Strong execution powers a
year of growth
Coca-Cola HBC AG, a growth-focused
Consumer Packaged Goods business and strategic bottling partner of
The Coca-Cola Company, reports its financial results for the
twelve months ended
31 December 2023.
Full-year highlights
·
Focused
execution of 24/7 strategy delivered 16.9% organic revenue
growth1
o Organic volume growth of 1.7% led by our strategic priority
categories, with Sparkling +2.5%, Energy +27.3% and Coffee
+31.5%
o Strong finish to the year with 6.8% organic volume growth in
Q4 and improving trends in all three reporting segments
o Organic revenue per case growth
of 15.0%, reflecting the benefits of
revenue growth management initiatives throughout
the year
o Reported revenue up 10.7%, with strong organic growth partly
offset by FX translation headwinds in Emerging markets
o Continued value share gains in 2023 in both
Non-Alcoholic Ready-To-Drink (NARTD) and Sparkling of 110bps and
80bps respectively
·
Strong organic
EBIT growth of 17.7% driving good improvement in Return on Invested
Capital
o Comparable EBIT of €1,083.8 million; Comparable EBIT margins improved 50 basis points on a
reported basis to 10.6%, up 10 basis points on an organic
basis
o Comparable gross profit margin up 80 basis points,
reflecting easing cost pressures
in the second half of the year
o Disciplined investment in growth
capabilities and good operating leverage reduced comparable operating expenses as a percent of revenue by 10
basis points
o ROIC up 230 basis points to 16.4%
·
Double-digit
organic revenue and EBIT growth across all
segments
o Established:
Organic revenue up
12.3%, led by pricing and mix. Organic EBIT grew 23.0%
o Developing:
Organic revenue up 18.2%, with strong revenue per case expansion. Organic EBIT grew 26.9%
o Emerging:
Organic revenue up 19.9%, with volume growth as
well as revenue per case improvement. Organic EBIT grew by
11.7%
·
Strong EPS
progress, record FCF generation and improved shareholder
returns
o Comparable EPS grew by 21.8% to €2.08, supported by strong
profit delivery and effective management of finance
costs
o Free cash flow increased by 10.3% to a record €711.8
million
o Net debt of €1.6 billion and 1.1x net debt to comparable
adjusted EBITDA, reflecting the strength of our balance
sheet
o Launched a two-year share buyback programme of up to €400
million in November, reflecting the
Board's long-term confidence in business
performance
o Board of Directors to propose an ordinary dividend of €0.93
per share, up 19.2% year on year and representing a 45%
payout
·
Sustained
investment across our strategic priorities
o Capital expenditure of €674.9 million, up 14.5%, focused on
sustainable growth
o Acquisition of Finlandia Vodka
business from Brown-Forman for €180 million net consideration
paid
o Accelerated investment in bespoke capabilities, particularly digital initiatives, and our
agenda to further strengthen our ability to win in the
market
o Launched Jack Daniel's & Coca-Cola in Poland, Ireland and
Hungary
Zoran Bogdanovic, Chief Executive Officer of Coca-Cola HBC
AG, commented:
"I am deeply proud of our team as
we delivered a third year of double-digit growth and record
profits. I would like to thank them for their tireless efforts, and
their commitment to our company vision, our customers and
consistent focused execution. I would also like to thank our
customers and partners for their ongoing support throughout the
year.
"2023 was another year of
consistent execution of our growth strategy. We delivered volume
growth, share gains, improved margins and record levels of free
cash flow. As a result, we were able to increase shareholder
returns, including the launch of a share buyback
programme.
"The power of our 24/7 portfolio,
our diversified country footprint and our sustained investment in
building bespoke capabilities, driven by data, insights and
analytics, are foundations of compounding growth.
"In 2023, we made significant
progress towards our Mission 2025 and NetZeroby40 goals, with key
milestones including commissioning a new in-house recycled plastic
(rPET) production facility in Romania and a new line for returnable
and resealable glass bottles in Austria. In December, we also
announced that we are establishing a charitable foundation
dedicated to supporting local communities where we
operate.
"While we expect the macroeconomic
and geopolitical environment to remain challenging, we remain
confident that we will continue to make progress against our
medium-term growth targets."
|
Full Year
|
|
|
|
2023
|
2022
|
% Change Reported
|
%Change Organic1
|
Volume (m unit
cases)
|
2,835.5
|
2,711.8
|
4.6%
|
1.7%
|
Net sales revenue (€
m)
|
10,184.0
|
9,198.4
|
10.7%
|
16.9%
|
Net sales revenue
per unit case (€)
|
3.59
|
3.39
|
5.9%
|
15.0%
|
Operating profit
(EBIT)2 (€
m)
|
953.6
|
703.8
|
35.5%
|
|
Comparable
EBIT1 (€
m)
|
1,083.8
|
929.7
|
16.6%
|
17.7%
|
EBIT margin
(%)
|
9.4
|
7.7
|
170bps
|
|
Comparable EBIT
margin1 (%)
|
10.6
|
10.1
|
50bps
|
10bps
|
Net
profit3 (€
m)
|
636.5
|
415.4
|
53.2%
|
|
Comparable net
profit1,3 (€ m)
|
764.2
|
624.9
|
22.3%
|
|
Basic earnings per
share (EPS) (€)
|
1.730
|
1.134
|
52.6%
|
|
Comparable
EPS1 (€)
|
2.078
|
1.706
|
21.8%
|
|
Free cash
flow1 (€
m)
|
711.8
|
645.1
|
10.3%
|
|
1For details on APMs refer
to 'Alternative Performance Measures' and 'Definitions and
reconciliations of APMs' sections.
2Refer to the condensed
consolidated income statement.
3Net Profit and comparable
net profit refer to net profit and comparable net profit
respectively after tax attributable to owners of the
parent.
Business Outlook
We have delivered a
stronger-than-expected financial performance in 2023, despite the
significant headwinds to our business. While we expect the
macroeconomic and geopolitical environment to remain challenging,
we have high confidence in our 24/7 portfolio and the opportunities
for growth in our diverse markets, amplified by our bespoke
capabilities, and above all, the talent of our people. In 2024 we
expect to make progress against our medium-term growth
targets.
Our guidance for 2024
is:
· Organic revenue growth at a Group level in our 6-7%
medium-term target range
· On a
comparable basis, COGS per unit case should increase low to
mid-single digits through the combined effect of inflation,
transactional and translational FX
· Organic EBIT growth in the range of +3% to +9%
Technical 2024 guidance
FX: We
expect the impact of translational FX on our Group comparable EBIT
to be a €30-50 million headwind.
Restructuring: We do not expect significant restructuring initiatives to
take place.
Tax: We
expect our comparable effective tax rate to be towards the top end
of our 25% to 27% range.
Finance costs: We expect net finance costs to be between €50-70
million.
Scope: We
expect the scope impact from the Finlandia acquisition to be
between €5-10 million
Group Operational Review
Consistent execution of our
24/7 growth strategy has delivered a
strong financial performance and significant strategic progress. We
have invested strategically in the business, further developed our
bespoke capabilities and evolved our culture, our partnerships and
our portfolio. As a result, we remain very confident in the
differentiated strengths of our business and our ability to sustain
high levels of revenue growth into the future. This is well
reflected in the progress we have made delivering our strategic
pillars.
Leveraging our unique 24/7 portfolio
Full year organic revenue grew by
16.9%, with growth in volumes, price and mix. Reported net sales
revenue increased by 10.7%, with adverse FX translation effects
partially offsetting strong organic growth across the
group.
Volumes increased by 1.7% on an
organic basis, led by our strategic priority categories of
Sparkling, Energy and Coffee, which offset declines in
Stills, as a result of conscious choices
to drive profitable growth.
·
Sparkling volumes grew by
2.5%. Excluding Russia, where we no longer sell any Coca-Cola
Company brands, Trademark Coke brands grew 1.9%.
·
Energy volumes grew by 27.3%,
the eighth consecutive year of strong double-digit growth, with
good results across all segments. In Established and Developing
markets, growth was driven by Monster, while growth in Emerging was
led by Predator, as well as the successful launch of our Energy
portfolio in Egypt.
·
Coffee volumes grew 31.5%,
with all three segments growing above 20%. We continue to
make good progress on out-of-home customer
recruitment, adding 5,000 outlets in the year to bring our total to
13,000. Our segmentation strategy is working well and we remain
excited about the medium-term opportunity.
·
Sports drinks delivered good growth, however
Still volumes declined 4.4%
as we consciously chose to focus on opportunities for the most
profitable revenue growth in the Water category. As a result, Water
volumes were 5.9% lower than the prior year, largely reflecting
declines in Italy, Poland, Hungary, Czech and Romania.
·
Premium
Spirits volumes grew by 13.1% on an
organic basis, driven by all segments. The acquisition of the
Finlandia Vodka business, completed in
November 2023, is a unique opportunity with significant geographic overlap in
our territories, enhancing our premium spirits credentials and
opening incremental mixability opportunities for our NARTD
portfolio.
Winning in the marketplace
Organic net sales revenue per case
grew by 15.0% in the full year, led by 19.0% growth in the first
half, due to pricing actions to mitigate cost inflation in our
markets. As cost pressures eased in the second half of the year,
organic net sales revenue per case grew 11.1%, largely reflecting
the cycling effect of pricing actions taken in the second half of
2022.
Our revenue growth management initiatives,
powered by ongoing investment in data, insights and analytics, have
allowed us to take more informed pricing decisions and address both
affordability and premiumisation, while still improving revenue per
case. Affordability remained important in 2023, as many of our
markets faced pressures on consumer disposable income. We responded
by launching new smaller pack formats, as well as by driving
promotional activities with a higher return on investment, and
utilising the strength of our 24/7 portfolio to tailor our offer in
different markets and for different customer needs.
Our actions to drive
premiumisation resulted in positive category and package mix.
Category mix benefitted mainly from the increased contribution of
Sparkling, Adult Sparkling and Energy, as well as the lower
contribution from Water. Package mix improved as we made further
strategic progress, increasing single-serve mix by 80 basis
points.
As a result of the commercial
decisions we have made, we continued to deliver strong share gains in 2023, gaining 110 basis
points of value share in NARTD and 80 basis points in Sparkling.
This improved performance benefitted from our core focus of driving
joint value with customers and the strength of our 24/7 brand
portfolio. We were again the number one contributor to retail
customers' absolute revenue growth within fast moving consumer
goods (FMCG) in Europe, according to Nielsen.
Operating profit, margins and cost control
Comparable gross profit grew by
13.2%, with gross
profit margins up 80 basis points to
35.0%. Comparable COGS per case increased 4.7%,
mainly reflecting easing inflation in some commodities in the
second half of the year, FX translational benefits from the
movements in the Nigerian Naira, offset by transactional
headwinds.
Comparable operating costs as a
percent of revenue decreased by 10 basis points to 24.4%.
We benefitted from good operational leverage
while investing in growth as revenues
accelerated. We
increased marketing spend and added route-to-market capabilities,
seizing opportunities across our
markets while maintaining tight control of
non-essential costs.
Comparable EBIT increased by 16.6%
on a reported basis to €1,083.8 million, principally driven by
organic growth across our markets, only partially offset by
negative foreign currency movements. The comparable EBIT margin was
10.6%, up 50 basis points on a reported basis, benefitting from
operational leverage. On an organic
basis, comparable
EBIT increased by 17.7%, and margins grew 10 basis
points.
We saw a negative translational
and transactional currency impact in 2023, driven by the
depreciation of the Nigerian Naira, Russian Rouble and Egyptian
Pound.
Net profit and free cash flow
Comparable net profit of €764.2
million and comparable basic earnings per share of €2.078 were
22.3% and 21.8% higher respectively. Reported net profit and
reported basic earnings per share of €636.5 million and €1.730 were
53.2% and 52.6% higher respectively compared to 2022, reflecting the lower
level of non-cash financial charges including
impairments.
Comparable taxes amounted to
€277.1 million, representing a comparable tax rate of 27%, at the
top end of our guided range of 25% to 27%.
ROIC expanded by 230 basis points
to 16.4%, driven by higher profit, partly offset by higher invested
capital.
Net finance costs were €34.4
million lower than the prior year at €48.3 million, driven mainly
by higher finance income as a result of increased interest on cash
deposits and stable finance costs on fixed rate
borrowings.
Net impairment losses were €16.9
million lower, reflecting a €109.4 million charge in Egypt, more
than offset by the non-repeat of the charges taken in
2022.
Capital expenditure increased by
€85.4 million to €674.9 million as we continued to invest in
developing our production
facilities, renovating and expanding our cooler footprint, and driving
other strategic opportunities that help deliver our sustainability agenda. Capex as a percentage of revenue
was 6.6%, towards the low end of our targeted range of 6.5% to
7.5%, reflecting the strong level of revenue growth achieved
in the year.
Free cash flow was €711.8 million,
an increase of €66.7 million compared to the prior year and a
record for the business, largely
reflecting higher operating
profit.
ESG leadership
In 2023 we made good progress on
sustainability, which remains an important growth
enabler.
A significant focus for us is full
packaging circularity. In 2023, Romania
became our first country to have all three elements: 100% recycled
bottles, in-house rPET production
and a newly launched, country-wide Deposit Return Scheme
(DRS). By the end of the year a DRS was live in six of our markets:
Croatia, Estonia, Latvia, Lithuania, Romania and
Slovakia. Our in-house rPET production in
Poland, Italy and Romania will cover 50% of our rPET needs
in 2024, securing availability and reducing
costs.
We have also led on packaging innovation. In
Austria we commissioned a new RGB4 line for both 1 litre and
new 400ml resealable bottles. We also
introduced an industry-leading, innovative solution to replace
shrink plastic with 100%-recyclable paper on 1.5 litre PET
bottles.
Turning to other elements of our
Mission 2025 framework, we exceeded
our goal of
having 50% energy-efficient coolers in the market
(excluding Egypt - acquired in 2022),
with a total of 54% by June 2023 - eighteen months ahead of target. On water stewardship, we now
have community projects in twelve
water-risk areas where we operate, up from eight last
year.
Innovation is critical in creating
new technologies and for this reason we became a partner in the
$137.7 million Greycroft Coca-Cola System Sustainability Fund, with
seven other bottlers and The Coca-Cola Company. Also in 2023, we
announced we are establishing a charitable foundation, with an
initial donation of €10 million, dedicated to supporting local
communities.
Our 2023 sustainability
performance was recognised externally by leading scores from major
ESG benchmarks. We were ranked, for the seventh time, as the
world's most sustainable beverage company by the 2023 Dow Jones
Sustainability Indices, and we were recognised in CDP's A List for
leading practices in climate and water security.
4 Returnable Glass Bottle line co-funded by the European Union,
NextGenerationEU.
Operational Review by Reporting Segment
Established markets
|
|
|
|
|
|
Full Year
|
|
|
|
2023
|
2022
|
% Change Reported
|
% Change Organic
|
Volume (m unit cases)
|
628.7
|
643.9
|
-2.4%
|
-2.4%
|
Net sales revenue (€ m)
|
3,358.5
|
2,974.1
|
12.9%
|
12.3%
|
Net sales revenue per unit case
(€)
|
5.34
|
4.62
|
15.7%
|
15.1%
|
Operating profit (EBIT) (€
m)
|
379.2
|
310.4
|
22.2%
|
|
Comparable EBIT (€ m)
|
381.1
|
307.1
|
24.1%
|
23.0%
|
EBIT margin (%)
|
11.3
|
10.4
|
90bps
|
|
Comparable EBIT margin
(%)
|
11.3
|
10.3
|
100bps
|
100bps
|
Net sales revenue grew by 12.3%
and 12.9% on an organic and reported basis respectively, as we
experienced positive foreign currency movements from the Swiss
Franc.
Organic growth in net sales
revenue per case was 15.1%, driven by price increases, weighted to
the first half, as well as positive category and package mix. A
focus on single-serve activation drove a 3.2 percentage point
improvement in single-serve mix.
Established markets volume
declined by 2.4%, on strong comparatives, with an improving trend
towards the end of the year. Sparkling volumes fell slightly,
despite growth in Coke Zero and Adult Sparkling. Energy volumes
expanded by mid-teens despite tough comparatives, with good growth
in Monster. Stills volumes declined by high-single digits, driven
by a low-double digit decline in the Water category, as we made
conscious choices to prioritise profitable revenue
growth.
·
Volumes in Greece grew by 6.9%, despite tough
comparatives, driven by strong execution throughout key trading
periods, with an extended tourist season. Sparkling expanded
mid-single digits driven by Coke Zero, Fanta and Adult Sparkling,
while Energy grew mid-teens. Stills grew high-single
digits.
·
In Italy, volumes declined 8.6%, primarily due to
Water. Volume trends improved in Q4, with growth in Sparkling. In
the year, Coke Zero volumes grew low-single digits and Coke Zero
Sugar Zero Caffeine performed well. Adult Sparkling grew
high-single digits, driven by both Kinley and Lurisia. In Water, we
made deliberate choices to focus on profitable revenue growth, and
as a result volumes declined over 25%. Stills overall declined over
20%, but only low-single digits excluding Water.
·
In Ireland, volumes grew by 2.7%. Sparkling
volumes were up by low-single digits, driven by Coke Zero, Sprite
and Fanta. Energy grew in the mid-twenties, retaining good
momentum. Stills were slightly down year-on-year, with a low-single
digit decline in Water, partly offset by strong growth in premium
water brands.
