In this section
Financial
Statements
149
Independent auditor’s reports
162
Consolidated financial statements
167
Notes to the consolidated financial
statements
223
Company financial statements
227
Notes to the Company financial
statements
Image: Coca-Cola Original Taste
and Coca-Cola Zero Sugar
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2023 Integrated Report and Form 20-F
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Opinion
In our opinion:
• Coca-Cola Europacific Partners plc’s Group financial statements and Parent
Company financial statements (the “financial statements”) give a true and fair
view of the state of the Group’s and of the Parent Company’s affairs as at
31 December 2023 and of the Group’s and the Parent Company’s profit for the
year then ended;
• the Group and Parent Company financial statements have been properly
prepared in accordance with U.K. adopted International Accounting Standards;
International Financial Reporting Standards (‘IFRS’) as adopted by the European
Union and International Financial Reporting Standards as issued by the
International Accounting Standards Board (‘IASB’); and
• the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements of Coca-Cola Europacific Partners plc
(the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended
31 December 2023 which comprise:
Group
Parent Company
Consolidated statement of financial
position as at 31 December 2023
Statement of financial position as at
31 December 2023
Consolidated income statement for the
year then ended
Statement of comprehensive income for the
year then ended
Consolidated statement of comprehensive
income for the year then ended
Statement of cash flows for the year then
ended
Consolidated statement of changes in
equity for the year then ended
Statement of changes in equity for the year
then ended
Consolidated statement of cash flows for
the year then ended
Related notes 1 to 11 to the financial
statements including material accounting
policy information
Related notes 1 to 29 to the financial
statements, including material accounting
policy information
The financial reporting framework that has been applied in their preparation is
applicable law, UK adopted International Accounting Standards, IFRS as adopted
by the European Union and International Financial Reporting Standards as issued
by the IASB.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and Parent in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not
provided to the Group or the Parent Company and we remain independent of the
Group and the Parent Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of
the going concern basis of accounting in the preparation of the financial
statements is appropriate. Our evaluation of the Directors’ assessment of the
Group and Parent Company’s ability to continue to adopt the going concern basis
of accounting included:
• In conjunction with our walkthrough of the Group’s financial close process, we
confirmed our understanding of management’s going concern assessment
process.
• We obtained management’s going concern assessment, including the liquidity
forecast for the going concern period which covers a year from the date of
signing this audit opinion. The Group has modelled downside scenarios in their
liquidity forecasts in order to incorporate unexpected changes to the
forecasted liquidity of the Group. They have also considered the impact of the
acquisition of Coca-Cola Beverages Philippines, Inc completed in February 2024.
We understood the factors and assumptions included in each modelled
downside scenario and assessed the plausibility of these in the context of our
understanding of the Group and its principal risks, including climate-related risks.
• We tested the clerical accuracy of the model used to prepare the Group’s going
concern assessment.
• We considered the appropriateness of the methods used to calculate the cash
forecasts and determined through inspection and testing of the methodology
and calculations, that the methods utilised were appropriate.
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• We confirmed the cash and cash equivalents balance of €1.4 billion as at
31 December 2023 and verified the cash flows from operating activities of
€2.8 billion in the year. We obtained evidence of the Group’s €1.8 billion
multi-currency credit facility which is available through to January 2029, noting
no associated financial covenants. The facility is undrawn as at 15 March 2024.
• We reviewed the debt maturity ladder and concluded that all debt repayments
were included in the forecasts. We also checked that the Group is forecast to
have sufficient liquidity to repay debt which matures in the 12 months after the
going concern period.
• We considered whether the Group’s forecasts used in the going concern
assessment were consistent with other forecasts used by the Group in its
accounting estimates, including those used in the annual impairment test.
• We assessed the ability of the subsidiaries of the Group to remit earnings to the
Parent Company.
• We reviewed the Group and Parent Company going concern disclosures
included in the Directors’ Report on page 146 and Note 1 to the consolidated
and Parent Company financial statements on pages 167 and 227, respectively, in
order to assess that the disclosures were appropriate and in conformity with the
reporting standards.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or collectively, may
cast significant doubt on the Group and Parent Company’s ability to continue as a
going concern for a period of 12 months from when the financial statements are
authorised for issue.
In relation to the Group and Parent Company’s reporting on how they have
applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the Directors’ statement in the financial
statements about whether the Directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going
concern are described in the relevant sections of this report. However, because
not all future events or conditions can be predicted, this statement is not a
guarantee as to the Group’s ability to continue as a going concern.
Overview of our audit approach
Audit scope
• We performed an audit of the complete financial information of seven
components and audit procedures on specific balances for a further six
components.
• The components where we performed full or specific audit procedures
accounted for 91% of adjusted profit before tax (measure used to
calculate materiality), 86% of revenue and 89% of total assets.
Key audit
matters
• Accrued customer marketing costs.
• Accounting for uncertain tax positions.
Materiality
• Overall Group materiality of €100m which represents 4.8% of the
adjusted profit before tax.
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An overview of the scope of the Parent Company and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of
performance materiality determine our audit scope for each reporting
component within the Group. Taken together, this enables us to form an opinion
on the consolidated financial statements. We take into account size, risk profile,
the organisation of the group and effectiveness of Group-wide controls, changes
in the business environment, the potential impact of climate change and other
factors such as recent internal audit results when assessing the level of work to be
performed at each company.
In assessing the risk of material misstatement to the Group financial statements,
and to ensure we had adequate quantitative coverage of significant accounts in
the financial statements, of the 68 reporting components of the Group (17 of
which are trading components), we selected 36 components covering 25
corporate components and 11 trading components, which represent the principal
business units within the Group.
Of the 36 components selected, we performed an audit of the complete financial
information of seven components (“full scope components”) which were selected
based on their size or risk characteristics. For six components (“specific scope
components”), we performed audit procedures on specific accounts within that
component that we considered had the potential for the greatest impact on the
significant accounts in the financial statements either because of the size of these
accounts or their risk profile. We have also performed specified procedures over
23 locations, primarily in relation to the testing of cash and cash equivalents.
The table below illustrates the coverage obtained from the work performed by our audit teams.
Number % Group adjusted profit before tax % Group revenue % Total assets See Notes
2023 2022 2023
2022
2023 2022 2023 2022
Full scope
7 7 99% 97% 76% 75% 83% 84% A, B
Specific scope
6 5 (8)% 4% 10% 10% 6% 6% A, B, C, D
Coverage
13 12 91% 101% 86% 85% 89% 90%
Specified procedures
23 22 —% —% 6% 3% 4% 3% B
Remaining components
32 33 9% (1)% 8% 12% 7% 7% E
Total reporting components
68 67 100% 100% 100% 100% 100% 100%
Notes
(A) The Group audit risk in relation to tax was subject to audit procedures performed by both the component teams and the Group team.
(B) The Group audit risk in relation to accrued customer marketing costs was subject to audit procedures performed by the Group team and at six full scope components, three specific scope components and specified procedures at two components.
(C) The specific scope components relate to four trading components.
(D) The audit scope of these components may not have included testing of all significant accounts of the component but will have contributed to the coverage of significant accounts tested for the Group. Significant accounts that were not subject to the specific scope
audit procedures were subjected to testing of Group-wide controls and analytical review.
(E) Of the remaining 32 components that together represent 9% of the Group’s adjusted profit before tax, none are individually greater than 3% of the Group’s adjusted profit before tax. For the remaining components in this category, we performed other procedures,
including testing of Group-wide controls, analytical review procedures and testing of consolidation journals including intercompany eliminations to respond to any potential risks of material misstatement to the Group financial statements.
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Changes from the prior year
We have not removed any audits designated as full scope or specific scope
components from the prior year as these components remain the most significant
to the Group, by size and risk, and the coverage remains consistent with the prior
year. In the current year, we included one additional specific scope component in
our scope which includes certain intangibles assets. As this is a cost centre, this has
reduced our coverage over adjusted profit before tax compared to the prior year.
We performed specified procedures for a larger number of components, primarily
relating to cash and cash equivalents across the Group.
Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type
of work that needed to be undertaken at each of the components by us, as the
primary audit engagement team, or by component auditors from other EY global
network firms operating under our instruction. Of the seven full scope
components, audit procedures were performed on six of these directly by the
component audit team. For the 29 specific scope and specified procedures
components, eight represented work performed directly by component auditors.
Where the work was performed by component auditors, we determined the
appropriate level of involvement to enable us to determine that sufficient audit
evidence had been obtained as a basis for our opinion on the Group as a whole.
During the current audit cycle, we completed a combination of physical visits to
component teams and alternative oversight procedures, including meeting our
European full and specific scope components at our global audit event held in
London. We also attended video meetings and live reviewed our local audit teams’
working papers. Our physical visits included the Senior Statutory Auditor or
delegates visiting Australia, Spain, Germany, France, Great Britain, Belgium and
Indonesia.
Our site visits (both physical and virtual) involved: meeting with our component
teams to discuss and direct their audit approach; reviewing relevant working
papers and understanding the significant audit findings in response to the risk
areas including accrued customer marketing costs and taxation; holding meetings
with local management; and obtaining updates on local regulatory matters
including tax, pensions, restructuring and legal. The Group audit team interacted
regularly with the component teams where appropriate during various stages of
the audit, reviewed relevant working papers and were responsible for the scope
and direction of the audit process. This, together with the additional procedures
performed at Group level, gave us appropriate evidence for our opinion on the
Group financial statements.
Climate change
Stakeholders are increasingly interested in how climate change will impact the
Group. The Group has determined that the most significant future impacts from
climate change on its operations will be from the increased severity of extreme
weather events which could cause disruption to facilities and logistics routes,
increasing water stress or water scarcity, changes to weather and precipitation
patterns which could cause disruption to the supply of ingredients as well future
regulations (e.g. carbon tax related to greenhouse gas emissions). These are
explained on pages 48 to 60 in the Task Force On Climate Related Financial
disclosures and on pages 68 to 78 in the principal risks. The Group has also
explained its climate commitments on page 36. All of these disclosures form part
of the “Other information,” rather than the audited financial statements. Our
procedures on these unaudited disclosures therefore consisted solely of
considering whether they are materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit or otherwise appear to be
materially misstated, in line with our responsibilities on “Other information”.
In planning and performing our audit we assessed the potential impacts of
climate change on the Group’s business and any consequential material impact on
its financial statements.
The Group has explained in Note 1 (Impact of climate change) its articulation of
how climate change has been reflected in the financial statements including how
this aligns with their commitment to achieve net zero emissions by 2040. In Note 6
(Intangible assets and goodwill) and Note 7 (Property, plant and equipment) to
the financial statements, narrative explanation including further details over the
Group’s considerations has been provided.
Our audit effort in considering the impact of climate change on the financial
statements was focused on evaluating management’s assessment of the impact
of climate risk, physical and transition, their climate commitments, the effects of
material climate risks disclosed on pages 56 to 59 and the significant judgements
and estimates disclosed in Note 3 and whether these have been appropriately
reflected in asset values, useful economic lives, cash flow projections used in
assessing the recoverable amount of the Group’s CGUs, and also in the going
concern and viability assessment. As part of this evaluation, we performed our own
risk assessment, supported by our climate change internal specialists, to
determine the risks of material misstatement in the financial statements from
climate change which needed to be considered in our audit.
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We also challenged the Directors’ considerations of climate change risks in their
assessment of going concern and viability and associated disclosures. Where
considerations of climate change were relevant to our assessment of going
concern, these are described above.
Based on our work we have not identified the impact of climate change on the
financial statements to be a key audit matter or to impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of
most significance in our audit of the financial statements of the current period
and include the most significant assessed risks of material misstatement (whether
or not due to fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in
our opinion thereon, and we do not provide a separate opinion on these matters.
Accrued customer marketing costs
Refer to the Audit Committee Report (page
121-122); Accounting policies (pages 169 and
170).
The Group participates in various programmes
and arrangements with customers referred
to as “promotional programmes”, which
are recorded as deductions from revenue.
The off-invoice discounts activity totalled
€5.4 billion for the year ended 31 December
2023 (2022: €5.2 billion), with €1.3 billion of
accrued customer marketing costs as of
31 December 2023 (2023: €1.3 billion).
Auditing the completeness and measurement
of the accrued customer marketing costs is
complex and judgemental, particularly in
relation to promotional programmes where
there is estimation uncertainty related to
forecasted sales volumes, expected customer
performance or amounts ultimately claimed
by customers.
The types of promotional programmes
are more fully described in Note 3 to the
consolidated financial statements with details
about accrued customer marketing costs
disclosed in Note 14 to the consolidated
financial statements.
We performed audit procedures over this matter at ten reporting components which
covered 93% of the Group balance.
We obtained an understanding of the Group’s revenue recognition policies and
processes and how they are applied, and for full and specific scope reporting
components evaluated the design and tested the operating effectiveness of controls,
including IT controls, that address the risks of material misstatement relating to the
completeness and measurement of the promotional programmes. For example, we
tested controls over management’s determination of the total estimated sales volumes
used in the assessment of the accrued customer marketing costs.
To evaluate the specific estimations that are inherent in the calculation of the accrued
customer marketing costs and assess the completeness of the accrual:
• We evaluated management’s methodology to estimate the year-end accrued
customer marketing costs, in particular the use of historical trends.
• We tested the completeness and accuracy of the underlying data by agreeing key
terms of the promotional programmes to the executed sales agreements on a
sample basis. We also compared accrued customer marketing costs to subsequent
cash settlements on a sample basis.
• We performed analytical procedures on the ratio of accrued customer marketing
costs to relevant data such as gross revenue to identify any potential outliers and
tested material unusual or unexpected journal entries.
• We analysed the historical reversals and ageing of the accrued customer marketing
costs, to identify potential management bias in the estimate of the year-end accrual
and considered any changes in the business environment that would warrant changes
in the methodology.
• We also evaluated the disclosures provided in the consolidated financial statements
related to these promotional programmes.
The audit procedures performed to address this risk were performed by both the
component teams and the Primary team.
We concluded that accrued customer marketing
costs in the consolidated statement of financial
position represent a reasonable estimate of the
associated liability and the related disclosures
included in the financial statements are
appropriate.
Risk
Our response to the risk
Key observations communicated to the Audit Committee
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Accounting for uncertain tax positions
Refer to the Audit Committee Report (page
121-122); Accounting policies (pages 171 and
208).
At 31 December 2023, the Group recorded
provisions for uncertain tax positions of which
€175 million (31 December 2022: €122 million)
are included in current tax liabilities and the
remainder in non-current tax liabilities.
The Group is subject to income tax in
numerous jurisdictions and is routinely under
audit by tax authorities in the ordinary course
of business as described in Note 20 and
Note 22 of the consolidated financial
statements.
Management applies judgement in assessing
tax exposures in each jurisdiction, which
requires interpretation of local tax laws and
specific facts and circumstances.
Auditing the uncertain tax positions is
judgemental, because of the inherent
uncertainty related to the tax exposures,
which may result in materially different
outcomes. Specifically, each tax position
involves the evaluation of unique and evolving
facts and circumstances.
We performed audit procedures over this matter at four full scope components and
one specific scope component.
We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls, including IT controls, in place over the Group’s process to
evaluate and account for uncertain tax positions. For example, we tested the Group’s
controls around evaluation of the facts and circumstances supporting the conclusions
on the Group’s tax positions.
We obtained management’s calculations and agreed inputs to source documentation
where applicable.
We evaluated the tax positions taken by management in each significant jurisdiction in
the context of local tax laws, considering correspondence with tax authorities, the
status of any tax audits and third-party advice obtained by the Group. Our work
involved tax professionals with local knowledge to assess the tax positions taken in each
significant jurisdiction in the context of local tax law and significant tax assessments.
In evaluating management’s tax provisions, we evaluated the assumptions used by
management to assess its uncertain tax positions and compliance with the
requirements of IFRIC 23. We developed our independent range of possible outcomes
for the Group’s tax exposures based on evidence obtained, which we compared to the
Group’s provisions. Where exposures arise in jurisdictions with similar laws and
regulations, we also considered whether the evaluation of tax risks was consistent across
those jurisdictions and took into account any resolution of these issues with the tax
authorities.
We evaluated the adequacy of the related disclosures provided in the Group financial
statements.
The audit procedures performed to address this risk were performed by both the
component teams and the Group team.
We have evaluated the Group’s tax provisions
and challenged the judgements applied. We
concluded that the amounts provided for
uncertain tax positions are within an acceptable
range considering the latest developments in
each jurisdiction and the Group’s overall tax
exposures and that the related disclosures are
appropriate.
Risk
Our response to the risk
Key observations communicated to the Audit Committee
In the prior year, our auditor’s report included a key audit matter in relation to the
carrying value of goodwill and indefinite lived intangibles. In the current year, we
concluded that this is no longer a key audit matter due to the continued growth in
the Group’s significant cash generating units and as we concluded there is no risk
of a material misstatement.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in
evaluating the effect of identified misstatements on the audit and in forming our
audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the
aggregate, could reasonably be expected to influence the economic decisions
of the users of the financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the Group to be €100 million (2022: €87 million),
which is 4.8% (2022: 4.7%) of adjusted profit before tax. We believe that the
adjusted profit before tax provides us with the most relevant profit basis as the
non-recurring items were not related to the ongoing trading of the Group. The
increase in Group materiality since 2022 reflects the increase in profit before
taxation, driven by continued growth in the business in the current year.
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We determined materiality for the Parent Company to be €139 million
(2022: €142 million), which is 1% (2022: 1%) of shareholder’s equity.
During the course of our audit, we reassessed initial materiality and the actual
adjusted profit before tax was slightly higher than the forecasted adjusted profit
before tax and hence the recalculated materiality was higher than the Group’s
initial estimates used at planning. However, due to the status of our procedures
we did not change our materiality assessment to reflect this.
ADJUSTED PROFIT BEFORE TAX MEASURE
Starting basis
• Profit before tax: €2,203 million
Adjustments
• Gain on property sale: €54 million
• Gain on sale of sub-strata and associated mineral rights: €35 million
• Coal royalty income: €18 million
• Total adjustments: €107 million
Adjusted basis
• €2,096 million (adjusted profit before tax)
Materiality
• Materiality maintained at planning level of €100 million versus
€104.8 million on adjusted final reported profit before tax
Performance materiality
The application of materiality at the individual account or balance level. It is set
at an amount to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s
overall control environment, our judgement was that performance materiality was
75% (2022: 75%) of our planning materiality, namely €75 million (2022: €65 million).
We reviewed any misstatements identified in our 2022 Group audit to assess their
potential recurrence in 2023 (which would affect the percentage of Group
performance materiality we utilised to determine the extent of our audit
procedures). Based on the nature of the adjustments identified last year, we
concluded the likelihood of material misstatements would remain low in the
current year and, hence, we set performance materiality at 75%.
Audit work at component locations for the purpose of obtaining audit coverage
over significant financial statement accounts is undertaken based on a
percentage of total performance materiality. The performance materiality set for
each component is based on the relative scale and risk of the component to the
Group as a whole and our assessment of the risk of misstatement at that
component. In the current year, the range of performance materiality allocated to
components was €15 million to €37.5 million (2022: €13.1 million to €32.7 million).
Reporting threshold
An amount below which identified misstatements are considered as being
clearly trivial.
We agreed with the Audit Committee that we would report to them all
uncorrected audit differences in excess of €5 million (2022: €4.3 million), which is
set at 5% of planning materiality, as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative
measures of materiality discussed above and in light of other relevant qualitative
considerations in forming our opinion.
Other information
The other information comprises the information included in the annual report
including the Strategic Report set out on pages 1 to 90, Governance and Directors’
report set out on pages 91 to 147 and Other Group Information set out on pages
242 to 278 other than the financial statements and our auditor’s report thereon.
The Directors are responsible for the other information contained within the
annual report.
Our opinion on the financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in this report, we do not express
any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
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Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ remuneration report to be audited has
been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the
financial year for which the financial statements are prepared is consistent with
the financial statements; and
• the Strategic Report and the Directors’ Report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent
Company and its environment obtained in the course of the audit, we have not
identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which
the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
• the Parent Company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the accounting
records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our
audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement
relating to the Group and Parent Company’s compliance with the provisions of
the UK Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit:
• Directors’ statement with regards to the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified set out on
page 146;
• Directors’ explanation as to its assessment of the company’s prospects, the
period this assessment covers and why the period is appropriate set out on page
79;
• Director’s statement on whether it has a reasonable expectation that the Group
will be able to continue in operation and meets its liabilities set out on page 146;
• Directors’ statement on fair, balanced and understandable set out on page 147;
• Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on page 68-78;
• The section of the annual report that describes the review of effectiveness of
risk management and internal control systems set out on page 77 and 124; and
• The section describing the work of the Audit Committee set out on page
117-124.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page
147, the Directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors are responsible for assessing
the Group and Parent Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the Group or the
Parent Company or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these
financial statements.
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2023 Integrated Report and Form 20-F
156
Independent auditor’s report to the members of Coca-Cola Europacific Partners plc continued
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2023 as filed with the SEC.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined above,
to detect irregularities, including fraud. The risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for example, forgery
or intentional misrepresentations, or through collusion. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud
rests with both those charged with governance of the company and
management.
• We obtained an understanding of the legal and regulatory frameworks that
are applicable to the Group and determined that the most significant are:
• those that relate to the reporting framework: U.K. adopted International
Accounting Standards, International Financial Reporting Standards (IFRS) as
adopted by the European Union, International Financial Reporting Standards
as issued by the IASB, the UK Companies Act 2006 and the UK Corporate
Governance Code.
• those that relate to the accrual or recognition of expenses for taxation such
as various country specific tax regulations in which the Group has operations.
• those that relate to the accrual or recognition of expenses for pension costs,
as well as the treatment of its employees, such as labour agreements in
countries where the Group operates.
• In addition, we concluded that there are certain significant laws and
regulations which may have an effect on the determination of the amounts
and disclosures in the financial statements, primarily being The US Securities
Act and Exchange Act of 1934 and the Listing Rules of the UK Listing Authority.
• We understood how Coca-Cola Europacific Partners plc is complying with those
frameworks by making enquiries of management, internal audit, those responsible
for legal and compliance procedures and the company secretary. We corroborated
our enquiries through our review of board minutes and papers provided to the
Audit Committee and attendance at all meetings of the Audit Committee, as
well as consideration of the results of our audit procedures across the Group.
• We assessed the susceptibility of the Group’s financial statements to material
misstatement, including how fraud might occur. We did this by:
• Meeting with management from various parts of the business to understand
where they considered there to be susceptibility to fraud;
• Assessing whistleblowing incidences for those with a potential financial
reporting impact;
• Evaluating the historical performance of CCEP against similar companies;
• Understanding the Group’s annual bonus scheme and long-term incentive
plan performance targets and their propensity to influence on efforts made
by management to manage revenue and earnings;
• Understanding the related party transactions and significant transactions
occurring with related parties in the year;
• Assessing the key judgements and estimates and significant transactions
occurring in year; and
• Considering the controls framework, including IT General controls, that the
Group has established to prevent, deter and detect fraud; and how senior
management monitors those programmes and controls.
Where the risk was considered to be higher, we performed audit procedures
to address identified risks of material misstatement. These procedures included
those referred to in the “Accrued customer marketing costs” key audit matters
section above. In addition, we used data analytics at our full and specific scope
components to correlate revenue with trade receivables and cash received, as well
as promotional programmes expense with promotional programmes accruals and
settlements. We also performed journal entry testing, focusing on manual and
consolidation journals, and inspected documentation for any material unusual
or unexpected journals.
Based on this understanding we designed our audit procedures to identify
non-compliance with such laws and regulations, including specific instructions to
full and specific scope component audit teams. At a Group level, our procedures
involved: enquiries of Group management and those charged with governance,
legal counsel and internal audit and also testing over manual consolidation
journals and journals indicating large or unusual transactions based on our
understanding of the business. At a component level, our full and specific
scope component audit team’s procedures included enquiries of component
management; journal entry testing; and focused testing over areas we considered
more susceptible to management override, including as referred to in the
“Accrued customer marketing costs” key audit matters section above. Any
instances of non-compliance with laws and regulations, including in relation
to fraud, were communicated by/to components and considered in our audit
approach, if applicable. In addition, we completed procedures to conclude on the
compliance of the disclosures in the annual report and accounts with all applicable
requirements.
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157
Independent auditor’s report to the members of Coca-Cola Europacific Partners plc continued
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2023 as filed with the SEC.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor’s report.
Other matters we are required to address
• Following the recommendation from the Audit Committee we were appointed
by the Company on 22 June 2016 to audit the financial statements for the year
ending 31 December 2016 and subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and
reappointments is eight years, covering the years ending 31 December 2016 to
31 December 2023.
• The audit opinion is consistent with the additional report to the Audit
Committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s members those matters we
are required to state to them in an auditor’s report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
Sarah Kokot
Senior statutory auditor
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
15 March 2024
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158
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This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2023 as filed with the SEC.
To the Shareholders and the Board of Directors
of Coca-Cola Europacific Partners plc
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position
of Coca-Cola Europacific Partners plc (the “Group”) as of 31 December 2023 and
2022, the related consolidated statements of income, comprehensive income,
statement of changes in equity and cash flows for each of the three years in the
period ended 31 December 2023, and the related notes, collectively referred to as
the “consolidated financial statements”. In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the
Group at 31 December 2023 and 2022, and the results of its operations and its cash
flows for each of the three years in the period ended 31 December 2023, in
conformity with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (PCAOB), the Group's internal
control over financial reporting as of 31 December 2023, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) and our
report dated 15 March 2024 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Group’s management. Our
responsibility is to express an opinion on the Group’s financial statements based
on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Group in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing
procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audits provide a reasonable basis for
our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the
current period audit of the financial statements that were communicated or
required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the financial statements and (2)
involved our especially challenging, subjective or complex judgements. The
communication of critical audit matters does not alter in any way our opinion on
the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate opinions on
the critical audit matters or on the accounts or disclosures to which they relate.
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2023 Integrated Report and Form 20-F
159
Report of independent registered public accounting firm
Description of the matter
How we addressed the matter in our audit
Accrued
customer
marketing
costs
The Group participates in various programmes and
arrangements with customers referred to as “promotional
programmes”, which are recorded as deductions from revenue.
The off-invoice discounts activity totalled €5.4 billion for the year
ended 31 December 2023, with €1.3 billion of accrued customer
marketing costs as of 31 December 2023.
Auditing the completeness and measurement of the accrued
customer marketing costs is complex and judgemental,
particularly in relation to promotional programmes where there
is estimation uncertainty related to the forecasted sales
volumes, expected customer performance or amounts
ultimately claimed by customers.
The types of promotional programmes are more fully described
in Note 3 to the consolidated financial statements with details
about accrued customer marketing costs disclosed in Note 14
to the consolidated financial statements.
We obtained an understanding of the Group’s revenue recognition policies and processes and how they
are applied, evaluated the design and tested the operating effectiveness of controls that address the
risks of material misstatement relating to the completeness and measurement of the promotional
programmes. For example, we tested controls over management’s determination of the total estimated
sales volumes used in the assessment of the accrued customer marketing costs.
To evaluate the specific estimations that are inherent in the calculation of the accrued customer
marketing costs and the completeness of the accrual, our audit procedures included, among others,
testing management’s methodology to estimate the year-end accrued customer marketing costs, in
particular the use of historical trends. We tested the completeness and accuracy of the underlying data
by agreeing key terms of the promotional programmes to the executed sales agreements on a sample
basis. We compared accrued customer marketing costs to subsequent cash settlements on a sample
basis. We performed analytical procedures on the ratio of accrued customer marketing costs to relevant
data such as gross revenue to identify any potential outliers and tested material unusual or unexpected
journal entries.
We also analysed the historical reversals and ageing of the accrued customer marketing costs, to identify
potential management bias in the estimate of the year-end accrual and considered any changes in the
business environment that would warrant changes in the methodology.
Accounting
for uncertain
tax positions
At 31 December 2023, the Group recorded provisions for
uncertain tax positions of which €175 million are included in
current tax liabilities and the remainder in non-current tax
liabilities.
