United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the period ending 31 December 2022
Commission File Number 001-37791
COCA-COLA EUROPACIFIC PARTNERS PLC
Pemberton House, Bakers Road
Uxbridge, UB8 1EZ, United Kingdom
(Address of principal executive office)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
(Check One) Form 20-F ý Form 40-F D Â
COCA-COLA EUROPACIFIC PARTNERS
Preliminary unaudited results for the full year ended 31 December 2022
Solid end to a very successful year, well placed for FY23 and beyond
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| FY 2022 Metric[1] | As Reported | | Comparable [1] | Change vs 2021 | | | Change vs 2021 |
| As Reported | Comparable [1] | Comparable Fx-Neutral [1] | | Pro forma Comparable [3] | Pro forma Comparable Fx-Neutral[3] |
| Total CCEP | Volume (M UC)[2] | 3,300 | | | 3,300 | | 17.5 | % | 18.0 | % | | | | 9.5 | % | |
| Revenue (€M) | 17,320 | | | 17,320 | | 26.0 | % | 26.0 | % | 24.5 | % | | | 17.0 | % | 15.5 | % |
| Cost of sales (€M) | 11,096 | | | 11,088 | | 28.0 | % | 29.0 | % | 27.5 | % | | | 20.0 | % | 19.0 | % |
| Operating expenses (€M) | 4,234 | | | 4,094 | | 18.5 | % | 21.0 | % | 19.5 | % | | | 10.5 | % | 9.0 | % |
| Operating profit (€M) | 2,086 | | | 2,138 | | 37.5 | % | 20.5 | % | 19.5 | % | | | 13.5 | % | 12.5 | % |
| Profit after taxes (€M) | 1,521 | | | 1,564 | | 54.0 | % | 20.0 | % | 19.0 | % | | | | |
| Diluted EPS (€) | 3.29 | | | 3.39 | | 53.0 | % | 19.5 | % | 18.5 | % | | | 14.0 | % | 13.0 | % |
Revenue per UC[2] (€) | | | 5.20 | | | | 6.0 | % | | | | 6.0 | % |
Cost of sales per UC[2] (€) | | | 3.33 | | | | 8.5 | % | | | | 9.0 | % |
| Adjusted Free cash Flow (€M) | | | 1,805 | | | | | | | | |
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| Dividend per share[4] (€) | | 1.68 | | Maintained dividend payout ratio of c.50% | | | | |
| | | | | | | | | | | |
| Europe | Volume (M UC)[2] | 2,631 | | | 2,631 | | 10.5 | % | 11.0 | % | | | | 11.0 | % | |
| Revenue (€M) | 13,529 | | | 13,529 | | 17.0 | % | 17.0 | % | 16.5 | % | | | 17.0 | % | 16.5 | % |
| Operating profit (€M) | 1,529 | | | 1,670 | | 18.0 | % | 11.5 | % | 11.5 | % | | | 11.5 | % | 11.5 | % |
Revenue per UC[2] (€) | | | 5.14 | | | | 5.5 | % | | | | 5.5 | % |
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| API | Volume (M UC)[2] | 669 | | | 669 | | 57.5 | % | 57.5 | % | | | | 5.0 | % | |
| Revenue (€M) | 3,791 | | | 3,791 | | 74.0 | % | 74.0 | % | 66.5 | % | | | 17.0 | % | 12.0 | % |
| Operating profit (€M) | 557 | | | 468 | | 155.5 | % | 72.0 | % | 64.5 | % | | | 21.0 | % | 16.0 | % |
Revenue per UC[2] (€) | | | 5.42 | | | | 6.0 | % | | | | 7.5 | % |
DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:
“2022 was a very successful year, our first as Coca-Cola Europacific Partners. This is testament to the hard work of our colleagues to whom we are extremely grateful. Our focus on well invested and winning brands across our broad pack offering, great in-market execution and price and promotion strategy served us well. We benefited from the continued recovery of the away from home channel and the return of travel and tourism with further growth in the home channel. Combined with our ongoing focus on efficiency, this delivered strong top and bottom-line growth, value share gains and generated solid free cash flow. We continue to be a great partner for our customers, a great place to work for our colleagues whilst making further progress against our sustainability commitments – more of our sites went carbon neutral, we switched logistics to lower carbon alternatives and invested in recycling facilities.
“A record dividend in FY22 combined with our FY23 guidance and ambitious but achievable mid-term objectives demonstrate the strength of our business. Enhanced by our great API business, we are bigger and better, more diverse and robust, operating in resilient categories. We remain confident in the future, despite a dynamic outlook, and we continue to invest for the longer-term, evidenced by the minority buy out of our exciting Indonesian market. Our clear strategy, strong brand partner relationships and great people will ensure we continue to create sustainable value for all our stakeholders. We have the platform and momentum to go even further together for a greater future.”
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Note: All footnotes included after the ‘About CCEP’ section
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FY & Q4 HIGHLIGHTS[1],[3] |
Revenue
FY Reported +26.0%; FY Pro forma +15.5%[5]
•Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil (completed 10 May 2021)
•Delivered more revenue growth for our retail customers than any of our FMCG peers in Europe, & any of our NARTD peers in Australia & New Zealand[6]
•NARTD value share gains across measured channels both in store[7] (+10bps) including sparkling (+20bps) & online[8] (+80bps)
•Pro forma:
◦Comparable volume +9.5%[9] (+3.5% vs 2019) driven by solid recovery of away from home (AFH), & continued growth in Home across our markets
◦Comparable volume by channel: AFH +18.5% (broadly flat vs 2019) reflecting fewer restrictions & increased mobility. The return of tourism & favourable weather in Europe also supported the strong recovery of immediate consumption (IC) packs (+23.0%[10]). Home +4.0% (+6.5% vs 2019) supported by recovery of IC packs & sustained growth in key future consumption packs (e.g. multipack cans +6.0%[10] & +25.0% vs 2019)
◦Revenue per unit case +6.0%[2],[5] (+9.0%[11] vs 2019) reflecting positive pack & channel mix driven by the recovery of AFH, promotional optimisation & favourable headline price following the successful implementation of dynamic headline pricing strategies across our markets
Q4 Reported +10.0%; Q4 Fx-neutral +10.5%[5]
•Comparable volume +1.5%[9] (flat vs 2019) despite disruption related to a customer negotiation in the Home channel & cycling tougher comparables
◦AFH comparable volume: +5.5% (-4.5% vs 2019)
◦Home comparable volume: -1.0% (+3.5% vs 2019)
•Revenue per unit case +9.0%[2],[5] (+14.0%[11] vs 2019) driven by favourable price & positive pack & channel mix driven by the recovery of AFH
•Recent trading indicating no significant change in underlying consumer demand
Operating profit
FY Reported +37.5%; Pro forma comparable +12.5%[5]
•Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil
•Pro forma cost of sales per unit case +9.0%[2],[5] reflecting increased revenue per unit case driving higher concentrate costs, commodity inflation & adverse mix, partially offset by the favourable recovery of fixed manufacturing costs given higher volumes
•Comparable operating profit of €2,138m, +12.5%[3],[5] reflecting increased revenue & the benefit of ongoing efficiency programmes (over 90% delivered of multi-year ~€375m programme)
•Comparable diluted EPS of €3.39, +13.0%[3],[5] (reported +53.0%)
Dividend
•Record full year interim dividend per share of €1.68[4], +20.0% vs last year & +35.5% vs 2019, maintaining annualised dividend payout ratio of approximately 50% (in line with our dividend policy). Equating to total absolute dividend of €763m
Other
•Generated strong adjusted free cash flow[12] of €1,805m reflecting strong performance & working capital initiatives (net cashflows from operating activities of €2,932m), supporting our guidance to return to the top end of our target leverage range by the end of 2023 (Net debt:Adjusted EBITDA[1] of 2.5x-3x). At the end of 2022, Net debt:Adjusted EBITDA[1] was 3.5x
•ROIC increased by 112bps[3] on a pro forma basis to 9.1% driven by the increase in comparable profit after tax & continued focus on capital allocation
•Maximising system value creation with API:
◦Reorientation of the portfolio to enable greater focus on NARTD, RTD alcohol & spirits nearing completion:
▪Previously announced plans to exit the production, sale & distribution of Australia beer & apple cider products completed[13]; minimal EBIT impact
▪Sale of NARTD own brands to The Coca-Cola Company for A$275m; substantially complete; annualised EBIT impact of ~A$25m
◦On 15 February 2023, CCEP completed the purchase of The Coca-Cola Company's 29.4% minority share in our Indonesia business (Coca-Cola Bottling Indonesia), increasing CCEP's ownership to 100% for a total consideration of €282m (including significant cash acquired). Expect transaction to be EPS accretive (minimal overall impact). This simplifies our ownership structure & operations whilst demonstrating our commitment to the future of this exciting market
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| FY22 SUSTAINABILITY HIGHLIGHTS | | | |
•Launched updated commitments & targets to include API (announced in November 2022, link to presentation https://ir.cocacolaep.com/static-files/69f82655-5d6c-4c06-8ab8-835b0d2be957)
•Retained inclusion on Carbon Disclosures Project’s A Lists for Climate & Water & continued to be recognised in MSCI ESG Leaders Index
•Closed 2022 at ~48%[14] recycled plastic (rPET); Europe ~56%[14] & API ~27%[14]
◦Launched tethered closures on our PET bottles in 7 of our markets
◦Opened new industry partnership PET recycling facilities in Australia & Indonesia
•Achieved 6 manufacturing sites as carbon neutral certified
•Retained inclusion on the Bloomberg Gender Equality index
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FY23 GUIDANCE & OUTLOOK[1] | | | |
The outlook for FY23 reflects current market conditions. Unless stated otherwise, guidance is on a comparable & Fx-neutral basis
Top line
•Revenue: comparable growth of 6-8% driven by price & mix
◦Dynamic headline pricing & promotional optimisation across our markets & annualisation of FY22 second headline pricing increases
Bottom line
•Cost of sales per unit case*: comparable growth of ~8%
◦Expect commodity inflation to be up ~10% (previously mid-teens)
◦FY23 hedge coverage at ~85%
◦Concentrate directly linked to revenue per unit case through the incidence pricing model
◦Low overall FX transactional exposure (<10%)
•Operating profit*: comparable growth of 6-7%
◦Continued focus on delivering efficiency programmes & optimising discretionary spend
Other
•Comparable effective tax rate: ~23%
•Free cash flow: at least €1.6bn
•Capital expenditure: 4-5% of revenue excluding leases
•Dividend payout ratio: c.50%[15]
* We expect the cost of sales per unit case increase to be weighted more to the first half given the lower comparable from last year as previously disclosed. Consequently we anticipate low single digit operating profit growth in the first half of this year
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Fourth-quarter & Full-Year Revenue Performance by Geography[1] |
| | | | | | | | | | | | | | | | | | | | | | | |
| Fourth-quarter | | Full Year |
| | Fx-Neutral | | | Fx-Neutral |
| € million | % change | % change | | € million | % change | % change |
| Great Britain | 795 | | 13.0 | % | 16.0 | % | | 3,088 | | 18.0 | % | 17.5 | % |
France[17] | 504 | | 11.0 | % | 11.0 | % | | 2,089 | | 15.0 | % | 15.0 | % |
| Germany | 653 | | 7.5 | % | 7.5 | % | | 2,682 | | 15.0 | % | 15.0 | % |
Iberia[18] | 693 | | 10.0 | % | 10.0 | % | | 3,034 | | 21.5 | % | 21.5 | % |
Northern Europe[19] | 613 | | 10.5 | % | 12.5 | % | | 2,636 | | 13.0 | % | 13.5 | % |
| Total Europe | 3,258 | | 10.5 | % | 11.5 | % | | 13,529 | | 17.0 | % | 16.5 | % |
API[16],[3] | 1,037 | | 9.5 | % | 8.0 | % | | 3,791 | | 17.0 | % | 12.0 | % |
Total CCEP[3] | 4,295 | | 10.0 | % | 10.5 | % | | 17,320 | | 17.0 | % | 15.5 | % |
API
•Q4 volume reflects continued trading momentum in Australia & NZ. Increased mobility, strong trading & navigation of industry-wide supply constraints in Australia & New Zealand, & a record Ramadan in Indonesia supported solid FY volume growth.
