reflecting the increase of
restrictive measures & outlet closures
Robust home channel volumes (+4.0%) driven by solid Christmas
execution & the outperformance of FC packs, partially offset by
weaker IC trends
Broadly similar volumes across Q4 however weaker volumes in
January 2021 reflecting even tougher restrictions
-- Reported volumes -7.0% reflecting the benefit of two
additional selling days when compared to the prior year
-- Revenue per unit case -3.5% ([2]) reflecting negative geographic, channel & pack mix
Comparable Operating Profit -28.5% ([2]) (Reported Operating
Profit -47.5%)
-- Cost of sales per unit case + 2.5% ([2]) reflects the
under-recovery of fixed manufacturing costs given lower volumes
& adverse mix, offset by the decline in revenue per unit case
driving lower concentrate costs
-- Comparable operating profit of EUR1,194m, -28.5%([2])
reflecting revenue declines offset by a reduction in discretionary
operating expenses of c.EUR260m (ahead of guidance of
EUR200-250m)
-- Comparable diluted EPS of EUR1.80 -28.5% (reported -53.0%)
Capital Returns
-- Dividends: full-year dividend of EUR0.85 per share (announced
at Q3), maintaining annualised dividend payout ratio of
approximately 50%, in line with our policy
-- Share buyback: repurchased c.EUR130m (3m shares) prior to suspension of programme in March
Other
-- Generated strong free cash flow of EUR924m (net cashflows
from operating activities of EUR1,490m)
-- ROIC 7.6% (2019: 10.3%) driven by the decline in profit
-- CCEP Ventures continued to bring new innovative solutions
into the business with 5 new investment partnerships in early stage
e-commerce, packaging free & recycling technology
businesses
-- Unable to provide FY21 outlook guidance given on-going COVID-19 uncertainty
Sustainability
-- Announced ambition to reach net zero greenhouse gas (GHG)
emissions across our entire value chain by 2040, and to reduce our
absolute GHG emissions by 30% by 2030 (vs 2019)
-- Closed 2020 at c.41 %([6]) recycled plastic (rPET); targeting 50% rPET by 2023
Sweden became first 100% rPET market in the Coke system. Norway,
the Netherlands & Iceland to transition full portfolio to 100%
rPET in 2021
-- Retained:
on Carbon Disclosures Project's A List for climate change &
water security
in Dow Jones Sustainability Indices (Europe & World)
AAA MSCI ESG rating
[1] Refer to 'Note Regarding the Presentation of Alternative
Performance Measures' for further details; Change percentages
against prior year equivalent period; [2] Comparable and
Fx-Neutral; [3] Instore: NARTD (non-alcoholic ready to drink)
Nielsen Global Track Data for ES, PT, DE, GB, FR, BE, NL, SE, NO to
YE 27.12.20; Online: Data to w/e GB 26.12.20 (Retailer EPOS), ES FR
& NL 27.12.20 (Nielsen); [4] Adjusted for 1 extra selling day
in 2020. Reported volumes (9.5)%; [5] Source: Nielsen Top 4 markets
(GB FR NL ES) to YE 27.12.20 changes; [6] Unaudited. Provisional.
Note: Changes versus equivalent 2019 period
COVID-19 FY20 UPDATE: Respond, recover & build for future led by green
& digital
Our rapid response prioritised our people, customers &
communities whilst protecting our business for the long-term &
building for the future.
Key highlights as follows:
People:
-- Implemented comprehensive measures in line with government guidance
-- Advanced digital workplace capabilities
-- Increased internal communications with colleagues
-- Provided extensive emotional & mental well-being support
-- Maintained high colleague engagement & progressed on inclusion & diversity
Communities:
-- Donated over 600,000 unit cases of product
-- Partnered with The Coca-Cola Company to provide substantial
financial aid through the Red Cross & other local NGOs
Business continuity:
-- Leveraged strong relationships with brand partners & jointly invested behind core brands
-- Optimised pack price architecture
-- Maintained great customer service levels
-- Reallocated resource to capture revenue opportunities
-- Leveraged our digital capabilities
Balance sheet & cost mitigation:
-- Delivered discretionary opex savings of c.EUR260m, ahead of
targeted EUR200-250m, & launch of Accelerate Competitiveness
efficiency programme (see Supplemental Financial Information - Cost
of Sales and Operating Expenses)
FY21 opex savings of c.EUR150m vs. FY19 (combination of
permanent discretionary savings from 2020 & new Accelerate
Competitiveness savings); FY21 opex expected to be lower than
FY19
-- Reduced Capex([1]) spend by around a third to c.EUR360m
-- Suspension of share buyback programme
-- Maintained solid balance sheet & strong free cash flow
generation (net debt/adjusted EBITDA of 3.2 times([2]) )
-- Maintained strong investment grade debt rating (Moody's
A3/P2; S&P BBB+/A2)([3]) with no covenants on our debt or
facilities
Acquisition of Coca-Cola Amatil Limited (CCL)
-- Entered into binding agreement to acquire CCL on 3 November 2020
