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  Communiqué de la société COCA-COLA EUROPACIFIC PARTNERS PLC du 16/02/2022

  16/02/2022 - 08:00

Preliminary Unaudited Results Q4 and FY 2021


COCA-COLA EUROPACIFIC PARTNERS

Preliminary unaudited results for the full-year ended 31 December 2021

Extraordinary year, entering 2022 as a stronger business

  FY 2021 Metric[1] As Reported   Comparable [1] Change vs 2020   Pro forma Comparable [3] Change vs 2020
As Reported Comparable
[1]
Comparable Fx-Neutral [1]   Pro forma Comparable [3] Pro forma Comparable Fx-Neutral[3]
Total CCEP Volume (M UC)[2] 2,804   2,804 23.0 % 23.5 %     3,019 4.5 %  
Revenue (€M) 13,763   13,763 30.0 % 30.0 % 28.0 %   14,819 9.5 % 7.5 %
Cost of sales (€M) 8,677   8,606 26.5 % 26.5 % 24.5 %   9,222 8.0 % 6.0 %
Operating expenses (€M) 3,570   3,385 22.0 % 30.0 % 28.5 %   3,711 6.0 % 4.5 %
Operating profit (€M) 1,516   1,772 86.5 % 48.5 % 46.0 %   1,886 26.0 % 23.5 %
Profit after taxes (€M) 988   1,302 98.5 % 58.5 % 56.0 %        
Diluted EPS (€) 2.15   2.83 97.0 % 57.0 % 54.5 %        
Revenue per UC (€)     4.83     4.0 %   4.83   3.0 %
Cost of sales per UC (€)     3.02     1.0 %   3.00   1.5 %
                     
  Dividend per share[4] (€)   1.40 Maintained dividend payout ratio of c.50%        
                       
Europe Volume (M UC)[2] 2,379   2,379 4.5 % 5.0 %     2,379 5.0 %  
Revenue (€M) 11,584   11,584 9.0 % 9.0 % 8.0 %   11,584 9.0 % 8.0 %
Operating profit (€M) 1,298   1,500 59.5 % 25.5 % 24.0 %   1,500 25.5 % 24.0 %
Revenue per UC (€)     4.81     3.5 %   4.81   3.5 %
                       
API Volume (M UC)[2] 425   425         640 4.0 %  
Revenue (€M) 2,179   2,179         3,235 10.5 % 7.0 %
Operating profit (€M) 218   272         386 28.0 % 23.5 %
Revenue per UC (€)     4.95         4.88   3.0 %

DAMIAN GAMMELL, CHIEF EXECUTIVE OFFICER, SAID:

“2021 was an extraordinary year for CCEP. We are a stronger more diverse business, built on great people, great service and great beverages – done sustainably. Solid top-line recovery, value share gains, operating margin expansion and remarkable free cash flow generation demonstrate our strong performance in a challenging environment. Our results also reflect the successful acquisition and integration of Coca-Cola Amatil, a fantastic business to have acquired at the right time, as we look forward to an even brighter future together.

“Together with The Coca-Cola Company and our other partners, our focus on core brands, in-market execution and smart revenue growth management initiatives solidified our FY21 position as the largest FMCG value creator[5], delivering revenue per unit case[2],[3] growth ahead of FY19[6],[11]. We also continued to make progress on our ambition to reach net zero emissions by 2040 and invest in making our packaging more sustainable.

“We are well placed as we look to FY22 and beyond. Our aim is to be smart and sustainable – through our people centric, data driven and digitally enabled approach. Disciplined investment in these areas, as well as in our portfolio, will support our long-term growth ambitions. In the near-term, we expect to see further volume and mix recovery whilst managing our key levers of pricing, promotional spend and driving efficiencies across our business, collectively with the aim of mitigating inflationary pressures.

“It is an outstanding time to be leading CCEP. We are making a difference and believe we have the right foundation to drive sustainable growth and, as evidenced by our FY21 dividend being greater than FY19 and FY20, deliver increased shareholder value.”

___________________________

Note: All footnotes included after the ‘About CCEP' section

FY & Q4 HIGHLIGHTS[1],[3]

Revenue

FY Reported +30.0%; FY Pro forma +7.5%[6]

  • Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil (completed 10 May 2021)
  • NARTD value share gains across measured channels both in store[7] (+40bps) including sparkling (+30bps) & online[8] (+120bps)
  • Delivered more revenue growth for our retail customers than any of our FMCG peers[5]
  • Pro forma:
    • comparable volume +4.5%[9] (-5.5% vs FY19) driven by the reopening of Away from Home (AFH) & increased consumer mobility given the easing of restrictions across most of our markets
    • comparable volume by channel: AFH +10.0% (-16.0% vs FY19) reflecting fewer restrictions & recovery of immediate consumption (IC) packs (+20.5%[10] vs FY20; -19.5%[10] vs FY19); Home +1.5% (+2.0% vs FY19) supported by growth of IC & sustained growth in key future consumption packs (e.g. multipack cans +3.5%[10] vs FY20; +18.5%[10] vs FY19)
    • revenue per unit case +3.0%[2],[6] (+1.5%[11] vs FY19) reflecting positive pack & channel mix driven by the improvement in AFH volume & growth in IC packs, alongside favourable price & brand mix

Q4 Reported +50.5%; Q4 Pro forma +8.5%[6]

  • Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil
  • Pro forma:
    • comparable volume +8.5%[9] (-1.5% vs FY19) driven by solid execution in the Home channel & cycling of soft comparables
    • comparable volume by channel: AFH +23.0% (-9.5% vs FY19); Home +1.5% (+4.0% vs FY19)
    • revenue per unit case +5.5%[2],[6] (+1.5%[11] vs FY19) primarily driven by favourable pack mix & promotional optimisation
  • Recent trading impacted by Omicron however restrictions not as severe as PY (pro forma comparable volume Q1 2021 -8.5% vs FY20)

Operating profit

Reported +86.5%; Pro forma comparable +23.5%[6]

  • Reported growth, in addition to the drivers below, reflects the acquisition of Coca-Cola Amatil
  • Pro forma cost of sales per unit case +1.5%[2],[6] 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
  • Pro forma comparable operating profit of €1,886m, +23.5%[6] reflecting the increased revenue, the benefit of on-going efficiency programmes & our continuous efforts on discretionary spend optimisation
  • Comparable diluted EPS of €2.83, +54.5%[6] (reported +97.0%)