•Coca-Cola No Sugar & Monster outperformed, with both Q4 & FY volume ahead of 2019.
•FY revenue/UC[20] growth driven by favourable underlying price, promotional optimisation in Australia, & positive pack & channel mix.
France
•Q4 volume reflects strong momentum in the AFH channel & solid trading in the Home channel. The rebound of the AFH channel, supported by the return of tourism & favourable weather, & growth in the Home channel supported solid FY volume growth in both channels versus 2019.
•Coca-Cola Zero Sugar, Fuze Tea & Monster outperformed versus 2019 in both Q4 & FY.
•FY revenue/UC[20] growth driven by positive channel & pack mix led by the recovery of the AFH channel (e.g. small glass +55.5% & small PET +25.0%) & favourable underlying price.
Germany
•Q4 volume reflects the ongoing recovery of the AFH channel & disruption relating to a customer negotiation (now resolved). The rebound of the AFH channel, favourable weather & solid performance in the Home channel, supported FY overall volume growth versus 2019.
•Coca-Cola Zero Sugar, Fuze Tea & Monster outperformed versus 2019 in both Q4 & FY.
•FY revenue/UC[20] growth driven by favourable underlying price, positive brand mix (e.g. Monster volume +23.0%) & positive pack & channel mix led by the recovery of the AFH channel.
Great Britain
•Q4 volume reflects sustained trading momentum in the AFH channel. The solid recovery of this channel, supported by favourable weather & increased domestic tourism, & further growth in the Home channel supported double-digit FY volume growth versus 2019.
•Coca-Cola Zero Sugar, Fanta, Monster & Dr Pepper outperformed versus 2019 in both Q4 & FY.
•FY revenue/UC[20] growth driven by favourable underlying price & positive pack mix led by the recovery of the AFH channel (e.g. small glass +20.5% & small PET +15.0%).
Iberia
•Q4 volume reflects the strong recovery of the AFH channel. Continued trading momentum, the return of tourism & favourable weather supported FY volume growth versus 2019 in this channel. Despite good trading in the Home channel, overall FY volume versus 2019 was impacted by the increased Spanish VAT rate.
•Coca-Cola Zero Sugar & Monster outperformed, with both Q4 & FY volume ahead of 2019.
•FY revenue/UC[20] growth driven by favourable underlying price & positive channel & pack mix led by the recovery of the AFH channel (e.g. small glass +33.5% & small PET +29.5%).
Northern Europe
•Q4 volume reflects the ongoing recovery of the AFH channel. Despite the late removal of restrictions, the rebound of the AFH channel & further growth in the Home channel supported solid FY overall volume growth versus 2019.
•Coca-Cola Zero Sugar, Monster & Fuze Tea outperformed versus 2019 in both Q4 & FY.
•FY revenue/UC[20] growth driven by favourable underlying price & positive pack & channel mix led by the ongoing recovery of the AFH channel (e.g. small glass +57.5% & small PET +16.0%).
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Note: All values are unaudited and all references to volumes are on a comparable basis. All changes are versus 2021 equivalent period unless stated otherwise
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Fourth-quarter & Full-Year Volume Performance by Category[1],[3],[9] |
Comparable volumes, changes versus equivalent 2021 period.
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| Fourth-quarter | | Full Year |
| % of Total | | % Change | | % of Total | | % Change[5] |
| Sparkling | 85.5 | % | | 2.0 | % | | 84.5 | % | | 9.0 | % |
Coca-ColaTM | 60.0 | % | | 2.5 | % | | 58.5 | % | | 8.0 | % |
| Flavours, Mixers & Energy | 25.5 | % | | 1.0 | % | | 26.0 | % | | 11.5 | % |
| Stills | 14.5 | % | | (1.0) | % | | 15.5 | % | | 11.5 | % |
| Hydration | 7.5 | % | | 1.0 | % | | 8.0 | % | | 16.0 | % |
RTD Tea, RTD Coffee, Juices & Other[21] | 7.0 | % | | (3.5) | % | | 7.5 | % | | 7.0 | % |
| Total | 100.0 | % | | 1.5 | % | | 100.0 | % | | 9.5 | % |
Coca-ColaTM
•Q4 Original Taste +2.5%; Lights +2.5%
•FY Original Taste +9.5%; Lights +6.5% driven by the rebound of the AFH channel & outperformance of Coca-Cola Zero Sugar (+10.0%)
•FY Coca-Cola Zero Sugar +23.5% growth vs 2019
•Coca-Cola Zero Sugar gained value share[7] of Total Cola +60bps
Flavours, Mixers & Energy
•Q4 Fanta +3.0%; Sprite -0.5%
•FY Fanta +15.5%; Sprite +11.5% driven by the rebound of the AFH channel
•Q4 Energy +14.0% with continued momentum in both channels led by Monster
•FY Energy +18.5%, (+60.5% vs 2019) supported by solid distribution & exciting innovation including Juice & Ultra flavour extensions
Hydration
•Q4 Water -4.0%; Sports +16.0%
•FY Water +13.5% reflecting its exposure to IC across both channels, with the rebound of the AFH channel & increased mobility
•FY Sports +23.0% with growth in both Europe & API
RTD Tea, RTD Coffee, Juices & Other[21]
•Q4 Juice drinks -7.0% reflecting SKU rationalisation in Indonesia
•Fuze Tea solid growth vs 2019 (Q4: +31.0%[10]; FY: +39.5%[10]) & continuing to grow value share in Europe[7]
•Alcohol continued to deliver solid growth in Australia driven by Spirits & RTD (Q4: +2.0%; FY: +11.0% vs 2019)
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Note: All references to volumes are on a comparable basis. All changes are versus 2021 equivalent period unless stated otherwise
| | |
Conference Call (with presentation) |
•16 February 2023 at 12:00 GMT, 13:00 CET & 7:00 a.m.EST; accessible via www.cocacolaep.com
•Replay & transcript will be available at www.cocacolaep.com as soon as possible
•Integrated Report and form 20-F for 2022 publication: 17 March 2023
•First-quarter 2023 trading update: 25 April 2023
•Financial calendar available here: https://ir.cocacolaep.com/financial-calendar/
Investor Relations
Sarah Willett Claire Michael Claire Copps
+44 7970 145 218 +44 7528 251 033 +44 7980 775 889
Media Relations
Shanna Wendt Nick Carter
+44 7976 595 168 +44 7976 595 275
Coca-Cola Europacific Partners is one of the world’s leading consumer goods companies. We make, move and sell some of the world’s most loved brands – serving 600 million consumers and helping 1.75 million customers across 29 countries grow.
We combine the strength and scale of a large, multi-national business with an expert, local knowledge of the customers we serve and communities we support.
The Company is currently listed on Euronext Amsterdam, the NASDAQ Global Select Market, London Stock Exchange and on the Spanish Stock Exchanges, trading under the symbol CCEP.
For more information about CCEP, please visit www.cocacolaep.com & follow CCEP on Twitter at @CocaColaEP.