·
In Switzerland, volumes increased by 1.6%.
Sparkling volumes grew low-single digits with a strong performance
from Adult Sparkling and Coke Zero. Energy volumes grew strongly.
Stills volume was down low-single digits, impacted by
Ready-to-Drink Tea, despite low-double digit growth in Sport
Drinks.
Comparable EBIT in the Established
segment increased by 23.0% and 24.1% on an organic and reported
basis respectively, to €381.1 million. Comparable EBIT margin was
11.3%, up 100 basis points on an organic basis, as operational
leverage and cost control more than offset COGS
inflation.
Developing markets
|
|
|
|
|
|
Full Year
|
|
|
|
2023
|
2022
|
% Change Reported
|
% Change Organic
|
Volume (m unit cases)
|
471.0
|
478.8
|
-1.6%
|
-1.7%
|
Net sales revenue (€ m)
|
2,088.6
|
1,719.7
|
21.5%
|
18.2%
|
Net sales revenue per unit case
(€)
|
4.43
|
3.59
|
23.5%
|
20.2%
|
Operating profit (EBIT) (€
m)
|
152.6
|
113.1
|
34.9%
|
|
Comparable EBIT (€ m)
|
153.8
|
115.1
|
33.6%
|
26.9%
|
EBIT margin (%)
|
7.3
|
6.6
|
70bps
|
|
Comparable EBIT margin
(%)
|
7.4
|
6.7
|
70bps
|
50bps
|
Net sales revenue grew by 18.2%
and 21.5% on an organic and reported basis respectively,
as well as positive foreign currency movements
from the Polish Zloty and Hungarian
Forint.
Organic net sales revenue per case
increased by 20.2%, driven by pricing initiatives, and positive
category and package mix.
Developing markets volume declined
1.7% on an organic basis, with a better performance in Q4.
Sparkling volume declined slightly, while Energy delivered
low-teens growth. Stills declined double-digits, as Water and Juice
contracted.
·
Poland volumes increased by 1.5%, despite lapping
a strong performance in 2022. Sparkling grew by low-single digits,
led by double-digit growth in Coke Zero and Sprite, and an
encouraging performance from Coke Zero Sugar Zero Caffeine. Energy
grew by low-teens and Coffee grew strongly. Stills volumes declined
more than 20%, due to deliberate choices made in Water to
prioritise profitable revenue growth.
·
In Hungary, volumes declined by 5.3%, due to
Stills. Encouragingly, we saw a return to volume growth in Q4. In
the year, Sparkling grew slightly, despite being impacted by the
incremental sugar tax effective July 2022, and Trademark Coke grew
mid-single digits. Stills declined high teens, led by
Water.
·
Volume in the Czech Republic declined 12.6%, on
tough comparatives. We saw declines in Sparkling and Stills, albeit
with an improved performance in Q4. We actively drove robust price
mix to manage cost inflation, particularly in the first half.
Energy grew low-double digits and Coffee grew strongly.
Comparable EBIT in the Developing
segment increased by 26.9% and 33.6% on an organic and reported
basis respectively, to €153.8 million. Comparable EBIT margin was
7.4%, up 50 basis points on an organic basis, as operational
leverage and cost control more than offset COGS
inflation.
Emerging markets
|
|
|
|
|
|
Full Year
|
|
|
|
2023
|
2022
|
% Change Reported
|
% Change Organic
|
Volume (m unit cases)
|
1,735.8
|
1,589.1
|
9.2%
|
4.3%
|
Net sales revenue (€ m)
|
4,736.9
|
4,504.6
|
5.2%
|
19.9%
|
Net sales revenue per unit case
(€)
|
2.73
|
2.83
|
-3.7%
|
15.0%
|
Operating profit (EBIT) (€
m)
|
421.8
|
280.3
|
50.5%
|
|
Comparable EBIT (€ m)
|
548.9
|
507.5
|
8.2%
|
11.7%
|
EBIT margin (%)
|
8.9
|
6.2
|
270bps
|
|
Comparable EBIT margin
(%)
|
11.6
|
11.3
|
30bps
|
-80bps
|
Net sales revenue grew by 19.9% on
an organic basis, or by 5.2% on a reported basis, as currency
headwinds from the Nigerian Naira, Egyptian Pound and Russian
Rouble offset strong organic growth and the impact of the
consolidation of Multon for the first seven months of the
year.
Net sales revenue per case grew
15.0% organically, driven by pricing actions taken throughout the
year, proactively managing the impact of currency
devaluation.
Emerging markets' volume grew by
4.3% organically and 9.2% on a reported basis, which includes the
consolidation of Multon. Sparkling volumes grew by mid-single
digits and Energy volume grew strong double-digits. Still volumes
were broadly unchanged year-on-year.
·
Volume in Nigeria grew by 1.8%, with high-single
digit growth in Q4. We continued to consciously drive price mix to
manage cost inflation and currency devaluations while addressing
affordability and gaining both value and volume share. Trademark
Coke volumes increased high-single digits and Energy continued to
grow strong double-digits. Stills fell low-double digits, due to
Water.
·
Ukraine volume grew by 17.8%, with good results
across the portfolio, on soft comparatives impacted by the war.
Sparkling grew high-teens, led by Trademark Coke, Adult Sparkling
and Fanta. Energy grew very strongly, and Juice and Ready-to-Drink
Tea performed well.
·
Volume in Romania declined by 8.3%, reflecting a
challenging customer and consumer backdrop for the first nine
months of the year. Trends improved in Q4, with volumes returning
to growth. Sparkling volumes fell mid-single digits, although we
drove low-single digit growth in Coke Zero and strong double-digit
growth in Energy and Coffee. Stills declined high-teens.
·
Volumes in Serbia increased by 2.2%. Sparkling
grew low-single digits, and Energy delivered low-teens growth.
Stills grew high-single digits.
·
Volumes grew by 4.5% in Egypt on an organic
basis, despite some macroeconomic headwinds, benefitting from our
significant investment in commercial capabilities over the last two
years. Sparkling grew, with a good performance in Coke Zero. We are
encouraged by the launch of Energy, both Monster and Fury, which
contributed positively to the results. Water grew high-single
digits, with a rebound in the second half. Trademark Coke was
impacted in Q4 by pushback against some western brands.
·
Volumes in Russia grew by 12.1% on an organic
basis. Compared to 2021, volumes were down around 30% on an organic
basis. The local business continued to
perform in line with expectations.
Comparable EBIT in the Emerging
segment grew by 11.7% on an organic basis and 8.2% on a reported
basis, to €548.9 million. Operating profit grew strongly, driven by
lower non-cash financial charges compared to prior-year period.
Comparable EBIT margin was 11.6%, down 80 basis points on an
organic basis, but up 30 basis points on a reported basis,
reflecting the mix effect from currency headwinds.
Conference call
Coca-Cola HBC's management will
host a conference call for investors and analysts on Wednesday, 14
February 2024 at 9:00 am GMT. To join the call, in listen-only mode
please join via webcast.
If you anticipate asking a question, please
click here to register and find
dial-in details.
Next event
|
|
30 April 2024
|
2024
First quarter trading update
|
Enquiries
|
|
|
|
Coca-Cola HBC Group
|
|
|
|
Investors and Analysts:
|
|
|
|
John Dawson
Investor Relations Director
(Interim)
|
|
Tel: +44
7552 619509
john.dawson@cchellenic.com
|
|
|
|
|
|
Jemima Benstead
Investor Relations
Manager
|
|
Tel:
+44 7740 535130
jemima.benstead@cchellenic.com
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|
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Virginia Phillips
Investor Relations
Manager
|
|
Tel: +44
7864 686582
virginia.phillips@cchellenic.com
|
|
Media:
|
|
|
|
Sonia Bastian
Head of Communications
|
|
Tel: +41
7946 88054
sonia.bastian@cchellenic.com
|
|
|
|
|
|
Claire Evans
Group Senior Communications
Manager
|
|
Tel: +44 7597 562 978
claire.evans@cchellenic.com
|
|
|
|
|
|
Greek media contact:
V+O Communications
Sonia Manesi
|
|
Tel: +30
694 454 8914
sm@vando.gr
|
|
|
|
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|
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| |
Coca-Cola HBC Group
Coca-Cola HBC is a growth-focused
consumer packaged goods business and strategic bottling partner of
The Coca-Cola Company. We open up moments that refresh us all, by
creating value for our stakeholders and supporting the
socio-economic development of the communities in which we operate.
With a vision to be the leading 24/7 beverage partner, we offer
drinks for all occasions around the clock and work together with
our customers to serve 740 million consumers across a broad
geographic footprint of 29 countries. Our portfolio is one of the
strongest, broadest and most flexible in the beverage industry,
with consumer-leading beverage brands in the sparkling, adult
sparkling, juice, water, sport, energy, ready-to-drink tea, coffee,
and premium spirits categories. These include Coca-Cola, Coca-Cola
Zero Sugar, Fanta, Sprite, Schweppes, Kinley, Costa Coffee, Caffè
Vergnano, Valser, FuzeTea, Powerade, Cappy, Monster Energy,
Finlandia Vodka, The Macallan, Jack Daniel's and Grey Goose. We
foster an open and inclusive work environment amongst our 33,000
employees and believe that building a more positive environmental
impact is integral to our future growth. We rank among the top
sustainability performers in ESG benchmarks such as the Dow Jones
Sustainability Indices, CDP, MSCI ESG, FTSE4Good and ISS
ESG.
Coca-Cola HBC has a premium listing
on the London Stock Exchange (LSE: CCH) and is listed on the Athens
Exchange (ATHEX: EEE). For more information, please visit
https://www.coca-colahellenic.com.
Financial information in
this announcement is presented on the basis of
International Financial Reporting Standards
('IFRS')
Special Note Regarding the Information set out
herein
Unless otherwise indicated, the
condensed consolidated financial statements and the financial and
operating data or other information included herein relate to
Coca-Cola HBC AG and its subsidiaries ('Coca-Cola HBC' or the
'Company' or 'we' or the 'Group').
Forward-Looking Statements
This document contains
forward-looking statements that involve risks and uncertainties.
These statements may generally, but not always, be identified by
the use of words such as 'believe', 'outlook', 'guidance',
'intend', 'expect', 'anticipate', 'plan', 'target' and similar
expressions to identify forward-looking statements. All statements
other than statements of historical facts, including, among others,
statements regarding our future financial position and results, our
outlook for 2024 and future years, business strategy and the
effects of the global economic slowdown, the impact of the
sovereign debt crisis, currency volatility, our recent
acquisitions, and restructuring initiatives on our business and
financial condition, our future dealings with The Coca-Cola
Company, budgets, projected levels of consumption and production,
projected raw material and other costs, estimates of capital
expenditure, free cash flow, effective tax rates and plans and
objectives of management for future operations, are forward-looking
statements. By their nature, forward-looking statements involve
risk and uncertainty because they reflect our current expectations
and assumptions as to future events and circumstances that may not
prove accurate. Our actual results and events could differ
materially from those anticipated in the forward-looking statements
for many reasons, including the risks described in the 2022
Integrated Annual Report for Coca-Cola HBC AG and its
subsidiaries.
Although we believe that, as of
the date of this document, the expectations reflected in the
forward-looking statements are reasonable, we cannot assure you
that our future results, level of activity, performance or
achievements will meet these expectations. Moreover, neither we,
nor our directors, employees, advisors nor any other person assumes
responsibility for the accuracy and completeness of the
forward-looking statements. After the date of the condensed
consolidated financial statements included in this document, unless
we are required by law or the rules of the UK Financial Conduct
Authority to update these forward-looking statements, we will not
necessarily update any of these forward-looking statements to
conform them either to actual results or to changes in our
expectations.
Alternative Performance Measures
The Group uses certain Alternative
Performance Measures ('APMs') in making financial, operating and
planning decisions as well as in evaluating and reporting its
performance. These APMs provide additional insights and
understanding to the Group's underlying operating and financial
performance, financial condition and cash flow. The APMs should be
read in conjunction with and do not replace by any means the
directly reconcilable IFRS line items. For more details on APMs
please refer to 'Definitions and reconciliations of APMs'
section.
Group Financial Review
|
|
|
|
|
|
|
|
|
|
Income statement
|
Full
Year
|
|
2023
€
million
|
2022
€
million
|
% Change
Reported
|
% Change
Organic5
|
Volume (m unit cases)
|
2,835.5
|
2,711.8
|
4.6%
|
1.7%
|
Net sales revenue
|
10,184.0
|
9,198.4
|
10.7%
|
16.9%
|
Net sales revenue per unit case
(€)
|
3.59
|
3.39
|
5.9%
|
15.0%
|
Cost of goods sold
|
(6,626.6)
|
(6,054.2)
|
9.5%
|
|
Comparable cost of goods
sold5
|
(6,622.0)
|
(6,050.6)
|
9.4%
|
|
Gross profit
|
3,557.4
|
3,144.2
|
13.1%
|
|
Comparable gross
profit5
|
3,562.0
|
3,147.8
|
13.2%
|
|
Operating expenses (excluding
exceptional items
related to Russia-Ukraine
conflict)
|
(2,613.5)
|
(2,354.6)
|
11.0%
|
|
Exceptional items related to
Russia-Ukraine conflict
|
-
|
(127.4)
|
-100.0%
|
|
Operating expenses
|
(2,613.5)
|
(2,482.0)
|
5.3%
|
|
Comparable operating
expenses5
|
(2,487.9)
|
(2,259.7)
|
10.1%
|
|
Share of results of integral
equity method investments
|
9.7
|
41.6
|
-76.7%
|
|
Operating profit
(EBIT)6
|
953.6
|
703.8
|
35.5%
|
|
Comparable operating profit
(EBIT)5
|
1,083.8
|
929.7
|
16.6%
|
17.7%
|
Adjusted
EBITDA5
|
1,487.8
|
1,343.6
|
10.7%
|
|
Comparable adjusted
EBITDA5
|
1,506.1
|
1,371.5
|
9.8%
|
|
Finance costs, net
|
(48.3)
|
(82.7)
|
-41.6%
|
|
Share of results of non-integral
equity method investments
|
5.0
|
2.5
|
100.0%
|
|
Tax
|
(274.6)
|
(208.0)
|
32.0%
|
|
Comparable
tax5
|
(277.1)
|
(224.4)
|
23.5%
|
|
Net profit7
|
636.5
|
415.4
|
53.2%
|
|
Comparable net
profit5,7
|
764.2
|
624.9
|
22.3%
|
|
Basic earnings per share
(€)
|
1.730
|
1.134
|
52.6%
|
|
Comparable basic earnings per
share (€)5
|
2.078
|
1.706
|
21.8%
|
|
|
|
|
|
|
|
| |
5Refer to the
'Alternative Performance Measures' and
'Definitions and reconciliations of APMs'
sections.
6Refer to the condensed
consolidated income statement.
7Net Profit and comparable
net profit refer to net profit and comparable net profit
respectively after tax attributable to owners of the
parent.
Net sales revenue grew by 10.7% in
2023 compared to the prior year. These results were primarily
driven by pricing initiatives and the consolidation of Multon for
the first seven months of the year as well as mix improvements,
which were partially offset by adverse foreign currency movements
mainly in connection with the Nigerian Naira, the Russian Rouble
and the Egyptian Pound. On an organic basis, net sales revenue grew
by 16.9% during 2023, compared to the prior year.
Comparable and reported cost of
goods sold increased by 9.4% and 9.5% respectively in 2023 compared
to the prior year, due to input
cost inflation and the consolidation of
Multon for the first seven months of the year.
Comparable operating expenses
increased by 10.1% in 2023 compared to the prior year, mainly
driven by higher selling and administrative expenses. Operating
expenses increased by 5.3% in 2023, due to higher selling and
administrative expenses as well as the current-year impairment of
goodwill predominantly related to the
Group's operations in Egypt, which were
partially offset by the cycling of prior-year's exceptional items
related to Russia-Ukraine conflict and acquisition costs resulting
from the change in control of Multon.
Exceptional items related to
Russia-Ukraine conflict in the prior year consisted of net
impairment losses for property, plant and equipment, equity method
investments and goodwill, resulting from the Group's restructuring
initiatives in Russia and the deterioration of Russia's
macroeconomic environment.
Comparable operating profit grew
by 16.6% in 2023, compared to the prior year, primarily reflecting
the benefits from top-line growth resulting from pricing
initiatives and mix improvements, partially offset by adverse
foreign currency movements. Operating profit improved by 35.5% in
2023 compared to the prior year, due to top-line growth resulting
from pricing initiatives and mix improvements as well as the
cycling of prior-year's exceptional items related to Russia-Ukraine
conflict and acquisition costs resulting from the change in control
of Multon, partially offset by the current-year impairment of
goodwill and adverse foreign currency movements.
Net finance costs decreased by
€34.4 million during 2023 compared to the prior year, mainly driven
by higher finance income earned on the Group's cash, cash
equivalents and financial assets, partially offset by the increased
interest expense from the Green bond issued in September
2022.
On a comparable basis, the
effective tax rate was 26.6% for 2023 and 26.4% for 2022. On a
reported basis, the effective tax rate was 30.2% for 2023, impacted
by the current-year impairment of goodwill, and 33.4% for 2022,
respectively. The Group's effective tax rate varies depending on
the mix of taxable profits by territory, the non-deductibility of
certain expenses, non-taxable income and other one-off tax items
across its territories.
