23
February 2024
Coca-Cola Europacific
Partners (CCEP) today confirms it has, together with Aboitiz Equity
Ventures Inc. (AEV), completed the acquisition of Coca-Cola
Beverages Philippines, Inc. (CCBPI) from The Coca-Cola Company
(KO)
•
Further to the announcements on 2 August 2023, 20
November 2023 and 30 January 2024 (see links below), CCEP today
announces it has, together with AEV, completed the acquisition to
jointly acquire 100% of CCBPI from KO
•
The key terms of the Share Purchase Agreement
comprise:
◦
60:40 ownership structure between CCEP and AEV
with comprehensive governance arrangements in place
◦
Valuation of 100% of CCBPI at $1.8 billion on a
debt-free, cash-free basis
•
To aid comparability, FY23 adjusted financial
information for selected metrics is provided in this
release
The acquisition builds on CCEP's
successful expansion into Australia, Pacific & Indonesia (API)
in 2021, further strengthens its partnership with KO and supports
its long-term growth strategy and focus on driving shareholder
value.
CCEP's acquisition of CCBPI, with
AEV, one of the leading conglomerates in the local market, is a
great opportunity to co-own an established, well-run business with
attractive profitability and growth prospects.
The transaction is thus immediately
EPS accretive and creates an even more diverse footprint for CCEP
within its existing API business segment, from now on renamed APS
(Australia, Pacific & South East Asia). It provides the
opportunity to leverage best practice and talent, including
supporting Indonesia's transformation journey. It is therefore
aligned with CCEP's aim of driving sustainable and stronger growth
through diversification and scale, and underpins the company's
mid-term strategic objectives.
As CCEP will control the majority
(60%) of CCBPI, it will consolidate CCBPI as of the acquisition
date and establish a non-controlling interest representing AEV's
minority interest (40%). CCBPI delivered
~$1.91 billion (~€1.7 billion1) of Revenue and
~$1151 million (~€105 million1) of Operating Profit in
FY23.
The transaction consideration has
been funded through existing liquidity and incremental borrowing.
It will have a modest impact on CCEP's leverage, having closed FY23
at the top end of its mid-term guided range of 3.0 times Net Debt
to Comparable EBITDA2.
[1] Amounts represent CCBPI's unaudited results prepared in
accordance with Philippine Financial Reporting Standards (PFRS)
which will be filed with the registrar in due course. These
unaudited results have been presented as if the acquisition had
occurred on 1 January 2023 and have been adjusted for provisional
acquisition accounting adjustments, CCEP IFRS accounting policy
reclassifications and the impact of debt financing costs in
connection with the acquisition, excluding items impacting
comparability. CCBPI translated from Euros to US Dollars using the
average exchange rate for the period of 1.09.
[2] Adjusted for items impacting comparability. For further
details, refer to our unaudited results for the fourth quarter and
full year ended 31 December 2023, issued on 23 February 2024, which
details our non-IFRS performance measures and reconciles, where
applicable, our 2023 and 2022 results as reported under IFRS to the
non-IFRS performance measures included in this document.
Adjusted financial information
The following non-IFRS adjusted
financial information for selected metrics is provided in order to
illustrate the effects of the acquisition of CCBPI on the results
of operations of CCEP and to allow for greater comparability of the
results of the combined group between periods. The adjusted
financial information has been prepared for illustrative purposes
only, and because of its nature addresses a hypothetical situation.
It does not intend to represent the results had the acquisition
occurred at the dates indicated, or project the results for any
future dates or periods. It is based on information and assumptions
that CCEP believe are reasonable, including assumptions as at 1
January 2023 relating to provisional transaction accounting
adjustments. No cost savings or synergies were contemplated in
these provisional adjustments.
The non-IFRS adjusted financial
information has not been prepared in accordance with the
requirements of Regulation S-X Article 11 of the US Securities Act
of 1933 or any generally accepted accounting standards, may not
necessarily be comparable to similarly titled measures employed by
other companies and should be considered supplemental to, and not a
substitute for, financial information prepared in accordance with
generally accepted accounting standards.
The adjusted financial information
provided below is on a full year basis for FY23, assuming the
acquisition occurred on 1 January 2023. It includes revenues and
volumes, and is updated to include the expected cost of
financing.
Supplementary Financial Information - Reported to Adjusted
comparable
|
The following provides a summary
reconciliation of CCEP's reported and adjusted comparable results
for the full year ended 31 December 2023.
