TIDMCCH
RNS Number : 6953O
Coca-Cola HBC AG
11 February 2021
Operational agility delivers resilient performance
Coca-Cola HBC AG, a growth-focused C onsumer P ackaged G oods
business and strategic bottling partner of The Coca-Cola Company,
reports its financial results for the full year ended 31 December
2020.
Full-year highlights
-- Our business adapted quickly to changing consumer behaviour
as a result of COVID-19 restrictions, delivering resilient
financial performance reflecting strength of brand portfolio,
operational agility and strong execution
-- Improving volume trends in second half, with Q4
like-for-like(1) volume down 0.7% and full-year like-for-like(1)
volume decline contained at 4.6% YoY
- Four of our largest markets grew volumes, on a like-for-like1
basis: Nigeria, Russia, Poland and Ukraine
- At-home channel volumes up mid-single digit in second half
-- FX-neutral revenue per case stabilised in the second half,
improving to a 4.1% decline YoY (H1 20 20 -6.1% YoY)
- Driven by negative package mix from lower single-serve volumes
- Strong positive category mix, Sparkling +0.2%, Adult Sparkling +3.2% and Energy up 17.9%
-- Full-year like-for-like(1) FX-neutral revenue declined by
8.5%, while reported revenue declined by 12.7%
- Strong market share gains in 2020: +40 bps of value share in NARTD and +30 bps in Sparkling
- Performance by segment mainly driven by each region's relative
exposure to the out-of-home channel as well as timing and severity
of lockdowns through the year
-- We have created a more agile business; comparable EBIT margin
at 11.0%, up 20bps YoY, or 10.6% like-for-like(1) , down 20bps YoY.
Reported EBIT declined by 7.6% to EUR660.7 million
- Structural improvement to cost base over several years,
shifting fixed costs to variable, enabling efficiency gains
- Gross profit margin up 20bps through good management of input
& supply chain costs and FX hedging
- Decisive action on discretionary costs early in the pandemic delivered EUR120m of cost savings
-- Comparable EPS of EUR1.19, down 17.5%, impacted by a higher
effective tax rate and a small increase in financing costs; basic
EPS declined by 14.9%
-- Board of Directors to propose an ordinary dividend of EUR0.64
per share, a +3.2% increase year-on-year
- Free cash flow of EUR497 million, up EUR54.4 million YoY
- Financial discipline and strong balance sheet continue to support investment in the business
-- Ongoing investment in sustainable solutions for packaging
including rPET in-house production and deposit return scheme (DRS)
studies
Zoran Bogdanovic, Chief Executive Officer of Coca-Cola HBC AG,
commented:
"The numbers we released today demonstrate how far our business
has come in building both operational agility and lasting margin
resilience. I am proud of the speed, flexibility and care with
which our people responded to the pandemic and the results we have
achieved. I am also thankful to our customers and suppliers for
their valuable partnerships which are even more critical in these
challenging times.
The improved second-half trading was driven by a return to
growth in the at-home and greater resilience in the out-of-home,
despite a resurgence of infections in many of our markets towards
the end of the year. Partnering closely with The Coca-Cola Company
team on rigorous prioritisation of our joint market investments,
coupled with our rapid adaptation of the route-to-market and
excellent execution, resulted in strong value share gains in both
Non-alcoholic ready-to-drink and Sparkling across the majority of
our markets.
While the economic outlook remains uncertain, we are clear on
the opportunity and direction for our business and are investing to
strengthen our capabilities which will drive our long-term
performance, underpinned by further advances on sustainability.
Looking to 2021, we will continue adapting fast in a dynamic market
and partnering with our customers to drive a strong recovery in
FX-neutral revenues, along with a small increase in EBIT margin. In
recognition of our business ' strength and future opportunities,
the Board has proposed a dividend of EUR0.64, a 3.2% increase
compared to last year. We move forward with confidence and resolve
to continue adapting to win."
Full Year Change
2020(1) 2019
Volume (m unit cases) 2,135.6 2,264.5 -5.7%
Net sales revenue (EUR m) 6,131.8 7,026.0 -12.7%
Net sales revenue per unit case (EUR) 2.87 3.10 -7.5%
FX-neutral net sales revenue(2) (EUR) 6,131.8 6,781.7 -9.6%
FX-neutral net sales revenue per unit
case(2) (EUR) 2.87 2.99 -4.1%
Operating expenses/ Net sales revenue
(%) 27.4 27.5 -
Comparable operating expenses / Net
sales revenue (%) 27.3 26.9 40bps
Operating profit (EBIT)(3) (EUR m) 660.7 715.3 -7.6%
Comparable EBIT(2) (EUR m) 672.3 758.7 -11.4%
EBIT margin (%) 10.8 10.2 60bps
Comparable EBIT margin(2) (%) 11.0 10.8 20bps
Net profit(4) (EUR m) 414.9 487.5 -14.9%
Comparable net profit(2,4) (EUR m) 431.4 522.2 -17.4%
Basic earnings per share (EPS) (EUR) 1.140 1.340 -14.9%
Comparable EPS(2) (EUR) 1.185 1.436 -17.5%
Free cash flow(2) (EUR m) 497.0 442.6 12.3%
--------------------------------------- ---------------- --------------- -------
(1) Performance, unless stated otherwise, is negatively impacted
by the change in classification of our Russian Juice business,
Multon, from a joint operation to a joint venture, following its
re-organisation, and positively impacted by the inclusion of H1
2020 performance of Bambi, the acquisition of which was cycled in
H2 2020. In addition, profitability is positively impacted by the
Group's election to classify share of results of integral equity
method investments within operating profit. Like-for-like
performance adjusts for all three impacts. For a table of
performance measures excluding these impacts, please refer to the
'Supplementary information' section.
(2) For details on APMs refer to 'Alternative Performance
Measures' and 'Definitions and reconciliations of APMs'
sections.
(3) Refer to the condensed consolidated income statement.
(4) Net Profit and comparable net profit refer to net profit and
comparable net profit respectively after tax attributable to owners
of the parent.
Coca-Cola HBC Group
Coca-Cola HBC is a growth-focused CPG business and strategic
bottling partner of The Coca-Cola Company. We create value for all
our stakeholders by supporting the socio-economic development of
the communities in which we operate and we believe building a more
positive environmental impact is integral to our future growth.
Together, we and our customers serve more than 600 million
consumers across a broad geographic footprint of 28 countries on 3
continents. Our portfolio is one of the strongest, broadest and
most flexible in the beverage industry, offering consumer-leading
partner brands in the sparkling, juice, water, sport, energy,
plant-based, ready-to-drink tea, coffee, adult sparkling and
premium spirits categories. These brands include Coca-Cola,
Coca-Cola Zero, Schweppes, Kinley, Royal Bliss, Costa Coffee,
Valser, Romerquelle, Fanta, Sprite, Powerade, FuzeTea, Dobry,
Cappy, Monster and Adez. We foster an open and inclusive work
environment amongst our more than 27,000 employees and we are
ranked among the top sustainability performers in ESG benchmarks
such as the Dow Jones Sustainability Indices, CDP, MSCI ESG and
FTSE4Good.
Coca-Cola HBC has a premium listing on the London Stock Exchange
(LSE:CCH) and is listed on the Athens Exchange (ATHEX:EEE). For
more information, please visit http://www.coca-colahellenic.com
.
Financial information in this announcement is presented on the
basis of International Financial Reporting Standards ('IFRS').
Conference call
Coca-Cola HBC will host a conference call for financial analysts
and investors to discuss the 2020 full year results on Thursday, 11
February 2021 at 09:30am GMT. Interested parties can access the
live, audio webcast of the call through Coca-Cola HBC's website
https://www.coca-colahellenic.com/en/investor-relations/results-reports-presentations
Next event
12 May 2021 2021 First quarter trading update
Enquiries
Coca--Cola HBC Group
Investors and Analysts:
Joanna Kennedy Tel: +44 7802 427505
Investor Relations Director joanna.kennedy@cchellenic.com
Carla Fabiano Tel: +44 7808 215245
Investor Relations Manager carla.fabiano@cchellenic.com
Vasso Aliferi Tel: +41 79 610 7881
Investor Relations Manager vasso.aliferi@cchellenic.com
Media:
David Hart Tel: +41 41 726 0143
Group Communication Director david.hart@cchellenic.com
Greek media contact:
V+O Communications Tel: +30 6936750476
Chara Yioti cy@vando.gr
Special Note Regarding the Information set out herein
Unless otherwise indicated, the condensed consolidated financial
statements and the financial and operating data or other
information included herein relate to Coca-Cola HBC AG and its
subsidiaries ("Coca-Cola HBC" or the "Company" or "we" or the
"Group").
Forward-Looking Statements
This document contains forward-looking statements that involve
risks and uncertainties. These statements may generally, but not
always, be identified by the use of words such as "believe",
"outlook", "guidance", "intend", "expect", "anticipate", "plan",
"target" and similar expressions to identify forward-looking
statements. All statements other than statements of historical
facts, including, among others, statements regarding our future
financial position and results, our outlook for 2021 and future
years, business strategy and the effects of the global economic
slowdown, the impact of the sovereign debt crisis, currency
volatility, our recent acquisitions, and restructuring initiatives
on our business and financial condition, our future dealings with
The Coca-Cola Company, budgets, projected levels of consumption and
production, projected raw material and other costs, estimates of
capital expenditure, free cash flow, effective tax rates and plans
and objectives of management for future operations, are
forward-looking statements. By their nature, forward-looking
statements involve risk and uncertainty because they reflect our
current expectations and assumptions as to future events and
circumstances that may not prove accurate. Our actual results and
events could differ materially from those anticipated in the
forward-looking statements for many reasons, including the risks
described in the 2019 Integrated Annual Report for Coca-Cola HBC AG
and its subsidiaries .
Although we believe that, as of the date of this document, the
expectations reflected in the forward-looking statements are
reasonable, we cannot assure you that our future results, level of
activity, performance or achievements will meet these expectations.
Moreover, neither we, nor our directors, employees, advisors nor
any other person assumes responsibility for the accuracy and
completeness of the forward-looking statements. After the date of
the condensed consolidated financial statements included in this
document, unless we are required by law or the rules of the UK
Financial Conduct Authority to update these forward-looking
statements, we will not necessarily update any of these
forward-looking statements to conform them either to actual results
or to changes in our expectations .
Alternative Performance Measures
The Group uses certain Alternative Performance Measures ("APMs")
in making financial, operating and planning decisions as well as in
evaluating and reporting its performance. These APMs provide
additional insights and understanding to the Group's underlying
operating and financial performance, financial condition and cash
flow. The APMs should be read in conjunction with and do not
replace by any means the directly reconcilable IFRS line items. For
more details on APMs please refer to 'Definitions and
reconciliations of APMs' section.
Group Operational Review
Our response to the COVID-19 pandemic
Since the start of the pandemic our top priority has been the
safety of our people, customers, partners and communities. Keeping
our colleagues safe and healthy lies at the heart of our ability to
continue serving our customers and operating the business for the
shared benefit of our stakeholders. Therefore, wherever they are
working, our teams have the right protocols and equipment that keep
them - and others - safe.
Partnering with and investing in the communities we serve has
always been a core part of the way we do business. The community
networks and partnerships that we have established over the years
allowed us to support those in need, those fighting the pandemic on
the frontline and our customers that continue to serve our shared
communities. Working with our partner The Coca-Cola Company, we
donated more than 4 million litres of beverages to those on the
frontline and via The Coca-Cola Foundation provided grants to NGOs
such as the Red Cross. In addition, we utilised our supply chain to
produce safety equipment such as masks and bottles for the
dispensation of hand sanitizer and hundreds of our people
volunteered to support community projects and the vulnerable.
Financial performance in 2020 was impacted by the lockdowns put
in place in response to the COVID-19 pandemic. The out-of-home
channel, which typically accounts for slightly over 40% of our
revenues, operated with severe restrictions during periods of
lockdown, and below capacity even when operational. Consequently,
as the degree of lockdown in place has varied across our markets
and across the year, we have seen trade fluctuate in this channel.
Overall, while in the most severe weeks of the lockdowns in April
we experienced volume declines in the out-of-home channel of 70% to
90%, during Q3 this improved to high-single digit declines, and in
Q4, with renewed restrictions in place, to mid-teens declines.
Performance in the at-home channel strengthened through the
year. Volumes were weaker at the start of the pandemic but
recovered quickly to a mid-single digit growth rate in July which
has since been sustained through the third and fourth quarter. We
have seen consumers switching some of their traditional out-of-home
routines for at-home ones, and we have adapted fast, creating
offers which target the most relevant occasions, including meals,
socialising, screen time and 'me time' at home.
The tools and capabilities that we have spent years building and
investing behind have enabled us to react quickly to changing
consumer behaviour and will be what allows us to continue to adapt
to win. We can respond rapidly to evolving consumer demands with
targeted plans to ensure that our customers have the right packs
for the occasion, with both affordable and premium offerings.
Our route to market is dynamic allowing us to re-route
immediately to ensure that our sales force are maximising potential
opportunities as the marketplace evolves. It is also increasingly
digital, and investment behind this capability has accelerated in
2020. We continue to see significant growth in e-commerce in three
main areas: (i) growing demand from our customers to order online
from us (ii) e-commerce websites of our omnichannel customers where
we are working to increase our digital shelf space and visibility;
and (iii) demand for our own D2C platform in Switzerland which is
providing us valuable learning opportunities in a fast growing part
of the market.
Finally, our ability to re-deploy promotion and marketing
budgets between regions or countries delivers the best possible
return on that spend. Overall, we are able to adapt the business to
continue to be able to win in the market, as demonstrated by the
value share gains achieved in the year.
Trading and the current environment
Volume decline for the full year was contained at 4.6% like for
like. Q4 like-for-like volumes fell by 0.7% compared to the
prior-year period, a resilient performance in the face of renewed
lockdown restrictions in our markets and a strong comparative.
Volume performance was better in the second half, benefiting from
continued growth in the at-home channel. Reported volume declined
by 5.7% in 2020 also impacted by the deconsolidation of our Russian
Juice business (Multon).
FX-neutral revenue per case declined by 4.1%. The single largest
driver of the decline was weaker package mix as a result of lower
volumes in the out-of-home channel which carries more single-serve
package formats with a relatively higher revenue per case. Channel
mix was also negative, driven by the lower volumes from the
out-of-home channel. Meanwhile category mix was positive,
benefiting from better performance in Sparkling and Energy compared
to Stills. Pricing was also positive in the year.