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1.Refer to ‘Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures’ for further details and to ‘Supplementary Financial Information’ for a reconciliation of reported to comparable and reported to pro forma comparable results; Change percentages against prior year equivalent period unless stated otherwise
2.A unit case equals approximately 5.678 litres or 24 8-ounce servings
3.Comparative pro forma figures as if the acquisition of Coca-Cola Amatil Limited occurred at 1 January 2021 presented for illustrative purposes only, it is not intended to estimate or predict future financial performance or what actual results would have been. Acquisition completed on 10 May 2021. Prepared on a basis consistent with CCEP accounting policies for the period 1 January to 10 May 2021. Refer to ‘Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures’ for further details
4.27 April 2022 declared first half interim dividend of €0.56 dividend per share, paid 26 May 2022; 2 November 2022 declared second half interim dividend of €1.12 dividend per share, paid 7 December 2022
5.Comparable & FX-neutral
6.External data source: Europe: NielsenIQ Strategic Planner FY22 data: Countries: GB, BE, DE, ES, FR, NL, NO, PT & SE data to 01.01.23, API: NielsenIQ Global Track FY22 Data; Countries: NZ & IND data to 01.01.23; IRI FY22 data: Country; AUS data to 01.01.23
7.External data source: Combined NARTD (non-alcoholic ready to drink) Nielseniq Data ES, PT, DE, FR, BE, NL, SE, NO to 01.01.23, GB to WE 31.12.22, IND to WE 31.12.22, NZ to WE 01.01.23. IRI Data AUS to WE 01.01.23
8.External data source: Online Data is for available markets FY22 GB to 01.Jan.23 (Retailer data+NielsenIQ), ES, FR, NL & SE to 01.Jan.23 (NielsenIQ), AUS to 01.Jan.23 (Retailer Data)
9.No selling day shift in Q4; FY 2022 adjusted for 1 less selling day in Q1; FY 2022 pro forma volume +9.5%
10.Europe only
11.Management’s best estimate
12.Adjusted Free Cash Flow excludes cash proceeds related to a historical VAT dispute refund in Spain
13.As previously announced (Q1 2022 Trading update on 27 April 2022), CCEP will retain ownership of Feral craft brewery
14.Unassured & provisional
15.Dividends subject to Board approval
16.Includes Australia, New Zealand & the Pacific Islands, Indonesia & Papua New Guinea
17.Includes France & Monaco
18.Includes Spain, Portugal & Andorra
19.Includes Belgium, Luxembourg, the Netherlands, Norway, Sweden & Iceland
20.Revenue per unit case
21.RTD refers to Ready to Drink; Other includes Alcohol & Coffee
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Forward-Looking Statements |
This document contains statements, estimates or projections that constitute “forward-looking statements” concerning the financial condition, performance, results, guidance and outlook, dividends, consequences of mergers, acquisitions and divestitures, strategy and objectives of Coca-Cola Europacific Partners plc and its subsidiaries (together CCEP or the Group). Generally, the words “ambition”, “target”, “aim”, “believe”, “expect”, “intend”, “estimate”, “anticipate”, “project”, “plan”, “seek”, “may”, “could”, “would”, “should”, “might”, “will”, “forecast”, “outlook”, “guidance”, “possible”, “potential”, “predict”, “objective” and similar expressions identify forward-looking statements, which generally are not historical in nature.
Forward-looking statements are subject to certain risks that could cause actual results to differ materially from CCEP’s historical experience and present expectations or projections. As a result, undue reliance should not be placed on forward-looking statements, which speak only as of the date on which they are made. These risks include but are not limited to:
1. those set forth in the “Risk Factors” section of CCEP’s 2021 Annual Report on Form 20-F filed with the SEC on 15 March 2022 and as updated and supplemented with the additional information set forth in the “Principal Risks and Risk Factors” section of the H1 2022 Half-year Report filed with the SEC on 4 August 2022;
2. the extent to which COVID-19 will continue to affect CCEP and the results of its operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic;
3. risks and uncertainties relating to the global supply chain, including impact from war in Ukraine, such as the risk that the business will not be able to guarantee sufficient supply of raw materials, supplies, finished goods, natural gas and oil and increased state-sponsored cyber risks;
4. risks and uncertainties relating to the global economy and/or a potential recession in one or more countries, including risks from elevated inflation, price increases, price elasticity, disposable income of consumers and employees, pressure on and from suppliers, increased fraud, and the perception or manifestation of a global economic downturn; and
5. risks and uncertainties relating to potential global energy crisis, with potential interruptions and shortages in the global energy supply, specifically the natural gas supply in our territories. Energy shortages at our sites, our suppliers and customers could cause interruptions to our supply chain and capability to meet our production and distribution targets.
Due to these risks, CCEP’s actual future results, dividend payments, capital and leverage ratios, growth, including growth in revenue, cost of sales per unit case and operating profit, free cash flow, market share, tax rate, efficiency savings, achievement of sustainability goals, including net zero emissions, capital expenditures, the results of the acquisition of the minority share of our Indonesian business, and the results of the integration of the businesses following the acquisition of Coca-Cola Amatil, including expected efficiency and combination savings, may differ materially from the plans, goals, expectations and guidance set out in forward-looking statements. These risks may also adversely affect CCEP’s share price. Additional risks that may impact CCEP’s future financial condition and performance are identified in filings with the SEC which are available on the SEC’s website at www.sec.gov. CCEP does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable rules, laws and regulations. Any or all of the forward-looking statements contained in this filing and in any other of CCEP’s public statements may prove to be incorrect.
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Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures |
Pro forma financial information
Pro forma financial information has been provided in order to illustrate the effects of the acquisition of Coca-Cola Amatil Limited (the Acquisition; referred to as CCL pre acquisition, API post acquisition) on the results of operations of CCEP in 2021 and allow for greater comparability of the results of the combined group between periods. The pro forma financial information for 2021 has been prepared for illustrative purposes only and because of its nature, addresses a hypothetical situation. It is based on information and assumptions that CCEP believes are reasonable, including assumptions as at 1 January 2021 relating to acquisition accounting provisional fair values of API assets and liabilities which are assumed to be equivalent to those that have been provisionally determined as of the acquisition date and included in the financial statements for the year ended 31 December 2021, on a constant currency basis. The pro forma information for 2021 also assumes the interest impact of additional debt financing reflecting the actual weighted average interest rate for acquisition financing of c.0.40% for 2021.
The pro forma financial information does not intend to represent what CCEP’s results of operations actually would have been if the acquisition had been completed on the dates indicated, nor does it intend to represent, predict or estimate the results of operations for any future period or financial position at any future date. In addition, it does not reflect ongoing cost savings that CCEP expects to achieve as a result of the acquisition or the costs necessary to achieve these cost savings or synergies. As pro forma information is prepared to illustrate retrospectively the effects of future transactions, there are limitations that are inherent to the nature of pro forma information. As such, had the acquisition taken place on the dates assumed, the actual effects would not necessarily have been the same as those presented in the pro forma financial information contained herein.
Alternative Performance Measures
We use certain alternative performance measures (non-GAAP performance measures) to make financial, operating and planning decisions and to evaluate and report performance. We believe these measures provide useful information to investors and as such, where clearly identified, we have included certain alternative performance measures in this document to allow investors to better analyse our business performance and allow for greater comparability. To do so, we have excluded items affecting the comparability of period-over-period financial performance as described below. The alternative performance measures included herein should be read in conjunction with and do not replace the directly reconcilable GAAP measures.
For purposes of this document, the following terms are defined:
‘‘As reported’’ are results extracted from our consolidated financial statements.
‘‘Pro forma’’ includes the results of CCEP and API as if the Acquisition had occurred at the beginning of 2021, including acquisition accounting adjustments relating to provisional fair values. Pro forma also includes impact of the additional debt financing costs incurred by CCEP in connection with the Acquisition for all periods presented.
"Comparable’’ is defined as results excluding items impacting comparability, which include restructuring charges, acquisition and integration related costs, inventory fair value step up related to acquisition accounting, the impact of the closure of the GB defined benefit pension scheme, net impact related to European flooding, income arising from the favourable court ruling pertaining to the ownership of certain mineral rights in Australia, impact of a defined benefit plan amendment arising from legislative changes in respect of the minimum retirement age and net tax items relating to rate and law changes. Comparable volume is also adjusted for selling days.
‘‘Pro forma Comparable’’ is defined as the pro forma results excluding items impacting comparability, as described above.
‘‘Fx-neutral’’ is defined as period results excluding the impact of foreign exchange rate changes. Foreign exchange impact is calculated by recasting current year results at prior year exchange rates.
‘‘Capex’’ or “Capital expenditures’’ is defined as purchases of property, plant and equipment and capitalised software, plus payments of principal on lease obligations, less proceeds from disposals of property, plant and equipment. Capex is used as a measure to ensure that cash spending on capital investment is in line with the Group’s overall strategy for the use of cash.
‘‘Free cash flow’’ is defined as net cash flows from operating activities less capital expenditures (as defined above) and interest paid. Free cash flow is used as a measure of the Group’s cash generation from operating activities, taking into account investments in property, plant and equipment and non-discretionary lease and interest payments. Free cash flow is not intended to represent residual cash flow available for discretionary expenditures.
‘‘Adjusted free cash flow’’ is defined as Free cash flow (as defined above) adjusted for items that are not reasonably likely to recur within two years, nor have occurred within the prior two years. Adjusted free cash flow is not intended to represent residual cash flow available for discretionary expenditures. Refer to page 19 for additional information.
‘‘Adjusted EBITDA’’ is calculated as Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), after adding back items impacting the comparability of period over period financial performance. Adjusted EBITDA does not reflect cash expenditures, or future requirements for capital expenditures or contractual commitments. Further, adjusted EBITDA does not
reflect changes in, or cash requirements for, working capital needs, and although depreciation and amortisation are non-cash charges, the assets being depreciated and amortised are likely to be replaced in the future and adjusted EBITDA does not reflect cash requirements for such replacements.
‘‘Net Debt’’ is defined as the net of cash and cash equivalents and short term investments less borrowings and adjusted for the fair value of hedging instruments related to borrowings and other financial assets/liabilities related to borrowings. We believe that reporting net debt is useful as it reflects a metric used by the Group to assess cash management and leverage. In addition, the ratio of net debt to adjusted EBITDA is used by investors, analysts and credit rating agencies to analyse our operating performance in the context of targeted financial leverage.
‘‘ROIC” or “Return on invested capital” is defined as comparable operating profit after tax attributable to shareholders divided by the average of opening and closing invested capital for the year. Invested capital is calculated as the addition of borrowings and equity attributable to shareholders less cash and cash equivalents and short term investments. ROIC is used as a measure of capital efficiency and reflects how well the Group generates comparable operating profit relative to the capital invested in the business.
‘‘Dividend payout ratio’’ is defined as dividends as a proportion of comparable profit after tax.
Additionally, within this document, we provide certain forward-looking non-GAAP financial Information, which management uses for planning and measuring performance. We are not able to reconcile forward-looking non-GAAP measures to reported measures without unreasonable efforts because it is not possible to predict with a reasonable degree of certainty the actual impact or exact timing of items that may impact comparability throughout year.