The Group is subject to income tax in numerous jurisdictions
and is routinely under audit by taxing authorities in the ordinary
course of business as described in Note 20 and Note 22 of the
consolidated financial statements.
Management applies judgement in assessing tax exposures in
each jurisdiction, which requires interpretation of local tax laws
and specific facts and circumstances.
Auditing the uncertain tax positions is judgemental, because of
the inherent uncertainty related to the tax exposures, which
may result in materially different outcomes. Specifically, each
tax position involves the evaluation of unique and evolving facts
and circumstances.
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls
in place over the Group’s process to evaluate and account for uncertain tax positions. For example, we
tested the Group’s controls around evaluation of the facts and circumstances supporting the conclusions
on the Group’s tax positions.
We obtained management’s calculations and agreed inputs to source documentation where applicable.
We evaluated the tax positions taken by management in each significant jurisdiction in the context
of local tax laws, considering correspondence with tax authorities, the status of any tax audits and
third-party advice obtained by the Group. Our work involved tax professionals with local knowledge to
assess the tax positions taken in each significant jurisdiction in the context of local tax law and significant
tax assessments.
In evaluating management’s tax provisions, we evaluated the assumptions used by management to
assess its uncertain tax positions and compliance with the requirements of IFRIC 23. We developed our
independent range of possible outcomes for the Group’s tax exposures based on evidence obtained,
which we compared to the Group’s provisions. Where exposures arise in jurisdictions with similar laws and
regulations, we also considered whether the evaluation of tax risks was consistent across those
jurisdictions and took into account any resolution of these issues with the tax authorities.
/s/ Ernst & Young LLP
We have served as the Group’s auditor since 2016.
London, United Kingdom
15 March 2024
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2023 Integrated Report and Form 20-F
160
Report of independent registered public accounting firm continued
To the Shareholders and the Board of Directors
of Coca-Cola Europacific Partners plc
Opinion on Internal Control Over Financial Reporting
We have audited Coca-Cola Europacific Partners plc’s internal control over
financial reporting as of 31 December 2023, based on criteria established in
Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework), (the COSO criteria).
In our opinion, Coca-Cola Europacific Partners plc (the “Group”) maintained,
in all material respects, effective internal control over financial reporting as
of 31 December 2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (PCAOB), the consolidated
statements of financial position of the Group as of 31 December 2023 and
2022, the related consolidated statements of income, comprehensive income,
statement of changes in equity and cash flows for each of the three years
in the period ended 31 December 2023, and the related notes and our report
dated 15 March 2024 expressed an unqualified opinion thereon.
Basis for Opinion
The Group’s management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting included in the accompanying Management’s
report on internal control over financial reporting. Our responsibility is to express
an opinion on the Group’s internal control over financial reporting based on our
audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Group in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was
maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating
the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in
accordance with authorisations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the company’s assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may
not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
London, United Kingdom
15 March 2024
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2023 Integrated Report and Form 20-F
161
Report of independent registered public accounting firm continued
Year ended 31 December
2023 2022 2021
Note € million € million € million
Revenue
4 18,302 17,320 13,763
Cost of sales
(11,582) (11,096) (8,677)
Gross profit
6,720 6,224 5,086
Selling and distribution expenses
17 (3,178) (2,984) (2,496)
Administrative expenses
17 (1,310) (1,250) (1,074)
Other income
23 107 96 —
Operating profit
2,339 2,086 1,516
Finance income
18 65 67 43
Finance costs
18 (185) (181) (172)
Total finance costs, net
(120) (114) (129)
Non-operating items
(16) (15) (5)
Profit before taxes
2,203 1,957 1,382
Taxes
20 (534) (436) (394)
Profit after taxes
1,669 1,521 988
Profit attributable to shareholders
1,669 1,508 982
Profit attributable to non-controlling interests
— 13 6
Profit after taxes
1,669 1,521 988
Basic earnings per share (€)
5 3.64 3.30 2.15
Diluted earnings per share (€)
5 3.63 3.29 2.15
The accompanying notes are an integral part of these consolidated financial statements.
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2023 Integrated Report and Form 20-F
162
Consolidated income statement
Year ended 31 December
2023 2022 2021
Note € million € million € million
Profit after taxes
1,669 1,521 988
Components of other comprehensive income/(loss):
Items that may be subsequently reclassified to the income statement:
Foreign currency translations:
Pre-tax activity, net
(246) (205) 260
Tax effect
— — —
Foreign currency translation, net of tax
(246) (205) 260
Cash flow hedges:
Pre-tax activity, net
21 (64) 277
Tax effect
20 (11) 17 (63)
Cash flow hedges, net of tax
12 10 (47) 214
Other reserves:
Pre-tax activity, net
3 (9) 7
Tax effect
20 — 3 (1)
Other reserves, net of tax
3 (6) 6
Items that may be subsequently reclassified to the income statement
(233) (258) 480
Items that will not be subsequently reclassified to the income statement:
Pension plan remeasurements:
Pre-tax activity, net 15
(108) (45) 301
Tax effect
20 35 11 (63)
Pension plan remeasurements, net of tax
(73) (34) 238
Items that will not be subsequently reclassified to the income statement
(73) (34) 238
Other comprehensive (loss)/income for the period, net of tax
(306) (292) 718
Comprehensive income for the period
1,363 1,229 1,706
Comprehensive income attributable to shareholders
1,363 1,202 1,684
Comprehensive income attributable to non-controlling interests
— 27 22
Comprehensive income for the period
1,363 1,229 1,706
The accompanying notes are an integral part of these consolidated financial statements.
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2023 Integrated Report and Form 20-F
163
Consolidated statement of comprehensive income
ASSETS
Non-current:
Intangible assets
6 12,395 12,505
Goodwill
6 4,514 4,600
Property, plant and equipment
7 5,344 5,201
Non-current derivative assets
12 100 191
Deferred tax assets
20
1 21
Other non-current assets
25 295 252
Total non-current assets
22,649 22,770
Current:
Current derivative assets
12 161 257
Current tax assets
58 85
Inventories
8 1,356 1,380
Amounts receivable from related parties
19 123 139
Trade accounts receivable
9 2,547 2,466
Other current assets
24 351 479
Assets held for sale
24 22 94
Short-term investments
10 568 256
Cash and cash equivalents
10 1,419 1,387
Total current assets
6,605 6,543
Total assets
29,254 29,313
LIABILITIES
Non-current:
Borrowings, less current portion
13 10,096 10,571
Employee benefit liabilities
15 191 108
Non-current provisions
22 45 55
Non-current derivative liabilities
12 169 187
Deferred tax liabilities
20 3,378 3,513
Non-current tax liabilities
75 82
Other non-current liabilities
46 37
Total non-current liabilities
14,000 14,553
Year ended 31 December
2023 2022
Note € million € million
Current:
Current portion of borrowings
13 1,300 1,336
Current portion of employee benefit liabilities
15 8 8
Current provisions
22 114 115
Current derivative liabilities
12 99 76
Current tax liabilities
253 241
Amounts payable to related parties
19 270 485
Trade and other payables
14 5,234 5,052
Total current liabilities
7,278 7,313
Total liabilities
21,278 21,866
EQUITY
Share capital
16 5 5
Share premium
16 276 234
Merger reserves
16 287 287
Other reserves
16 (823) (507)
Retained earnings
8,231 7,428
Equity attributable to shareholders
7,976 7,447
Non-controlling interest
16 — —
Total equity
7,976 7,447
Total equity and liabilities
29,254 29,313
Year ended 31 December
2023 2022
Note € million € million
The accompanying notes are an integral part of these consolidated financial
statements.
The financial statements were approved by the Board of Directors and authorised
for issue on 15 March 2024. They were signed on its behalf by:
Damian Gammell,
Chief Executive Officer
15 March 2024
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Consolidated statement of financial position
Cash flows from operating activities:
Profit before taxes
2,203 1,957 1,382
Adjustments to reconcile profit before tax to net
cash flows from operating activities:
Depreciation
7 653 715 693
Amortisation of intangible assets
6 139 101 89
Share-based payment expense
21 57 33 16
Gain on sale of sub-strata and associated mineral
rights
23 (35) — —
Gain on the sale of property
23 (54) — —
Finance costs, net
18 120 114 129
Income taxes paid (509) (415) (306)
Changes in assets and liabilities:
Increase in trade and other receivables
(5) (282) (242)
Decrease/(increase) in inventories
6 (244) (1)
Increase in trade and other payables
124 885 507
Increase/(decrease) in net payable receivable
from related parties
80 (15) 8
(Decrease)/increase in provisions
(11) 37 (116)
Change in other operating assets and liabilities
38 46 (42)
Net cash flows from operating activities
2,806 2,932 2,117
Cash flows from investing activities:
Acquisition of bottling operations, net of cash
acquired
— — (5,401)
Purchases of property, plant and equipment
(672) (500) (349)
Purchases of capitalised software
(140) (103) (97)
Proceeds from sales of property, plant and
equipment
101 11 25
Proceeds from sales of intangible assets
37 143 —
Proceeds from the sale of sub-strata and
associated mineral rights
23 35 — —
Net (payments)/proceeds of short-term
investments
(342) (207) 198
Year ended 31 December
2023 2022 2021
Note € million € million € million
Investments in equity instruments
(5) (2) (4)
Proceeds from sale of equity instruments
— 13 25
Interest received
58 — —
Other investing activity, net
(9) — (2)
Net cash flows used in investing activities
(937) (645) (5,605)
Cash flows from financing activities:
Proceeds from borrowings, net
13 694 — 4,877
Changes in short-term borrowings
13 — (285) 276
Repayments on third party borrowings
13 (1,159) (938) (950)
Settlement of debt-related cross currency swaps
13 69 — —
Payments of principal on lease obligations
13 (148) (153) (139)
Interest paid
13 (182) (130) (97)
Dividends paid
16 (841) (763) (638)
Exercise of employee share options
43 13 28
Transactions with non-controlling interests
— — (73)
Acquisition of non-controlling interest
19 (282) — —
Other financing activities, net
(16) (20) 5
Net cash flows (used in)/from financing activities
(1,822) (2,276) 3,289
Net change in cash and cash equivalents
47 11 (199)
Net effect of currency exchange rate changes on
cash and cash equivalents
(15) (31) 83
Cash and cash equivalents at beginning of period
10 1,387 1,407 1,523
Cash and cash equivalents at end of period
10 1,419 1,387 1,407
Year ended 31 December
2023 2022 2021
Note € million € million € million
The accompanying notes are an integral part of these consolidated financial
statements.
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Consolidated statement of cash flows
Share capital
Share
premium
Merger
reserves
Other
reserves
Retained
earnings Total
Non-
controlling
interest
Total
equity
Note € million € million € million € million € million € million € million € million
As at 1 January 2021
5 192 287 (537) 6,078 6,025 — 6,025
Profit after taxes
— — — — 982 982 6 988
Other comprehensive income
— — — 465 237 702 16 718
Total comprehensive income
— — — 465 1,219 1,684 22 1,706
Non-controlling interests recognised relating to business combination
— — — — — — 228 228
Transactions with non-controlling interests
— — — — — — (73) (73)
Cash flow hedge gains transferred to goodwill relating to business combination
12 — — — (84) — (84) — (84)
Issue of shares during the year
16 — 28 — — — 28 — 28
Equity-settled share-based payment expense
21 — — — — 16 16 — 16
Share-based payment tax effects
20 — — — — 3 3 — 3
Dividends
16 — — — — (639) (639) — (639)
As at 31 December 2021
5 220 287 (156) 6,677 7,033 177 7,210
Profit after taxes
— — — — 1,508 1,508 13 1,521
Other comprehensive income/(loss)
— — — (272) (34) (306) 14 (292)
Total comprehensive income/(loss)
— — — (272) 1,474 1,202 27 1,229
Acquisition of non-controlling interests
16 — — — (79) — (79) (204) (283)
Issue of shares during the year
16 — 14 — — — 14 — 14
Equity-settled share-based payment expense
21 — — — — 33 33 — 33
Share-based payment tax effects
20 — — — — 10 10 — 10
Dividends
16 — — — — (766) (766) — (766)
As at 31 December 2022
5 234 287 (507) 7,428 7,447 — 7,447
Profit after taxes
— — — — 1,669 1,669 — 1,669
Other comprehensive loss
— — — (233) (73) (306) — (306)
Total comprehensive income/(loss)
— — — (233) 1,596 1,363 — 1,363
Cash flow hedge (gains)/losses transferred to cost of inventories
12 — — — (114) — (114) — (114)
Tax effect on cash flow hedge (gains)/losses transferred to cost of inventories
12; 20 — — — 31 — 31 — 31
Issue of shares during the year
16 — 42 — — — 42 — 42
Equity-settled share-based payment expense
21 — — — — 54 54 — 54
Purchases of shares for equity settled Employee Share Purchase Plan
— — — — (4) (4) — (4)
Share-based payment tax effects
20 — — — — 1 1 — 1
Dividends
16 — — — — (844) (844) — (844)
As at 31 December 2023
5 276 287 (823) 8,231 7,976 — 7,976
The accompanying notes are an integral part of these consolidated financial statements.
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Consolidated statement of changes in equity
Note 1
General information and basis of preparation
Coca-Cola Europacific Partners plc (the Company) and its subsidiaries (together
CCEP, or the Group) are a leading consumer goods group in Western Europe and
the Asia Pacific region, making, selling and distributing an extensive range of
primarily non-alcoholic ready to drink beverages.
The Company has ordinary shares with a nominal value of €0.01 per share
(Shares). CCEP is a public company limited by shares, incorporated under the laws
of England and Wales with the registered number in England of 9717350. The
Group’s Shares are listed and traded on Euronext Amsterdam, the NASDAQ Global
Select Market, London Stock Exchange and on the Spanish Stock Exchanges. The
address of the Company’s registered office is Pemberton House, Bakers Road,
Uxbridge, UB8 1EZ, United Kingdom.
The consolidated financial statements of the Group for the year ended
31 December 2023 were approved and signed by Damian Gammell,
Chief Executive Officer, on 15 March 2024 having been duly authorised to do so by
the Board of Directors.
Impact of climate change
As part of the preparation of these consolidated financial statements, the Group
has considered the impact of climate change risks on the current valuation of the
Group’s assets and liabilities, particularly in the context of the risks and scenarios
identified in the Task Force on Climate-related Financial Disclosures (TCFD) on
pages 48-60 of the Strategic Report. There has been no material impact on the
financial reporting judgements and estimates arising from the considerations of
the Group and, as a result, the valuation of the Group’s assets and liabilities as of
31 December 2023 have not been affected. The Group’s considerations were
specifically focused on the impact of climate change risks on the projected cash
flows used in the impairment assessment of our indefinite lived intangible assets
and goodwill (refer to Note 6) as well as the carrying value and useful economic
lives of property, plant and equipment (refer to Note 7). As the pace and
effectiveness of a global transition to a low-carbon economy evolve, including the
development of government policies aiming to address the risks arising from
climate change, the Group will continue to monitor and assess the relevant
implications on the valuation of the Group’s assets and liabilities that could arise in
future years.
Basis of preparation
These consolidated financial statements of the Group reflect the following:
• They have been prepared in accordance with UK adopted International
Accounting Standards, International Financial Reporting Standards (IFRS) as
adopted by the European Union and International Financial Reporting
Standards as issued by the International Accounting Standards Board (IASB).
• They have been prepared under the historical cost convention, except for
certain items measured at fair value. Those accounting policies have been
applied consistently in all periods, except for the adoption of new standards and
amendments as of 1 January 2023, as described below under accounting policies.
• They are presented in euros, which is also the Parent Company’s functional
currency, and all values are rounded to the nearest euro million except where
otherwise indicated.
• They have been prepared on a going concern basis (refer to the “Going concern”
paragraph on page 146).
Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Group and its subsidiaries. All subsidiaries have accounting years ended 31
December and apply consistent accounting policies for the purpose of the
consolidated financial statements.
Subsidiary undertakings are consolidated from the date on which control is
transferred to the Group and cease to be consolidated from the date on which
control is transferred out of the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through the Group’s power to direct the
activities of the entity. All intercompany accounts and transactions are eliminated
on consolidation.
Associates are all entities over which the Group has significant influence but not
control, generally accompanying a shareholding of between 20% to 50% of voting
rights. Investments in associates are accounted for using the equity method of
accounting, after initially being recognised at cost.
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Notes to the consolidated financial statements
The Group treats transactions with non-controlling interests that do not result in a
loss of control as equity transactions.
When the Group loses control over a subsidiary, it derecognises the related assets
(including goodwill), liabilities, non-controlling interest and any other components
of equity, while any resulting gain or loss is recognised in profit or loss. Any interest
retained in the former subsidiary is measured at fair value when control is lost.
The financial results presented herein for the period from 1 January 2021 through
to the acquisition of CCL (the Acquisition) effective 10 May 2021 refer to Coca-
Cola European Partners plc (Legacy CCEP) and its consolidated subsidiaries. The
periods from the Acquisition to the year ended 31 December 2023 refer to the
combined financial results of CCEP.
Foreign currency
The individual financial statements of each subsidiary are presented in the
currency of the primary economic environment in which the subsidiary operates
(its functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each subsidiary are expressed in euros.
Foreign currency transactions are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies are remeasured to the functional
currency of the entity at the rate of exchange in effect at the statement of
financial position date with the resulting gain or loss recorded in the consolidated
income statement.
The consolidated income statement includes non-operating items which are
primarily made up of remeasurement gains and losses related to currency
exchange rate fluctuations on financing transactions denominated in a currency
other than the subsidiary’s functional currency. Non-operating items are shown on
a net basis and reflect the impact of any derivative instruments utilised to hedge
the foreign currency movements of the underlying financing transactions.
The assets and liabilities of the Group's foreign operations are translated from
local currencies to the euro reporting currency at exchange rates in effect at the
end of each reporting period. Revenues and expenses are translated at average
monthly exchange rates, with average rates being a reasonable approximation of
the rates prevailing on the transaction dates. Gains and losses from translation are
included in other comprehensive income. On disposal of a foreign operation,
accumulated exchange differences are recognised as a component of the gain or
loss on disposal.
The principal exchange rates used for translation purposes in respect of one euro
were:
Average for the year ended 31 December
(A)
Closing as at 31 December
2023 2022 2021 2023 2022
British pound
1.15 1.17 1.16 1.15 1.13
US dollar
0.92 0.95 0.85 0.90 0.94
Norwegian
krone
0.09 0.10 0.10 0.09 0.10
Swedish krona
0.09 0.09 0.10 0.09 0.09
Icelandic krona
0.01 0.01 0.01 0.01 0.01
Australian dollar
0.61 0.66 0.63 0.61 0.64
Indonesian
rupiah
(B)
0.06 0.06 0.06 0.06 0.06
New Zealand
dollar
0.57 0.60 0.60 0.57 0.60
Papua New
Guinean kina
0.26 0.27 0.24 0.24 0.27
(A) For the year ended 31 December 2021, the rates for the Asia Pacific region are calculated as average for the period from 10 May
2021 to 31 December 2021.
(B) Indonesian rupiah is shown as 1000 IDR versus 1 EUR.
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Notes to the consolidated financial statements continued
Reporting periods
In these consolidated financial statements, the Group is reporting the financial
results for the years ended 31 December 2023, 31 December 2022 and
31 December 2021.
The following table summarises the number of selling days for the years ended
31 December 2023, 31 December 2022 and 31 December 2021 (based on a
standard five day selling week):
First half Second half Full year
2023
130 130 260
2022
130 130 260
2021
131 130 261
Comparability
Sales of the Group’s products are seasonal. In Europe, the second and third
quarters typically account for higher unit sales of the Group’s products than the
first and fourth quarters. In the Group’s Asia Pacific territories, the fourth quarter
would typically reflect higher sales volumes in the year. The seasonality of the
Group’s sales volume, combined with the accounting for fixed costs such as
depreciation, amortisation, rent and interest expense, impacts the Group’s
reported results for the first and second halves of the year. Additionally, year over
year shifts in holidays, selling days and weather patterns can impact the Group’s
results on an annual or half yearly basis.
Note 2
Accounting policies
IFRS 15 “Revenue recognition and deductions from revenue”
The Group derives its revenues by making, selling and distributing ready to drink
beverages. The revenue from the sale of products is recognised at the point in
time at which control passes to a customer, typically when products are delivered
to a customer. A receivable is recognised by the Group at the point in time at
which the right to consideration becomes unconditional.
The Group uses various promotional programmes under which rebates, refunds,
price concessions or similar items can be earned by customers for attaining
agreed upon sales levels or for participating in specific marketing programmes.
Those promotional programmes do not give rise to a separate performance
obligation. Where the consideration the Group is entitled to varies because of
such programmes, it is deemed to be variable consideration. The related accruals
are recognised as a deduction from revenue and are not considered distinct from
the sale of products to the customer. Variable consideration is only included to the
extent that it is highly probable that the inclusion will not result in a significant
revenue reversal in the future normal commercial terms.
Financing elements are not deemed present in our contracts with customers, as
the sales are made with credit terms not exceeding normal commercial terms.
Taxes on sugared soft drinks, excise taxes and taxes on packaging are recorded on
a gross basis (i.e. included in revenue) where the Group is the principal in the
arrangement. Value added taxes are recorded on a net basis (i.e. excluded from
revenue). The Group assesses these taxes and duties on a jurisdiction by
jurisdiction basis to conclude on the appropriate accounting treatment.
The rest of the accounting policies applied by the Group are included in the
relevant notes herein.
New and amended standards
The Group has applied the following standards and amendments for the first time
in the year ended 31 December 2023.
IFRS 17 “Insurance Contracts”
IFRS 17 “Insurance Contracts” is a comprehensive new standard for insurance
contracts covering recognition, measurement, presentation and disclosure. IFRS 17
replaces IFRS 4 “Insurance Contracts”. The overall objective of IFRS 17 is to provide
a comprehensive accounting model for insurance contracts that is more useful
and consistent for insurers covering all relevant accounting aspects.
The new standard had no impact on the consolidated financial statements of the
Group.
Definition of Accounting Estimates – Amendments to IAS 8
The amendments to IAS 8 clarify the distinction between changes in accounting
estimates, changes in accounting policies and corrections of errors. They also
clarify how entities use measurement techniques and inputs to develop
accounting estimates.
These amendments had no impact on the consolidated financial statements of
the Group.
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Notes to the consolidated financial statements continued
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice
Statement 2
The amendments to IAS 1 “Presentation of Financial Statements” and IFRS
Practice Statement 2 “Making Materiality Judgements” 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 concerning accounting policy
disclosures.
The amendments had no impact on the consolidated financial statements of the
Group.
Deferred Tax related to Assets and Liabilities arising from a Single Transaction –
Amendments to IAS 12
The amendments to IAS 12 “Income Tax” 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.
The amendments had no material impact on the consolidated financial
statements of the Group.
International Tax Reform - Pillar Two Model Rules - Amendments to IAS 12
The Group has adopted International Tax Reform – Pillar Two Model Rules
(Amendments to IAS 12) upon their release on 23 May 2023. The amendments
provide a temporary mandatory exception from deferred tax accounting for the
top-up tax, which is effective immediately, and require new disclosures about the
Pillar Two exposure (see Note 20 for further details).
The Group has not early adopted any other amendments to accounting standards
that have been issued but are not yet effective. These amendments are not
expected to have a material impact to the Group in the current or future periods
and on foreseeable future transactions.
Note 3
Significant judgements and estimates
In preparing these consolidated financial statements, management has made
judgements and estimates that affect the application of the Group’s accounting
policies and the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to estimates are
recognised prospectively. The significant judgements made in applying the
Group’s accounting policies were applied consistently across the annual periods.
The significant judgements and key sources of estimation uncertainty that have a
significant effect on the amounts recognised in these financial statements are
outlined below.
Significant judgements
Intangible assets and goodwill
The Group has assigned indefinite lives to its bottling agreements with TCCC. This
judgement has been made after evaluating the contractual provisions of the
bottling agreements, the Group’s mutually beneficial relationship with TCCC and
the history of renewals for bottling agreements.
Refer to Note 6 for further details on the judgement regarding the lives of
bottling agreements.
Significant estimates
Impairment of indefinite lived intangible assets and goodwill
Determining whether goodwill and intangible assets with indefinite lives are
impaired requires an estimation of the value in use or the fair value less costs to
sell of the cash generating unit (CGU) to which the goodwill or intangible asset has
been allocated. The value in use calculation requires management’s estimation of
the future cash flows expected to arise from the CGU, including climate-related
risks. Refer to Note 6 for the sensitivity analysis of the assumptions used in the
impairment analysis of goodwill and intangible assets with indefinite lives.
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Notes to the consolidated financial statements continued
Deductions from revenue and sales incentives
The Group participates in various promotional programmes with customers
designed to increase the sale of products. Among the programmes are
arrangements under which rebates, refunds, price concessions or similar items can
be earned by customers for attaining agreed upon sales levels, or for participating
in specific marketing programmes. Those promotional programmes do not give
rise to a separate performance obligation. Where the consideration the Group is
entitled to varies because of such programmes, the amount payable is deemed to
be variable consideration. Management makes estimates on an ongoing basis for
each individual promotion to assess the value of the variable consideration based
upon historical customer experience, expected customer performance and/or
estimated sales volumes. The related accruals are recognised as a deduction from
revenue and are not considered distinct from the sale of products to the
customer. Refer to Note 14 for further details.
Income tax
The Group is subject to income taxes in numerous jurisdictions and there are
many transactions for which the ultimate tax determination cannot be assessed
with certainty in the ordinary course of business. The Group recognises a provision
for situations that might arise in the foreseeable future based on an assessment of
the probabilities as to whether additional taxes will be due. In addition, the Group
is involved in various legal proceedings and tax matters. Where an outflow of funds
is believed to be probable and a reliable estimate of the outcome of the dispute
can be made, management provides for its best estimate of the liability. Where
the final outcome on these matters is different from the amounts that were
initially recorded, such differences impact the tax provision in the period in which
such determination is made. These estimates are subject to potential change over
time as new facts emerge and each circumstance progresses. The evaluation of
deferred tax asset recoverability requires estimates to be made regarding the
availability of future taxable income in the jurisdiction giving rise to the deferred
tax asset. Refer to Note 20 for further details regarding income taxes.
Defined benefit plans
The determination of pension benefit costs and obligations is estimated based on
assumptions determined with the assistance of external actuarial advice. The key
assumptions impacting the valuations are the discount rate, salary rate of inflation
and mortality rates. Refer to Note 15 for further details about the Group’s defined
benefit pension plan costs and obligations, including sensitivities to the key
assumptions applied.
Note 4
Segment information
Description of segment and principal activities
The Group derives its revenues through a single business activity, which is making,
selling and distributing an extensive range of primarily non-alcoholic ready to drink
beverages. The Group’s Board continues to be its Chief Operating Decision Maker
(CODM), which allocates resources and evaluates performance of its operating
segments based on volume, revenue and comparable operating profit.
Comparable operating profit excludes items impacting the comparability of
period over period financial performance.
The following table provides a reconciliation between reportable segment
operating profit and consolidated profit before tax:
Year ended 31 December
2023 2022 2021
Europe API Total Europe API Total Europe API Total
€ million € million € million € million € million € million € million € million € million
Revenue
14,553 3,749 18,302 13,529 3,791 17,320 11,584 2,179 13,763
Comparable
operating profit
(A)
1,888 485 2,373 1,670 468 2,138 1,500 272 1,772
Items impacting
comparability
(B)
(34) (52) (256)
Reported operating
profit
2,339 2,086 1,516
Total finance costs,
net
(120) (114) (129)
Non-operating
items
(16) (15) (5)
Reported profit
before tax
2,203 1,957 1,382
(A) Comparable operating profit includes comparable depreciation and amortisation of €558 million and €196 million for Europe and
API respectively, for the year ended 31 December 2023. Comparable depreciation and amortisation charges for the year ended
31 December 2022 totalled €549 million and €223 million for Europe and API respectively. Comparable depreciation and
amortisation charges for the year ended 31 December 2021 totalled €564 million and €162 million for Europe and API respectively.