Dividend

  • FY21 dividend per share of €1.40 (paid December[4]), +64.5% vs last year & +13.0% vs FY19, maintaining annualised dividend payout ratio of approximately 50% (in line with our dividend policy)
  • CCEP announces that it will revert to two interim dividends starting in FY22, the first declared with the Q1 trading update (paid in June), the second declared at the Q3 trading update (paid in December). The first interim dividend will be calculated as 40% of the prior year FY dividend, with the second interim dividend being paid with reference to the current year annualised total dividend payout ratio of approximately 50%

Other

  • Generated strong free cash flow of €1,460m (net cash flows from operating activities of €2,117m), supporting our focus on returning to our target leverage range (Net debt:Adjusted EBITDA of 2.5x-3x) by FY24. Assuming the Coca-Cola Amatil acquisition occurred on 1 January 2021, FY21 pro forma free cash flow is estimated to be €85m lower
  • Pro forma ROIC 8.0% (reported ROIC 9.2%)
  • API integration progressing very well; reorienting the portfolio to maximise system value creation to enable greater focus on NARTD, RTD alcohol & Spirits:
    • sale of NARTD own brands to The Coca-Cola Company for A$275m; annualised EBIT impact of ~A$25m
    • progressing previously announced plans to exit production, sale & distribution of Australia beer & apple cider products; minimal EBIT impact
    • these initiatives are expected to substantially complete by the end of the first half

Sustainability

  • Europe: closed 2021 at ~53%[12] recycled plastic (rPET) achieving 2023 target 2 years early
  • API[13]: announced industry partnerships to build new PET recycling facilities in Australia & Indonesia
  • 2 manufacturing sites in Spain & Sweden certified carbon neutral. Aiming for at least 8 sites by end of 2023
  • Retained on Carbon Disclosures Project's A Lists for climate change & water security; in Dow Jones Sustainability Indices (Europe & World) for 6 years in a row & MSCI ESG Leaders index
FY22 Guidance & Outlook[1],[3]      

The outlook for FY22 reflects current markets conditions. Guidance is on a pro forma comparable & Fx-neutral basis.

Revenue: pro forma comparable growth of 6-8%

Volume

  • Continued recovery as easing restrictions support AFH & tourism

Price

  • Successful execution of pricing strategies to date across many of our markets, elevated given input cost pressures

Promotions

  • Optimising our spend
  • Continuing to leverage segmentation, analytics, customer & consumer insights

Mix

  • Continued recovery of AFH & IC packs
  • Driving positive mix through smart revenue growth management initiatives & scaling innovation

Cost of sales per unit case: pro forma comparable growth of ~5% (previously 4-5%)

  • Volume recovery supporting favourable overhead absorption
  • We expect commodity inflation to be in the high single-digit range
  • FY22 hedge coverage at ~57%

 Operating profit: pro forma comparable growth of 6-9%

  • Remain on track to deliver our previously announced efficiency savings & API combination benefits (multi-year programmes amounting to €350 to €395m in total (vs FY19))
  • Continued focus on optimising our discretionary spend

Comparable effective tax rate: c.22-23%

Dividend payout ratio: c.50%[14]

Fourth-quarter & Full-Year Pro forma Revenue Performance by Geography[1]

All values are unaudited, changes versus equivalent 2020 period

  Fourth-quarter   Full Year
    Fx-Neutral     Fx-Neutral
  € million % change % change   € million % change % change
Great Britain 702 24.0 % 16.5 %   2,613 18.5 % 14.0 %
France[15] 454 13.0 % 13.0 %   1,813 6.0 % 6.0 %
Germany 608 4.0 % 4.0 %   2,335 3.0 % 3.0 %
Iberia[16] 631 22.0 % 22.0 %   2,495 15.0 % 15.0 %
Northern Europe[17] 555 6.5 % 4.5 %   2,328 3.5 % 2.0 %
Total Europe 2,950 14.0 % 12.0 %   11,584 9.0 % 8.0 %
API[13] (Pro forma)[3] 946 4.0 % (1.0) %   3,235 10.5 % 7.0 %
Total CCEP (Pro forma)[3] 3,896 11.5 % 8.5 %   14,819 9.5 % 7.5 %

API

  • Q4 volumes reflect supply challenges & adverse weather in Australia, offset by fewer restrictions in Indonesia & a strong start to the summer selling period in New Zealand. FY volumes reflect the continued recovery of the AFH channel in all markets & solid performance in the Home channel.
  • Coca-Cola No Sugar outperformed in Australia, gaining +380bps of Q4 value share. Monster continued to grow in all markets.
  • FY revenue/UC[18] growth driven by positive pack & brand mix, lower promotions in Australia & underlying favourable price.
  • API reported revenues for Q4 were €946m & for the FY21 were €2,179m

France

  • FY & Q4 volumes reflect fewer restrictions & cycling soft comparables. Strong rebound in the AFH channel & continued growth in the Home channel led by IC.
  • Coca-Cola Zero Sugar & Monster continued to outperform, with both FY & Q4 volumes ahead of FY19.
  • FY revenue/UC[18] growth supported by positive customer & pack mix led by AFH rebound & increased mobility e.g. small PET +22.0%; small glass +14.5%.

Germany

  • Q4 volumes reflect fewer restrictions in the AFH channel. FY volumes impacted by adverse weather in Q3 & restrictions within HoReCa[19] throughout the year slowing the overall recovery of the AFH channel. Continued growth in the Home channel.
  • Coca-Cola Zero Sugar & Fuze Tea outperformed, with both FY & Q4 volumes above FY19 levels.
  • FY revenue/UC[18] growth driven by positive brand mix from Monster & the delisting of some PET waters, as well as favourable underlying price & positive pack mix.

Great Britain

  • Q4 volumes reflect rebound of AFH channel with few restrictions in place during the quarter. FY volumes reflected the continued recovery of the AFH channel, as well as increased domestic tourism & cycling soft comparables. Solid performance in the Home channel.
  • FY & Q4 volumes for Coca-Cola® TM, Fanta & Monster were ahead of FY19.
  • FY revenue/UC[18] growth supported by favourable underlying price, alongside positive pack mix led by IC e.g. small glass +39.5%; small PET +25.0%.