Full year 2023
(unaudited)
|
|
|
|
|
|
|
|
In
€ millions except per share data which is calculated prior to
rounding
|
|
Reported
|
Items
impacting comparability[1]
|
Comparable
|
Adjusted
comparable[2]
|
Transaction accounting adjustments[3]
|
Adjusted comparable
combined
|
|
|
CCEP
|
|
CCEP
|
CCBPI
|
CCEP
|
CCEP
|
Revenue
|
|
18,302
|
-
|
18,302
|
1,744
|
-
|
20,046
|
Cost of sales
|
|
11,582
|
(6)
|
11,576
|
1,380
|
-
|
12,956
|
Operating profit
|
|
2,339
|
34
|
2,373
|
105
|
-
|
2,478
|
Total finance costs, net
|
|
120
|
-
|
120
|
28
|
26
|
174
|
Profit after taxes
|
|
1,669
|
32
|
1,701
|
57
|
(20)
|
1,738
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
Shareholders
|
|
1,669
|
32
|
1,701
|
34
|
(20)
|
1,715
|
Non-controlling interest
|
|
-
|
-
|
-
|
23
|
-
|
23
|
Diluted earnings per share
(€)
|
|
3.63
|
|
3.71
|
|
|
3.74
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
|
|
|
|
|
459
|
[1] Amounts represent items affecting the comparability of CCEP's
year-over-year financial performance. Refer to our unaudited
results for the fourth quarter and full year ended 31 December
2023, issued on 23 February 2024, for further details on our
non-IFRS performance measures and a reconciliation of CCEP's
reported to comparable
results.
[2] Amounts represent unaudited results of CCBPI as if the
acquisition had occurred on 1 January 2023, including provisional
acquisition accounting adjustments, CCEP IFRS accounting policy
reclassifications and the impact of debt financing costs in
connection with the acquisition, excluding items impacting
comparability. Total finance costs include a net finance income of
€3 million for the year ended 31 December 2023.
[3] Amounts represent provisional transaction accounting
adjustments for the 12 months ending 31 December 2023 as if the
acquisition had occurred on 1 January 2023 comprising finance costs
from CCEP acquisition financing. Tax rate used is 24%, in line with
the Group's effective tax rate for the year ended 31 December 2023.
Separate financing adjustment is included within CCBPI Adjusted
comparable.
The table below illustrates the
impact of adjustments made to CCBPI in order to present them on a
basis consistent with CCEP's accounting policies and including
acquisition accounting adjustments.
Full year 2023
(unaudited)
|
|
|
|
|
|
|
|
In
€ millions
|
|
Historical
CCBPI[1]
|
Reclassifications[2]
|
Historical adjusted
CCBPI
|
Transaction accounting adjustments[3]
|
Items
impacting comparability[4]
|
Adjusted
comparable
|
Revenue
|
|
1,757
|
(1)
|
1,756
|
-
|
(12)
|
1,744
|
Cost of sales
|
|
1,380
|
(2)
|
1,378
|
15
|
(13)
|
1,380
|
Operating profit
|
|
123
|
(3)
|
120
|
(7)
|
(8)
|
105
|
Total finance costs, net
|
|
-
|
(3)
|
(3)
|
31
|
-
|
28
|
Profit after taxes
|
|
90
|
(1)
|
89
|
(29)
|
(3)
|
57
|
[1] Historical unaudited CCBPI results for the period 1 January
2023 to 31 December 2023.
[2] Accounting policy and classification adjustments made to CCBPI
in order to present on a basis consistent with CCEP IFRS
accounting.
[3] Amounts represent provisional transaction accounting
adjustments for the 12 months ending 31 December 2023 as if the
acquisition had occurred on 1 January 2023, and mainly include
inventory step up costs and an increase in total finance costs as a
result of local financing in the Philippines related to the
acquisition.
[4] Amounts represent one-time items identified by CCBPI which are
not expected to recur, and mainly include the impact from the
reversal of certain provisions partially offset by charges related
to business transformation activities.