Comparable net profit grew by
22.3% compared to the prior year, due to higher operating
profitability and lower finance costs, partially offset by higher
taxes, while net profit grew by 53.2%, further cycling the impact
of prior-year's exceptional items related to Russia-Ukraine
conflict and acquisition costs resulting from the change in control
of Multon, partially offset by the current-year impairment of
goodwill
Balance Sheet
|
|
|
|
|
As at 31 December
|
|
2023
|
2022
|
Change
|
Assets
|
€ million
|
€ million
|
€ million
|
Total non-current assets
|
5,969.4
|
6,139.5
|
(170.1)
|
Total current assets
|
3,910.2
|
3,716.2
|
194.0
|
Total assets
|
9,879.6
|
9,855.7
|
23.9
|
Liabilities
|
|
|
|
Total current
liabilities
|
3,846.3
|
3,006.7
|
839.6
|
Total non-current
liabilities
|
2,846.6
|
3,463.4
|
(616.8)
|
Total liabilities
|
6,692.9
|
6,470.1
|
222.8
|
Equity
|
|
|
|
Owners of the parent
|
3,092.8
|
3,282.3
|
(189.5)
|
Non-controlling
interests
|
93.9
|
103.3
|
(9.4)
|
Total equity
|
3,186.7
|
3,385.6
|
(198.9)
|
Total equity and liabilities
|
9,879.6
|
9,855.7
|
23.9
|
|
|
|
|
Net current assets
|
63.9
|
709.5
|
(645.6)
|
Total non-current assets decreased
by €170.1 million during 2023, primarily driven by foreign currency
translation, which was partially offset by the Group's continued
investment in property, plant and equipment. Net current assets
decreased by €645.6 million, while non-current liabilities
decreased by €616.8 million during 2023 respectively, mainly due to
the reclassification of the current portion of borrowings from
non-current liabilities to current liabilities.
Cash flow
|
|
|
|
|
Full Year
|
|
2023
€ million
|
2022
€ million
|
%
Change
|
Net cash from operating
activities
|
1,386.7
|
1,234.6
|
12.3%
|
Capital
expenditure8
|
(674.9)
|
(589.5)
|
14.5%
|
Free cash
flow8
|
711.8
|
645.1
|
10.3%
|
8Refer to the 'Definitions
and reconciliations of APMs' section.
Net cash from operating activities
increased by 12.3% or €152.1 million during 2023, compared to the
prior year, mainly due to increased operating profitability
excluding non-cash charges, partially offset by higher taxes
paid.
Capital expenditure increased by
14.5% in 2023, compared to the prior year. In 2023, capital
expenditure amounted to €674.9 million of which 53% was related to
investment in production equipment and facilities and 17% to the
acquisition of marketing equipment. In 2022, capital expenditure
amounted to €589.5 million of which 53% was related to investment
in production equipment and facilities and 20% to the acquisition
of marketing equipment.
In 2023, free cash flow increased
by 10.3% or €66.7 million, compared to the prior-year period,
driven by the increased cash from operating activities, partially
offset by increased capital expenditure.
Definitions and reconciliations of Alternative Performance
Measures ("APMs")
1. Comparable APMs9
In discussing the performance of
the Group, "comparable" measures are used. In 2023, the Group
updated the definitions of items which are deducted from the
directly reconcilable IFRS measures to calculate comparable APMs,
to include impairment of goodwill and indefinite-lived intangible
assets. This update was performed to provide more relevant
information on the Group's ongoing operating and financial
performance, considering also reporting by its peer group and had
no impact on the comparative figures disclosed.
More specifically, comparable
measures are calculated by deducting from the directly reconcilable
IFRS measures the impact of the Group's restructuring costs, the
mark-to-market valuation of the commodity hedging activity, the
acquisition, integration and divestment-related costs, the
impairment of goodwill and indefinite-lived intangible assets, the
Russia-Ukraine conflict impact and certain other tax items, which
are collectively considered as items impacting comparability, due
to their nature. More specifically the following items are
considered as items that impact comparability:
1) Restructuring costs
Restructuring costs comprise costs
arising from significant changes in the way the Group conducts
business, such as significant supply chain infrastructure changes,
outsourcing of activities and centralisation of processes. These
costs are included within the income statement line 'Operating
expenses'; however, they are excluded from the comparable results
so that the users can obtain a better understanding of the Group's
operating and financial performance achieved from underlying
activity. Restructuring costs resulting from initiatives driven by
the Russia-Ukraine conflict are presented under the 'Russia-Ukraine
conflict impact' item, to provide users complete information on the
financial implications of the conflict.
2) Commodity hedging
The Group has entered into certain
commodity derivative transactions in order to hedge its exposure to
commodity price risk.
Although these transactions are
economic hedging activities that aim to manage our exposure to
sugar, aluminium, gas oil and plastics price volatility, hedge
accounting has not been applied in all cases. In addition, the
Group recognises certain derivatives embedded within commodity
purchase contracts that have been accounted for as stand-alone
derivatives and do not qualify for hedge accounting. The fair value
gains or losses on the derivatives and embedded derivatives are
immediately recognised in the income statement in the cost of goods
sold and operating expenses line items. The Group's comparable
results exclude the gains or losses resulting from the
mark-to-market valuation of these derivatives to which hedge
accounting has not been applied (primarily plastics) and embedded
derivatives. These gains or losses are reflected in the comparable
results in the period when the underlying transactions occur, to
match the profit or loss to that of the corresponding underlying
transactions. We believe this adjustment provides useful
information related to the impact of our economic risk management
activities.
3) Acquisition, integration and
divestment-related costs or gains
Acquisition costs comprise costs
incurred to effect a business combination such as finder's fees,
advisory, legal, accounting, valuation and other professional or
consulting fees as well as changes in the fair value of contingent
consideration recognised in the income statement. They also include
any gain from bargain purchase arising from business combinations,
as well as any gain or loss recognised in the income statement from
the remeasurement to fair value of previously held interests and
the reclassification to the income statement of items of other
comprehensive income resulting from step acquisitions. Integration
costs comprise direct incremental costs necessary for the acquiree
to operate within the Group. Divestment-related costs comprise
transaction expenses, including advisory, consulting, and other
professional fees to effect the disposal of a subsidiary or equity
method investment, any impairment losses or write-downs to fair
value less costs to sell recognised in the income statement upon
classification as held for sale and any relevant disposal gains or
losses or reversals of impairment recognised in the income
statement upon disposal. These costs or gains are included within
the income statement line 'Operating expenses', however, to the
extent that they relate to business combinations or divestments
that have been completed or are expected to be completed, they are
excluded from the comparable results so that the users can obtain a
better understanding of the Group's operating and financial
performance achieved from underlying activity.
4) Impairment of goodwill and indefinite-lived
intangible assets
Impairment losses recognised for
goodwill and indefinite-lived intangible assets as well as
reversals of impairment losses recognised for indefinite-lived
intangible assets, are included within the income statement line
'Operating expenses'; however are excluded from comparable results
so that the users can obtain a better understanding of the Group's
ongoing operating and financial performance.
5) Russia-Ukraine conflict
impact
As a result of the conflict
between Russia and Ukraine, the Group recognised net impairment
losses for property, plant and equipment, intangible assets and
equity method investments as well as restructuring costs, in
connection with the new business model in Russia and adverse
changes to the economic environment. The Group also recognised
incremental allowance for expected credit losses and write-offs of
inventory and property, plant and equipment resulting from the
Russia-Ukraine conflict. The aforementioned net impairment losses
are included within the income statement line 'Exceptional items
related to Russia-Ukraine conflict' so as to provide users with
enhanced visibility over these items considering their materiality,
while remaining costs are included within 'Operating expenses' and
'Cost of goods sold' lines of the income statement accordingly. Net
impairment losses and other costs directly attributable to the
Russia-Ukraine conflict are excluded from the comparable results so
that the users can obtain a better understanding of the Group's
operating and financial performance from underlying
activity.
6) Other tax items
Other tax items represent the tax
impact of (a) changes in income tax rates affecting the opening
balance of deferred tax arising during the year and (b) certain
tax-related matters selected based on their nature. Both (a) and
(b) are excluded from comparable after-tax results so that the
users can obtain a better understanding of the Group's underlying
financial performance.
9Comparable APMs refer to
comparable COGS, comparable gross profit, comparable operating
expenses, comparable EBIT, comparable EBIT margin, comparable
Adjusted EBITDA, comparable profit before tax, comparable tax,
comparable net profit and comparable EPS
The Group discloses comparable
performance measures to enable users to focus on the underlying
performance of the business on a basis
which is common to both periods for which
these measures are presented. The
reconciliation of comparable measures to the directly related
measures calculated in accordance with IFRS is as
follows:
Reconciliation of comparable financial
indicators (numbers in € million
except per share data)
|
Full Year 2023
|
|
COGS
|
Gross
Profit
|
Operating
expenses
|
EBIT
|
Adjusted
EBITDA
|
Profit before
tax
|
Tax
|
Net
Profit10
|
EPS
(€)
|
As
reported
|
(6,626.6)
|
3,557.4
|
(2,613.5)
|
953.6
|
1,487.8
|
910.3
|
(274.6)
|
636.5
|
1.730
|
Restructuring costs
|
-
|
-
|
8.3
|
8.3
|
6.9
|
8.3
|
(1.6)
|
6.7
|
0.018
|
Commodity hedging
|
4.6
|
4.6
|
-
|
4.6
|
4.6
|
4.6
|
(1.3)
|
3.3
|
0.009
|
Acquisition costs
|
-
|
-
|
6.3
|
6.3
|
6.3
|
6.3
|
-
|
6.3
|
0.017
|
Russia-Ukraine conflict
impact
|
-
|
-
|
0.5
|
0.5
|
0.5
|
0.5
|
(0.1)
|
0.4
|
0.001
|
Impairment of goodwill and
indefinite-lived intangible assets
|
-
|
-
|
110.5
|
110.5
|
-
|
110.5
|
-
|
110.5
|
0.301
|
Other tax items
|
-
|
-
|
-
|
-
|
-
|
-
|
0.5
|
0.5
|
0.002
|
Comparable
|
(6,622.0)
|
3,562.0
|
(2,487.9)
|
1,083.8
|
1,506.1
|
1,040.5
|
(277.1)
|
764.2
|
2.078
|
|
|
|
|
|
Full Year 2022
|
|
COGS
|
Gross
Profit
|
Operating
expenses
|
EBIT
|
Adjusted
EBITDA
|
Profit before
tax
|
Tax
|
Net
Profit10
|
EPS
(€)
|
As
reported
|
(6,054.2)
|
3,144.2
|
(2,482.0)
|
703.8
|
1,343.6
|
623.6
|
(208.0)
|
415.4
|
1.134
|
Restructuring costs
|
-
|
-
|
8.0
|
8.0
|
7.9
|
8.0
|
(1.7)
|
6.3
|
0.017
|
Commodity hedging
|
2.5
|
2.5
|
-
|
2.5
|
2.5
|
2.5
|
(0.5)
|
2.0
|
0.005
|
Acquisition and integration
costs
|
-
|
-
|
79.7
|
79.7
|
9.2
|
79.7
|
-
|
79.7
|
0.218
|
Russia-Ukraine conflict
impact
|
1.1
|
1.1
|
134.6
|
135.7
|
8.3
|
135.7
|
(13.8)
|
121.9
|
0.333
|
Other tax items
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.4)
|
(0.4)
|
(0.001)
|
Comparable
|
(6,050.6)
|
3,147.8
|
(2,259.7)
|
929.7
|
1,371.5
|
849.5
|
(224.4)
|
624.9
|
1.706
|
|
|
|
|
|
|
|
|
|
|
| |
10 Net Profit and comparable
net profit refer to net profit and comparable net profit
respectively after tax attributable to owners of the
parent.
Reconciliation of comparable EBIT per reportable
segment (numbers in €
million)
|
|
Full Year 2023
|
|
Established
|
Developing
|
Emerging
|
Consolidated
|
EBIT
|
379.2
|
152.6
|
421.8
|
953.6
|
Restructuring costs
|
0.9
|
1.1
|
6.3
|
8.3
|
Commodity hedging
|
(0.9)
|
(2.0)
|
7.5
|
4.6
|
Acquisition costs
|
1.9
|
1.0
|
3.4
|
6.3
|
Russia-Ukraine conflict impact
|
-
|
-
|
0.5
|
0.5
|
Impairment of goodwill and indefinite-lived
intangible assets
|
-
|
1.1
|
109.4
|
110.5
|
Comparable
EBIT
|
381.1
|
153.8
|
548.9
|
1,083.8
|
|
|
|
|
|
|
Full Year 2022
|
|
Established
|
Developing
|
Emerging
|
Consolidated
|
EBIT
|
310.4
|
113.1
|
280.3
|
703.8
|
Restructuring costs
|
(6.1)
|
(1.5)
|
15.6
|
8.0
|
Commodity hedging
|
2.5
|
3.5
|
(3.5)
|
2.5
|
Acquisition and integration costs
|
0.3
|
-
|
79.4
|
79.7
|
Russia-Ukraine conflict impact
|
-
|
-
|
135.7
|
135.7
|
Comparable
EBIT
|
307.1
|
115.1
|
507.5
|
929.7
|
|
|
|
|
|
|
| |
2. Organic APMs
Organic growth
Organic growth enables users to
focus on the operating performance of the business on a basis which
is not affected by changes in foreign currency exchange rates from
year to year or changes in the Group's scope of consolidation
('consolidation perimeter') i.e. acquisitions, divestments and
reorganisations resulting in equity method accounting. Thus,
organic growth is designed to assist users in better understanding
the Group's underlying performance.
More specifically, the following
items are adjusted from the Group's volume, net sales revenue and
comparable EBIT in order to derive organic growth
metrics:
(a) Foreign Currency impact
Foreign Currency impact in the
organic growth calculation reflects the adjustment of prior-year
net sales revenue and comparable EBIT metrics for the impact of
changes in exchange rates applicable to the current
year.
(b) Consolidation
perimeter impact
Current year volume, net sales
revenue and comparable EBIT metrics, are each adjusted for the
impact of changes in the consolidation perimeter. More specifically
adjustments are performed as follows:
i.
Acquisitions:
For current year acquisitions, the
results generated in the current year by the acquired entities are
not included in the organic growth calculation. For prior year
acquisitions, the results generated in the current year over the
period during which the acquired entities were not consolidated in
the prior year, are not included in the organic growth
calculation.
For current year step acquisitions
where the Group obtains control of a) entities over which it
previously held either joint control or significant influence and
which were accounted for under the equity method, or b) entities
which were carried at fair value either through profit or loss or
other comprehensive income, the results generated in the current
year by the relevant entities over the period during which these
entities are consolidated, are not included in the organic growth
calculation. For such step acquisitions of entities previously
accounted for under the equity method the share of results for the
respective period described above, is included in the organic
growth calculation of the current year. For such step acquisitions
of entities previously accounted for at fair value through profit
or loss any fair value gains or losses for the respective period
described above, are included in the organic growth calculation.
For such step acquisitions in the prior year, the results generated
in the current year by the relevant entities over the period during
which these entities were not consolidated in the prior year, are
not included in the organic growth calculation. However, the share
of results or gains or losses from fair value changes of the
respective entities, based on their accounting treatment prior to
the step acquisition, for the current-year period during which
these entities were not consolidated in the prior year are included
in the organic growth calculation.
ii.
Divestments:
For current year divestments, the
results generated in the prior year by the divested entities over
the period during which the divested entities are no longer
consolidated in the current year, are included in the current
year's results for the purpose of the organic growth calculation.
For prior-year divestments, the results generated in the prior year
by the divested entities over the period during which the divested
entities were consolidated, are included in the current year's
results for the purpose of the organic growth
calculation.
iii.
Reorganisations resulting in equity method accounting:
For current year reorganisations
where the Group maintains either joint control or significant
influence over the relevant entities so that they are reclassified
from subsidiaries or joint operations to joint ventures or
associates and accounted for under the equity method, the results
generated in the current year by the relevant entities over the
period during which these entities are no longer consolidated, are
included in the current year's results for the purpose of the
organic growth calculation. For such reorganisations in the
prior year, the results generated in the current year by the
relevant entities over the period during which these entities were
consolidated in the prior year, are included in the current year's
results for the purpose of the organic growth calculation. In
addition, the share of results in the current year of the relevant
entities, for the respective period as described above, is excluded
from the organic growth calculation for such
reorganisations.
The calculations of the organic
growth and the reconciliation to the most directly related measures
calculated in accordance with IFRS are presented in the below
tables. Organic growth (%) is calculated by dividing the amount in
the row titled 'Organic movement' by the amount in the associated
row titled '2022 reported' or, where presented, '2022 adjusted'.
Organic growth for comparable EBIT margin is the organic movement
expressed in basis points.