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Notes to the consolidated financial statements continued
(B) Items impacting the comparability of period over period financial performance for 2023 primarily include restructuring charges of
€94 million (refer to Note 17) and accelerated amortisation charges of €27 million (refer to Note 6), partially offset by €18 million
of royalty income arising from the ownership of certain mineral rights in Australia (refer to Note 23), considerations of €35 million
received relating to the sale of the sub-strata and associated mineral rights in Australia (refer to Note 23) and gains of €54 million
mainly attributable to the sale of property in Germany (refer to Note 23). Items impacting the comparability for 2022 included
restructuring charges of €163 million (refer to Note 17), partially offset by €96 million of other income arising from the favourable
court ruling pertaining to the ownership of certain mineral rights in Australia (refer to Note 23) and net insurance recoveries
received of €11 million arising from the July 2021 flooding events.
No single customer accounted for more than 10% of the Group’s revenue during
the years ended 31 December 2023, 31 December 2022 and 31 December 2021.
Revenue by geography
The following table summarises revenue from external customers by geography,
which is based on the origin of the sale:
Year ended 31 December
2023 2022 2021
Revenue:
€ million € million € million
Iberia
(A)
3,325 3,034 2,495
Germany
3,018 2,682 2,335
Great Britain
3,235 3,088 2,613
France
(B)
2,321 2,089 1,813
Belgium/Luxembourg
1,078 1,042 926
Netherlands
718 682 557
Norway
376 404 391
Sweden
398 421 375
Iceland
84 87 79
Total Europe
14,553 13,529 11,584
Australia
2,385 2,339 1,359
New Zealand and Pacific Islands
679 649 377
Indonesia and Papua New Guinea
685 803 443
Total API
3,749 3,791 2,179
Total CCEP
18,302 17,320 13,763
(A) Iberia refers to Spain, Portugal and Andorra.
(B) France refers to continental France and Monaco.
Assets by geography
Assets are allocated based on operations and physical location. The following table
summarises non-current assets, other than financial instruments and deferred tax
assets, by geography:
Year ended 31 December
2023 2022
Assets:
€ million € million
Iberia
(A)
6,455 6,401
Germany
3,162 3,091
Great Britain
2,523 2,469
France
(B)
940 896
Belgium/Luxembourg
623 613
Netherlands
439 428
Sweden
349 349
Norway
225 242
Iceland
38 36
Other unallocated
360 271
Total Europe
15,114 14,796
Australia
5,065 5,281
New Zealand and Pacific Islands
1,687 1,755
Indonesia and Papua New Guinea
682 726
Total API
7,434 7,762
Total CCEP
22,548 22,558
(A) Iberia refers to Spain, Portugal and Andorra.
(B) France refers to continental France and Monaco.
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Notes to the consolidated financial statements continued
Note 5
Earnings per share
Basic earnings per share is calculated by dividing profit after taxes by the
weighted average number of Shares in issue and outstanding during the
period. Diluted earnings per share is calculated in a similar manner, but includes
the effect of dilutive securities, principally share options, restricted stock units
and performance share units. Share-based payment awards that are contingently
issuable upon the achievement of specified market and/or performance
conditions are included in the diluted earnings per share calculation based on
the number of Shares that would be issuable if the end of the period was the
end of the contingency period.
The following table summarises basic and diluted earnings per share calculations
for the years presented:
Year ended 31 December
2023 2022 2021
Profit after taxes attributable to equity
shareholders (€ million)
1,669 1,508 982
Basic weighted average number of Shares
in issue
(A)
(million)
459 457 456
Effect of dilutive potential Shares
(B)
(million)
— 1 1
Diluted weighted average number of Shares
in issue
(A)
(million)
459 458 457
Basic earnings per share
(C)
(€)
3.64 3.30 2.15
Diluted earnings per share
(C)
(€)
3.63 3.29 2.15
(A) As at 31 December 2023, 31 December 2022 and 31 December 2021, the Group had 459,200,818, 457,106,453 and
456,235,032 Shares, respectively, in issue and outstanding.
(B) For the years ended 31 December 2023, 31 December 2022 and 31 December 2021, no options to purchase Shares were excluded
from the diluted earnings per share calculation. The dilutive impact of all outstanding options, unvested restricted stock units and
unvested performance share units was included in the effect of dilutive securities.
(C) Basic and diluted earnings per share are calculated prior to rounding.
Note 6
Intangible assets and goodwill
Intangible assets with indefinite lives
Intangible assets with indefinite lives acquired through business combination
transactions are measured at fair value at the date of acquisition. These assets
are not subject to amortisation but are tested for impairment annually at the
CGU level or more frequently if facts and circumstances indicate an impairment
may exist. In addition to the annual impairment test, the assessment of indefinite
lives is also reviewed annually.
TCCC franchise intangible assets
The Group’s bottling agreements with TCCC contain performance
requirements and convey the rights to distribute and sell products within
specified territories. The agreements in each territory are for initial terms of
10 years that can be renewed for another 10 years. The Group believes that its
interdependent relationship with TCCC and the substantial cost and disruption
to TCCC that would be caused by non-renewal ensure that these agreements
will continue to be renewed and, therefore, are essentially perpetual.
The Group has never had a bottling agreement with TCCC terminated due
to non-performance of the terms of the agreement or due to a decision by
TCCC to terminate an agreement at the expiration of a term. After evaluating
the contractual provisions of the bottling agreements as at 31 December 2023,
the Group’s mutually beneficial relationship with TCCC and history of renewals,
indefinite lives have been assigned to all of the Group’s TCCC bottling agreements.
Brands
In connection with the Acquisition, the Group acquired a portfolio of brands,
predominantly comprised of certain non-alcoholic ready to drink beverages
distributed and sold in Australia and New Zealand. These are considered to have
an indefinite life, given the strength and durability of the brands. Refer to Note 19
for details surrounding the subsequent sale of certain non-alcoholic ready to drink
brands to TCCC, which was completed in tranches.
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Notes to the consolidated financial statements continued
Goodwill
Goodwill is initially measured as the excess of the total consideration transferred
over the amount recognised for net identifiable assets acquired and liabilities
assumed in a business combination. If the fair value of the net assets acquired is in
excess of the aggregate consideration transferred, the gain is recognised in the
consolidated income statement as a bargain purchase. Goodwill is not subject to
amortisation. It is tested annually for impairment at the CGU level or more
frequently if events or changes in circumstances indicate that it might be
impaired. Goodwill acquired in a business combination is allocated to the CGU
that is expected to benefit from the synergies of the combination irrespective of
whether a CGU is part of the business combination.
Intangible assets with finite lives
Intangible assets with finite lives are measured at cost of acquisition or production
and are amortised using the straight-line method over their respective estimated
useful lives. Finite lived intangible assets are assessed for impairment whenever
there is an indication that they may be impaired. The amortisation period and
method are reviewed annually.
Internally generated software
The Group capitalises certain development costs associated with internally
developed software, including external direct costs of materials and services, and
payroll costs for employees devoting time to a software project and any such
software acquired as part of a business combination. Development expenditure is
recognised as an intangible asset only after its technical feasibility and commercial
viability can be demonstrated. When capitalised software is not integral to related
hardware, it is treated as an intangible asset; otherwise it is included within
property, plant and equipment. The estimated useful life of capitalised software is
predominantly between five and seven years. Amortisation expense for capitalised
software is included within administrative expenses and was €94 million, €83
million and €75 million for the years ended 31 December 2023, 31 December 2022
and 31 December 2021, respectively.
Customer relationships
The Group has acquired certain customer relationships in connection with
business combinations. These customer relationships are recorded at fair value on
the date of acquisition, and amortised over an estimated economic useful life of
20 years. Amortisation expense for these assets is included within administrative
expenses and was €10 million, €10 million and €9 million for the years ended
31 December 2023, 31 December 2022 and 31 December 2021, respectively.
Non-TCCC franchise intangible
In connection with the Acquisition, the Group acquired certain bottling
agreements with non-TCCC distribution partners, mainly Beam Suntory, which
contain performance requirements and convey the rights to distribute and sell
products within specified API territories. The non-TCCC bottling arrangements
were recorded at fair value at the acquisition date and were initially amortised
over an expected economic useful life of 20 years. On 2 August 2023, the Group
announced that CCEP and Beam Suntory will discontinue their relationship
effective 1 July 2025 (Australia) and 1 January 2026 (New Zealand). CCEP will
remain the exclusive manufacturing, sales and distribution partner for Beam
Suntory in Australia and New Zealand through the end of the current contractual
terms set to expire on 30 June 2025 and 31 December 2025, respectively. The
discontinuance of the relationship triggered a change in the assigned useful
economic life of the intangible assets effective from the second half of 2023,
resulting in an accelerated amortisation charge of €27 million recognised for the
year ending 31 December 2023. As at 31 December 2023, finite-lived intangible
assets of €94 million were reflected in the consolidated statement of financial
position related to the Beam Suntory distribution rights, primarily attributable to
those available in Australia. Total amortisation expense for these assets is
recognised within administrative expenses and totalled €35 million, €8 million and
€5 million for the years ended 31 December 2023, 31 December 2022 and 31
December 2021, respectively.
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Notes to the consolidated financial statements continued
Balances and movements in intangible assets and goodwill
The following table summarises the movements in the carrying amounts of intangible assets and goodwill for the periods presented:
TCCC franchise
intangible Brands Software
Customer
relationships
Non-TCCC
franchise
intangible
Assets under
construction Total intangibles Goodwill
€ million € million € million € million € million € million € million € million
Cost:
As at 31 December 2021
12,008 22 571 197 149 47 12,994 4,623
Additions
— — 40 1 — 63 104 —
Disposals
— — (27) — — (1) (28) —
Transfers and reclassifications
— 11 39 — — (38) 12 —
Currency translation adjustments
(134) 6 (2) (3) (1) (2) (136) (23)
As at 31 December 2022
11,874 39 621 195 148 69 12,946 4,600
Additions
— — 64 — — 92 156 —
Disposals
— — (27) — — — (27) —
Transfers and reclassifications
— — 63 — — (65) (2) —
Currency translation adjustments
(116) (7) (1) (1) (6) (2) (133) (86)
As at 31 December 2023
11,758 32 720 194 142 94 12,940 4,514
Accumulated amortisation:
As at 31 December 2021
— — (297) (53) (5) — (355) —
Amortisation expense
— — (83) (10) (8) — (101) —
Disposals
— — 22 — — — 22 —
Currency translation adjustments
— (7) (2) 2 — — (7) —
As at 31 December 2022
— (7) (360) (61) (13) — (441) —
Amortisation expense
— — (94) (10) (35) — (139) —
Disposals
— — 27 — — — 27 —
Currency translation adjustments
— 7 1 — — — 8 —
As at 31 December 2023
— — (426) (71) (48) — (545) —
Net book value:
As at 31 December 2021
12,008 22 274 144 144 47 12,639 4,623
As at 31 December 2022
11,874 32 261 134 135 69 12,505 4,600
As at 31 December 2023
11,758 32 294 123 94 94 12,395 4,514
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Notes to the consolidated financial statements continued
Impairment of indefinite lived intangible assets and goodwill
Each CGU is tested for impairment annually in the fourth quarter or whenever
there is an indication of impairment. The recoverable amount of each CGU is
normally determined through a value in use calculation. To determine value in use
for a CGU, estimated future cash flows are discounted to their present values
using a pre-tax discount rate reflective of the current market conditions and risks
specific to each CGU. If the carrying value of a CGU exceeds its recoverable
amount, the carrying value of the CGU is reduced to its recoverable amount and
impairment charges are recognised immediately within the consolidated income
statement. Impairment charges other than those related to goodwill may be
reversed in future periods if a subsequent test indicates that the recoverable
amount has increased. Such recoveries may not exceed a CGU’s original carrying
value less any depreciation that would have been recognised if no impairment
charges were previously recorded.
The Group’s CGUs are based on geography and generally represent the individual
territories in which the Group operates. For the purposes of allocating intangibles,
each indefinite lived intangible asset is allocated to the geographic region to
which the agreement relates and goodwill is allocated to each of the CGUs
expected to benefit from a business combination, irrespective of whether other
assets and liabilities of the acquired businesses are assigned to the CGUs.
The following table identifies the carrying value of goodwill and indefinite lived
intangible assets attributable to each significant CGU of the Group. In addition to
the significant CGUs of the Group, as at 31 December 2023, the Group had other
CGUs with total indefinite lived intangible assets of €1,349 million (2022: €1,369 million)
and goodwill of €370 million (2022: €380 million).
Year ended 31 December
2023 2022
Indefinite lived
intangible assets Goodwill
Indefinite lived
intangible assets Goodwill
Cash generating unit
€ million € million € million € million
Iberia
4,289 1,275 4,289 1,275
Australia
2,596 1,397 2,690 1,450
Great Britain
1,680 200 1,646 200
Germany
1,060 748 1,060 748
Pacific
(A)
816 524 849 547
(A) Pacific refers to New Zealand and Pacific Islands.
The recoverable amount of each CGU was determined through a value in use
calculation, which uses cash flow projections for a five year period. These
projections reflect the impact of climate change on our business as well as the
mitigating actions and strategies we are undertaking to support our commitment
to reach Net Zero by 2040. The key assumptions used in projecting these cash
flows were as follows:
• Growth rate and operating margins: Cash flows were projected over four years
based on the Group’s strategic business plan. Cash flows for the fifth year and
beyond were projected using an inflation-based long-term terminal growth rate
between 1.6% and 4.5%.
• Discount rate: A weighted average cost of capital was applied specific to each
CGU as a hurdle rate to discount cash flows. The discount rates represent the
current market assessment of the risks specific to each CGU, taking into
consideration the time value of money and individual risks of the underlying
assets that have not been incorporated in the cash flow estimates. The following
table summarises the pre-tax discount rate attributable to each significant CGU.
2023 2022
Pre-tax
discount rate
Pre-tax
discount rate
Cash generating unit
% %
Iberia
9.3 8.7
Australia
11.1 9.1
Great Britain
9.8 9.3
Germany
10.1 7.9
Pacific
(A)
11.2 9.7
(A) Pacific refers to New Zealand and Pacific Islands.
The Group did not record any impairment charges as a result of the tests
conducted in 2023 and 2022.
The Group’s Iberia, Australia, Great Britain and Germany CGUs have substantial
headroom when comparing the value in use calculation of the CGU versus the
CGU’s total carrying value.
For the Group’s Pacific CGU, the headroom in the 2023 impairment analysis was
approximately 11% of total carrying value. The Group estimates that a 0.9%
reduction in the terminal growth rate or a 0.7% increase in the discount rate, each
in isolation, would eliminate existing headroom in Pacific.
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Notes to the consolidated financial statements continued
For the Group’s Indonesia CGU, the headroom in the 2023 impairment analysis was
approximately 11% of total carrying value. The indefinite lived intangible assets and
goodwill equalled €143 million in total and the pre-tax discount rate used in the
test was 12.2%. The Group estimates that a 1.2% reduction in the terminal growth
rate or a 0.8% increase in the discount rate, each in isolation, would eliminate
existing headroom in Indonesia.
Note 7
Property, plant and equipment
Property, plant and equipment is recorded at cost, net of accumulated
depreciation and accumulated impairment losses, where cost is the amount of
cash or cash equivalents paid to acquire an asset at the time of its acquisition
or construction. Major property additions, replacements and improvements are
capitalised, while maintenance and repairs that do not extend the useful life of an
asset or add new functionality are expensed as incurred. Land is not depreciated,
as it is considered to have an indefinite life. For all property, plant and equipment,
other than land, depreciation is recorded using the straight-line method over the
respective estimated useful lives as follows:
Useful life (years)
Category
Low High
Buildings and improvements
10 40
Machinery, equipment and containers
3 20
Cold drink equipment
2 12
Vehicle fleet
3 12
Furniture and office equipment
3 10
Gains or losses arising on the disposal or retirement of an asset are determined as
the difference between the carrying amount of the asset and any proceeds from
its sale. Leasehold improvements are amortised using the straight-line method
over the shorter of the remaining lease term or the estimated useful life of the
improvement.
The Group assesses, at each reporting date, whether there is an indication that an
asset may be impaired. If any indication exists, an impairment test is performed to
estimate the potential loss of value that may reduce the recoverable amount of
the asset to below its carrying amount. Any impairment loss is recognised within
the consolidated income statement by the amount which the carrying amount
exceeds the recoverable amount. Useful lives and residual amounts are reviewed
annually and adjustments are made prospectively as required.
For property, plant and equipment, the Group assesses annually whether there is
an indication that previously recognised impairment losses no longer exist or have
decreased. If such an indication exists, a previously recognised impairment loss is
reversed only if there has been a change in the assumptions used to determine
the asset’s recoverable amount since the last impairment loss was recognised and
only up to the recoverable amount or the original carrying amount net of
depreciation that would have been incurred had no impairment losses been
recognised.
The transition to a low-carbon economy may impact the carrying value and
remaining useful economic lives of the Group’s property, plant and equipment.
The Group continues to invest in more efficient, cleaner and more technologically
advanced assets, however, the significant majority of the Group’s assets currently
in operation are likely to be substantially depreciated ahead of our Net Zero 2040
target, as set out in our Strategic Report on pages 37-40. In addition, the Group
continuously monitors the latest developments in government legislation in
relation to climate-related risks. Currently, no legislation has been passed that will
materially impact the carrying value and remaining useful economic lives of the
Group.
The Group leases land, office and warehouse property, computer hardware,
machinery and equipment, and vehicles under non-cancellable lease agreements,
most of which expire at various dates through to 2030. The Group includes right of
use assets within property, plant and equipment. Right of use assets are initially
measured at cost, comprising the initial measurement of the lease liability, plus any
direct costs and an estimate of asset retirement obligations, less lease incentives.
Subsequently, right of use assets are measured at cost, less accumulated
depreciation and any accumulated impairment losses. Depreciation is calculated
on a straight-line basis over the term of the lease.
The Group does not separate lease from non-lease components for each of its
lease categories, except for property leases. All low value leases with total
minimum lease payments under €5,000 and leases with a term less than 12 months
are expensed on a straight-line basis.
Extension and termination options are included in a number of property and
equipment leases across the Group and are used to maximise operational flexibility
in terms of managing contracts. Extension options (or periods after termination
options) are only included in the lease term if the Group has an enforceable right
to extend or terminate the lease and is reasonably certain to do so.
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Notes to the consolidated financial statements continued
The following table summarises the movement in net book value for property, plant and equipment for the periods presented:
Land
Buildings and
improvements
Machinery,
equipment and
containers
Cold drink
equipment Vehicle fleet
Furniture
and office
equipment
Assets under
construction Total
€ million € million € million € million € million € million € million € million
Cost:
As at 31 December 2021
663 2,429 3,578 1,026 298 160 206 8,360
Additions
1 131 221 65 59 21 287 785
Disposals
(3) (28) (103) (49) (58) (8) — (249)
Assets held for sale
(29) (26) (8) — — — — (63)
Transfers and reclassifications
27 37 75 36 2 8 (184) 1
Currency translation adjustments
(11) (42) (40) 32 (4) (2) (4) (71)
As at 31 December 2022
648 2,501 3,723 1,110 297 179 305 8,763
Additions
20 71 271 73 101 9 344 889
Disposals
(1) (44) (214) (47) (51) (3) — (360)
Transfers and reclassifications
2 84 124 34 3 12 (259) —
Currency translation adjustments
(12) (26) (18) (9) (1) (2) (1) (69)
As at 31 December 2023
657 2,586 3,886 1,161 349 195 389 9,223
Accumulated depreciation:
As at 31 December 2021
— (766) (1,473) (631) (151) (91) — (3,112)
Depreciation expense
— (128) (380) (127) (58) (22) — (715)
Disposals
— 19 105 49 53 8 — 234
Assets held for sale
— 10 9 — — — — 19
Transfers and reclassifications
— — 3 (2) — — — 1
Currency translation adjustments
— 22 (2) (14) 3 2 — 11
As at 31 December 2022
— (843) (1,738) (725) (153) (103) — (3,562)
Depreciation expense
— (137) (318) (112) (61) (25) — (653)
Disposals
— 28 204 43 47 3 — 325
Transfers and reclassifications
— — 3 (1) — — — 2
Currency translation adjustments
— — 5 4 — — — 9
As at 31 December 2023
— (952) (1,844) (791) (167) (125) — (3,879)
Net book value:
As at 31 December 2021
663 1,663 2,105 395 147 69 206 5,248
As at 31 December 2022
648 1,658 1,985 385 144 76 305 5,201
As at 31 December 2023
657 1,634 2,042 370 182 70 389 5,344
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Notes to the consolidated financial statements continued
Right of use assets
The following table summarises the net book value of right of use assets included
within property, plant and equipment:
Year ended 31 December
2023 2022
€ million € million
Buildings and improvements
427 465
Vehicle fleet
171 133
Machinery, equipment and containers
81 82
Furniture and office equipment
2 3
Total
681 683
Total additions to right of use assets during 2023 were €192 million
(2022: €208 million).
The following table summarises depreciation charges relating to right of use
assets for the periods presented:
Year ended 31 December
2023 2022
€ million € million
Buildings and improvements
67 63
Vehicle fleet
58 57
Machinery, equipment and containers
32 34
Furniture and office equipment
2 2
Total
159 156
During the years ended 31 December 2023 and 31 December 2022, the total
expense relating to low value and short-term leases was €24 million and
€24 million, respectively, which is primarily included in administrative expenses. The
Group does not have any residual value guarantees in relation to its leases. As at
31 December 2023, the total value of lease extension and termination options
included within right of use assets was €17 million (2022: €35 million).
The Group incurred variable lease expenses of €157 million in 2023 (2022: €153 million),
primarily included in administrative expenses. This amount mainly consists of the
variable component of lease payments for product transportation services in
Australia and New Zealand, whereby these components are dependent on various
factors such as number of cases of product delivered, number of trips and pallets.
Note 8
Inventories
Inventories are valued at the lower of cost or net realisable value and cost is
determined using the first-in, first-out (FIFO) method. Inventories consist of raw
materials, supplies (primarily including concentrate, other ingredients
and packaging) and finished goods, which also include direct labour, indirect
production and overhead costs. Cost includes all costs incurred to bring
inventories to their present location and condition. Cost of inventories also
includes the transfer from equity of gains and/or losses on qualified cash flow
hedges relating to inventory purchases. Spare parts, classified and accounted as
inventories, are recorded as assets at the time of purchase and are expensed as
utilised. Net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs necessary to complete and sell the inventory.
The following table summarises the inventory outstanding in the consolidated
statement of financial position as at the dates presented:
Year ended 31 December
2023 2022
€ million € million
Finished goods
750 777
Raw materials and supplies
449 452
Spare parts and other
157 151
Total inventories
1,356 1,380
Write downs of inventories totalled €59 million, €41 million and €41 million for the
years ended 31 December 2023, 31 December 2022 and 31 December 2021,
respectively. The majority of these write downs were included in cost of sales on
the consolidated income statement. None of these write downs of inventory were
subsequently reversed.
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Notes to the consolidated financial statements continued
Note 9
Trade accounts receivable
The Group sells its products to retailers, wholesalers and other customers and
extends credit, generally without requiring collateral, based on an evaluation of
the customer’s financial condition. While the Group has a concentration of credit
risk in the retail sector, this risk is mitigated due to the diverse nature of the
customers the Group serves, including, but not limited to, their type, geographic
location, size and beverage channel.
Trade accounts receivable are initially recognised at their transaction price and
subsequently measured at amortised cost less provision for impairment. Typically,
accounts receivable have terms of 30 to 60 days and do not bear interest. The
Group applies an expected credit loss reserve methodology to assess possible
impairments. Balances are considered for impairment on an individual basis rather
than by reference to the extent that they become overdue. The Group considers
factors such as delinquency in payment, financial difficulties, payment history of
the debtor and certain forward-looking macroeconomic indicators. The carrying
amount of trade accounts receivable is reduced through the use of an allowance
account, and the amount of the loss is recognised in the consolidated income
statement. Credit insurance on a portion of the accounts receivable balance is also
carried. Refer to Note 26 for further details on credit risk management.
As a result of continued recession risk across our European territories, the Group
supplements its existing credit loss reserve methodology to include an
incremental loss allowance for those receivable balances that were deemed to be
higher risk in the current environment. The incremental allowance is included
within allowance for doubtful accounts below, as at 31 December 2023 and
31 December 2022.
The following table summarises the trade accounts receivable outstanding in the
consolidated statement of financial position as at the dates presented:
Year ended 31 December
2023 2022
€ million € million
Trade accounts receivable, gross
2,601 2,523
Allowance for doubtful accounts
(54) (57)
Total trade accounts receivable
2,547 2,466
The following table summarises the ageing of trade accounts receivable, net of
allowance for doubtful accounts, in the consolidated statement of financial
position as at the dates presented:
Year ended 31 December
2023 2022
€ million € million
Not past due
2,348 2,287
Past due 1 – 30 days
142 102
Past due 31 – 60 days
16 30
Past due 61 – 90 days
7 15
Past due 91 – 120 days
9 14
Past due 121+ days
25 18
Total
2,547 2,466
The following table summarises the change in the allowance for doubtful
accounts for the periods presented:
Allowance for
doubtful accounts
€ million
As at 31 December 2021
(49)
Provision for impairment recognised during the year
(15)
Receivables written off during the year as uncollectable
5
Reversals
1
Currency translation adjustments
1
As at 31 December 2022
(57)
Provision for impairment recognised during the year
(9)
Receivables written off during the year as uncollectible
9
Reversals
2
Currency translation adjustments
1
As at 31 December 2023
(54)
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Notes to the consolidated financial statements continued
Note 10
Cash and cash equivalents and short-term investments
Cash and cash equivalents
Cash and cash equivalents include cash and short-term, highly liquid financial
instruments with maturity dates of less than three months when acquired that
are readily convertible to cash and which are subject to an insignificant risk of
changes in value. Counterparties and instruments used to hold the Group’s cash
and cash equivalents are continually assessed, with a focus on preservation of
capital and liquidity.
The following table summarises the cash and cash equivalents outstanding in the
consolidated statement of financial position as at the dates presented:
Year ended 31 December
2023 2022
€ million € million
Cash at banks and on hand
465 491
Short-term deposits and securities
954 896
Total cash and cash equivalents
1,419 1,387
Cash and cash equivalents are held in the following currencies as at the
dates presented:
Year ended 31 December
2023 2022
€ million € million
Euro
662 477
British pound
305 190
US dollar
64 88
Norwegian krone
58 35
Swedish krona
26 21
Australian dollar
118 358
Indonesian rupiah
48 26
Papua New Guinean kina
42 102
Other
96 90
Total cash and cash equivalents
1,419 1,387
Included within cash and cash equivalents as at 31 December 2023 and
31 December 2022 are Papua New Guinea cash assets of €42 million
and €102 million respectively, denominated in local currency (kina).
Government-imposed currency controls impact the extent to which the
cash held in Papua New Guinea can be converted into foreign currency
and remitted for use elsewhere in the Group. There are no other material
restrictions on the Group’s cash and cash equivalents.
Short-term investments
Short-term investments are financial assets that are initially recognised at fair
value and subsequently measured at amortised cost. The Group classifies its
financial assets as at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect the
contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments for
principal and interest.
The short-term investment balance is comprised of time deposits and treasury
bills, with maturity dates of greater than three months and less than one year
when acquired, which do not meet the definition of cash and cash equivalents, and
are expected to be held until maturity. These are highly liquid investments and,
due to their short-term nature, their carrying amount is not significantly different
from the fair values.
As at 31 December 2023, short-term investments were €568 million (2022: €256
million), which included €33 million (2022: €49 million) denominated in Papua New
Guinea kina that are subject to government-imposed currency controls which
impact the extent to which these investments, upon maturity, can be converted
into foreign currency and remitted for use elsewhere in the Group.
Cash receipts arising from the interest earned on cash and cash equivalents and
short-term investments were €58 million, €25 million and €12 million for the years
ended 31 December 2023, 31 December 2022, and 31 December 2021 respectively,
and in the current year considered a major class of gross cash receipts from
investing activities. Accordingly, these have been presented separately in the
Group’s consolidated statement of cash flows in the current year.