In the full year, FX-neutral revenue declined by 8.5% on a
like-for-like basis. This like-for-like adjustment includes the
volumes from our Russian Juice business (Multon), which as of May
2020 are no longer consolidated in our reported numbers and removes
the impact from the acquisition of Bambi for the first half of
2020. Without these adjustments FX-neutral revenue declined by
9.6%. Group reported revenue declined by 12.7%, a larger decline
than FX-neutral revenue, mainly due to the weakening of the Russian
Rouble.
From the start of the COVID-19 pandemic we moved quickly to put
in place strategies which could drive single-serve package formats.
Our increased activation of multi-packs of cans and glass bottles
which earn a higher revenue per case than larger packages drove a
12.9% growth of single-serve multipacks in the at-home channel in
Q4, an acceleration of the 4.7% growth in Q3.
We achieved strong market share performance in 2020, gaining 40
bps of value share in NARTD and 30 bps of value share in Sparkling.
This performance, particularly in a year in which we reduced
marketing spend, demonstrates the strength of our brand portfolio
and execution in the market.
Sustainability initiatives
As we work towards delivering our World Without Waste
sustainable packaging goals, competitively priced, quality recycled
PET (rPET) feedstock continues to be in short supply. We are
committed to proactively addressing this challenge so that we can
deliver our rPET targets, which are to use 35% rPET across our
total business and 50% in our EU countries by 2025. To this end, we
are investing in inhouse capacity to produce rPET bottle preforms
from hot-washed PET flakes, which are widely available at a lower
price than food-grade rPET pellets. This in-house capacity will
also help us to reduce energy consumption for 100% rPET preforms by
40%. To deliver on our target to collect 100% of our primary
packaging for recycling or reuse by 2030, significant change in
national collection system infrastructure is required in most of
our territories. Deposit Return Schemes (DRS) have been shown to
allow high collection rates and better availability of recycled PET
feedstock. We support well-designed, industry-led collection
schemes and during 2020 we funded or contributed to 10 new
modelling studies to help design the most efficient,
high-performing, collection systems for these countries.
Performance by segment
Volume performance by market was highly correlated to the
exposure of each of those markets to the out-of-home channel and
the severity and length of lockdowns. Four of our largest markets
grew volumes in the year: Russia, Nigeria, Poland and Ukraine.
Established segment volumes were down 14.0%, with FX-neutral
revenue per case broadly flat (-0.1%). The segment derives a larger
proportion of revenues from the out-of-home channel and therefore
saw the largest impact on volumes from COVID-19 related
restrictions. FX-neutral revenue per case performed relatively well
despite lower volumes from the out-of-home channel. This was due to
positive category mix driven by better performance in Sparkling
than Stills, price increases taken at the beginning of the year, as
well as positive country mix due to relatively better performance
from higher revenue per case markets such as Switzerland.
Developing segment volumes were down 4.4% with FX-neutral
revenue per case down 6.2%. The segment as a whole derives a lower
proportion of its revenues from the out-of-home channel compared to
the Established segment, and benefited from good performance in
Poland, the largest market in the segment. The Developing segment's
FX-neutral revenue per case, in addition to being impacted by lower
volumes from the out-of-home channel, was impacted by the strategic
decision taken before the outbreak of the pandemic to take less
pricing in 2020, after several years of strong price/mix
development in the segment. Category mix was positive, driven by
marginal growth in Sparkling and strong growth in Energy.
Emerging segment volumes were down 1.8% with FX-neutral revenue
per case down 3.6%. On a like-for-like basis volumes grew by 0.3%
and FX-neutral revenues declined by 2.8%. This segment has
benefited from volume growth in three of its largest markets:
Russia, Nigeria and Ukraine. The Emerging segment's FX-neutral
revenue per case, in addition to being impacted by lower volumes
from the out-of-home channel, was also impacted by the pricing
investments implemented in Nigeria in the last quarter of 2019, as
well as negative country mix due to good volume development in
lower revenue per case markets such as Nigeria and Ukraine. C
ategory mix was positive, driven by strong growth in Sparkling and
Energy.
Performance by category
Sparkling volumes grew by 0.2%, with stronger performance from
low- and no-sugar variants. Within the category we see broad based
resilience, with Trademark Coke volumes up 0.7%, Fanta volumes up
0.3%, while Adult Sparkling grew by 3.2%. We gained value share in
Sparkling in the majority of our measured markets.
Energy volumes grew by 17.9%. Monster growth outpaced the
category and we saw encouraging contribution from Coke Energy in
the premium segment and Predator in the affordable segment.
Water volumes fell by 19.7%, with similar levels of decline
across all three segments. We sell proportionally more Water in the
out-of-home channel compared to Sparkling drinks, which has been a
clear driver of weaker performance.
Juice volumes declined by 7.9% on a like for like basis. The
underlying juice category in our markets has seen weaker
performance than Sparkling within the NARTD category, which has in
turn impacted our performance in Juice.
Ready-to-drink tea (RTD tea) volume declined by 20.2%. The
underlying RTD tea category has seen the weakest performance among
the NARTD categories in our markets.
Our Premium Spirits business volumes declined by 11.1%. Premium
Spirits have the highest exposure to the out-of-home channel among
our categories.
Innovation
In full alignment with The Coca-Cola Company we continue to
focus on fewer, bigger innovations while eliminating
underperforming brands and SKUs. Costa Coffee, launched in May and
now in 14 of our markets, is a good example of this prioritised
approach. Early signs from the launch are positive with strong
customer interest as well as repeat purchase. Another focus of our
joint approach to innovation is on speed of consumer-centric brand
launches, and we are pleased to have rolled-out Topo Chico Hard
Seltzer in five markets during the last two months of the year.
Cost control, operating profit and margins
Gross profit margins improved by 20 basis points to 37.9%.
Careful management of input costs and timely hedging have allowed
us to benefit from lower input costs while protecting our cost of
goods sold from foreign currency volatility. Input costs per case
decreased by 6.4% on a currency-neutral basis, benefiting from
lower costs of PET resin and aluminium. Sugar costs increased by
mid-single digits. The adverse impact from foreign currency
movements amounted to EUR66 million in the period, driven
predominantly by the Russian Rouble.
Comparable EBIT fell by 11.4% to EUR672.3 million taking
comparable EBIT margins up 20 basis points to 11.0%. Comparable
EBIT margins include a benefit from the change in accounting
treatment of our Russian Juice business. EBIT margin on a
like-for-like basis was 10.6%, down only 20 basis points compared
to prior-year EBIT margins. This strong performance is the result
of both short and long-term actions. Decisive action taken on
discretionary costs early in the crisis has allowed us to deliver
our targeted cost savings of EUR120 million in 2020. In addition,
many years of structural improvement in the cost base, efficiency
gains and shifting of fixed costs to variable ones where possible
have created a lean and resilient operating model, able to maintain
good profitability despite a high-single digit decline in
revenues.
On a segmental basis, comparable EBIT margins declined by 60
basis points to 9.6% in the Established Segment and by 210 basis
points to 8.7% in the Developing Segment. Comparable EBIT margins
expanded by 170bps to 13.0% in the Emerging Segment. On a
like-for-like basis Emerging segment EBIT margins reached 12.0%. On
a reported basis, we delivered EUR660.7 million of EBIT in the
period, an 7.6% decline on the prior year.
We implemented restructuring projects across all segments in the
full-year period, incurring EUR9.8 million in pre-tax restructuring
charges.
Net profit and free cash flow
Comparable net profit of EUR431.4 million and comparable basic
earnings per share of EUR1.185 were 17.4% and 17.5% lower than in
the prior-year period, respectively. Reported net profit and
reported basic earnings per share in the period were EUR414.9
million and EUR1.140, respectively.
Comparable taxes amounted to EUR174.0 million, representing a
tax rate of 28.7%, 290bps higher than the rate in the prior year.
This increase is due to certain one-off items that impacted the
year, as well as the settlement of the 2011-2019 Transfer Price tax
audit in Nigeria. 2
Financing costs amounted to EUR70.1 million in the year, EUR3.0
million higher compared to the prior-year period, in line with
expectations. The increase was driven by the change in the
accounting treatment of Multon in addition to lower deposit rates,
partially offset by lower interest rates on our bonds.
Free cash flow was EUR497.0 million, an increase of EUR54.4
million compared to the prior-year period, mainly driven by cash
generated from working capital of EUR108.3 million. Working capital
benefited from the phasing of payments of certain customers,
driving a strong improvement in receivables performance during Q4
which we expect to partly reverse in H1 2021.
Balance sheet
Our strong balance sheet and liquidity position continue to
support and allow investment in the business and inorganic
expansion potential. At the balance sheet date, the Group had cash
and cash equivalents and other financial assets of EUR1.3 billion,
an undrawn and available Revolving Credit Facility of EUR0.8
billion, as well as EUR0.8 billion available out of the EUR1.0
billion Commercial Paper Programme. None of these credit lines
carry any financial covenants and we have no further bond
maturities until November 2024.
Technical adjustments and the Bambi acquisition
Acquisition of Bambi
We cycled the acquisition of Bambi at the end of H1 2020, so as
of that point we started including Bambi's financials in our
like-for-like growth. The impact of Bambi on our reported numbers
in the first half of the year benefited our full-year volume and
FX-neutral revenue growth by 60bps and our full year comparable
EBIT by EUR13.1 million.
Accounting changes
From early May, the accounting treatment of our Russian Juice
business, which is undertaken jointly with The Coca-Cola Company,
has changed following its re-organisation. Without this change,
Group volume and FX-neutral revenue growth would have been 180bps
and 170 bps better respectively.
As of 1 January 2020, the Group elected to classify its share of
results from integral equity method investments within operating
profit.
Without the above accounting changes, comparable EBIT would have
been lower by EUR2.9 million. Please refer to notes 1 and 16 of the
condensed consolidated financial statements for further detail.
2 Please refer to the Group Financial Review notes and Note 6
for further detail.
Operational Review by Reporting Segment
Established markets
Full Year Change
2020 2019
Volume (m unit cases) 536.9 624.5 -14.0%
Net sales revenue (EUR m) 2,174.6 2,517.6 -13.6%
Net sales revenue per unit case (EUR) 4.05 4.03 0.5%
FX-neutral net sales revenue (EUR m) 2,174.6 2,531.0 -14.1%
FX-neutral net sales revenue per unit
case (EUR) 4.05 4.05 -0.1%
Operating profit (EBIT) (EUR m) 203.3 236.0 -13.9%
Comparable EBIT (EUR m) 209.0 256.2 -18.4%
EBIT margin (%) 9.3 9.4 -
Comparable EBIT margin (%) 9.6 10.2 -60bps
----------------------------------------- -------- -------- -------
-- Established markets volume declined by 14.0% in the full
year, driven mainly by the extended duration of the lockdowns in
several of the biggest countries as well as the higher exposure to
out-of-home sales relative to the other segments. Energy was the
best performing category with mid teens growth in the period,
followed by Sparkling with a low double-digit decline. The period
saw weaker performance in stills categories with Water declining in
the low twenties.
-- On a currency-neutral basis, net sales revenue per unit case
was stable at -0.1% in the year, helped by positive country and
category mix as well as pricing taken at the start of the year.
-- FX-neutral net sales revenue declined by 14.1%. Declines in
volume, package and channel mix were partially offset by
improvements in category and price mix. Net sales revenue decreased
by 13.6%, helped by the Swiss Franc strength in the period.
-- Volume in Italy was down 13.9%. Italy was the first of our
markets to enter lockdown at the start of the year and has high
exposure to the out-of-home channel. However, a return to growth in
the
at-home-channel as consumer behaviour adapted helped to protect
performance. Sparkling and Energy were the most resilient
categories.
-- Volume in Greece declined by 20.6% in the year, being one of
the hardest hit countries in the segment given its high exposure to
the out-of-home channel and tourism. Volume performance during Q4
saw a significant improvement despite cycling high
comparatives.
-- In Ireland, volume declined by 11.8%. While faced with
several lockdowns in the year, the country benefited from good
performance in the at-home channel.
-- In Switzerland, volume declined by 8.1%. Performance in the
country was supported by the relatively less restrictive measures
in place and easier comparatives during the prior year period.
Sparkling and Energy have been the best performing categories,
moving back to growth during the second half of the year.
-- Comparable operating profit in the Established segment
declined by 18.4% to EUR209.0 million. Comparable EBIT margin
declined by 60 basis points to 9.6%. Volume decline and lower price
mix more than offset lower input costs and operating expenses. On a
reported basis, operating profit was EUR203.3 million, 13.9% lower
compared to the prior-year period.
Developing markets
Full Year Change
2020 2019
Volume (m unit cases) 412.1 431.1 -4.4%
Net sales revenue (EUR m) 1,170.9 1,352.1 -13.4%
Net sales revenue per unit case (EUR) 2.84 3.14 -9.4%
FX-neutral net sales revenue (EUR m) 1,170.9 1,305.9 -10.3%
FX-neutral net sales revenue per unit case
(EUR) 2.84 3.03 -6.2%
Operating profit (EBIT) (EUR m) 97.0 139.0 -30.2%
Comparable EBIT (EUR m) 102.1 146.4 -30.3%
EBIT margin (%) 8.3 10.3 -200bps
Comparable EBIT margin (%) 8.7 10.8 -210bps
-------------------------------------------- -------- -------- --------
-- Developing markets volume fell by 4.4% in the year. The
segment is less exposed to the out-of-home channel as well as
tourism when compared to our Established markets, which supported
performance during the year. The energy and sparkling categories
performed best, with Energy in high teens growth and Sparkling
flattish in the year, helped by mid-single digit growth in Adult
Sparkling beverages. Stills' performance was weaker, with low to
mid-twenties declines in Water and Juice.
-- On a currency-neutral basis, net sales revenue per unit case
declined by 6.2%. This is the result of the negative impact that
the COVID-19 pandemic had on channel and package mix as well as the
strategic decision to take less pricing in some of these markets
compared to the previous years. Category mix was positive given the
better performance from Sparkling compared to Stills.
-- FX-neutral revenue declined by 10.3%, as volume, package,
channel and price mix declines were only partially offset by an
improvement in category mix. Net sales revenue fell by 13.4% in the
period, impacted by the Hungarian Forint and Polish Zloty
weakness.
-- Poland was the best performing country in the segment with
volumes up 3.0% in the year. Strong growth in Sparkling was led by
low- and no-sugar variants up over 40%. Polish growth was also
supported by growth from the at-home channel as well as the
country's relatively larger exposure to at home. During Q4 we saw
some stock-up activity by customers in anticipation of the sugar
tax that came into effect on the January 1st, 2021.