Reconciliation of organic measures
|
Full Year 2023
|
Volume (m unit
cases)
|
Established
|
Developing
|
Emerging
|
Group
|
2022 reported
|
643.9
|
478.8
|
1,589.1
|
2,711.8
|
Consolidation perimeter impact
|
0.3
|
0.4
|
78.0
|
78.7
|
Organic movement
|
-15.5
|
-8.2
|
68.7
|
45.0
|
2023
reported
|
628.7
|
471.0
|
1,735.8
|
2,835.5
|
|
|
|
|
|
Organic growth
(%)
|
-2.4%
|
-1.7%
|
4.3%
|
1.7%
|
|
Full Year 2023
|
Net sales revenue (€
m)
|
Established
|
Developing
|
Emerging
|
Group
|
2022 reported
|
2,974.1
|
1,719.7
|
4,504.6
|
9,198.4
|
Foreign currency impact
|
11.0
|
41.8
|
-816.7
|
-763.9
|
2022 adjusted
|
2,985.1
|
1,761.5
|
3,687.9
|
8,434.5
|
Consolidation perimeter impact
|
4.9
|
7.0
|
313.5
|
325.4
|
Organic movement
|
368.5
|
320.1
|
735.5
|
1,424.1
|
2023
reported
|
3,358.5
|
2,088.6
|
4,736.9
|
10,184.0
|
|
|
|
|
|
Organic growth
(%)
|
12.3%
|
18.2%
|
19.9%
|
16.9%
|
|
Full Year 2023
|
Net sales revenue
per unit case (€)11
|
Established
|
Developing
|
Emerging
|
Group
|
2022 reported
|
4.62
|
3.59
|
2.83
|
3.39
|
Foreign currency impact
|
0.02
|
0.09
|
-0.51
|
-0.28
|
2022 adjusted
|
4.64
|
3.68
|
2.32
|
3.11
|
Consolidation perimeter impact
|
0.01
|
0.01
|
0.06
|
0.02
|
Organic movement
|
0.70
|
0.74
|
0.35
|
0.47
|
2023
reported
|
5.34
|
4.43
|
2.73
|
3.59
|
|
|
|
|
|
Organic growth
(%)
|
15.1%
|
20.2%
|
15.0%
|
15.0%
|
|
Full Year 2023
|
Comparable EBIT (€
m)
|
Established
|
Developing
|
Emerging
|
Group
|
2022 reported
|
307.1
|
115.1
|
507.5
|
929.7
|
Foreign currency impact
|
2.1
|
3.9
|
-55.7
|
-49.7
|
2022 adjusted
|
309.2
|
119.0
|
451.8
|
880.0
|
Consolidation perimeter impact
|
0.8
|
2.8
|
44.3
|
47.9
|
Organic movement
|
71.1
|
32.0
|
52.8
|
155.9
|
2023
reported
|
381.1
|
153.8
|
548.9
|
1,083.8
|
|
|
|
|
|
Organic growth
(%)
|
23.0%
|
26.9%
|
11.7%
|
17.7%
|
|
Full Year 2023
|
Comparable EBIT
Margin (%)11
|
Established
|
Developing
|
Emerging
|
Group
|
2022 reported
|
10.3%
|
6.7%
|
11.3%
|
10.1%
|
Foreign currency impact
|
-
|
0.1%
|
1.0%
|
0.3%
|
2022 adjusted
|
10.4%
|
6.8%
|
12.3%
|
10.4%
|
Consolidation perimeter impact
|
-
|
0.1%
|
0.2%
|
0.1%
|
Organic movement
|
1.0%
|
0.5%
|
-0.8%
|
0.1%
|
2023
reported
|
11.3%
|
7.4%
|
11.6%
|
10.6%
|
|
|
|
|
|
Organic growth
(%)
|
100bps
|
50bps
|
-80bps
|
10bps
|
11 Certain differences in
calculations are due to rounding.
3. Other APMs
Adjusted EBITDA
Adjusted EBITDA is calculated by
adding back to operating profit the depreciation and net impairment
of property, plant and equipment, the amortisation and impairment
of intangible assets, the net impairment of equity method
investments, the employee share option and performance share costs
and items, if any, reported in line 'Other non-cash items' of the
condensed consolidated cash flow statement. Adjusted EBITDA is
intended to provide useful information to analyse the Group's
operating performance excluding the impact of operating non-cash
items as defined above. The Group also uses comparable Adjusted
EBITDA, which is calculated by deducting from Adjusted EBITDA the
impact of: the Group's restructuring costs, the acquisition,
integration and divestment-related costs, the mark-to-market
valuation of the commodity hedging activity and the impact from the
Russia-Ukraine conflict. Comparable Adjusted EBITDA is intended to
measure the level of financial leverage of the Group by comparing
comparable Adjusted EBITDA to Net debt.
Adjusted EBITDA and comparable
Adjusted EBITDA are not measures of profitability and liquidity
under IFRS and have limitations, some of which are as follows:
Adjusted EBITDA and comparable Adjusted EBITDA do not reflect our
cash expenditures, or future requirements, for capital expenditures
or contractual commitments; Adjusted EBITDA and comparable Adjusted
EBITDA do not reflect changes in, or cash requirements for, our
working capital needs; although depreciation and amortisation are
non-cash charges, the assets being depreciated and amortised will
often have to be replaced in the future, and Adjusted EBITDA and
comparable Adjusted EBITDA do not reflect any cash requirements for
such replacements. Because of these limitations, Adjusted EBITDA
and comparable Adjusted EBITDA should not be considered as measures
of discretionary cash available to us and should be used only as
supplementary APMs.
Free cash flow
Free cash flow is an APM used by
the Group and defined as cash generated by operating activities
after payments for purchases of property, plant and equipment net
of proceeds from sales of property, plant and equipment and
including principal repayments of lease obligations. Free cash flow
is intended to measure the cash generation from the Group's
business, based on operating activities, including the efficient
use of working capital and taking into account its net payments for
purchases of property, plant and equipment. The Group considers the purchase and disposal of
property, plant and equipment as ultimately non‑discretionary since
ongoing investment in plant, machinery, technology and marketing
equipment, including coolers, is required to support the day-to-day
operations and the Group's growth prospects. The Group presents
free cash flow because it believes the measure assists users of the
financial statements in understanding the Group's cash generating
performance as well as availability for interest payment, dividend
distribution and own retention. The free cash flow measure is used
by management for its own planning and reporting purposes since it
provides information on operating cash flows, working capital
changes and net capital expenditure that local managers are most
directly able to influence.
Free cash flow is not a measure of
cash generation under IFRS and has limitations, some of which are
as follows: free cash flow does not represent the Group's residual
cash flow available for discretionary expenditures since the Group
has debt payment obligations that are not deducted from the
measure; free cash flow does not deduct cash flows used by the
Group in other investing and financing activities and free cash
flow does not deduct certain items settled in cash. Other companies
in the industry in which the Group operates may calculate free cash
flow differently, limiting its usefulness as a comparative
measure.
Capital expenditure
Capital expenditure is defined as
payments for purchases of property, plant and equipment plus
principal repayments of lease obligations less proceeds from sales
of property, plant and equipment. The Group uses capital
expenditure as an APM to ensure that the cash spending is in line
with its overall strategy for the use of cash.
The following table illustrates
how Adjusted EBITDA, Free Cash Flow and Capital Expenditure are
calculated:
|
Full Year
|
Full Year
|
|
2023
|
2022
|
|
€ million
|
€ million
|
Operating profit
(EBIT)
|
953.6
|
703.8
|
Depreciation and impairment of property, plant and
equipment,
including right-of-use assets
|
399.9
|
484.9
|
Amortisation and impairment of intangible assets
|
113.9
|
15.1
|
Employee performance shares
|
20.4
|
16.5
|
Impairment of equity method investments
|
-
|
52.8
|
Other non-cash items included in operating
profit12
|
-
|
70.5
|
Adjusted
EBITDA
|
1,487.8
|
1,343.6
|
Share of results of integral equity method
investments
|
(9.7)
|
(41.6)
|
(Gain) / loss on disposals of non-current assets
|
(1.3)
|
1.5
|
Cash generated from working capital movements
|
135.7
|
126.8
|
Tax paid
|
(225.8)
|
(195.7)
|
Net cash from
operating activities
|
1,386.7
|
1,234.6
|
Payments for purchases of property, plant and
equipment13
|
(623.0)
|
(531.8)
|
Principal repayments of lease obligations
|
(59.1)
|
(65.2)
|
Proceeds from sales of property, plant and
equipment
|
7.2
|
7.5
|
Capital
expenditure
|
(674.9)
|
(589.5)
|
Free cash
flow
|
711.8
|
645.1
|
12Other non-cash items
included in operating profit for 2022 relate to the net loss
recognised in the income statement from the remeasurement to fair
value of the previously held interest, the reclassification to the
income statement of items of other comprehensive income and the
gain from bargain purchase arising due to the change in control of
Multon Z.A.O. group of companies ('Multon'), For more details,
refer to Note 24 of the Group's 2022 Integrated Annual
Report.
13Payments for purchases of
property, plant and equipment for 2023 include €12.3 million (2022:
€8.4 million) relating to repayment of borrowings undertaken to
finance the purchase of production equipment by the Group's
subsidiary in Nigeria, classified as 'Repayments of borrowings' in
the condensed consolidated cash flow statement.
Net
debt
Net debt is an APM used by
management to evaluate the Group's capital structure and leverage.
Net debt is defined as current borrowings plus non-current
borrowings less cash and cash equivalents and financial assets
(time deposits and money market funds), as illustrated
below:
|
As at 31 December
|
|
2023
|
2022
|
|
€ million
|
€ million
|
Current borrowings
|
948.1
|
337.0
|
Non-current borrowings
|
2,476.4
|
3,082.9
|
Other financial assets
|
(568.6)
|
(1,026.7)
|
Cash and cash equivalents
|
(1,260.6)
|
(719.9)
|
Net debt
|
1,595.3
|
1,673.3
|
Return on invested capital ('ROIC')
ROIC is an APM used by management
to assess the return obtained from the Group's asset base and is
defined as the percentage of comparable net profit excluding net
finance costs divided by the five-quarter average capital invested
in the business ('capital employed'). Capital employed is defined
as the average net debt and shareholders' equity attributable to
the owners of the parent, as illustrated below. The Group presents
ROIC because it believes the measure assists users of the financial
statements in understanding the Group's capital
efficiency.
|
Year ended
|
|
31 December 2023
€ million
|
31 December 2022
€ million
|
Comparable operating
profit
|
1,083.8
|
929.7
|
Plus: Share of results of non-integral equity method
investments
|
5.0
|
2.5
|
Less: Comparable tax
|
(277.1)
|
(224.4)
|
Tax shield14
|
(13.0)
|
(21.5)
|
Comparable net
profit excl. finance costs, net (a)
|
798.7
|
686.3
|
|
|
|
Average net debt16
|
1,676.1
|
1,575.2
|
Plus: Average equity attributable to owners of the
parent16
|
3,194.2
|
3,300.4
|
Capital employed
(b)
|
4,870.3
|
4,875.6
|
|
|
|
Return on invested
capital (a/b)
|
16.4%
|
14.1%
|
14Tax shield is calculated as
comparable effective tax rate times finance costs, net as
illustrated below:
|
Year ended
|
|
31 December
2023
€ million
|
31 December
2022
€ million
|
Finance costs, net
|
48.3
|
82.7
|
Comparable effective tax rate
(%)15
|
27%
|
26%
|
Tax shield
|
13.0
|
21.5
|
|
|
|
15Comparable effective tax
rate is calculated as comparable tax divided by comparable profit
before tax, as illustrated below:
|
Year ended
|
|
31 December
2023
€ million
|
31 December
2022
€ million
|
Comparable tax
|
277.1
|
224.4
|
Comparable profit before
tax
|
1,040.5
|
849.5
|
Comparable effective tax rate (%)
|
27%
|
26%
|
|
|
|
16Five-quarter average net
debt and equity attributable to owners of the parent are calculated
as presented below:
2023
|
Q4
2022
€
million
|
Q1
2023
€
million
|
Q2
2023
€
million
|
Q3
2023
€
million
|
Q4
2023
€
million
|
Average
€
million*
|
Net debt
|
1,673.3
|
1,827.2
|
1,779.4
|
1,504.9
|
1,595.3
|
1,676.1
|
Equity attributable to owners of
the parent
|
3,282.3
|
3,255.2
|
3,005.0
|
3,335.6
|
3,092.8
|
3,194.2
|
|
|
|
|
|
|
|
2022
|
Q4
2021
€
million
|
Q1
2022
€
million
|
Q2
2022
€
million
|
Q3
2022
€
million
|
Q4
2022
€
million
|
Average
€
million*
|
Net debt
|
1,319.7
|
1,881.9
|
1,584.1
|
1,417.2
|
1,673.3
|
1,575.2
|
Equity attributable to owners of
the parent
|
3,114.5
|
3,203.5
|
3,275.7
|
3,626.1
|
3,282.3
|
3,300.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
*Certain differences in
calculations are due to rounding.