Iberia

  • FY & Q4 volumes reflect fewer restrictions & cycling soft comparables. Strong rebound in the AFH channel, although Omicron slowed the recovery in Q4 as restrictions in HoReCa[19] were reintroduced. FY volumes impacted by lower international tourism & the increased Spanish VAT rate within the Home channel.
  • Coca-Cola Zero Sugar & Monster volumes ahead of FY19 for FY & Q4.
  • FY revenue/UC[18] growth driven by positive pack & channel mix led by the on-going recovery of the AFH channel & favourable underlying price.

Northern Europe

  • Q4 volumes reflect fewer restrictions in the AFH channel, although Omicron slowed its recovery with restrictions reintroduced in some markets. FY volumes affected by adverse weather in Q3, including the impact of flooding in Belgium in July.
  • Coca-Cola Zero Sugar, Monster & Capri-Sun all outperformed in both Q4 & FY, with volumes ahead of FY19.
  • FY revenue/UC[18] (excluding soft drinks taxes[20]) growth supported by positive pack mix, alongside favourable brand mix & underlying price.

___________________________

Note: All values are unaudited and all references to volumes are on a comparable basis

Fourth-quarter & Full-Year Pro forma Volume Performance by Category[1],[3],[9]

Comparable volumes, changes versus equivalent 2020 period.

  Fourth-quarter   Full Year
  % of Total % Change   % of Total % Change[5]
Sparkling 85.0 % 8.5 %   84.5 % 4.5 %
Coca-ColaTM 59.5 % 7.5 %   59.0 % 3.5 %
Flavours, Mixers & Energy 25.5 % 10.5 %   25.5 % 7.0 %
Stills 15.0 % 10.5 %   15.5 % 5.0 %
Hydration 7.5 % 9.5 %   7.5 % — %
RTD Tea, RTD Coffee, Juices & Other[21] 7.5 % 11.5 %   8.0 % 10.0 %
Total 100.0 % 8.5 %   100.0 % 4.5 %

Coca-ColaTM

  • Q4 Original Taste +7.5%; Lights +7.5% driven by the continued rebound of the AFH channel & strong performance of the reformulated & rebranded Coca-Cola Zero Sugar (+9.5%)
  • FY Coca-Cola Zero Sugar in growth vs both FY20 (+8.5%) & FY19 (+11.5%)
  • Coca-Cola Zero Sugar gained FY value share[7] of Total Cola +90bps, supported by new look, new taste launch

Flavours, Mixers & Energy

  • Q4 Fanta +15.5% driven by the continued rebound of the AFH channel
  • Q4 Energy +11.0% with growth in both channels led by Monster. FY Energy +21.5% vs FY20 & +35.5% vs FY19 supported by solid distribution & innovation
  • Schweppes Mixers growth vs FY19 (Q4: +1.0%; FY: +1.5%)

Hydration

  • Q4 Water +7.0% reflecting its exposure to IC across both channels, with fewer restrictions & increased mobility during the quarter
  • FY Sports category brands in API in growth vs both FY20 (+11.0%) & FY19 (+9.0%)

RTD Tea, RTD Coffee, Juices & Other[21]

  • Q4 Juice drinks +8.5% reflecting the continued rebound of the AFH channel. Solid growth in Capri-Sun (Q4:+20.5%; FY:+16.5% vs FY19)
  • Fuze Tea growth vs FY19 (Q4: +10.5%[10]; FY: +9.5%[10]) & continuing to grow value share in Europe[7]
  • Alcohol delivered strong growth in Australia driven by Spirits & RTD (Q4: +9.5%; FY: +5.0% vs FY19)

___________________________

Note: All references to volumes are on a comparable basis

Conference Call (with presentation)
  • 16 February 2022 at 12:00 GMT, 13:00 CET & 7:00 a.m.EST; accessible via www.cocacolaep.com
Financial Calendar
  • First-quarter 2022 trading update: 27 April 2022
Contacts

Investor Relations

Sarah Willett Joe Collins Claire Copps

+44 7970 145 218 +44 7583 903 560 +44 7980 775 889

Media Relations

Shanna Wendt Nick Carter

+44 7976 595 168 +44 7976 595 275

About CCEP

Coca-Cola Europacific Partners is one of the world's leading consumer goods companies. We make, move and sell some of the world's most loved brands – serving 600 million consumers and helping 1.75 million customers across 29 countries grow.

We combine the strength and scale of a large, multi-national business with an expert, local knowledge of the customers we serve and communities we support.

The Company is currently listed on Euronext Amsterdam, the NASDAQ Global Select Market, London Stock Exchange and on the Spanish Stock Exchanges, trading under the symbol CCEP.

For more information about CCEP, please visit www.cocacolaep.com & follow CCEP on Twitter at @CocaColaEP

___________________________

  1. Refer to ‘Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures' for further details and to ‘Supplementary Financial Information' for a reconciliation of reported to comparable and reported to pro forma comparable results; Change percentages against prior year equivalent period unless stated otherwise
  1. A unit case equals approximately 5.678 litres or 24 8-ounce servings
  1. Pro forma figures as if the acquisition of Coca-Cola Amatil Limited occurred at the beginning of the period 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 and include transaction accounting adjustments for the period 1 January to 10 May. Refer to ‘Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures' for further details
  1. 9 November 2021 declared €1.40 dividend per share, paid 6 December 2021
  1. NielsenIQ Strategic Planner FY21 Data to 02.Jan.22 Countries included are ES, DE, GB, FR, BE, NL, SE, PT & NO
  1. Comparable & FX-neutral
  1. Combined NARTD (non-alcoholic ready to drink) NielsenIQ Global Track MAT data for ES, PT, DE, FR, BE, NL, NZ, NO, SE to 02.Jan.22; GB to 01.Jan.22; IND to 31.Dec.21; NARTD IRI data for AUS to 02.Jan.22
  1. Online Data is for available markets MAT GB to 01.Jan.22 (Retailer data+NielsenIQ), ES, FR, NL & SE to 02.Jan.22 (NielsenIQ), AUS to 02.Jan.22 (Retailer Data)
  1. Adjusted for 4 fewer selling days in Q4; 1 less selling day in FY21; CCEP pro forma volume Q4 +3.0% vs FY20; CCEP pro forma volume FY21 +4.5% vs FY20
  1. Europe only
  1. Management's best estimate
  1. Unassured & provisional
  1. Includes Australia, New Zealand & the Pacific Islands, Indonesia & Papua New Guinea
  1. Dividends subject to Board approval
  1. Includes France & Monaco
  1. Includes Spain, Portugal & Andorra
  1. Includes Belgium, Luxembourg, the Netherlands, Norway, Sweden & Iceland
  1. Revenue per unit case
  1. HoReCa = Hotels, Restaurants & Cafes
  1. Northern Europe revenue per unit case declined in FY21 as a result of changes to Norwegian Soft Drink Taxes
  1. RTD refers to Ready to Drink; Other includes Alcohol & Coffee
Forward-Looking Statements