Unless otherwise stated, percent amounts are rounded to the nearest 0.5%.
| | | | | | | | | | | | | | |
Supplementary Financial Information - Income Statement - Reported to Comparable |
The following provides a summary reconciliation of CCEP’s reported and comparable results for the full-year ended 31 December 2022 and 31 December 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Full year 2022 | | As Reported | | Items impacting Comparability | | Comparable | |
| Unaudited, in millions of € except per share data which is calculated prior to rounding | | CCEP | | Restructuring Charges [1] | | Acquisition and Integration related costs [2] | European flooding [3] | Defined benefit plan amendment [4] | Coal royalties [5] | | CCEP | |
| Revenue | | 17,320 | | | — | | | — | | — | | — | | — | | | 17,320 | | |
| Cost of sales | | 11,096 | | | (19) | | | — | | 11 | | — | | — | | | 11,088 | | |
| Gross profit | | 6,224 | | | 19 | | | — | | (11) | | — | | — | | | 6,232 | | |
| Operating expenses | | 4,234 | | | (144) | | | (3) | | — | | 7 | | — | | | 4,094 | | |
| Other income | | 96 | | | — | | | — | | — | | — | | (96) | | | — | | |
| Operating profit | | 2,086 | | | 163 | | | 3 | | (11) | | (7) | | (96) | | | 2,138 | | |
| Total finance costs, net | | 114 | | | — | | | — | | — | | — | | — | | | 114 | | |
| Non-operating items | | 15 | | | — | | | — | | — | | — | | — | | | 15 | | |
| Profit before taxes | | 1,957 | | | 163 | | | 3 | | (11) | | (7) | | (96) | | | 2,009 | | |
| Taxes | | 436 | | | 42 | | | — | | (3) | | (1) | | (29) | | | 445 | | |
| Profit after taxes | | 1,521 | | | 121 | | | 3 | | (8) | | (6) | | (67) | | | 1,564 | | |
| | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | |
| Shareholders | | 1,508 | | | 121 | | | 3 | | (8) | | (6) | | (67) | | | 1,551 | | |
| Non-controlling interest | | 13 | | | — | | | — | | — | | — | | — | | | 13 | | |
| Profit after taxes | | 1,521 | | | 121 | | | 3 | | (8) | | (6) | | (67) | | | 1,564 | | |
| | | | | | | | | | | | |
| Diluted earnings per share (€) | | 3.29 | | | 0.27 | | | 0.01 | | (0.02) | | (0.01) | | (0.15) | | | 3.39 | | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Full year 2021 | | As Reported | | Items impacting Comparability | | | Comparable |
| Unaudited, in millions of € except share data which is calculated prior to rounding | | CCEP | | Restructuring Charges [1] | DB plan closure [6] | Total Acquisition Related Costs [2] | Inventory step up costs [7] | European flooding[3] | Net Tax [8] | | | CCEP |
| Revenue | | 13,763 | | | — | | — | | — | | — | | — | | — | | | | 13,763 | |
| Cost of sales | | 8,677 | | | (17) | | 3 | | — | | (48) | | (9) | | — | | | | 8,606 | |
| Gross profit | | 5,086 | | | 17 | | (3) | | — | | 48 | | 9 | | — | | | | 5,157 | |
| Operating expenses | | 3,570 | | | (136) | | 6 | | (49) | | — | | (6) | | — | | | | 3,385 | |
| Operating profit | | 1,516 | | | 153 | | (9) | | 49 | | 48 | | 15 | | — | | | | 1,772 | |
| Total finance costs, net | | 129 | | | — | | — | | (4) | | — | | — | | — | | | | 125 | |
| Non-operating items | | 5 | | | — | | — | | — | | — | | — | | — | | | | 5 | |
| Profit before taxes | | 1,382 | | | 153 | | (9) | | 53 | | 48 | | 15 | | — | | | | 1,642 | |
| Taxes | | 394 | | | 43 | | 4 | | 10 | | 13 | | 3 | | (127) | | | | 340 | |
| Profit after taxes | | 988 | | | 110 | | (13) | | 43 | | 35 | | 12 | | 127 | | | | 1,302 | |
| | | | | | | | | | | | |
| Attributable to: | | | | | | | | | | | | |
| Shareholders | | 982 | | | 109 | | (13) | | 43 | | 34 | | 12 | | 127 | | | | 1,294 | |
| Non-controlling interest | | 6 | | | 1 | | — | | — | | 1 | | — | | — | | | | 8 | |
| Profit after taxes | | 988 | | | 110 | | (13) | | 43 | | 35 | | 12 | | 127 | | | | 1,302 | |
| | | | | | | | | | | | |
| Diluted earnings per share (€) | | 2.15 | | | 0.24 | | (0.03) | | 0.09 | | 0.07 | | 0.03 | | 0.28 | | | | 2.83 | |
__________________________[1] Amounts represent restructuring charges related to business transformation activities.
[2] Amounts represent cost associated with the acquisition and integration of CCL.
[3] Amounts represent the incremental expense incurred offset/partially offset by the insurance recoveries collected as a result of the July 2021 flooding events, which impacted the operations of our manufacturing facilities in Chaudfontaine and Bad Neuenahr.
[4] Amounts represent the impact of a plan amendment arising from legislative changes in respect of the minimum retirement age.
[5] Amounts represent other income arising from the favourable court ruling pertaining to the ownership of certain mineral rights in Australia.
[6] Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.
[7] Amounts represent the non-recurring impact of the fair value step-up of API finished goods.
[8] Amounts include the deferred tax impact related to income tax rate and law changes.
| | | | | | | | | | | | | | |
Supplementary Financial Information - Income Statement - Reported to Pro forma Comparable |
The following provides a summary reconciliation of CCEP’s reported and pro forma comparable results for the full-year ended 31 December 2021:
| | | | | | | | | | | | | | | | | | | | |
Full Year 2021 | As Reported | Pro forma adjustments CCL [A] | Transaction accounting adjustments [B] | Pro forma
Combined | Items impacting Comparability [C] | Pro forma Comparable |
Unaudited, in millions of € except share data which is calculated prior to rounding | CCEP | | | CCEP | | CCEP |
| Revenue | 13,763 | | 1,056 | | — | | 14,819 | | — | | 14,819 | |
| Cost of sales | 8,677 | | 616 | | — | | 9,293 | | (71) | | 9,222 | |
| Gross profit | 5,086 | | 440 | | — | | 5,526 | | 71 | | 5,597 | |
| Operating expenses | 3,570 | | 323 | | 68 | | 3,961 | | (250) | | 3,711 | |
| Operating profit | 1,516 | | 117 | | (68) | | 1,565 | | 321 | | 1,886 | |
| Total finance costs, net | 129 | | 12 | | 9 | | 150 | | (4) | | 146 | |
| Non-operating items | 5 | | (1) | | — | | 4 | | — | | 4 | |
| Profit before taxes | 1,382 | | 106 | | (77) | | 1,411 | | 325 | | 1,736 | |
| Taxes | 394 | | 29 | | (20) | | 403 | | (36) | | 367 | |
| Profit after taxes | 988 | | 77 | | (57) | | 1,008 | | 361 | | 1,369 | |
| | | | | | |
| Attributable to: | | | | | | |
| Shareholders | 982 | | 74 | | (58) | | 998 | | 359 | | 1,357 | |
| Non-controlling interest | 6 | | 3 | | 1 | | 10 | | 2 | | 12 | |
| Profit after taxes | 988 | | 77 | | (57) | | 1,008 | | 361 | | 1,369 | |
| | | | | | |
| Diluted earnings per share (€) | 2.15 | | 0.16 | | (0.13) | | 2.18 | | 0.79 | | 2.97 | |
__________________________[A] Amounts represent adjustments to include CCL financial results prepared on a basis consistent with CCEP accounting policies, as if the Acquisition had occurred on 1 January 2021 and excludes CCL acquisition and integration related costs.
[B] Amounts represent transaction accounting adjustments for the period 1 January to 10 May as if the Acquisition had occurred on 1 January 2021. These include the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment, the interest impact of additional debt financing reflecting the actual weighted average interest rate for Acquisition financing of c.0.40% and the inclusion of acquisition and integration related costs incurred by CCL prior to the Acquisition.
[C] Items impacting comparability represents amounts included within pro forma Combined CCEP affecting the comparability of CCEP’s year-over-year financial performance and are set out in the following table:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Full year 2021 | Items impacting Comparability | |
Unaudited, in millions of € except share data which is calculated prior to rounding | Restructuring Charges [1] | Defined benefit plan closure[2] | Acquisition and Integration related costs [3] | Inventory step up costs [4] | European flooding[5] | Net Tax [6] | Other [7] | Total items impacting Comparability |
| Revenue | — | | — | | — | | — | | — | | — | | — | | — | |
| Cost of sales | (17) | | 3 | | — | | (48) | | (9) | | — | | — | | (71) | |
| Gross profit | 17 | | (3) | | — | | 48 | | 9 | | — | | — | | 71 | |
| Operating expenses | (136) | | 6 | | (110) | | — | | (6) | | — | | (4) | | (250) | |
| Operating profit | 153 | | (9) | | 110 | | 48 | | 15 | | — | | 4 | | 321 | |
| Total finance costs, net | — | | — | | (4) | | — | | — | | — | | — | | (4) | |
| Non-operating items | — | | — | | — | | — | | — | | — | | — | | — | |
| Profit before taxes | 153 | | (9) | | 114 | | 48 | | 15 | | — | | 4 | | 325 | |
| Taxes | 43 | | 4 | | 27 | | 13 | | 3 | | (127) | | 1 | | (36) | |
| Profit after taxes | 110 | | (13) | | 87 | | 35 | | 12 | | 127 | | 3 | | 361 | |
| | | | | | | | |
| Attributable to: | | | | | | | | |
| Shareholders | 109 | | (13) | | 87 | | 34 | | 12 | | 127 | | 3 | | 359 | |
| Non-controlling interest | 1 | | — | | — | | 1 | | | — | | — | | 2 | |
| Profit after taxes | 110 | | (13) | | 87 | | 35 | | 12 | | 127 | | 3 | | 361 | |
| | | | | | | | |
| Diluted earnings per share (€) | 0.24 | | (0.03) | | 0.19 | | 0.07 | | 0.03 | | 0.28 | | 0.01 | | 0.79 | |
_________________________[1] Amounts represent restructuring charges related to business transformation activities.
[2] Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.