-- Received Australian Foreign Investment Review Board regulatory approval 29 January 2021
-- The Scheme remains subject to other customary conditions,
including CCL independent shareholder approval, court approval
& the New Zealand Overseas Investment Office regulatory
approval
-- Further updates will be provided in due course ([4])
__________________________
[1] Excludes payments of principal on lease obligations; Refer
to 'Note Regarding the Presentation of Alternative Performance
Measures' for further details. Change vs initial FY20 guidance
announced 13 February 2020; [2] As at 31 December 2020. Refer to
'Note Regarding the Presentation of Alternative Performance
Measures' for further details; [3] Moody's on review for downgrade;
S&P on CreditWatch negative reflecting proposed acquisition of
Coca-Cola Amatil; [4] CCEP has not yet made an election as to how
they will purchase the remaining 20% of The Coca-Cola Company's
shares, but have agreed with The Coca-Cola Company that they will
make this election no later than 14 days before the Scheme vote
FULL-YEAR & FOURTH-QUARTER REVENUE PERFORMANCE BY GEOGRAPHY
All values are unaudited, changes versus 2019
As reported Fx-Neutral
Full-Year EUR million % of Total % change % change
=================================== =========== ============ ========== ============
Great Britain 2,203 21.0% (8.5)% (7.5)%
----------------------------------- ----------- -------- ------ --------
France (France & Monaco) 1,709 16.0% (10.0)% (10.0)%
----------------------------------- ----------- -------- ------ --------
Germany 2,270 21.5% (6.5)% (6.5)%
----------------------------------- ----------- -------- ------ --------
Iberia (Spain, Portugal & Andorra) 2,173 20.5% (22.0)% (22.0)%
----------------------------------- ----------- -------- ------ --------
Northern Europe([1]) 2,251 21.0% (9.5)% (8.0)%
----------------------------------- ----------- -------- ------ --------
Total 10,606 100.0% (11.5)% (11.0)%
As reported Fx-Neutral
Q4 EUR million % of Total % change % change
=================================== =========== ============ ========== ============
Great Britain 565 22.0% (11.0)% (6.5)%
----------------------------------- ----------- -------- ------ --------
France (France & Monaco) 401 15.5% (12.5)% (12.5)%
----------------------------------- ----------- -------- ------ --------
Germany 586 22.5% (4.0)% (4.0)%
----------------------------------- ----------- -------- ------ --------
Iberia (Spain, Portugal & Andorra) 517 20.0% (17.0)% (17.0)%
----------------------------------- ----------- -------- ------ --------
Northern Europe([1]) 521 20.0% (13.5)% (12.5)%
----------------------------------- ----------- -------- ------ --------
Total 2,590 100.0% (11.5)% (10.5)%
___________________________
([1]) Belgium, Luxembourg, Netherlands, Norway, Sweden &
Iceland
Great Britain
-- FY & Q4 volume impacted by restrictive measures &
outlet closures. Weakness in AFH channel partially offset by home
channel volume growth, both online & in store. Coca-Cola Zero
Sugar, Monster & Schweppes mixers all grew in Q4
-- FY revenue/UC([1]) negatively impacted by the outperformance
of the home channel & in particular the growth in FC packs
(e.g. large PET +5.0% & multipack cans +23.0%), alongside IC
weakness in both channels
France (France & Monaco)
-- FY & Q4 volume mainly impacted by AFH outlet closures
& hypermarket weakness reflecting lower footfall given
restrictions. FY volume benefited from a solid Q3 when AFH outlets
reopened & consumer mobility increased, aided by favourable
weather. Coca-Cola Zero Sugar, Monster & Capri-Sun all
outperformed in Q4
-- FY revenue/UC([1]) negatively impacted by channel mix given
AFH outlet closures & pack mix due to the weakness in IC,
partially offset by lower promotions
Germany
-- FY & Q4 volume impacted by AFH outlet closures, partially
offset by the additional border trade business. Coca-Cola Zero
Sugar & Monster outperformed, while Vio & Apollinaris
underperformed given the brands' exposure to AFH & IC
-- FY revenue/UC([1]) driven by the growth in cans due to the
additional border trade business, increased promotional efficiency
in the home channel & favourable brand mix. This was partially
offset by adverse channel mix & pack mix given the
outperformance of FC packs
Iberia (Spain, Portugal & Andorra)
-- FY & Q4 volume impacted by significant exposure to the
AFH channel & weaker tourism trends, particularly in Spain
where we over-index in exposure to HoReCa([2]) . The home channel
also suffered, partly due to weakness in the cash & carry
channel([3])
-- FY revenue/UC([1]) significantly impacted by channel mix
given the closure of HoReCa([2]) outlets in addition to negative
pack mix (e.g. glass -48.0%)
Northern Europe
-- FY & Q4 impacted by negative AFH volumes reflecting
outlet clos ures partially offset by growth in the home channel led
by Norway & the Netherlands. Coca-Cola Zero Sugar, Monster
