TIDMCCEP
RNS Number : 2138Y
Coca-Cola Europacific Partners plc
11 May 2021
LONDON, 11(th) May 2021
COCA-COLA EUROPACIFIC PARTNERS
Coca-Cola Europacific Partners plc (CCEP) today hosts a virtual
investor event
following implementation of the acquisition of Coca-Cola Amatil
Ltd
Following the implementation of the Scheme of Arrangement to
acquire Coca-Cola Amatil Ltd on 10 May 2021, CCEP is today hosting
a virtual investor event for institutional investors and analysts.
The meeting will be hosted by Sarah Willett, Vice President,
Investor Relations & Corporate Strategy. Key speakers will
include Chairman Sol Daurella, Chief Executive Officer Damian
Gammell, Chief Financial Officer Nik Jhangiani, and General Manager
for the newly named API (Australia, Pacific and Indonesia) business
unit Peter West.
Sol Daurella, Chairman of CCEP, said:
"We are excited to welcome Coca-Cola Amatil's great colleagues
to Coca-Cola Europacific Partners and look forward to a more
diversified future with sustainability at the heart of everything
we do. We have a proven track record in successfully bringing
together talent, culture and best practice to create value. I truly
believe that we can go further together, delivering great service
and great beverages in all of our now 29 markets."
Damian Gammell, Chief Executive Officer of CCEP, added:
"This acquisition brings together two of the world's best
bottlers whilst strengthening our strategic relationship with The
Coca-Cola Company and our other brand partners. It brings an
exciting diversity to our business, including exposure to the
world's fourth most populous market, a wider portfolio including
alcohol and hot coffee, and local in-market expertise. Together
with our great business in Europe, we will unlock new, higher
growth opportunities. In Australia, Pacific and Indonesia we will
accelerate momentum by applying Europe's proven business model, and
we will strengthen our European operations by applying learnings
from our new markets. This is the start of a journey which will
create significant value to shareholders and strengthen our profile
as an attractive and sustainable total return investment
opportunity."
Investor meeting highlights
-- Structurally higher growth platform
API's faster growing markets create a larger and higher growth
addressable market for the combined business
-- Non-alcoholic ready to drink of c.EUR125 billion(1) and set
to grow by around 3% per annum(2) (FY22-25)
-- Hot Coffee of c.EUR75 billion(3) and set to grow by around 4% per annum(2) (FY22-25)
This is supported by attractive long-term macro fundamentals.
Australia and New Zealand are expected to see GDP and population
growth ahead of Western Europe over the medium-term. Indonesia, the
world's fourth most populous country, has a young population, and
is undergoing rapid urbanisation with a growing, more affluent
middle class. It is expected to grow GDP at over 5% over the
medium-term(4) .
([1]) Global Data FY2019; rounded. Markets inc. BE, FR, DE, NL,
NO, PT, SP, SE, UK, AUS, IND, NZ
([2]) CCEP internal estimates based on Global Data 2022-2025;
rounded to nearest percent
([3]) Global Data, Euromonitor, European Vending and OCS
Association & internal estimates; FY2019; rounded; Markets inc.
BE, FR, DE, NL, NO, PT, SP, SE, UK, AUS, IND, NZ
([4]) 2025 real GDP year-on-year growth rate; source: IHS
Markit
-- Significant performance improvement opportunities supported
by best practice sharing and a strengthened relationship with The
Coca-Cola Company (TCCC)
There is significant potential to improve performance, led by a
strong local management team and supported by a wealth of developed
and emerging market experience across Europe's senior management
team.
-- Australia - business returned to revenue growth in 2019 after
6 years of decline, providing a solid base from which to further
benefit from the reorientation of its portfolio with TCCC, winning
with customers by focusing on joint value creation, accelerating in
e-commerce and building on capabilities like revenue growth
management
-- In Indonesia, where penetration of sparkling beverages is low
but with proven demand, there exists significant headroom for
growth
-- And the Pacific business, led by New Zealand, is a great
business from which to leverage learnings
-- CCEP will go further together through building on the best of
both businesses to drive growth and scale faster as one, from
people to digital and of course sustainability - both businesses
have a strong, shared focus in this area, each with leading
credentials. Together they will align commitments to go further
together and faster.
-- From an efficiency perspective, the two businesses will
continue on their individual journeys to become ever more efficient
and will be even leaner as one. The ongoing and pre-announced
efficiency programmes - Accelerate Competitiveness in Europe and
Fighting Fit in Australia - remain on track. In addition, the
transaction will create further opportunities in areas such as
procurement, supply chain and group functions. CCEP estimates that
around EUR60-80 million of efficiency savings will be delivered
over the next three years, weighted to FY22 onwards.