-- Volume in Hungary declined by 13.5% in the year, impacted by
a relatively late lifting of the restrictions compared to other
countries in the segment during the first wave, followed by a
second national lockdown in force since November.
-- In the Czech Republic, volume declined by 5.7%. Although the
country benefitted from an earlier lifting of the restrictions
during the first lockdown, the prolonged and stricter lockdown in
the second half of the year weighed on the full-year
performance.
-- The Developing markets segment delivered comparable operating
profit of EUR102.1 million, a 30.3% decline compared with last
year. Comparable operating profit margin for the segment decreased
by 210 basis points to 8.7%. Volume decline and lower price/mix
more than offset lower input costs and operating expenses. On a
reported basis, operating profit was EUR97.0 million, a decline of
30.2% compared to the prior year period.
Emerging markets
Full Year Change
2020 2019
Volume (m unit cases) 1,186.6 1,208.9 -1.8%
Net sales revenue (EUR m) 2,786.3 3,156.3 -11.7%
Net sales revenue per unit case (EUR) 2.35 2.61 -10.1%
FX-neutral net sales revenue (EUR m) 2,786.3 2,944.8 -5.4%
FX-neutral net sales revenue per unit case
(EUR) 2.35 2.44 -3.6%
Operating profit (EBIT) (EUR m) 360.4 340.3 5.9%
Comparable EBIT (EUR m) 361.2 356.1 1.4%
EBIT margin (%) 12.9 10.8 220bps
Comparable EBIT margin (%) 13.0 11.3 170bps
-------------------------------------------- -------- -------- -------
-- Emerging markets volumes declined by 1.8% or increased by
0.3% on a like-for-like basis. The segment's performance was driven
by Russia, Nigeria and Ukraine where a lower level of COVID
restrictions in place helped to maintain good growth momentum. On a
category level, Energy and Sparkling performed best with both
growing, while Water saw declines in the high-teens and Juice
declined by high single digits.
-- FX-neutral net sales revenue per case declined by 3.6%, or
3.1% on a like-for-like basis, impacted by the pricing investments
implemented in Nigeria in the last quarter of 2019, as well as
negative country mix due to good volume development in lower
revenue per case markets such as Nigeria and Ukraine.
-- FX-neutral revenues declined by 5.4%, or 2.8% on a
like-for-like basis. We saw declining volume, package, channel and
price mix while category mix improved due to the relative strength
of Sparkling and Energy. Net sales revenue fell by 11.7%, also
impacted by the weaker Russian Rouble and Nigerian Naira.
-- Russian Federation volumes declined by 10.4% or grew by 1.0%
on a like-for-like basis. Russia has a relatively low proportion of
revenue from the out-of-home channel and saw fewer restrictions in
place during the year. We continue to drive strong results from a
Revenue-Growth-Management approach that addresses both
affordability and premiumisation within the portfolio; this
delivered strong results in the sparkling category led by Adult
Sparkling and low- and no-sugar variants.
-- In Nigeria, the limited duration of the first lockdown and
virtually no restrictions imposed later in the year helped support
volumes. Volume grew 13.5% in the period with continued momentum
through the last quarter of the year despite a high comparative.
All categories grew double digits, with the exception of Water and
we have continued to invest in the market to increase capacity. Our
competitive position benefited from our fully operational
route-to-market, sophisticated customer segmentation provided by
Big Data and Advanced Analytics as well as successful price
investments implemented in 2019.
-- Volume in Romania declined by 8.9% in the year, as the
country experienced a long period of COVID-19 related restrictions
which extended into the second half of the year. The sparkling
category was broadly stable with Trademark Coke and Adult Sparkling
in growth.
-- In Ukraine, volume grew by 2.8%. This resilient performance
reflects the lower-than-average contribution from the out-of-home
channel in the country as well as growth in Sparkling and Energy
during the period.
-- The Emerging segment had comparable operating profit of
EUR361.2 million, an increase of 1.4% compared to last year,
leading to a 170 basis points increase in comparable operating
margin to 13.0%. The Bambi acquisition, as well as the change in
accounting treatment of our Russian Juice business and change in
classification of our share of results of integral equity method
investments, benefited the Emerging segment's EBIT margin by 100
bps. Volume growth, favourable category mix as well as lower input
costs and the decline in operating expenses more than offset
unfavourable price mix as well as a negative foreign exchange
impact. On a reported basis, operating profit was EUR360.4 million,
5.9% higher compared to the prior year.
Business Outlook
While the outlook for the global economy in 2021 remains
uncertain, we are encouraged by our resilient performance and share
gains in 2020.
We expect to see a strong FX-neutral revenue recovery in 2021 on
the back of gradual volume recovery against the COVID-19 impact in
2020, as well as price/mix recovery led by improved package mix and
pricing taken in relation to the Polish sugar tax. We plan to
increase marketing investments in 2021, to fuel this top-line
recovery.
We believe that the actions taken over several years to improve
our cost base will continue to benefit our margin resilience. We
expect to be able to have another year in which we achieve strong
cost control, which we will be able to adjust depending on the
trading environment, allowing us to manage our profitability.
We expect high-single digit input cost per unit case inflation
and that the negative impact of foreign currency on EBIT will be
higher in 2021 than in 2020.
With this in mind, we believe that we will be able to achieve a
small expansion in our EBIT margin versus 2020.
Looking further ahead, beverages continue to be a high-potential
industry and we see many growth opportunities within our evolving
brand portfolio and the markets we operate in. Therefore, we
believe that once the recovery is underway, the business can return
to the growth algorithm we set out at our Capital Markets Day in
2019, which was for FX-neutral revenue growth of 5-6%, with 20-40
basis points of EBIT margin expansion per year on average.
Technical guidance
Comparability of our top-line growth until May 2021 continues to
be impacted by the change in the accounting treatment of Multon
made in 2020. This change and its impact on full year performance
are summarised in the Supplementary Information section. It is
expected that the impact of this change in 2021 will be to remove
approximately 90 bps of growth from FX-neutral revenue and volume
growth.
We expect comparable EBIT margin in 2021 compared to 2020 to be
impacted by the following items:
1. The implementation of a sugar tax in Poland on January 1,
2021. We expect this tax to lead to an inflation in revenue, with
minimal net impact on Group EBIT and a negative impact on EBIT
margin of approximately 40 to 45 bps.
2. From January 1, 2021 the expected useful economic lives of
certain assets will change, positively impacting the annual
depreciation charge, and therefore positively impacting comparable
EBIT margin by approximately 40 to 45 bps.
3. We expect no significant impact, year over year, for the Multon accounting impact.
As a result, we expect no significant net impact on our
like-for-like EBIT margin movement, year over year, from the
factors noted above.
We remain focused on continuously improving operational
efficiencies in the business. For 2021, we have identified
restructuring initiatives of approximately EUR26 million. We expect
these initiatives to yield EUR10 million in annualised benefits
from 2021 onwards, while the initiatives already taken in 2020 and
those that will be taken in 2021 are expected to yield EUR34
million of total benefits in 2021.
We expect financing costs to be lower by around 10% compared to
2020, following completion of our refinancing in June 2020.
Considering the dynamics of the evolving mix of profitability in
our country portfolio, we expect our comparable effective tax rate
to be in the range of 25% and 27%.
Group Financial Review
Income statement Full Year
2020 2019 %
EUR million EUR million Change
--------------- ---------------
Volume (m unit cases) 2,135.6 2,264.5 -5.7%
Net sales revenue 6,131.8 7,026.0 -12.7%
Net sales revenue per unit case (EUR) 2.87 3.10 -7.5%
FX-neutral net sales revenue(1) 6,131.8 6,781.7 -9.6%
FX-neutral net sales revenue per unit
case (EUR)(1) 2.87 2.99 -4.1%
Cost of goods sold (3,810.3) (4,380.4) -13.0%
Comparable cost of goods sold(1) (3,808.7) (4,378.0) -13.0%
Gross profit 2,321.5 2,645.6 -12.3%
Comparable gross profit(1) 2,323.1 2,648.0 -12.3%
Operating expenses (1,682.2) (1,930.3) -12.9%
Comparable operating expenses(1) (1,672.4) (1,889.3) -11.5%
Share of results of integral equity method
investments(2) 21.4 - NM
Operating profit (EBIT)(2) 660.7 715.3 -7.6%
Comparable operating profit (EBIT)(1) 672.3 758.7 -11.4%
Adjusted EBITDA(1) 1,059.2 1,110.7 -4.6%
Comparable adjusted EBITDA(1) 1,070.8 1,152.9 -7.1%
Finance costs, net (70.1) (67.1) 4.5%
Share of results of equity method investments - 13.0 NM
Share of results of non-integral equity
method investments(2) 3.3 - NM
Tax (178.9) (173.2) 3.3%
Comparable tax(1) (174.0) (181.9) -4.3%
Net profit(3) 414.9 487.5 -14.9%
Comparable net profit(1,3) 431.4 522.2 -17.4%
Basic earnings per share (EUR) 1.140 1.340 -14.9%
Comparable basic earnings per share (EUR)(1) 1.185 1.436 -17.5%
--------------- --------------- ----------
(1) Refer to the ' Definitions and reconciliations of APMs'
section.
(2) Refer to the condensed consolidated income statement.
(3) Net Profit and comparable net profit refer to net profit and
comparable net profit respectively after tax attributable to owners
of the parent.
Net sales revenue declined by 12.7% in 2020, compared to the
prior year, driven by lower volume and negative package and channel
mix due to the impact of COVID-19 related measures to the
out-of-home consumption as well as unfavourable foreign currency
movements, which more than offset the favourable category mix and
pricing. On a currency-neutral basis, net sales revenue declined by
9.6% during 2020, compared to the prior year.
Comparable cost of goods sold and Cost of goods sold decreased
by 13.0% in 2020, compared to the prior year, mainly driven by the
volume decline and lower input costs, due to the decrease in cost
of PET and other raw materials, which more than offset a slight
increase in the cost of sugar.
Comparable operating expenses decreased by 11.5% in 2020,
compared to the prior year, mainly driven by lower volumes and our
focus on cost control. Operating expenses decreased by 12.9% in
2020, compared to the prior year, due to lower volumes, cost
control and lower restructuring costs.
Comparable operating profit declined by 11.4% in 2020, compared
to the prior year, driven by lower volume and net sales revenue,
due to the out-of-home consumption decline resulting from the
COVID-19 related measures, as well as unfavorable foreign currency
movements, which were only partially offset by lower input costs
and operating expenses, as well as the positive contribution from
the Bambi acquisition. Operating profit declined by 7.6% in 2020,
compared to the prior year, as volume and net sales revenue decline
as well as unfavorable foreign currency movements, more than offset
lower input costs and operating expenses, including restructuring
costs, as well as the positive contribution from the Bambi
acquisition.
Net finance costs increased by EUR3.0 million in 2020, compared
to the prior year, driven by the change in accounting treatment of
Multon, which resulted in higher interest expense, as well as lower
deposit rates, partially offset by lower interest rates on our
bonds.
On a comparable basis, the effective tax rate was 28.7% for 2020
and 25.8% for 2019. On a reported basis, the effective tax rate was
30.1% for 2020 and 26.2% for 2019. The Group's effective tax rate
varies depending on the mix of taxable profits by territory, the
non-deductibility of certain expenses, non-taxable income and other
one-off tax items across its territories.
In August 2020, Nigerian Bottling Company Ltd ("NBC"), the
Group's subsidiary in Nigeria, settled the additional tax assessed
by the Nigerian tax authorities ("FIRS") following the completion
of their income tax audit for the years 2005-2019 and transfer
pricing ("TP") audit for the years 2011-2019. The net impact to the
Tax line item in the income statement, following the utilisation of
provisions for uncertain tax positions, was EUR16.5 million, out of
which EUR7.2 million is attributable to the results of the TP
audit. This additional tax charge of EUR16.5 million resulted in a
2.8pp increase of the Group's effective tax rate on a reported
basis, for 2020.
NBC was audited by the FIRS with respect to TP for the first
time since the inception of the TP rules and principles in the
country. The TP audit focused on the transactions between NBC and
The Coca-Cola Company Group entities ("TCCC") over a 9-year period
(2011-2019). The FIRS challenged the prices of concentrate
purchased from and the charges for services provided by TCCC to
NBC. As a result, the FIRS adjusted NBC's profitability, increasing
its taxable base accordingly. The TP audit concluded with a
settlement between FIRS and NBC.
This increase of NBC's taxable base over this 9-year period
amounted to EUR195 million (Naira 90 billion) and resulted in the
elimination of accumulated capital allowances of EUR183 million
(Naira 84 billion). In addition, to the extent that the available
capital allowances were not sufficient to offset the full impact of
the tax adjustment in a certain year, a tax payment was required to
be made. Following the settlement, the total tax assessed by the
FIRS amounted to EUR62.7 million (Naira 28.6 billion), of which
EUR7.6 million (Naira 3.5 billion) was settled in cash and EUR55.1
million (Naira 25.1 billion) was settled through the elimination of
the deferred tax asset relating to the available capital
allowances.
The FIRS applied Nigerian TP rules and principles to assess tax
on a portion of the income earned by TCCC from its transactions
with NBC which, the FIRS determined, should have been subject to
taxation in Nigeria. The outcome of the TP audit and the additional
related tax that was assessed by the FIRS, is therefore not
associated with the operations of NBC. Consequently, we consider
that the income statement impact of this TP audit (net income
statement charge of EUR 7.2m after the utilisation of provisions
for uncertain tax positions) distorts users' understanding of the
Group's underlying financial performance for 2020 and therefore
have excluded it from the comparable after-tax results, by
reporting it under 'Other tax matters' for comparability purposes.
Adjusting for this TP audit charge, the Group's effective tax rate
on a comparable basis was 28.7% for 2020, an increase of 2.9pp year
on year.
Comparable net profit and net profit decreased by 17.4% and
14.9% respectively in 2020 compared to the prior year, driven by
operating profitability decline.