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Notes to the consolidated financial statements continued
Note 11
Fair values
Fair value measurements
All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy. This is described as one
of the following, based on the lowest-level input that is significant to the fair value
measurement as a whole:
• Level 1 – Quoted prices in active markets for identical assets or liabilities.
• Level 2 – Observable inputs other than quoted prices included in Level 1. The
Group values assets and liabilities included in this level using dealer and broker
quotations, certain pricing models, bid prices, quoted prices for similar assets
and liabilities in active markets or other inputs that are observable or can be
corroborated by observable market data.
• Level 3 – Unobservable inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or liabilities. This includes
certain pricing models, discounted cash flow methodologies and similar
techniques that use significant unobservable inputs.
The fair values of the Group’s cash and cash equivalents, short-term investments,
trade accounts receivable, amounts receivable from related parties, trade and
other payables and amounts payable to related parties approximate their carrying
amounts due to their short-term nature.
The fair values of the Group’s borrowings are estimated based on borrowings with
similar maturities and credit quality and current market interest rates. These are
categorised within Level 2 of the fair value hierarchy, as the Group uses certain
pricing models and quoted prices for similar liabilities in active markets in
assessing their fair values. Refer to Note 13 for further details regarding the
Group’s borrowings.
The following table summarises the book value and fair value of the Group’s
borrowings as at the dates presented:
Year ended 31 December
2023 2022
€ million € million
Fair value of borrowings
10,580 10,503
Book value of borrowings (Note 13)
11,396 11,907
The Group’s derivative assets and liabilities are carried at fair value both upon initial
recognition and subsequently. The fair value is determined using a variety of
valuation techniques, depending on the specific characteristics of the hedging
instrument, taking into account credit risk. The fair value of the Group’s derivative
contracts (including forwards, options, futures, cross currency swaps and interest
rate swaps) is determined using standard valuation models. The significant inputs
used in these models are readily available in public markets or can be derived from
observable market transactions and, therefore, the derivative contracts have been
classified as Level 2. Inputs used in these standard valuation models include the
applicable spot, forward and discount rates. The standard valuation model for the
option contracts also includes implied volatility, which is specific to individual
options and is based on rates quoted from a widely used third party resource.
Refer to Note 12 for further details about the Group’s derivatives.
The following table summarises the fair value of the derivative assets and liabilities
as at the dates presented:
Year ended 31 December
2023 2022
€ million € million
Assets at fair value:
Derivatives (Note 12)
261 448
Liabilities at fair value:
Derivatives (Note 12)
268 263
For assets and liabilities that are recognised in the financial statements on a
recurring basis, the Group determines whether transfers have occurred between
levels in the hierarchy by reassessing categorisation at the end of each reporting
period. There have been no transfers between levels during the periods presented.
Note 12
Hedging activities
Derivative financial instruments
The Group utilises derivative financial instruments to mitigate its exposure to
certain market risks associated with its ongoing operations. The primary risks that
it seeks to manage through the use of derivative financial instruments include
currency exchange risk, commodity price risk and interest rate risk.
All derivative financial instrument assets and liabilities are recorded at fair value in
the consolidated statement of financial position. The Group does not use
derivative financial instruments for trading or speculative purposes, and all hedge
ratios are on a 1:1 basis. At the inception of a hedge transaction, the Group
documents the relationship between the hedging instrument and the hedged
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Notes to the consolidated financial statements continued
item, as well as its risk management objective and strategy for undertaking the
hedge transaction. This process includes linking the derivative financial instrument
designated as a hedging instrument to the specific asset, liability, firm
commitment or forecasted transaction. Refer to Note 26 for further details about
the Group’s risk management strategy and objectives. Both at the hedge
inception and on an ongoing basis, the Group assesses and documents whether
the derivative financial instrument used in the hedging transaction is highly
effective in maintaining the risk management objectives. Where critical terms
match, the Group uses a qualitative assessment to ensure initial and ongoing
effectiveness criteria. Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated, exercised or no longer qualifies for
hedge accounting. At that time, any cumulative gain or loss on the hedging
instrument recognised in equity is retained in equity until the forecasted
transaction occurs. If the hedged transaction is no longer expected to occur, the
net cumulative gain or loss recognised in equity is transferred to the income
statement.
While certain derivative financial instruments are designated as hedging
instruments, the Group may also enter into derivative financial instruments that
are designed to hedge a risk but are not designated as hedging instruments
(referred to as an economic hedge or a non-designated hedge). The decision
regarding whether or not to designate a hedge for hedge accounting is made by
management considering the size, purpose and tenure of the hedge, as well as the
anticipated ability to achieve and maintain the Group’s risk management
objective.
The Group is exposed to counterparty credit risk on all of its derivative financial
instruments. It has established and maintained strict counterparty credit
guidelines and enters into hedges only with financial institutions that are
investment grade or better. It continuously monitors counterparty credit risk and
utilises numerous counterparties to minimise its exposure to potential defaults.
The following table summarises the fair value of the assets and liabilities related to
derivative financial instruments and the respective line items in which they were
recorded in the consolidated statement of financial position as at the dates
presented. All derivative instruments are classified as Level 2 within the fair value
hierarchy.
Discussion of the Group’s other financial assets and liabilities is contained
elsewhere in these financial statements. Refer to Note 9 for trade accounts
receivable, Note 14 for trade and other payables, Note 13 for borrowings and Note
19 for amounts receivable and payable with related parties.
Hedging instrument
Location – statement
of financial position
Year ended 31 December
2023 2022
€ million € million
Assets:
Derivatives designated as
hedging instruments:
Commodity contracts
Non-current derivative assets
38 30
Foreign currency contracts
Non-current derivative assets
— 4
Interest rate and cross
currency swaps
Non-current derivative assets
62 157
Commodity contracts
Current derivative assets
94 133
Foreign currency contracts
Current derivative assets
20 27
Interest rate and cross
currency swaps
Current derivative assets
47 97
Total assets
261 448
Liabilities:
Derivatives designated as
hedging instruments:
Commodity contracts
Non-current derivative
liabilities
30 6
Foreign currency contracts
Non-current derivative
liabilities
2 10
Interest rate and cross
currency swaps
Non-current derivative
liabilities
137 171
Commodity contracts
Current derivative liabilities
58 47
Foreign currency contracts
Current derivative liabilities
36 29
Deal contingent forwards
Current derivative liabilities
5 —
Total liabilities
268 263
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183
Notes to the consolidated financial statements continued
Cash flow hedges
The Group uses cash flow hedges to mitigate its exposure to variability in cash
flows attributable to currency fluctuations and commodity price fluctuations
associated with certain highly probable forecasted transactions, including
purchases of raw materials, finished goods and services denominated in
non-functional currencies, the receipts of interest as well as the payments
of interest and principal on debt issuances in non-functional currencies.
Effective changes in the fair value of these cash flow hedging instruments are
recognised as a component of other reserves in the consolidated statement of
changes in equity. Any changes in the fair value of these cash flow hedges that are
the result of ineffectiveness are recognised immediately in the line item in the
consolidated income statement that is consistent with the nature of the
underlying hedged item. Historically, the Group has not experienced, nor does it
expect to experience, material hedge ineffectiveness with the value of the
hedged instrument equalling that of the hedged item. If the hedged cash flow
results in a subsequent recognition of a non-financial asset or liability, the gains
and/or losses accumulated in equity are included in the measurement of the cost
of the asset or liability. For other cash flow hedges, the amounts deferred in equity
are then recognised within the line item in the consolidated income statement
that is consistent with the nature of the underlying hedged item in the period that
the forecasted purchases or payments impact earnings.
The following table summarises the Group’s outstanding cash flow hedges by risk
category as at the dates presented (all contracts denominated in a foreign
currency have been converted into euro using the respective year end spot rate):
Notional maturity profile
Total
Less than
1 year 1 to 3 years 3 to 5 years Over 5 years
Cash flow hedges
€ million € million € million € million € million
Foreign currency contracts
1,074 912 162 — —
Interest rate and cross currency
swaps
2,225 144 1,365 — 716
Commodity contracts
922 566 356 — —
As at 31 December 2021
4,221 1,622 1,883 — 716
Foreign currency contracts
1,723 1,292 431 — —
Interest rate and cross currency
swaps
2,079 760 604 416 299
Commodity contracts
1,397 834 563 — —
As at 31 December 2022
5,199 2,886 1,598 416 299
Deal contingent foreign currency
forwards
636 636 — — —
Foreign currency contracts
1,105 980 125 — —
Interest rate and cross currency
swaps
1,306 602 — 520 184
Commodity contracts
1,441 829 588 9 15
As at 31 December 2023
4,488 3,047 713 529 199
The net notional amount of outstanding interest rate and cross currency swaps
used to hedge interest rate risk and currency fluctuations of non-functional
currency borrowings was €1.3 billion as at 31 December 2023, €2.1 billion as
at 31 December 2022 and €2.2 billion as at 31 December 2021. The net notional
amount of the other outstanding foreign currency cash flow hedges was
€1.1 billion as at 31 December 2023, €1.7 billion as at 31 December 2022 and
€1.1 billion as at 31 December 2021. The net notional amount of outstanding
commodity-related cash flow hedges was €1.4 billion as at 31 December 2023,
€1.4 billion as at 31 December 2022 and €0.9 billion as at 31 December 2021.
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Notes to the consolidated financial statements continued
During 2023, the Group entered into deal-contingent foreign currency forwards
with a total notional amount of €636 million in order to mitigate the foreign
currency risk arising from the proposed acquisition of CCBPI. These instruments
were recorded as cash flow hedges. Refer to Note 19 for further information
concerning the proposed acquisition. As of 31 December 2023, a loss of €5 million
is recognised in other comprehensive income related to changes in the fair value
of these instruments.
Outstanding cash flow hedges as at 31 December 2023 are expected to be settled
between 2024 and 2036.
The following table provides a reconciliation by risk category of the net of tax
impacts on the cash flow hedge reserve disclosed in Note 16, resulting from cash
flow hedge accounting:
Foreign
currency
contracts
Commodity
contracts
Interest rate
and cross
currency
swaps Total
Cash flow hedges
€ million € million € million € million
As at 1 January 2021
(1) 20 1 20
Net fair value gains/(losses) recognised in OCI
108 209 (16) 301
Net (gains)/losses reclassified from OCI to
income statement or transferred to cost of
inventories
3 (76) (13) (86)
Gains transferred to goodwill
(84) — — (84)
As at 31 December 2021
26 153 (28) 151
Net fair value gains/(losses) recognised in OCI
13 43 46 102
Net (gains)/losses reclassified from OCI to
income statement or transferred to cost of
inventories
(19) (117) (13) (149)
As at 31 December 2022
20 79 5 104
Net fair value gains/(losses) recognised in OCI
(26) 67 (3) 38
Net (gains)/losses reclassified from OCI to
income statement or transferred to cost of
inventories
(A)
10 (111) (10) (111)
As at 31 December 2023
4 35 (8) 31
(A) The amount includes a net of tax gain of €83 million transferred from the cash flow hedge reserve to the cost of inventories.
The following table summarises the net of tax effect of the cash flow hedges in
the consolidated income statement for the periods presented:
Cash flow hedging instruments
Location – Income statement
Amount of gain/(loss) reclassified
from the cash flow hedge reserve into profit
Year ended 31 December
2023 2022 2021
€ million € million € million
Foreign currency
contracts
Cost of sales
1 19 (3)
Commodity contracts
Cost of sales
— 83 74
Commodity contracts
Selling and
distribution expenses
17 34 2
Interest rate and cross
currency swaps
Finance costs
10 13 13
Total
28 149 86
Ineffectiveness associated with these cash flow hedges was not material during
any year presented within these financial statements.
Fair value hedges
The Group has designated certain cross currency swaps used to mitigate foreign
currency risk and interest rate risk on foreign currency borrowings as fair value
hedges. There is an economic relationship between the hedged item and the
hedging instrument, as the terms of the cross currency swap contracts match the
terms of the fixed rate borrowings. The Group has established a hedge ratio of 1:1
for the hedging relationship.
The following table summarises the Group’s outstanding fair value hedges by risk
category as at the dates presented (all contracts denominated in a foreign
currency have been converted into euros using the respective year end spot rate):
Less than
1 year 1 to 3 years 3 to 5 years Over 5 years
Fair value hedges
Total € million € million € million € million
Interest rate and cross currency swaps
166 — — — 166
As at 31 December 2021
166 — — — 166
Interest rate and cross currency swaps
1,165 — — 500 665
As at 31 December 2022
1,165 — — 500 665
Interest rate and cross currency swaps
1,159 — 275 450 434
As at 31 December 2023
1,159 — 275 450 434
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Notes to the consolidated financial statements continued
The net notional amount of outstanding interest rate and cross currency swaps
designated in a fair value hedge relationship with borrowings was €1,159 million as
at 31 December 2023, €1,165 million as at 31 December 2022 and €166 million as at
31 December 2021.
The following table summarises the gains/(losses) recognised from the settlement
of fair value hedges within the consolidated income statement for the periods
presented:
Fair value hedges
Location – Income
statement
Year ended 31 December
2023 2022 2021
€ million € million € million
Interest rate and cross
currency swaps
Finance costs
(30) 2 (2)
Total
(30) 2 (2)
The carrying value of the hedged item recognised in borrowings as at
31 December 2023 is €1,051 million (31 December 2022: €1,019 million), which
includes accumulated amounts of fair value hedging adjustments of €106 million
reduction in borrowings (31 December 2022: €146 million reduction in borrowings).
Non-designated hedges
The Group periodically enters into derivative instruments that are designed to
hedge various risks but are not designated as hedging instruments.
At times, it enters into other short-term non-designated hedges to mitigate its
exposure to changes in cash flows attributable to currency fluctuations associated
with no qualifying hedged items such as short-term intercompany loans and
certain cash equivalents denominated in non-functional currencies. Changes in
the fair value of outstanding non-designated hedges are recognised each
reporting period in the line item in the consolidated income statement that is
consistent with the nature of the hedged risk.
There were €215 million of outstanding non-designated foreign currency hedges
related to hedging foreign currency exposure on intercompany loans as at
31 December 2023. There were €29 million outstanding non-designated hedges as
at 31 December 2022.
The following table summarises the gains/(losses) recognised from non-designated
derivative financial instruments in the consolidated income statement for the
years presented:
Non-designated
hedging instruments
Location – Income statement
Year ended 31 December
2023 2022 2021
€ million € million € million
Foreign currency
contracts
(A)
Non-operating items
(5) (5) —
Total
(5) (5) —
(A) The gain/(loss) recognised on these currency contracts is offset by the gain/(loss) recognised on the remeasurement of the underlying
hedged items; therefore, there is a minimal consolidated net effect in non-operating items on the consolidated income statement.
Net investment hedges
The Group had no net investment hedges in place as at 31 December 2023 or
31 December 2022; however, it continues to monitor its exposure to currency
exchange rates and may enter into future net investment hedges as a result of
volatility in the functional currencies of certain of its subsidiaries.
Note 13
Borrowings and leases
Borrowings
Borrowings are initially recognised at fair value, net of issuance costs incurred.
Borrowings acquired by the Group as part of the Acquisition have been
recognised at fair value at the acquisition date. After initial recognition, borrowings
are subsequently measured at amortised cost using the effective interest rate
method. Amortisation of transaction costs, fair value adjustments made on
acquisition, premiums and discounts are recognised as part of finance costs within
the consolidated income statement.
Leases
Lease liabilities are included within borrowings in our consolidated statement of
financial position.
The lease liability is measured at the present value of lease payments, discounted
using the Group’s incremental borrowing rate (IBR). The lease term comprises the
non-cancellable period of the contract, together with periods covered by an
option to extend the lease whenever the Group is reasonably certain to exercise
that option and has an enforceable right to do so. Subsequently, the lease liability
is measured by increasing the carrying amount to reflect interest on the lease
liability and reducing it by lease payments made.
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2023 Integrated Report and Form 20-F
186
Notes to the consolidated financial statements continued
Borrowings outstanding
The following table summarises the carrying value of the Group’s borrowings as at the dates presented:
Non-current:
Euro denominated bonds:
€500 million 1.125% Notes 2024
— 498
€350 million 2.375% Notes 2025
349 349
€250 million 2.75% Notes 2026
(E)
245 240
€600 million 1.75% Notes 2026
(E)
588 580
€400 million 1.50% Notes 2027
(E)
381 370
€250 million 1.50% Notes 2027
258 259
€500 million 1.75% Notes 2028
(E)
478 466
€750 million 0.20% Notes 2028
745 744
€500 million 1.125% Notes 2029
496 495
€500 million 1.875% Notes 2030
(E)
482 472
€700 million 3.875% Notes 2030
(A)
694 —
€500 million 0.70% Notes 2031
(E)
482 473
€800 million 0.00% Notes 2025
798 798
€700 million 0.50% Notes 2029
695 695
€1,000 million 0.875% Notes 2033
991 991
€750 million 1.50% Notes 2041
746 746
Foreign currency bonds (swapped into euro)
(F)
:
US$650 million 0.80% Notes 2024
— 608
US$500 million 1.50% Notes 2027
451 466
Year ended 31 December
2023 2022
€ million € million
Australian dollar denominated bonds:
A$100 million 3.50% Notes 2024
— 66
A$30 million 4.166% Notes 2025
19 21
A$20 million 4.25% Notes 2025
13 14
A$30 million 4.125% Notes 2026
19 20
A$50 million 4.155% Notes 2028
33 35
A$133 million 2.45% Notes 2029
83 86
A$50 million 4.20% Notes 2031
34 36
A$187 million 4.20% Notes 2031
128 135
A$13 million 4.20% Notes 2031
9 9
Foreign currency bonds (swapped into Australian dollar or
New Zealand dollar)
(F)
:
NOK1 billion 3.04% Notes 2028
92 99
NOK750 million 2.75% Notes 2030
68 73
US$50 million 2.6525% Notes 2030
45 47
JPY10 billion 4.15% Notes 2036
(E)
67 74
JPY12.3 billion 1.06% Notes 2037
(E)
65 71
Lease obligations
542 535
Total non-current borrowings
10,096 10,571
Year ended 31 December
2023 2022
€ million € million
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Notes to the consolidated financial statements continued
Current:
Euro denominated bonds:
€500 million 1.125% Notes 2024
500 —
€350 million 2.625% Notes 2023
(B)
— 350
Foreign currency bonds (swapped into euro)
(F)
:
US$650 million 0.8% Notes due 2024
588 —
US$850 million 0.50% Notes due 2023
(C)
— 797
Australian dollar denominated bonds:
A$100 million 3.5% Notes 2024
62 —
Foreign currency bonds
(swapped into New Zealand dollar)
(F)
:
US$25 million 4.34% Notes 2023
(D)
— 24
US$25 million 4.34% Notes 2023
(D)
— 24
Lease obligations
150 141
Total current borrowings
1,300 1,336
Year ended 31 December
2023 2022
€ million € million
(A) In December 2023, the Group issued €700 million 3.875% Notes 2030 in connection with the proposed acquisition of CCBPI. Refer
to Note 19 for further information concerning the proposed acquisition
(B) In November 2023, the Group repaid on maturity the outstanding amount related to the €350 million 2.625% Notes 2023.
(C) In May 2023, the Group repaid on maturity the outstanding amount related to the US$850 million 0.50% Notes due 2023.
(D) In October 2023, the Group repaid on maturity the outstanding amount related to US$25 million 4.34% Notes 2023 and
US$25 million 4.34% Notes 2023 assumed as part of the Acquisition.
(E) Bond designated in full or partially in a fair value hedge relationship.
(F) Cross currency swaps are used by the Group to swap foreign currency bonds into the required local currency.
Borrowings are stated net of unamortised financing fees of €30 million and €33
million, as at 31 December 2023 and 31 December 2022, respectively.
Interest expense recognised on lease liabilities totalled €17 million, €14 million and
€10 million in 2023, 2022 and 2021, respectively.
Credit facilities
During 2023, the amount available under the Group’s multi currency credit facility
was €1.80 billion. This amount is available for borrowing with a syndicate
of 12 banks. This credit facility matures in 2029 and is for general corporate
purposes and supporting the Group’s working capital needs. Based on information
currently available, there is no indication that the financial institutions participating
in this facility would be unable to fulfil their commitments to the Group as at the
date of these consolidated financial statements. The Group’s current credit facility
contains no financial covenants that would impact its liquidity or access to capital.
As at 31 December 2023, the Group had no amounts drawn under this credit
facility.
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Notes to the consolidated financial statements continued
Changes in liabilities arising from financing activities
The following table provides a reconciliation of movements of liabilities to cash flows arising from financing activities:
As at 01 January 2021
805 6,382 57 — 2 7,246
Acquisition of API
381 1,251 — 16 — 1,648
Changes from financing cash
flows
Proceeds from third party
borrowings, net
— 4,877 — — — 4,877
Changes in short-term
borrowings
(A)
276 — — — — 276
Repayments on third party
borrowings
(950) — — — — (950)
Payment of principal on
lease obligations
(139) — — — — (139)
Interest paid
(10) — (87) — — (97)
Dividends paid
— — — — (638) (638)
Other non-cash changes
Amortisation of discount,
premium and issue costs
— (3) — — — (3)
Other non-cash movements 39 83 108 — 639 869
Movement as a result of fair
value hedges
6 9 — — — 15
Changes in fair values — — — (98) — (98)
Currency translation 33 100 — (28) — 105
Reclassifications
909 (909) — — — —
Total changes
545 5,408 21 (110) 1 5,865
As at 31 December 2021
1,350 11,790 78 (110) 3 13,111
Changes from financing cash
flows
Changes in short-term
borrowings
(A)
(285) — — — — (285)
Repayments on third party
borrowings
(938) — — — — (938)
Current
portion
of borrowings
Borrowings,
less current
portion
Interest
payable
(B)
Derivatives
(assets)/
liabilities
held to
hedge
borrowings
(C)
Dividend
payable
(B)
Total
€ million € million € million € million € million € million
Payment of principal on
lease obligations
(153) — — — — (153)
Interest paid (14) — (116) — — (130)
Dividends paid — — — — (763) (763)
Other financing activities (1) — — — — (1)
Other non-cash changes
Amortisation of discount,
premium and issue costs
(1) 4 — — — 3
Other non-cash movements 34 171 112 — 766 1,083
Movement as a result of fair
value hedges
11 (172) — — — (161)
Changes in fair values
— — — 45 — 45
Currency translation
— 111 — (18) (2) 91
Reclassifications
1,333 (1,333) — — — —
Total changes
(14) (1,219) (4) 27 1 (1,209)
As at 31 December 2022
1,336 10,571 74 (83) 4 11,902
Changes from financing cash
flows
Proceeds from third party
borrowings, net
— 694 — — — 694
Repayments on third party
borrowings
(1,159) — — — — (1,159)
Payment of principal on
lease obligations
(148) — — — — (148)
Settlement of debt-related
cross-currency swaps
— — — 69 — 69
Interest paid
(17) — (165) — — (182)
Dividends paid
— — — — (841) (841)
Current
portion
of borrowings
Borrowings,
less current
portion
Interest
payable
(B)
Derivatives
(assets)/
liabilities
held to
hedge
borrowings
(C)
Dividend
payable
(B)
Total
€ million € million € million € million € million € million
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Notes to the consolidated financial statements continued
Other non-cash changes
Amortisation of discounts,
premium, issue costs and fair
value adjustments
— 5 — — — 5
Other non-cash movements
93 98 164 — 844 1,199
Movement as a result of fair
value hedges
— 40 — — — 40
Changes in fair values
— — — 25 — 25
Currency translation
(40) (77) — 17 (2) (102)
Reclassifications
1,235 (1,235) — — — —
Total changes
(36) (475) (1) 111 1 (400)
As at 31 December 2023
1,300 10,096 73 28 5 11,502
Current
portion
of borrowings
Borrowings,
less current
portion
Interest
payable
(B)
Derivatives
(assets)/
liabilities
held to
hedge
borrowings
(C)
Dividend
payable
(B)
Total
€ million € million € million € million € million € million
(A) In 2023, changes in short-term borrowings include €6,810 million of newly issued and €6,810 million of repaid EUR commercial
paper. In 2022, changes in short-term borrowings included €2,464 million and €2,749 million of newly issued and repaid EUR
commercial paper, respectively.
(B) Interest payable and dividends payable balances are presented within the “Trade and other payables” line item in the Group’s
consolidated statement of financial position.
(C) Interest rate and cross currency swaps used to hedge interest rate risk and currency fluctuations of non-functional currency
borrowings, refer to Note 12.
Total cash outflows for leases were €165 million, €167 million and €149 million for
the years ended 31 December 2023, 31 December 2022 and 31 December 2021,
respectively.
Note 14
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to
the Group prior to the end of the reporting period, which are unpaid. Trade and
other payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. Trade and other payables are recognised
initially at fair value and subsequently measured at amortised cost using the
effective interest rate method. Trade payables are non-interest bearing and are
normally settled between 70 to 80 days.
The Group participates in various programmes and arrangements with customers
designed to increase the sale of our products. The costs of these programmes are
recorded as deductions from revenue. Among the programmes are arrangements
under which allowances can be earned by customers for attaining agreed upon
sales levels or for participating in specific marketing programmes. When these
allowances are paid in arrears, the Group accrues the estimated amount to be
paid based upon historical customer experience, the programme’s contractual
terms, expected customer performance and/or estimated sales volume. The costs
of these off-invoice customer marketing costs totalled €5.4 billion, €5.2 billion and
€4.1 billion for 2023, 2022 and 2021, respectively.
The following table summarises trade and other payables as at the dates
presented:
Year ended 31 December
2023 2022
€ million € million
Trade accounts payable
(A)
2,306 2,221
Accrued customer marketing costs
1,340 1,348
Accrued deposits
338 288
Accrued compensation and benefits
532 500
Accrued taxes
(B)
280 253
Other accrued expenses
438 442
Total trade and other payables
5,234 5,052
(A) Includes amounts of €622 million (2022: €212 million) which are part of a supply chain finance programme facilitated by the Group.
The programme permits suppliers to elect on an invoice by invoice basis to receive a discounted payment from the partner bank
earlier than the agreed payment terms with the Group. If a supplier makes this election, the value and the due date of the invoice
payable by the Group remains unchanged.
(B) This line item includes a payable of €59 million in 2023 and €57 million in 2022 to the Spanish tax authorities. Refer to Note 24 for
further details.
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Notes to the consolidated financial statements continued
Note 15
Post-employment benefits
The cost of providing benefits is determined using the projected unit credit
method, with actuarial valuations being carried out at the end of each annual
reporting period. All remeasurements of the defined benefit obligation, such as
actuarial gains and losses and return on plan assets, are recognised directly in
other comprehensive income. Remeasurements recognised in other
comprehensive income are reflected immediately in retained earnings and are
not reclassified to profit or loss. Service cost is presented within cost of sales,
selling and distribution expenses and administrative expenses in the consolidated
income statement. Past service cost is recognised immediately within cost of sales,
selling and distribution expenses, and administrative expenses in the consolidated
income statement. The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation and the fair value of plan
assets. Net interest cost is presented within finance costs or finance income, as
applicable, in the consolidated income statement. The defined benefit obligation
recognised in the consolidated statement of financial position represents the
present value of the estimated future cash outflows, using interest rates of high
quality corporate bonds which have terms to maturity approximating the terms of
the related liability.
The Group recognises termination benefits at the earlier of the following dates: (1)
when the Group can no longer withdraw the offer of those benefits; and (2) when
the Group recognises costs for restructuring that are within the scope of IAS 37,
“Provisions, Contingent Liabilities and Contingent Assets” and involves the
payment of termination benefits. In the case of an offer made to encourage
voluntary redundancy, the termination benefits are measured based on the
number of employees expected to accept the offer. Termination benefits are
payable whenever an employee’s employment is terminated before the normal
retirement date or whenever an employee accepts voluntary redundancy in
exchange for those benefits.