[3] Amounts represent cost associated with the acquisition and integration of CCL.
[4] Amounts represent the non-recurring impact of the provisional fair value step-up of API finished goods. For 2021, these charges are included within the As Reported results.
[5] Amounts represent the incremental net costs incurred as a result of the July 2021 flooding events, which impacted the operations of our manufacturing facilities in Chaudfontaine and Bad Neuenahr.
[6] Amounts include the deferred tax impact related to income tax rate and law changes.
[7] Amounts represent charges incurred prior to Acquisition classified as non-trading items by CCL which are not expected to recur.
| | | | | | | | | | | | | | |
Supplemental Financial Information - Operating Profit - Reported to Comparable |
Revenue
| | | | | | | | | | | | | | | | | | | | | | | |
Revenue CCEP 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. | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| As reported | 4,295 | | 3,896 | | 10.0 | % | | 17,320 | | 13,763 | | 26.0 | % |
| Adjust: Impact of fx changes | 19 | | n/a | n/a | | (172) | | n/a | n/a |
| Fx-neutral | 4,314 | | 3,896 | | 10.5 | % | | 17,148 | | 13,763 | | 24.5 | % |
| | | | | | | |
| Revenue per unit case | 5.43 | | 4.99 | | 9.0 | % | | 5.20 | | 4.91 | | 6.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
Revenue Europe 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. | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| As reported | 3,258 | | 2,950 | | 10.5 | % | | 13,529 | | 11,584 | | 17.0 | % |
| Adjust: Impact of fx changes | 32 | | n/a | n/a | | (6) | | n/a | n/a |
| Fx-neutral | 3,290 | | 2,950 | | 11.5 | % | | 13,523 | | 11,584 | | 16.5 | % |
| | | | | | | |
| Revenue per unit case | 5.31 | | 4.91 | | 8.0 | % | | 5.14 | | 4.87 | | 5.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue API 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. | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | | 31 December 2022 | 31 December 2021 | % Change | |
| As reported | 1,037 | | 946 | | 9.5 | % | | | 3,791 | | 2,179 | | 74.0 | % | |
| Adjust: Impact of fx changes | (13) | | n/a | n/a | | | (166) | | n/a | n/a | |
| Fx-neutral | 1,024 | | 946 | | 8.0 | % | | | 3,625 | | 2,179 | | 66.5 | % | |
| | | | | | | | | |
| Revenue per unit case | 5.86 | | 5.25 | | 11.5 | % | | | 5.42 | | 5.12 | | 6.0 | % | |
| | | | | | | | | | | | | | |
Revenue by Geography In millions of € | | Year ended 31 December 2022 |
| As reported | Reported
% change | Fx-Neutral
% change |
|
| Great Britain | | 3,088 | | 18.0 | % | 17.5 | % |
| Germany | | 2,682 | | 15.0 | % | 15.0 | % |
Iberia[1] | | 3,034 | | 21.5 | % | 21.5 | % |
France[2] | | 2,089 | | 15.0 | % | 15.0 | % |
| Belgium and Luxembourg | | 1,042 | | 12.5 | % | 12.5 | % |
| Netherlands | | 682 | | 22.5 | % | 22.5 | % |
| Norway | | 404 | | 3.5 | % | 2.5 | % |
| Sweden | | 421 | | 12.5 | % | 17.5 | % |
| Iceland | | 87 | | 10.0 | % | 4.0 | % |
| | | | |
| Total Europe | | 13,529 | | 17.0 | % | 16.5 | % |
| Australia | | 2,339 | | 72.0 | % | 65.5 | % |
New Zealand and Pacific Islands | | 649 | | 72.0 | % | 69.5 | % |
| Indonesia and Papua New Guinea | | 803 | | 81.5 | % | 65.5 | % |
| Total API | | 3,791 | | 74.0 | % | 66.5 | % |
| Total CCEP | | 17,320 | | 26.0 | % | 24.5 | % |
[1] Iberia refers to Spain, Portugal & Andorra.
[2] France refers to continental France & Monaco.
Volume
| | | | | | | | | | | | | | | | | | | | | | | |
Comparable Volume - Selling Day Shift CCEP
In millions of unit cases, prior period volume recast using current year selling days | Fourth-Quarter Ended | | Year Ended |
31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| Volume | 794 | | 781 | | 1.5 | % | | 3,300 | | 2,804 | | 17.5 | % |
| Impact of selling day shift | n/a | — | | n/a | | n/a | (7) | | n/a |
| Comparable volume - Selling Day Shift adjusted | 794 | | 781 | | 1.5 | % | | 3,300 | | 2,797 | | 18.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
Comparable Volume - Selling Day Shift Europe
In millions of unit cases, prior period volume recast using current year selling days | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| Volume | 619 | | 601 | | 3.0 | % | | 2,631 | | 2,379 | | 10.5 | % |
| Impact of selling day shift | n/a | — | | n/a | | n/a | (7) | | n/a |
| Comparable volume - Selling Day Shift adjusted | 619 | | 601 | | 3.0 | % | | 2,631 | | 2,372 | | 11.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
Comparable Volume - Selling Day Shift API
In millions of unit cases, prior period volume recast using current year selling days | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| Volume | 175 | | 180 | | (3.0) | % | | 669 | | 425 | | 57.5 | % |
| Impact of selling day shift | n/a | — | | n/a | | n/a | — | | n/a |
| Comparable volume - Selling Day Shift adjusted | 175 | | 180 | | (3.0) | % | | 669 | | 425 | | 57.5 | % |
Cost of Sales
| | | | | | | | | | | | | | | | | |
Cost of Sales 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. | | | Year Ended |
| | | | 31 December 2022 | 31 December 2021 | % Change |
| As reported | | | | | 11,096 | | 8,677 | | 28.0 | % |
| Adjust: Total items impacting comparability | | | | | (8) | | (71) | | n/a |
| Comparable | | | | | 11,088 | | 8,606 | | 29.0 | % |
| Adjust: Impact of fx changes | | | | | (107) | | n/a | n/a |
| Comparable & fx-neutral | | | | | 10,981 | | 8,606 | | 27.5 | % |
| | | | | | | |
| Cost of sales per unit case | | | | | 3.33 | | 3.07 | | 8.5 | % |
For the year ending 31 December 2022, reported cost of sales were €11,096 million, up 28.0% versus 2021, reflecting the full year impact of the API operations acquired in 2021, higher volumes and increased cost of sales per case.
Comparable cost of sales for the same period were €11,088 million, up 29.0% versus 2021. Cost of sales per unit case increased by 8.5% on a comparable and fx-neutral basis, reflecting increased revenue per unit case driving higher concentrate costs, commodity inflation & adverse mix, partially offset by the favourable recovery of fixed manufacturing costs as a result of higher volumes.
Operating expenses
| | | | | | | | | | | | | | | | | |
Operating Expenses In millions of €. FX impact calculated by recasting current year results at prior year rates. | | | Year Ended |
| | | | 31 December 2022 | 31 December 2021 | % Change |
| As reported | | | | | 4,234 | | 3,570 | | 18.5 | % |
| Adjust: Total items impacting comparability | | | | | (140) | | (185) | | n/a |
| Comparable | | | | | 4,094 | | 3,385 | | 21.0 | % |
| Adjust: Impact of fx changes | | | | | (45) | | n/a | n/a |
| Comparable & fx-neutral | | | | | 4,049 | | 3,385 | | 19.5 | % |
For the year ending 31 December 2022, reported operating expenses were €4,234 million, up 18.5% versus 2021.
Comparable operating expenses were €4,094 million for the same period, up 21.0% versus 2021, reflecting the full year impact of the API operations acquired in 2021, higher volumes and inflation, partially offset by the benefit of ongoing efficiency programmes and our continuous efforts on discretionary spend optimisation.
Restructuring charges of €144 million were recognised within reported operating expenses for the year ending 31 December 2022, which are primarily attributable to €82 million of expense recognised in connection with the transformation of the full service vending operations and related initiatives in Germany.
Restructuring charges of €136 million were recognised within reported operating expenses for the year ending 31 December 2021, related principally to the continuation of the Accelerate Competitiveness programme announced in October 2020. This programme relates to initiatives across Europe aimed at improving productivity through the use of technology enabled solutions. Restructuring charges in 2021 include €51 million of severance costs related to productivity initiatives within the commercial organisation in Iberia.
Operating profit
| | | | | | | | | | | | | | |
Operating Profit CCEP In millions of €. FX impact calculated by recasting current year results at prior year rates. | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change |
| As reported | | 2,086 | | 1,516 | | 37.5 | % |
| Adjust: Total items impacting comparability | | 52 | | 256 | | n/a |
| Comparable | | 2,138 | | 1,772 | | 20.5 | % |
| Adjust: Impact of fx changes | | (20) | | n/a | n/a |
| Comparable & fx-neutral | | 2,118 | | 1,772 | | 19.5 | % |
| | | | | | | | | | | | | | |
Operating Profit Europe In millions of €. FX impact calculated by recasting current year results at prior year rates. | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change |
| As reported | | 1,529 | | 1,298 | | 18.0 | % |
| Adjust: Total items impacting comparability | | 141 | | 202 | | n/a |
| Comparable | | 1,670 | | 1,500 | | 11.5 | % |
| Adjust: Impact of fx changes | | — | | n/a | n/a |
| Comparable & fx-neutral | | 1,670 | | 1,500 | | 11.5 | % |
| | | | | | | | | | | | | | | |
Operating Profit API In millions of €. FX impact calculated by recasting current year results at prior year rates. | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | |
| As reported | | 557 | | 218 | | 155.5 | % | |
| Adjust: Total items impacting comparability | | (89) | | 54 | | n/a | |
| Comparable | | 468 | | 272 | | 72.0 | % | |
| Adjust: Impact of fx changes | | (20) | | — | | n/a | |
| Comparable & fx-neutral | | 448 | | 272 | | 64.5 | % | |
| | | | | | | | | | | | | | |
Supplemental Financial Information - Operating Profit - Reported to Pro forma Comparable |
All pro forma measures presented below relate only to the full year ended 31 December 2021.