& Nalu all grew volumes during Q4
-- FY revenue/UC([1]) grew modestly due to positive country
& brand mix, offset by adverse channel mix
___________________________
[1] Revenue per unit case
[2] HoReCa = Hotels, Restaurants & Cafes
[3] Cash & Carry included in home channel for Iberia (12.5%
of 2019 Iberia volume), elsewhere included in AFH channel
Note: All values are unaudited, changes versus equivalent 2019
period; comparable volumes
FULL-YEAR & FOURTH-QUARTER VOLUME PERFORMANCE([1]) BY CATEGORY
Comparable volumes, changes versus 2019
Q4 YTD
% of Total % Change % of Total % Change
========================================= ============ ========== ============ ==========
Sparkling 90.5% (7.0)% 88.5% (7.0)%
Coca-Cola(TM) 67.5% (7.0)% 66.0% (6.5)%
Flavours, Mixers & Energy 23.0% (7.0)% 22.5% (9.0)%
Stills 9.5% (29.0)% 11.5% (27.0)%
Hydration 5.0% (38.0)% 6.5% (34.0)%
RTD Tea, RTD Coffee, Juices & Other([2]) 4.5% (15.5)% 5.0% (17.0)%
Total 100.0% (9.5)% 100.0% (10.0)%
SPARKLING
Coca-Cola(TM)
-- Q4 transactions -10.0%([3]) , reflecting decline in small
glass & PET, partially offset by growth in cans
-- Q4 Classic -10.0%; Lights -2.0%, Diet/light taste decline
(-10.5%) offset by resilient performance of Coca-Cola Zero Sugar
(+1.5%)
-- Coca-Cola Zero Sugar: FY20 #1 brand in NARTD for absolute
value growth across our markets([4])
Flavours, Mixers & Energy
-- Q4 Fanta -12.0% driven by the impact of COVID-19 on AFH
-- Q4 Energy +27.5% reflecting growth in both channels &
driven by Monster. Strong growth in Monster multipacks (+54.0%)
-- Q4 Schweppes mixers +1.0% in GB reflecting growth in the home
channel given switching of AFH occasions. Schweppes mixers gained
FY value share in GB([5])
STILLS
Hydration
-- Continued soft performance in Q4 reflecting on-going impact of COVID-19 & exposure to IC
RTD Tea, RTD Coffee, Juices & Other([2])
-- Q4 Fuze Tea -14.5% reflecting soft IC performance due to reduced on-the-go consumption
-- Q4 Juice drinks -13.0% reflecting exposure to o n-the-go
occasions, offset by solid growth in Capri-Sun in GB &
France
-- Launched Topo Chico Hard Seltzer in three flavours in GB
& NL in December. Will launch across other markets in 2021
___________________________
[1] Adjusted for selling day shifts
[2] RTD refers to Ready To Drink
[3] Defined as the serving container that is ultimately used
directly by the consumer. It can be a standalone container or one
part of a multipack
[4] Nielsen Strategic Planner FY20 Data to YE 27.12.2020.
Countries included are ES, PT, DE, GB, FR, BE, NL, SE & NO
[5] Nielsen Global Track Data for GB to YE 27.12.2020
Note: All values are unaudited, changes versus equivalent 2019
period; comparable volumes
Conference Call
-- 11 February 2021 at 12:00 GMT, 13:00 CET and 7:00 a.m. EST;
accessible via www.cocacolaep.com
-- Replay & transcript will be available at www.cocacolaep.com as soon as possible
Financial Calendar
-- Financial calendar available here: https://ir.cocacolaep.com/financial-calendar/
Results & Presentations
-- Previous results & presentations available here:
https://ir.cocacolaep.com/financial-reports-and-results/financial-releases/default.aspx
Contacts
Investor Relations
Sarah Willett Claire Michael Joe Collins
+44 7970 145 218 +44 7528 251 033 +44 7583 903 560
Media Relations
Shanna Wendt Nick Carter
+44 7976 595 168 +44 7976 595 275
About CCEP
Coca-Cola European Partners plc is a leading consumer goods
company in Western Europe, making, selling & distributing an
extensive range of non-alcoholic ready to drink beverages & is
the world's largest Coca-Cola bottler based on revenue.
Coca-Cola European Partners serves a consumer population of over
300 million across Western Europe, including Andorra, Belgium,
continental France, Germany, Great Britain, Iceland, Luxembourg,
Monaco, the Netherlands, Norway, Portugal, Spain & Sweden. The
Company is listed on Euronext Amsterdam, the New York Stock
Exchange, London Stock Exchange & on the Spanish Stock
Exchanges, trading under the symbol CCEP.
For more information about CCEP, please visit www.cocacolaep.com
& follow CCEP on Twitter at @CocaColaEP.
Forward-Looking Statements
This document contains statements, estimates or projections that
constitute "forward-looking statements" concerning the financial
condition, performance, results, strategy and objectives of
Coca-Cola European Partners plc and its subsidiaries (together
"CCEP"). CCEP's proposed acquisition (the "Acquisition") of
Coca-Cola Amatil Limited and its subsidiaries (together "CCL") and
the integration of CCL into CCEP. Generally, the words "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 and
CCL's historical experience and present expectations or
projections, including with respect to the Acquisition. As a
result, undue reliance should not be placed on forward-looking
statements, which speak only as of the date on which they are made.