The following table summarises our non-current employee benefit liabilities as at
the dates presented:
Year ended 31 December
2023 2022
GB
Rest of
world Total GB
Rest of
world Total
€ million € million € million € million € million € million
Retirement benefit
obligation
77 81 158 — 77 77
Other employee benefit
liabilities
— 33 33 — 31 31
Total non-current employee
benefit liabilities
77 114 191 — 108 108
Defined benefit plans
The Group sponsors a number of defined benefit pension plans in Belgium,
France, Germany, Great Britain, Luxembourg, Norway, Australia and Indonesia. The
majority of the defined benefit plans are either career average, final salary or
hybrid plans, and operate on a funded basis with assets held in external funds. The
Group’s Great Britain plan (GB Scheme) is the most significant.
The GB Scheme’s defined benefit obligation includes benefits for current
employees, former employees and current pensioners. The level of benefits
provided (funded final salary pension) depends on the member’s length of service
and salary at retirement age. Part of the pension may be exchanged for a tax free
cash lump sum. The GB Scheme was closed to new members with effect from
1 October 2005 and is administered by a board of trustees, which is legally
separate from the Group. The board of trustees is composed of representatives of
both the employer and employees. The board of trustees is required by law to act
in the interest of all relevant beneficiaries and is responsible for the investment
policy with regard to the assets plus the day to day administration of the benefits.
On 8 October 2020, the Group announced a proposal to close the GB Scheme to
future accrual, which was implemented on 31 March 2021. The affected employees
were offered to enrol in the Group’s defined contribution scheme (DC scheme).
Subsequent to the implementation of the closure of the GB Scheme, the
members moved from active to deferred status, with future indexation of
deferred pensions before retirement measured by reference to the consumer
price index (CPI).
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Notes to the consolidated financial statements continued
As part of its risk management strategy, in September 2023, the board of trustees
entered into a buy-in agreement with Just Retirement Ltd. to acquire an
insurance policy with the intent of matching a specific portion of the GB Scheme’s
future cash flows arising from the accrued pension liabilities of retired members.
The transaction was financed entirely using a portion of the existing plan assets,
with no further funding required from the Group. On an IAS 19 “Employee
Benefits” basis, the subsequent fair value of the insurance policy matches the
present value of the liabilities being insured. As the purchase price of the annuity
of €257 million exceeded the IAS 19 accounting value of the corresponding
liabilities, an asset remeasurement loss of €26 million has been recorded in other
comprehensive income.
A full actuarial valuation of the GB Scheme occurs on a triennial basis by a qualified
external actuary, which is used as the basis of determining the Group’s future
contributions to the plan. The latest triennial valuation was carried out as at 5 April
2022 and has been updated to 31 December 2023 to reflect our defined benefit
obligation, for known events and changes in market conditions as allowed under
IAS 19.
Risks
The Group’s defined benefit pension schemes expose the Group to a number of
risks, including:
• Asset volatility: the plan liabilities are calculated using a discount rate set with
reference to corporate bond yields; if assets underperformed this yield, a deficit
would occur. Some of our plans hold a significant proportion of growth assets
(equities and property) which, though expected to outperform corporate
bonds in the long term, create volatility and risk in the short term. The allocation
to growth assets is monitored to ensure it remains appropriate given each
scheme’s long-term objectives.
• Changes in bond yields – a decrease in corporate bond yields will increase the
defined benefit liability, although this will be partially offset by an increase in the
value of the plan’s bond holdings.
• Inflation risk: a significant proportion of our benefit obligations are linked to inflation,
and higher inflation will lead to higher liabilities (although, in most cases, caps on the
level of inflationary increases are in place to protect against extreme inflation). The
majority of the assets are either unaffected by or only loosely correlated with
inflation, meaning that an increase in inflation will also increase the deficit.
• Life expectancy: the majority of our plans have an obligation to provide benefits
for the life of the member, so increases in life expectancy will result in an
increase in the defined benefit liabilities.
Benefit costs
The following table summarises the expense related to pension plans recognised
in the consolidated income statement for the years presented:
Year ended 31 December
2023 2022 2021
GB
Rest of
world Total GB
Rest of
world Total GB
Rest of
world Total
€ million € million € million € million € million € million € million € million € million
Service cost
— 14 14 — 18 18 10 16 26
Past service
(credit)/cost
(A)
— (7) (7) — (2) (2) (29) 6 (23)
Net interest
(income)/cost
(1) (1) (2) (2) 1 (1) 1 1 2
Administrative
expenses
— 1 1 — 1 1 1 1 2
Total cost
(1) 7 6 (2) 18 16 (17) 24 7
(A) The current year activity is predominantly comprised of the impact of a plan amendment arising from legislative changes in
respect of the minimum retirement age in France.
Other comprehensive income
The following table summarises the changes in other comprehensive income
related to our pension plans for the years presented:
Year ended 31 December
2023 2022 2021
GB
Rest of
world Total GB
Rest of
world Total GB
Rest of
world Total
€ million € million € million € million € million € million € million € million € million
Actuarial loss/(gain)
on defined benefit
obligation arising
during the period
39 32 71 (712) (125) (837) (60) (6) (66)
Return on plan
assets less/(greater)
than discount rate
65 (28) 37 808 74 882 (177) (58) (235)
Net charge to other
comprehensive
income
104 4 108 96 (51) 45 (237) (64) (301)
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Notes to the consolidated financial statements continued
Benefit obligation and fair value of plan assets
The following tables summarise the changes in the pension plan benefit obligation and the fair value of plan assets for the periods presented:
Reconciliation of benefit
obligation:
Benefit obligation at beginning
of plan year
937 529 1,466 1,739 674 2,413
Service cost
— 14 14 — 18 18
Past service (credit)/cost
— (7) (7) — (2) (2)
Interest costs on defined benefit
obligation
45 15 60 32 7 39
Plan participants contribution
— 36 36 — 28 28
Actuarial loss/(gain) – experience
21 9 30 26 7 33
Actuarial (gain)/loss –
demographic assumptions
(13) — (13) 2 — 2
Actuarial loss/(gain) – financial
assumptions
31 23 54 (740) (132) (872)
Benefit payments
(33) (70) (103) (57) (72) (129)
Administrative expenses
— 1 1 — 1 1
Currency translation adjustments
20 (2) 18 (65) — (65)
Benefit obligation at end of
plan year
1,008 548 1,556 937 529 1,466
Year ended 31 December
2023 2022
GB
Rest of
world Total GB
Rest of
world Total
€ million € million € million € million € million € million
Reconciliation of fair value
of plan assets:
Fair value of plan assets at
beginning of plan year
952 572 1,524 1,840 664 2,504
Interest income on plan assets
46 16 62 34 6 40
Return on plan assets (less)/
greater than discount rate
(65) 28 (37) (808) (74) (882)
Plan participants contributions
— 36 36 — 28 28
Employer contributions
11 21 32 11 21 32
Benefit payments
(33) (70) (103) (57) (72) (129)
Currency translation adjustment
20 (2) 18 (68) (1) (69)
Fair value of plan assets at end
of plan year
931 601 1,532 952 572 1,524
Year ended 31 December
2023 2022
GB
Rest of
world Total GB
Rest of
world Total
€ million € million € million € million € million € million
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Notes to the consolidated financial statements continued
Timing of benefit payments
The weighted average duration of the defined benefit plan obligation as at
31 December 2023 is 15 years, including 16 years for the GB Scheme. The weighted
average duration of the defined benefit plan obligation as at 31 December 2022
was 16 years, including 17 years for the GB Scheme.
Retirement benefit status
The following table summarises the retirement benefit status of pension plans as
at the dates presented:
Year ended 31 December
2023 2022
GB
Rest of
world Total GB
Rest of
world Total
€ million € million € million € million € million € million
Net benefit status:
Present value of obligation
(1,008) (548) (1,556) (937) (529) (1,466)
Fair value of assets
931 601 1,532 952 572 1,524
Net benefit status:
(77) 53 (24) 15 43 58
Retirement benefit surplus (Note
25)
— 134 134 15 120 135
Retirement benefit obligation
(77) (81) (158) — (77) (77)
The surplus for 2023 is primarily related to the defined benefit plans in Germany
and Belgium. The surplus is recognised on the balance sheet on the basis that the
Group is entitled to a refund of any remaining assets once all members have left
the plan.
Actuarial assumptions
The following tables summarise the weighted average actuarial assumptions used
to determine the benefit obligations of pension plans as at the dates presented:
Year ended 31 December
2023 2022
GB
Rest of
world Average GB
Rest of
world Average
Financial assumptions
% % % % % %
Discount rate
4.5 3.6 4.2 4.8 4.0 4.5
Rate of compensation increase
N/A 3.6 3.6 N/A 3.6 3.6
Rate of price inflation
3.1 2.3 2.9 3.3 2.4 3.0
Year ended 31 December
2023 2022
Demographic assumptions
(weighted average)
(A)
GB
Rest of
world Average GB
Rest of
world Average
Retiring at the end
of the reporting period
Male
21.4 19.8 21.0 21.9 19.8 21.3
Female
23.9 23.2 23.7 24.4 23.1 24.0
Retiring 15 years after the end
of the reporting period
Male
22.3 20.0 21.7 22.8 20.0 22.1
Female
25.0 23.5 24.6 25.5 23.5 24.9
(A) These assumptions translate into an average life expectancy in years, post-retirement, for an employee retiring at age 65.
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Notes to the consolidated financial statements continued
The following tables summarise the sensitivity of the defined benefit obligation to
changes in the weighted average principal assumptions for the periods presented:
Year ended 31 December 2023
Change in
assumption
Impact on defined benefit obligation (%)
Increase in assumption Decrease in assumption
Principal assumptions
GB
Rest of
world Average GB
Rest of
world Average
Discount rate
0.5% (7.3) (4.1) (6.2) 7.9 4.4 6.7
Rate of compensation
increase
(A)
0.5% N/A 1.6 0.5 N/A (1.4) (0.5)
Rate of price inflation
0.5% 4.6 3.2 4.1 (4.5) (3.0) (4.0)
Mortality rates
1 year 2.3 1.7 2.1 (2.5) (1.8) (2.2)
Year ended 31 December 2022
Change in
assumption
Impact on defined benefit obligation (%)
Increase in assumption Decrease in assumption
Principal assumptions
GB
Rest of
world Average GB
Rest of
world Average
Discount rate
0.5% (7.9) (4.0) (6.5) 8.6 4.4 7.1
Rate of compensation
increase
(A)
0.5% N/A 1.6 0.6 N/A (1.4) (0.5)
Rate of price inflation
0.5% 3.9 3.1 3.6 (3.8) (2.9) (3.4)
Mortality rates
1 year 3.0 1.7 2.5 (2.8) (1.7) (2.4)
(A) The compensation increase assumption is no longer applicable to the valuation of the defined benefit obligation associated with
the GB Scheme in light of the plan closure effective 31 March 2021.
The sensitivity analyses have been determined based on a method that
extrapolates the impact on the defined benefit obligation as a result of
reasonable changes in key assumptions occurring at the end of the reporting
period. The sensitivity analyses are based on a change in a significant assumption,
keeping all other assumptions constant. The sensitivity analyses may not be
representative of an actual change in the defined benefit obligation, as it is
unlikely that changes in assumptions would occur in isolation from one another.
Pension plan assets
There are formal investment policies for the assets associated with our pension
plans. Policy objectives include: (1) maximising long-term return at acceptable risk
levels; (2) diversifying among asset classes, if appropriate, and among investment
managers; and (3) establishing relevant risk parameters within each asset class.
Investment policies reflect the unique circumstances of the respective plans and
include requirements designed to mitigate risk, including quality and
diversification standards. Asset allocation targets are based on periodic asset
liability and/or risk budgeting study results, which help determine the appropriate
investment strategies for acceptable risk levels. The investment policies permit
variances from the targets within certain parameters.
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Notes to the consolidated financial statements continued
The following table summarises pension plan assets measured at fair value as at the dates presented:
Year ended 31 December 2023 Year ended 31 December 2022
Total
Investments quoted
in active markets
Unquoted investments Total
Investments quoted
in active markets
Unquoted investments
GB Rest of world GB Rest of world GB Rest of world GB Rest of world
€ million € million € million € million € million € million € million € million € million € million
Equity securities
(A)
154 — 154 — — 185 — 185 — —
Fixed income securities:
(B)
Corporate bonds and notes
211 117 94 — — 56 — 56 — —
Government bonds
(C)
335 770 41 (476) — 692 1,131 28 (467) —
Cash and other short-term investments
(D)
25 19 6 — — 28 23 5 — —
Other investments:
Real estate funds
(E)
255 21 26 208 — 274 43 15 216 —
Insurance contracts
(F)
463 — — 260 203 207 — — — 207
Investment funds
(G)
77 — — — 77 76 — 5 — 71
Derivatives
(H)
12 7 — 5 — 6 5 — 1 —
Total
1,532 934 321 (3) 280 1,524 1,202 294 (250) 278
(A) Equity securities are comprised of ordinary shares and investments in equity funds. Investments in ordinary shares are valued using quoted market prices multiplied by the number of shares owned. Investments in equity funds are valued at the net asset value per share,
which is calculated predominantly based on the underlying quoted investments market price, multiplied by the number of shares held as of the measurement date.
(B) The fair values of the fixed income securities are determined based on quoted market prices in active markets. Bonds are held mainly in the currency of the geography of the plan.
(C) The unquoted amounts within this category relate to repurchase agreements (where the Scheme has sold government bonds with the agreement to repurchase at a fixed date and price). The commitment to repurchase the government bonds reduces the pension
assets and is reflected at fair value based on the repurchase price. The assets sold are reported at their fair value, reflecting that the Scheme retains the risks and rewards of ownership of those assets. The asset portfolio of the GB Scheme was refined during 2022 by
entering into repurchase agreement of government bonds in order to better match the Scheme liability and to offset the exposure to interests and inflation rates, while remaining invested in the assets of similar risk profile.
(D) Cash and other short-term investments are valued at €1.00/unit, which approximates fair value. Amounts are generally invested in cash or interest bearing accounts.
(E) The valuation of unquoted real estate funds is based on net assets value per share multiplied by the number of shares owned. For quoted real estate funds, the calculation is based on the underlying quoted investments market price, multiplied by the number of shares
held as of the measurement date.
(F) Insurance contracts exactly match the amount and timing of certain benefits and therefore the fair value of these insurance policies is deemed to be the present value of the related obligations.
(G) Primarily includes investments in equity securities, fixed income securities and combinations of both. Fair values are sourced from broker quotes.
(H) The unquoted amounts within derivatives primarily relate to total return swaps, which represent the current value of future cash flows arising from the swap determined using discounted cash flow models and market data at the reporting date.
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Notes to the consolidated financial statements continued
Contributions
To support a long-term funding arrangement, during 2019 the Group entered into
a partnership agreement with the GB Scheme and the CCEP Scottish Limited
Partnership (the Partnership). Certain property assets in Great Britain, with a
market value of £171 million, were transferred into the Partnership and
subsequently leased back to the Group’s operating subsidiary in Great Britain. The
GB Scheme receives semi-annual distributions from the Partnership, increasing
each year at a fixed cumulative rate of 3% through to 2034. The Group exercises
control over the Partnership, and as such, it is fully consolidated in these
consolidated financial statements. Under IAS 19, the investment held by the GB
Scheme in the Partnership does not represent a plan asset for the purposes of
these consolidated financial statements. Similarly, the associated liability is not
included in the consolidated statement of financial position; rather, the
distributions are recognised when paid as a contribution to the plan assets of the
scheme.
Contributions to pension plans totalled €32 million, €32 million and €39 million
during the years ended 31 December 2023, 31 December 2022 and
31 December 2021, respectively. Included within the 2023 contribution is €11 million
relating to the Partnership agreement. The Group expects to make contributions
of €31 million for the full year ending 31 December 2024.
Other employee benefit liabilities
In certain territories, the Group has an early retirement programme designed to
create an incentive for employees, within a certain age group, to transition from
(full or part time) employment into retirement before their legal retirement age.
Furthermore, the Group also sponsors deferred compensation plans in other
territories. The current portion of these liabilities totalled €8 million and €8 million
as at 31 December 2023 and 31 December 2022, respectively, and is included
within the current portion of employee benefit liabilities. The non-current portion
of these liabilities totalled €33 million and €31 million as at 31 December 2023 and
31 December 2022, respectively, and is included within employee benefit liabilities.
Defined contribution plans
The Group sponsors a number of defined contribution plans across its territories.
Contributions payable for the period are charged to the consolidated income
statement as an operating expense for defined contribution plans. Contributions
to these plans totalled €81 million for the year ended 31 December 2023,
€79 million for the year ended 31 December 2022 and €62 million for the year
ended 31 December 2021.
Note 16
Equity
Share capital
As at 31 December 2023, the Company has issued and fully paid 459,200,818
Shares. Shares in issue have one voting right each and no restrictions related to
dividends or return of capital.
Number of Shares Share capital
millions € million
As at 1 January 2021
455 5
Issuances of Shares
1 —
Cancellation of Shares
— —
As at 31 December 2021
456 5
Issuance of Shares
1 —
Cancellation of Shares
— —
As at 31 December 2022
457 5
Issuance of Shares
2 —
Cancellation of Shares
— —
As at 31 December 2023
459 5
The number of Shares increased in 2023, 2022 and 2021 from the issue of 2,094,365,
871,421 and 1,589,522 Shares, respectively, following the exercise of share-based
payment awards.
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Notes to the consolidated financial statements continued
Share premium
The share premium account increased by cash received for the exercise of options
by €42 million in 2023, €14 million in 2022 and €28 million in 2021.
Merger reserves
The consideration transferred to acquire CCIP and CCEG qualified for merger
relief under the Companies Act. As such, the excess consideration transferred over
nominal value of €287 million was required to be excluded from the share
premium account and recorded to merger reserves.
Other reserves
The following table summarises the balances in other reserves (net of tax) as at
the dates presented:
Year ended 31 December
2023 2022 2021
€ million € million € million
Cash flow hedge reserve
31 104 151
Net investment hedge reserve
197 197 197
Foreign currency translation adjustment
reserve
(974) (728) (509)
Reserve related to the acquisition of non-
controlling interests
(79) (79) —
Other reserves
(A)
2 (1) 5
Total other reserves
(823) (507) (156)
(A) Other reserves relate to cost of hedging which represents forward point on spot designations, time value of options and currency
basis.
Movements, including the tax effects, in these accounts through to
31 December 2023 are included in the consolidated statement of comprehensive
income or directly within the consolidated statement of changes in equity.
Dividends
Dividends are recorded within the Group’s consolidated financial statements in
the period in which they are paid.
Year ended 31 December
2023 2022 2021
€ million € million € million
First half dividend
(A)
308 256 —
Second half dividend
(B)
533 507 638
Total dividend on ordinary shares paid
841 763 638
(A) Dividend of €0.67 per Share was paid in first half of 2023. Dividend of €0.56 per Share was paid in first half of 2022.
(B) Dividend of €1.17 per Share was paid in second half of 2023. Dividend of €1.12 per Share was paid in second half of 2022.
A full year dividend of €1.40 per Share was paid in 2021.
Dividends attributable to restricted stock units and performance share units that
are unvested at the period end date are accrued accordingly. During 2023, an
incremental dividend accrual of €3 million has been recognised (2022: €3 million,
2021: €1 million).
Non-controlling interest
As at 31 December 2023, 31 December 2022 and 31 December 2021, equity
attributable to non-controlling interest was nil, nil and €177 million, respectively.
In December 2022, the Group entered into a share purchase agreement (SPA)
with TCCC to acquire the remaining 29.4% ownership interest of its subsidiary, PT
Coca-Cola Bottling Indonesia, for a total consideration of €282 million. The
acquisition completed in the first quarter of 2023, following the resolution of
customary conditions (refer to Note 19). As at 31 December 2022, the non-
controlling interest was derecognised.
As at 31 December 2021, equity attributable to non-controlling interest was
€177 million, representing 29.4% of PT Coca-Cola Bottling Indonesia, held by TCCC
and 6.1% of Samoa Breweries Limited held by numerous investors.
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Notes to the consolidated financial statements continued
Note 17
Total operating costs
The following tables summarise the significant cost items by nature within
operating costs for the years presented:
Year ended 31 December
2023 2022 2021
€ million € million € million
Transportation costs
(A)
958 851 631
Employee benefits
1,116 1,110 975
Depreciation of property, plant and
equipment, excluding restructuring
236 246 245
Amortisation of intangible assets
6 7 4
Restructuring charges, including
accelerated depreciation
(B)
— 1 45
Other selling and distribution expenses
862 769 596
Total selling and distribution expenses
3,178
2,984 2,496
Transportation costs
(A)
3 16 2
Employee benefits
608 544 462
Depreciation of property, plant and
equipment, excluding restructuring
93 99 76
Amortisation of intangible assets
130 94 83
Acquisition related costs
12 3 49
Restructuring charges, including
accelerated depreciation
(B)
85 143 91
Other administrative expenses
379 351 311
Total administrative expenses
1,310 1,250 1,074
Total operating expenses
4,488 4,234 3,570
(A) Transportation costs include warehousing and delivery costs to the final customer destination. They exclude depreciation and
amortisation.
(B) See restructuring costs table.
Year ended 31 December
2023 2022 2021
Restructuring costs
€ million € million € million
Increase in provision for restructuring
programmes (Note 22)
78 115 93
Amount of provision unused (Note 22)
(10) (8) (13)
Accelerated depreciation and non-cash
costs
11 44 60
Other cash costs
(A)
15 12 13
Total restructuring costs
94 163 153
Restructuring costs by function:
Cost of sales
9 19 17
Selling and distribution expenses
— 1 45
Administrative expenses
85 143 91
(A) Other cash costs primarily relate to professional fees, which include consultancy costs, legal fees and other costs directly
associated with restructuring.
Restructuring costs charged in arriving at operating profit for the years presented
include restructuring costs arising under the following programmes and initiatives.
Accelerate competitiveness
In October 2020, the Group announced a number of proposals aimed at
improving productivity through the use of technology enabled solutions. Included
in these proposals was the closure of certain production facilities, including
Liederbach and Sodenthaler in Germany and Malaga in Iberia. These proposals
continue the focus on network optimisation and site rationalisation of the Group,
with the majority of the impacted activities to be transferred within our network
of facilities in each respective territory.
The proposals are also expected to impact a number of functions across the
Group, including business process technology, customer service, sales and
marketing, and finance, as the Group seeks to reduce complexity, improve
efficiency and increase the use of technology.
In 2023, as part of the continuation of this program, the Group announced
additional restructuring proposals. These initiatives resulted in €7 million of
restructuring charges primarily related to severance costs. As at
31 December 2023, the programme is substantially complete.
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Notes to the consolidated financial statements continued
In November 2022, the Group announced a new efficiency programme to be
delivered by the end of 2028. This programme focusses on further supply chain
efficiencies, leveraging global procurement and a more integrated shared service
centre model, all enabled by next generation technology including digital tools
and data and analytics.
In 2023, as part of this efficiency programme, the Group announced restructuring
proposals resulting in €82 million of recognised costs primarily related to expected
severance payments.
Staff costs
Staff costs included within the income statement were as follows:
Year ended 31 December
2023 2022 2021
Employee costs
€ million € million € million
Wages and salaries
1,841 1,769 1,544
Social security costs
339 316 302
Pension and other employee benefits
253 233 170
Total employee costs
2,433 2,318 2,016
Directors’ remuneration information is disclosed in the Directors’ remuneration
report.
The average number of persons employed by the Group (including Directors) for
the periods presented were as follows:
2023 2022 2021
No. in thousands No. in thousands No. in thousands
Commercial
11.6 12.5 10.9
Supply chain
17.1 16.6 14.9
Support functions
4.1 4.0 3.9
Total average staff employed
32.8 33.1 29.7
Auditor’s remuneration
Audit and other fees charged in the income statement concerning the statutory
auditor of the consolidated financial statements, Ernst & Young LLP, were as
follows:
Year ended 31 December
2023 2022 2021
€ thousand € thousand € thousand
Audit of Parent Company and consolidated
financial statements
(A)
3,759 3,136 4,751
Audit of the Company’s subsidiaries
6,269 6,248 5,493
Total audit
10,028 9,384 10,244
Audit-related assurance services
(B)
1,019 1,002 1,234
Other assurance services
717 213 313
Total audit and audit-related assurance
services
11,764 10,599 11,791
All other services
(C)
36 47 35
Total non-audit or non-audit-related
assurance services
36 47 35
Total audit and all other fees
11,800 10,646 11,826
(A) Fees in respect of the audit of the accounts of the Company, including the Group's consolidated financial statements.
(B) Includes professional fees for interim reviews, reporting on internal financial controls, services related to the transactions entered
into with TCCC, issuance of comfort letters for debt issuances, regulatory inspections, certain accounting consultations and other
attested engagements.
(C) Represents fees for all other allowable services.
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Notes to the consolidated financial statements continued
Note 18
Finance costs
Finance costs are recognised in the consolidated income statement in the period
in which they are incurred, with the exception of general and specific borrowing
costs directly attributable to the acquisition, construction or production of
qualifying assets. Qualifying assets are assets that necessarily take a substantial
period of time to get ready for their intended use or sale. Borrowing costs are
added to the cost of those assets, until such time as the assets are substantially
ready for their intended use or sale. All other borrowing costs are recognised
within the consolidated income statement in the period in which they are incurred
based upon the effective interest rate method. Interest income is recognised
using the effective interest rate method.
The following table summarises net finance costs for the years presented:
Year ended 31 December
2023 2022 2021
€ million € million € million
Interest income
(A)
65 67 43
Interest expense on external debt
(A)
(162) (162) (153)
Other finance costs
(B)
(23) (19) (19)
Total finance costs, net
(120) (114) (129)
(A) Includes interest income and expense amounts, as applicable, on cross currency swaps and interest rate swaps. Cross currency
swap and interest rate swap income totalled €47 million, €50 million and €27 million in 2023, 2022 and 2021, respectively. Cross
currency swap and interest rate swap expense totalled €67 million, €31 million and €14 million in 2023, 2022 and 2021, respectively.
Refer to Note 12 for further details.
(B) Other finance costs principally includes amortisation of the discount on external debt and interest on leases.
Note 19
Related party transactions
For the purpose of these consolidated financial statements, transactions with
related parties mainly comprise transactions between subsidiaries of the Group
and the related parties of the Group.
Transactions with entities with significant influence over the Group
Transactions with TCCC
TCCC exerts significant influence over the Group, as defined by IAS 24 “Related
Party Disclosures”. As at 31 December 2023, 19.20% of the total outstanding Shares
in the Group were owned by European Refreshments, a wholly owned subsidiary
of TCCC. The Group is a key bottler of TCCC products and has entered into
bottling agreements with TCCC to make, sell and distribute products of TCCC
within the Group’s territories. The Group purchases concentrate from TCCC and
also receives marketing funding to help promote the sale of TCCC products.
The Group’s agreements with TCCC in each territory are for 10-year terms and
each contains the right for the Group to request a 10-year renewal. The existing
bottling agreements expire no earlier than 1 September 2025. Additionally, two of
the Group’s seventeen Directors are nominated by TCCC.
The Group and TCCC engage in a variety of marketing programmes to promote
the sale of TCCC products in territories in which the Group operates. The Group
and TCCC operate under an incidence based concentrate pricing model and
funding programme across most territories, the terms of which are tied to the
bottling agreements. In certain API territories, the Group operates under a fixed
price model with marketing rebates and support.
TCCC makes discretionary marketing contributions under shared marketing
agreements to CCEP’s operating subsidiaries. Amounts to be paid to the Group by
TCCC under the programmes are generally determined annually and are
periodically reassessed as the programmes progress. Under the bottling
agreements, TCCC is under no obligation to participate in the programmes or
continue past levels of funding in the future. The amounts paid and terms of
similar programmes with other franchises may differ.
Marketing support funding programmes granted to the Group provide financial
support principally based on product sales or on the completion of stated
requirements and are intended to offset a portion of the costs of the
programmes.
Payments from TCCC for marketing programmes to promote the sale of
products are classified as a reduction in cost of sales, unless the presumption that
the payment is a reduction in the price of the franchisors’ products can be
overcome. Payments for marketing programmes are recognised as product is
sold.