-- Value creating for shareholders
The transaction will create attractive value for shareholders,
with immediate EPS accretion and an expectation that ROIC(1) will
cover WACC(2) in around 5 years. CCEP also intends to maintain its
c.50% dividend payout ratio(1) on a larger earnings base, thereby
generating enhanced returns.
-- Focused on returning to target leverage within 3 years driven
by stronger cash generation
CCEP entered into the transaction with both a strong balance
sheet and an investment grade rating(3) , to which it remains fully
committed. After acquisition related borrowings of EUR5.7 billion
with balanced maturities and at a weighted effective average
interest cost of c.40 basis points. Leverage(1) at close was at
around 5 times adjusted EBITDA(1) .
CCEP has a balanced mix of debt maturities at an average of 6.5
years, with no financial covenants and an average interest cost of
1.3%. Driven by the stronger cash generation from the combined
business, CCEP is focused on returning to target leverage(1) within
3 years, without affecting ongoing organic growth investments.
-- Transaction underpins medium-term objectives
The transaction underpins CCEP's medium-term annual objectives,
which are as follows:
-- Low single digit revenue growth
-- Mid-single digit operating profit growth
-- Mid-single digit diluted EPS growth (excluding share buybacks)
-- Return on invested capital improvement of c.40 basis points
-- Free cash flow of at least EUR1.25 billion (after c.5%
capital expenditure(4) as a % of revenue, excluding payments of
principal on lease obligations)
-- Dividend payout ratio of c.50%
-- Target leverage of 2.5 to 3.0 times net debt to adjusted EBITDA
Growth and improvement measures are each comparable and
FX-neutral. Mid-term annual financial objectives should be read in
conjunction with the note regarding the presentation of alternative
performance measures.
([1]) Refer to "Note Regarding the Presentation of Alternative
Performance Measures" for further details.
([2]) WACC = Weighted average cost of capital
([3]) Moody's Baa1, stable outlook; Fitch BBB+, stable
outlook
([4]) c6% capital expenditure as a % of revenue, including
payments of principal on lease obligations
Pro Forma Financial Information
Provided in the appendix to this release on a full year basis
for FY20 and FY19, including quarterly revenues and volumes and
updated (compared to the pro forma condensed combined financial
information prepared in connection with proposed financings of the
Coca-Cola Amatil Limited acquisition by CCEP and furnished on Form
6-K on 20 April 2021) to include the actual cost of financing. The
proformas are also available in excel format on CCEP's website,
www.cocacolaep.com , in the Investors section.
Webcast
CCEP will webcast the main presentation live through its website
today beginning at 13:00 BST, 14:00 CEST and 8:00 a.m. EDT. A
presentation will be followed by a Q&A session and is expected
to last approximately two hours. A replay and transcript will be
made available post the event on the website as soon as
possible.
Contacts
Clare Wardle, General Counsel and Company Secretary:
secretariat@ccep.com
Investor Relations: Sarah Willett: sarah.willett@ccep.com +44
7970 145 218
Media: Shanna Wendt: swendt@ccep.com +44 7976 595 168;
Peter Brookes: pbrookes@citadelmagnus.com +61 407 911 389; Brett
Clegg: bclegg@citadelmagnus.com +61 487 436 985
About CCEP
Coca-Cola Europacific Partners is one of the leading consumer
goods companies in the world. We make, move and sell some 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 listed on Euronext Amsterdam, the New York Stock
Exchange, 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 @CCEP.
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, including
Coca-Cola Amatil Limited and its subsidiaries (together "CCL", and
CCL with Coca-Cola Europacific Partners plc and its subsidiaries
together "CCEP" or the "Group"). Generally, the words "believe,"
"expect," "intend," "estimate," "anticipate," "project," "plan,"
"seek," "may," "could," "would, " "should," "might," "will,"
"forecast," "outlook," "guidance," "possible," "potential,"
"predict," "objective" and similar expressions identify
forward-looking statements, which generally are not historical in
nature.