These risks include but are not limited to:
1. those set forth in the "Risk Factors" section of CCEP's 2019
Integrated Report / Annual Report on Form 20-F, including the
statements under the following headings: Packaging (such as,
refillables and recycled plastic); Perceived health impacts of our
beverages and ingredients, and changing consumer preferences (such
as sugar alternatives and other ingredients); Legal, regulatory and
tax change (such as the development of regulations regarding
packaging, taxes and deposit return schemes); Market (such as
disruption due to customer negotiations, customer consolidation and
route to market); Cyber and social engineering attacks;
Competitiveness and transformation; Climate change and water (such
as net zero emission legislation and regulation, and resource
scarcity); Economic and political conditions (such as the UK's exit
from the EU, the EU-UK trade and co-operation agreement, and
uncertainty about the future relationship between the UK and EU);
The relationship with The Coca-Cola Company and other franchisors;
Product quality; and Other risks, such as widespread outbreaks of
infectious disease including the adverse impact that the COVID-19
pandemic and related government restrictions and social distancing
measures implemented in many of our markets, and any associated
economic downturn, may have on our financial results, operations,
workforce and demand for our products;
2. those set forth in the "Principal Risks" section of CCEP's
2019 Integrated Report / Annual Report on Form 20-F, as updated in
CCEP's Results for the six months ended 26 June 2020 & COVID-19
update and including principal risks under the additional headings:
Business continuity (such as government restrictions in our
countries of operation); People; and Stakeholders; and
3. risks and uncertainties relating to the Acquisition,
including the risk that the businesses will not be integrated
successfully or such integration may be more difficult,
time-consuming or costly than expected, which could result in
additional demands on CCEP's resources, systems, procedures and
controls, disruption of its ongoing business and diversion of
management's attention from other business concerns; the
possibility that certain assumptions with respect to CCL or the
Acquisition could prove to be inaccurate; the failure to receive,
delays in the receipt of, or unacceptable or burdensome conditions
imposed in connection with, all required regulatory approvals,
shareholder approvals and the satisfaction of closing conditions to
the Acquisition; ability to raise financing; the possibility that
CCEP and CCL fail to agree upon a scheme implementation agreement;
the potential that the Acquisition may involve unexpected
liabilities for which there is no indemnity; the potential failure
to retain key employees of CCEP and CCL as a result of the proposed
Acquisition or during integration of the businesses and disruptions
resulting from the proposed Acquisition, making it more difficult
to maintain business relationships; the potential if the
Acquisition is not completed in a timely manner or at all for (i)
negative reaction from financial markets, customers, regulators,
employees and other stakeholders, (ii) loss of time spent on an
unsuccessful Acquisition, and (iii) litigation related to the
Acquisition.
The full extent to which the COVID-19 pandemic will negatively
affect CCEP and/or CCL and the results of their operations,
financial condition and cash flows will depend on future
developments that are highly uncertain and cannot be predicted,
including the scope and duration of the pandemic and actions taken
by governmental authorities and other third parties in response to
the pandemic.
Due to these risks, CCEP's actual future results, dividend
payments, and capital and leverage ratios may differ materially
from the plans, goals, expectations and guidance set out in
forward-looking statements (including those issued by CCL prior to
the Acquisition). These risks may also adversely affect CCEP's
share price. Additional risks that may impact CCEP's future
financial condition and performance are identified in filings with
the United States Securities and Exchange Commission ("SEC") which
are available on the SEC's website at www.sec.gov. CCEP does not
undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as required under applicable
rules, laws and regulations. Furthermore, CCEP assumes no
responsibility for the accuracy and completeness of any
forward-looking statements. Any or all of the forward-looking
statements contained in this filing and in any other of CCEP's
public statements (whether prior or subsequent to the Acquisition)
may prove to be incorrect.
Note Regarding the Presentation of Alternative Performance Measures
We use certain alternative performance measures (non-GAAP
performance measures) to make financial, operating and planning
decisions and to evaluate and report performance. We believe these
measures provide useful information to investors and as such, where
clearly identified, we have included certain alternative
performance measures in this document to allow investors to better
analyse our business performance and allow for greater
comparability. To do so, we have excluded items affecting the
comparability of period-over-period financial performance as
described below. The alternative performance measures included
herein should be read in conjunction with and do not replace the
directly reconcilable GAAP measure.
For purposes of this document, the following terms are
defined:
"As reported" are results extracted from our consolidated
financial statements.
"Comparable" is defined as results excluding items impacting
comparability, such as restructuring charges, out of period
mark-to-market impact of hedges and net tax items relating to rate
and law changes. Comparable volume is also adjusted for selling
days.
"Fx-neutral" is defined as comparable results excluding the
impact of foreign exchange rate changes. Foreign exchange impact is
calculated by recasting current year results at prior year exchange
rates.
"Capex" or "Capital expenditures" is defined as purchases of
property, plant and equipment and capitalised software, plus
payments of principal on lease obligations, less proceeds from
disposals of property, plant and equipment. Capex is used as a
measure to ensure that cash spending on capital investment is in
line with the Group's overall strategy for the use of cash.
"Free cash flow" is defined as net cash flows from operating
activities less capital expenditures (as defined above) and
interest paid. Free cash flow is used as a measure of the Group's
cash generation from operating activities, taking into account
investments in property, plant and equipment and non-discretionary
lease and interest payments. Free cash flow is not intended to
represent residual cash flow available for discretionary
expenditures.