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Notes to the consolidated financial statements continued
The following table summarises the transactions with TCCC that directly impacted
the consolidated income statement for the years presented:
Year ended 31 December
2023 2022 2021
€ million € million € million
Amounts affecting revenue
(A)
140 117 50
Amounts affecting cost of sales
(B)
(3,964) (3,805) (3,056)
Amounts affecting operating expenses
(C)
25 19 9
Amounts affecting finance costs, net
(D)
4 — —
Total net amount affecting
the consolidated income statement
(3,795) (3,669) (2,997)
(A) Amounts principally relate to fountain syrup and packaged product sales.
(B) Amounts principally relate to the purchase of concentrate, syrup, mineral water and juice, as well as funding for marketing
programmes.
(C) Amounts principally relate to certain costs associated with new product development initiatives and reimbursement of certain
marketing expenses.
(D) Amounts relate to bank fees recharges for bank guarantees.
The following table summarises the transactions with TCCC that impacted the
consolidated statement of financial position for the periods presented:
Year ended 31 December
2023 2022
€ million € million
Amounts due from TCCC
101 130
Amounts payable to TCCC
229 442
In December 2022, the Group entered into a share purchase agreement (SPA)
with TCCC to acquire the remaining 29.4% ownership interest of its subsidiary, PT
Coca-Cola Bottling Indonesia, for a total consideration of €282 million. As at
31 December 2022, we recognised a redemption liability equalling the
consideration amount, which was reflected within the amounts payable to related
parties line of our consolidated statement of financial position. The acquisition
completed on 15 February 2023, following the resolution of customary conditions.
In February 2022, the Group entered into asset sale arrangements with TCCC,
pursuant to which the Group agreed to sell certain non-alcoholic ready to drink
beverage brands predominantly available in Australia and New Zealand, which
were acquired as part of the business combination transaction consummated on
10 May 2021, for a total consideration approximating €182 million. The sale price
approximated the fair value of the brands assessed at the acquisition date. During
the first half of 2022, the Group partially completed the asset sale transaction and
classified the remaining brands as assets held for sale in our consolidated
statement of financial position as at 31 December 2022. The remaining portion of
the asset sale transaction was finalised during the first half of 2023. The Group has
also entered into commercial agreements with TCCC to facilitate ongoing
manufacturing, distributing and/or selling activities pertaining to these brands.
Terms and conditions of transactions with TCCC
Outstanding balances on transactions with TCCC are unsecured, interest free and
generally settled in cash. Receivables from TCCC are considered to be fully
recoverable.
Proposed acquisition of Coca-Cola Beverages Philippines, Inc. (CCBPI)
In November 2023, the Group together with Aboitiz Equity Ventures Inc. (AEV)
entered into a definitive agreement with The Coca-Cola Company (TCCC) to
jointly acquire 100% of CCBPI, a wholly owned subsidiary of TCCC, for an estimated
total consideration of US$1.8 billion on a debt-free, cash-free basis. The proposed
acquisition reflects a 60:40 ownership structure between CCEP and AEV. The
parties also agreed that if any currently unforeseen events lead AEV to terminate
its participation in the proposed acquisition, at the election of TCCC, CCEP may
acquire 60% or 100% of CCBPI. The transaction, which is subject to a number of
customary closing conditions, including the receipt of regulatory approval, is
expected to complete during the first quarter of 2024 (refer to Note 27 for
further details).
Transactions with Cobega companies
Cobega, S.A. (Cobega) exhibits significant influence over the Group, as defined by
IAS 24, “Related Party Disclosures”. As at 31 December 2023, 20.80% of the total
outstanding Shares in the Group were indirectly owned by Cobega through its
ownership interest in Olive Partners, S.A. Additionally, five of the Group’s seventeen
Directors, including the Chairman, are nominated by Olive Partners, three of whom
are affiliated with Cobega.
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Notes to the consolidated financial statements continued
The principal transactions with Cobega are for the purchase of packaging
materials and maintenance services for vending machines. The following table
summarises the transactions with Cobega that directly impacted the consolidated
income statement for the years presented:
Year ended 31 December
2023 2022 2021
€ million € million € million
Amounts affecting revenue
(A)
1 2 1
Amounts affecting cost of sales
(B)
(69) (76) (49)
Amounts affecting operating expenses
(C)
(18) (17) (11)
Total net amount affecting
the consolidated income statement
(86) (91) (59)
(A) Amounts principally relate to packaged product sales.
(B) Amounts principally relate to the purchase of packaging materials and concentrate.
(C) Amounts principally relate to maintenance and repair services and transportation.
The following table summarises the transactions with Cobega that impacted the
consolidated statement of financial position for the periods presented:
Year ended 31 December
2023 2022
€ million € million
Amounts due from Cobega
16 3
Amounts payable to Cobega
22 24
Terms and conditions of transactions with Cobega
Outstanding balances on transactions with Cobega are unsecured, interest free
and generally settled in cash. Receivables from Cobega are considered to be fully
recoverable.
Other related parties
Transactions with associates, joint ventures and other related parties
Joint venture investments relate to interests in a service provider supporting the
operation of container refund schemes in certain Australian states, a PET recycling
plant in Indonesia and a manufacturer of alcoholic beverages (divested during the
first half of 2022).
Associate investments relate to interests in deposit scheme coordinators and a
holding company of container deposit schemes in certain Australian states and
territories. Associate investments also include the Group’s equity interests in early
stage development companies as part of CCEP Ventures.
Other related parties include coordinators of container deposit schemes in certain
Australian states over which significant influence is held.
The following table summarises the transactions with associates, joint ventures
and other related parties:
Year ended 31 December
2023 2022 2021
€ million € million € million
Net amounts affecting consolidated
income statement – associates
(A)
(68) (73) (49)
Net amounts affecting consolidated
income statement – joint ventures
(B)
(28) (9) (9)
Net amounts affecting consolidated
income statement – other related parties
(A)
(85) (85) (52)
Total net amount affecting
the consolidated income statement
(181) (167) (110)
(A) Amounts principally relate to container deposit scheme charges in Australia.
(B) Amounts principally relate to the purchase of certain raw materials.
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Notes to the consolidated financial statements continued
The following table summarises the balances with associates, joint ventures and
other related parties:
Year ended 31 December
2023 2022
€ million € million
Amounts due from associates
6 6
Amounts payable to associates
2 9
Amounts payable to joint ventures
7 —
Amounts payable to other related parties
10 10
Terms and conditions of transactions with associates, joint ventures and other
related parties
Outstanding balances on transactions are unsecured, interest free and generally
settled in cash. Receivables are considered to be fully recoverable.
Refer to Note 28 for a listing of associates, joint ventures and other related parties.
Transactions with key management personnel
Key management personnel are the members of the Board of Directors and the
members of the Executive Leadership Team. The following table summarises the
total remuneration paid or accrued during the reporting period related to key
management personnel:
Year ended 31 December
2023 2022 2021
€ million € million € million
Salaries and other short-term employee
benefits
(A)
31 30 22
Share-based payments
20 15 7
Total
51 45 29
(A) Short-term employee benefits include wages, salaries and social security contributions, paid annual leave and paid sick leave, paid
bonuses and non-monetary benefits.
The Group did not have any loans with key management personnel and was not
party to any other transactions with key management personnel during the
periods presented.
Note 20
Income taxes
Current tax
Current tax for the period includes amounts expected to be payable on taxable
income in the period together with any adjustments to taxes payable in respect of
previous periods, and is determined based on the tax laws enacted or
substantively enacted at the balance sheet date in the countries where the Group
operates and generates taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions, where
appropriate, on the basis of amounts expected to be paid to the tax authorities.
Deferred tax
Deferred tax is determined by identifying the temporary differences between
the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date. Deferred tax for the period includes
origination and reversal of temporary differences, remeasurements of deferred
tax balances and adjustments in respect of prior periods.
Deferred tax liabilities are recognised for all taxable temporary differences,
except:
• When the deferred tax liability arises from the initial recognition of goodwill or
an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit
or loss, unless it gives rise to equal taxable and deductible temporary
differences; or
• In respect of taxable temporary differences associated with investments in
subsidiaries, branches and associates, and interests in joint ventures, when the
timing of the reversal of the temporary differences can be controlled by the
Group and it is probable that the temporary differences will not reverse in the
foreseeable future.
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Notes to the consolidated financial statements continued
Deferred tax assets are recognised for all deductible temporary differences, carry
forward of unused tax credits and unused tax losses, to the extent that it is
probable that taxable profit will be available against which the deductible
temporary differences and the carry forward of unused tax credits and unused tax
losses can be utilised, except:
• When the deferred tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not
a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss, unless it gives rise to equal taxable
and deductible temporary differences; or
• In respect of deductible temporary differences associated with investments in
subsidiaries, branches and associates, and interests in joint ventures, deferred tax
assets are recognised only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be
available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected
to apply in the year when the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable
right exists to set off current tax assets against current income tax liabilities and
the deferred taxes relate to the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the
balances on a net basis.
Income tax is recognised in the consolidated income statement. Income tax is
recognised in other comprehensive income or directly in equity to the extent that
it relates to items recognised in other comprehensive income or in equity.
2023, 2022 and 2021 results
The following table summarises the major components of income tax expense for
the periods presented:
Year ended 31 December
2023 2022 2021
€ million € million € million
Current tax:
Current tax charge
555 460 323
Adjustment in respect of current tax
from prior periods
(10) (37) (53)
Total current tax
545 423 270
Deferred tax:
Relating to the origination and reversal of
temporary differences
11 35 6
Adjustment in respect of deferred
income tax from prior periods
(22) (22) (9)
Relating to changes in tax rates or the
imposition of new taxes
— — 127
Total deferred tax
(11) 13 124
Income tax charge per
the consolidated income statement
534 436 394
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Notes to the consolidated financial statements continued
The following table summarises the taxes on items recognised in other
comprehensive income (OCI) and directly within equity for the periods presented:
Year ended 31 December
2023 2022 2021
€ million € million € million
Taxes charged/(credited) to OCI:
Deferred tax on net gain/loss on
revaluation of cash flow hedges
11 (20) 63
Deferred tax on net gain/loss on pension
plan remeasurements
(43) (11) 63
Current tax on net gain/loss on pension
plan remeasurements
8 — 1
Total taxes charged/(credited) to OCI
(24) (31) 127
Taxes charged/(credited) to equity:
Deferred tax charge/(credit): cash flow
hedges
(31) — —
Deferred tax charge/(credit): share-
based compensation
(1) (2) (3)
Current tax charge/(credit): share-based
compensation
— (8) —
Total taxes charged/(credited) to equity
(32) (10) (3)
The effective tax rate was 24.2%, 22.3% and 28.5% for the years ended
31 December 2023, 31 December 2022 and 31 December 2021, respectively. The
Parent Company of the Group is a UK company.
Accordingly, the following tables provide reconciliations of the Group’s income tax
expense at the UK statutory tax rate to the actual income tax expense for the
periods presented:
Year ended 31 December
2023 2022 2021
€ million € million € million
Accounting profit before tax
from continuing operations
2,203 1,957 1,382
Tax expense at the UK statutory rate
518 371 262
Taxation of foreign operations, net
(A)
43 115 72
Non-deductible expense items for tax
purposes
15 2 2
Rate and law change impact, net
(B)(C)(D)
— — 127
Deferred taxes not recognised
(10) 7 (7)
Adjustment in respect of prior periods
(E)
(32) (59) (62)
Total provision for income taxes
534 436 394
(A) This reflects the impact, net of income tax contingencies, of having operations outside the UK, which are taxed at rates other than
the statutory UK rate of 23.5% (2022: 19%, 2021: 19%).
(B) In 2021, the UK enacted a law change that increased its tax rate to 25% with effect from 1 April 2023. The Group recognised a
deferred tax expense of €123 million to reflect the impact of this change.
(C) In 2021, the Netherlands enacted a law change that increased its tax rate to 25.8% with effect from 1 January 2022. The Group
recognised a deferred tax expense of €2 million to reflect the impact of this change.
(D) In 2021, Indonesia enacted a law change that retained its tax rate of 22% with effect from 1 January 2022, reversing a previously
enacted decrease to 20%. The Group recognised a deferred tax expense of €2 million to reflect the impact of this change.
(E) The prior year adjustment is principally due to the release of tax reserves that are no longer required and tax audit settlements.
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Notes to the consolidated financial statements continued
Deferred income taxes
The following table summarises the movements in the carrying amounts of deferred tax liabilities and assets by significant component during the periods presented:
Franchise
and other
intangible assets
Property, plant
and equipment
Financial assets
and liabilities
Tax
losses
Employee
and retiree
benefit accruals
Tax
credits
Other,
net
Total,
net
€ million € million € million € million € million € million € million € million
As at 31 December 2021
3,285 251 36 (14) (14) (12) 25 3,557
Amount charged/(credited) to income statement
(excluding effect of tax rate changes)
(4) (11) 5 7 5 — 11 13
Amounts charged/(credited) directly to OCI
— — (20) — (11) — — (31)
Amount charged/(credited) to equity
— — — — (2) — — (2)
Acquired through business combinations
(4) 2 — — — — — (2)
Balance sheet reclassifications
(1) (2) (1) (4) — — 4 (4)
Effect of movements in foreign exchange
(22) (4) (3) — (1) — (9) (39)
As at 31 December 2022
3,254 236 17 (11) (23) (12) 31 3,492
Amount charged/(credited) to income statement
(excluding effect of tax rate changes)
(14) 2 11 — (15) (12) 17 (11)
Amounts charged/(credited) directly to OCI
— — 11 — (43) — — (32)
Amount charged/(credited) to equity
— — (31) — (1) — — (32)
Balance sheet reclassifications
— 10 — — — — (10) —
Effect of movements in foreign exchange
(49) — — — 2 — 7 (40)
As at 31 December 2023
3,191 248 8 (11) (80) (24) 45 3,377
Analysed as follows:
As at 31 December
2022
As at 31 December
2023
Deferred tax asset
(21) (1)
Deferred tax liability
3,513 3,378
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Notes to the consolidated financial statements continued
Unrecognised tax items
The utilisation of tax losses and temporary differences carried forward, for which
no deferred tax asset is currently recognised, is subject to the resolution of tax
authority enquiries and the achievement of positive income in periods which are
beyond the Group’s current business plan, and therefore this utilisation is
uncertain.
The gross and tax effected amounts including expiry dates, where applicable, of
unrecognised losses, tax credits and deductible temporary differences available
for carry forward are as follows:
Year ended 31 December
2023 2022 2021
€ million € million € million
Gross
amount
Tax
effected
Gross
amount
Tax
effected
Gross
amount
Tax
effected
Tax losses expiring:
Beyond 10 years
3 1 3 1 — —
No time limit
1,391 264 1,657 288 1,803 310
1,394 265 1,660 289 1,803 310
Tax credits expiring:
Within 10 years
57 57 58 58 100 100
Beyond 10 years
35 35 43 43 45 45
92 92 101 101 145 145
Deductible temporary differences
No time limit
17 4 79 20 53 11
17 4 79 20 53 11
Total
1,503 361 1,840 410 2,001 466
As at 31 December 2023, no deferred tax liability has been recognised in respect of
€244 million (2022: €309 million) of unremitted earnings in subsidiaries, associates
and joint ventures.
Tax provisions
The Group is routinely under audit by tax authorities in the ordinary course of
business. Due to their nature, such proceedings and tax matters involve inherent
uncertainties including, but not limited to, court rulings, settlements between
affected parties and/or governmental actions. The probability of outcome is
assessed and accrued as a liability and/or disclosed, as appropriate. The Group
maintains provisions for uncertainty relating to these tax matters that it believes
appropriately reflect its risk. As at 31 December 2023, €175 million
(31 December 2022: €122 million) of these provisions is included in current tax
liabilities and the remainder is included in non-current tax liabilities.
The Group reviews the adequacy of these provisions at the end of each reporting
period and adjusts them based on changing facts and circumstances. Due to the
uncertainty associated with tax matters, it is possible that at some future date,
liabilities resulting from audits or litigation could vary significantly from the
Group’s provisions. When an uncertain tax liability is regarded as probable, it is
measured on the basis of the Group’s best estimate.
The Group has received tax assessments in certain jurisdictions for potential tax
related to the Group’s purchases of concentrate. The value of the Group’s
concentrate purchases is significant, and, therefore, the tax assessments are
substantial. The Group strongly believes the application of tax has no technical
merit based on applicable tax law, and its tax position would be sustained.
Accordingly, the Group has not recorded a tax liability for these assessments, and
is vigorously defending its position against these assessments.
Global minimum top-up tax
On 11 July 2023, the Finance (No.2) Act 2023 was enacted in the United Kingdom,
introducing a global minimum effective tax rate of 15%. The legislation
implements a domestic top-up tax and a multinational top-up tax effective for
accounting periods starting on or after 31 December 2023.
The Group expects to be subject to the top-up tax in relation to its operations in a
few countries. However, since the newly enacted tax legislation in the United
Kingdom is only effective from 1 January 2024, there is no current tax impact for
the year ended 31 December 2023.
The Group has applied a temporary mandatory relief from recognising and
disclosing information about deferred tax assets and liabilities in relation to top-
up tax and accounts for it as a current tax when it is incurred.
If the top-up tax had applied in 2023, the additional tax expense relating to the
Group’s operations for the year ended 31 December 2023 would be immaterial.
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Notes to the consolidated financial statements continued
Note 21
Share-based payment plans
The Group has an established Share options plan and a Long-Term Incentive Plan
(LTIP) for certain executive and management level employees that provide for
granting restricted stock units, some with performance and/or market conditions.
These awards are designed to align the interests of executives and management
with the interests of shareholders.
During 2022, the Group launched a new global Employee Share Purchase Plan
(ESPP), which gives employees the opportunity to purchase CCEP Shares on a
regular basis and become a shareholder, promoting an ownership culture. Under
the ESPP, participating employees are granted matching Shares when certain
vesting and non-vesting conditions are met.
The Group recognises compensation expense equal to the grant date fair
value for all share-based payment awards that are expected to vest. Expense
is generally recorded on a straight-line basis over the requisite service period
for each separately vesting portion of the award.
During the years ended 31 December 2023, 31 December 2022 and
31 December 2021, compensation expense related to our share-based payment
plans totalled €57 million, €33 million and €17 million, respectively. The expense
arising from equity-settled share-based payment transactions was €54 million
for the year ended 31 December 2023 (2022: €33 million; 2021: €16 million).
Share options
Share options: (1) are granted with exercise prices equal to or greater than the fair
value of the Group’s stock on the date of grant, (2) generally vest in three annual
tranches over a period of 36 months, and (3) expire 10 years from the date of
grant. Generally, when options are exercised, new Shares will be issued rather than
issuing treasury Shares, if available. No options were granted during the years
ended 31 December 2023, 31 December 2022 and 31 December 2021. All options
outstanding as at 31 December 2023, 31 December 2022 and 31 December 2021
were valued and had exercise prices in US dollars.
The following table summarises our share option activity for the periods
presented:
2023 2022 2021
Shares
Average
exercise
price Shares
Average
exercise
price Shares
Average
exercise
price
thousands US$ thousands US$ thousands US$
Outstanding at
beginning of year
2,272 35.30 2,758 34.19 4,051 31.68
Granted
— — — — — —
Exercised
(1,352) 33.86 (484) 29.00 (1,290) 26.33
Forfeited, expired
or cancelled
— — (2) 23.21 (3) 19.68
Outstanding
at end of year
920 37.42 2,272 35.30 2,758 34.19
Options exercisable
at end of year
920 37.42 2,272 35.30 2,758 34.19
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209
Notes to the consolidated financial statements continued
The weighted average Share price during the years ended 31 December 2023,
31 December 2022 and 31 December 2021 was US$60.96, US$51.21 and US$55.68,
respectively.
The following table summarises the weighted average remaining life of options
outstanding for the periods presented:
2023 2022 2021
Range of
exercise prices
Options
outstanding
Weighted
average
remaining life
Options
outstanding
Weighted
average
remaining life
Options
outstanding
Weighted
average
remaining life
US$
thousands years thousands years thousands years
15.01 to 25.00
— 0 — 0 151 0.85
25.01 to 40.00
920 1.60 2,272 2.20 2,607 3.04
Total
920 1.60 2,272 2.20 2,758 2.92
Restricted Stock Units (RSUs) and Performance Share Units (PSUs)
RSU awards entitle the participant to accrue dividends, which are paid in cash only
if the RSUs vest. They do not have voting rights. Upon vesting, the participant is
granted one Share for each RSU. They generally vest subject to continued
employment for a period of 36 months. Unvested RSUs are restricted as to
disposition and subject to forfeiture.
There were 0.1 million, 0.1 million and 0.1 million unvested RSUs outstanding with a
weighted average grant date fair value of US$50.67, US$42.74 and US$43.29 as at
31 December 2023, 31 December 2022 and 31 December 2021, respectively.
PSU awards entitle the participant to the same benefits as RSUs. They generally
vest subject to continued employment for a period of 36 months and the
attainment of certain performance targets. There were 2.1 million, 1.8 million and
1.3 million of unvested PSUs, with weighted average grant date fair values of
US$48.95, US$41.65 and US$43.07 outstanding as at 31 December 2023,
31 December 2022 and 31 December 2021, respectively.
The PSUs granted in 2023, 2022 and 2021 are subject to performance conditions of
absolute EPS and ROIC, each with a 42.5% weighting, and to a sustainability metric,
focused on the reduction of greenhouse gas emissions (CO
2
e) across our entire
value chain with a 15% weighting.
Key assumptions for grant date fair value
The following table summarises the weighted average grant date fair values
per unit:
Restricted stock units and performance share units
2023 2022
Grant date fair value – service conditions (US$)
59.21 45.43
Grant date fair value – service and performance conditions (US$)
59.23 45.44
Employee Share Purchase Plan
Through the ESPP, employees are able to contribute on a regular basis up to
a maximum amount deducted from their salary for the purpose of purchasing
CCEP Shares. Every quarter, for each purchased share, CCEP awards participating
employees matching Shares at the same time. Participating employees become
owners of the matching Shares 12 months after the award, as long as they remain
in employment and do not sell the related purchased Shares during this period.
Participants have all the rights of a shareholder in respect of their purchased
Shares and matching Shares (once they are fully owned by the employees),
including dividend rights and voting rights. During the years ended 31 December 2023
and 31 December 2022, the Group recognised a compensation expense related to
the ESPP of €14 million and €3 million, respectively.
Note 22
Provisions, contingencies and commitments
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. When some or all
of a provision is expected to be reimbursed, the reimbursement is recognised as a
separate asset, but only when the reimbursement is virtually certain. The expense
relating to a provision is presented in the consolidated income statement, net of
any reimbursement.
Asset retirement obligations are estimated at the inception of a lease or contract,
for which a liability is recognised. A corresponding asset is also created and
depreciated.
If the effect of the time value of money is material, provisions are discounted
using a current pre-tax rate that reflects, when appropriate, the risks specific to
the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.
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Notes to the consolidated financial statements continued
Provisions
The following table summarises the movement in each class of provision for the
periods presented:
Restructuring
provision
Decommissioning
provision
Other
provisions
(A)
Total
€ million € million € million € million
As at 31 December 2021
103 20 11 134
Charged/(credited) to profit or
loss:
Additional provisions
recognised
115 7 2 124
Unused amounts reversed
(8) (2) (3) (13)
Utilised during the period
(74) (1) (1) (76)
Translation
1 — — 1
As at 31 December 2022
137 24 9 170
Charged/(credited) to profit or
loss:
Additional provisions
recognised
78 1 24 103
Unused amounts reversed
(10) (9) (1) (20)
Utilised during the period
(89) (1) (4) (94)
Translation
— — — —
As at 31 December 2023
116 15 28 159
Non-current
26 15 4 45
Current
90 — 24 114
As at 31 December 2023
116 15 28 159
(A) Other provisions primarily relate to property tax assessment provisions and legal reserves, and are not considered material to the
consolidated financial statements.
Restructuring provision
Restructuring provisions are recognised only when the Group has a constructive
obligation, which is when a detailed formal plan identifies the business or part of
the business concerned, the location and number of employees affected, a
detailed estimate of the associated costs and an appropriate timeline, and the
employees affected have been notified of the plan’s main features. These
provisions are expected to be resolved by the time the related programme
is substantively complete.
Refer to Note 17 for further details regarding our restructuring programmes.
Decommissioning provisions
Decommissioning liabilities relate to contractual or legal obligations to pay for
asset retirement costs. The liabilities represent both the reinstatement obligations
when the Group is contractually obligated to pay for the cost of retiring leased
buildings and the costs for collection, treatment, reuse, recovery and
environmentally sound disposal of cold drink equipment. Specific to cold drink
equipment obligations, the Group is subject to, and operates in accordance with,
the EU Directive on Waste from Electrical and Electronic Equipment (WEEE).
Under the WEEE, companies that put electrical and electronic equipment (such as
cold drink equipment) on the EU market are responsible for the costs of
collection, treatment, recovery and disposal of their own products. Where
applicable, the WEEE provision estimate is calculated using assumptions, including
disposal cost per unit, average equipment age and the inflation rate, to determine
the appropriate accrual amount.
The period over which the decommissioning liabilities on leased buildings and cold
drink equipment will be settled ranges from 1 to 30 years and 2 to 9 years,
respectively.
Contingencies
Legal proceedings and tax matters
The Group is involved in various legal proceedings and tax matters and is routinely
under audit by tax authorities in the ordinary course of business. Due to their
nature, such legal proceedings and tax matters involve inherent uncertainties
including, but not limited to, court rulings, settlements between affected parties
and/or governmental actions. The probability of loss for such contingencies is
assessed and accrued as a liability and/or disclosed, as appropriate.
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211
Notes to the consolidated financial statements continued
Guarantees
In connection with ongoing litigation and tax matters in certain territories,
guarantees of approximately €1,127 million have been issued (2022: €646 million).
The Group was required to issue these guarantees to satisfy potential obligations
arising from such litigation. In addition, we have approximately €37 million of
guarantees issued to third parties through the normal course of business
(2022: €29 million). The guarantees have various terms and the amounts represent
the maximum potential future payments that we could be required to make
under the guarantees. No significant additional liabilities in the accompanying
consolidated financial statements are expected to arise from guarantees issued.
Commitments
Commitments beyond 31 December 2023 are disclosed herein but not accrued
for within the consolidated statement of financial position.
Purchase agreements
Total purchase commitments were €0.2 billion as at 31 December 2023. This
amount represents non-cancellable purchase agreements with various suppliers
that are enforceable and legally binding, and that specify a fixed or minimum
quantity that we must purchase. All purchases made under these agreements
have standard quality and performance criteria. In addition to these amounts, the
Group has outstanding capital expenditure purchase orders of approximately
€165 million as at 31 December 2023. The Group also has other purchase orders
raised in the ordinary course of business, which are settled in a reasonably short
period of time.
Lease agreements
As at 31 December 2023, the Group had committed to a number of lease agreements
that have not yet commenced. The minimum lease payments for these lease
agreements totalled €23 million.
Proposed Acquisition of Coca-Cola Beverages Philippines, Inc. (CCBPI)
In November 2023, the Group together with Aboitiz Equity Ventures Inc. (AEV)
entered into a definitive agreement with The Coca-Cola Company (TCCC) to jointly
acquire 100% of Coca-Cola Beverages Philippines, Inc. (CCBPI) (refer to Note 19 and
Note 27 for further details).
Note 23
Other income
Other income for the year ended 31 December 2023 totalled €107 million
(31 December 2022: €96 million, 31 December 2021: nil). The balance is primarily
attributable to the following activities.
The Group recognised €18 million of royalty income arising from the ownership of
mineral rights in Queensland, Australia (2022: €96 million). On 7 March 2023, the
Group entered into an agreement to sell the sub-strata and associated mineral
rights. Upon regulatory approval, the transaction was consummated in April 2023.
The total consideration approximated €35 million.
The Group recognised a gain of €54 million related to the sales of properties,
mainly attributable to the sale of property in Germany completed on 7 July 2023.