This document contains statements, estimates or projections that constitute “forward-looking statements” concerning the financial condition, performance, results, 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, including with respect to the acquisition of Coca-Cola Amatil Limited and its subsidiaries (together “CCL” or “API”) completed on 10 May 2021 (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 2020 Annual Report on Form 20-F filed with the SEC on 12 March 2021,as updated and supplemented with the additional information set forth in the “Principal Risks and Risk Factors” section of the H1 2021 Half-year Report Filed with the SEC on 2 September 2021;

2. those set forth in the "Business and Sustainability Risks" section of CCL's 2020 Financial and Statutory Reports; 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 API or the Acquisition could prove to be inaccurate; burdensome conditions imposed in connection with any regulatory approvals; ability to raise financing; the potential that the Acquisition may involve unexpected liabilities for which there is no indemnity; the potential failure to retain key employees as a result of the Acquisition or during integration of the businesses and disruptions resulting from the Acquisition, making it more difficult to maintain business relationships; the potential for (i) negative reaction from financial markets, customers, regulators, employees and other stakeholders, (ii) litigation related to the Acquisition.

The full extent to which the COVID-19 pandemic will negatively 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.

Due to these risks, CCEP's actual future results, dividend payments, capital and leverage ratios, growth, market share, tax rate, efficiency savings, the results of the integration of the businesses following the Acquisition, including expected efficiency and combination savings, and achievement of sustainability goals, 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 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 or CCL's public statements (whether prior or subsequent to the Acquisition) may prove to be incorrect.

Note Regarding the Presentation of Pro forma financial information and Alternative Performance Measures

Pro forma financial information

Pro forma financial information has been provided in order to illustrate the effects of the acquisition of Coca-Cola Amatil Limited (referred to as CCL pre acquisition, API post acquisition) on the results of operations of CCEP and allow for greater comparability of the results of the combined group between periods. The pro forma financial information 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 and 1 January 2020 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 also assumes the interest impact of additional debt financing reflecting the actual weighted average interest rate for acquisition financing of c.0.40% for all periods presented. Acquisition costs included in 2020 pro forma financial information are assumed to be equivalent to those incurred in 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 condensed consolidated interim financial statements.

‘‘Pro forma'' includes the results of CCEP and API as if the Acquisition had occurred at the beginning of the period presented, 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 costs related to European flooding 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 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 2021 and 31 December 2020:

Full year 2021 As Reported   Items impacting Comparability   Comparable
Unaudited, in millions of € except per share data which is calculated prior to rounding CCEP   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]   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

 

Full year 2020   As Reported   Items impacting Comparability   Comparable
Unaudited, in millions of € except share data which is calculated prior to rounding   CCEP   Mark-to-market effects [7] Restructuring Charges [1] Total Acquisition Related Costs [3] Net Tax [6]   CCEP
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
                   
Attributable to:                  
Shareholders   498   2 265 11 45   821
Non-controlling interest      
Profit after taxes   498   2 265 11 45   821
                   
Diluted earnings per share (€)   1.09   0.58 0.03 0.10   1.80

__________________________

[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 fair value step-up of API finished goods.

[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 the net out of period mark-to-market impact of non-designated commodity hedges.

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 and 31 December 2020:

Full Year 2021 As Reported Pro forma adjustments CCL [A] Transaction accounting adjustments [B] Pro forma
Combined
Items impacting Comparability [E] 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.

Full Year 2020 As Reported Historical adjusted CCL[C] Transaction accounting adjustments [D] Pro forma Combined Items impacting Comparability [E] Pro forma Comparable
Unaudited, in millions of € except share data which is calculated prior to rounding CCEP     CCEP   CCEP
Revenue 10,606 2,929 13,535 13,535
Cost of sales 6,871 1,737 57 8,665 (118) 8,547
Gross profit 3,735 1,192 (57) 4,870 118 4,988
Operating expenses 2,922 1,022 130 4,074 (581) 3,493
Operating profit 813 170 (187) 796 699 1,495
Total finance costs, net 111 37 19 167 (7) 160
Non-operating items 7 2 9 (4) 5
Profit before taxes 695 131 (206) 620 710 1,330
Taxes 197 44 (57) 184 142 326
Profit after taxes 498 87 (149) 436 568 1,004
             
Attributable to:            
Shareholders 498 109 (152) 455 542 997
Non-controlling interest (22) 3 (19) 26 7
Profit after taxes 498 87 (149) 436 568 1,004
             
Diluted earnings per share (€) 1.09 0.24 (0.33) 1.00 1.19 2.19

__________________________

[C] Amounts represent adjustments to reflect CCL financial results as if the Acquisition had occurred on 1 January 2020. The impact of adjustments made to CCL's historical financial statements in order to present them on a basis consistent with CCEP's accounting policies is provided in Note 1. 

[D] Amounts represent transaction accounting adjustments for the period 1 January to 31 December as if the Acquisition had occurred on 1 January 2020. These include the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment, the non-recurring impact of the provisional fair value step-up of API finished goods, 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 related costs.

[E] 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

 

Full year 2020 Items impacting Comparability  
Unaudited, in millions of € except share data which is calculated prior to rounding Restructuring Charges [1] Acquisition and Integration related costs [3] Inventory step up costs [4] Mark-to-market effects [8] Net Tax [6] Impairment [9] Other [7] Total items impacting Comparability
Revenue
Cost of sales (70) (48) (118)
Gross profit 70 48 118
Operating expenses (325) (125) (2) (116) (13) (581)
Operating profit 395 125 48 2 116 13 699
Total finance costs, net (7) (7)
Non-operating items (4) (4)
Profit before taxes 395 132 48 2 116 17 710
Taxes 111  30 13 (45) 29 4 142
Profit after taxes 284 102 35 2 45 87 13 568
                 
Attributable to:                
Shareholders 284 102 34 2 45 62 13 542
Non-controlling interest 1 25 26
Profit after taxes 284 102 35 2 45 87 13 568
                 
Diluted earnings per share (€) 0.62 0.23 0.07 0.10 0.14 0.03 1.19

_________________________

[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. For 2020, these charges are included within Transaction accounting adjustments.