Condensed consolidated financial
statements for the six months and the year ended
31 December 2023
Condensed consolidated
income statement (unaudited)
|
|
Six months ended
31 December
|
|
Note
|
2023
|
|
2022
|
€ million
|
€ million
|
Net sales
revenue
|
3
|
5,162.5
|
|
4,988.5
|
Cost of
goods sold
|
|
(3,366.7)
|
|
(3,294.5)
|
Gross profit
|
|
1,795.8
|
|
1,694.0
|
|
|
|
|
|
Operating
expenses (excluding exceptional items related to Russia-Ukraine
conflict)
|
|
(1,405.1)
|
|
(1,339.3)
|
Exceptional items related to Russia-Ukraine
conflict
|
|
-
|
|
56.2
|
Operating expenses
|
|
(1,405.1)
|
|
(1,283.1)
|
Share of
results of integral equity method investments
|
|
5.6
|
|
17.2
|
Operating profit
|
3
|
396.3
|
|
428.1
|
|
|
|
|
|
Finance
costs, net
|
5
|
(16.9)
|
|
(40.0)
|
Share of
results of non-integral equity method investments
|
|
3.3
|
|
1.1
|
Profit before tax
|
|
382.7
|
|
389.2
|
|
|
|
|
|
Tax
|
6
|
(132.1)
|
|
(126.0)
|
Profit after tax
|
|
250.6
|
|
263.2
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
Owners of
the parent
|
|
250.8
|
|
262.5
|
Non-controlling interests
|
|
(0.2)
|
|
0.7
|
|
|
250.6
|
|
263.2
|
|
|
|
|
|
Basic and
diluted earnings per share (€)
|
7
|
0.68
|
|
0.72
|
Condensed consolidated
statement of comprehensive income (unaudited)
|
Six months
ended
31
December
|
|
2023
|
2022
|
€ million
|
€
million
|
Profit after tax
|
250.6
|
263.2
|
|
|
|
Other comprehensive income:
|
|
|
Items that may be subsequently reclassified to income
statement:
|
|
|
Cost of hedging
|
(4.4)
|
(3.2)
|
Net gain of cash flow
hedges
|
1.3
|
10.1
|
Foreign currency translation
losses
|
(91.6)
|
(388.5)
|
Share of other comprehensive loss
of equity method investments
|
(3.9)
|
(10.1)
|
Reclassification of share of other
comprehensive income of equity method investments to income
statement arising from business combination
|
-
|
145.2
|
Income tax relating to items that
may be subsequently reclassified to income statement
|
(0.5)
|
-
|
|
(99.1)
|
(246.5)
|
Items that will not be subsequently reclassified to income
statement:
|
|
|
Actuarial losses
|
(19.7)
|
(13.2)
|
Income tax relating to items that
will not be subsequently reclassified to income
statement
|
2.7
|
2.9
|
|
(17.0)
|
(10.3)
|
Other comprehensive loss for the period, net of
tax
|
(116.1)
|
(256.8)
|
Total comprehensive income for the period
|
134.5
|
6.4
|
|
|
|
Total comprehensive income attributable to:
|
|
|
Owners of the parent
|
136.2
|
12.5
|
Non-controlling
interests
|
(1.7)
|
(6.1)
|
|
134.5
|
6.4
|
Condensed consolidated
income statement (unaudited)
|
|
Year ended 31
December
|
|
Note
|
2023
|
|
2022
|
€ million
|
€ million
|
Net sales
revenue
|
3
|
10,184.0
|
|
9,198.4
|
Cost of
goods sold
|
|
(6,626.6)
|
|
(6,054.2)
|
Gross profit
|
|
3,557.4
|
|
3,144.2
|
|
|
|
|
|
Operating
expenses (excluding exceptional items related to Russia-Ukraine
conflict)
|
|
(2,613.5)
|
|
(2,354.6)
|
Exceptional items related to Russia-Ukraine
conflict
|
|
-
|
|
(127.4)
|
Operating expenses
|
|
(2,613.5)
|
|
(2,482.0)
|
Share of
results of integral equity method investments
|
|
9.7
|
|
41.6
|
Operating profit
|
3
|
953.6
|
|
703.8
|
|
|
|
|
|
Finance
costs, net
|
5
|
(48.3)
|
|
(82.7)
|
Share of
results of non-integral equity method investments
|
|
5.0
|
|
2.5
|
Profit before tax
|
|
910.3
|
|
623.6
|
|
|
|
|
|
Tax
|
6
|
(274.6)
|
|
(208.0)
|
Profit after tax
|
|
635.7
|
|
415.6
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
Owners of
the parent
|
|
636.5
|
|
415.4
|
Non-controlling interests
|
|
(0.8)
|
|
0.2
|
|
|
635.7
|
|
415.6
|
|
|
|
|
|
Basic and
diluted earnings per share (€)
|
7
|
1.73
|
|
1.13
|
Condensed consolidated
statement of comprehensive income (unaudited)
|
Year ended 31
December
|
|
2023
|
2022
|
€ million
|
€
million
|
Profit after tax
|
635.7
|
415.6
|
|
|
|
Other comprehensive income:
|
|
|
Items that may be subsequently reclassified to income
statement:
|
|
|
|
|
|
Cost of hedging
|
(7.1)
|
(3.5)
|
Net gain of cash flow
hedges
|
19.7
|
34.6
|
Foreign currency translation
losses
|
(484.6)
|
(252.6)
|
Share of other comprehensive
(loss) / income of equity method investments
|
(11.7)
|
34.2
|
Reclassification of share of other
comprehensive income of equity method investments to income
statement arising from business combination
|
-
|
145.2
|
Income tax relating to items that
may be subsequently reclassified to income statement
|
(3.0)
|
(3.9)
|
|
(486.7)
|
(46.0)
|
Items that will not be subsequently reclassified to income
statement:
|
|
|
Valuation gain / (loss) on equity
investments at fair value through other comprehensive
income
|
0.4
|
(0.1)
|
Actuarial (losses) /
gains
|
(16.4)
|
26.0
|
Income tax relating to items that
will not be subsequently reclassified to income
statement
|
1.9
|
1.8
|
|
(14.1)
|
27.7
|
Other comprehensive loss for the year, net of
tax
|
(500.8)
|
(18.3)
|
Total comprehensive income for the year
|
134.9
|
397.3
|
|
|
|
Total comprehensive income attributable to:
|
|
|
Owners of the parent
|
141.3
|
406.1
|
Non-controlling
interests
|
(6.4)
|
(8.8)
|
|
134.9
|
397.3
|
Condensed consolidated
balance sheet (unaudited)
|
|
As at 31
December
|
|
|
|
|
2023
|
2022
|
|
Note
|
€ million
|
€
million
|
|
Assets
|
|
|
|
|
Intangible assets
|
8
|
2,568.6
|
2,542.5
|
|
Property, plant and
equipment
|
8
|
3,057.1
|
3,266.3
|
|
Other non-current assets
|
|
343.7
|
330.7
|
|
Total non-current assets
|
|
5,969.4
|
6,139.5
|
|
|
|
|
|
|
Inventories
|
|
773.3
|
770.0
|
|
Trade, other receivables and
assets
|
|
1,205.1
|
1,162.4
|
|
Other financial assets
|
10
|
667.9
|
1,063.8
|
|
Cash and cash
equivalents
|
10
|
1,260.6
|
719.9
|
|
|
|
3,906.9
|
3,716.1
|
|
Assets classified as held for
sale
|
|
3.3
|
0.1
|
|
Total current assets
|
|
3,910.2
|
3,716.2
|
|
Total assets
|
|
9,879.6
|
9,855.7
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Borrowings
|
10
|
948.1
|
337.0
|
|
Other current
liabilities
|
|
2,898.2
|
2,669.7
|
|
Total current liabilities
|
|
3,846.3
|
3,006.7
|
|
|
|
|
|
|
Borrowings
|
10
|
2,476.4
|
3,082.9
|
|
Other non-current
liabilities
|
|
370.2
|
380.5
|
|
Total non-current liabilities
|
|
2,846.6
|
3,463.4
|
|
Total liabilities
|
|
6,692.9
|
6,470.1
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Owners of the parent
|
|
3,092.8
|
3,282.3
|
|
Non-controlling
interests
|
|
93.9
|
103.3
|
|
Total equity
|
|
3,186.7
|
3,385.6
|
|
Total equity and liabilities
|
|
9,879.6
|
9,855.7
|
|
Condensed consolidated
statement of changes in equity (unaudited)
|
Attributable to owners of the parent
|
|
|
|
|
Share
capital
€
million
|
Share
premium
€
million
|
Group
reorganisation reserve
€
million
|
Treasury
shares
€
million
|
Exchange
equalisation reserve
€
million
|
Other
reserves
€
million
|
Retained
earnings
€
million
|
Total
€ million
|
Non-controlling interests
€
million
|
Total
equity
€ million
|
|
|
|
Balance as at 1 January 2022
|
2,022.3
|
3,097.3
|
(6,472.1)
|
(146.6)
|
(1,154.0)
|
310.2
|
5,457.4
|
3,114.5
|
2.6
|
3,117.1
|
|
Shares issued to employees
exercising stock options
(Note 11)
|
2.0
|
2.7
|
-
|
-
|
-
|
-
|
-
|
4.7
|
-
|
4.7
|
|
Share-based
compensation:
|
|
|
|
|
|
|
|
|
|
|
|
Performance shares
|
-
|
-
|
-
|
-
|
-
|
16.6
|
-
|
16.6
|
-
|
16.6
|
|
Movement in shares held
for
equity compensation
plan
|
-
|
-
|
-
|
-
|
-
|
1.2
|
-
|
1.2
|
-
|
1.2
|
|
Appropriation of
reserves
(Note 11)
|
-
|
-
|
-
|
15.4
|
-
|
(21.1)
|
5.7
|
-
|
-
|
-
|
|
Non-controlling interests on
business combinations
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
259.6
|
259.6
|
|
Purchase of shares held by
non-controlling interests
(Note 14)
|
-
|
-
|
-
|
-
|
-
|
-
|
40.9
|
40.9
|
(149.8)
|
(108.9)
|
|
Dividends (Note 13)
|
-
|
(262.6)
|
-
|
-
|
-
|
-
|
2.4
|
(260.2)
|
(0.3)
|
(260.5)
|
|
Transfer of cash flow hedge
reserve, including cost of
hedging to inventories, net
of
tax 1
|
-
|
-
|
-
|
-
|
-
|
(41.5)
|
-
|
(41.5)
|
-
|
(41.5)
|
|
|
2,024.3
|
2,837.4
|
(6,472.1)
|
(131.2)
|
(1,154.0)
|
265.4
|
5,506.4
|
2,876.2
|
112.1
|
2,988.3
|
|
Profit for the year, net of
tax
|
-
|
-
|
-
|
-
|
-
|
-
|
415.4
|
415.4
|
0.2
|
415.6
|
|
Other comprehensive loss for the
year, net of tax
|
-
|
-
|
-
|
-
|
(64.2)
|
27.1
|
27.8
|
(9.3)
|
(9.0)
|
(18.3)
|
|
Total comprehensive income for the
year, net of tax2
|
-
|
-
|
-
|
-
|
(64.2)
|
27.1
|
443.2
|
406.1
|
(8.8)
|
397.3
|
|
Balance as at 31 December 2022
|
2,024.3
|
2,837.4
|
(6,472.1)
|
(131.2)
|
(1,218.2)
|
292.5
|
5,949.6
|
3,282.3
|
103.3
|
3,385.6
|
|
1The amount included in
other reserves of €41.5 million represents the cash flow hedge
reserve, including cost of hedging, transferred to inventories of
€51.4 million gain, and the deferred tax expense thereof amounting
to €9.9 million.
2The amount included in the
exchange equalisation reserve of €64.2 million loss for 2022
represents the exchange loss attributable to owners of the parent,
mainly related to the Egyptian Pound, including €34.8 million gain
relating to the share of other comprehensive income of equity
method investments and €144.6 million gain relating to
reclassification of share of other comprehensive income of equity
method investments to the income statement arising from business
combination.
The amount of other comprehensive income, net of tax included
in other reserves of €27.1 million gain for 2022 consists of cash
flow hedges gain of €31.1 million, share of other comprehensive
income of equity method investments of €0.6 million loss, valuation
losses of €0.1 million on equity investments at fair value through
other comprehensive income, €0.6 million gain relating to
reclassification of share of other comprehensive income of equity
method investments to the income statement arising from business
combination, and the deferred tax expense thereof amounting to €3.9
million.
The amount of €443.2 million gain attributable to owners of
the parent for 2022 comprises profit for the year, net of tax of
€415.4 million, actuarial gains of €26.0 million and the deferred
tax income thereof amounting to €1.8 million.
The amount of €8.8 million losses included in non-controlling
interests for 2022, represents the exchange loss attributable to
non-controlling interests of €9.0 million, and the share of
non-controlling interests in profit for the year, net of tax of
€0.2 million.
Condensed consolidated
statement of changes in equity (unaudited)
|
Attributable to owners of the parent
|
|
|
|
|
Share
capital
€
million
|
Share
premium
€
million
|
Group
reorganisation reserve
€
million
|
Treasury
shares
€
million
|
Exchange
equalisation reserve
€
million
|
Other
reserves
€
million
|
Retained
earnings
€
million
|
Total
€ million
|
Non-controlling interests
€
million
|
Total
equity
€ million
|
|
|
|
Balance as at 1 January 2023
|
2,024.3
|
2,837.4
|
(6,472.1)
|
(131.2)
|
(1,218.2)
|
292.5
|
5,949.6
|
3,282.3
|
103.3
|
3,385.6
|
|
Shares issued to employees
exercising stock options (Note
11)
|
6.0
|
8.2
|
-
|
-
|
-
|
-
|
-
|
14.2
|
-
|
14.2
|
|
Share-based
compensation:
|
|
|
|
|
|
|
|
|
|
|
|
Performance shares
|
-
|
-
|
-
|
-
|
-
|
20.4
|
-
|
20.4
|
-
|
20.4
|
|
Movement in shares held for
equity
compensation plan
|
-
|
-
|
-
|
-
|
-
|
0.2
|
-
|
0.2
|
-
|
0.2
|
|
Appropriation of reserves
(Note 11)
|
-
|
-
|
-
|
29.7
|
-
|
(25.0)
|
(4.7)
|
-
|
-
|
-
|
|
Purchase of shares held by
non-controlling interests (Note
14)
|
-
|
-
|
-
|
-
|
-
|
-
|
(9.9)
|
(9.9)
|
(2.7)
|
(12.6)
|
|
Acquisition of treasury
shares
(Note 11)
|
-
|
-
|
-
|
(42.6)
|
-
|
-
|
-
|
(42.6)
|
-
|
(42.6)
|
|
Dividends (Note 13)
|
-
|
(289.9)
|
-
|
-
|
-
|
-
|
2.7
|
(287.2)
|
(0.3)
|
(287.5)
|
|
Transfer of cash flow hedge
reserve, including cost of hedging to
inventories, net of
tax3
|
-
|
-
|
-
|
-
|
-
|
(25.9)
|
-
|
(25.9)
|
-
|
(25.9)
|
|
|
2,030.3
|
2,555.7
|
(6,472.1)
|
(144.1)
|
(1,218.2)
|
262.2
|
5,937.7
|
2,951.5
|
100.3
|
3,051.8
|
|
Profit for the year, net of
tax
|
-
|
-
|
-
|
-
|
-
|
-
|
636.5
|
636.5
|
(0.8)
|
635.7
|
|
Other comprehensive loss
for the year, net of tax
|
-
|
-
|
-
|
-
|
(490.7)
|
9.9
|
(14.4)
|
(495.2)
|
(5.6)
|
(500.8)
|
|
Total comprehensive income
for the year, net of tax4
|
-
|
-
|
-
|
-
|
(490.7)
|
9.9
|
622.1
|
141.3
|
(6.4)
|
134.9
|
|
Balance as at 31 December 2023
|
2,030.3
|
2,555.7
|
(6,472.1)
|
(144.1)
|
(1,708.9)
|
272.1
|
6,559.8
|
3,092.8
|
93.9
|
3,186.7
|
|
3The amount included in
other reserves of €25.9 million represents the cash flow hedge
reserve, including cost of hedging, transferred to inventories of
€30.8 million gain, and the deferred tax expense thereof amounting
to €4.9 million.
4The amount included in the
exchange equalisation reserve of €490.7 million loss for 2023
represents the exchange loss attributable to owners of the parent,
primarily related to the Nigerian Naira, the Russian Rouble and the
Egyptian Pound, including €11.7 million loss relating to the share
of other comprehensive income of equity method
investments.
The amount of other comprehensive income, net of tax included
in other reserves of €9.9 million gain for 2023 consists of cash
flow hedges gain of €12.6 million, valuation gain of €0.4 million
on equity investments at fair value through other comprehensive
income and the deferred tax expense thereof amounting to €3.1
million.
The amount of €622.1 million gain attributable to owners of
the parent for 2023 comprises profit for the year, net of tax of
€636.5 million, actuarial losses of €16.4 million and the deferred
tax income thereof amounting to €2.0 million.
The amount of €6.4 million losses included in non-controlling
interests for 2023, represents the exchange loss attributable to
the non-controlling interests of €5.6 million, and the share of
non-controlling interests in profit for the year, net of tax
amounting to €0.8 million loss.
Condensed consolidated cash
flow statement (unaudited)
|
|
Year ended 31
December
|
|
Note
|
2023
|
|
2022
|
€ million
|
€
million
|
Operating activities
|
|
|
|
|
Profit after tax for the
year
|
|
635.7
|
|
415.6
|
Finance costs, net
|
5
|
48.3
|
|
82.7
|
Share of results of non-integral
equity method investments
|
|
(5.0)
|
|
(2.5)
|
Tax charged to the income
statement
|
|
274.6
|
|
208.0
|
Depreciation and impairment of
property, plant and equipment, including right-of-use
assets
|
|
399.9
|
|
484.9
|
Employee performance
shares
|
|
20.4
|
|
16.5
|
Amortisation and impairment of
intangible assets
|
8
|
113.9
|
|
15.1
|
Impairment of equity method
investments
|
|
-
|
|
52.8
|
Other non-cash items
|
|
-
|
|
70.5
|
|
|
1,487.8
|
|
1,343.6
|
Share of results of integral
equity-method investments
|
|
(9.7)
|
|
(41.6)
|
(Gain) / loss on disposals of
non-current assets
|
|
(1.3)
|
|
1.5
|
Increase in inventories
|
|
(142.6)
|
|
(241.1)
|
Increase in trade and other
receivables
|
|
(212.7)
|
|
(104.7)
|
Increase in trade and other
payables
|
|
491.0
|
|
472.6
|
Tax paid
|
|
(225.8)
|
|
(195.7)
|
Net cash inflow from operating activities
|
|
1,386.7
|
|
1,234.6
|
Investing activities
|
|
|
|
|
Payments for purchases of property,
plant and equipment
|
|
(610.7)
|
|
(523.4)
|
Proceeds from sales of property,
plant and equipment
|
|
7.2
|
|
7.5
|
Payment for integral equity-method
investment
|
15
|
-
|
|
(4.0)
|
Receipts from integral
equity-method investments
|
15
|
6.7
|
|
9.7
|
Payments for non-integral equity
method investments
|
|
-
|
|
(6.5)
|
Receipts from non-integral
equity-method investments
|
15
|
7.0
|
|
1.8
|
Net proceeds from / (payments for)
investments in financial assets at amortised cost
|
|
473.5
|
|
(333.4)
|
Net proceeds from investments in
financial assets at fair value through profit or loss
|
|
-
|
|
142.6
|
Payments for investments in
financial assets at fair value through other comprehensive
income
|
|
(5.9)
|
|
-
|
Payment for business combination,
net of cash acquired
|
14
|
(180.4)
|
|
(399.2)
|
Proceeds from settlement of
derivatives relating to
business combination
|
14
|
-
|
|
13.0
|
Loans to related parties
|
|
(4.7)
|
|
(0.4)
|
Repayments of loans by related
parties
|
|
0.5
|
|
2.0
|
Interest received
|
|
38.0
|
|
7.2
|
Net cash outflow from investing activities
|
|
(268.8)
|
|
(1,083.1)
|
Financing activities
|
|
|
|
|
Proceeds from shares issued to
employees, exercising stock options
|
11
|
14.2
|
|
4.7
|
Purchase of shares held by
non-controlling interests
|
14
|
(12.6)
|
|
(108.9)
|
Acquisition of treasury
shares
|
11
|
(42.6)
|
|
-
|
Proceeds from borrowings
|
|
136.4
|
|
650.0
|
Repayments of borrowings
|
|
(89.7)
|
|
(358.6)
|
Principal repayments of lease
obligations
|
|
(59.1)
|
|
(65.2)
|
Proceeds from settlement of
derivatives regarding financing activities
|
|
4.6
|
|
0.1
|
Interest paid
|
|
(76.2)
|
|
(60.4)
|
Dividends paid to owners of the
parent
|
|
(287.2)
|
|
(260.2)
|
Dividends paid to non-controlling
interests
|
|
(0.2)
|
|
(0.2)
|
Net cash outflow from financing activities
|
|
(412.4)
|
|
(198.7)
|
Net increase / (decrease) in cash and cash
equivalents
|
|
705.5
|
|
(47.2)
|
Movement in cash and cash equivalents
|
|
|
|
|
Cash and cash equivalents at 1
January
|
|
719.9
|
|
782.8
|
Net increase / (decrease) in cash
and cash equivalents
|
|
705.5
|
|
(47.2)
|
Effect of changes in exchange
rates
|
|
(164.8)
|
|
(15.7)
|
Cash and cash equivalents at 31 December
|
|
1,260.6
|
|
719.9
|
The
accompanying notes form an integral part of these condensed
consolidated financial statements
Selected explanatory notes
to the condensed consolidated financial statements
(unaudited)
1. Basis of preparation and
accounting policies
Basis of preparation
These condensed consolidated
financial statements are prepared in accordance with International
Accounting Standard ('IAS') 34, 'Interim Financial Reporting', as
adopted by the European Union ('EU'), and the Disclosure Guidance
and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. These condensed consolidated financial
statements do not include all the information and disclosures
required in the annual financial statements and should be read in
conjunction with the Group's annual consolidated financial
statements for the year ended 31 December 2022.