Balance Sheet
As at 31 December
2020 2019 Change
Assets EUR million EUR million EUR million
------------ ------------ ------------
Total non-current assets 5,046.0 5,137.7 -91.7
Total current assets 2,527.1 3,076.3 -549.2
Total assets 7,573.1 8,214.0 -640.9
Liabilities
Total current liabilities 2,026.2 2,667.2 -641.0
Total non-current liabilities 2,913.6 2,846.6 67.0
Total liabilities 4,939.8 5,513.8 -574.0
Equity
Owners of the parent 2,630.7 2,697.5 -66.8
Non-controlling interests 2.6 2.7 -0.1
Total equity 2,633.3 2,700.2 -66.9
Total equity and liabilities 7,573.1 8,214.0 -640.9
Net current assets 500.9 409.1 91.8
------------ ------------ ------------
Total non-current assets decreased by EUR91.7 million in 2020,
mainly due to currency translation and the elimination of
non-current deferred tax asset resulting from the Nigerian tax
audit, partially offset by fixed assets additions over depreciation
and the impact of the change in Multon's accounting treatment,
following its reorganisation. Net current assets increased by
EUR91.8 million in 2020 mainly as a result of the repayment of the
remaining bond which matured in June 2020 and lower investments in
financial assets, partially offset by increased cash and cash
equivalents. Total non-current liabilities increased by EUR67.0
million in 2020, mainly due to the partial drawdown of the Nigerian
property, plant and equipment related US dollar facility as well as
increased deferred tax liabilities.
Cash flow
Full Year
2020 2019 %
EUR million EUR million Change
------------- -------------
Net cash from operating activities(1) 961.5 926.2 3.8%
Capital expenditure(1) (464.5) (483.6) -3.9%
Free cash flow(1) 497.0 442.6 12.3%
------------- ------------- --------
(1) Refer to the 'Definitions and reconciliations of APMs'
section.
Net cash from operating activities increased by 3.8% or EUR35.3
million, in 2020, compared to the prior-year, mainly due to cash
generated from working capital movements.
Capital expenditure decreased by 3.9% in 2020, compared to the
prior year. In 2020, capital expenditure amounted to EUR464.5
million of which 56% was related to investment in production
equipment and facilities and 18% to the acquisition of marketing
equipment. In 2019, capital expenditure amounted to EUR483.6
million of which 53% was related to investment in production
equipment and facilities and 27% to the acquisition of marketing
equipment.
In 2020, free cash flow increased by 12.3% or EUR54.4 million,
compared to the prior year, driven by the increased cash from
operating activities and decreased capital expenditure.
Supplementary Information
Effective May 2020, following a re-organisation of Multon's
structure, the joint arrangement was reclassified from a joint
operation to a joint venture. Also, in H2 2020 we cycled the
acquisition of Bambi. As of 1 January 2020, the Group elected to
classify its share of results from integral equity method
investments within operating profit. The table below depicts these
impacts to the Group's growth compared to the prior year:
Net sales revenue per unit case
--------------------------------------------------------------------------------
2020 vs
2019 Volume FX-neutral Reported
Growth Total Excl. Incl. Total Excl. Incl. Total Excl. Incl.
(%) CCH Bambi Multon Like-for-like CCH Bambi Multon Like-for-like CCH Bambi Multon Like-for-like
Total
Group -5.7 -6.3 -3.9 -4.6 -4.1 -4.1 -4.1 -4.1 -7.5 -7.5 -7.4 -7.4
Established -14.0 -14.0 -14.0 -14.0 -0.1 -0.1 -0.1 -0.1 0.5 0.5 0.5 0.5
Developing -4.4 -4.4 -4.4 -4.4 -6.2 -6.2 -6.2 -6.2 -9.4 -9.4 -9.4 -9.4
Emerging -1.8 -3.0 1.5 0.3 -3.6 -3.9 -2.8 -3.1 -10.1 -10.3 -9.4 -9.6
------ ------ ------- -------------- ------ ------ ------- -------------- ------ ------ ------- --------------
Net sales revenue
2020 vs 2019 FX-neutral Reported
Total Excl. Incl. Total Excl. Incl.
Growth (%) CCH Bambi Multon Like-for-like CCH Bambi Multon Like-for-like
Total Group -9.6 -10.2 -7.9 -8.5 -12.7 -13.3 -11.1 -11.7
Established -14.1 -14.1 -14.1 -14.1 -13.6 -13.6 -13.6 -13.6
Developing -10.3 -10.3 -10.3 -10.3 -13.4 -13.4 -13.4 -13.4
Emerging -5.4 -6.8 -1.4 -2.8 -11.7 -13.1 -8.0 -9.4
------ ------- -------- -------------- ------ ------- -------- --------------
EBIT
----------------------------------------------------------------------------------------------------------
2020 vs 2019 Reported Comparable
Excl. Excl.
Share Share
Total Excl. Incl. of Total Excl. Incl. of
Growth (%) CCH Bambi Multon results(1) Like-for-like CCH Bambi Multon results(1) Like-for-like
Total Group -7.6 -9.5 -7.3 -8.3 -9.9 -11.4 -13.1 -11.1 -12.1 -13.5
Established -13.9 -13.9 -13.9 -13.3 -13.3 -18.4 -18.4 -18.4 -17.9 -17.9
Developing -30.2 -30.2 -30.2 -30.0 -30.0 -30.3 -30.3 -30.3 -30.1 -30.1
Emerging 5.9 2.1 6.6 4.0 0.3 1.4 -2.3 2.0 -0.4 -3.5
------ ------ ------- ----------- -------------- ------ ------ ------- ----------- --------------
(1) The impact to share of integral equity method investments
from the change in accounting treatment of Multon, is considered in
the context of the " Incl. Multon" adjustment.
The volume, net sales revenue and net sales revenue per unit
case on a reported and currency-neutral basis, are provided for
NARTD and Premium Spirits, as set out below:
Full Year %
NARTD 2020 2019 Change
Volume (m in unit cases)(1) 2,133.2 2,261.8 -5.7%
Net sales revenue (EUR m) 5,974.4 6,845.7 -12.7%
Net sales revenue per unit case (EUR) 2.80 3.03 -7.5%
FX-neutral net sales revenue (EUR m) 5,974.4 6,606.8 -9.6%
FX-neutral net sales revenue per unit case
(EUR) 2.80 2.92 -4.1%
Full Year %
Premium Spirits 2020 2019 Change
Volume (m in unit cases)(1) 2.421 2.722 -11.1%
Net sales revenue (EUR m) 157.4 180.3 -12.7%
Net sales revenue per unit case (EUR) 65.01 66.24 -1.8%
FX-neutral net sales revenue (EUR m) 157.4 174.9 -10.0%
FX-neutral net sales revenue per unit case
(EUR) 65.01 64.25 1.2%
Full Year %
Total 2020 2019 Change
Volume (m in unit cases)(1) 2,135.6 2,264.5 -5.7%
Net sales revenue (EUR m) 6,131.8 7,026.0 -12.7%
Net sales revenue per unit case (EUR) 2.87 3.10 -7.5%
FX-neutral net sales revenue (EUR m) 6,131.8 6,781.7 -9.6%
FX-neutral net sales revenue per unit case
(EUR) 2.87 2.99 -4.1%
(1) For NARTD volume, one unit case corresponds to approximately
5.678 litres or 24 servings, being a typically used measure of
volume. For Premium Spirits volume, one unit case also corresponds
to 5.678 litres. For biscuits volume, one unit case corresponds to
1 kilogram.
Definitions and reconciliations of Alternative Performance
Measures (" APMs")
1. Comparable APMs(1)
In discussing the performance of the Group, "comparable"
measures are used, which are calculated by deducting from the
directly reconcilable IFRS measures the impact of the Group's
restructuring costs, the mark-to-market valuation of the commodity
hedging activity, acquisition costs and certain other tax items,
which are collectively considered as items impacting comparability,
due to their nature. More specifically the following items are
considered as items that impact comparability:
1) Restructuring costs
Restructuring costs comprise costs arising from significant
changes in the way the Group conducts business, such as significant
supply chain infrastructure changes, outsourcing of activities and
centralisation of processes. These costs are included within the
income statement line "Operating expenses". However, they are
excluded from the comparable results in order for the user to
obtain a better understanding of the Group's operating and
financial performance achieved from underlying activity.
2) Commodity hedging
The Group has entered into certain commodity derivative
transactions in order to hedge its exposure to commodity price
risk. Although these transactions are economic hedging activities
that aim to manage our exposure to sugar, aluminium, gas oil and
PET price volatility, hedge accounting has not been applied in all
cases. In addition, the Group recognises certain derivatives
embedded within commodity purchase contracts that have been
accounted for as stand-alone derivatives and do not qualify for
hedge accounting. The fair value gains and losses on the
derivatives and embedded derivatives are immediately recognised in
the income statement in the cost of goods sold and operating
expenses line items. The Group's comparable results exclude the
gains or losses resulting from the mark-to-market valuation of
these derivatives to which hedge accounting has not been applied
(primarily PET) and embedded derivatives. These gains or losses are
reflected in the comparable results in the period when the
underlying transactions occur, to match the profit or loss to that
of the corresponding underlying transactions. We believe this
adjustment provides useful information related to the impact of our
economic risk management activities.
3) Acquisition costs
Acquisition costs comprise costs incurred to effect a business
combination such as finder's fees, advisory, legal, accounting,
valuation and other professional or consulting fees. These costs
are included within the income statement line "Operating expenses".
However, to the extent that they relate to business combinations
that have completed or are expected to be completed, they are
excluded from the comparable results in order for the user to
obtain a better understanding of the Group's operating and
financial performance achieved from underlying activity.
4) Other tax items
Other tax items represent the tax impact of (a) changes in
income tax rates affecting the opening balance of deferred tax
arising during the year and (b) certain tax related matters
selected based on their nature. Both (a) and (b) are excluded from
comparable after-tax results in order for the user to obtain a
better understanding of the Group's underlying financial
performance.
The Group discloses comparable performance measures to enable
users to focus on the underlying performance of the business on a
basis which is common to both periods for which these measures are
presented.
(1) Comparable APMs refer to comparable COGS, comparable Gross
Profit, comparable Operating expenses, comparable EBIT, comparable
EBIT margin, comparable Adjusted EBITDA, comparable tax, comparable
net profit and comparable EPS.
The reconciliation of comparable measures to the directly
related measures calculated in accordance with IFRS is as
follows:
Reconciliation of comparable financial indicators (numbers in
EUR million except per share data)
Full Year 2020
-------------------------------------------------------------------------------------
Gross Operating Adjusted Net EPS
COGS Profit expenses EBIT(1) EBITDA Tax Profit(2) (EUR)
As reported (3,810.3) 2,321.5 (1,682.2) 660.7 1,059.2 (178.9) 414.9 1.140
Restructuring
costs - - 9.8 10.0 10.0 (1.6) 8.4 0.022
Commodity hedging 1.6 1.6 - 1.6 1.6 (0.3) 1.3 0.004
Other tax items(3) - - - - - 6.8 6.8 0.019
-------
Comparable (3,808.7) 2,323.1 (1,672.4) 672.3 1,070.8 (174.0) 431.4 1.185
---------- -------- ---------- -------- --------- -------- ----------- -------
Full Year 2019
-------------------------------------------------------------------------------------
Gross Operating Adjusted Net EPS
COGS Profit expenses EBIT EBITDA Tax Profit(1) (EUR)
As reported (4,380.4) 2,645.6 (1,930.3) 715.3 1,110.7 (173.2) 487.5 1.340
Restructuring
costs - - 37.8 37.8 36.6 (8.6) 29.2 0.080
Commodity hedging 2.4 2.4 - 2.4 2.4 (0.5) 1.9 0.005
Acquisition costs - - 3.2 3.2 3.2 (0.5) 2.7 0.008
Other tax items - - - - - 0.9 0.9 0.003
Comparable (4,378.0) 2,648.0 (1,889.3) 758.7 1,152.9 (181.9) 522.2 1.436
---------- -------- ---------- -------- --------- -------- ----------- -------
(1) EBIT for 2020 includes EUR0.2 million from restructuring
within share of results of integral equity method investments
(2019: EURnil).
(2) Net Profit and comparable net profit refer to net profit and
comparable net profit respectively after tax attributable to owners
of the parent.
(3) Amount includes EUR7.2 million regarding net impact from the
settlement of transfer pricing audit for years 2011-2019 in Nigeria
(refer to Group Financial review section for relevant details).
Reconciliation of comparable EBIT per reportable segment (numbers
in EUR million)
Full Year 2020
---------------------------------------------------
Established Developing Emerging Consolidated
EBIT(1) 203.3 97.0 360.4 660.7
Restructuring costs 5.5 4.0 0.5 10.0
Commodity hedging 0.2 1.1 0.3 1.6
------------ ----------- --------- -------------
Comparable EBIT 209.0 102.1 361.2 672.3
Full Year 2019
---------------------------------------------------
Established Developing Emerging Consolidated
EBIT 236.0 139.0 340.3 715.3
Restructuring costs 20.0 6.7 11.1 37.8
Commodity hedging 0.2 0.5 1.7 2.4
Acquisition costs - 0.2 3.0 3.2
Comparable EBIT 256.2 146.4 356.1 758.7
------------ ----------- --------- -------------
(1) EBIT for 2020 includes EUR0.2 million from restructuring
within share of results of integral equity method investments
(2019: EURnil).
2. FX- neutral APMs
The Group also evaluates its operating and financial performance
on an FX-neutral basis (i.e. without giving effect to the impact of
variation of foreign currency exchange rates from year to
year).
FX-neutral APMs are calculated by adjusting prior period amounts
for the impact of exchange rates applicable to the current year.
FX-neutral measures enable users to focus on the performance of the
business on a basis which is not affected by changes in foreign
currency exchange rates applicable to the Group's operating
activities from year to year. The most common FX-neutral measures
used by the Group are:
1) FX-neutral net sales revenue and FX-neutral net sales revenue per unit case
FX-neutral net sales revenue and FX-neutral net sales revenue
per unit case are calculated by adjusting prior year net sales
revenue for the impact of changes in exchange rates applicable in
the current year.
2) FX-neutral comparable input costs per unit case
FX-neutral comparable input costs per unit case is calculated by
adjusting prior year commodity costs and more specifically, sugar,
resin, aluminium and fuel commodity costs, excluding commodity
hedging as described above; and other raw materials costs for the
impact of changes in exchange rates applicable in the current
year.