Forward-looking statements are subject to certain risks that
could cause actual results to differ materially from CCEP's
historical experience and present expectations or projections,
including with respect to the acquisition of CCL (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,
including the statements under the following headings: Business
continuity and resilience (such as the adverse impact that the
COVID-19 pandemic and related government restrictions and social
distancing measures implemented in many of our markets, and any
associated economic downturn, may have on our financial results,
operations, workforce and demand for our products); Packaging (such
as refillables and recycled plastics); Cyber and social engineering
attacks and IT infrastructure; Economic and political conditions
(such as the UK's exit from the EU, the EU-UK Trade and Cooperation
Agreement, and uncertainty about the future relationship between
the UK and EU); Market (such as disruption due to customer
negotiations, customer consolidation and route to market); Legal,
regulatory and tax (such as the development of regulations
regarding packaging, taxes and deposit return schemes); Climate
change and water (such as net zero emission legislation and
regulation, and resource scarcity); Perceived health impact of our
beverages and ingredients, and changing consumer buying trends
(such as sugar alternatives and other ingredients);
Competitiveness, business transformation and integration; People
and wellbeing; Relationship with TCCC and other franchisors;
Product quality; and Other risks;
2. those set forth in the "Business and Sustainability Risks"
section of CCL's 2020 Financial and Statutory Reports including the
statements under the following headings: COVID-19 related risks;
The Coca-Cola Company (TCCC) and other brand partners relationship
risk; Economic and political risks; Cyber risk; Foreign exchange
risk; Key personnel risk; Beverage industry risk; Regulatory risk;
Corporate social responsibility risk; Climate change risk; Supply
chain risk; Litigation and legal disputes risk; Malicious product
tampering risk; Workplace Health & Safety (WHS) risk; Business
interruption risk; Product quality risk; Fraud risk; and
3. risks and uncertainties relating to the Acquisition,
including the risk that the businesses will not be integrated
successfully or such integration may be more difficult, time
consuming or costly than expected, which could result in additional
demands on CCEP's resources, systems, procedures and controls,
disruption of its ongoing business and diversion of management's
attention from other business concerns; the possibility that
certain assumptions with respect to CCL or the Acquisition could
prove to be inaccurate; 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, and capital and leverage ratios may differ materially
from the plans, goals, expectations and guidance set out in
forward-looking statements (including those issued by CCL prior to
the Acquisition). These risks may also adversely affect CCEP's
share price. Additional risks that may impact CCEP's future
financial condition and performance are identified in filings with
the 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 Alternative Performance
Measures
We use certain alternative performance measures (non-GAAP
performance measures) to make financial, operating and planning
decisions and to evaluate and report performance. We believe these
measures provide useful information to investors and as such, where
clearly identified, we have included certain alternative
performance measures in this document to allow investors to better
analyse our business performance and allow for greater
comparability. To do so, we have excluded items affecting the
comparability of period-over-period financial performance as
described below. The alternative performance measures included
herein should be read in conjunction with and do not replace the
directly reconcilable GAAP measure.
For purposes of this document, the following terms are
defined:
"As reported" are results extracted from our consolidated
financial statements.
"Comparable" is defined as results excluding items impacting
comparability, such as restructuring charges, out of period
mark-to-market impact of hedges and net tax items relating to rate
and law changes. Comparable volume is also adjusted for selling
days.
"Fx-neutral" is defined as comparable results excluding the
impact of foreign exchange rate changes. Foreign exchange impact is
calculated by recasting current year results at prior year exchange
rates.
"Capex" or "Capital expenditures" is defined as purchases of
property, plant and equipment and capitalised software, plus
payments of principal on lease obligations, less proceeds from
disposals of property, plant and equipment. Capex is used as a
measure to ensure that cash spending on capital investment is in
line with the Group's overall strategy for the use of cash.
"Free cash flow" is defined as net cash flows from operating
activities less capital expenditures (as defined above) and
interest paid. Free cash flow is used as a measure of the Group's
cash generation from operating activities, taking into account
investments in property, plant and equipment and non-discretionary
lease and interest payments. Free cash flow is not intended to
represent residual cash flow available for discretionary
expenditures.
"Adjusted EBITDA" is calculated as Earnings Before Interest,
Tax, Depreciation and Amortisation (EBITDA), after adding back
items impacting the comparability of year over year financial
performance. Adjusted EBITDA does not reflect cash expenditures, or
future requirements for capital expenditures or contractual
commitments. Further, adjusted EBITDA does not reflect changes in,
or cash requirements for, working capital needs, and although
depreciation and amortisation are non-cash charges, the assets
being depreciated and amortised are likely to be replaced in the
future and adjusted EBITDA does not reflect cash requirements for
such replacements.
"Net Debt" is defined as the net of cash and cash equivalents
less currency adjusted borrowing. We believe that reporting net
debt is useful as it reflects a metric used by the Group to assess
cash management and leverage. In addition, the ratio of net debt to
adjusted EBITDA is used by investors, analysts and credit rating
agencies to analyse our operating performance in the context of
targeted financial leverage.
"ROIC" is defined as comparable operating profit after tax
divided by the average of opening and closing invested capital for
the year. Invested capital is calculated as the addition of
borrowings and equity less cash and cash equivalents. ROIC is used
as a measure of capital efficiency and reflects how well the Group
generates comparable operating profit relative to the capital
invested in the business.