[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.

[8] Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.

[9] Amounts represent the charges recognised by CCL relating to the impairment of Indonesia and Fiji during H1 2020.

Note 1: Adjustments to API's financial statements

The financial statements below illustrate the impact of adjustments made to the historical financial statements of CCL in order to present them on a basis consistent with CCEP's accounting policies.

Full year 2020 Historical CCL [1] Reclassifications [2] Adjusted CCL Historical Adjusted CCL [3]
Unaudited, in millions of € AUD (A$) AUD (A$) AUD (A$) EUR (€)
Revenue 4,853 4,853 2,929
Trading revenue 4,762 (4,762)
Cost of sales (2,877) (2,877) (1,737)
Cost of goods sold (2,862) 2,862
Delivery (221) 221
Gross profit 1,679 297 1,976 1,192
Other revenues 39 (39)
Operating expenses (1,438) (255) (1,693) (1,022)
Operating profit 280 3 283 170
Finance income 33   33 20
Finance costs (95)   (95) (57)
Total finance costs, net (62) (62) (37)
Non-operating items (3) (3) (2)
Profit before taxes 218 218 131
Taxes (73) (73) (44)
Income tax expense (73) 73
Profit after taxes 145 145 87
         
Attributable to:        
Shareholders 180 180 109
Non-controlling interest (35) (35) (22)
Profit after taxes 145 145 87

__________________________

[1] Historical income statement previously published by CCL for the period 1 January 2020 to 31 December 2020. 

[2] Accounting policy and classification adjustments made to CCL's income statement in order to present on a basis consistent with CCEP.

[3] CCL income statement has been translated from Australian Dollars to Euros using the average exchange rate for the period of 0.6036.

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 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
As reported 3,896 2,590 50.5 %   13,763 10,606 30.0 %
Adjust: Impact of fx changes (96) n/a n/a   (206) n/a n/a
Fx-neutral 3,800 2,590 46.5 %   13,557 10,606 28.0 %
               
Revenue per unit case 4.86 4.53 7.5 %   4.83 4.66 4.0 %

 

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 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
As reported 2,950 2,590 14.0 %   11,584 10,606 9.0 %
Adjust: Impact of fx changes (53) n/a n/a   (132) n/a n/a
Fx-neutral 2,897 2,590 12.0 %   11,452 10,606 8.0 %
               
Revenue per unit case 4.82 4.53 6.5 %   4.81 4.66 3.5 %

 

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 2021 31 December 2020   31 December 2021 31 December 2020
As reported 946   2,179
Adjust: Impact of fx changes (43) n/a   (74) n/a
Fx-neutral 903   2,105
           
Revenue per unit case 5.02   4.95

 

Revenue by Geography
In millions of €
  Year Ended 31 December 2021  
  As reported Reported
 % change
Fx-Neutral
 % change
 
 
Great Britain   2,613 18.5 % 14.0 %  
Germany   2,335 3.0 % 3.0 %  
Iberia[1]   2,495 15.0 % 15.0 %  
France[2]   1,813 6.0 % 6.0 %  
Belgium and Luxembourg   926 4.0 % 4.0 %  
Netherlands   557 5.5 % 5.5 %  
Norway   391 (7.5) % (12.5) %  
Sweden   375 11.5 % 7.5 %  
Iceland   79 13.0 % 10.0 %  
Total Europe   11,584 9.0 % 8.0 %  
Australia   1,359 n/a n/a  
New Zealand and Pacific Islands   377 n/a n/a  
Indonesia and Papua New Guinea   443 n/a n/a  
Total API   2,179 n/a n/a  
Total CCEP   13,763 30.0 % 28.0 %  

[1] Iberia refers to Spain, Portugal & Andorra.

[2] France refers to continental France & Monaco.

Volume

Comparable Volume - Selling Day Shift CCEP

In millions of unit cases, prior period volume recast using current year selling days
Fourth-Quarter Ended   Year Ended
31 December 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
Volume 781 572 36,5%   2,804 2,277 23.0 %
Impact of selling day shift n/a (30) n/a   n/a (7) n/a
Comparable volume - Selling Day Shift adjusted 781 542 44.0 %   2,804 2,270 23.5 %

 

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 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
Volume 601 572 5.0 %   2,379 2,277 4.5 %
Impact of selling day shift n/a (30) n/a   n/a (7) n/a
Comparable volume - Selling Day Shift adjusted 601 542 11.0 %   2,379 2,270 5.0 %

 

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 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
Volume 180 n/a   425 n/a
Impact of selling day shift n/a n/a   n/a n/a
Comparable volume - Selling Day Shift adjusted 180 n/a   425 n/a

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 2021 31 December 2020 % Change
As reported   8,677 6,871 26.5 %
Adjust: Total items impacting comparability   (71) (62) n/a
Comparable   8,606 6,809 26.5 %
Adjust: Impact of fx changes   (130) n/a n/a
Comparable & fx-neutral   8,476 6,809 24.5 %
         
Cost of sales per unit case   3.02 2.99 1.0 %

For the year ending 31 December 2021, reported cost of sales were €8,677 million, up 26.5% versus 2020, and include the impact of a €48 million acquisition accounting fair value step up to API finished goods at the time of the Acquisition that were sold during May and June. 

Comparable cost of sales for the same period were €8,606 million, up 26.5% versus 2020. Cost of sales per unit case increased by 1.0% on a comparable and fx-neutral basis, reflecting the impact of the newly acquired API operations, 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.

Operating expenses

Operating Expenses
In millions of €. FX impact calculated by recasting current year results at prior year rates.
  Year Ended
  31 December 2021 31 December 2020 % Change
As reported   3,570 2,922 22.0 %
Adjust: Total items impacting comparability   (185) (319) n/a
Comparable   3,385 2,603 30.0 %
Adjust: Impact of fx changes   (45) n/a n/a
Comparable & fx-neutral   3,340 2,603 28.5 %

For the year ending 31 December 2021, reported operating expenses were €3,570 million, up 22.0% versus 2020.