The calculations of the FX-neutral APMs and the reconciliation
to the most directly related measures calculated in accordance with
IFRS is as follows:
Reconciliation of FX-neutral net sales revenue per unit case
(numbers in EUR million otherwise stated)
Full Year 2020
---------------------------------------------------
Established Developing Emerging Consolidated
Net sales revenue 2,174.6 1,170.9 2,786.3 6,131.8
Currency impact - - - -
------------ ----------- --------- -------------
FX-neutral net sales revenue 2,174.6 1,170.9 2,786.3 6,131.8
Volume (m unit cases) 536.9 412.1 1,186.6 2,135.6
------------ ----------- --------- -------------
FX-neutral net sales revenue
per unit case (EUR) 4.05 2.84 2.35 2.87
------------ ----------- --------- -------------
Full Year 2019
---------------------------------------------------
Established Developing Emerging Consolidated
Net sales revenue 2,517.6 1,352.1 3,156.3 7,026.0
Currency impact 13.4 (46.2) (211.5) (244.3)
------------ ----------- --------- -------------
FX-neutral net sales revenue 2,531.0 1,305.9 2,944.8 6,781.7
Volume (m unit cases) 624.5 431.1 1,208.9 2,264.5
------------ ----------- --------- -------------
FX-neutral net sales revenue
per unit case (EUR) 4.05 3.03 2.44 2.99
------------ ----------- --------- -------------
Reconciliation of FX-neutral input costs per unit case (numbers
in EUR million unless otherwise stated)
Full Year Full Year
2020 2019
---------- ----------
Input costs 1,554.2 1,824.4
Commodity hedging (1.6) (2.4)
---------- ----------
Comparable input costs 1,552.6 1,822.0
Currency impact - (62.1)
---------- ----------
FX-neutral comparable input costs (EUR) 1,552.6 1,759.9
Volume (m unit cases) 2,135.6 2,264.5
---------- ----------
FX-neutral comparable input costs per unit case
(EUR) 0.73 0.78
---------- ----------
3. Other APMs
Adjusted EBITDA
Adjusted EBITDA is calculated by adding back to operating profit
the depreciation and impairment of property, plant and equipment,
the amortisation and impairment of intangible assets, the employee
share option and performance share costs and items, if any,
reported in line "Other non-cash items" of the consolidated cash
flow statement. Adjusted EBITDA is intended to provide useful
information to analyse the Group's operating performance excluding
the impact of operating non-cash items as defined above. It is also
intended to measure the level of financial leverage of the Group by
comparing Adjusted EBITDA to Net debt.
Adjusted EBITDA is not a measure of profitability and liquidity
under IFRS and has limitations, some of which are as follows:
Adjusted EBITDA does not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual commitments;
Adjusted EBITDA does not reflect changes in, or cash requirements
for, our working capital needs; although depreciation and
amortisation are non-cash charges, the assets being depreciated and
amortised will often have to be replaced in the future, and
Adjusted EBITDA does not reflect any cash requirements for such
replacements. Because of these limitations, Adjusted EBITDA should
not be considered as a measure of discretionary cash available to
us and should be used only as a supplementary APM.
Free cash flow
Free cash flow is an APM used by the Group and defined as cash
generated by operating activities after payments for purchases of
property, plant and equipment net of proceeds from sales of
property, plant and equipment and including principal repayments of
lease obligations. Free cash flow is intended to measure the cash
generation from the Group's business, based on operating
activities, including the efficient use of working capital and
taking into account its net payments for purchases of property,
plant and equipment. The Group considers the purchase and disposal
of property, plant and equipment as ultimately non--discretionary
since ongoing investment in plant, machinery, technology and
marketing equipment, including coolers, is required to support the
day--to--day operations and the Group's growth prospects. The Group
presents free cash flow because it believes the measure assists
users of the financial statements in understanding the Group's cash
generating performance as well as availability for interest
payment, dividend distribution and own retention. The free cash
flow measure is used by management for its own planning and
reporting purposes since it provides information on operating cash
flows, working capital changes and net capital expenditure that
local managers are most directly able to influence.
Free cash flow is not a measure of cash generation under IFRS
and has limitations, some of which are as follows: Free cash flow
does not represent the Group's residual cash flow available for
discretionary expenditures since the Group has debt payment
obligations that are not deducted from the measure; free cash flow
does not deduct cash flows used by the Group in other investing and
financing activities and free cash flow does not deduct certain
items settled in cash. Other companies in the industry in which the
Group operates may calculate free cash flow differently, limiting
its usefulness as a comparative measure.
Capital expenditure
The Group uses capital expenditure as an APM to ensure that the
cash spending is in line with its overall strategy for the use of
cash. Capital expenditure is defined as payments for purchases of
property, plant and equipment plus principal repayments of lease
obligations less proceeds from sale of property, plant and
equipment.
The following table illustrates how Adjusted EBITDA, Free Cash
Flow and Capital Expenditure are calculated:
Full Year Full Year
2020 2019
EUR million EUR million
------------ ------------
Operating profit (EBIT) 660.7 715.3
Depreciation and impairment of property, plant and
equipment, including right of use assets 388.1 384.8
Amortisation of intangible assets 0.9 0.7
Employee performance shares 9.5 9.9
------------ ------------
Adjusted EBITDA 1,059.2 1,110.7
Share of results of integral equity method investments (21.4) -
Gain on disposals of non-current assets (1.4) (6.2)
Cash generated from working capital movements 108.3 33.2
Tax paid (183.2) (211.5)
------------ ------------
Net cash from operating activities 961.5 926.2
------------ ------------
Payments for purchases of property, plant and equipment (419.2) (473.2)
Principal repayments of lease obligations (58.7) (45.5)
Proceeds from sales of property, plant and equipment 13.4 35.1
Capital expenditure (464.5) (483.6)
------------ ------------
Free cash flow 497.0 442.6
------------ ------------
Net debt
Net debt is an APM used by management to evaluate the Group's
capital structure and leverage. Net debt is defined as current
borrowings plus non-current borrowings less cash and cash
equivalents and financial assets (time deposits, treasury bills and
money market funds), as illustrated below:
As at
31 December 31 December
2020 2019
EUR million EUR million
------------ ------------
Current borrowings 315.2 761.8
Non-current borrowings 2,610.3 2,562.9
Other financial assets (92.9) (728.8)
Cash and cash equivalents (1,215.8) (823.0)
------------ ------------
Net debt 1,616.8 1,772.9
------------ ------------
Condensed consolidated financial statements for the six months
and the year ended 31 December 2020
Condensed consolidated income statement (unaudited)
Six months ended 31 December
2020 2019
---------------------------------- -----
Note EUR million EUR million
---------------------------------- ----- --------------- --------------
Net sales revenue 3 3,300.6 3,673.6
Cost of goods sold (2,028.2) (2,272.0)
---------------------------------- ----- --------------- --------------
Gross profit 1,272.4 1,401.6
Operating expenses 4 (831.4) (975.2)
Share of results of integral
equity method investments 1 16.8 -
---------------------------------- ----- --------------- --------------
Operating profit 3 457.8 426.4
Finance costs, net 5 (33.9) (34.3)
Share of results of equity
method investments - 8.3
Share of results of non-integral
equity method investments 1 2.8 -
---------------------------------- ----- --------------- --------------
Profit before tax 426.7 400.4
Tax 6 (135.8) (107.6)
---------------------------------- ----- --------------- --------------
Profit after tax 290.9 292.8
---------------------------------- ----- --------------- --------------
Attributable to:
Owners of the parent 290.9 292.4
Non-controlling interests - 0.4
---------------------------------- ----- --------------- --------------
290.9 292.8
---------------------------------- ----- --------------- --------------
Basic earnings per share (EUR) 7 0.80 0.81
Diluted earnings per share
(EUR) 7 0.80 0.80
Condensed consolidated statement of comprehensive income
(unaudited)
Six months ended 31
December
2020 2019
---------------------------------------------------------
EUR million EUR million
--------------------------------------------------------- ------------ ------------
Profit after tax 290.9 292.8
Other comprehensive income:
Items that may be subsequently reclassified to
income
statement:
Cost of hedging - (2.2)
Net gain of cash flow hedges 18.3 3.2
Foreign currency translation (116.2) 45.7
Share of other comprehensive (loss) / income
of equity method
investments (31.3) 0.3
Income tax relating to items that may be subsequently
reclassified
to income statement (2.7) 0.6
--------------------------------------------------------- ------------ ------------
(131.9) 47.6
Items that will not be subsequently reclassified
to income
statement:
Valuation gain on equity investments at fair
value through other
comprehensive income 0.1 -
Actuarial gains 10.8 6.6
Income tax relating to items that will not be
subsequently
reclassified to income statement (2.3) (2.1)
8.6 4.5
--------------------------------------------------------- ------------ ------------
Other comprehensive (loss) / income for the period,
net of tax (123.3) 52.1
--------------------------------------------------------- ------------ ------------
Total comprehensive income for the period 167.6 344.9
--------------------------------------------------------- ------------ ------------
Total comprehensive income attributable to:
Owners of the parent 167.6 344.5
Non-controlling interests - 0.4
167.6 344.9
--------------------------------------------------------- ------------ ------------
Condensed consolidated income statement (unaudited)
Year ended 31 December
2020 2019
----------------------------------------- -----
Note EUR million EUR million
----------------------------------------- ----- ------------ ------------
Net sales revenue 3 6,131.8 7,026.0
Cost of goods sold (3,810.3) (4,380.4)
----------------------------------------- ----- ------------ ------------
Gross profit 2,321.5 2,645.6
Operating expenses 4 (1,682.2) (1,930.3)
Share of results of integral equity
method investments 1 21.4 -
----------------------------------------- ----- ------------ ------------
Operating profit 3 660.7 715.3
Finance costs, net 5 (70.1) (67.1)
Share of results of equity method
investments - 13.0
Share of results of non-integral equity
method investments 1 3.3 -
----------------------------------------- ----- ------------ ------------
Profit before tax 593.9 661.2
Tax 6 (178.9) (173.2)
----------------------------------------- ----- ------------ ------------
Profit after tax 415.0 488.0
----------------------------------------- ----- ------------ ------------
Attributable to:
Owners of the parent 414.9 487.5
Non-controlling interests 0.1 0.5
----------------------------------------- ----- ------------ ------------
415.0 488.0
----------------------------------------- ----- ------------ ------------
Basic earnings per share (EUR) 7 1.14 1.34
Diluted earnings per share (EUR) 7 1.14 1.33
Condensed consolidated statement of comprehensive income
(unaudited)
Year ended 31 December
2020 2019
---------------------------------------------------------
EUR million EUR million
--------------------------------------------------------- ------------ ------------
Profit after tax 415.0 488.0
Other comprehensive income:
Items that may be subsequently reclassified to
income
statement:
Cost of hedging (2.2) (11.1)
Net gain of cash flow hedges 22.7 2.5
Foreign currency translation (254.9) 123.4
Share of other comprehensive (loss) / income
of equity method
investments (25.4) 0.7
Income tax relating to items that may be subsequently
reclassified
to income statement (2.4) 1.4
--------------------------------------------------------- ------------ ------------
(262.2) 116.9
Items that will not be subsequently reclassified
to income
statement:
Valuation (loss) / gain on equity investments
at fair value through other
comprehensive income (0.2) 0.2
Actuarial losses (12.5) (17.0)
Income tax relating to items that will not be
subsequently
reclassified to income statement 2.0 1.8
(10.7) (15.0)
--------------------------------------------------------- ------------ ------------
Other comprehensive (loss) / income for the year,
net of tax (272.9) 101.9
--------------------------------------------------------- ------------ ------------
Total comprehensive income for the year 142.1 589.9
--------------------------------------------------------- ------------ ------------
Total comprehensive income attributable to:
Owners of the parent 142.0 589.4
Non-controlling interests 0.1 0.5
142.1 589.9
--------------------------------------------------------- ------------ ------------
Condensed consolidated balance sheet (unaudited)
As at 31 December
2020 2019
-------------------------------------
Note EUR million EUR million
------------------------------------- ----- ----------------- -----------------
Assets
Intangible assets 8 1,986.1 2,105.4
Property, plant and equipment 8 2,616.6 2,742.2
Other non-current assets 443.3 290.1
------------------------------------- ----- ----------------- -----------------
Total non-current assets 5,046.0 5,137.7
------------------------------------- ----- ----------------- -----------------
Inventories 417.6 488.1
Trade, other receivables and assets 787.1 1,029.7
Other financial assets 11 106.6 734.9
Cash and cash equivalents 11 1,215.8 823.0
------------------------------------- ----- ----------------- -----------------
2,527.1 3,075.7
Assets classified as held for sale - 0.6
------------------------------------- ----- ----------------- -----------------
Total current assets 2,527.1 3,076.3
------------------------------------- ----- ----------------- -----------------
Total assets 7,573.1 8,214.0
------------------------------------- ----- ----------------- -----------------
Liabilities
Borrowings 11 315.2 761.8
Other current liabilities 1,711.0 1,905.4
------------------------------------- ----- ----------------- -----------------
Total current liabilities 2,026.2 2,667.2
------------------------------------- ----- ----------------- -----------------
Borrowings 11 2,610.3 2,562.9
Other non-current liabilities 303.3 283.7
------------------------------------- ----- ----------------- -----------------
Total non-current liabilities 2,913.6 2,846.6
------------------------------------- ----- ----------------- -----------------
Total liabilities 4,939.8 5,513.8
------------------------------------- ----- ----------------- -----------------
Equity
Owners of the parent 2,630.7 2,697.5
Non-controlling interests 2.6 2.7
------------------------------------- ----- ----------------- -----------------
Total equity 2,633.3 2,700.2
------------------------------------- ----- ----------------- -----------------
Total equity and liabilities 7,573.1 8,214.0
------------------------------------- ----- ----------------- -----------------
Condensed consolidated statement of changes in equity
(unaudited)
Attributable to owners of the parent
Share Share Group Treasury Exchange Other Retained Total
capital premium Reorganisation shares equalisation reserves earnings Total Non-controlling equity
EUR EUR reserve EUR reserve EUR EUR EUR interests EUR
million million EUR million million EUR million million million million EUR million million
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
Balance as at 1
January
2019 2,021.2 4,547.9 (6,472.1) (184.1) (1,088.8) 269.0 4,018.0 3,111.1 5.3 3,116.4
Shares issued to
employees
exercising
stock
options (note
12) 8.0 13.4 - - - - - 21.4 - 21.4
Share-based
compensation: -
Performance
shares - - - - - 9.9 - 9.9 - 9.9
Cancellation of
shares (18.4) (74.1) - 92.5 - - - - - -
Appropriation of
reserves
(note 12) - - - 27.9 - (27.5) (0.4) - - -
Movement of
treasury
shares (note
12) - - - (106.1) - - - (106.1) - (106.1)
Acquisition of
shares
held by
non-controlling
interests
(note 15) - - - - - - (7.0) (7.0) (2.5) (9.5)
Dividends (note
14) - (941.9) - - - - 8.8 (933.1) (0.6) (933.7)
Transfer of cash
flow
hedge reserve,
including cost
of
hedging
to
inventories,
net
of tax (1) - - - - - 11.9 - 11.9 - 11.9
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
2,010.8 3,545.3 (6,472.1) (169.8) (1,088.8) 263.3 4,019.4 2,108.1 2.2 2,110.3
Profit for the
year,
net of tax - - - - - - 487.5 487.5 0.5 488.0
Other
comprehensive
income
for the year,
net
of tax - - - - 124.1 (7.0) (15.2) 101.9 - 101.9
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
Total
comprehensive
income
for the year,
net
of tax(2) - - - - 124.1 (7.0) 472.3 589.4 0.5 589.9
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
Balance as at 31
December
2019 2,010.8 3,545.3 (6,472.1) (169.8) (964.7) 256.3 4,491.7 2,697.5 2.7 2,700.2
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
(1) The amount included in other reserves of EUR11.9 million
loss for 2019 represents the cash flow hedge reserve, including
cost of hedging, transferred to inventory of EUR15.1 million loss,
and the deferred tax income thereof amounting to EUR3.2
million.