Going concern
As part of the consideration of
whether to adopt the going concern basis in preparing the condensed
consolidated financial statements, management has considered the
Group's financial performance in the year and overall financial
position, as well as a quantitative viability exercise, including
the performance of various stress tests that consider the Group's
principal risks, including those relating to climate change, and
confirms the Group's ability to generate cash in 12 months from the
date of approval of the condensed consolidated financial statements
and beyond. Management has also considered the geopolitical events
involving Russia and Ukraine as well as the tensions in the Middle
East and no impact has been identified on the Group's ability to
continue as a going concern. Therefore, it is deemed appropriate
that the Group continues to adopt the going concern basis of
accounting for the preparation of the condensed consolidated
financial statements.
Accounting policies
The accounting policies used in
the preparation of the condensed consolidated financial statements
of Coca-Cola HBC AG ('Coca-Cola HBC', the 'Company' or the 'Group')
are consistent with those used in the 2022 annual consolidated
financial statements, except for the adoption of applicable
standards and amendments to accounting standards effective as of 1
January 2023. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet
effective.
Amended and new standards adopted by the
Group
The below standard and amendments
to standards became applicable as of 1 January 2023 and were
adopted by the Group. The adoption of these amendments and new
standard did not have a material impact on the Group's condensed
consolidated financial statements.
Amendments to IAS 1 and IFRS Practice Statement 2 -
Disclosure of Accounting policies: These amendments provide guidance and examples to help
entities apply materiality judgements to accounting policy
disclosures. The amendments aim to help entities provide accounting
policy disclosures that are more useful by replacing the
requirement for entities to disclose their 'significant' accounting
policies with a requirement to disclose their 'material' accounting
policies and adding guidance on how entities apply the concept of
materiality in making decisions about accounting policy
disclosures.
Amendments to IAS 8 - Definition of Accounting
Estimates: These amendments clarify
the distinction between changes in accounting estimates and changes
in accounting policies and the correction of errors. Also, they
clarify how entities use measurement techniques and inputs to
develop accounting estimates.
Amendment to IAS 12 - International tax reform - pillar two
model rules: These amendments give
companies temporary relief from recognising and disclosing deferred
tax assets and liabilities related to Pillar Two income taxes. The
amendments clarify that IAS 12 applies to income taxes arising from
tax law enacted or substantively enacted to implement the Pillar
Two Model Rules published by the Organization for Economic
Cooperation and Development ('OECD'), including tax law that
implements qualified domestic minimum top-up taxes.
An entity is required to separately disclose its
current tax expense (income) related to Pillar Two income taxes, in
the periods when the legislation is effective. The amendments
require, for periods in which Pillar Two legislation is
(substantively) enacted but not yet effective, disclosure of known
or reasonably estimable information that helps users of financial
statements understand the entity's exposure arising from Pillar Two
income taxes. To comply with these requirements, an entity is
required to disclose qualitative and quantitative information about
its exposure to Pillar Two income taxes at the end of the reporting
period.
Amendments to IAS 12 - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction:
These amendments narrow the scope of the initial
recognition exception, so that it no longer applies to transactions
that give rise to equal taxable and deductible temporary
differences such as leases and decommissioning
liabilities.
IFRS 17 - Insurance Contracts: In May 2017, the IASB issued IFRS 17 'Insurance Contracts', a
comprehensive new accounting standard for insurance contracts
covering recognition and measurement, presentation and disclosure.
IFRS 17 replaces IFRS 4 'Insurance Contracts' that was issued in
2005. IFRS 17 applies to all types of insurance contracts,
regardless of the type of entities that issue them, as well as to
certain guarantees and financial instruments with discretionary
participation features, while a few scope exceptions apply.
Targeted amendments made in July 2020 aimed to ease the
implementation of the standard and deferred the application
date of IFRS 17 to 1 January 2023, while further
amendments made in December 2021 added a transition option that
permits an entity to apply an optional classification overlay in
the comparative period(s) presented on initial application of IFRS
17.
2. Foreign currency and
translation
The Group's reporting currency is
the Euro (€). Coca-Cola HBC translates the income statements of
foreign operations to the Euro at average exchange rates and the
balance sheets at the closing exchange rates on 31 December. The
principal exchange rates used for translation purposes in respect
of one Euro are:
|
Average rate for the year
ended
|
Closing rate as
at
|
|
31 December
2023
|
31
December 2022
|
31 December
2023
|
31
December 2022
|
US Dollar
|
1.08
|
1.05
|
1.11
|
1.06
|
UK Sterling
|
0.87
|
0.85
|
0.87
|
0.88
|
Polish Zloty
|
4.54
|
4.68
|
4.32
|
4.69
|
Nigerian Naira
|
695.06
|
448.99
|
1,056.96
|
493.61
|
Hungarian Forint
|
381.75
|
390.36
|
382.03
|
401.54
|
Swiss Franc
|
0.97
|
1.01
|
0.94
|
0.99
|
Russian Rouble
|
92.40
|
74.01
|
101.68
|
79.23
|
Romanian Leu
|
4.95
|
4.93
|
4.98
|
4.94
|
Ukrainian Hryvnia
|
39.54
|
33.92
|
41.63
|
38.94
|
Czech Koruna
|
24.00
|
24.56
|
24.69
|
24.21
|
Serbian Dinar
|
117.25
|
117.47
|
117.16
|
117.30
|
Egyptian Pound
|
33.15
|
20.09
|
34.16
|
26.35
|
In mid-June 2023, the Nigerian
Central Bank stopped intervening heavily in the interbank foreign
exchange market, allowing the Nigerian Naira to float more freely.
The Group monitors the situation in Nigeria in order to ensure that
timely actions and initiatives are undertaken to mitigate any
potential adverse impact.
3. Segmental
analysis
The Group has essentially one
business, being the production, sale and distribution of
ready-to-drink, primarily non-alcoholic, beverages across 29
countries. The Group's markets are aggregated in reportable
segments as follows:
Established markets:
|
Austria, Cyprus, Greece, Italy,
Northern Ireland, the Republic of Ireland and Switzerland, Global
exports*.
|
Developing markets:
|
Croatia, Czech Republic, Estonia,
Hungary, Latvia, Lithuania, Poland, Slovakia and
Slovenia.
|
Emerging markets:
|
Armenia, Belarus, Bosnia and
Herzegovina, Bulgaria, Egypt, Moldova, Montenegro, Nigeria, North
Macedonia, Romania, the Russian Federation, Serbia (including the
Republic of Kosovo) and Ukraine.
|
*The Global exports market refers to the export business for
Finlandia Vodka and Three Cents in countries where the Group does
not have operations in connection with non-alcoholic
ready-to-drink beverages, driven by the Finlandia
acquisition.
a) Volume and net sales
revenue
The Group sales volume in million
unit cases5 for the six months and the years ended 31 December
was as follows:
|
Six months
ended
31
December
|
Year ended
31
December
|
|
|
2023
|
2022
|
2023
|
2022
|
Established
|
322.3
|
338.2
|
628.7
|
643.9
|
Developing
|
243.7
|
248.4
|
471.0
|
478.8
|
Emerging
|
886.4
|
795.0
|
1,735.8
|
1,589.1
|
Total volume
|
1,452.4
|
1,381.6
|
2,835.5
|
2,711.8
|
|
|
|
|
| |
5 One unit case corresponds
to approximately 5.678 litres or 24 servings, being a typically
used measure of volume. For Premium Spirits volume, one unit case
also corresponds to 5.678 litres. For biscuits volume, one unit
case corresponds to 1 kilogram. For coffee volume, one unit case
corresponds to 0.5 kilograms or 5.678 litres. Volume data is
derived from unaudited operational data.
Net sales revenue per reportable
segment for the six months and the years ended 31 December is
presented below:
|
Six months
ended
31
December
|
Year ended
31
December
|
|
2023
|
2022
|
2023
|
2022
|
|
€ million
|
€
million
|
€ million
|
€
million
|
Established
|
1,730.5
|
1,589.9
|
3,358.5
|
2,974.1
|
Developing
|
1,103.4
|
928.1
|
2,088.6
|
1,719.7
|
Emerging
|
2,328.6
|
2,470.5
|
4,736.9
|
4,504.6
|
Total net sales revenue
|
5,162.5
|
4,988.5
|
10,184.0
|
9,198.4
|
In addition to non-alcoholic,
ready-to-drink beverages as well as coffee and snacks ("NARTD"),
the Group sells and distributes Premium Spirits. An analysis of
volume and net sales revenue per product type for the six months
and the years ended 31 December is presented below:
|
Six months
ended
31
December
|
Year ended
31
December
|
|
2023
|
2022
|
2023
|
2022
|
|
€ million
|
€
million
|
€ million
|
€
million
|
Volume (in million unit cases)
|
|
|
|
|
NARTD
|
1,449.8
|
1,379.6
|
2,831.2
|
2,708.4
|
Premium spirits
|
2.6
|
2.0
|
4.3
|
3.4
|
Total volume
|
1,452.4
|
1,381.6
|
2,835.5
|
2,711.8
|
Net sales revenue (€ million)
|
|
|
|
|
NARTD
|
4,992.6
|
4,846.4
|
9,886.1
|
8,956.0
|
Premium spirits
|
169.9
|
142.1
|
297.9
|
242.4
|
Total net sales revenue
|
5,162.5
|
4,988.5
|
10,184.0
|
9,198.4
|
b) Other income statement
items
|
Six months
ended
31
December
|
Year ended
31
December
|
|
2023
|
2022
|
2023
|
2022
|
|
€ million
|
€
million
|
€ million
|
€
million
|
Operating profit
|
|
|
|
|
Established
|
208.4
|
163.0
|
379.2
|
310.4
|
Developing
|
85.4
|
56.2
|
152.6
|
113.1
|
Emerging
|
102.5
|
208.9
|
421.8
|
280.3
|
Total operating profit
|
396.3
|
428.1
|
953.6
|
703.8
|
Reconciling items
|
|
|
|
|
Finance costs, net
|
(16.9)
|
(40.0)
|
(48.3)
|
(82.7)
|
Tax
|
(132.1)
|
(126.0)
|
(274.6)
|
(208.0)
|
Share of results of non-integral
equity method investments
|
3.3
|
1.1
|
5.0
|
2.5
|
Non-controlling
interests
|
0.2
|
(0.7)
|
0.8
|
(0.2)
|
Profit after tax attributable to owners of the
parent
|
250.8
|
262.5
|
636.5
|
415.4
|
c) Other
items
We disclosed in our 2022
Integrated Annual Report that exceptional items related to
Russia-Ukraine conflict of €127.4 million
were recognised in the income statement, referring to net
impairment losses for property, plant and equipment, equity method
investments and goodwill. These resulted from the Group's
restructuring initiatives in connection with its Russian operation,
as a result of The Coca-Cola Company's decision to suspend its
business in Russia, and the worsening macroeconomic factors in
Russia, as sanctions and other regulations had an adverse impact on
the country's economic environment. In 2023, the Russian operations
continued to operate under a self-sufficient business model
focusing on local brands and there are no significant developments
in the geopolitical events involving Russia and Ukraine that would
have a material adverse impact in the Group's operations in those
territories and the Group's consolidated financial statements. The
Group continues to monitor the situation in Russia and Ukraine in
order to ensure that timely actions and initiatives are undertaken
to mitigate any potential adverse impact arising from the ongoing
conflict.
4. Restructuring costs
As part of the effort to optimise
its cost base and sustain competitiveness in the marketplace, the
Group undertakes restructuring initiatives. Restructuring mainly
concerns employees' termination benefits, which are included within
operating expenses. Restructuring costs per reportable segment for
the six months and years ended 31 December are presented
below:
|
Six months
ended
31
December
|
Year ended
31
December
|
|
2023
|
2022
|
2023
|
2022
|
|
€ million
|
€
million
|
€ million
|
€
million
|
Established
|
0.9
|
(1.1)
|
0.9
|
(6.1)
|
Developing
|
1.1
|
(1.5)
|
1.1
|
(1.5)
|
Emerging
|
5.2
|
8.5
|
7.0
|
19.5
|
Total restructuring costs
|
7.2
|
5.9
|
9.0
|
11.9
|
5. Finance costs,
net
|
Six months
ended
31
December
|
Year ended
31
December
|
|
2023
|
2022
|
2023
|
2022
|
|
€ million
|
€
million
|
€ million
|
€
million
|
Finance income
|
(35.7)
|
(9.3)
|
(55.7)
|
(13.2)
|
Finance costs
|
45.3
|
38.9
|
88.1
|
79.9
|
Net foreign exchange
losses
|
7.3
|
10.4
|
15.9
|
16.0
|
Finance costs, net
|
16.9
|
40.0
|
48.3
|
82.7
|
6. Tax
|
Six months
ended
31
December
|
Year ended
31
December
|
|
2023
|
2022
|
2023
|
2022
|
|
€ million
|
€
million
|
€ million
|
€
million
|
Profit before tax
|
382.7
|
389.2
|
910.3
|
623.6
|
Tax
|
(132.1)
|
(126.0)
|
(274.6)
|
(208.0)
|
Effective tax rate
|
34.5%
|
32.4%
|
30.2%
|
33.4%
|
The Group's effective tax rate for 2023 may differ from the
theoretical amount that would arise using the weighted average tax
rate applicable to profits of the consolidated entities. This
difference can be a consequence of a number of factors, the most
significant of which are the application of statutory tax rates of
the countries in which the Group operates, the non-deductibility of
certain expenses, the non-taxable income and one-off tax
items.
7. Earnings per share
Basic earnings per share is
calculated by dividing the net profit attributable to the owners of
the parent by the weighted average number of shares outstanding
during the period (full year of 2023: 367,824,641; full year of
2022: 366,351,704; six months ended 31 December 2023: 368,133,839;
six months ended 31 December 2022: 366,539,951). Diluted earnings
per share is calculated by adjusting the weighted average number of
ordinary shares outstanding to assume conversion of all dilutive
ordinary shares arising from exercising employee stock
options.
8. Intangible assets and property,
plant and equipment
|
Intangible
|
Property,
plant
|
|
assets
|
and
equipment
|
|
€ million
|
€ million
|
Net book value as at 1 January 2023 excluding right-of-use
assets
|
2,542.5
|
3,062.4
|
Additions
|
-
|
610.2
|
Arising from business combinations
(Note 14)
|
204.4
|
-
|
Reclassified to assets held for
sale
|
-
|
(3.3)
|
Assets held for sale classified
back to property, plant and equipment
|
-
|
0.1
|
Disposals
|
-
|
(8.3)
|
Depreciation, impairment and
amortisation
|
(113.9)
|
(340.8)
|
Foreign currency
translation
|
(64.4)
|
(472.8)
|
Net book value as at 31 December 2023 excluding right-of-use
assets
|
2,568.6
|
2,847.5
|
Net book value as at 1 January 2023
of right-of-use assets (Note 12)
|
|
203.9
|
Net book value as at 31 December 2023 of right-of-use assets
(Note 12)
|
|
209.6
|
Net book value as at 31 December 2023
|
|
3,057.1
|
|
|
| |
Right-of-use assets arising from
business combinations in 2023 amounted to €6.7 million (2022: €40.1
million).
Impairment losses recognised in
connection with intangible assets amounted to €112.5 million in
2023 as detailed below (2022: €13.7 million, in connection with the
Group's Russian cash-generating unit).
Impairment of Egyptian cash-generating unit
We disclosed in our 2022
integrated annual report that in the cash-generating unit ('unit')
of Egypt, reasonably possible changes in key assumptions of the
2022 impairment test would remove the remaining headroom. During
2023, we experienced worsening macroeconomic factors in the country
with inflation persisting at record-high levels, more than double
of the upper bound of the Central Bank of Egypt's target band and
increasing risk of foreign currency crisis due to low reserves,
while geopolitical tensions in the Middle East negatively impacted
the financial performance of the unit in late 2023.
The Group performed its annual
impairment test in 2023, which resulted in an impairment loss for
its Egyptian unit of €109.4 million, as the recoverable amount was
lower than the carrying amount of the unit. The recoverable amount
was determined based on value-in-use calculations consistent with
those performed in 2022, updated to consider management's best
estimates of expected cash flows and a
higher discount rate, reflective of the increased
macroeconomic uncertainty in Egypt, as discussed above. The
impairment loss was allocated in its entirety to reduce the
carrying amount of goodwill allocated to the unit and was included
in line 'Operating expenses' of the condensed consolidated income
statement and included under Emerging markets for segmental
allocation purposes.
The following table sets out the
key assumptions used in the impairment assessment of the Egyptian
unit:
|
December
2023
|
December
2022
|
Growth rate in
perpetuity
|
5.0%
|
5.0%
|
Post-tax discount rate
|
17.4%
|
15.2%
|
Pre-tax discount rate
|
20.8%
|
17.8%
|
As at 31 December 2023, the
recoverable amount of the Egyptian unit was approximately €340
million. The Group continues to closely monitor its Egyptian unit
in order to ensure that timely actions and initiatives are
undertaken to minimise potential adverse impacts on its expected
performance.