"Dividend Payout Ratio" is defined as dividends as a proportion
of comparable profit after tax.
Additionally, within this document, we provide certain
forward-looking non-GAAP financial Information, which management
uses for planning and measuring performance. We are not able to
reconcile forward-looking non-GAAP measures to reported measures
without unreasonable efforts because it is not possible to predict
with a reasonable degree of certainty the actual impact or exact
timing of items that may impact comparability throughout year.
Unless otherwise stated, percent amounts are rounded to the
nearest 0.5%.
Pro Forma Financial Information
The following Pro Forma Financial Information is presented for
illustrative purposes only and does not necessarily reflect the
results of operations or the financial position that actually would
have resulted had the Acquisition occurred at the dates indicated,
or project the results of operations or financial position for any
future dates or periods. The Pro Forma Financial Information has
not been prepared in accordance with the requirements of Regulation
S-X of the US Securities Act of 1933, the Prospectus Regulation, or
any generally accepted accounting standards.
Pro forma and Comparable
Financials
FY20 FY19
============== ====== ========
Revenue
([1]) 13,535 15,235
Operating
Profit ([1]) 1,492 2,038
Adjusted
EBITDA ([2]) 2,340 2,888
Diluted
EPS ([1]) 2.17 2.99
Net Debt
to adjusted
EBITDA ([3]) 5.3 -
Historical Financial Notes
--------------------------------------------------------
Financial basis Assumes acquisition as at
beginning of respective financial
year.
Depreciation Preliminary valuation of inventory,
& Amortisation PPE and intangibles - to be
revised. Impacts COGS and
Operating Expenses.
Transaction Removed as an adjusting item
costs for comparable financial information.
Weighted average c.0.40% relating to acquisition
cost of debt related financing.
Income tax Derived from historical actuals.
rate Proforma adjustments tax effected
based on blended 2020 actual
rates.
______________________
([1]) Refer to "Pro Forma Financial Information - Combined Pro
Forma and Comparable Income Statement" section for a reconciliation
to previously reported financial information.
([2]) Refer to "Pro Forma Financial Information - Pro Forma
Adjusted EBITDA " sections for a reconciliation to previously
reported financial information.
([3]) Net debt calculated in accordance with definition provided
in "Note Regarding the Presentation of Alternative Performance
Measures".
Pro Forma Financial Information - Combined Pro Forma and Comparable
Income Statement
The following provides a reconciliation of CCEP Pro forma
Combined to CCEP Combined Pro forma and Comparable for the periods
presented. For 2020, CCEP Pro forma Combined has been extracted
from the Unaudited pro forma condensed combined financial
information, prepared in connection with proposed financings of the
Coca-Cola Amatil Limited acquisition by CCEP and furnished on Form
6-K on 20 April 2021, and adjusted for a reduction in total finance
costs, net of EUR11m, to reflect actual weighted average interest
rate for acquisition financing of c.0.40%. For 2019, a separate
reconciliation between historically reported consolidated income
statements for CCEP and CCL and CCEP Pro forma Combined has been
provided herein.
Items Impacting Comparability
-------- -------------------------------------------------------------------------------------------------- ------------
Full-year 2020 CCEP Mark-to-market Restructuring Impairment Total Inventory Net Other Total CCEP
Unaudited, Pro effects([2]) Charges([3]) ([4]) Acquisition step tax([8]) ([9]) items Combined
in millions forma Related up costs impacting Pro forma
of EUR except Combined Costs ([6]) comparability and
per share data ([1a]) ([5]) Comparable
which is
calculated
prior to
rounding
======== ============== ============= ========== =========== ========= ======== ====== ============= ============
Revenue 13,535 - - - - - - - - 13,535
Cost of sales 8,646 - (70) - - (29) - - (99) 8,547
---------------- -------- -------------- ------------- ---------- ----------- --------- -------- ------ ------------- ----------
Gross profit 4,889 - 70 - - 29 - - 99 4,988
Operating
expenses 4,059 (2) (325) (116) (107) - - (13) (563) 3,496
---------------- -------- -------------- ------------- ---------- ----------- --------- -------- ------ ------------- ----------
Operating profit 830 2 395 116 107 29 - 13 662 1,492
Total finance
costs, net 175 - - - (7) - - - (7) 168
Non-operating
items 9 - - - - - - (4) (4) 5
---------------- -------- -------------- ------------- ---------- ----------- --------- -------- ------ ------------- ----------
Profit before
taxes 646 2 395 116 114 29 - 17 673 1,319
Taxes 189 - 111 29 33 8 (45) 4 140 329
---------------- -------- -------------- ------------- ---------- ----------- --------- -------- ------ ------------- ----------