(2) The amount included in the exchange equalisation reserve of
EUR124.1 million gain for 2019 represents the exchange gain
attributed to the owners of the parent, primarily related to the
Russian Rouble but also the Swiss Franc and Ukrainian Hryvnia,
including EUR0.7 million gain relating to share of other
comprehensive income of equity method investments.
The amount of other comprehensive income net of tax included in
other reserves of EUR7.0 million loss for 2019 consists of gain on
valuation of equity investments at fair value through other
comprehensive income of EUR0.2 million, cash flow hedges loss of
EUR8.6 million, and the deferred tax income thereof amounting to
EUR1.4 million.
The amount of EUR472.3 million gain attributable to owners of
the parent comprises profit for the year of EUR487.5 million plus
actuarial losses of EUR17.0 million, minus deferred tax income of
EUR1.8 million.
The amount of EUR0.5 million gain included in non-controlling
interests for 2019 represents the share of non-controlling
interests in profit for the year.
Condensed consolidated statement of changes in equity
(unaudited)
Attributable to owners of the parent
Share Share Group Treasury Exchange Other Retained Total
capital premium Reorganisation shares equalisation reserves earnings Total Non-controlling equity
EUR EUR reserve EUR reserve EUR EUR EUR interests EUR
million million EUR million million EUR million million million million EUR million million
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
Balance as at 1
January
2020 2,010.8 3,545.3 (6,472.1) (169.8) (964.7) 256.3 4,491.7 2,697.5 2.7 2,700.2
Shares issued to
employees
exercising
stock
options (note
12) 3.6 4.0 - - - - - 7.6 - 7.6
Share-based
compensation:
Performance
shares - - - - - 9.5 - 9.5 - 9.5
Appropriation of
reserves
(note 12) - - - 14.3 - (13.9) (0.4) - - -
Dividends (note
14) - (227.9) - - - - 2.2 (225.7) (0.2) (225.9)
Transfer of cash
flow
hedge reserve,
including cost
of
hedging to
inventories,
net
of tax(3) - - - - - (0.2) - (0.2) - (0.2)
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
2,014.4 3,321.4 (6,472.1) (155.5) (964.7) 251.7 4,493.5 2,488.7 2.5 2,491.2
Profit for the
year
net of tax - - - - - - 414.9 414.9 0.1 415.0
Other
comprehensive
loss
for the year,
net
of tax - - - - (277.4) 15.0 (10.5) (272.9) - (272.9)
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
Total
comprehensive
income
for the year,
net
of tax(4) - - - - (277.4) 15.0 404.4 142.0 0.1 142.1
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
Balance as at 31
December
2020 2,014.4 3,321.4 (6,472.1) (155.5) (1,242.1) 266.7 4,897.9 2,630.7 2.6 2,633.3
----------------- -------- -------- --------------- --------- ------------- --------- --------- --------- ---------------- --------
(3) The amount included in other reserves of EUR0.2 million gain
for 2020 represents the cash flow hedge reserve, including cost of
hedging, transferred to inventory of EUR0.1 million loss, and the
deferred tax income thereof amounting to EUR0.3 million.
(4) The amount included in the exchange equalisation reserve of
EUR277.4 million loss for 2020 represents the exchange loss
attributed to the owners of the parent, primarily related to the
Nigerian Naira and the Russian Rouble, including EUR22.5 million
loss relating to the share of other comprehensive income of equity
methods investments.
The amount of other comprehensive income net of tax included in
other reserves of EUR15.0 million gain for 2020 consists of loss on
valuation of equity investments at fair value through other
comprehensive income of EUR0.2 million, cash flow hedges gain of
EUR20.5 million, share of other comprehensive income of equity
method investments of EUR2.9 million loss and the deferred tax
expense thereof amounting to EUR2.4 million.
The amount of EUR404.4 million gain attributable to owners of
the parent comprises profit for the period of EUR414.9 million plus
actuarial losses of EUR12.5 million minus deferred tax income of
EUR2.0 million.
The amount of EUR0.1 million gain included in non-controlling
interests for 2020 represents the share of non-controlling
interests in profit for the year.
Condensed consolidated cash flow statement (unaudited)
Year ended 31 December
Note 2020 2019
------------------------------------------------ -----
EUR million EUR million
------------------------------------------------ ----- ------------------ -----------------
Operating activities
Profit after tax for the period 415.0 488.0
Finance costs, net 5 70.1 67.1
Share of results of equity method investments - (13.0)
Share of results of non-integral equity
method investments 1 (3.3) -
Tax charged to the income statement 178.9 173.2
Depreciation and impairment of property,
plant and equipment 388.1 384.8
Employee performance shares 9.5 9.9
Amortisation of intangible assets 8 0.9 0.7
------------------------------------------------ ----- ------------------ -----------------
1,059.2 1,110.7
Share of results of integral equity-method
investments 1 (21.4) -
Gain on disposals of non-current assets (1.4) (6.2)
Decrease in inventories 9.4 14.2
Decrease/ (increase) in trade and other
receivables 178.5 (18.0)
(Decrease)/ increase in trade and other
payables (79.6) 37.0
Tax paid (183.2) (211.5)
Net cash inflow from operating activities 961.5 926.2
------------------------------------------------ ----- ------------------ -----------------
Investing activities
Payments for purchases of property, plant
and equipment (419.2) (473.2)
Proceeds from sales of property, plant
and equipment 13.4 35.1
Payments for business combinations, net
of cash acquired 15 - (138.2)
Payment for acquisition of equity-method
investment 15 - (42.5)
Net payment for acquisition of integral
equity-method investment 16 (0.5) -
Net receipts from integral equity-method
investments 17 27.1 -
Payment for acquisition of non-integral
equity-method investment (2.4) -
Net receipts from non-integral equity-method
investments 17 1.3 -
Joint arrangement reclassification 16 (13.1) -
Net receipts from equity investments - 8.9
Net proceeds from / (payments for) investments
in financial assets at
amortised cost 264.4 (113.4)
Net proceeds from / (payments for) investments
in financial assets at
fair value through profit or loss 370.4 (337.3)
Loans to related parties (2.5) -
Interest received 0.2 5.9
Proceeds from loans - 5.8
Net cash inflow / (outflow) from investing
activities 239.1 (1,048.9)
------------------------------------------------ ----- ------------------ -----------------
Financing activities
Proceeds from shares issued to employees,
exercising stock options 12 7.6 21.4
Purchase of shares from non-controlling
interests 15 - (9.5)
Purchase of own shares 12 - (192.8)
Proceeds from borrowings 211.8 1,840.0
Repayments of borrowings (655.8) (372.2)
Principal repayments of lease obligations (58.7) (45.5)
Dividends paid to owners of the parent (225.7) (933.1)
Dividends paid to non-controlling interests (0.2) (0.6)
Payments for settlement of derivatives
regarding financing activities (1.1) (8.3)
Interest paid (64.7) (71.8)
Net cash (outflow) / inflow from financing
activities (786.8) 227.6
------------------------------------------------ ----- ------------------ -----------------
Net increase in cash and cash equivalents 413.8 104.9
------------------------------------------------ ----- ------------------ -----------------
Movement in cash and cash equivalents
Cash and cash equivalents at 1 January 823.0 712.3
Net increase in cash and cash equivalents 426.9 104.9
Joint arrangement reclassification (13.1) -
Effect of changes in exchange rates (21.0) 5.8
------------------------------------------------ ----- ------------------ -----------------
Cash and cash equivalents at the end
of the year 1,215.8 823.0
------------------------------------------------ ----- ------------------ -----------------
The accompanying notes form an integral part of these condensed
consolidated financial statements
Selected explanatory notes to the condensed consolidated
financial statements (unaudited)
1. Accounting policies and basis of preparation
Basis of preparation
These condensed consolidated financial statements are prepared
in accordance with International Financial Reporting Standards
('IFRS') as issued by the International Accounting Standards Board
('IASB') applicable to Financial Reporting ('IAS 34'). These
condensed consolidated financial statements do not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
annual consolidated financial statements as at 31 December
2019.
COVID-19 considerations
The outbreak of the COVID-19 global pandemic during the year has
been an unprecedented event that, in varying degrees, has impacted
people around the world and created, and continues to create, a
high degree of uncertainty as to future financial performance of
many companies. The implications of this, and particularly the
implications of the enforced lockdowns in almost all of our markets
during the year and the related impact on the Group's trading, have
been considered by the Directors in assessing the ability of the
Group to continue trading as a going concern. As the COVID-19
lockdown restrictions ease, the Group's markets are expected to
resume their economic activities.
As part of the consideration of whether to adopt the going
concern basis in preparing the financial statements, management
reviewed a range of scenarios and forecasts. The assumptions have
been modelled on the estimated potential impact and plausible
severe scenarios, along with the Group's proposed responses as a
result of the COVID-19 pandemic. Following the assessment based on
a quantitative viability exercise and the performance of various
stress tests, the Group continues to adopt the going concern basis
in preparing the condensed consolidated financial statements.
The Group has considered the impact of the COVID-19 pandemic on
the condensed consolidated financial statements, including critical
accounting estimates and judgements as detailed in note 5 of the
2019 consolidated financial statements of the Group. Relevant
disclosures have been included where appropriate, refer to note 8
for impairment testing of goodwill and indefinite-lived intangible
assets, note 9 for financial risk management considerations and
note 10 for trade receivables analysis.
Accounting policies
The accounting policies used in the preparation of the condensed
consolidated financial statements of Coca-Cola HBC AG ('Coca-Cola
HBC', the 'Company' or the 'Group') are consistent with those used
in the 2019 annual financial statements , except for the adoption
of new and amended accounting standards effective as of 1 January
2020 and the Group's voluntary change in accounting policy
regarding the presentation of its share of results from equity
method investments.
The Group has not early adopted any standard, interpretation or
amendment that has been issued but is not yet effective.
New and amended standards adopted by the Group
A number of amendments to the standards became applicable as of
1 January 2020 and were adopted by the Group. The Group did not
have to change its accounting policies or make retrospective
adjustments as a result of adopting these amendments.
Amendments to IFRS 3, Definition of a Business: The amendments
to IFRS 3 clarify that to be considered a business, an integrated
set of activities and assets must include, at a minimum, an input
and a substantive process that together significantly contribute to
the ability to create output. Furthermore, the amendments clarify
that a business can exist without including all of the inputs and
processes needed to create outputs. These amendments had no impact
on these condensed consolidated financial statements of the Group
but may impact future periods should the Group enter into any
business combinations.
Amendments to IFRS 7, IFRS 9 and IAS 39, Interest Rate Benchmark
Reform Phase 1: The amendments provide a number of reliefs, which
apply to all hedging relationships that are directly affected by
interest rate benchmark reform. A hedging relationship is affected
if the reform gives rise to uncertainties about the timing and or
amount of benchmark-based cash flows of the hedged item or the
hedging instrument. These amendments had no impact on these
condensed consolidated financial statements of the Group as it does
not have any interest rate hedge relationships.
Amendments to IAS 1 and IAS 8 Definition of Material: The
amendments provide a new definition of material that states
"information is material if omitting, misstating or obscuring it
could reasonably be expected to influence decisions that the
primary users of general purpose financial statements make on the
basis of those financial statements, which provide financial
information about a specific reporting entity." The amendments
clarify that materiality will depend on the nature or magnitude of
information, either individually or in combination with other
information, in the context of the financial statements. A
misstatement of information is material if it could reasonably be
expected to influence decisions made by the primary users. These
amendments had no impact on these condensed consolidated financial
statements .
Conceptual Framework for Financial Reporting issued on 29 March
2018 : The Conceptual Framework is not a standard, and none of the
concepts contained therein override the concepts or requirements in
any standard. The purpose of the Conceptual Framework is to assist
the IASB in developing standards, to help preparers develop
consistent accounting policies where there is no applicable
standard in place and to assist all parties to understand and
interpret the standards. The revised Conceptual Framework includes
some new concepts, provides updated definitions and recognition
criteria for assets and liabilities and clarifies some important
concepts. These amendments had no impact on these condensed
consolidated financial statements.
Other amendments issued but not yet effective and not early
adopted by the Group
- Interest Rate Benchmark Reform Phase 2 - Amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16;
- COVID-19-Related Rent Concessions - Amendments to IFRS 16;
- Property, Plant and Equipment: Proceeds before Intended Use - Amendments to IAS 16;
- Onerous Contracts - Cost of Fulfilling a Contract - Amendments to IAS 37;
- Classification of Liabilities as Current or Non-current - Amendments to IAS 1;
- Reference to the Conceptual Framework - Amendments to IFRS 3; and
- Annual Improvements to IFRS Standards 2018-2020.
The above amendments are not expected to have a significant
impact on the consolidated financial statements of the Group.
Change in accounting policy
The Group re-assessed its presentation of its share of results
of equity method investments. The Group had previously presented
its share of results from all equity method investments in a single
line after operating profit. As of 1 January 2020, the Group
elected to change the classification of its investments in joint
ventures and associates to integral and non-integral investments
and present its share of results from integral equity method
investments within operating profit.
Integral investments in joint ventures and associates are those
which are considered to be part of the Group's core operations and
strategy; therefore, including the Group's share of results from
integral equity method investments within operating profit better
reflects the relevance of their underlying activities to the Group.
The share of results of non-integral equity method investments
(i.e. investments that are not considered to be part of the Group's
core operations and strategy) continue to be presented below
operating profit. Furthermore, as of 1 January 2020 the Group
presents cash flows in respect of its investments in integral and
non-integral associates and joint ventures separately within
investing activities, to reflect the distinction in the income
statement.