Comparable operating expenses were €3,385 million for the same period, up 30.0% versus 2020, reflecting the impact of the newly acquired API operations and higher volumes, partially offset by the benefit of ongoing efficiency programmes and our continuous efforts on discretionary spend optimisation.

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.

Restructuring charges of €306 million were recognised within operating expenses for the year ending 31 December 2020, the majority of which also relate to the severance and accelerated depreciation in connection with the Accelerate Competitiveness programme. Charges included costs associated with closure of production sites in Germany and Iberia as well as the closure of five distribution centres and changes in commercial organisation in Germany. 

Acquisition and integration related costs of €49 million were recognised within reported operating expenses the year ending 31 December 2021 associated with the acquisition of CCL, primarily brokerage and advisory fees. This compares to €11 million of acquisition related costs recognised during the year ending 31 December 2020.

Operating profit

Operating Profit CCEP
In millions of €. FX impact calculated by recasting current year results at prior year rates.
  Year Ended
  31 December 2021 31 December 2020 % Change
As reported   1,516 813 86.5 %
Adjust: Total items impacting comparability   256 381 n/a
Comparable   1,772 1,194 48.5 %
Adjust: Impact of fx changes   (31) n/a n/a
Comparable & fx-neutral   1,741 1,194 46.0 %

 

Operating Profit Europe
In millions of €. FX impact calculated by recasting current year results at prior year rates.
  Year Ended
  31 December 2021 31 December 2020 % Change
As reported   1,298 813 59.5 %
Adjust: Total items impacting comparability   202 381 n/a
Comparable   1,500 1,194 25.5 %
Adjust: Impact of fx changes   (22) n/a n/a
Comparable & fx-neutral   1,478 1,194 24.0 %

 

Operating Profit API
In millions of €. FX impact calculated by recasting current year results at prior year rates.
  Year Ended
  31 December 2021 31 December 2020
As reported   218
Adjust: Total items impacting comparability   54
Comparable   272
Adjust: Impact of fx changes   (9)
Comparable & fx-neutral   263

 

Supplemental Financial Information - Operating Profit - Reported to Pro forma Comparable

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 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
As reported and comparable 3,896 2,590 50.5 %   13,763 10,606 30.0 %
Add: Pro forma adjustments 911 n/a   1,056 2,929 n/a
Pro forma Comparable 3,896 3,501 11.5 %   14,819 13,535 9.5 %
Adjust: Impact of fx changes (96) n/a n/a   (240) n/a n/a
Pro forma Comparable and fx-neutral 3,800 3,501 8.5 %   14,579 13,535 7.5 %
               
Pro forma Revenue per unit case 4.86 4.61 5.5 %   4.83 4.68 3.0 %

 

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 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
As reported and comparable 946 n/a   2,179 n/a
Add: Pro forma adjustments 911 n/a   1,056 2,929 n/a
Pro forma Comparable 946 911 4.0 %   3,235 2,929 10.5 %
Adjust: Impact of fx changes (43) n/a n/a   (108) n/a n/a
Pro forma Comparable and fx-neutral 903 911 (1.0) %   3,127 2,929 7.0 %
               
Pro forma Revenue per unit case 5.01 4.88 3.0 %   4.88 4.74 3.0 %

 

Pro forma revenue by Geography
In millions of €
Fourth-Quarter Ended 31 December 2021   Full Year Ended 31 December 2021  
Pro forma comparable Pro forma comparable % change Pro forma Fx-Neutral
 % change
  Pro forma comparable Pro forma comparable % change Pro forma Fx-Neutral
 % change
 
 
Europe 2,950 14.0 % 12.0 %   11,584 9.0 % 8.0 %  
Australia 590 1.0 % (3.5) %   2,028 11.0 % 5.5 %  
New Zealand and Pacific Islands 173 6.0 % 0.5 %   555 12.5 % 7.5 %  
Indonesia and Papua New Guinea 183 12.5 % 7.5 %   652 7.5 % 10.0 %  
Total API 946 4.0 % (1.0) %   3,235 10.5 % 7.0 %  
Total CCEP 3,896 11.5 % 8.5 %   14,819 9.5 % 7.5 %  

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 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
Volume 781 572 36,5%   2,804 2,277 23.0 %
Impact of selling day shift n/a (30) n/a   n/a (7) n/a
Comparable volume - Selling Day Shift adjusted 781 542 44.0 %   2,804 2,270 23.5 %
Pro forma impact[1] 177 n/a   215 616 n/a
Pro forma comparable volume 781 719 8.5 %   3,019 2,886 4.5 %

 

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 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
Volume 180 n/a   425 n/a
Impact of selling day shift n/a n/a   n/a n/a
Comparable volume - Selling Day Shift adjusted 180 n/a   425 n/a
Pro forma impact[1] 177 n/a   215 616 n/a
Pro forma comparable volume 180 177 1.5 %   640 616 4.0 %

[1] Pro forma API volume for the year ended 31 December 2020 is 618 million unit cases. Including the impact of the Q1 and Q4 selling day shift (2 million unit cases), pro forma comparable API volume is 616 million unit cases.

Pro forma Comparable Volume by Brand Category CCEP
Adjusted for selling day shift
Fourth-Quarter Ended   Year Ended
31 December 2021 31 December 2020 % Change   31 December 2021 31 December 2020 % Change
% of Total % of Total % of Total % of Total
Sparkling 85.0 % 85.5 % 8.5 %   84.5 % 84.5 % 4.5 %
Coca-ColaTM 59.5 % 60.5 % 7.5 %   59.0 % 60.0 % 3.5 %
Flavours, Mixers & Energy 25.5 % 25.0 % 10.5 %   25.5 % 24.5 % 7.0 %
Stills 15.0 % 14.5 % 10.5 %   15.5 % 15.5 % 5.0 %
Hydration 7.5 % 7.5 % 9.5 %   7.5 % 8.0 % — %
RTD Tea, RTD Coffee, Juices & Other[1] 7.5 % 7.0 % 11.5 %   8.0 % 7.5 % 10.0 %
Total 100.0 % 100.0 % 8.5 %   100.0 % 100.0 % 4.5 %