Profit after
taxes 457 2 284 87 81 21 45 13 533 990
Attributable
to:
Shareholders 479 507 986
Non-controlling
interests (22) 26 4
---------------- ======== ============= ==========
Profit after
taxes 457 533 990
Diluted earnings
per share (EUR) 1.00 2.17
Diluted weighted average shares outstanding 456
Items Impacting Comparability
================ -------- ---------------------------------------------------------------------------------------------------- ------------
Full-year 2019 CCEP Mark-to-market Restructuring Total Inventory Disconti-nued Net Other Total CCEP
Unaudited, Pro effects([2]) Charges([3]) Acquisition step operations tax([8]) ([9]) items Combined
in millions forma Related up costs ([7]) impacting Pro forma
of EUR except Combined Costs ([6]) comparability and
per share data ([1b]) ([5]) Comparable
which is
calculated
prior to
rounding
================ ======== ============== ============= =========== ========= ============= ======== ===== ============= ============
Continuing
operations
Revenue 15,235 - - - - - - - - 15,235
Cost of sales 9,312 (1) - - (30) - - - (31) 9,281
---------------- -------- -------------- ------------- ----------- --------- ------------- -------- ----- ------------- ----------
Gross profit 5,923 1 - - 30 - - - 31 5,954
Operating
expenses 4,157 3 (147) (92) - - - (5) (241) 3,916
---------------- -------- -------------- ------------- ----------- --------- ------------- -------- ----- ------------- ----------
Operating profit 1,766 (2) 147 92 30 - - 5 272 2,038
Total finance
costs, net 164 - - (4) - - - (4) 160
Non-operating
items (1) - - - - - - (4) (4) (5)
---------------- -------- -------------- ------------- ----------- --------- ------------- -------- ----- ------------- ----------
Profit before
taxes 1,603 (2) 147 96 30 - - 9 280 1,883
Taxes 405 (1) 42 28 8 - (2) 3 78 483
---------------- -------- -------------- ------------- ----------- --------- ------------- -------- ----- ------------- ----------
Profit after
taxes from
continuing
operations 1,198 (1) 105 68 22 - 2 6 202 1,400
Discontinued operations
Profit from
discontinued
operations,
net of tax 4 - - - - (4) - - (4) -
---------------- -------- -------------- ------------- ----------- --------- ------------- -------- ----- ------------- ----------
Profit after
taxes 1,202 - (1) 105 68 22 (4) 2 6 198 - 1,400
Attributable
to:
Shareholders 1,193 198 1,391
Non-controlling
interests 9 - 9
---------------- ======== ============= ==========
Profit after
taxes 1,202 198 1,400
Diluted earnings
per share (EUR) 2.56 2.99
Diluted weighted average shares outstanding 469
______________________
([1a]) Extracted from the Unaudited pro forma condensed combined
financial information for the year ended 31 December 2020, prepared
in connection with proposed financings of the Coca-Cola Amatil
Limited acquisition by CCEP and furnished on Form 6-K on 20 April
2021, and adjusted for a reduction in total finance costs, net of
EUR11m, to reflect actual weighted average interest rate for
acquisition financing of c.0.40%.
([1b]) For 2019, refer to the reconciliation between
historically reported consolidated income statements for CCEP and
CCL and CCEP Pro forma Combined on page 9.
([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.
([4]) Amounts represent the charges recognised by CCL relating
to the impairment of Indonesia and Fiji during H1 2020.
([5]) Amounts represent costs associated with the acquisition of
CCL.
([6]) Amounts represent the impact of the preliminary
acquisition accounting step-up in the fair value of finished
goods.
([7]) Amounts represent the results of CCL discontinued
operations relating to sale of SPC in 2019.
([8]) Amounts include the deferred tax impact related to income
tax rate and law changes.
([9]) Amounts represent charges, other than restructuring,
classified as non-trading items by CCL which are not expected to
recur.
The unaudited pro forma income statement and related notes for
2019 (the "2019 Pro Forma Financial Information") is based on the
historical consolidated income statement of CCEP and CCL and has
been prepared to reflect the acquisition of CCL as if it had
occurred on 1 January 2019. The 2019 Pro Forma Financial
Information should be read in conjunction with, and reflects the
same transaction accounting adjustments presented within, CCEP's
6-K dated 20 April 2021 which includes the Unaudited pro forma
condensed combined financial information for the year ended 31
December 2020, except that the translation rate used to convert
Australian Dollars to Euros is a 2019 average rate and is included
within the notes herein. The 2019 Pro Forma Financial Information
has not been prepared in accordance with the requirements of
Regulation S-X of the US Securities Act of 1933, the Prospectus
Regulation, or any generally accepted accounting standards.