Revenue
| | | | | | | | | | | | | | | | | | | | | | | |
Pro forma Revenue CCEP 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. | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| As reported and comparable | 4,295 | | 3,896 | | 10.0 | % | | 17,320 | | 13,763 | | 26.0 | % |
| Add: Pro forma adjustments | — | | — | | n/a | | | 1,056 | | n/a |
| Pro forma Comparable | 4,295 | | 3,896 | | 10.0 | % | | 17,320 | | 14,819 | | 17.0 | % |
| Adjust: Impact of fx changes | 19 | | n/a | n/a | | (172) | | n/a | n/a |
| Pro forma Comparable and fx-neutral | 4,314 | | 3,896 | | 10.5 | % | | 17,148 | | 14,819 | | 15.5 | % |
| | | | | | | |
| Pro forma Revenue per unit case | 5.43 | | 4.99 | | 9.0 | % | | 5.20 | | 4.91 | | 6.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
Pro forma Revenue API 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. | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| As reported and comparable | 1,037 | | 946 | | 9.5 | % | | 3,791 | | 2,179 | | 74.0 | % |
| Add: Pro forma adjustments | — | | — | | n/a | | — | | 1,056 | | n/a |
| Pro forma Comparable | 1,037 | | 946 | | 9.5 | % | | 3,791 | | 3,235 | | 17.0 | % |
| Adjust: Impact of fx changes | (13) | | n/a | n/a | | (166) | | n/a | n/a |
| Pro forma Comparable and fx-neutral | 1,024 | | 946 | | 8.0 | % | | 3,625 | | 3,235 | | 12.0 | % |
| | | | | | | |
| Pro forma Revenue per unit case | 5.86 | | 5.25 | | 11.5 | % | | 5.42 | | 5.05 | | 7.5 | % |
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Pro forma revenue by Geography In millions of € | Fourth-Quarter Ended 31 December 2022 | | Year ended 31 December 2022 |
| Pro forma comparable | | Pro forma comparable % change | Pro forma Fx-Neutral
% change | | Pro forma comparable | | Pro forma comparable % change | Pro forma Fx-Neutral
% change |
|
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| Europe | 3,258 | | | 10.5 | % | 11.5 | % | | 13,529 | | | 17.0 | % | 16.5 | % |
| Australia | 654 | | | 11.0 | % | 10.0 | % | | 2,339 | | | 15.5 | % | 11.0 | % |
New Zealand and Pacific Islands | 193 | | | 11.5 | % | 14.0 | % | | 649 | | | 17.0 | % | 15.0 | % |
| Indonesia and Papua New Guinea | 190 | | | 4.0 | % | (2.0) | % | | 803 | | | 23.0 | % | 12.5 | % |
| | | | | | | | | |
| Total API | 1,037 | | | 9.5 | % | 8.0 | % | | 3,791 | | | 17.0 | % | 12.0 | % |
| Total CCEP | 4,295 | | | 10.0 | % | 10.5 | % | | 17,320 | | | 17.0 | % | 15.5 | % |
Volume | | | | | | | | | | | | | | | | | | | | | | | |
Comparable Volume - Selling Day Shift CCEP
In millions of unit cases, prior period volume recast using current year selling days | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| Volume | 794 | | 781 | | 1.5 | % | | 3,300 | | 2,804 | | 17.5 | % |
| Impact of selling day shift | n/a | — | | n/a | | n/a | (7) | | n/a |
| Comparable volume - Selling Day Shift adjusted | 794 | | 781 | | 1.5 | % | | 3,300 | | 2,797 | | 18.0 | % |
Pro forma impact[1] | — | | — | | n/a | | — | | 212 | | n/a |
Pro forma comparable volume | 794 | | 781 | | 1.5 | % | | 3,300 | | 3,009 | | 9.5 | % |
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Comparable Volume - Selling Day Shift API
In millions of unit cases, prior period volume recast using current year selling days | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| Volume | 175 | | 180 | | (3.0) | % | | 669 | | 425 | | 57.5 | % |
| Impact of selling day shift | n/a | — | | n/a | | n/a | — | | n/a |
| Comparable volume - Selling Day Shift adjusted | 175 | | 180 | | (3.0) | % | | 669 | | 425 | | 57.5 | % |
Pro forma impact[1] | — | | — | | n/a | | — | | 212 | | n/a |
| Pro forma comparable volume | 175 | | 180 | | (3.0) | % | | 669 | | 637 | | 5.0 | % |
[1] Pro forma API volume for the year ended 31 December 2021 is 640 million unit cases. Including the impact of the Q1 selling day shift (3 million unit cases), pro forma comparable API volume is 637 million unit cases. | | | | | | | | | | | | | | | | | | | | | | | |
Pro forma Comparable Volume by Brand Category CCEP Adjusted for selling day shift | Fourth-Quarter Ended | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change | | 31 December 2022 | 31 December 2021 | % Change |
| % of Total | % of Total | % of Total | % of Total |
| Sparkling | 85.5 | % | 85.0 | % | 2.0 | % | | 84.5 | % | 84.5 | % | 9.0 | % |
Coca-ColaTM | 60.0 | % | 59.5 | % | 2.5 | % | | 58.5 | % | 59.0 | % | 8.0 | % |
| Flavours, Mixers & Energy | 25.5 | % | 25.5 | % | 1.0 | % | | 26.0 | % | 25.5 | % | 11.5 | % |
| Stills | 14.5 | % | 15.0 | % | (1.0) | % | | 15.5 | % | 15.5 | % | 11.5 | % |
| Hydration | 7.5 | % | 7.5 | % | 1.0 | % | | 8.0 | % | 7.5 | % | 16.0 | % |
RTD Tea, RTD Coffee, Juices & Other[1] | 7.0 | % | 7.5 | % | (3.5) | % | | 7.5 | % | 8.0 | % | 7.0 | % |
| Total | 100.0 | % | 100.0 | % | 1.5 | % | | 100.0 | % | 100.0 | % | 9.5 | % |
________________________[1] RTD refers to Ready-To-Drink.
Cost of Sales
| | | | | | | | | | | | | | | | | |
Pro forma Cost of Sales 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. | | | Year Ended |
| | | | 31 December 2022 | 31 December 2021 | % Change |
| As reported | | | | | 11,096 | | 8,677 | | 28.0 | % |
| Add: Pro forma adjustments | | | | | — | | 616 | | n/a |
| | | | | | |
| Adjust: Total items impacting comparability | | | | | (8) | | (71) | |
| Pro forma Comparable | | | | | 11,088 | | 9,222 | | 20.0 | % |
| Adjust: Impact of fx changes | | | | | (107) | | n/a | n/a |
| Pro forma Comparable & fx-neutral | | | | | 10,981 | | 9,222 | | 19.0 | % |
| | | | | | | |
| Cost of sales per unit case | | | | | 3.33 | | 3.05 | | 9.0 | % |
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Comparable cost of sales for the year ending 31 December 2022 were €11,088 million, up 20.0% versus 2021 on a pro forma comparable basis. Cost of sales per unit case increased by 9.0% on a pro forma comparable and fx-neutral basis, driven by an increase in concentrate in line with our incidence model reflecting the improvement in revenue per unit case. There was also upward pressure on commodities and adverse mix, partially offset by the favourable recovery of fixed manufacturing costs given higher volumes.
Operating Expenses
| | | | | | | | | | | | | | | | | |
Pro forma Operating Expenses In millions of €. FX impact calculated by recasting current year results at prior year rates. | | | Year Ended |
| | | | 31 December 2022 | 31 December 2021 | % Change |
| As reported | | | | | 4,234 | | 3,570 | | 18.5 | % |
| Add: Pro forma adjustments | | | | | — | | 323 | | n/a |
| Adjust: Transaction accounting adjustments | | | | | — | | 68 | |
| Adjust: Total items impacting comparability | | | | | (140) | | (250) | |
| Pro forma Comparable | | | | | 4,094 | | 3,711 | | 10.5 | % |
| Adjust: Impact of fx changes | | | | | (45) | | n/a | n/a |
| Pro forma Comparable & fx-neutral | | | | | 4,049 | | 3,711 | | 9.0 | % |
Comparable operating expenses for the year ending 31 December 2022 were €4,094 million, up 10.5% versus 2021 on a pro forma comparable basis, reflecting higher volumes and inflation, partially offset by the benefit of on-going efficiency programmes and our continuous efforts on discretionary spend optimisation in areas such as trade marketing, travel and meetings.
Operating Profit
| | | | | | | | | | | | | | |
Pro forma Operating Profit CCEP In millions of €. FX impact calculated by recasting current year results at prior year rates. | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change |
| As reported | | 2,086 | | 1,516 | | 37.5 | % |
| Add: Pro forma adjustments | | — | | 117 | | n/a |
| Adjust: Transaction accounting adjustments | | — | | (68) | |
| Adjust: Total items impacting comparability | | 52 | | 321 | |
| Pro forma Comparable | | 2,138 | | 1,886 | | 13.5 | % |
| Adjust: Impact of fx changes | | (20) | | n/a | n/a |
| Pro forma Comparable & fx-neutral | | 2,118 | | 1,886 | | 12.5 | % |
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Pro forma Operating Profit API In millions of €. FX impact calculated by recasting current year results at prior year rates. | | Year Ended |
| 31 December 2022 | 31 December 2021 | % Change |
| As reported | | 557 | | 218 | | 155.5 | % |
| Add: Pro forma adjustments | | — | | 117 | | n/a |
| Adjust: Transaction accounting adjustments | | — | | (68) | |
| Adjust: Total items impacting comparability | | (89) | | 119 | |
| Pro forma Comparable | | 468 | | 386 | | 21.0 | % |
| Adjust: Impact of fx changes | | (20) | | n/a | n/a |
| Pro forma Comparable & fx-neutral | | 448 | | 386 | | 16.0 | % |
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Supplemental Financial Information - Effective Tax Rate |
The reported effective tax rate was 22% and 29% for the year ended 31 December 2022 and 31 December 2021, respectively.
The decrease in the reported effective tax rate to 22% in 2022 (2021: 29%) is largely due to the remeasurement of deferred tax positions following the enactment of tax rate changes in the United Kingdom, Netherlands and Indonesia in the prior period.