________________________

[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 2021 31 December 2020 % Change
As reported   8,677 6,871 26.5 %
Add: Pro forma adjustments   616 1,737 n/a
Adjust: Transaction accounting adjustments   57
Adjust: Total items impacting comparability   (71) (118)
Pro forma Comparable   9,222 8,547 8.0 %
Adjust: Impact of fx changes   (149) n/a n/a
Pro forma Comparable & fx-neutral   9,073 8,547 6.0 %
         
Cost of sales per unit case   3.00 2.95 1.5 %

Pro forma comparable cost of sales for the year ending 31 December 2021 were €9,222 million, up 8.0% versus 2020. Cost of sales per unit case increased by 1.5% on a 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 2021 31 December 2020 % Change
As reported   3,570 2,922 22.0 %
Add: Pro forma adjustments   323 1,022 n/a
Adjust: Transaction accounting adjustments   68 130
Adjust: Total items impacting comparability   (250) (581)
Pro forma Comparable   3,711 3,493 6.0 %
Adjust: Impact of fx changes   (54) n/a n/a
Pro forma Comparable & fx-neutral   3,657 3,493 4.5 %

Pro forma comparable operating expenses for the year ending 31 December 2021 were €3,711 million, up 6.0% versus 2020, reflecting higher volumes, partially offset by the benefit of on-going efficiency programmes, combination benefits 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 2021 31 December 2020 % Change
As reported   1,516 813 86.5 %
Add: Pro forma adjustments   117 170 n/a
Adjust: Transaction accounting adjustments   (68) (187)
Adjust: Total items impacting comparability   321 699
Pro forma Comparable   1,886 1,495 26.0 %
Adjust: Impact of fx changes   (37) n/a n/a
Pro forma Comparable & fx-neutral   1,849 1,495 23.5 %

 

Pro forma Operating Profit API
In millions of €. FX impact calculated by recasting current year results at prior year rates.
  Year Ended
  31 December 2021 31 December 2020 % Change
As reported   218 n/a
Add: Pro forma adjustments   117 170 n/a
Adjust: Transaction accounting adjustments   (68) (187)
Adjust: Total items impacting comparability   119 318
Pro forma Comparable   386 301 28.0 %
Adjust: Impact of fx changes   (15) n/a n/a
Pro forma Comparable & fx-neutral   371 301 23.5 %

 

Supplemental Financial Information - Effective Tax Rate

The reported effective tax rate was 29% and 28% for the year ended 31 December 2021 and 31 December 2020, respectively.

For the year ended 31 December 2021,the effective tax rate included a €127 million impact related to the revaluation of deferred tax positions due to enacted increases in the UK statutory income tax rate from 19% to 25% effective from 1 April 2023, the Netherlands statutory income tax rate from 25% to 25.8% effective from 1 January 2022 and an enacted law change in Indonesia which held its statutory income tax rate at 22% from 1 January 2022, reversing the previously enacted reduction from 22% to 20%.

The comparable effective tax rate was 21% and 24% for the years ended 31 December 2021 and 31 December 2020, respectively.

Supplemental Financial Information - Free Cash Flow

 

Free Cash Flow
In millions of €
  Year Ended
  31 December 2021   31 December 2020
Net cash flows from operating activities   2,117   1,490
Less: Purchases of property, plant and equipment   (349)   (348)
Less: Purchases of capitalised software   (97)   (60)
Add: Proceeds from sales of property, plant and equipment   25   49
Less: Payments of principal on lease obligations   (139)   (116)
Less: Interest paid, net   (97)   (91)
Free Cash Flow   1,460   924

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.

Supplemental Financial Information - Borrowings

 

Net Debt
In millions of €
As at   Credit Ratings
As of 15 February 2022
       
31 December 2021   31 December 2020     Moody's   Fitch Ratings
Total borrowings 13,140   7,187   Long-term rating   Baa1   BBB+
Fair value of hedges related to borrowings[1] (110)   36   Outlook   Stable   Stable
Other financial assets/liabilities[1] 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] 13,072   7,223  
Less: cash and cash equivalents[2] (1,407)   (1,523)  
Less: short term investments[3] (58)    
Net debt 11,607   5,700  

___________________

[1] Following the acquisition of CCL, 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. As at 31 December 2020, the Group did not hold interest rate hedging instruments and adjusted Net Debt only for currency impacts. 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 2021 includes €45 million 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 held in API 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 2021 includes €44 million of assets in Papua New Guinea Kina, subject to the same currency controls outlined above.

Supplemental Financial Information - Adjusted EBITDA

 

Adjusted EBITDA
In millions of €
  Year Ended
  31 December 2021   31 December 2020
Reported profit after tax   988   498
Taxes   394   197
Finance costs, net   129   111 
Non-operating items   5   7
Reported operating profit   1,516   813
Depreciation and amortisation[1]   782   727
Reported EBITDA   2,298   1,540
         
Items impacting comparability        
Mark-to-market effects[2]     2
Restructuring charges[3]   97   247
Defined benefit plan closure[4]   (9)  
Acquisition and Integration related costs[5]   49   11
Inventory step up costs[6]   48  
European flooding[7]]   15  
Adjusted EBITDA   2,498   1,800
         
Net debt to EBITDA   5.1   3.7
         
Net debt to adjusted EBITDA   4.7   3.2

______________________

[1] Includes the depreciation and amortisation impact relating to provisional fair values for intangibles and property plant and equipment.

[2] Amounts represent the net out of period mark-to-market impact of non-designated commodity hedges.

[3] Amounts represent restructuring charges related to business transformation activities, excluding accelerated depreciation included in the depreciation and amortisation line.

[4] Amounts represent the impact of the closure of the GB defined benefit pension scheme to future benefits accrual on 31 March 2021.

[5] Amounts represent cost associated with the acquisition and integration of CCL.

[6] Amounts represent the non-recurring impact of the fair value step-up of API finished goods.

[7] 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.