The 2019 Pro Forma Financial Information is derived from and
should be read in conjunction with the 2019 financial statements of
CCEP and CCL for the year end 31 December 2019. The historical
financial statements and related notes thereto of CCEP are filed
with the US Securities and Exchange Commission as part of CCEP's
Annual Report on Form 20-F for the year ended 31 December 2019. The
historical financial statements and related notes thereto of CCL
can be found on CCL's website at
https://www.ccamatil.com/au/Investors/Financial-reporting.
Transaction accounting adjustments
---------------------------------------------------------------
Full-year 2019 CCEP Adjusted Fixed Intangible Inventory Acquisition Financing Total CCEP
Unaudited, As CCL asset asset step Related Adjustments acquisition Pro
in millions Reported ([1]) depreciation amortisation up costs Costs ([4]) adjustments forma
of EUR except adjustment adjustment ([2]) ([3]) Combined
per share data ([2]) ([2])
which is
calculated
prior to
rounding
======== ======== ============ ============ ========= =========== =========== =========== ==========
Continuing
operations
Revenue 12,017 3,218 - - - - - - 15,235
Cost of sales 7,424 1,849 9 - 30 - - 39 9,312
---------------- -------- -------- ------------ ------------ --------- ----------- ----------- ----------- --------
Gross profit 4,593 1,369 (9) - (30) - - (39) 5,923
Operating
expenses 3,045 996 2 22 - 92 - 116 4,157
---------------- -------- -------- ------------ ------------ --------- ----------- ----------- ----------- --------
Operating profit 1,548 373 (11) (22) (30) (92) - (155) 1,766
Total finance
costs, net 96 41 - - - 4 23 27 164
Non-operating
items (2) 1 - - - - - - (1)
---------------- -------- -------- ------------ ------------ --------- ----------- ----------- ----------- --------
Profit before
taxes 1,454 331 (11) (22) (30) (96) (23) (182) 1,603
Taxes 364 93 (3) (6) (8) (28) (7) (52) 405
---------------- -------- -------- ------------ ------------ --------- ----------- ----------- ----------- --------
Profit after
taxes from
continuing
operations 1,090 238 (8) (16) (22) (68) (16) (130) 1,198
Discontinued operations
Profit from
discontinued
operations,
net of tax - 4 - 4
---------------- -------- -------- ------------ ------------ --------- ----------- ----------- ----------- --------
Profit after
taxes 1,090 242 - (8) (16) (22) (68) (16) (130) - 1,202
Attributable
to:
Shareholders 1,090 233 (130) 1,193
Non-controlling
interests - 9 - 9
---------------- -------- -------- ----------- --------
Profit after
taxes 1,090 242 (130) 1,202
Diluted earnings
per share (EUR) 2.32 2.56
Diluted weighted average shares outstanding 469
_____________________
([1]) Includes preliminary adjustments to present on a basis
consistent with CCEP accounting policies. Translated from
Australian Dollars to Euros using an average annual exchange rate
of 0.6216.
([2]) Amounts represent 2020 transaction accounting adjustments,
translated from Australian Dollars to Euros using an average annual
exchange rate of 0.6216. Refer to the Unaudited pro forma condensed
combined financial information for the year ended 31 December 2020,
prepared in connection with proposed financings of the Coca-Cola
Amatil Limited acquisition by CCEP and furnished on Form 6-K on 20
April 2021, for more details.
([3]) Amounts represent non-recurring costs associated with the
acquisition of CCL.
([4]) Amounts represent total finance costs, reflecting a
weighted average interest rate for acquisition financing of
c.0.40%.