The comparable effective tax rate was 22% and 21% for the years ended 31 December 2022 and 31 December 2021, respectively.
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Supplemental Financial Information - Free Cash Flow |
| | | | | | | | | | | | | | |
Free Cash Flow In millions of € | | Year Ended |
| 31 December 2022 | | 31 December 2021 |
| Net cash flows from operating activities | | 2,932 | | | 2,117 | |
| Less: Purchases of property, plant and equipment | | (500) | | | (349) | |
| Less: Purchases of capitalised software | | (103) | | | (97) | |
| Add: Proceeds from sales of property, plant and equipment | | 11 | | | 25 | |
| Less: Payments of principal on lease obligations | | (153) | | | (139) | |
| Less: Interest paid, net | | (130) | | | (97) | |
Free Cash Flow [1] | | 2,057 | | | 1,460 | |
| Less: Proceeds received from Spanish VAT dispute | | (252) | | | — | |
Adjusted Free Cash Flow [2] | | 1,805 | | | 1,460 | |
[1] If the Acquisition had occurred on 1 January 2021, free cash flow for the year ended 31 December 2021 is estimated to be €85 million lower.
[2] In connection with the ongoing dispute in Spain regarding the refund of historical VAT amounts related to the period 2013-2016, during the year ended 31 December 2022, €252 million of cash proceeds were received from the regional tax authorities of Bizkaia (Basque Region). These proceeds are included within Group’s net cash flows from operating activities for the year. Given the unusual nature of this item, and to allow for better period over period comparability of our free cash flow measure, adjusted free cash flow excludes the cash proceeds received from the Bizkaia tax authorities during this year.
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Supplemental Financial Information - Borrowings |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Debt In millions of € | As at | | Credit Ratings As of 16 February 2023 | | | | |
| 31 December 2022 | | 31 December 2021 | | | Moody’s | | Fitch Ratings |
| Total borrowings | 11,907 | | | 13,140 | | | Long-term rating | | Baa1 | | BBB+ |
Fair value of hedges related to borrowings[1] | (83) | | | (110) | | | Outlook | | Stable | | Stable |
Other financial assets/liabilities[1] | 25 | | | 42 | | | Note: Our credit ratings can be materially influenced by a number of factors including, but not limited to, acquisitions, investment decisions and working capital management activities of TCCC and/or changes in the credit rating of TCCC. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. |
Adjusted total borrowings[1] | 11,849 | | | 13,072 | | |
Less: cash and cash equivalents[2] | (1,387) | | | (1,407) | | |
Less: short term investments[3] | (256) | | | (58) | | |
| Net debt | 10,206 | | | 11,607 | | |
___________________[1] Net debt includes adjustments for the fair value of derivative instruments used to hedge both currency and interest rate risk on the Group’s borrowings. In addition, net debt also includes other financial assets/liabilities relating to cash collateral pledged by/to external parties on hedging instruments related to borrowings.
[2] Cash and cash equivalents as at 31 December 2022 and 31 December 2021 includes €102 million and €45 million respectively of cash in Papua New Guinea Kina. Presently, there are government-imposed currency controls which impact the extent to which the cash held in Papua New Guinea can be converted into foreign currency and remitted for use elsewhere in the Group.
[3] Short term investments are term cash deposits with maturity dates when acquired of greater than three months and less than one year. These short term investments are held with counterparties that are continually assessed with a focus on preservation of capital and liquidity. Short term term investments as at 31 December 2022 and 31 December 2021 includes €49 million and €44 million respectively of assets in Papua New Guinea Kina, subject to the same currency controls outlined above.
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| Supplemental Financial Information - Adjusted EBITDA |
| | | | | | | | | | | | | | |
Adjusted EBITDA In millions of € | | Year Ended |
| 31 December 2022 | | 31 December 2021 |
| Reported profit after tax | | 1,521 | | | 988 | |
| Taxes | | 436 | | | 394 | |
| Finance costs, net | | 114 | | | 129 | |
| Non-operating items | | 15 | | | 5 | |
| Reported operating profit | | 2,086 | | | 1,516 | |
Depreciation and amortisation[1] | | 816 | | | 782 | |
| Reported EBITDA | | 2,902 | | | 2,298 | |
| | | | |
| | | | |
| | | | |
| Items impacting comparability | | | | |
| | | | |
Restructuring charges[2] | | 119 | | | 97 | |
Defined benefit plan closure[3] | | — | | | (9) | |
Acquisition and Integration related costs[4] | | 3 | | | 49 | |
Inventory step up costs[5] | | — | | | 48 | |
European flooding[6] | | (11) | | | 15 | |
Defined benefit plan amendment[7] | | (7) | | | — | |
Coal royalties[8] | | (96) | | | — | |
| Adjusted EBITDA | | 2,910 | | | 2,498 | |
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| Net debt to EBITDA | | 3.5 | | | 5.1 | |
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| Net debt to adjusted EBITDA | | 3.5 | | | 4.7 | |
______________________
[1] Includes the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment as at 31 December 2021.
[2] Amounts represent restructuring charges related to business transformation activities, excluding accelerated depreciation included in the depreciation and amortisation line.
[3] Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.
[4] Amounts represent cost associated with the acquisition and integration of CCL.
[5] Amounts represent the non-recurring impact of the fair value step-up of API finished goods.
[6] Amounts represent the incremental expense incurred offset/partially offset by the insurance recoveries collected as a result of the July 2021 flooding events, which impacted the operations of our manufacturing facilities in Chaudfontaine and Bad Neuenahr.
[7] Amounts represent the impact of a plan amendment arising from legislative changes in respect of the minimum retirement age.
[8] Amounts represent other income arising from the favourable court ruling pertaining to the ownership of certain mineral rights in Australia.
Pro forma measures presented below relate only to 2021.
| | | | | | | | | | | | | |
Pro forma Adjusted EBITDA In millions of € | Year Ended |
| 31 December 2022 | | 31 December 2021 | | |
| Reported profit after tax | 1,521 | | | 988 | | | |
| Taxes | 436 | | | 394 | | | |
| Finance costs, net | 114 | | | 129 | | | |
| Non-operating items | 15 | | | 5 | | | |
| Reported operating profit | 2,086 | | | 1,516 | | | |
Pro forma adjustments CCL[1] | — | | | 117 | | | |
| | | | | |
Transaction accounting adjustments[2] | — | | | (68) | | | |
| Pro forma Combined operating profit | | | 1,565 | | | |
Depreciation and amortisation[3] | 816 | | | 858 | | | |
| Reported EBITDA | 2,902 | | | 2,423 | | | |
| | | | | |
| | | | | |
| | | | | |
| Items impacting comparability | | | | | |
| | | | | |
Restructuring charges[4] | 119 | | | 97 | | | |
Defined benefit plan closure [5] | — | | | (9) | | | |
Acquisition and Integration related costs[6] | 3 | | | 110 | | | |
Inventory step up costs[7] | — | | | 48 | | | |
European flooding[8] | (11) | | | 15 | | | |
Defined benefit plan amendment[9] | (7) | | | — | | | |
Coal royalties[10] | (96) | | | — | | | |
Other[11] | — | | | 4 | | | |
| Pro forma adjusted EBITDA | 2,910 | | | 2,688 | | | |
| | | | | |
| | | | | |
| Net debt to Pro forma adjusted EBITDA | 3.5 | | | 4.3 | | | |
______________________[1] Amounts represent adjustments to include CCL financial results prepared on a basis consistent with CCEP accounting policies, as if the Acquisition had occurred on 1 January 2021 and excludes CCL acquisition and integration related costs.
[2] Amounts represent transaction accounting adjustments for the period 1 January to 10 May as if the Acquisition had occurred on 1 January 2021.
[3] Includes the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment as if the Acquisition had occurred on 1 January 2021.
[4] Amounts represent restructuring charges related to business transformation activities, excluding accelerated depreciation included in the depreciation and amortisation line.
[5] Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.
[6] Amounts represent costs associated with the acquisition and integration of CCL.
[7] Amounts represent the non-recurring impact of the fair value step-up of API finished goods.
[8] Amounts represent the incremental expense incurred offset/partially offset by the insurance recoveries collected as a result of the July 2021 flooding events, which impacted the operations of our manufacturing facilities in Chaudfontaine and Bad Neuenahr.
[9] Amounts represent the impact of a plan amendment arising from legislative changes in respect of the minimum retirement age.
[10] Amounts represent other income arising from the favourable court ruling pertaining to the ownership of certain mineral rights in Australia
[11] Amounts represent charges incurred prior to Acquisition classified as non-trading items by CCL which are not expected to recur.
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| Supplemental Financial Information - Return on invested capital |
| | | | | | | | | | | | | | | | | |
ROIC In millions of € | Year Ended |
| 31 December 2022 | | 31 December 2021 | | 31 December 2021 |
| | Pro forma[3] | | |
Comparable operating profit[1] | 2,138 | | | 1,886 | | | 1,772 | |
Taxes[2] | (474) | | | (399) | | | (367) | |
| Non-controlling interest | (13) | | | (12) | | | (8) | |
| Comparable operating profit after tax attributable to shareholders | 1,651 | | | 1,475 | | | 1,397 | |
Opening borrowings less cash and cash equivalents and short term investments[3] | 11,675 | | | 12,498 | | | 5,664 | |
Opening equity attributable to shareholders[3] | 7,033 | | | 5,911 | | | 6,025 | |
| Opening Invested Capital | 18,708 | | | 18,409 | | | 11,689 | |
| Closing borrowings less cash and cash equivalents and short term investments | 10,264 | | | 11,675 | | | 11,675 | |
| Closing equity attributable to shareholders | 7,447 | | | 7,033 | | | 7,033 | |
| Closing Invested Capital | 17,711 | | | 18,708 | | | 18,708 | |
| | | | | |
| Average Invested Capital | 18,210 | | | 18,559 | | | 15,199 | |
| | | | | |
| ROIC | 9.1 | % | | 8.0 | % | | 9.2 | % |
____________________
[1] Reconciliation from reported operating profit to comparable operating profit and to pro forma comparable operating profit is included in Supplementary Financial Information - Income Statement section.