Note 24
Other current assets and assets held for sale
Other current assets
The following table summarises the Group’s other current assets as at the dates
presented:
Year ended 31 December
2023 2022
Other current assets
€ million € million
Prepayments
130 180
VAT receivables
40 41
Coal royalties
(A)
— 96
Miscellaneous receivables
181 162
Total other current assets
351 479
(A) As at 31 December 2022, the amount related to the royalty income recognised in connection with a favourable court ruling
pertaining to the ownership of certain mineral rights in Australia. Refer to Note 23 for further detail.
VAT receivables
In 2014, a dispute arose between the Spanish tax authorities and the regional tax
authorities of Bizkaia (Basque Region) as to the responsibility for refunding VAT to
CCEP. Pertaining to the VAT assessment for years 2013 to 2016, the Group
recognised a VAT receivable of €214 million within other non-current assets, for
the year ended 31 December 2021. During 2022, the Group received €252 million,
inclusive of interest, from the regional tax authorities of Bizkaia following the
Arbitration Board ruling and recognised an additional VAT receivable of
€25 million from the Basque Region within Other current assets, and a payable of
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Notes to the consolidated financial statements continued
€57 million to the Spanish tax authorities within Trade and other payables, both
inclusive of interest. As at 31 December 2023, the VAT receivable balance of
€25 million remains unchanged, while the VAT payable balance increased to
€59 million resulting from interests. The classification of both balances remains
unchanged.
Related to the same dispute between the Spanish tax authorities and the regional
tax authorities of Bizkaia (Basque Region), on 8 February 2023 the Group received
a proposed VAT assessment for years 2017 to 2019, approximating €250 million,
inclusive of interest. For the period under the proposed assessment, the VAT
refund was issued by the Spanish tax authorities. We believe that the Group will
continue to be held neutral in respect of the VAT dispute.
Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are
classified as held for sale if it is highly probable that they would be recovered
through sale rather than continuous use. In order for a sale to be considered highly
probable, all of the following criteria needs to be met: management is committed
to a plan to sell the assets, an active programme to locate a buyer and complete
the plan has been initiated, the assets are actively marketed at a reasonable price,
and the sale is expected to be completed within one year from the date of
classification.
Such assets, or disposal groups, are generally measured at the lower of their
carrying amount and fair value less cost to sale.
Once classified as held for sale, intangible assets and property, plant and
equipment are no longer amortised or depreciated, and any equity accounted
investee is no longer equity accounted.
Assets classified as held for sale as at 31 December 2023 totalled €22 million and are
comprised of properties expected to be sold in the near future.
Assets classified as held for sale as at 31 December 2022 totalled €94 million and
were predominantly comprised of €40 million related to certain non-alcoholic
ready to drink brands that were sold to TCCC (refer to Note 19 for further details),
as well as €29 million related to a sale of property in Germany (refer to Note 23 for
further details).
Note 25
Other non-current assets
The following table summarises the Group’s other non-current assets as at the
dates presented:
Year ended 31 December
2023 2022
Other non-current assets
€ million € million
Retirement benefit surplus (Note 15)
134 135
Investments
39 35
Other
122 82
Total other non-current assets
295 252
Investments
Joint ventures are undertakings in which the Group has an interest and which are
jointly controlled by the Group and one or more other parties. Associates are
undertakings where the Group has an investment in which it does not have control
or joint control but can exercise significant influence. Interests in joint ventures
and associates are accounted for using the equity method and are stated in the
consolidated balance sheet at cost, adjusted for the movement in the Group’s
share of their net assets and liabilities. The Group’s share of the profit or loss after
tax of joint ventures and associates is included in the Group’s consolidated income
statement as non-operating items. Where the Group’s share of losses exceeds its
interest in the equity accounted investee, the carrying amount of the investment
is reduced to zero and the recognition of further losses is discontinued, except to
the extent that the Group has an obligation to make payments on behalf of the
investee.
Financial assets at fair value through other comprehensive income relate to equity
investments. These investments are not held for trading purposes, and hence the
Group has opted to recognise fair value movements through other
comprehensive income. There have been no significant changes in fair value of
these investments during the period.
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Notes to the consolidated financial statements continued
The following table summarises the Group’s carrying value of investments as at
the dates presented:
Year ended 31 December
2023 2022
Investments
€ million € million
Investments accounted using equity method
35 33
Financial assets at fair value through other comprehensive
income
4 2
Total investments
39 35
Note 26
Financial risk management
Financial risk factors, objectives and policies
The Group’s activities expose it to several financial risks including market risk,
credit risk and liquidity risk. Financial risk activities are governed by appropriate
policies and procedures to minimise the uncertainties these risks create on the
Group’s future cash flows. Such policies are developed and approved by the
Group’s Treasury and Commodities Risk Committee, through the authority
delegated to it by the Board.
Market risk
Market risk represents the risk that the fair value of future cash flows of a financial
instrument will fluctuate due to changes in market prices and includes interest
rate risk, currency risk and other price risk such as commodity price risk. Market risk
affects outstanding borrowings, as well as derivative financial instruments.
Interest rates
The Group is subject to interest rate risk for its outstanding borrowings. To
manage interest rate risk, the Group maintains a significant proportion of its
borrowings at fixed rates. Approximately 89% and 90% of the Group’s interest
bearing borrowings were comprised of fixed rate borrowings at
31 December 2023 and 31 December 2022, respectively. The Group also
modifies its interest rate exposure through the use of interest rate swaps. As at
31 December 2023 and 31 December 2022, the notional value of the Group’s
interest rate swaps was €1,123 million and €1,146 million, respectively.
If interest rates on the Group’s floating rate debt were adjusted by 1% for the years
ended 31 December 2023, 31 December 2022 and 31 December 2021, the Group’s
finance costs and pre-tax equity would change on an annual basis by
approximately €9 million, €9 million and €7 million, respectively. This amount is
determined by calculating the effect of a hypothetical interest rate change on the
Group’s floating rate debt.
Currency exchange rates
Foreign currency exchange risk can only arise on financial instruments that are
denominated in a currency other than the functional currency in which they are
measured. Translation-related risks are therefore not included in the assessment
of the Group’s exposure to currency risks. Translation exposures arise from
financial and non-financial items held by the Group with a functional currency
different from the Group’s presentation currency (euro). To manage currency
exchange risk arising from future commercial transactions and recognised
monetary assets and liabilities, foreign currency forward and option contracts with
external third parties are used. Typically, up to 80% of anticipated cash flow
exposures in each major foreign currency for the next calendar year are hedged
using a combination of forward and option contracts with third parties.
The Group is also exposed to the risk of changes in currency exchange rates
between US dollar and euro relating to its US denominated borrowings. This risk is
managed by entering into cross currency swaps upon issuance thereby mitigating
all the foreign currency risk.
The Group also has borrowing denominated in Australian dollars that are not
swapped into euro and are converted as part of the currency translation of the net
assets of API, and, as such, movements in exchange rates would not impact profit.
The Group’s main foreign currency exchange rate exposure relates to the change
in value of the euro against other currencies. The impact of a reasonably probable
movement such as 10% appreciation of the euro on the Group’s pre-tax equity
would have led to a €6 million loss as at 31 December 2023 (31 December 2022:
€29 million loss; 31 December 2021: €11 million gain). A 10% weakening of the euro
would have led to an equal but opposite effect. The impact on the Group’s pre-tax
equity is due to changes in the fair value of foreign currency hedges designated as
cash flow hedges.
During 2023, the Group entered into deal contingent foreign currency forwards
(refer to Note 12 for further details) in order to mitigate the foreign currency risk
arising from the proposed acquisition of CCBPI. A 10% appreciation of the euro as
at 31 December 2023 would have led to a €64 million loss impacting the Group’s
pre-tax equity. A 10% weakening of the euro would have led to an equal but
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Notes to the consolidated financial statements continued
opposite effect. There would be no impact on the Group’s income statement as
these instruments are designated as cash flow hedges.
Movements in foreign currencies related to the Group’s other financial
instruments do not have a material impact on profit before income taxes or pre-
tax equity.
Commodity price risk
The competitive marketplace in which the Group operates may limit its ability to
recover increased costs through higher prices. As such, the Group is subject to
market risk with respect to commodity price fluctuations, principally related to its
purchases of aluminium, PET (plastic, including recycled PET, LDPE), ethylene,
sugar and vehicle fuel. When possible, exposure to this risk is managed primarily
through the use of supplier pricing agreements, which enable the Group to
establish the purchase price for certain commodities. Certain suppliers restrict the
Group’s ability to hedge prices through supplier agreements. As a result,
commodity hedging programmes are entered into and generally designated as
hedging instruments. Refer to Note 12 for more information. Typically, up to 80%
of the anticipated commodity transaction exposures for the next calendar year
are hedged using a combination of forward and option contracts executed with
third parties.
During the year ended 31 December 2023, the Group implemented a new gas and
power hedging programme to manage its exposure to changes in commodity
prices in relation to its purchases of power and gas, by entering into financial swaps
designated in a cash flow hedge relationship. As at 31 December 2023, the notional
value of the swaps was €89 million and amounts of €13 million and €52 million were
included in derivative assets and derivative liabilities, respectively (refer to Note
12).
The following table demonstrates the sensitivity to reasonably possible changes in
commodity prices at the reporting date, with all other variables held constant. The
impact on the Group’s pre-tax equity is due to changes in the fair value of
commodity hedges designated as cash flow hedges. There is no impact on the
Group’s income statement as all commodity derivatives are designated as
hedging instruments in cash flow hedges.
Year ended 31 December
2023 2022 2021
Commodity price risk
€ million € million € million
10% increase in commodity prices equity gain
144 140 92
10% decrease in commodity prices equity loss
(144) (140) (92)
Credit risk
The Group is exposed to counterparty credit risk on all of its derivative financial
instruments. Strict counterparty credit guidelines are maintained and only
financial institutions that are investment grade or better are acceptable
counterparties. Counterparty credit risk is continuously monitored and numerous
counterparties are used to minimise exposure to potential defaults. Where
required, collateral is paid between the counterparties to minimise counterparty
risk. The maximum credit risk exposure for each derivative financial instrument
is the carrying amount of the derivative. Included in trade and other payables is
€20 million (2022: €25 million) related to collateral received from counterparties.
Credit is extended in the form of payment terms for trade to customers of the
Group, consisting of retailers, wholesalers and other customers, generally without
requiring collateral, based on an evaluation of the customer’s financial condition.
While the Group has a concentration of credit risk in the retail sector, this risk is
mitigated due to the diverse nature of the customers the Group serves, including,
but not limited to, their type, geographic location, size and beverage channel.
Depending on the risk profile of certain customers, we may also seek bank
guarantees. Collections of receivables are dependent on each individual
customer’s financial condition and sales adjustments granted. Trade accounts
receivable are initially recognised at their transaction price and subsequently
measured at amortised cost less provision for impairment. Typically, accounts
receivable have terms of 30 to 60 days and do not bear interest. A default on a
financial asset is when the counterparty fails to make contractual payments when
they fall due. Exposure to losses on receivables is monitored, and balances are
adjusted for expected credit losses. Expected credit losses are determined by: (1)
evaluating the ageing of receivables; (2) analysing the history of adjustments; and
(3) reviewing high risk customers. Credit insurance on a portion of the accounts
receivable balance is also carried.
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Notes to the consolidated financial statements continued
Liquidity risk
Liquidity risk is actively managed to ensure that the Group has sufficient funds to
satisfy its commitments. The Group’s sources of capital include, but are not limited
to, cash flows from operations, public and private issuances of debt and equity
securities, and bank borrowings. The Group believes its operating cash flow, cash
on hand and available short- and long-term capital resources are sufficient to fund
its working capital requirements, scheduled borrowing payments, interest
payments, capital expenditures, benefit plan contributions, income tax obligations
and dividends to its shareholders. Counterparties and instruments used to hold
cash and cash equivalents are continuously assessed, with a focus on preservation
of capital and liquidity. Based on information currently available, the Group does
not believe it is at significant risk of default by its counterparties.
The Group has amounts available for borrowing under a €1.80 billion multi
currency credit facility (2022: €1.95 billion) with a syndicate of 12 banks. This credit
facility matures in 2029 and is for general corporate purposes, including serving as
a backstop to its commercial paper programme and supporting the Group’s
working capital needs. Based on information currently available, the Group has no
indication that the financial institutions participating in this facility would be
unable to fulfil their commitments as at the date of these financial statements.
The current credit facility contains no financial covenants that would impact the
Group’s liquidity or access to capital. As at 31 December 2023, the Group had no
amounts drawn under this credit facility.
In 2022, the Group implemented a new sustainability-linked supply chain finance
programme. The facility is provided by a third party bank and will help our
suppliers get paid earlier than under contractual credit terms. Supplier balances
under supply chain finance facilities are disclosed in Note 14.
The following table analyses the Group’s non-derivative financial liabilities and net
settled derivative financial liabilities into relevant maturity groupings based on the
remaining period at the statement of financial position date to the contractual
maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows:
Total
Less than
1 year 1 to 3 years 3 to 5 years
More than
5 years
Financial liabilities
€ million € million € million € million € million
31 December 2023
Trade and other payables
4,875 4,875 — — —
Amounts payable to related
parties
270 270 — — —
Borrowings
11,803 1,322 2,325 2,681 5,475
Derivatives
268 99 42 39 88
Lease liabilities
774 159 237 141 237
Total financial liabilities
17,990 6,725 2,604 2,861 5,800
31 December 2022
Trade and other payables
4,714 4,714 — — —
Amounts payable to related
parties
485 485 — — —
Borrowings
12,314 1,336 2,597 2,179 6,202
Derivatives
263 76 17 51 119
Lease liabilities
752 149 217 129 257
Total financial liabilities
18,528 6,760 2,831 2,359 6,578
Capital management
The primary objective of the Group’s capital management is to ensure a strong
credit rating and appropriate capital ratios are maintained to support the Group’s
business and maximise shareholder value. The Group’s credit ratings are
periodically reviewed by rating agencies. Currently, the Group’s long-term ratings
from Moody’s and Fitch are Baa1 and BBB+, respectively. Changes in the operating
results, cash flows or financial position could impact the ratings assigned by the
various rating agencies. The credit rating can be materially influenced by a number
of factors including, but not limited to, acquisitions, investment decisions, capital
management activities of TCCC and/or changes in the credit rating of TCCC.
Should the credit ratings be adjusted downwards, the Group may incur higher
costs to borrow, which could have a material impact on the financial condition and
results of operations.
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Notes to the consolidated financial statements continued
The capital structure is managed and, as appropriate, adjustments are made in
light of changes in economic conditions and the Group’s financial policy. The
Group monitors its operating performance in the context of targeted financial
leverage by comparing the ratio of net debt with comparable EBITDA. Net debt is
calculated as borrowings adjusted for the fair value of hedging instruments and
other financial assets/liabilities related to borrowings, net of cash and cash
equivalents and short term investments. Comparable EBITDA is calculated as
EBITDA and adjusted for items impacting comparability.
Refer to Note 11 for the presentation of fair values for each class of financial assets
and financial liabilities and Note 12 for an outline of how the Group utilises
derivative financial instruments to mitigate its exposure to certain market risks
associated with its ongoing operations.
Refer to the Strategic Report included within this Integrated Report for disclosure
of strategic, commercial and operational risk relevant to the Group.
Note 27
Significant events after the reporting period
On 14 February 2024, in connection with the acquisition of Coca-Cola Beverages
Philippines, Inc. CCBPI, the Group entered into a term loan facility agreement with
the Bank of the Philippine Islands. A term loan facility in an aggregate amount of
US$500 million is made available under the agreement to be utilised in Philippine
Peso (PHP), which has been defined as the base currency. On 20 February 2024,
the Group drew down a PHP23.5 billion (US$420 million) loan under the facility
with a maturity date of 20 February 2034. The vast majority of the balance (90% of
the total principal amount of the loan) is repayable in full upon maturity.
On 23 February 2024, the joint acquisition of Coca-Cola Beverages Philippines, Inc.
CCBPI was successfully consummated for a total consideration of US$1.68 billion
(€1.55 billion), all of which was settled in cash upon completion. The Group paid
US$1.0 billion (€930 million) of the total consideration, commensurate with the
effective 60:40 ownership structure of CCBPI. The transaction is going to be
accounted for under IFRS 3 “Business Combinations”, using the acquisition method
of accounting. The Group has commenced the purchase price allocation
procedures related to the assets acquired and liabilities assumed, which as of the
date of this filing remain incomplete.
Note 28
Group companies
In accordance with section 409 of the Companies Act 2006, a full list of the Company’s subsidiaries, partnerships, associates, joint ventures and joint arrangements as at
31 December 2023 is disclosed below, along with the country of incorporation, the registered address and the effective percentage of equity owned at that date. Unless
otherwise stated, each entity has a share capital comprising a single class of ordinary shares and is wholly owned and indirectly held by CCEP.
Agua De La Vega Del Codorno, S.L.U.
Spain
100%
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Aguas De Cospeito, S.L.U.
Spain
100%
Crta. Pino km. 1 - 2, 27377, Cospeito (Lugo), Spain
Aguas De Santolin, S.L.U.
Spain
100%
C/ Real, s/n 09246, Quintanaurria, Burgos, Spain
Aguas Del Maestrazgo, S.L.U.
Spain
100%
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Aguas Del Toscal, S.A.U.
Spain
100%
Ctra. de la Pasadilla, km, 3-35250, ingenio (Gran Canaria), Spain
Aguas Vilas Del Turbon, S.L.U.
Spain
100%
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Aitonomi AG
Switzerland
15%
Bruderhausstrasse 10, CH-6372 Ennetmoos, Switzerland
Amalgamated Beverages Great Britain Limited
United Kingdom
100%
(D)
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Apand Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Associated Products & Distribution Proprietary
Australia
100%
(O)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
BBH Investment Ireland Limited
Ireland
100%
6th Floor, 2 Grand Canal Square, Dublin 2, Ireland
Name
Country of incorporation
% equity
interest
Registered address
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
217
Notes to the consolidated financial statements continued
Bebidas Gaseosas Del Noroeste, S.L.U.
Spain
100%
Avda. Alcalde Alfonso Molina, S/N-15007, (A Coruna), Spain
Beganet, S.L.U.
Spain
100%
Avda Paisos Catalans, 32, 08950, Esplugues de Llobregat, Spain
Beverage Bottlers (NQ) Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Beverage Bottlers (QLD) Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Birtingahúsið ehf.
Iceland
34.5%
Laugavegur 174, 105, Reykjavík, Iceland
BL Bottling Holdings UK Limited
United Kingdom
100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
BNI B.V.
Netherlands
100%
Marten Meesweg 25 J, 3068 AV, Rotterdam, Netherlands
BNII Inc.
Philippines
100%
(G)
V&A Law Center, 11th Ave Cor 39th St., Bonifacio Global City, Fort Bonifacio, 1634 Taguig City
NCR, Fourth District, Philippines
BNI (Finance) B.V.
Netherlands
100%
Marten Meesweg 25 J, 3068 AV, Rotterdam, Netherlands
Bottling Great Britain Limited
United Kingdom
100%
(D)
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Bottling Holding France SAS
France
100%
9 chemin de Bretagne, 92784, Issy-les-Moulineaux, France
Bottling Holdings (Luxembourg) SARL
Luxembourg
100%
2, Rue des Joncs, L-1818, Howald, Luxembourg
Bottling Holdings (Netherlands) B.V.
Netherlands
100%
Marten Meesweg 25 J, 3068 AV, Rotterdam, Netherlands
Bottling Holdings Europe Limited
United Kingdom
100%
(B)(E)
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Brewcorp Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Brewhouse Investments Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
C - C Bottlers Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Can Recycling (S.A.) Pty. Ltd.
Australia
100%
(B)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
CC Digital GmbH
Germany
50%
Stralauer Allee 4, 10245, Berlin, Germany
CC Erfrischungsgetränke Oldenburg Verwaltungs GmbH
Germany
100%
(I)
Stralauer Allee 4, 10245, Berlin, Germany
CC Iberian Partners Gestion S.L.
Spain
100%
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
CC Verpackungsgesellschaft mit beschraenkter Haftung
Germany
100%
Schieferstrasse 20, 06126, Halle (Saale), Germany
CCA Bayswater Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
CCEP Australia Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
CCEP Finance (Australia) Limited
United Kingdom
100%
(A)
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
CCEP Finance (Ireland) Designated Activity Company
Ireland
100%
3 Dublin Landings, North Wall Quay, Dublin, D01 C4E0, Ireland
CCEP Group Services Limited
United Kingdom
100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
CCEP Holdings (Australia) Limited
United Kingdom
100%
(A)(D)
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
CCEP Holdings (Australia) Pty Ltd
Australia
100%
(A)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
CCEP Holdings Norge AS
Norway
100%
Robsrudskogen 5, Lørenskog, 1470, Norway
CCEP Holdings Sverige AB
Sweden
100%
Dryckesvägen 2 C, 136 87, Haninge, Sweden
CCEP Holdings UK Limited
United Kingdom
100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Name
Country of incorporation
% equity
interest
Registered address
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
218
Notes to the consolidated financial statements continued
CCEP Scottish Limited Partnership
United Kingdom
100%
(P)
52 Milton Road, College Milton, East Kilbride, Scotland, G74 5DJ, United Kingdom
CCEP Ventures Australia Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
CCEP Ventures Europe Limited
United Kingdom
100%
(A)
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
CCEP Ventures UK Limited
United Kingdom
100%
(A)
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
CCIP Soporte, S.L.U.
Spain
100%
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Circular Plastics Australia (PET) Holdings Pty Ltd
Australia
16.67%
Building 3, 658 Church Street, Cremorne VIC 3121, Australia
Classic Brand (Europe) Designated Activity Company
Ireland
100%
Charlotte House, Charlemont Street, Saint Kevin's, Dublin, D02 NV26
Cobega Embotellador, S.L.U.
Spain
100%
Avda Paisos Catalans, 32, 08950, Esplugues de Llobregat, Spain
Coca-Cola Europacific Partners (CDE Aust) Pty Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Coca-Cola Europacific Partners (Fiji) Pte Limited
Fiji
100%
Lot 1, Ratu Dovi Road, Laucala Beach Estate, NASINU, Fiji
Coca-Cola Europacific Partners (Holdings) Pty Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Coca-Cola Europacific Partners (Initial LP) Limited
United Kingdom
100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Coca-Cola Europacific Partners (Scotland) Limited
United Kingdom
100%
52 Milton Road, College Milton, East Kilbride, Scotland, G74 5DJ, United Kingdom
Coca-Cola Europacific Partners API Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Coca-Cola Europacific Partners Australia Pty Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Coca-Cola Europacific Partners Belgium SRL/BV
Belgium
100%
Chaussée de Mons 1424, 1070 Brussels, Belgium
Coca-Cola Europacific Partners Deutschland GmbH
Germany
100%
(F)
Stralauer Allee 4, 10245, Berlin, Germany
Coca-Cola Europacific Partners France SAS
France
100%
(G)
9 chemin de Bretagne, 92784, Issy-les-Moulineaux, France
Coca-Cola Europacific Partners Great Britain Limited
United Kingdom
100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Coca-Cola Europacific Partners Holdings Great Britain Limited
United Kingdom
100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Coca-Cola Europacific Partners Holdings NZ Limited
New Zealand
100%
The Oasis, 19 Carbine Road, Mount Wellington, Auckland, 1060, New Zealand
Coca-Cola Europacific Partners Holdings US, Inc.
United States
100%
(A)(D)
Corporation Trust Center, 1209 Orange Street, Wilmington DE, USA
Coca-Cola Europacific Partners Iberia, S.L.U.
Spain
100%
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Coca-Cola Europacific Partners Investments (Singapore) Pte. Ltd.
Singapore
100%
80 Robinson Road, #02-00, 068898, Singapore
Coca-Cola Europacific Partners Ísland ehf.
Iceland
100%
Studlahals 1, 110, Reykjavik, Iceland
Coca-Cola Europacific Partners Luxembourg sàrl
Luxembourg
100%
2, Rue des Joncs, L-1818, Howald, Luxembourg
Coca-Cola Europacific Partners Nederland B.V.
Netherlands
100%
Marten Meesweg 25 J, 3068 AV, Rotterdam, Netherlands
Coca-Cola Europacific Partners New Zealand Limited
New Zealand
100%
The Oasis, 19 Carbine Road, Mount Wellington, Auckland, 1060, New Zealand
Coca-Cola Europacific Partners Norge AS
Norway
100%
Robsrudskogen 5, Lørenskog, 1470, Norway
Coca-Cola Europacific Partners Papua New Guinea Limited
Papua New Guinea
100%
Section 23, Allotment 14, Milfordhaven Road, LAE, Morobe Province, 411, Papua New Guinea
Coca-Cola Europacific Partners Pension Scheme Trustees Limited
United Kingdom
100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Coca-Cola Europacific Partners Portugal Unipessoal LDA
Portugal
100%
Quinta da Salmoura - Cabanas-2925-362 Azeitão, Setúbal, Portugal
Coca-Cola Europacific Partners Services Bulgaria EOOD
Bulgaria
100%
2 Donka Ushlinova Street, Garitage Park, Office Building 4, floor 6, Sofia, 1766, Bulgaria
Name
Country of incorporation
% equity
interest
Registered address
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
219
Notes to the consolidated financial statements continued
Coca-Cola Europacific Partners Services Europe Limited
United Kingdom
100%
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Coca-Cola Europacific Partners Services SRL
Belgium
100%
(N)
Chaussée de Mons 1424, 1070 Brussels, Belgium
Coca-Cola Europacific Partners Sverige AB
Sweden
100%
136 87, Haninge, Sweden
Coca-Cola Europacific Partners US, LLC
United States
100%
Corporation Trust Center, 1209 Orange Street, Wilmington 19801, Delaware, USA
Coca-Cola Europacific Partners US II, LLC
United States
100%
Corporation Trust Center, 1209 Orange Street, Wilmington 19801, Delaware, USA
Coca-Cola Europacific Partners Vanuatu Limited
Vanuatu
100%
1st Floor, Govant Building, Kumul Highway, Port Vila, Vanuatu
Coca-Cola Immobilier SCI
France
100%
(G)
9 chemin de Bretagne, 92784, Issy-les-Moulineaux, France
Coca-Cola Production SAS
France
100%
Zone d' entreprises de Bergues, 59380, Commune de Socx, France
Coca-Cola Australia Foundation Limited
Australia
—%
(L)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Compañía Asturiana De Bebidas Gaseosas, S.L.U.
Spain
100%
C/ Nava, 18- 3ª (Granda) Siero - 33006, Oviedo, Spain
Compañía Castellana De Bebidas Gaseosas, S.L.
Spain
100%
C/ Ribera Del Loira 20-22, 2a Planta, 28042, (Madrid), Spain
Compañía Levantina De Bebidas Gaseosas, S.L.U.
Spain
100%
Av. Real Monasterio de Sta., Maria de Poblet, 3646930, Quart de Poblet, Spain
Compañía Norteña De Bebidas Gaseosas, S.L.U.
Spain
100%
C/ Ibaizábal, 57, Galdakao, 48960, Bizkaia, Spain
Compañía Para La Comunicación De Bebidas Sin Alcohol, S.L.U.
Spain
100%
C/ Ribera Del Loira 20-22, 2a Planta, 28042, Madrid, Spain
Container Exchange (QLD) Limited
Australia
—%
(L)
Level 17, 100 Creek Street, Brisbane QLD 4000, Australia
Circular Economy Systems Pty Ltd
Australia
50%
Maddocks, Angel Place, Level 27, 123 Pitt Street, Sydney NSW 2000, Australia
Crusta Fruit Juices Proprietary Limited
Australia
100%
(J)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Developed System Logistics, S.L.U.
Spain
100%
Av. Henry Ford 25, Manzana 19, Complejo Pq.Ind.Juan, CARLOS I, 46220, Picassent, Valencia,
Spain
Endurvinnslan hf.