Supplementary Financial Information - Adjusted Revenue &
Volume
|
2023 Adjusted Comparable Revenue by
Geography
|
|
Q1
|
Q2
|
Q3
|
Q4
|
HY1
|
HY2
|
FY
|
In
€ millions
|
Iberia[1]
|
|
655
|
886
|
1,029
|
755
|
1,541
|
1,784
|
3,325
|
Germany
|
|
659
|
799
|
800
|
760
|
1,458
|
1,560
|
3,018
|
Great Britain
|
|
689
|
881
|
853
|
812
|
1,570
|
1,665
|
3,235
|
France[2]
|
|
535
|
665
|
586
|
535
|
1,200
|
1,121
|
2,321
|
Northern
Europe[3]
|
|
607
|
729
|
688
|
630
|
1,336
|
1,318
|
2,654
|
Total Europe
|
|
3,145
|
3,960
|
3,956
|
3,492
|
7,105
|
7,448
|
14,553
|
Australia
|
|
631
|
531
|
562
|
661
|
1,162
|
1,223
|
2,385
|
Pacific[4]
|
|
175
|
155
|
150
|
199
|
330
|
349
|
679
|
Indonesia and Papua New
Guinea
|
|
203
|
177
|
139
|
166
|
380
|
305
|
685
|
Philippines[5]
|
|
382
|
453
|
424
|
485
|
835
|
909
|
1,744
|
Total APS
|
|
1,391
|
1,316
|
1,275
|
1,511
|
2,707
|
2,786
|
5,493
|
Total CCEP (adjusted)
|
|
4,536
|
5,276
|
5,231
|
5,003
|
9,812
|
10,234
|
20,046
|
|
|
|
|
|
|
|
|
|
Revenue per unit case[6]
|
|
|
|
|
|
|
|
|
Total Europe
|
|
5.42
|
5.60
|
5.65
|
5.54
|
5.52
|
5.60
|
5.56
|
API
|
|
5.77
|
6.35
|
6.74
|
6.44
|
6.03
|
6.58
|
6.30
|
Philippines[5]
|
|
2.70
|
2.86
|
2.81
|
2.80
|
2.78
|
2.80
|
2.79
|
Total APS
|
|
3.63
|
3.47
|
3.67
|
3.65
|
3.55
|
3.66
|
3.61
|
Total CCEP (adjusted)
|
|
4.79
|
4.95
|
5.06
|
4.87
|
4.87
|
4.96
|
4.92
|
[1] Iberia refers to Spain, Portugal and
Andorra.
[2] France refers to continental France and Monaco.
[3] Includes Belgium, Luxembourg, the Netherlands, Norway, Sweden
and
Iceland.
[4] Pacific refers to New Zealand and the Pacific
Islands.
[5] Acquisition of Coca-Cola Beverages Philippines, Inc (CCBPI)
completed on 23 February 2024. CCBPI full year comparable revenue
measures for 2023 provided by CCBPI management. Revenue includes
preliminary adjustments to present on a basis consistent with CCEP
IFRS accounting policies and has been adjusted for items impacting
period over period comparability. Adjusted as if the acquisition of
CCBPI occurred on 1 January 2023 for illustrative purposes only. It
is not intended to estimate or predict future financial performance
or what actual results would have
been.
[6] Comparable and Fx-neutral.
2023 Adjusted Volumes by Reporting Segment
|
|
Q1
|
Q2
|
Q3
|
Q4
|
HY1
|
HY2
|
FY
|
In
millions of Unit cases[1]
|
Total Europe
|
|
590
|
717
|
705
|
632
|
1,307
|
1,337
|
2,644
|
API
|
|
178
|
146
|
141
|
170
|
324
|
311
|
635
|
Philippines[2]
|
|
144
|
171
|
162
|
178
|
315
|
340
|
655
|
Total APS
|
|
322
|
317
|
303
|
348
|
639
|
651
|
1,290
|
Total CCEP (adjusted)
|
|
912
|
1,034
|
1,008
|
980
|
1,946
|
1,988
|
3,934
|
[1] A unit case equals approximately 5.678 litres or 24 8-ounce
servings.
[2] CCBPI volumes on an adjusted basis as if the acquisition
occurred on 1 January 2023.
Note: volumes on a comparable basis;
no selling day shift in FY23.
Further information
For more information on the
transaction, please see our website www.cocacolaep.com
-
https://ir.cocacolaep.com/static-files/0e2aab54-4883-4518-bb2b-c1a5b4d55c2c
(2 August 2023)
-
https://ir.cocacolaep.com/news-releases/news-release-details/coca-cola-ep-plc-update-re-acquisition-ccbpi
(20 November 2023)
-
https://ir.cocacolaep.com/news-releases/news-release-details/coca-cola-ep-plc-pcc-approval-received-jointly-acquire-ccbpi
(30 January 2024)
About CCEP (LEI 549300LTH67W4GWMRF57)
CCEP is one of the leading consumer
goods companies in the world. We make, move and sell some the
world's most loved brands - serving 600 million consumers and
helping more than 2 million customers across 31 countries
grow.
We combine the strength and scale of
a large, multi-national business with an expert, local knowledge of
the customers we serve and communities we support.
The Company is currently listed on
Euronext Amsterdam, NASDAQ (and a constituent of the Nasdaq 100),
London Stock Exchange and on the Spanish Stock Exchanges, trading
under the symbol CCEP.
For more information about CCEP,
please visit www.cocacolaep.com
& follow CCEP on LinkedIn @ Coca-Cola
Europacific Partners | LinkedIn
About AEV
AEV is one of the leading
conglomerates in the Philippines with over 100 years of business
history. It has major investments in power, banking and financial
services, food, infrastructure, land, and data science and
artificial intelligence. AEV is recognized as one of the
best-managed companies in the Philippines and the region,
consistently cited for its commitment to good corporate governance
and sustainability. Currently, the company is on its Great
Transformation journey to become the Philippines' first
Techglomerate as it continues to drive change for a better world by
advancing business and communities.