"Adjusted EBITDA" is calculated as Earnings Before Interest,
Tax, Depreciation and Amortisation (EBITDA), after adding back
items impacting the comparability of year over year financial
performance. Adjusted EBITDA does not reflect cash expenditures, or
future requirements for capital expenditures or contractual
commitments. Further, adjusted EBITDA does not reflect changes in,
or cash requirements for, working capital needs, and although
depreciation and amortisation are non-cash charges, the assets
being depreciated and amortised are likely to be replaced in the
future and adjusted EBITDA does not reflect cash requirements for
such replacements.
"Net Debt" is defined as the net of cash and cash equivalents
less currency adjusted borrowing. We believe that reporting net
debt is useful as it reflects a metric used by the Group to assess
cash management and leverage. In addition, the ratio of net debt to
adjusted EBITDA is used by investors, analysts and credit rating
agencies to analyse our operating performance in the context of
targeted financial leverage.
"ROIC" is defined as comparable operating profit after tax
divided by the average of opening and closing invested capital for
the year. Invested capital is calculated as the addition of
borrowings and equity less cash and cash equivalents. ROIC is used
as a measure of capital efficiency and reflects how well the Group
generates comparable operating profit relative to the capital
invested in the business.
"Dividend Payout Ratio" is defined as dividends as a proportion
of comparable profit after tax.
Additionally, within this document, we provide certain
forward-looking non-GAAP financial Information, which management
uses for planning and measuring performance. We are not able to
reconcile forward-looking non-GAAP measures to reported measures
without unreasonable efforts because it is not possible to predict
with a reasonable degree of certainty the actual impact or exact
timing of items that may impact comparability throughout year.
Unless otherwise stated, percent amounts are rounded to the
nearest 0.5%.
Supplementary Financial Information - Income Statement
The following provides a summary reconciliation of CCEP's
reported and comparable results for the periods presented:
As Reported Items Impacting Comparability Comparable
----------- ---------------------------------------------------------- ------------
Full year 2020 CCEP Mark-to-market Restructuring Acquisition Net tax([4]) CCEP
Unaudited, in effects([1]) Charges([2]) Related
millions Costs([3])
of EUR except per
share
data which is
calculated
prior to rounding
=========== ================ ============= =========== ============ ============
Revenue 10,606 - - - - 10,606
Cost of sales 6,871 - (62) - - 6,809
----------------- ----------- ---------------- ------------- ----------- ------------ ----------
Gross profit 3,735 - 62 - - 3,797
Operating
expenses 2,922 (2) (306) (11) - 2,603
----------------- ----------- ---------------- ------------- ----------- ------------ ----------
Operating profit 813 2 368 11 - 1,194
Total finance
costs,
net 111 - - (3) - 108
Non-operating
items 7 - - - - 7
----------------- ----------- ---------------- ------------- ----------- ------------ ----------
Profit before
taxes 695 2 368 14 - 1,079
Taxes 197 - 103 3 (45) 258
----------------- ----------- ---------------- ------------- ----------- ------------ ----------
Profit after
taxes 498 2 265 11 45 821
Diluted earnings
per
share (EUR) 1.09 - 0.58 0.03 0.10 1.80
----------------- ----------- ---------------- ------------- ----------- ------------ ----------
Diluted weighted average shares outstanding 456
As Reported Items Impacting Comparability Comparable
=========================== ----------- ------------------------------------------------ ------------
Full year 2019 CCEP Mark-to-market Restructuring Net tax([4]) CCEP
Unaudited, in millions effects([1]) Charges([2])
of EUR except per share
data which is calculated
prior to rounding
=========================== =========== =================== ============= ============ ============
Revenue 12,017 - - - 12,017
Cost of sales 7,424 (1) - - 7,423
--------------------------- ----------- ------------------- ------------- ------------ ----------
Gross profit 4,593 1 - - 4,594
Operating expenses 3,045 3 (130) - 2,918
--------------------------- ----------- ------------------- ------------- ------------ ----------
Operating profit 1,548 (2) 130 - 1,676
Total finance costs, net 96 - - - 96
Non-operating items (2) - - - (2)
--------------------------- ----------- ------------------- ------------- ------------ ----------
Profit before taxes 1,454 (2) 130 - 1,582
Taxes 364 (1) 36 (2) 397
--------------------------- ----------- ------------------- ------------- ------------ ----------
Profit after taxes 1,090 (1) 94 2 1,185
--------------------------- ----------- ------------------- ------------- ------------ ----------
Diluted earnings per share
(EUR) 2.32 - 0.21 - 2.53
--------------------------- ----------- ------------------- ------------- ------------ ----------
Diluted weighted average shares outstanding 469
___________________________
([1]) Amounts represent the net out-of-period mark-to-market
impact of non-designated commodity hedges.
([2]) During the full-year 2020, we recognised restructuring
charges totalling EUR368million, which include EUR202 million
related to Accelerate Competitiveness proposals announced in
October 2020. These proposals are aimed at reshaping CCEP using
technology enabled solutions to improve productivity and include
the closure of certain production sites in Germany and Iberia .
([3]) Amounts represent costs associated with the proposed
acquisition of Coca-Cola Amatil Limited.
([4]) Amounts include the deferred tax impact related to income
tax rate and law changes.