Pro forma Adjusted EBITDA
In millions of €
  Year Ended
  31 December 2021
Reported profit after tax   988
Taxes   394
Finance costs, net   129
Non-operating items   5
Reported operating profit   1,516
Pro forma adjustments CCL[1]   117
Transaction accounting adjustments[2]   (68)
Pro forma Combined operating profit   1,565
Depreciation and amortisation[3]   858
Pro forma EBITDA   2,423
     
Items impacting comparability    
Restructuring charges[4]   97
Defined benefit plan closure [5]   (9)
Acquisition and Integration related costs[6]   110
Inventory step up costs[7]   48
European flooding[8]   15
Other[9]   4
Pro forma adjusted EBITDA   2,688
     
Net debt to Pro forma adjusted EBITDA   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 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.

[9] Amounts represent charges incurred prior to Acquisition classified as non-trading items by CCL which are not expected to recur.

Supplemental Financial Information - Return on invested capital

 

ROIC
In millions of €
Year Ended
31 December 2021   31 December 2021   31 December 2020
Pro forma[3]        
Comparable operating profit[1] 1,886   1,772   1,194
Taxes[2] (399)   (367)   (286)
Non-controlling interest (12)   (8)  
Comparable operating profit after tax attributable to shareholders 1,475   1,397   908
Opening borrowings less cash and cash equivalents and short term investments[3] 12,498   5,664   6,105
Opening equity attributable to shareholders[3] 5,911   6,025   6,156
Opening Invested Capital 18,409   11,689   12,261
Closing borrowings less cash and cash equivalents and short term investments 11,675   11,675   5,664
Closing equity attributable to shareholders 7,033   7,033   6,025
Closing Invested Capital 18,708   18,708   11,689
           
Average Invested Capital 18,559   15,199   11,975
           
ROIC 8.0 %   9.2 %   7.6 %

____________________

[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 (2021 pro forma: 21.1%; 2021: 20.7%; 2020: 23.9%).

[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 2021   31 December 2020
    € million   € million
Revenue   13,763   10,606
Cost of sales   (8,677)   (6,871)
Gross profit   5,086   3,735
Selling and distribution expenses   (2,496)   (1,939)
Administrative expenses   (1,074)   (983)
Operating profit   1,516   813
Finance income   43   33
Finance costs   (172)   (144)
Total finance costs, net   (129)   (111)
Non-operating items   (5)   (7)
Profit before taxes   1,382   695
Taxes   (394)   (197)
Profit after taxes   988   498
         
Profit attributable to shareholders   982   498
Profit attributable to non-controlling interests   6  
Profit after taxes   988   498
         
Basic earnings per share (€)   2.15   1.09
Diluted earnings per share (€)   2.15   1.09

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 2021   31 December 2020
    € million   € million
ASSETS        
Non-current:        
Intangible assets   12,639   8,414
Goodwill   4,623   2,517
Property, plant and equipment   5,248   3,860
Non-current derivative assets   226   6
Deferred tax assets   60   27
Other non-current assets   534   337
Total non-current assets   23,330   15,161
Current:        
Current derivative assets   150   40
Current tax assets   46   19
Inventories   1,157   681
Amounts receivable from related parties   143   150
Trade accounts receivable   2,305   1,439
Other current assets   271   204
Assets held for sale   223   20
Short term investments   58  
Cash and cash equivalents   1,407   1,523
Total current assets   5,760   4,076
Total assets   29,090   19,237
LIABILITIES        
Non-current:        
Borrowings, less current portion   11,790   6,382
Employee benefit liabilities   138   283
Non-current provisions   48   83
Non-current derivative liabilities   47   15
Deferred tax liabilities   3,617   2,134
Non-current tax liabilities   110   131
Other non-current liabilities   37   44
Total non-current liabilities   15,787   9,072
Current:        
Current portion of borrowings   1,350   805
Current portion of employee benefit liabilities   10   13
Current provisions   86   154
Current derivative liabilities   19   62
Current tax liabilities   181   171
Amounts payable to related parties   210   181
Trade and other payables   4,237   2,754
Total current liabilities   6,093   4,140
Total liabilities   21,880   13,212
EQUITY        
Share capital   5   5
Share premium   220   192
Merger reserves   287   287
Other reserves   (156)   (537)
Retained earnings   6,677   6,078
Equity attributable to shareholders   7,033   6,025
Non-controlling interest   177  
Total equity   7,210   6,025
Total equity and liabilities   29,090   19,237

Coca-Cola Europacific Partners plc 

Consolidated Statement of Cash Flows (Unaudited)

    Year Ended
    31 December 2021   31 December 2020
    € million   € million
Cash flows from operating activities:        
Profit before taxes   1,382   695
Adjustments to reconcile profit before tax to net cash flows from operating activities:        
Depreciation   693   665
Amortisation of intangible assets   89   62
Share-based payment expense   16   14
Finance costs, net   129   111 
Income taxes paid   (306)   (273)
Changes in assets and liabilities:        
(Increase)/decrease in trade and other receivables   (242)   208
(Increase)/decrease in inventories   (1)   34
Increase in trade and other payables   507   53
Increase/(decrease) in net payable receivable from related parties   8   (112)
(Decrease)/increase in provisions   (116)   43
Change in other operating assets and liabilities   (42)   (10)
Net cash flows from operating activities   2,117   1,490
Cash flows from investing activities:        
Acquisition of bottling operations, net of cash acquired   (5,401)  
Purchases of property, plant and equipment   (349)   (348)
Purchases of capitalised software   (97)   (60)
Proceeds from sales of property, plant and equipment   25   49
Net proceeds/(payments) of short term investments   198  
Investments in equity instruments   (4)   (11)
Proceeds from sale of equity instruments   25  
Other investing activity, net   (2)  
Net cash flows used in investing activities   (5,605)   (370)
Cash flows from financing activities:        
Proceeds from borrowings, net   4,877   1,598
Changes in short-term borrowings   276   (221)
Repayments on third party borrowings   (950)   (569)
Payments of principal on lease obligations   (139)   (116)
Interest paid, net   (97)   (91)
Dividends paid   (638)   (386)
Purchase of own shares under share buyback programme     (129)
Exercise of employee share options   28   14
Transactions with non-controlling interests   (73)  
Other financing activities, net   5  
Net cash flows from financing activities   3,289   100
Net change in cash and cash equivalents   (199)   1,220
Net effect of currency exchange rate changes on cash and cash equivalents   83   (13)
Cash and cash equivalents at beginning of period   1,523   316
Cash and cash equivalents at end of period   1,407   1,523

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.


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  Original Source : COCA-COLA EUROPACIFIC PARTNERS PLC