Pro Forma Financial Information - Pro Forma Revenue & Volume
Pro forma 2020 Revenue Q1 Q2 Q3 Q4 H1 H2 FY
by Geography in millions
of EUR
========================== ===== ===== ======
Iberia([1]) 529 388 739 517 917 1,256 2,173
========================== ===== ===== ===== ===== ===== ===== ======
Germany 517 497 670 586 1,014 1,256 2,270
========================== ===== ===== ===== ===== ===== ===== ======
Great Britain 495 531 612 565 1,026 1,177 2,203
========================== ===== ===== ===== ===== ===== ===== ======
France([2]) 413 395 500 401 808 901 1,709
========================== ===== ===== ===== ===== ===== ===== ======
Total Northern Europe 524 548 658 521 1,072 1,179 2,251
========================== ===== ===== ===== ===== ===== ===== ======
Belgium/Luxembourg - - - - 426 466 892
========================== ===== ===== ===== ===== ===== ===== ======
Netherlands - - - - 250 279 529
========================== ===== ===== ===== ===== ===== ===== ======
Norway - - - - 199 224 423
========================== ===== ===== ===== ===== ===== ===== ======
Sweden - - - - 162 175 337
========================== ===== ===== ===== ===== ===== ===== ======
Iceland - - - - 35 35 70
===== ===== ===== ===== ===== ===== ======
Total Europe 2,478 2,359 3,179 2,590 4,837 5,769 10,606
========================== ===== ===== ===== ===== ===== ===== ======
Australia 453 350 442 585 803 1,027 1,830
========================== ===== ===== ===== ===== ===== ===== ======
Pacific([3]) 123 94 113 163 217 276 493
========================== ===== ===== ===== ===== ===== ===== ======
Indonesia & Papua
New Guinea 162 153 128 163 315 291 606
========================== ===== ===== ===== ===== ===== ===== ======
Total API([4]) 738 597 683 911 1,335 1,594 2,929
========================== ===== ===== ===== ===== ===== ===== ======
Pro forma total Coca-Cola
Europacific Partners 3,216 2,956 3,862 3,501 6,172 7,363 13,535
========================== ===== ===== ===== ===== ===== ===== ======
Revenue per unit
case([5])
========================== ===== ===== ===== ===== ===== ===== ======
Europe 4.77 4.59 4.80 4.59 4.68 4.70 4.69
========================== ===== ===== ===== ===== ===== ===== ======
API([6]) 4.81 4.70 4.98 5.02 4.76 5.00 4.89
Pro forma total Coca-Cola
Europacific Partners 4.78 4.61 4.83 4.70 4.69 4.77 4.73
Pro forma 2019 Revenue Q1 Q2 Q3 Q4 H1 H2 FY
by Geography in millions
of EUR
========================== ===== ===== ========
Iberia([1]) 537 745 878 624 1,282 1,502 2,784
========================== ===== ===== ===== ===== ===== ===== ======
Germany 528 643 650 611 1,171 1,261 2,432
========================== ===== ===== ===== ===== ===== ===== ======
Great Britain 530 621 626 635 1,151 1,261 2,412
========================== ===== ===== ===== ===== ===== ===== ======
France([2]) 442 525 471 459 967 930 1,897
========================== ===== ===== ===== ===== ===== ===== ======
Total Northern Europe 547 683 657 604 1,231 1,261 2,492
========================== ===== ===== ===== ===== ===== ===== ======
Belgium/Luxembourg - - - - 493 509 1,002
========================== ===== ===== ===== ===== ===== ===== ======
Netherlands - - - - 295 307 602
========================== ===== ===== ===== ===== ===== ===== ======
Norway - - - - 218 219 437
========================== ===== ===== ===== ===== ===== ===== ======
Sweden - - - - 184 182 366
========================== ===== ===== ===== ===== ===== ===== ======
Iceland - - - - 41 44 85
========================== ===== ===== ===== ===== ===== ===== ======
Total Europe 2,584 3,217 3,282 2,933 5,802 6,215 12,017
========================== ===== ===== ===== ===== ===== ===== ======
Australia 472 450 455 580 922 1,035 1,957
========================== ===== ===== ===== ===== ===== ===== ======
Pacific([3]) 123 114 112 155 237 267 504
========================== ===== ===== ===== ===== ===== ===== ======
Indonesia & Papua
New Guinea 155 224 162 216 379 378 757
========================== ===== ===== ===== ===== ===== ===== ======
Total API([4]) 750 788 729 951 1,538 1,680 3,218
========================== ===== ===== ===== ===== ===== ===== ======
Pro forma total Coca-Cola
Europacific Partners 3,334 4,005 4,011 3,884 7,340 7,895 15,235
========================== ===== ===== ===== ===== ===== ===== ======
Revenue per unit
case([5])
========================== ===== ===== ===== ===== ===== ===== ========
Europe 4.71 4.84 4.75 4.76 4.78 4.75 4.77
========================== ===== ===== ===== ===== ===== ===== ======
API([6]) 4.82 4.59 4.87 4.82 4.70 4.84 4.77
Pro forma total Coca-Cola
Europacific Partners 4.73 4.79 4.77 4.77 4.76 4.77 4.77
___________________________
([1]) Iberia refers to Spain, Portugal & Andorra.
([2]) France refers to continental France & Monaco.
([3]) Pacific refers to New Zealand & the Pacific
Islands.