For 2019 the share of results of equity method investments
amounted to EUR13.0 million of which EUR8.5 million was
attributable to integral equity method investments and EUR4.5
million to non-integral equity method investments. As the amounts
are not material, comparatives have not been restated.
2. Foreign currency and translation
The Group's reporting currency is the Euro (EUR). Coca-Cola HBC
translates the income statements of foreign operations to the Euro
at average exchange rates and the balance sheets at the closing
exchange rates at 31 December. The principal exchange rates used
for translation purposes in respect of one Euro are:
Average rate for the year
ended Closing rate as at
31 December
2020 31 December 2019 31 December 2020 31 December 2019
------------------- ------------ ----------------- ----------------- -----------------
US Dollar 1.14 1.12 1.22 1.12
UK Sterling 0.89 0.88 0.91 0.85
Polish Zloty 4.44 4.30 4.54 4.26
Nigerian Naira 435.06 405.07 480.68 406.66
Hungarian Forint 350.65 325.10 364.83 330.46
Swiss Franc 1.07 1.11 1.08 1.09
Russian Rouble 82.23 72.54 90.55 69.43
Romanian Leu 4.84 4.74 4.88 4.79
Ukrainian Hryvnia 30.66 29.03 34.64 25.81
Czech Koruna 26.45 25.67 26.21 25.46
Serbian Dinar 117.58 117.87 117.57 117.55
------------------- ------------ ----------------- ----------------- -----------------
3. Segmental analysis
The Group has essentially one business, being the production,
sale and distribution of ready-to-drink, primarily non-alcoholic,
beverages. The Group operates in 28 countries which are aggregated
in reportable segments as follows:
Established markets: Austria, Cyprus, Greece, Italy, Northern Ireland, the Republic of Ireland and Switzerland.
Developing markets: Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia.
Emerging markets: Armenia, Belarus, Bosnia and Herzegovina, Bulgaria, Moldova, Montenegro, Nigeria, North
Macedonia,
Romania, the Russian Federation, Serbia (including the Republic of Kosovo) and Ukraine.
a) Volume and net sales revenue
The Group sales volume in million unit cases (1) was as
follows:
Six months ended 31 December Year ended 31 December
2020 2019 2020 2019
-------------- --------------- -------------- ------------ -----------
Established 291.6 321.5 536.9 624.5
Developing 222.4 222.9 412.1 431.1
Emerging 631.1 629.7 1,186.6 1,208.9
Total volume 1,145.1 1,174.1 2,135.6 2,264.5
-------------- --------------- -------------- ------------ -----------
(1) One unit case corresponds to approximately 5.678 litres or
24 servings, being a typically used measure of volume. For biscuits
volume, one unit case corresponds to 1 kilogram. Volume data is
derived from unaudited operational data.
Net sales revenue per reportable segment for the six months and
the years ended 31 December is presented below:
Six months ended 31 December Year ended 31 December
2020 2019 2020 2019
EUR million EUR million EUR million EUR million
------------------------- --------------- -------------- ------------ ------------
Established 1,188.7 1,279.9 2,174.6 2,517.6
Developing 650.7 710.4 1,170.9 1,352.1
Emerging 1,461.2 1,683.3 2,786.3 3,156.3
Total net sales revenue 3,300.6 3,673.6 6,131.8 7,026.0
------------------------- --------------- -------------- ------------ ------------
In addition to non-alcoholic ready-to-drink beverages ("NARTD"),
the Group sells and distributes Premium Spirits. An analysis of
volume and net sales revenue per product type for the six months
and the years ended 31 December is presented below :
Six months ended 31 December Year ended 31 December
2020 2019 2020 2019
EUR million EUR million EUR million EUR million
------------------------- --------------- -------------- ------------ ------------
Volume in million unit
cases(1)
NARTD(2) 1,143.6 1,172.6 2,133.2 2,261.8
Premium spirits 1.5 1.5 2.4 2.7
Total volume 1,145.1 1,174.1 2,135.6 2,264.5
------------------------- --------------- -------------- ------------ ------------
Net sales revenue (EUR
million)
NARTD 3,202.4 3,569.7 5,974.4 6,845.7
Premium spirits 98.2 103.9 157.4 180.3
------------------------- --------------- -------------- ------------ ------------
Total net sales revenue 3,300.6 3,673.6 6,131.8 7,026.0
------------------------- --------------- -------------- ------------ ------------
(1) One unit case corresponds to approximately 5.678 litres or
24 servings, being a typically used measure of volume. For Premium
Spirits volume, one unit case also corresponds to 5.678 litres. For
biscuits volume, one unit case corresponds to 1 kilogram. Volume
data is derived from unaudited operational data.
(2) NARTD: non-alcoholic, ready-to-drink beverages .
b) Other income statement items
Six months ended 31 December Year ended 31 December
2020 2019 2020 2019
EUR million EUR million EUR million EUR million
------------------------------- --------------- -------------- ------------ ------------
Operating profit
Established 156.7 143.8 203.3 236.0
Developing 80.9 89.5 97.0 139.0
Emerging 220.2 193.1 360.4 340.3
Total operating profit 457.8 426.4 660.7 715.3
------------------------------- --------------- -------------- ------------ ------------
Reconciling items
Finance costs, net (33.9) (34.3) (70.1) (67.1)
Tax (135.8) (107.6) (178.9) (173.2)
Share of results of
equity
method investments - 8.3 - 13.0
Share of results of
non-integral equity
method investments 2.8 - 3.3 -
Non-controlling interests - (0.4) (0.1) (0.5)
-------------------------------
Profit after tax attributable
to owners of the parent 290.9 292.4 414.9 487.5
------------------------------- --------------- -------------- ------------ ------------
4. Restructuring expenses
As part of the effort to optimise its cost base and sustain
competitiveness in the marketplace, the Company undertakes
restructuring initiatives. Restructuring concerns mainly employee
costs, which are included within operating expenses. Restructuring
expenses per reportable segment for the six months and years ended
31 December are presented below:
Six months ended 31 December Year ended 31 December
2020 2019 2020 2019
EUR million EUR million EUR million EUR million
--------------------- --------------- -------------- ------------ ------------
Established 4.7 0.4 5.5 20.0
Developing 4.0 3.3 4.0 6.7
Emerging 0.3 3.9 0.3 11.1
Total restructuring
costs 9.0 7.6 9.8 37.8
--------------------- --------------- -------------- ------------ ------------
5. Finance costs, net
Six months ended 31 December Year ended 31 December
2020 2019 2020 2019
EUR million EUR million EUR million EUR million
---------------------- --------------- -------------- ------------ ------------
Interest income (1.7) (3.2) (3.8) (6.3)
Finance costs 35.0 37.7 73.6 73.9
Net foreign exchange
losses / (gains) 0.6 (0.2) 0.3 (0.5)
Finance costs, net 33.9 34.3 70.1 67.1
---------------------- --------------- -------------- ------------ ------------
6. Tax
Six months ended 31 December Year ended 31 December
2020 2019 2020 2019
EUR million EUR million EUR million EUR million
-------------------- --------------- -------------- ------------ ------------
Profit before tax 426.7 400.4 593.9 661.2
Tax (135.8) (107.6) (178.9) (173.2)
Effective tax rate 31.8% 26.9% 30.1% 26.2%
-------------------- --------------- -------------- ------------ ------------
The Group's effective tax rate for 2020 may differ from the
theoretical amount that would arise using the weighted average tax
rate applicable to profits of the consolidated entities. This
difference can be a consequence of a number of factors, the most
significant of which are the application of statutory tax rates of
the countries in which the Group operates, the non-deductibility of
certain expenses, the non-taxable income and one-off tax items.
In August 2020, Nigerian Bottling Company Ltd, the Group's
subsidiary in Nigeria, settled the additional tax assessed by the
Nigerian tax authorities following the completion of their income
tax audit, for the years 2005-2019, and their transfer pricing
audit, for the years 2011-2019. The net impact to the Tax line item
of the income statement, following the utilisation of provisions
for uncertain tax positions, was EUR16.5 million. These additional
tax charges have resulted in a 3.8pp and 2.8pp increase of the
Group's effective tax rate for the six months ended 31 December
2020 and full year of 2020, respectively.
7. Earnings per share
Basic earnings per share is calculated by dividing the net
profit attributable to the owners of the parent by the weighted
average number of shares outstanding during the period (full year
of 2020: 363,991,866, full year of 2019: 363,711,686, six months
ended 31 December 2020: 364,205,261, six months ended 31 December
2019: 363,159,314). Diluted earnings per share is calculated by
adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive ordinary shares
arising from exercising employee stock options.
8. Intangible assets and property, plant and equipment
Intangible Property, plant
assets and equipment
EUR million EUR million
----------------------------------------------------- ------------ ----------------
Net book value as at 1 January 2020 excluding
right-of-use assets 2,105.4 2,538.0
Additions - 505.0
Reclassified to assets held for sale - (1.1)
Assets held for sale classified back to property,
plant and equipment - 0.1
Disposals(1) (78.1) (44.0)
Depreciation, impairment and amortisation (0.9) (332.9)
Foreign currency translation (40.3) (230.6)
Net book value as at 31 December 2020 excluding
right-of-use assets 1,986.1 2,434.5
----------------------------------------------------- ------------ ----------------
Net book value as at 1 January 2020 of right-of-use
assets 204.2
Net book value as at 31 December 2020 of
right-of-use assets 182.1
----------------------------------------------------- ------------ ----------------
Net book value as at 31 December 2020 2,616.6
----------------------------------------------------- ------------ ----------------
(1) Disposals line for Intangible assets and Property, plant and
equipment includes the impact from the reorganisation of Multon
(refer to note 16).
Impairment testing for goodwill and other indefinite-lived
intangible assets
The Group performs its impairment test annually. The recoverable
amount of the cash-generating units was determined through a
value-in-use calculation, which uses cash flow projections based on
financial budgets approved by the Board of Directors covering a
one-year period and cash projections for four additional years.
Cash flows for years two to five were projected by management based
on operation and market-specific high-level assumptions including
growth rates, discount rates and forecast selling prices and direct
costs. The growth rates used in perpetuity reflect the forecasts in
line with management beliefs. These forecasts exceeded, in certain
cases, those expected to for the industry in general, due to the
strength of our brand portfolio. The Group applies post-tax
discount rates to post-tax cash flows as the valuation calculated
using this method closely approximates to applying pre-tax discount
rates to pre-tax cash flows.
Management determined gross margins based on past performance,
expectations for the development of the market and the key impacts
of the COVID-19 pandemic to each operation, including restrictions,
as well as expectations about raw material costs. No impairment of
goodwill and other indefinite-lived assets was identified as at 31
December 2020.
Sensitivity analysis
For the cash-generating units of Nigeria and Italy, which held
EUR17.9 million and EUR752.1 million of goodwill and franchise
agreements as at 31 December 2020 respectively, possible changes in
key assumptions of the 2020 impairment assessment would remove the
remaining headroom. The recoverable amount of the Nigerian and
Italian cash-generating units exceeded carrying value by EUR120.9
million and EUR310.7 million; changes per assumption that would
eliminate remaining headroom are summarised below:
Average gross Growth rate Discount
profit margins in perpetuity rate
---------------- --------------- ---------
Nigeria -230bps -180bps 150bps
Italy -330bps -240bps 190bps
The Group will continue to closely monitor these cash-generating
units in order to ensure that timely actions and initiatives are
undertaken to minimize potential adverse impact on their expected
performance , particularly in relation to potential currency
volatility in Nigeria. During 2020, revenue from our operations in
Nigeria amounted to 8% of consolidated net sales revenue; as at 31
December 2020 non-current assets of our operations in Nigeria
amounted to 11% of the consolidated non-current assets.
9. Financial risk management and financial instruments
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk, interest rate risk and
commodity price risk), credit risk, liquidity risk and capital
risk. There have been no material changes in the risk management
policies since the previous year end.
As described in the 2019 integrated annual report, the Group
actively manages its liquidity risk. This has been an area of focus
due to the impact of COVID-19, however the Group maintains its
healthy liquidity position and is able to meet its liabilities as
they fall due. As at 31 December 2020, the Group has a net debt of
EUR1.6 billion (refer to note 11). The Group repaid the remaining
bond of EUR563.4 million which matured in June, while there are no
further bond maturities until November 2024. In addition, as at 31
December 2020, the Group has cash and cash equivalents and other
financial assets of EUR1.3 billion, an undrawn Revolving Credit
Facility of EUR0.8 billion available, as well as EUR0.8 billion
available out of the EUR1.0 billion Commercial Paper Programme.
None of our debt facilities are subject to any financial covenants
that would impact the Group's liquidity or access to capital. The
Group credit ratings as disclosed in the 2019 integrated annual
report were re-affirmed during 2020.
The Group's financial instruments recorded at fair value are
included in Level 1, Level 2 and Level 3 within the fair value
hierarchy as described in the 2019 Integrated Annual Report. The
money market funds recorded at fair value are included in Level 1
within the fair value hierarchy. As at 31 December 2020, the fair
value of the money market funds amounted to EURnil (31 December
2019: EUR371.5 million). As at 31 December 2020, the total
derivatives included in Level 2 were financial assets of EUR11.3
million and financial liabilities of EUR5.5 million.
The Group uses derivatives to mitigate the commodity price risk
related to PET. As the valuation of these derivatives uses prices
that are not observable in the market, it is classified within
Level 3. The fair value of the PET derivatives as at 31 December
2020 amounted to a financial liability of EUR5.8 million.
There were no transfers between Levels 1 and 2 during 2020. In
2020 the Group reclassified foreign currency derivatives relating
to the Nigerian Naira from Level 2 into Level 3. This
reclassification resulted from the use of a more relevant valuation
technique which incorporates greater use of the unobservable inputs
and more appropriately approximates their fair value as at 31
December 2020. The fair value of these derivatives as at 31
December 2020 amounted to a financial asset of EUR4.9 million (31
December 2019: financial liability of EUR0.1 million).
The fair value of bonds and notes payable applying the clean
market price, as at 31 December 2020, was EUR2,586.2 million
compared to their book value of EUR2,383.4 million, as at the same
date.