Supplemental Financial Information - Revenue
Fourth Quarter Ended Year Ended
------------------------------------ ------------------------------------
Revenue 31 December 31 December % Change 31 December 31 December % Change
In millions of 2020 2019 2020 2019
EUR, except per
case data which
is calculated
prior to rounding.
FX impact calculated
by recasting current
year results at
prior year rates.
=========== =========== ========== =========== =========== ==========
As reported 2,590 2,933 (11.5)% 10,606 12,017 (11.5)%
Adjust: Total
items impacting
comparability - - -% - - -%
Comparable 2,590 2,933 (11.5)% 10,606 12,017 (11.5)%
Adjust: Impact
of fx changes 36 n/a (1.0)% 75 n/a (0.5)%
Comparable & fx-neutral 2,626 2,933 (10.5)% 10,681 12,017 (11.0)%
Revenue per unit
case 4.59 4.76 (3.5)% 4.69 4.77 (1.5)%
Fourth Quarter Ended 31 December
2020 Year Ended 31 December 2020
----------------------------------------- --------------------------------------
Revenue by Geography As reported Reported Fx-Neutral As reported Reported Fx-Neutral
In millions of % change % change % change % change
EUR
Iberia ([1]) 517 (17.0)% (17.0)% 2,173 (22.0)% (22.0)%
---------------------- -------------- ------- -------- ----------- ------- --------
Germany 586 (4.0)% (4.0)% 2,270 (6.5)% (6.5)%
---------------------- -------------- ------- -------- ----------- ------- --------
Great Britain 565 (11.0)% (6.5)% 2,203 (8.5)% (7.5)%
---------------------- -------------- ------- -------- ----------- ------- --------
France ([2]) 401 (12.5)% (12.5)% 1,709 (10.0)% (10.0)%
---------------------- -------------- ------- -------- ----------- -------
Belgium/Luxembourg 892 (11.0)%
---------------------- -------------- ----------- ------------ ----------- ------- ------------
Netherlands 529 (12.0)%
---------------------- -------------- ----------- ------------ ----------- ------- ------------
Norway 423 (3.0)%
---------------------- -------------- ----------- ------------ ----------- ------- ------------
Sweden 337 (8.0)%
---------------------- -------------- ----------- ------------ ----------- ------- ------------
Iceland 70 (17.5)%
---------------------- -------------- ----------- ------------ ----------- ------- ------------
Northern Europe 521 (13.5)% (12.5)% 2,251 (9.5)% (8.0)%
---------------------- -------------- ------- -------- ----------- ------- --------
Total 2,590 (11.5)% (10.5)% 10,606 (11.5)% (11.0)%
___________________________
([1]) Iberia refers to Spain, Portugal & Andorra.
([2]) France refers to continental France & Monaco.
Fourth Quarter Ended Year Ended
------------------------------------ ------------------------------------
Comparable Volume 31 December 31 December % Change 31 December 31 December % Change
- Selling Day 2020 2019 2020 2019
Shift
In millions of
unit cases, prior
period volume
recast using current
year selling days
=========== =========== ========== =========== =========== ==========
Volume 572 616 (7.0)% 2,277 2,521 (9.5)%
Impact of selling
day shift n/a 16 n/a n/a 8 n/a
Comparable volume
- Selling Day
Shift adjusted 572 632 (9.5)% 2,277 2,529 (10.0)%
Fourth Quarter Ended Year Ended
---------------------------------------- ----------------------------------------
31 December 31 December Volume % 31 December 31 December % Change
2020 2019 Change 2020 2019
Comparable Volume % of Total % of Total % of Total % of Total
by Brand Category
Adjusted for selling
day shift
============= ============= ============= =============
Sparkling 90.5% 88.0% (7.0)% 88.5% 86.0% (7.0)%
Coca-Cola(TM) 67.5% 65.5% (7.0)% 66.0% 63.5% (6.5)%
Flavours, Mixers
& Energy 23.0% 22.5% (7.0)% 22.5% 22.5% (9.0)%
Stills 9.5% 12.0% (29.0)% 11.5% 14.0% (27.0)%
Hydration 5.0% 7.0% (38.0)% 6.5% 8.5% (34.0)%
RTD Tea, RTD Coffee,
Juices & Other
([1]) 4.5% 5.0% (15.5)% 5.0% 5.5% (17.0)%
Total 100.0% 100.0% (9.5)% 100.0% 100.0% (10.0)%
___________________________
([1]) RTD refers to Ready To Drink.
Supplemental Financial Information - Cost of Sales and Operating
Expenses
Cost of Sales
Year Ended
------------------------------------
Cost of Sales 31 December 31 December % Change
In millions of EUR, except per case data 2020 2019
which is calculated prior to rounding.
FX impact calculated by recasting current
year results at prior year rates.
=========== =========== ==========
As reported 6,871 7,424 (7.5)%
Adjust: Total items impacting comparability (62) (1) (1.0)%
Comparable 6,809 7,423 (8.5)%
Adjust: Impact of fx changes 54 n/a (1.0)%
Comparable & fx-neutral 6,863 7,423 (7.5)%
Cost of sales per unit case 3.01 2.94 2.5%
Reported cost of sales were EUR6,871 million, down 7.5 percent.