[2] Tax rate used is the comparable effective tax rate for the year (2022: 22.2%; 2021 pro forma: 21.1%; 2021: 20.7%).
[3] In light of the CCL acquisition and in order to provide investors with a more meaningful measure of capital efficiency for 2021, a pro forma ROIC measure has been presented. To derive this pro forma measure, opening borrowings, cash and cash equivalents and short term investments, and equity attributable to shareholders have been extracted from the unaudited pro forma condensed combined statement of financial position as of 31 December 2020 prepared in connection with proposed financing of the CCL acquisition and furnished on Form 6-K on 20 April 2021, and adjusted for any associated acquisition accounting fair value adjustments in the period through to 31 December 2021. These adjustments include an increase in borrowings of €38 million and a decrease in equity attributable to shareholders of €18 million.
Coca-Cola Europacific Partners plc
Consolidated Income Statement (Unaudited)
| | | | | | | | | | | | | | | | | | | |
| | | | | Year Ended |
| | | | | | | 31 December 2022 | | 31 December 2021 |
| | | | | | | € million | | € million |
| Revenue | | | | | | | 17,320 | | | 13,763 | |
| Cost of sales | | | | | | | (11,096) | | | (8,677) | |
| Gross profit | | | | | | | 6,224 | | | 5,086 | |
| Selling and distribution expenses | | | | | | | (2,984) | | | (2,496) | |
| Administrative expenses | | | | | | | (1,250) | | | (1,074) | |
| Other Income | | | | | | | 96 | | | — | |
| Operating profit | | | | | | | 2,086 | | | 1,516 | |
| Finance income | | | | | | | 67 | | | 43 | |
| Finance costs | | | | | | | (181) | | | (172) | |
| Total finance costs, net | | | | | | | (114) | | | (129) | |
| Non-operating items | | | | | | | (15) | | | (5) | |
| Profit before taxes | | | | | | | 1,957 | | | 1,382 | |
| Taxes | | | | | | | (436) | | | (394) | |
| Profit after taxes | | | | | | | 1,521 | | | 988 | |
| | | | | | | | | |
| Profit attributable to shareholders | | | | | | | 1,508 | | | 982 | |
| Profit attributable to non-controlling interests | | | | | | | 13 | | | 6 | |
| Profit after taxes | | | | | | | 1,521 | | | 988 | |
| | | | | | | | | |
| Basic earnings per share (€) | | | | | | | 3.30 | | | 2.15 | |
| Diluted earnings per share (€) | | | | | | | 3.29 | | | 2.15 | |
The financial information presented in the unaudited consolidated income statement, consolidated statement of financial position and consolidated statement of cash flows within this document does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. This financial information has been extracted from CCEP’s consolidated financial statements which will be delivered to the Registrar of Companies in due course.
Coca-Cola Europacific Partners plc
Consolidated Statement of Financial Position (Unaudited)
| | | | | | | | | | | | | | | | | |
| | | 31 December 2022 | | 31 December 2021 | | |
| | | € million | | € million | | |
| ASSETS | | | | | | | |
| Non-current: | | | | | | | |
| Intangible assets | | | 12,505 | | | 12,639 | | | |
| Goodwill | | | 4,600 | | | 4,623 | | | |
| Property, plant and equipment | | | 5,201 | | | 5,248 | | | |
| Non-current derivative assets | | | 191 | | | 226 | | | |
| Deferred tax assets | | | 21 | | | 60 | | | |
| Other non-current assets | | | 252 | | | 534 | | | |
| Total non-current assets | | | 22,770 | | | 23,330 | | | |
| Current: | | | | | | | |
| Current derivative assets | | | 257 | | | 150 | | | |
| Current tax assets | | | 85 | | | 46 | | | |
| Inventories | | | 1,380 | | | 1,157 | | | |
| Amounts receivable from related parties | | | 139 | | | 143 | | | |
| Trade accounts receivable | | | 2,466 | | | 2,305 | | | |
| Other current assets | | | 479 | | | 271 | | | |
| Assets held for sale | | | 94 | | | 223 | | | |
Short term investments | | | 256 | | | 58 | | | |
| Cash and cash equivalents | | | 1,387 | | | 1,407 | | | |
| Total current assets | | | 6,543 | | | 5,760 | | | |
| Total assets | | | 29,313 | | | 29,090 | | | |
| LIABILITIES | | | | | | | |
| Non-current: | | | | | | | |
| Borrowings, less current portion | | | 10,571 | | | 11,790 | | | |
| Employee benefit liabilities | | | 108 | | | 138 | | | |
| Non-current provisions | | | 55 | | | 48 | | | |
| Non-current derivative liabilities | | | 187 | | | 47 | | | |
| Deferred tax liabilities | | | 3,513 | | | 3,617 | | | |
| Non-current tax liabilities | | | 82 | | | 110 | | | |
| Other non-current liabilities | | | 37 | | | 37 | | | |
| Total non-current liabilities | | | 14,553 | | | 15,787 | | | |
| Current: | | | | | | | |
| Current portion of borrowings | | | 1,336 | | | 1,350 | | | |
| Current portion of employee benefit liabilities | | | 8 | | | 10 | | | |
| Current provisions | | | 115 | | | 86 | | | |
| Current derivative liabilities | | | 76 | | | 19 | | | |
| Current tax liabilities | | | 241 | | | 181 | | | |
| Amounts payable to related parties | | | 485 | | | 210 | | | |
| Trade and other payables | | | 5,052 | | | 4,237 | | | |
| Total current liabilities | | | 7,313 | | | 6,093 | | | |
| Total liabilities | | | 21,866 | | | 21,880 | | | |
| EQUITY | | | | | | | |
| Share capital | | | 5 | | | 5 | | | |
| Share premium | | | 234 | | | 220 | | | |
| Merger reserves | | | 287 | | | 287 | | | |
| Other reserves | | | (507) | | | (156) | | | |
| Retained earnings | | | 7,428 | | | 6,677 | | | |
| Equity attributable to shareholders | | | 7,447 | | | 7,033 | | | |
| Non-controlling interest | | | | | 177 | | | |
| Total equity | | | 7,447 | | | 7,210 | | | |
| Total equity and liabilities | | | 29,313 | | | 29,090 | | | |
Coca-Cola Europacific Partners plc
Consolidated Statement of Cash Flows (Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Year Ended | | |
| | | 31 December 2022 | | 31 December 2021 | | |
| | | € million | | € million | | |
| Cash flows from operating activities: | | | | | | | |
| Profit before taxes | | | 1,957 | | | 1,382 | | | |
| Adjustments to reconcile profit before tax to net cash flows from operating activities: | | | | | | | |
| Depreciation | | | 715 | | | 693 | | | |
| Amortisation of intangible assets | | | 101 | | | 89 | | | |
| Share-based payment expense | | | 33 | | | 16 | | | |
| Finance costs, net | | | 114 | | | 129 | | | |
| Income taxes paid | | | (415) | | | (306) | | | |
| Changes in assets and liabilities: | | | | | | | |
| (Increase)/decrease in trade and other receivables | | | (282) | | | (242) | | | |
| (Increase)/decrease in inventories | | | (244) | | | (1) | | | |
| Increase in trade and other payables | | | 885 | | | 507 | | | |
| Increase/(decrease) in net payable receivable from related parties | | | (15) | | | 8 | | | |
| (Decrease)/increase in provisions | | | 37 | | | (116) | | | |
| Change in other operating assets and liabilities* | | | 46 | | | (42) | | | |
| Net cash flows from operating activities | | | 2,932 | | | 2,117 | | | |
| Cash flows from investing activities: | | | | | | | |
| Acquisition of bottling operations, net of cash acquired | | | — | | | (5,401) | | | |
| Purchases of property, plant and equipment | | | (500) | | | (349) | | | |
| Purchases of capitalised software | | | (103) | | | (97) | | | |
| Proceeds from sales of property, plant and equipment | | | 11 | | | 25 | | | |
| | | | | | | |
| Proceeds from sales of intangible assets | | | 143 | | | — | | | |
Net proceeds/(payments) of short term investments | | | (207) | | | 198 | | | |
| Investments in equity instruments | | | (2) | | | (4) | | | |
| Proceeds from sale of equity instruments | | | 13 | | | 25 | | | |
| Other investing activity, net | | | — | | | (2) | | | |
| Net cash flows used in investing activities | | | (645) | | | (5,605) | | | |
| Cash flows from financing activities: | | | | | | | |
| Proceeds from borrowings, net | | | — | | | 4,877 | | | |
| | | | | | | |
| Changes in short-term borrowings | | | (285) | | | 276 | | | |
| Repayments on third party borrowings | | | (938) | | | (950) | | | |
| | | | | | | |
| Payments of principal on lease obligations | | | (153) | | | (139) | | | |
| Interest paid, net | | | (130) | | | (97) | | | |
| | | | | | | |
| Dividends paid | | | (763) | | | (638) | | | |
| Purchase of own shares under share buyback programme | | | — | | | — | | | |
| Exercise of employee share options | | | 13 | | | 28 | | | |
| | | | | | | |
| | | | | | | |
| Transactions with non-controlling interests | | | — | | | (73) | | | |
| Other financing activities, net | | | (20) | | | 5 | | | |
| Net cash flows from financing activities | | | (2,276) | | | 3,289 | | | |
| Net change in cash and cash equivalents | | | 11 | | | (199) | | | |
| Net effect of currency exchange rate changes on cash and cash equivalents | | | (31) | | | 83 | | | |
| Cash and cash equivalents at beginning of period | | | 1,407 | | | 1,523 | | | |
| Cash and cash equivalents at end of period | | | 1,387 | | | 1,407 | | | |
*Amounts include €252 million in cash proceeds received in December 2022 from the regional tax authorities in Bizkaia (Basque Region) in connection with an ongoing dispute regarding historical VAT amounts related to the period 2013-2016. Refer to page 19 for additional information.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorised.
| | | | | | | | |
| COCA-COLA EUROPACIFIC PARTNERS PLC |
| | (Registrant) |
Date: 16 February 2023 | By: | /s/ Manik Jhangiani |
| Name: | Manik Jhangiani |
| Title: | Chief Financial Officer |
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