([4]) Acquisition of Coca-Cola Amatil (CCL) completed on
10.May.21. API full year revenue measures for 2020 and 2019
provided by CCL management. Revenue includes preliminary
adjustments to present on a basis consistent with CCEP accounting
policies. Pro forma as if the acquisition of API occurred on
01.Jan.20 or 01.Jan.19 for illustrative purposes only. It is not
intended to estimate or predict future financial performance or
what actual results would have been.
([5]) To facilitate comparability revenue per unit case has been
calculated on an fx-neutral basis for 2020 and on a reported basis
for 2019; Refer to "Note Regarding the Presentation of Alternative
Performance Measures" for further details.
([6]) Includes alcohol & coffee.
Note: Includes additional disclosure for API revenue by
geography. This will be provided on a half-year and full-year basis
going forward.
Pro Forma 2020 Volumes Q1 Q2 Q3 Q4 H1 H2 FY
by Reporting Segment([1])
In millions of Unit
cases
Total Europe 521 519 665 572 1,040 1,237 2,277
=========================== === === === === ===== ===== =====
Total API([2]) 156 133 142 187 289 329 618
=========================== === === === === ===== ===== =====
Pro forma total Coca-Cola
Europacific Partners 677 652 807 759 1,329 1,566 2,895
Pro Forma 2019 Volumes Q1 Q2 Q3 Q4 H1 H2 FY
by Reporting Segment([1])
In millions of Unit
cases
Total Europe 549 665 691 616 1,214 1,307 2,521
=========================== === === === === ===== ===== =====
Total API([2]) 155 172 150 197 327 347 674
=========================== === === === === ===== ===== =====
Pro forma total Coca-Cola
Europacific Partners 704 837 841 813 1,541 1,654 3,195
______________________
([1]) Reported volumes.
([2]) Includes alcohol & coffee.
Pro Forma Financial Information - Pro Forma by Segment
Pro Forma 2020 by Segment Europe API Total
================================================= ========== ========= ==========
Pro forma Combined Revenue 10,606 2,929 13,535
Pro forma Combined Operating Profit (comparable) 1,194 298 1,492
Items impacting comparability([1]) - - 662
Pro forma Combined Operating Profit - - 830
Pro forma operating profit margin (comparable) 11.3% 10.2% 11.0%
Pro Forma 2019 by Segment Europe API Total
================================================= ==========
Pro forma Combined Revenue 12,017 3,218 15,235
Pro forma Combined Operating Profit (comparable) 1,676 362 2,038
Items impacting comparability([1]) - - 272
Pro forma Combined Operating Profit - - 1,766
Pro forma operating profit margin (comparable) 13.9% 11.2% 13.4%
___________________________
([1]) Refer to reconciliation on page 7 for 2020 and page 8 for
2019.
Pro Forma Financial Information - Pro Forma Adjusted EBITDA
Year Ended
============================ ------------
Pro Forma 2020 Adjusted 31 December
EBITDA 2020
In millions of EUR
============================ ===========
Reported profit
after tax 457
Taxes 189
Finance costs, net 175
Non-operating items 9
Reported operating
profit 830
Depreciation and
amortisation([1]) 969
Reported EBITDA 1,799
Items impacting
comparability
Mark-to-market effects([2]) 2
Restructuring Charges
([3]) 274
Impairment ([4]) 116
Total Acquisition
Related Costs ([5]) 107
Inventory step up
costs ([6]) 29
Other ([7]) 13
Pro Forma Adjusted
EBITDA 2,340
Year Ended
============================ --------------
Pro Forma 2019 Adjusted 31 December
EBITDA 2019
In millions of EUR
============================ =============
Reported profit
after tax 1,198
Taxes 405
Finance costs, net 164
Non-operating items (1)
Reported operating
profit 1,766
Depreciation and
amortisation([1]) 888
Reported EBITDA 2,654
Items impacting
comparability
Mark-to-market effects([2]) (2)
Restructuring Charges
([3]) 109
Total Acquisition
Related Costs ([5]) 92
Inventory step up
costs ([6]) 30
Other ([7]) 5
Pro Forma Adjusted
EBITDA 2,888
______________________
([1]) Includes the depreciation and amortisation impact of the
preliminary acquisition accounting step-up in the fair value of PPE
and intangibles.
([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 charges recognised by CCL relating
to the impairment of Indonesia and Fiji during H1 2020.
([5]) Amounts represent costs associated with the acquisition of
CCL.
([6]) Amounts represent the impact of the preliminary
acquisition accounting step-up in the fair value of finished
goods.
([7]) Amounts represent charges, other than restructuring,
classified as non-trading items by CCL which are not expected to
recur.
Note: calculations reflect CCEP's best estimates based upon the
information currently available to CCEP and could be subject to
change once more detailed information is obtained.
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