Comparable cost of sales were EUR6,809 million, down 8.5 percent on
a comparable basis and 7.5 percent on a comparable and fx-neutral
basis. Cost of sales per unit case increased by 2.5 percent on a
comparable and fx-neutral basis. This reflects the impact of the
under-recovery of fixed manufacturing costs given lower volumes
& adverse mix, offset by the decline in revenue per unit case
driving lower concentrate costs.
Operating Expenses
Year Ended
------------------------------------
Operating Expenses 31 December 31 December % Change
In millions of EUR. FX impact calculated 2020 2019
by recasting current year results at prior
year rates.
=========== =========== ==========
As reported 2,922 3,045 (4.0)%
Adjust: Total items impacting comparability (319) (127) (7.0)%
Comparable 2,603 2,918 (11.0)%
Adjust: Impact of fx changes 16 n/a (1.0)%
Comparable & fx-neutral 2,619 2,918 (10.0)%
Reported operating expenses were EUR2,922 million, down 4.0
percent. Comparable operating expenses were EUR2,603 million, down
11.0 percent on a comparable basis and 10.0 percent on a comparable
and fx-neutral basis. Lower volumes resulted in a reduction of
variable expenses, such as distribution costs. Operating expenses
also benefited from a reduction in discretionary spend, partially
offset by our continued investments for the future in areas such as
our digital capabilities.
During the full-year 2020, we recognised restructuring charges
totalling EUR368million, which include EUR202 million related to
Accelerate Competitiveness proposals announced in October 2020.
These proposals are aimed at reshaping CCEP using technology
enabled solutions to improve productivity and include the closure
of certain production sites in Germany and Iberia.
Effective Tax Rate
The effective tax rate was 28 percent and 25 percent for the
years ended 31 December 2020 and 31 December 2019,
respectively.
The increase in effective tax rate to 28 percent from 2019 is
largely due to the remeasurement of deferred tax positions
following tax rate changes in United Kingdom and the Netherlands,
offset by changes in profit mix and the impact of lower corporate
income tax rates in France and Belgium.
The comparable effective tax rate was 24 percent and 25 percent
for the years ended 31 December 2020 and 31 December 2019,
respectively.
Supplemental Financial Information - Free Cash Flow
Year Ended
================================================= --------------------------
Free Cash Flow 31 December 31 December
In millions of EUR 2020 2019
================================================= =========== =============
Net cash flows from operating activities 1,490 1,904
Less: Purchases of property, plant and equipment (348) (506)
Less: Purchases of capitalised software (60) (96)
Less: Interest paid, net (91) (86)
Add: Proceeds from sales of property, plant and
equipment 49 11
Less: Payments of principal on lease obligations (116) (128)
Free Cash Flow 924 1,099
Supplemental Financial Information - Borrowings
As at
------------------------
31 December 31 December Credit Ratings Moody's Standard
Net Debt 2020 2019 As of 11 February & Poor's
In millions of EUR 2021
=========== =========== ============== ==============
Long-term
Total borrowings 7,187 6,421 rating A3 BBB+
Add: fx impact of On review On CreditWatch
non-EUR borrowings 36 6 Outlook for downgrade negative
Note: Rating outlooks were updated
to reflect proposed acquisition
of Coca-Cola Amatil Limited.
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
Adjusted total borrowings 7,223 6,427 or withdrawal at any time.
Less: cash and cash
equivalents (1,523) (316)
Net debt 5,700 6,111
Supplemental Financial Information - Adjusted EBITDA
Year Ended
============================== --------------------------
Adjusted EBITDA 31 December 31 December
In millions of EUR 2020 2019
============================== =========== =============
Reported profit after tax 498 1,090
Taxes 197 364
Finance costs, net 111 96
Non-operating items 7 (2)
Reported operating profit 813 1,548
Depreciation and amortisation 727 639
Reported EBITDA 1,540 2,187
Items impacting comparability
Mark-to-market effects([1]) 2 (2)
Restructuring charges([2]) 247 92
Adjusted EBITDA 1,789 2,277
Net Debt to EBITDA 3.70 2.79
Net Debt to Adjusted EBITDA 3.19 2.68
______________________
([1]) Amounts represent the net out-of-period mark-to-market
impact of non-designated commodity hedges.
([2]) Amounts represent restructuring charges related to
business transformation activities, excluding accelerated
depreciation included in the depreciation and amortisation
line.
Supplemental Financial Information - Return on invested capital
Year Ended
================================================== ----------------------------
ROIC 31 December 31 December
In millions of EUR 2020 2019
================================================== ============= =============
Comparable operating profit([1]) 1,194 1,676
Taxes([2]) (286) (421)
Comparable operating profit after tax 908 1,255
Opening borrowings less cash and cash equivalents 6,105 5,631
Opening equity 6,156 6,564
Opening Invested Capital 12,261 12,195
Closing borrowings less cash and cash equivalents 5,664 6,105
Closing equity 6,025 6,156
Closing Invested Capital 11,689 12,261
Average Invested Capital 11,975 12,228
ROIC 7.6% 10.3%
______________________
([1]) Reconciliation from reported operating profit to
comparable operating profit is included in Supplementary Financial
Information - Income Statement section.