Impairment of Costa Express Business
In 2023, the Group recognised an
impairment loss of €3.1 million in connection with its self-serve
coffee vending business in Poland (the 'Costa Express Business'),
as the recoverable amount was lower than the carrying amount. The
recoverable amount was determined based on value-in-use
calculations, considering management's best estimates of future
cash flows expected to arise from the business, discounted at a
rate of 7.7%. The
impairment was driven mainly by change in expectations regarding
the scope and duration of a contract with a key customer. The
impairment loss was allocated to goodwill (€1.1 million) and other
finite-lived intangible assets (€2.0 million) and was included in
line 'Operating expenses' of the condensed consolidated income
statement and included under Developing markets for segmental
allocation purposes.
9. Financial risk management
and financial instruments
The Group's activities expose it
to a variety of financial risks: market risk (including currency
risk, interest rate risk and commodity price risk), credit risk,
liquidity risk and capital risk. There have been no material
changes in the risk management policies since the previous year
end.
As described in the 2022
Integrated Annual Report, the Group actively manages its liquidity
risk. The Group maintains its healthy liquidity position and is
able to meet its liabilities as they fall due. As at 31 December
2023, the Group has net debt of €1.6 billion (Note 10). In
addition, as at 31 December 2023, the Group has cash and cash
equivalents and other financial assets of €1.8 billion, an undrawn
Revolving Credit Facility of €0.8 billion, an uncommitted Money
Market Loan agreement of €0.2 billion, as well as €0.8 billion
available out of the €1.0 billion Commercial Paper Programme. None
of our debt facilities are subject to any financial covenants that
would impact the Group's liquidity or access to capital. The
Group's Standard & Poor's and Moody's credit ratings as
disclosed in the 2022 Integrated Annual Report were reaffirmed in
2023, while the outlook by Standard and Poor's returned to stable
in 2023 compared to negative in 2022.
The Group's financial instruments
recorded at fair value are included in Level 1, Level 2 and Level 3
within the fair value hierarchy as described in the 2022 Integrated
Annual Report.
The fair value of bonds and notes
payable applying the clean market price, as at 31 December 2023,
was €2,717.4 million compared to their book value of €2,887.3
million, as at the same date. The money market funds recorded at
fair value are included in Level 1 within the fair value hierarchy.
As at 31 December 2023, the fair value of the money market funds
amounted to €513.8 million (€497.2 million as at 31 December
2022).
As at 31 December 2023, the total
derivatives included in Level 2 were financial assets of €18.6
million and financial liabilities of €36.8 million. The Group
recognises embedded derivatives whose risks and economic
characteristics were not considered to be closely related to the
commodity contract in which they were embedded. The valuation
techniques used to determine their fair value maximised the use of
observable market data. The fair value of the embedded derivatives
as at 31 December 2023 amounted to a financial liability of €9.1
million and are classified within Level 2.
The Group uses derivatives to
mitigate the commodity price risk related to plastics. As the
valuation of these derivatives uses prices that are not observable
in the market, it is classified within Level 3. The fair value of
the derivatives related to plastics as at 31 December 2023 amounted
to a financial liability of €1.2 million.
The Group uses foreign currency
derivatives to mitigate the currency risk related to Nigerian
Naira. As the valuation technique of these derivatives incorporates
greater use of unobservable inputs, their fair value is classified
within Level 3. The fair value of these derivatives as at 31
December 2023 were financial assets of €82.9 million and financial
liabilities of €35.0 million.
There were no transfers between
Levels 1, 2 and 3 during the year ended 31 December
2023.
10. Net debt
|
As at 31
December
|
|
2023
|
|
2022
|
|
€ million
|
|
€
million
|
Current borrowings
|
948.1
|
|
337.0
|
Non-current borrowings
|
2,476.4
|
|
3,082.9
|
Less: Cash and cash
equivalents
|
(1,260.6)
|
|
(719.9)
|
- Financial assets at amortised cost
|
(54.8)
|
|
(529.5)
|
- Financial assets at fair value through profit or loss
|
(513.8)
|
|
(497.2)
|
Less: Other financial
assets
|
(568.6)
|
|
(1,026.7)
|
Net debt
|
1,595.3
|
|
1,673.3
|
In September 2022 the Group
completed the issue of a €500 million Euro-denominated fixed rate
Green bond maturing in September 2025 with a coupon rate of
2.75%.
In December 2019 the Group
established a loan facility of US Dollar 85.0 million to finance
the purchase of production equipment by the Group's subsidiary in
Nigeria. The facility has been drawn down by Nigerian Bottling
Company Ltd ('NBC') over the course of 2020 and 2021 and matures in
2027. The obligations under this facility are guaranteed by
Coca-Cola HBC AG. As at 31 December 2023, the outstanding liability
amounted to €45.4 million (€59.3 million as at 31 December
2022).
Cash and cash equivalents include
an amount of €92.5 million (€120.9 million as at 31 December 2022)
equivalent in Nigerian Naira. This includes an amount of €nil
(€10.6 million as at 31 December 2022) equivalent in Nigerian
Naira, which related to the outstanding balance held for the
repayment of NBC's former minority shareholders, following the 2011
acquisition of non-controlling interests. The financial liability
regarding former minority shareholders was extinguished in
2023.
As a result of sanctions and other
regulations, there have been changes in required regulatory
approvals, potentially impacting the transfer and usage of cash
outside of Russia. Cash and cash equivalents held by the Group's
operations in Russia (including Multon) amounted to €278.7 million
equivalent in Russian Rouble, US Dollar and Euro as at 31 December
2023 (2022: €155.3 million). The aforementioned changes restrict
the usage of cash held in Russia outside the country, however, are
not expected to have a material impact on the Group's liquidity, as
the cash and cash equivalents held in Russia are expected to be
used in the forthcoming financial periods primarily for working
capital purposes by the Russian operations.
The financial assets at amortised
cost comprise of time deposits amounting to €54.8 million (31
December 2022: €529.5 million) The financial assets at fair value
through profit or loss are related to money market funds. Included
in 'Other financial assets' of the condensed consolidated balance
sheet are derivative financial instruments of €97.5 million (31
December 2022: €35.3 million) and related party loans receivable of
€1.8 million (31 December 2022: €1.8 million).
11. Share capital, share premium and
treasury shares
|
Number of
shares
|
Share
|
Share
|
|
(authorised
|
capital
|
premium
|
|
and
issued)
|
€ million
|
€ million
|
Balance as at 1 January 2022
|
371,795,418
|
2,022.3
|
3,097.3
|
Shares issued to employees
exercising
|
|
|
|
stock options
|
290,677
|
2.0
|
2.7
|
Dividends (Note 13)
|
-
|
-
|
(262.6)
|
Balance as at 31 December 2022
|
372,086,095
|
2,024.3
|
2,837.4
|
Shares issued to employees
exercising
|
|
|
|
stock options
|
891,127
|
6.0
|
8.2
|
Dividends (Note 13)
|
-
|
-
|
(289.9)
|
Balance as at 31 December 2023
|
372,977,222
|
2,030.3
|
2,555.7
|
In 2023, the share capital of
Coca-Cola HBC increased by the issuance of 891,127 (2022: 290,677)
new ordinary shares following the exercise of stock options
pursuant to the Coca-Cola HBC AG's employees' stock option plan.
Total proceeds from the issuance of the shares under the stock
option plan amounted to €14.2 million (2022: €4.7
million).
An amount of €29.7 million in 2023
(2022: €15.4 million) relates to treasury shares provided to
employees in connection with vested performance share awards under
the Company's employee incentive scheme, which was reflected as an
appropriation of reserves between 'Treasury shares' and 'Other
reserves' in the condensed consolidated statement of changes in
equity.
Following the above changes, on 31
December 2023 the share capital of the Group amounted to €2,030.3
million and comprised 372,977,222 shares with a nominal value of
CHF 6.70 each.
On 20 November 2023, the Group
announced the launch of a share buyback programme of up to a
maximum of 18,000,000 ordinary shares to be purchased in a manner
consistent with the Company's general authority to repurchase
shares granted at its annual general meeting on 17 May 2023 and any
such authority granted at its following annual general meetings.
The programme commenced on 21 November 2023 and is expected to run
for a period of around two years. As at 31 December 2023, the Group
had purchased shares under the programme for a total consideration
of €42.6 million, which was reflected in line 'Acquisition of
treasury shares' of the consolidated cash flow statement and the
consolidated statement of changes in equity.
12. Leases
The leases which are recorded on
the condensed consolidated balance sheet are principally in respect
of vehicles and buildings. The Group's right-of-use assets and
lease liability are presented below:
|
2023
|
2022
|
|
€ million
|
€
million
|
Land and buildings
|
105.2
|
82.7
|
Plant and equipment
|
104.4
|
121.2
|
Total right-of-use assets
|
209.6
|
203.9
|
|
|
|
Current lease
liabilities
|
55.3
|
53.9
|
Non-current lease
liabilities
|
154.8
|
152.1
|
Total lease liability
|
210.1
|
206.0
|
13. Dividends
On 21 June 2022, the shareholders
of Coca-Cola HBC AG at the Annual General Meeting approved a
dividend distribution of 0.71 euro per share. The total dividend
amounted to €262.6 million and was paid on 2 August 2022. Of this,
an amount of €2.4 million related to shares held by the
Group.
The shareholders of Coca-Cola HBC
AG approved a dividend distribution of 0.78 euro per share at the
Annual General Meeting held on 17 May 2023. The total dividend
amounted to €289.9 million and was paid on 19 June 2023. Of this,
an amount of €2.7 million related to shares held by the
Group.
The Board of Directors will
propose a 0.93 euro dividend per share in respect of 2023. If
approved by the shareholders of Coca-Cola HBC AG, this dividend
will be paid in 2024.
14. Business combinations and
acquisition of non-controlling interests
Acquisition of Brown-Forman Finland
Oy
On 1 November 2023, the Group
acquired 100% of the issued shares of Brown-Forman Finland Oy
('BFF'), established in Finland, owner of the Finlandia Vodka brand
(the 'Finlandia acquisition'). The acquisition enhances the Group's
premium spirits business, while complementing its existing adult
sparkling beverages portfolio and better positions the Group to
strengthen partnerships with customers in strategically important
channels such as hotels, restaurants and cafes (HoReCa).
The fair value of the
consideration for the Finlandia acquisition consists of US Dollar
193.8 million (€183.9 million), which has already been paid, and an
additional payment, based on BFF's net financial position and
working capital movement, of US Dollar 0.6 million (€0.5 million)
expected to be transferred within the first quarter of 2024. This
additional payment is still under discussion with the seller,
according to the terms of the sale and purchase
agreement.
Details of the acquisition with
regards to the provisionally determined fair values of the net
assets acquired and goodwill are presented in the table below. The
net assets acquired reflect the additional payment at the
provisional amount of US Dollar 0.6 million (€0.5
million).
|
|
Fair value
€ million
|
Trademarks
|
|
197.0
|
Property, plant and
equipment
|
|
6.7
|
Inventories
|
|
4.9
|
Trade, other receivables and
assets
|
|
9.1
|
Cash and cash equivalents
|
|
3.5
|
Borrowings
|
|
(6.5)
|
Trade and other payables
|
|
(9.7)
|
Net deferred tax
liability
|
|
(28.0)
|
Net
identifiable assets acquired
|
|
177.0
|
Add: Goodwill arising on
acquisition
|
|
7.4
|
Net
assets acquired
|
|
184.4
|
|
|
|
| |
Fair values on acquisition are
provisional and will be finalised within 12 months of the
acquisition date.
The goodwill arising is
attributable to the brand's growth potential across the Group's
markets. Acquisition-related costs of €5.6 million were included in
the 2023 operating expenses, as a result of the above
acquisition.
The fair value of trade, other
receivables and assets acquired includes trade receivables with a
fair value of €2.0 million, while there was no significant amount
of trade receivables acquired considered to be
uncollectible.
Net sales revenue and profit after
tax contributed by BFF to the Group for the period from 1 November
2023 to 31 December 2023, amounted to €9.5 million and €2.8 million
respectively. If the business combination had occurred on 1 January
2023, consolidated net sales revenue and profit after tax for the
year ended 31 December 2023 would have been higher by approximately
€43.5 million and €7.4 million respectively. This pro forma
information reflects the pre-acquisition operating model of BFF and
is not adjusted for the benefits arising from the post-acquisition
transfer of distribution from Brown-Forman or third-party
distributors to CCH operations in the CCH markets and therefore
should not be considered as indicative of Finlandia Vodka brand
future performance.
Other acquisition costs
During 2023, the Group incurred
acquisition costs of €0.7 million in connection with acquisition
expected to be completed in 2024, which were included in line
'Operating expenses' of the condensed consolidated income
statement.
Acquisition of Three Cents
On 21 October 2022, the Group
acquired 100% of the issued shares of ESM Effervescent Sodas
Management Limited established in Cyprus, the owner of the
super-premium adult sparkling beverage and mixer product line under
the Three Cents brand and its subsidiary Three Cents Hellas Single
Member S.A. established in Greece (together 'Three Cents'), for a
consideration of €45.9 million.
Details of the acquisition with
regards to the determined fair values of the net assets acquired
and goodwill are presented in the table below:
|
|
|
Fair Value
|
|
|
€ million
|
Trademarks
|
|
|
22.6
|
Property, plant and
equipment
|
|
|
0.2
|
Trade, other receivables and
assets
|
|
|
1.9
|
Cash and cash
equivalents
|
|
|
1.9
|
Borrowings
|
|
|
(0.1)
|
Trade and other payables
|
|
|
(1.9)
|
Net deferred tax
liabilities
|
|
|
(2.7)
|
Net identifiable assets acquired
|
|
|
21.9
|
Add: Goodwill arising on
acquisition
|
|
|
24.0
|
Net assets acquired
|
|
|
45.9
|
|
|
|
|
| |
No changes to net identifiable
assets acquired have been identified compared to the relevant
amounts disclosed as part of the Group's 2022 integrated annual
report.
Details of the acquisition were
disclosed in Note 24 of the Group's 2022 Integrated Annual
Report.
Multon A.O. group of companies
('Multon')
The Group holds a 50% interest in
Multon, which is engaged in the production and distribution of
juices in Russia and was jointly controlled by the Group and TCCC.
On 11 August 2022, following TCCC's announcement on suspension of
its business in Russia, as well as TCCC's unilateral waiver of
certain of its governance rights in connection with its 50%
interest in Multon, the Group acquired control in
Multon.
Details of the change in control
of Multon were disclosed in Note 24 of the Group's 2022 Integrated
Annual Report. The cash and cash equivalents acquired amounting to
€24.2 million was presented in line 'Payment for business
combinations, net of cash acquired' in the condensed consolidated
cash flow statement.
Acquisition of Coca-Cola Bottling Company of
Egypt S.A.E.6
On 12 August 2021, the Group
entered into a sale and purchase agreement to acquire approximately
52.7% of Coca-Cola Bottling Company of Egypt S.A.E. ('CCBCE'), the
bottling partner of TCCC in Egypt, from MAC Beverages Limited and
certain of its affiliated entities ('MBL acquisition'). The MBL
acquisition was completed on 13 January 2022 and resulted in the
Group obtaining control over CCBCE.
The fair value of the
consideration for the MBL acquisition presented in line 'Payment
for business combinations, net of cash acquired' of the condensed
consolidated cash flow statement consisted of US Dollar 303.7
million (€264.9 million), which was transferred on acquisition, and
an additional payment of US Dollar 124.0 million (€119.1 million),
based on CCBCE's past performance, net financial position and
working capital movement, which was transferred in October 2022,
while cash and cash equivalents acquired amounted to €15.9 million.
Foreign exchange loss arising on settlement of the consideration
payable for the MBL acquisition amounted to €11.3 million and was
also presented in line 'Payment for business combinations, net of
cash acquired' of the condensed consolidated cash flow statement,
while proceeds from settlement of derivatives used to hedge the
relevant foreign currency risk amounted to €13.0 million and were
presented in line 'Proceeds from settlement of derivatives relating
to business combination' of the condensed consolidated cash flow
statement.
On 12 August 2021, the Group
entered into an additional sale and purchase agreement to acquire
approximately 42% of CCBCE, from a wholly-owned affiliate of TCCC
('TCCC acquisition') for a consideration of US Dollar 122.7 million
(€108.9 million). The TCCC acquisition was completed on 25 January
2022, it was treated as separate to the MBL acquisition and was
accordingly accounted for as an equity transaction.
Details of the above transactions
were disclosed in Note 24 of the Group's 2022 Integrated Annual
Report. Following the completion of both transactions, the Group
held a 94.7% interest in CCBCE as at 31 December 2022.
During 2023, the Group acquired
approximately 3.1% additional interest in CCBCE for a consideration
of €12.6 million, which was presented in line 'Purchases of shares
held by non-controlling interests' of the condensed consolidated
cash flow statement. Following this, the Group held a 97.8%
interest in CCBCE as at 31 December 2023.
6Effective 18 June 2023, Coca-Cola Bottling Company of Egypt
S.A.E. was renamed to Coca-Cola HBC Egypt.