AEV is a member of the United
Nations Global Compact, Global Compact Network Philippines Board of
Trustees, the APEC Business Advisory Council and the Council for
Inclusive Capitalism, and helps champion sustainability initiatives
on a regional level through policies, advocacies, and initiatives
that contribute to the United Nations Sustainable Development Goals
(UN SDGs). With a clear focus on ESG, the company is implementing
its #OneAboitizSustainability Synergy model which transforms its
life-essential businesses to improve sustainable practices and
continue to create a positive impact on society and the
environment.
Link to AEV's website and
release: https://aboitiz.com/investor-relations/disclosure/
Enquiries
General Counsel and Company
Secretary: Clare Wardle; secretariat@ccep.com
Investor Relations: Sarah Willett;
sarah.willett@ccep.com
Media: ccep@portland-communications.com
Forward-Looking Statements
This document contains statements,
estimates or projections that constitute "forward-looking
statements" concerning the financial condition, performance,
results, guidance and outlook, dividends, consequences of mergers,
acquisitions, joint ventures, and divestitures, including the joint
venture with Aboitiz Equity Ventures Inc. (AEV) and acquisition of
Coca-Cola Beverages Philippines, Inc. (CCBPI), strategy and
objectives of Coca-Cola Europacific Partners plc and its
subsidiaries (together CCEP or the Group). Generally, the words
"ambition", "target", "aim", "believe", "expect", "intend",
"estimate", "anticipate", "project", "plan", "seek", "may",
"could", "would", "should", "might", "will", "forecast", "outlook",
"guidance", "possible", "potential", "predict", "objective" and
similar expressions identify forward-looking statements, which
generally are not historical in nature.
Forward-looking statements are
subject to certain risks that could cause actual results to differ
materially from CCEP's historical experience and present
expectations or projections. As a result, undue reliance should not
be placed on forward-looking statements, which speak only as of the
date on which they are made. These risks include but are not
limited to:
1. those set forth in the "Risk
Factors" section of CCEP's 2022 Annual Report on Form 20-F filed
with the SEC on 17 March 2023 and as updated and supplemented with
the additional information set forth in the "Principal Risks and
Risk Factors" section of the H1 2023 Half-year Report filed with
the SEC on 2 August 2023;
2. risks and uncertainties relating
to the global supply chain and distribution, including impact from
war in Ukraine and increasing geopolitical tensions and conflicts
including in the Middle East and Asia Pacific region, such as the
risk that the business will not be able to guarantee sufficient
supply of raw materials, supplies, finished goods, natural gas and
oil and increased state-sponsored cyber risks;
3. risks and uncertainties relating
to the global economy and/or a potential recession in one or more
countries, including risks from elevated inflation, price
increases, price elasticity, disposable income of consumers and
employees, pressure on and from suppliers, increased fraud, and the
perception or manifestation of a global economic
downturn;
4. risks and uncertainties relating
to potential global energy crisis, with potential interruptions and
shortages in the global energy supply, specifically the natural gas
supply in our territories. Energy shortages at our sites, our
suppliers and customers could cause interruptions to our supply
chain and capability to meet our production and distribution
targets;
5. risks and uncertainties relating
to potential water use reductions due to regulations by national
and regional authorities leading to a potential temporary decrease
in production volume; and
6. risks and uncertainties relating
to the integration and operation of the joint venture with AEV and
acquisition of CCBPI, including the risk that our integration of
CCBPI's business and operations may not be successful or may be
more difficult, time consuming or costly than expected.
Due to these risks, CCEP's actual
future financial condition, results of operations, and business
activities, including its results, dividend payments, capital and
leverage ratios, growth, including growth in revenue, cost of sales
per unit case and operating profit, free cash flow, market share,
tax rate, efficiency savings, achievement of sustainability goals,
including net zero emissions and recycling initiatives, capital
expenditures, our agreements relating to and results of the joint
venture with AEV and acquisition of CCBPI, and ability to remain in
compliance with existing and future regulatory compliance, may
differ materially from the plans, goals, expectations and guidance
set out in forward-looking statements. These risks may also
adversely affect CCEP's share price. Additional risks that may
impact CCEP's future financial condition and performance are
identified in filings with the SEC which are available on the SEC's
website at www.sec.gov. CCEP does not undertake any obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise, except
as required under applicable rules, laws and regulations. Any or
all of the forward-looking statements contained in this filing and
in any other of CCEP's public statements may prove to be
incorrect.
End