Iceland
20%
Knarravogur 4, 104 Reykjavik, Iceland
Exchange for Change (ACT) Pty Ltd
Australia
20%
Building C, Suite 6, Level 1, 1 Homebush Bay Drive, Rhodes NSW 2138, Australia
Exchange for Change (NSW) Pty Ltd
Australia
20%
Building C, Suite 6, Level 1, 1 Homebush Bay Drive, Rhodes NSW 2138, Australia
Feral Brewing Company Pty Ltd
Australia
100%
(K)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Foodl B.V.
Netherlands
33.3%
HNK Utrecht West, V.02, Weg der Verenigde Naties 1, 3527 KT, Utrecht, Netherlands
GR Bottling Holdings UK Limited
United Kingdom
100%
(A)
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Infineo Recyclage SAS
France
49%
(H)
Sainte Marie la Blanche, 21200, Dijon, France
Innovative Tap Solutions Inc.
United States
21.8%
300 Brookside Avenue, Ambler, PA 19002, USA
Instelling voor Bedrijfspensioenvoorziening Coca-Cola
Europacific Partners Belgium/Coca-Cola Europacific Partners
Services – Bedienden-Arbeiders OFP
Belgium
100%
1424 – B1070 Bergensesteenweg, Brussels, Belgium
Instelling voor Bedrijfspensioenvoorziening Coca-Cola
Europacific Partners Belgium/Coca-Cola Europacific Partners
Services – Kaderleden OFP
Belgium
100%
1424 – B1070 Bergensesteenweg, Brussels, Belgium
Ionech Limited
United Kingdom
14.8%
6th Floor, Manfield House, 1 Southampton Street, London, England, WC2R 0LR
Name
Country of incorporation
% equity
interest
Registered address
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
220
Notes to the consolidated financial statements continued
Kollex GmbH
Germany
20%
Kottbusser Damm 25-26, 10967, Berlin, Germany
Lavit Holdings Inc
United States
13.7%
27 West 20th Street, Suite 1004, New York NY 10011, USA
Lusobega, S.L.
Spain
100%
C/ Ibaizábal, 57, 48960, Bizkaia, Galdakao, Spain
Madrid Ecoplatform, S.L.U.
Spain
100%
C/Pedro Lara, 8 Pq. Tecnologico de Leganes, 28919, (Leganes), Spain
Mahija Parahita Nusantara Foundation
Indonesia
—%
(L)
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak,
South Jakarta, 12430, Indonesia
Matila Nominees Pty. Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Neverfail Bottled Water Co Pty Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Neverfail SA Pty. Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Neverfail Springwater (VIC) Pty Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Neverfail Springwater Co Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Neverfail Springwater Co. (QLD) Pty. Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Neverfail Springwater Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Neverfail WA Pty. Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Pacbev Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Paradise Beverages (Fiji) Pte Limited
Fiji
100%
122-164 Foster Road, Walu Bay, Suva, Fiji
PEÑA Umbria S.L.U.
Spain
100%
Av. Real Monasterio de Sta., Maria de Poblet, 3646930, Quart de Poblet, Spain
Perfect Fruit Company Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
PT Amandina Bumi Nusantara
Indonesia
35.31%
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak,
South Jakarta, 12430, Indonesia
PT Coca-Cola Bottling Indonesia
Indonesia
100%
(C)
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak,
South Jakarta, 12430, Indonesia
PT Coca-Cola Distribution Indonesia
Indonesia
100%
South Quarter Tower C, 22nd (P) Floor, Jalan R.A. Kartini, Kav.8, Cilandak Barat, Cilandak,
South Jakarta, 12430, Indonesia
Purna Pty. Ltd.
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Quenchy Crusta Sales Pty. Ltd.
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Real Oz Water Supply Co (QLD) Pty Limited
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Refrescos Envasados Del Sur, S.L.U.
Spain
100%
Autovía del Sur A-IV, km.528- 41309, La Rinconada, Sevilla, Spain
Refrige SGPS, Unipessoal, LDA
Portugal
100%
Quinta da Salmoura - Cabanas-2925-362 Azeitão, Setúbal, Portugal
Sale Proprietary Co 1 Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Sale Proprietary Co 2 Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Sale Proprietary Co 3 Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Sale Proprietary Co 4 Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Sale Proprietary Co 5 Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Name
Country of incorporation
% equity
interest
Registered address
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
221
Notes to the consolidated financial statements continued
Sale Proprietary Co 6 Pty Ltd
Australia
100%
(D)
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Sale Proprietary Co 7 Pty Ltd
Australia
100%
Level 13, 40 Mount Street, North Sydney NSW 2060, Australia
Samoa Breweries Limited (SBL)
Samoa
100%
Vaitele Industrial Zone, Vaitele Tai, Faleata Sisifo, Samoa
TasRecycle Limited
Australia
—%
(M)
Level 9, 85 Macquarie Street, Hobart TAS 7000, Australia
VicRecycle Limited
Australia
—%
(M)
HWL Ebsworth Lawyers, Level 8, 447 Collins Street, Melbourne VIC 3000, Australia
WA Return Recycle Renew Ltd
Australia
—%
(L)
Unit 2, 1 Centro Avenue, Subiaco WA 6008, Australia
Wabi Portugal, Unipessoal LDA
Portugal
100%
Nº 16-A, Fracçao B, 5º Piso, Edificio Miraflores Premium Distrito: Lisboa Concelho: Oieras
Freguesia: Algés, Linda-a-Velha e Cruz Quebrada-Dafundo 1495 190 Algés, Portugal
WB Investment Ireland 2 Limited
Ireland
100%
3 Dublin Landings, North Wall Quay, Dublin, D01 C4E0, Ireland
WBH Holdings Luxembourg SCS
Luxembourg
100%
2, Rue des Joncs, L-1818, Howald, Luxembourg
WIH UK Limited
United Kingdom
100%
(A)
Pemberton House, Bakers Road, Uxbridge, England, UB8 1EZ, United Kingdom
Wir Sind Coca-Cola GmbH
Germany
100%
Stralauer Allee 4, 10245, Berlin, Germany
Name
Country of incorporation
% equity
interest
Registered address
(A) 100% equity interest directly held by Coca-Cola Europacific Partners plc.
(B) Class A and B ordinary shares.
(C) Series A, B, C and D shares.
(D) Including preference shares issued to the Group.
(E) 38.3% equity interest directly held by Coca-Cola Europacific Partners plc (100% of A ordinary shares in issue).
(F) 10% equity interest directly held by Coca-Cola Europacific Partners plc.
(G) Group shareholding of 99.99% or greater.
(H) Class A and B shares. The Group holds 49% of Class B shares.
(I) In liquidation.
(J) Class A and F shares.
(K) Includes ordinary shares and B Class shares.
(L) Company limited by guarantee. CCEP is a member along with one other member.
(M) Company limited by guarantee. CCEP is a member along with two other members.
(N) Class A, B and C ordinary shares.
(O) Includes redeemable preference shares and discretionary dividend shares issued to the Group.
(P) Limited partnership.
Note 29
Subsidiariesexempt from audit
The following UK subsidiaries will take advantage of the audit exemption set out
within section 479A of the Companies Act 2006 for the year ended
31 December 2023.
Name
Registration number
CCEP Holdings (Australia) Limited
12982568
WIH UK Limited
10140214
Amalgamated Beverages Great Britain Limited
01994995
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
222
Notes to the consolidated financial statements continued
Year ended 31 December
2023 2022
Note € million € million
Revenue from management fees
42 34
Dividend income
3 1,275 581
Administrative expenses
(70) (47)
Operating profit
1,247 568
Finance income
4 16 20
Finance costs
4 (268) (127)
Total finance costs, net
(252) (107)
Non-operating items
(7) (15)
Profit before taxes
988 446
Taxes
3 2
Profit after taxes
991 448
Components of other comprehensive income/(loss):
Cash flow hedges that may be subsequently reclassified to the income statement:
Pre-tax activity, net
4 (3)
Tax effect
— —
Other comprehensive income/(loss) for the period, net of tax
4 (3)
Comprehensive income for the period
995 445
The accompanying notes are an integral part of these Company financial statements.
Strategic
Report
Governance and
Directors’ Report
Financial
Statements
Further Sustainability
Information
Other
Information
Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
223
Coca-Cola Europacific Partners plc Company financial statements
Statement of comprehensive income
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2023 as filed with the SEC.
Year ended 31 December
2023 2022* 01 January 2022*
Note € million € million € million
ASSETS
Non-current:
Investments
5
27,406 27,099 27,093
Non-current derivative assets
9
35 123 92
Other non-current assets
9 9 12
Total non-current assets
27,450 27,231 27,197
Current:
Current derivative assets
9
47 86 1
Other current assets
11 14 12
Total current assets
58 100 13
Total assets
27,508 27,331 27,210
LIABILITIES
Non-current:
Borrowings, less current portion
7
4,979 6,063 7,237
Amounts payable to related parties
6
3,227 3,227 3,227
Non-current derivative liabilities
9
80 130 —
Other non-current liabilities
9 11 14
Total non-current liabilities
8,295 9,431 10,478
Current:
Amounts payable to related parties
6
4,130 3,000 1,703
Current portion of borrowings
7
1,089 1,148 986
Trade and other payables
67 69 85
Total current liabilities
5,286 4,217 2,774
Total liabilities
13,581 13,648 13,252
EQUITY
Share capital
8
5 5 5
Share premium
8
276 233 220
Merger reserves
8
8,466 8,466 8,466
Retained earnings
8
5,180 4,979 5,267
Total equity
13,927 13,683 13,958
Total equity and liabilities
27,508 27,331 27,210
The accompanying notes are an integral part of these Company financial
statements.
*The comparative information has been restated. Refer to Note 1.
The financial statements were approved by the Board of Directors and authorised
for issue on 15 March 2024. They were signed on its behalf by:
Damian Gammell,
Chief Executive Officer
15 March 2024
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
224
Statement of financial position
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2023 as filed with the SEC.
Cash flows from operating activities:
Profit before taxes
988 446
Adjustments to reconcile profit before tax to net cash
flows from operating activities:
Dividend income
3 (1,275) (581)
Depreciation
1 1
Amortisation of intangible assets
2 2
Share-based payment expense
24 16
Finance costs, net
4 252 107
Investment write down 5 2 11
Change in operating assets/liabilities
(104) (29)
Net cash flows used in operating activities
(110) (27)
Cash flows from investing activities:
Investments in subsidiaries, net
5 (282) —
Investments in equity instruments
5 (5) —
Dividend received
3 1,275 581
Interest received
— 19
Net cash flows from investing activities
988 600
Cash flows from financing activities:
Proceeds from borrowings, net
1,114 1,304
Repayments on borrowings
(1,125) (985)
Settlement of debt-related cross currency swaps
69 —
Payments of principal on lease obligations
(1) (1)
Interest paid
(137) (138)
Dividends paid
8 (841) (766)
Exercise of employee share options
43 13
Net cash flows used in financing activities
(878) (573)
Net change in cash and cash equivalents
— —
Net effect of currency exchange rate changes on
cash and cash equivalents
— —
Cash and cash equivalents at beginning of period
— —
Cash and cash equivalents at end of period
— —
Year ended 31 December
2023 2022
Note € million € million
The accompanying notes are an integral part of these Company financial
statements.
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2023 Integrated Report and Form 20-F
225
Statement of cash flows
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Share capital Share premium Merger reserves Retained earnings Total equity
Note € million € million € million € million € million
As at 01 January 2022 (as previously reported)
5 220 8,466 5,800 14,491
Investment write down
1 — — — (533) (533)
As at 01 January 2022 (restated)
5 220 8,466 5,267 13,958
Issue of shares during the year
— 13 — — 13
Equity-settled share-based payments
— — — 33 33
Total comprehensive income for the period
— — — 445 445
Dividends
— — — (766) (766)
As at 31 December 2022 (restated)
5 233 8,466 4,979 13,683
Issue of shares during the year
— 43 — — 43
Equity-settled share-based payments
— — — 54 54
Total comprehensive income for the period
— — — 995 995
Purchases of shares for equity-settled Employee Share Purchase Plan
— — — (4) (4)
Dividends
— — — (844) (844)
As at 31 December 2023
5 276 8,466 5,180 13,927
The accompanying notes are an integral part of these Company financial statements.
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2023 Integrated Report and Form 20-F
226
Statement of changes in equity
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2023 as filed with the SEC.
Note 1
General information and basis of preparation
Coca-Cola Europacific Partners plc (the Company) acts as a holding company
for investments in subsidiaries, as well as a provider of various intragroup services.
In addition, the Company engages in general corporate activities such as third
party borrowings.
The financial statements of the Company have been prepared in accordance with
the UK adopted International Accounting Standards, International Financial
Reporting Standards (IFRS) as adopted by the European Union and International
Financial Reporting Standards as issued by the International Accounting
Standards Board (IASB). The financial statements were approved and signed by
Damian Gammell, Chief Executive Officer, on 15 March 2024, having been duly
authorised to do so by the Board of Directors.
As described in the accounting policies in Note 2, the financial statements have
been prepared under the historical cost convention except for certain items
measured at fair value. Those accounting policies have been applied consistently
in all periods. The functional and presentation currency of the Company is euros,
and amounts are rounded to the nearest million.
The financial statements of the Company have been prepared on a going concern
basis (refer to the Going concern paragraph on page 146).
During 2023, the Company established that its investment in WIH UK Limited, a
wholly owned subsidiary, of €533 million should have been written down to zero by
2020. As a result, the previously reported Investments have been overstated. The
correction has been reflected by restating each of the affected financial
statement line items for prior periods, more specifically, decreasing Investments
and Retained Earnings by €533 million.
Note 2
Significant accounting policies
The preparation of these financial statements requires management to make
judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates. The significant judgements made
in applying the Company’s accounting policies were applied consistently across
the annual periods.
Investments
Investments in subsidiaries are initially recognised at cost and carried net of any
impairment. Investments are tested for impairment whenever events or changes
in circumstances indicate that the carrying amounts of those investments may not
be recoverable. An asset’s recoverable amount is the higher of an asset’s or CGU’s
fair value less costs to sell and its value in use, and is determined for an individual
asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount. Impairment losses on
continuing operations are recognised in the income statement in those expense
categories consistent with the function of the impaired asset.
For assets where an impairment loss subsequently reverses, the carrying amount
of the asset or CGU is increased to the revised estimate of its recoverable amount,
not to exceed the carrying amount that would have been determined, net of
depreciation, had no impairment losses been recognised for the asset or CGU
in prior years. A reversal of impairment loss is recognised immediately in the
income statement.
Share-based payments
The Company has established share-based payment plans that provide for the
granting of share options and restricted stock units, some with performance and/
or market conditions, to certain executive and management level employees that
are employed by the Company and its subsidiaries. These awards are designed to
align the interests of its employees with the interests of its shareholders.
The Company recognises compensation expense equal to the grant date fair
value for all share-based payment awards that are expected to vest. Expense is
generally recorded on a straight-line basis over the requisite service period for
each separately vesting portion of the award. As per IAS 27 Separate Financial
Statements, the Company equity settles share-based payments for employees of
subsidiary entities and accounts for the settlement as an addition to the cost of its
investment in the employing subsidiary. Upon vesting, the Company recharges the
costs of the share-based awards to the employing subsidiary and records a
reduction of the investment.
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
227
Notes to the Company financial statements
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2023 as filed with the SEC.
Financial instruments
(i) Financial assets
Initial recognition and measurement
Financial assets within the scope of IFRS 9 Financial Instruments are classified as
financial assets at fair value through profit or loss, loans and receivables, or as
derivatives designated as hedging instruments in an effective hedge, as
appropriate. The Company determines the classification of its financial assets at
initial recognition.
All financial assets are recognised initially at fair value plus, in the case of
investments not at fair value through profit or loss, directly attributable
transaction costs.
The Company’s financial assets include cash and short-term deposits, trade and
other receivables, loan notes, and derivative financial instruments.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification
as follows:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for
trading and financial assets designated upon initial recognition at fair value
through profit or loss. Financial assets are classified as held for trading if they are
acquired for the purpose of selling in the near term. This category includes
derivative financial instruments entered into by the Company that are not
designated as hedging instruments in hedge relationships as defined by IFRS 9.
Derivatives, including separated embedded derivatives, are also classified as held
for trading unless they are designated as effective hedging instruments.
Financial assets at fair value through profit and loss are carried in the statement of
financial position at fair value with changes in fair value recognised in finance
income or finance cost in the statement of comprehensive income.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Such assets are
initially recognised at fair value and subsequently measured at amortised
cost using the effective interest rate (EIR) method, less impairment. Amortised
cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is
included in finance income in the statement of comprehensive income. Losses
arising from impairment are recognised in the income statement in other
operating expenses.
(ii) Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of IFRS 9 are classified as financial liabilities at
fair value through profit or loss, loans and borrowings, or as derivatives designated
as hedging instruments in an effective hedge, as appropriate. The Company
determines the classification of its financial liabilities at initial recognition. All
financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings, plus directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held
for trading and financial liabilities designated upon initial recognition as at fair
value through profit or loss.
Interest bearing loans and borrowings
Obligations for loans and borrowings are recognised when the Company becomes
party to the related contracts and are measured initially at the fair value of
consideration received, less directly attributable transaction costs.
After initial recognition, interest bearing loans and borrowings are subsequently
measured at amortised cost using the effective interest method.
Gains and losses arising on the repurchase, settlement or other cancellation of
liabilities are recognised respectively in finance income and finance cost.
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2023 Integrated Report and Form 20-F
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Notes to the Company financial statements continued
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2023 as filed with the SEC.
Trade and other payables
Trade and other payable amounts represent liabilities for goods and services
provided to the Company prior to the end of the reporting period, which are
unpaid as of the balance sheet date. Trade and other payables are presented
as current liabilities unless payment is not due within 12 months after the
reporting period. Trade and other payables are recognised initially at fair
value and subsequently measured at amortised cost using the effective
interest method, as applicable.
Management fees
As the ultimate parent entity of the Group, the Company is involved in
the provision of intragroup services to certain subsidiaries. Specifically, the
Company’s employees are above-market roles, who provide services related
but not limited to strategy, people and culture, finance, legal, and business
process and technology. In addition, certain intragroup services are charged
to the Company by its subsidiaries. Management fees revenue for intragroup
services provided to subsidiaries is recorded in Revenue from management fees.
Costs incurred by subsidiaries are recharged to the Company and are recorded
in Administrative expenses in the statement of comprehensive income.
Note 3
Dividend income
Dividends are recognised when the right to receive the dividend is established.
During the year the Company has received the following dividends:
Year ended 31 December
2023 2022
€ million € million
Coca-Cola Europacific Partners Holdings US Inc
896
516
Coca-Cola Europacific Partners API Pty Ltd
270
—
CCEP Finance (Australia) Limited
102
—
Bottling Holdings Europe Limited
—
49
Coca-Cola Europacific Partners Deutschland GmbH
7
16
Total
1,275 581
Note 4
Finance income/(costs)
Year ended 31 December
2023 2022
€ million € million
Interest income
16
19
Total finance income
16 19
Interest expense
(266)
(125)
Amortisation of debt discount
(2)
(2)
Total finance costs
(268) (127)
Note 5
Investments
Year ended 31 December
2023 2022*
€ million € million
Balance at 1 January
27,099 27,093
Subsequent investment in subsidiaries
282
—
Investments in equity instruments
5
—
Capitalised/vested share-based payments, net
22
17
Investment write down
(2)
(11)
Balance at 31 December
27,406 27,099
In March 2023, CCEP Ventures UK Limited issued one million new ordinary shares
of £1 to the Company, resulting in an increase of the Company investment of
€1.1 million. In December 2023, the Company subscribed for 282 million ordinary
shares on CCEP Holdings (Australia) Limited and for 3.4 million ordinary shares in
CCEP Ventures UK Limited in exchange for cash in these amounts. The Company
also made a €1 incorporation payment to BNI B.V.
As part of its impairment review, the Company recognised a partial write down of
its investment in CCEP Ventures Europe Limited for €2 million.
During 2022, the Company recognised a full write down of its investment in CCEP
Ventures UK Limited for €3 million and a partial write down of its investment in
CCEP Ventures Europe Limited for €8 million.
*The comparative information has been restated. Refer to Note 1.
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Coca-Cola Europacific Partners plc
2023 Integrated Report and Form 20-F
229
Notes to the Company financial statements continued
This page does not form part of the Coca-Cola Europacific Partners plc Annual Report on Form 20-F for the year ended 31 December 2023 as filed with the SEC.
Note 6
Amounts receivable from/payable to related parties
Year ended 31 December
2023 2022 2021
€ million € million € million
Non-current amounts payable to related
parties:
Borrowings
(A)
3,227 3,227 3,227
Total non-current amounts payable to
related parties
3,227 3,227 3,227
Current amounts payable to related
parties:
Cash pool payables
(B)
4,094 2,942 1,674
Trade and other payables
36 58 29
Total current amounts payable to related
parties
4,130 3,000 1,703
Total amounts payable to related parties
7,357 6,227 4,930
(A) In relation to the acquisition of CCL, the Company borrowed interest bearing euro denominated loan notes from CCEP Finance
(Ireland) DAC due between September 2025 and May 2041 with interest rates between 0.1% and 1.6%.
(B) The Company participates in a cash pooling structure in which its available cash is swept to a cash pool header (CCEP Finance
(Ireland) DAC). Pooling allows the Company to deposit and withdraw cash on a daily basis to meet its working capital needs.
Transactions with key management personnel
Key management personnel are the members of the Board of Directors and the
members of the Executive Leadership Team that are employed by the Company.
The following table summarises the total remuneration paid or accrued during the
reporting period related to key management personnel:
Year ended 31 December
2023 2022 2021
€ million € million € million
Salaries and other short-term employee
benefits
(A)
17 16 19
Share-based payments
5 2 4
Total
22 18 23
(A) Short-term employee benefits include wages, salaries and social security contributions, paid annual leave and paid sick leave, paid
bonuses and non-monetary benefits.
Employee costs
The following table summarises the total employee costs of the Company during
the reporting period:
Year ended 31 December
2023 2022 2021
€ million € million € million
Wages and salaries
12
13 16
Social security costs
5 3 3
Total employee costs
17 16 19
The average number of persons employed by the Company during the year was
7 (2022: 7, 2021: 9).
Note 7
Borrowings
Year ended 31 December
2023 2022 2021
€ million € million € million
Non-current borrowings:
Loan notes
4,976 6,059 7,232
Lease obligations
3 4 5
Total non-current borrowings
4,979 6,063 7,237
Current borrowings:
Loan notes
1,088 1,147 700
Commercial paper
— — 285
Lease obligations
1 1 1
Total current borrowings
1,089 1,148 986
Total borrowings
6,068 7,211 8,223
The loan notes as at 31 December 2023 are due between May 2024 and
September 2031. The principal amounts due are €6,141 million (2022: €7,915 million,
2021: €7,915 million) and the applicable interest rates are between 0.2% and 2.75%.
In May 2023, the Company repaid $850 million 0.5% notes received in May 2021.
The loan notes are stated net of unamortised financing fees of €15 million
(2022: €20 million, 2021: €27 million).
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2023 Integrated Report and Form 20-F
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Notes to the Company financial statements continued
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During 2022, the Company entered into interest rate swaps with notional value of
€1 billion, which were designated in a fair value hedge relationship with euro
denominated bonds. As at 31 December 2023, fair value adjustments in respect of
those interest rate swaps are €(80) million (2022: €(130) million) included within
non-current borrowings.
Trade and other payables include interest payable on the borrowings of
€45 million (2022: €47 million, 2021: €51 million).
Lease obligations represent the present value of the Company’s lease obligations
in respect of right of use assets.
The Company has amounts available for borrowing under a €1.80 billion multi-currency
credit facility with a syndicate of 12 banks. This credit facility matures in 2029 and
is for general corporate purposes and supporting the working capital needs.
Based on information currently available, there is no indication that the financial
institutions participating in this facility would be unable to fulfil their commitments
to the Company as at the date of these financial statements. The Company’s
credit facility contains no financial covenants that would impact its liquidity or
access to capital. As at 31 December 2023, the Company had no amounts drawn
under this credit facility.
Note 8
Equity
Share capital
As at 31 December 2023, the Company has issued and fully paid 459,200,818
(2022: 457,106,453; 2021: 456,235,032) ordinary Shares with a nominal value of
€0.01 per share. Shares in issue have one voting right each and no restrictions
related to dividends or return on capital. For more details, please refer to
Note 16 of the consolidated financial statements.
Share premium
The balance in share premium as at 31 December 2023 represents the excess
over nominal value of €0.01 for the 228,244,244 Shares issued to CCE shareholders
on 28 May 2016 based on the adjusted closing stock price of CCE ordinary Shares
of €33.33 at the time of the CCEP merger. The balance also includes €189 million
(2022: €146 million) excess over nominal value of share-based payment awarded
through to 31 December 2023.
Merger reserves
The Company determined that the consideration transferred to acquire CCIP and
CCEG qualified for merger relief under the Companies Act. Therefore, the excess
consideration transferred over nominal value is excluded from the share premium.
The cumulative balance of €8.5 billion includes the consideration transferred in
excess of nominal value of €0.01 for CCIP and CCEG of €6.6 billion and €2.9 billion,
respectively.
Retained earnings
The balance in retained earnings represents the opening balance on
1 January 2023, combined with the result for the period, dividends paid
and the share-based payment reserve.
The prior period comparative information has been restated. Refer to Note 1.
Dividends
Dividends are recorded in the period in which they are paid. Refer to Note 16 of
the consolidated financial statements.
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Notes to the Company financial statements continued
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Note 9
Financial risk management
Financial risk factors, objectives and policies
The Company’s activities expose it to several financial risks, market risk and
liquidity risk. Financial risk activities are governed by appropriate policies and
procedures to minimise the uncertainties these risks create on the Company’s
future cash flows. Such policies are developed and approved by CCEP’s treasury
and commodities risk committee, through the authority delegated to it by the
Board.
Market risk
Market risk represents the risk that the fair value of future cash flows of a financial
instrument will fluctuate due to changes in market prices and includes interest
rate risk, currency risk and other price risk such as commodity price risk. Market risk
affects outstanding borrowings, as well as derivative financial instruments.
Interest rates
The Company is subject to interest rate risk for its outstanding borrowings. To
manage interest rate risk, the Company maintains a significant proportion of its
borrowings at fixed rates.
Currency exchange rates
Foreign currency exchange risk can only arise on financial instruments that are
denominated in a currency other than the functional currency in which they are
measured. Translation-related risks are therefore not included in the assessment
of the Company’s exposure to currency risks. Translation exposures arise from
financial and non-financial items held by the Company with a functional currency
different from the Company’s presentation currency (euro). To manage currency
exchange risk arising from future commercial transactions and recognised
monetary assets and liabilities, foreign currency forward and option contracts with
external third parties are used.
The Company is exposed to the risk of changes in currency exchange rates
between US dollar and euro relating to its US denominated borrowings.
In the statement of financial position, non-current derivative assets represent the
fair value (Level 2) of the cross currency swap of the USD denominated debt to
EUR.
Liquidity risk
Liquidity risk is actively managed to ensure that the Company has sufficient funds
to satisfy its commitments. The Company’s sources of capital include, but are not
limited to, dividend income, public and private issuances of debt and equity
securities, and bank borrowings. The Company believes its operating cash flow,
cash on hand and available short- and long-term capital resources are sufficient to
fund its working capital requirements, scheduled borrowing payments, interest
payments, capital expenditures, benefit plan contributions, income tax obligations
and dividends to its shareholders. Counterparties and instruments used to hold
cash and cash equivalents are continuously assessed, with a focus on preservation
of capital and liquidity. Based on information currently available, the Company
does not believe it is at significant risk of default by its counterparties.
Note 10
Auditor’s remuneration
Refer to Note 17 of the consolidated financial statements for details of the
remuneration of the Company’s auditor.
Note 11
Commitments
The Company has fully and unconditionally guaranteed unsecured borrowings
outstanding as at 31 December 2023. These borrowings have been issued by CCEP
Finance (Ireland) DAC for €3.2 billion, Coca-Cola Amatil Limited for €0.7 billion and
BNI (Finance) B.V. for €0.7 billion.
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