15. Related party transactions
a) The Coca-Cola
Company
As at 31 December 2023, TCCC indirectly owned
21.0% (31 December 2022: 21.0%) of the issued share capital of
Coca-Cola HBC. Coca-Cola HBC's business relationship with TCCC is
mainly governed by the bottlers' agreements with TCCC, which are an
important element of the Coca-Cola HBC's business. TCCC considers
Coca-Cola HBC to be a 'key bottler'. Following their expiry on 31
December 2023, all bottlers' agreements in the CCH territories
where CCH Group produces, sells and distributes TCCC's trademarked
beverages were renewed with effect as from 1 January 2024, for an
initial term of ten years, with the option for the CCH Group to
request an extension (at the discretion of TCCC) for another ten
years upon expiry of the initial term. The below table summarises
transactions with TCCC and its subsidiaries:
|
Six months
ended
31
December
|
Year ended
31
December
|
|
2023
|
2022
|
2023
|
2022
|
|
€ million
|
€
million
|
€ million
|
€
million
|
Purchases of concentrate, finished
products
|
|
|
|
|
and other items
|
882.9
|
845.5
|
1,861.4
|
1,808.7
|
Net contributions received for
marketing and
|
|
|
|
|
promotional incentives
|
67.8
|
56.0
|
125.1
|
108.6
|
Sales of finished goods and raw
materials
|
2.1
|
2.2
|
4.7
|
4.2
|
Other income
|
2.2
|
6.6
|
4.1
|
8.6
|
Other expenses
|
1.8
|
2.5
|
3.6
|
4.7
|
|
|
|
|
|
As at 31 December 2023, the Group
was owed €42.8 million (€45.3 million as at 31 December 2022) by
TCCC and owed €273.4 million (€226.9 million as at 31 December
2022) to TCCC.
Refer to Note 24 of the Group's
2022 Integrated Annual Report for payments to TCCC during 2022
regarding purchase of convertible loan and acquisition of
non-controlling interests in the context of the acquisition of
Coca-Cola Bottling Company of Egypt S.A.E.
b) Frigoglass S.A.
('Frigoglass'), Kar-Tess Holding and AG Leventis (Nigeria)
Ltd
Truad Verwaltungs AG currently
indirectly owns 99.3% (31 December 2022: 99.3%) of AG Leventis
(Nigeria) Ltd and also indirectly controls Kar-Tess Holding, which
holds approximately 23.0% (31 December 2022: 23.0%) of Coca-Cola
HBC's total issued capital.
As at 31 December 2022, Truad
Verwaltungs AG also indirectly owned 48.4% of Frigoglass.
Frigoglass, a company listed on the Athens Exchange, is a
manufacturer of coolers, cooler parts, glass bottles, crowns and
plastics. In April 2023, Frigoglass restructured its debt which
resulted in changes to its ownership structure. The restructured
Frigoglass Group no longer meets the definition of related party as
per IAS 24 'Related party disclosures' for Coca-Cola HBC AG.
Accordingly, transactions with: Frigoglass and its
subsidiaries7
up to April 2023 and the year ended 31 December
2022 are presented below:
|
|
|
|
Four months ended
28 April 2023
|
Year
ended
31
December 2022
|
|
€ million
|
€
million
|
Purchases of coolers and other
equipment, raw and other materials
|
24.4
|
112.3
|
Maintenance, rent and other
expenses
|
10.0
|
33.1
|
|
|
|
7 Transactions and balances with Frigoglass Industries (Nigeria)
Limited, an associate of the Group, for the year ended 31 December
2023 and as at 31 December 2023 respectively, are included under
'Other related parties' section
During 2022, the Group received
dividends of €1.2 million from Frigoglass Industries (Nigeria)
Limited, which were included in line 'Receipts from non-integral
equity method investments' of the condensed consolidated cash
flow statement.
Transactions and balances with AG
Leventis (Nigeria) Ltd for the six months and years ended 31
December are presented below:
|
Six months
ended
31
December
|
Year ended
31
December
|
|
2023
|
2022
|
2023
|
2022
|
|
€ million
|
€
million
|
€ million
|
€
million
|
Purchases of finished goods and
other items
|
―
|
1.7
|
―
|
3.6
|
Other expenses
|
3.9
|
0.1
|
11.0
|
0.1
|
As at 31 December
2023, the Group owed €1.1
million (2022: €2.7 million) and had a lease liability of €1.2 million (2022: €4.2
million) to AG Leventis (Nigeria) Ltd.
c) Other related
parties
During the six months and full year
ended 31 December 2023, the Group incurred other expenses of
€5.6 million and
€15.5 million (€7.9 million and €15.5 million in the respective
prior-year periods) mainly related to maintenance services for cold
drink equipment and installations of coolers, fountains, vending
and merchandising equipment as well as subsequent expenditure for
fixed assets of €1.7 million and €3.2 million (€1.8 million and
€3.0 million in the respective prior-year periods) from other
related parties. In addition, during the six months and year ended
31 December 2023, the Group purchased coolers and other equipment,
as well as inventory of €18.7 million and €44.1 million (€4.2
million and €5.5 million in the respective prior year periods) from
other related parties.
We disclosed in our 2022
Integrated Annual Report that Frigoglass Industries (Nigeria)
Limited, an associate in which the Group holds an effective
interest of 23.9% through its subsidiary Nigerian Bottling Company
Ltd, was guarantor under the amended banking facilities and notes
issued by the Frigoglass Group. This guarantee expired in April
2023 as part of the restructuring of Frigoglass Group. However,
Frigoglass Industries (Nigeria) Limited is a guarantor for the new
senior secured notes issued in 2023 by the restructured Frigoglass
Group. The Group has no direct exposure arising from this guarantee
arrangement, but the Group's investment in this associate, which
stood at €14.0 million as at 31 December 2023 (31 December 2022:
€21.1 million), would be at potential risk if there was a default
under the terms of the senior secured notes and the restructured
Frigoglass Group (including the guarantor) were unable to meet
their obligations thereunder.
During the six months and the year
ended 31 December 2023, the Group received dividends of €nil
and €7.0 million from other related parties (€nil
and €0.6 million in the respective prior-year periods), which are
included in line `Receipts from non-integral equity method
investments' of the condensed
consolidated cash flow statement and
paid €nil in the six months and year ended
31 December 2023 in connection with capital
increase of other related parties (€nil and €5.7 million in the respective prior-year periods, which was
included in line 'Payments for non-integral equity method
investments' of the condensed consolidated cash flow statement).
Furthermore, during the six months and the year ended 31
December 2023, €nil regarding loans receivable
from other related parties was converted to equity (€nil and
€1.3 million in the respective prior-year
periods).
As at 31 December 2023, the Group
owed €9.1 million
(€3.7 million as at 31 December 2022) to and was owed €6.7 million
including loans receivable of €4.3 million (€1.5 million dividends
receivable as at 31 December 2022) from other related
parties.
Capital commitments to other
related parties amounted to €3.8 million as at 31 December 2023
(€4.5 million as at 31 December 2022).
d) Joint ventures
The below table summarises
transactions with joint ventures:
|
Six months
ended
31
December
|
Year ended
31
December
|
|
2023
|
2022
|
2023
|
2022
|
|
€ million
|
€
million
|
€ million
|
€
million
|
Purchases of inventory
|
14.4
|
19.5
|
26.0
|
26.0
|
Sales of finished goods and raw
materials
|
4.0
|
3.0
|
7.8
|
9.2
|
Other income
|
4.8
|
8.3
|
10.4
|
15.8
|
Other expenses
|
4.0
|
5.4
|
8.3
|
15.7
|
As at 31 December 2023, the Group
owed €8.6 million
including loans payable of €2.7 million (€4.4 million as at 31 December 2022
including loans payable of €nil) to and was owed €12.3 million
including dividends and loans receivable of €2.6 million and €4.3
million respectively (€9.6
million as at 31 December 2022 including dividends
and loans receivable of €nil and €4.3 million respectively) from
joint ventures. During the six months and
year ended 31 December 2023, the Group received dividends of €5.2
million and €6.7 million from integral joint
ventures (€7.7 million and €9.7 million in the respective
prior-year periods), which were included in line `Receipts from
integral equity method investments' of the
condensed consolidated cash flow
statement. Furthermore, during the six
months and year ended 31 December 2023, the Group paid €nil in
connection with capital increase of joint ventures
(€4.0 million in the
respective prior-year periods, which was included
in line 'Payments for integral equity method investments' of the
condensed consolidated cash flow statement).
e) Directors
Evguenia Stoichkova and George
Leventis have been elected to the Board of Coca-Cola HBC, following
a nomination made by The Coca-Cola Company and Kar-Tess Holding
respectively. There have been no transactions between Coca-Cola HBC
and the Directors and senior management except for remuneration for
both the six months and years ended 31 December 2023 and
2022.
16. Contingencies
In relation to the Greek
Competition Authority's decision of 25 January 2002, one of
Coca-Cola Hellenic Bottling Company S.A.'s competitors had filed a
lawsuit against Coca-Cola Hellenic Bottling Company S.A. claiming
damages in an amount of €7.7 million. The court of first instance
heard the case on 21 January 2009 and subsequently rejected the
lawsuit. The plaintiff appealed the judgement and on 9 December
2013 the Athens Court of Appeals rejected the plaintiff's appeal.
On 19 April 2014, the same plaintiff filed a new lawsuit against
Coca-Cola Hellenic Bottling Company S.A. (following the spin-off,
Coca-Cola HBC Greece S.A.I.C.) claiming payment of €7.5 million as
compensation for losses and moral damages for alleged
anti-competitive commercial practices of Coca-Cola Hellenic
Bottling Company S.A. between 1994 and 2013. On 21 December 2018,
the plaintiff served their withdrawal from the lawsuit. However, on
20 June 2019, the same plaintiff filed a new lawsuit against
Coca-Cola HBC Greece S.A.I.C. claiming payment of €10.1 million as
compensation for losses and moral damages again for alleged
anti-competitive commercial practices of Coca-Cola Hellenic
Bottling Company S.A. for the same period between 1994 and 2013. On
16 July 2021, the Athens Multimember Court of First Instance issued
its judgement number 1929/2021 (hereinafter the "Judgment"), which
adjudicates that Coca-Cola HBC Greece S.A.I.C. is obliged to pay to
the plaintiff an amount of circa €0.9 million plus interest as of
31 December 2003. Both Coca-Cola HBC Greece S.A.I.C and the
plaintiff have appealed against this decision to the court of
appeals. Both appeals were heard on 19 January 2023. The
decision is pending to be issued. Management believes that any
liability to the Group that may arise as a result of these pending
legal proceedings will not have a material adverse effect on the
results of operations, cash flows, or the financial position of the
Group taken as a whole.
With respect to the investigation
of the Greek Competition Commission initiated on 6 September 2016,
regarding Coca-Cola HBC Greece S.A.I.C.'s operations in certain
commercial practices in the non-alcoholic beverages market, the
Rapporteur of the Greek Competition Commission appointed for this
case issued her Statement of Objections on 5 July 2021, alleging
that Coca‑Cola HBC
Greece S.A.I.C. undertook a series of anti-competitive practices in
the market of instant consumption for cola and non-cola carbonated
soft drinks, thereby excluding competitors and limiting their
growth potential. Coca‑Cola HBC Greece S.A.I.C. has vigorously defended its
commercial practices, in rebuttal of the allegations set out in the
Statement of Objections. The hearing of the case, before the
plenary session of the Greek Competition Commission, was concluded
on 29 November 2021 and the supplementary briefs of the parties
were submitted on 16 December 2021. On 3 November 2022, the
Hellenic Competition Commission notified Coca‑Cola HBC Greece S.A.I.C. of its
ruling on the case, according to which Coca‑Cola HBC Greece S.A.I.C. allegedly
abused its dominant position in the Greek immediate consumption
market segment for cola and non‑cola carbonated soft drinks. The
Hellenic Competition Commission ruling imposed on
Coca‑Cola HBC
Greece S.A.I.C. a fine of €10.3 million, as well as a behavioural
remedy in relation to beverage coolers valid until end of 2024.
Coca‑Cola HBC
Greece S.A.I.C. paid the fine in May 2023. Coca‑Cola HBC Greece S.A.I.C. strongly
disagrees with this ruling and has challenged it before the
competent Court of Appeal. The hearing date of the appeal is set
for 26 September 2024.
In 1992, our subsidiary NBC
acquired a manufacturing facility in Nigeria from Vacunak, a
Nigerian company. In 1994, Vacunak filed a lawsuit against NBC,
alleging that a representative of NBC had orally agreed to rescind
the sale agreement and instead enter into a lease agreement with
Vacunak. As part of its lawsuit, Vacunak sought compensation for
rent and loss of business opportunities. NBC discontinued all use
of the facility in 1995. On 19 August 2013, NBC received the
written judgement of the Nigerian court of first instance issued on
28 June 2012 providing for damages of approximately €7.8 million.
The Appeal Court dismissed NBC's appeal and Vacunak's
cross‑appeal and
affirmed the judgement of the first instance court in 2023. Both
NBC and Vacunak have filed an appeal against the judgement before
the Supreme Court. Based on advice from NBC's outside legal
counsel, we believe that it is unlikely that NBC will suffer
material financial losses from this case. We have consequently not
provided for any losses in relation to this case.
The tax filings of the Group and
its subsidiaries are routinely subjected to audit by tax
authorities in most of the jurisdictions in which the Group
conducts business. These audits may result in assessments of
additional taxes. The Group provides for additional tax in relation
to the outcome of such tax assessments, to the extent that a
liability is probable and estimable.
The Group is also involved in
various other legal proceedings. Management believes that any
liability to the Group that may arise as a result of these pending
legal proceedings will not have a material adverse effect on the
results of operations, cash flows, or the financial position of the
Group taken as a whole.
Considering the above, there have
been no significant adverse changes in contingencies since 31
December 2022 (as described in our 2022 Integrated Annual Report
available on the Coca-Cola HBC's web site:
www.coca-colahellenic.com).
17. Commitments
As at 31 December 2023 the Group
had capital commitments including commitments for leases and the
share of its joint ventures' capital commitments amounting to
€203.4 million (31 December 2022: €210.5 million), which mainly
relate to plant and machinery equipment.
18. Number of employees
The average number of full-time
equivalent employees in 2023 was 32,747 (2022: 33,043).
19. Subsequent events
In late January 2024, the Nigerian
Naira depreciated against the US Dollar by approximately 33%
compared to the December 2023 respective rate. The Group has
assessed the impact to 2024 operating profit of the devaluation
resulting from its operations in Nigeria and considering mitigation
actions available, does not expect that this will be material. This
is captured within the 2024 outlook. We are continuously monitoring
the situation to ensure that timely actions are undertaken as
planned to minimise the adverse impact from the currency
devaluation to the Group's business in Nigeria.
Volume by market for 2023 and 2022
|
|
|
|
|
|
%
Change
|
Unit cases
(million)8
|
2023
|
2022
|
2023 vs
2022
|
|
|
|
|
Established Markets
|
|
|
|
Austria
|
83.2
|
86.4
|
-4%
|
Cyprus
|
16.6
|
15.9
|
4%
|
Greece
|
120.7
|
112.8
|
7%
|
Italy
|
253.5
|
277.4
|
-9%
|
Republic of Ireland and Northern
Ireland
|
85.1
|
83.0
|
3%
|
Switzerland
|
69.5
|
68.4
|
2%
|
Global
exports*
|
0.1
|
-
|
NM
|
Total
|
628.7
|
643.9
|
-2%
|
|
|
|
|
Developing Markets
|
|
|
|
Baltics
|
38.1
|
37.0
|
3%
|
Croatia
|
32.7
|
31.9
|
3%
|
Czech Republic
|
52.6
|
60.2
|
-13%
|
Hungary
|
97.3
|
102.7
|
-5%
|
Poland
|
216.6
|
213.4
|
1%
|
Slovakia
|
24.5
|
24.5
|
-
|
Slovenia
|
9.2
|
9.1
|
1%
|
Total
|
471.0
|
478.8
|
-2%
|
|
|
|
|
Emerging Markets
|
|
|
|
Armenia
|
15.5
|
15.5
|
-
|
Belarus
|
50.7
|
43.7
|
16%
|
Bosnia and Herzegovina
|
24.5
|
23.6
|
4%
|
Bulgaria
|
72.5
|
68.5
|
6%
|
Moldova
|
8.8
|
9.0
|
-2%
|
Nigeria
|
415.5
|
408.3
|
2%
|
Romania
|
186.8
|
203.7
|
-8%
|
Russian Federation
|
368.7
|
266.1
|
39%
|
Serbia (including the Republic of
Kosovo)
|
165.7
|
162.1
|
2%
|
Ukraine
|
119.3
|
101.2
|
18%
|
Egypt
|
307.8
|
287.4
|
7%
|
Total
|
1,735.8
|
1,589.1
|
9%
|
|
|
|
|
Total Coca-Cola HBC
|
2,835.5
|
2,711.8
|
5%
|
|
|
|
|
| |
8One unit case corresponds
to approximately 5.678 litres or 24 servings, being a typically
used measure of volume. For Premium Spirits volume, one unit case
also corresponds to 5.678 litres. For biscuits volume, one unit
case corresponds to 1 kilogram. For coffee, one unit case
corresponds to 0.5 kilograms or 5.678 litres. Volume data is
derived from unaudited operational data.
*Global exports market refers to the export business for
Finlandia Vodka and Three Cents for the period November-December
2023.
- Our joint venture with Heineken in North Macedonia
generated volume of 27.7 million unit cases in 2023 (2022: 26.5
million unit cases), increased by 5% compared to the prior
year.
- Multon, our Russian juice business, generated volume of
36.7 million unit cases in 2022, prior to the change in control
effected 11 August 2022 (Note 14), which is not included in the
performance of the Russian Federation for 2022.