([2]) Tax rate used is the comparable effective tax rate for the
year (2020: 23.9%; 2019: 25.1%).
Coca-Cola European Partners plc
Consolidated Income Statement (Unaudited)
Year ended
--------------------------
31 December 31 December
2020 2019
EUR million EUR million
---------------------------------- ----------- -------------
Revenue 10,606 12,017
Cost of sales (6,871) (7,424)
----------- -----------
Gross profit 3,735 4,593
Selling and distribution expenses (1,939) (2,258)
Administrative expenses (983) (787)
----------- -----------
Operating profit 813 1,548
Finance income 33 49
Finance costs (144) (145)
----------- -----------
Total finance costs, net (111) (96)
Non-operating items (7) 2
----------- -----------
Profit before taxes 695 1,454
Taxes (197) (364)
----------- -----------
Profit after taxes 498 1,090
=========== ===========
Basic earnings per share (EUR) 1.09 2.34
Diluted earnings per share (EUR) 1.09 2.32
The financial information presented in the unaudited
consolidated income statement, consolidated statement of financial
position and consolidated statement of cash flows within this
document does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006. This financial information
has been extracted from CCEP's consolidated financial statements
which will be delivered to the Registrar of Companies in due
course.
Coca-Cola European Partners plc
Consolidated Statement of Financial Position (Unaudited)
31 December 31 December
2020 2019
EUR million EUR million
------------------------------------------------ ----------- -------------
ASSETS
Non-current:
Intangible assets 8,414 8,506
Goodwill 2,517 2,520
Property, plant and equipment 3,860 4,205
Non-current derivative assets 6 3
Deferred tax assets 27 27
Other non-current assets 337 321
----------- -----------
Total non-current assets 15,161 15,582
----------- -----------
Current:
Current derivative assets 40 12
Current tax assets 19 18
Inventories 681 723
Amounts receivable from related parties 150 106
Trade accounts receivable 1,439 1,669
Other current assets 224 259
Cash and cash equivalents 1,523 316
----------- -----------
Total current assets 4,076 3,103
----------- -----------
Total assets 19,237 18,685
=========== ===========
LIABILITIES
Non-current:
Borrowings, less current portion 6,382 5,622
Employee benefit liabilities 283 221
Non-current provisions 83 54
Non-current derivative liabilities 15 13
Deferred tax liabilities 2,134 2,203
Non-current tax liabilities 131 254
Other non-current liabilities 44 47
----------- -----------
Total non-current liabilities 9,072 8,414
----------- -----------
Current:
Current portion of borrowings 805 799
Current portion of employee benefit liabilities 13 17
Current provisions 154 142
Current derivative liabilities 62 28
Current tax liabilities 171 95
Amounts payable to related parties 181 249
Trade and other payables 2,754 2,785
----------- -----------
Total current liabilities 4,140 4,115
----------- -----------
Total liabilities 13,212 12,529
=========== ===========
EQUITY
Share capital 5 5
Share premium 192 178
Merger reserves 287 287
Other reserves (537) (449)
Retained earnings 6,078 6,135
----------- -----------
Total equity 6,025 6,156
----------- -----------
Total equity and liabilities 19,237 18,685
=========== ===========
Coca-Cola European Partners plc
Consolidated Statement of Cash Flows (Unaudited)
Year ended
31 December 31 December
2020 2019
EUR million EUR million
----------------------------------------------------------- ----------- -------------
Cash flows from operating activities:
Profit before taxes 695 1,454
Adjustments to reconcile profit before tax to
net cash flows from operating activities:
Depreciation 665 587
Amortisation of intangible assets 62 52
Share-based payment expense 14 15
Finance costs, net 111 96
Income taxes paid (273) (270)
Changes in assets and liabilities:
Decrease in trade and other receivables 208 5
Decrease/(increase) in inventories 34 (25)
(Decrease)/increase in trade and other payables 53 (63)
Increase/(decrease) in net payable / receivable
from related parties (112) 59
(Decrease)/increase in provisions 43 (57)
Change in other operating assets and liabilities (10) 51
----------- -----------
Net cash flows from operating activities 1,490 1,904
----------- -----------
Cash flows from investing activities:
Purchases of property, plant and equipment (348) (506)
Purchases of capitalised software (60) (96)
Proceeds from sales of property, plant and equipment 49 11
Investments in equity instruments (11) (8)
----------- -----------
Net cash flows used in investing activities (370) (599)
----------- -----------
Cash flows from financing activities:
Proceeds from borrowings, net 1,598 987
Changes in short-term borrowings (221) 101
Repayments on third party borrowings (569) (625)
Payments of principal on lease obligations (116) (128)
Interest paid, net (91) (86)
Dividends paid (386) (574)
Purchase of own shares under share buyback programme (129) (1,005)
Exercise of employee share options 14 26
Other financing activities, net - 2
----------- -----------
Net cash flows used in financing activities 100 (1,302)
----------- -----------
Net change in cash and cash equivalents 1,220 3
----------- -----------
Net effect of currency exchange rate changes on
cash and cash equivalents (13) 4
Cash and cash equivalents at beginning of period 316 309
----------- -----------
Cash and cash equivalents at end of period 1,523 316
=========== ===========
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February 11, 2021 02:00 ET (07:00 GMT)
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