10. Trade receivables
Trade receivables included within "Trade, other receivables and
assets" line of the condensed consolidated balance sheet, consisted
of the following as at 31 December 2020 and 2019 respectively:
31 December 31 December
2020 2019
EUR million EUR million
Trade receivables 646.5 866.1
Less: Loss allowance (87.8) (93.2)
---------------------- ------------ ------------
558.7 772.9
---------------------- ------------ ------------
The ageing analysis of trade receivables is as follows:
31 December 2020 31 December 2019
EUR million EUR million
----------------------------------------------- -----------------------------------------------
Gross Gross
carrying carrying
amount Loss allowance Trade receivables amount Loss allowance Trade receivables
---------- --------------- ------------------ ---------- --------------- ------------------
Within due date 500.3 (2.4) 497.9 671.4 (2.1) 669.3
Past due-Up to
three
months 35.4 (2.1) 33.3 82.1 (5.3) 76.8
Past due-Three to
six
months 7.5 (1.4) 6.1 12.3 (2.9) 9.4
Past due-Six to
nine
months 2.7 (0.8) 1.9 5.1 (0.9) 4.2
Past due-More than
nine
months 100.6 (81.1) 19.5 95.2 (82.0) 13.2
---------- --------------- ------------------ ---------- --------------- ------------------
Total trade
receivables 646.5 (87.8) 558.7 866.1 (93.2) 772.9
---------- --------------- ------------------ ---------- --------------- ------------------
In the current COVID-19 impacted environment, the Group is
actively monitoring the recoverability of trade receivables and
ensures loss allowance reflects on a timely basis management's best
estimate of potential losses in compliance with IFRS 9.
11. Net debt
As at 31 December
2020 2019
EUR million EUR million
----------------------------------------------------- ------------ ------------
Current borrowings 315.2 761.8
Non-current borrowings 2,610.3 2,562.9
Less: Cash and cash equivalents (1,215.8) (823.0)
- Financial assets at amortised cost (92.9) (357.3)
- Financial assets at fair value through
profit or loss - (371.5)
------------ ------------
Less: Other financial assets (92.9) (728.8)
Net debt 1,616.8 1,772.9
----------------------------------------------------- ------------ ------------
In May 2019 the Group completed the issue of a EUR700 million
Euro-denominated fixed rate bond maturing in May 2027 with a coupon
rate of 1% and the issue of a EUR600 million Euro-denominated fixed
rate bond maturing in May 2031 with a coupon rate of 1.625%. The
net proceeds of the new issues were used to partially repay
EUR236.6 million of the 2.375%, EUR800 million 7-year fixed rate
bond in May 2019, while the remaining EUR563.4 million was repaid
upon its maturity in June 2020. In November 2019 the Group
completed the issue of a EUR500 million Euro-denominated fixed rate
bond maturing in November 2029 with a coupon rate of 0.625%.
In December 2019 the Group established a loan facility of US
dollar 85.0 million to finance the purchase of production equipment
by the Group's subsidiary in Nigeria. The facility will be drawn
down by Nigerian Bottling Company Ltd (NBC) over the course of 2020
and 2021 maturing in 2027. The obligations under this facility are
guaranteed by Coca-Cola HBC AG. As at 31 December 2020, the
outstanding liability amounted to EUR48.2 million.
Cash and cash equivalents include an amount of EUR102.0 million
equivalent in Nigerian Naira. This includes an amount of EUR11.0
million equivalent in Nigerian Naira, which relates to the
outstanding balance held for the repayment of Nigerian Bottling
Company Ltd's former minority shareholders, following the 2011
acquisition of non-controlling interests.
The financial assets at amortised cost comprise of time deposits
amounting to EUR92.9 million (31 December 2019: EUR349.8 million)
and also include an amount of EURnil (31 December 2019: EUR7.5
million) equivalent in Nigerian Naira invested in Treasury Bills,
which in 2019 related to the outstanding balance of the bank
account held for the repayment of Nigerian Bottling Company Ltd's
former minority shareholders as described above. The financial
assets at fair value through profit or loss in 2019 related to
money market funds. Included in 'Other financial assets' of the
condensed consolidated balance sheet are derivative financial
instruments of EUR13.5 million (31 December 2019: EUR2.5 million)
and related party loans receivable of EUR0.2 million (31 December
2019: EUR3.6 million).
12. Share capital, share premium and treasury shares
Number of
shares Share Share
(authorised capital premium
and issued) EUR million EUR million
--------------------------------------- ------------ ------------ ------------
Balance as at 1 January 2019 371,827,229 2,021.2 4,547.9
Shares issued to employees exercising
stock options 1,352,731 8.0 13.4
Cancellation of shares (3,249,803) (18.4) (74.1)
Dividends (note 14) - - (208.9)
Special dividend (note 14) - - (733.0)
Balance as at 31 December 2019 369,930,157 2,010.8 3,545.3
--------------------------------------- ------------ ------------ ------------
Shares issued to employees exercising
stock options 582,440 3.6 4.0
Dividends (note 14) - - (227.9)
Balance as at 31 December 2020 370,512,597 2,014.4 3,321.4
--------------------------------------- ------------ ------------ ------------
On 11 June 2018, the Annual General Meeting adopted a proposal
for share buy-back of up to 7,500,000 ordinary shares of Coca-Cola
HBC for the purpose of neutralising the dilution resulting from
shares issued under Coca-Cola HBC's equity compensation plans and
meeting the requirements of the Company's employee incentive
scheme. The program was completed in full in May 2019 for a total
consideration of EUR220.6 million. This resulted in a movement to
treasury shares within the 2019 condensed consolidated statement of
changes in equity of EUR106.1 million, being the consideration paid
in 2019 of EUR192.8 million adjusted for the impact from the
EUR85.5 million UK sterling denominated liability recognised as at
31 December 2018, further adjusted by EUR1.2 million recorded on
settlement of the arrangement.
On 18 June 2019, the Annual General Meeting approved the
proposal to reduce the share capital of Coca-Cola HBC AG by
cancelling the 3,249,803 treasury shares acquired as part of the
share buy-back programme described above. The respective reduction
of the share capital was completed in August 2019.
In 2020, the share capital of Coca-Cola HBC increased by the
issue of 582,440 (2019: 1,352,731) new ordinary shares following
the exercise of stock options pursuant to the Coca-Cola HBC AG's
employees' stock option plan. Total proceeds from the issuance of
the shares under the stock option plan amounted to EUR7.6 million
(2019: EUR21.4 million).
An amount of EUR14.3 million in 2020 (2019: EUR27.9 million)
relates to treasury shares provided to employees in connection with
vested performance share awards under the Company's employee
incentive scheme, which was reflected as an appropriation of
reserves between 'Treasury shares' and 'Other reserves' in the
condensed consolidated statement of changes in equity.
Following the above changes, on 31 December 2020 the share
capital of the Group amounted to EUR2,014.4 million and comprised
370,512,597 shares with a nominal value of CHF 6.70 each.
13. Leases
The leases which are recorded on the consolidated balance sheet
following implementation of IFRS 16 are principally in respect of
vehicles and buildings. T he Group's right-of-use assets and lease
liability are presented below:
2020 2019
EUR million EUR million
Land and buildings 71.9 84.0
Plant and equipment 110.2 120.2
Total right-of-use assets 182.1 204.2
------------------------------- ------------ ------------
Current lease liabilities 54.8 56.3
Non-current lease liabilities 129.4 154.7
Total lease liability 184.2 211.0
------------------------------- ------------ ------------
14. Dividends
On 18 June 2019, the shareholders of Coca-Cola HBC AG at the
Annual General Meeting approved a dividend distribution of 0.57
euro per share as well as a special dividend of 2.00 euro per
share. The total dividend amounted to EUR941.9 million and was paid
on 30 July 2019. Of this an amount of EUR8.8 million related to
shares held by the Group.
The shareholders of Coca-Cola HBC AG approved a dividend
distribution of 0.62 euro per share at the Annual General Meeting
held on 16 June 2020. The total dividend amounted to EUR227.9
million and was paid on 28 July 2020. Of this an amount of EUR2.2
million related to shares held by the Group.
The Board of Directors of Coca-Cola HBC AG has proposed a 0.64
euro dividend per share in respect of 2020. If approved by the
shareholders of Coca-Cola HBC AG, this dividend will be paid in
2021.
15. Business combinations and acquisition of non-controlling
interest
On 18 June 2019, the Group acquired 100% of the issued shares of
Koncern Bambi a.d. Po arevac ("Bambi"), Serbia's leading
confectionery business, for a consideration of EUR148.8 million net
of borrowings of EUR125.9 million. The acquisition added a
relevant, adjacent category to the Group's portfolio in Serbia and
Western Balkans, which are among our fastest growing territories.
Details of the acquisition with regard to the net assets acquired
and goodwill are as follows:
Fair value
EUR million
---------------------------------- ------------
Trademarks 121.1
Property, plant and equipment 19.3
Other non-current assets 0.1
Inventories 5.9
Other current assets 25.7
Cash and cash equivalents 18.3
Current borrowings (125.9)
Other current liabilities (10.3)
Non-current borrowings (0.3)
Deferred tax liabilities (17.5)
Other non-current liabilities (2.2)
---------------------------------- ------------
Net identifiable assets acquired 34.2
Goodwill arising on acquisition 114.6
---------------------------------- ------------
Cash paid to former shareholders 148.8
---------------------------------- ------------
The acquisition resulted in the Group recording EUR114.6 million
of goodwill and EUR121.1 million of trademarks in its Emerging
segment. The goodwill arising is attributable to Bambi's strong
operating profitability and strong market position.
Net sales revenue and net profit after tax contributed by the
acquired business to the Group for the period from 18 June 2019 to
31 December 2019 amounted to EUR43.6 million and EUR11.2 million
respectively. If the acquisition had occurred on 1 January 2019,
consolidated Group revenue and consolidated Group profit after tax
for the year ended 31 December 2019 would have been higher by
EUR38.6 million and EUR7.0 million respectively.
Acquisition-related costs of EUR2.9 million were included in
2019 operating expenses, as a result of the above acquisition.
On 1 September 2019, the Group acquired a water business in the
Czech Republic for a cash consideration of EUR7.7 million. The
acquisition was of a group of assets that constituted a business,
and which have been integrated into the Group's operations in the
Czech Republic. The acquisition did not have a material effect on
the Group's 2019 financial position and income statement. As a
result of the acquisition, water rights of EUR1.3 million and
goodwill of EUR0.4 million were recorded in the Group's developing
segment. Acquisition-related costs of EUR0.3 million were included
in 2019 operating expenses, as a result of the above
acquisition.
On 12 November 2019, the Group acquired all of the remaining
shares of the non-controlling interest in its subsidiary Leman
Beverages Holding S.ár.l., through which the Group controls its
operation in Armenia. The consideration paid for the acquisition of
the non-controlling interest amounted to EUR9.5 million.
16. Interests in other entities
The Group holds a 50% effective interest in the Multon Z.A.O.
Group of companies ('Multon'), which is engaged in the production
and distribution of juices in Russia and is jointly controlled by
the Group and The Coca-Cola Company.
The joint arrangement was classified as a joint operation, as it
provided to the Group and The Coca-Cola Company rights to the
assets and obligations for the liabilities of the joint
arrangement. Effective May 6, 2020 following the completion of
Multon's reorganisation, the joint arrangement was reclassified
from a joint operation to an integral joint venture, as the new
structure provides to the Group and The Coca-Cola Company rights to
the joint arrangement's net assets. As a result, the Group
derecognised its share of the joint arrangement's assets and
liabilities with a corresponding increase in equity method
investments of EUR194.1 million, included in line " Other
non-current assets" of the condensed consolidated balance sheet. No
gain or loss was recognised in the condensed consolidated income
statement as a result of the above reorganisation.
More specifically, intangible assets and property, plant and
equipment decreased by EUR78.1 million and EUR30.9 million
(including right of use assets) respectively as a result of the
above reorganisation (refer to note 8). In addition, the decrease
of cash and cash equivalents resulting from the reorganisation,
amounting to EUR13.1 million, was reported in line "Joint
arrangement reclassification" within investing activities in the
condensed consolidated cash flow statement.
Following the reorganisation, the Group's share of results of
Multon integral joint venture amounted to EUR16.4 million and is
included in line "Share of results of integral equity-method
investments" of the condensed consolidated income statement, while
transactions between the Group entities and the joint arrangement
are reported as related party transactions under the joint venture
category (refer to note 17).
On 6 December 2019, the Group acquired, in conjunction with The
Coca-Cola Company, Acque Minerali S.r.l, a mineral water and adult
sparkling beverages business in Italy. The transaction resulted in
the Group holding a 50% effective interest in Acque Minerali S.r.l.
The relevant investment amounted to EUR44.5 million, including
acquisition costs of EUR0.7 million, and was classified as an
investment in a joint venture, in accordance with the requirements
of IFRS 11 'Joint arrangements', as it provides the Group and The
Coca-Cola Company with rights to the entity's net assets. The
investment was further classified as an integral joint venture. As
at 31 December 2019 consideration of EUR1.8 million and acquisition
costs of EUR0.2 million were not yet paid. During 2020, the Group
paid these amounts and further EUR0.2 million consideration for the
acquisition, while it received an amount of EUR1.7 million as
adjustment to the purchase price.
17. Related party transactions
a) The Coca-Cola Company
As at 31 December 2020, The Coca-Cola Company and its
subsidiaries (collectively, "TCCC") indirectly owned 23.0% (31
December 2019: 23.0%) of the issued share capital of Coca-Cola HBC.
The below table summarises transactions with The Coca-Cola Company
and its subsidiaries:
Six months ended 31
December Year ended 31 December
2020 2019 2020 2019
EUR million EUR million EUR million EUR million
----------------------------- ------------ ------------ ------------ ------------
Purchases of concentrate,
finished products
and other items 688.4 764.5 1,374.6 1,596.5
Net contributions received
for marketing and
promotional incentives 58.2 61.4 90.7 119.2
Sales of finished goods and
raw materials 2.3 6.7 3.5 15.7
Other income 4.3 2.1 6.3 3.3
Other expenses 3.0 2.9 5.6 5.6
As at 31 December 2020, the Group was owed EUR40.9 million
(EUR61.4 million as at 31 December 2019) by TCCC and owed EUR196.4
million (EUR309.4 million including loan payable of EUR43.3 million
as at 31 December 2019) to TCCC.
b) Frigoglass S.A. ( " Frigoglass"), Kar-Tess Holding and AG Leventis (Nigeria) Plc
Frigoglass, a company listed on the Athens Exchange, is a
manufacturer of coolers, cooler parts, glass bottles, crowns and
plastics. Truad Verwaltungs AG currently indirectly owns 48.6% of
Frigoglass and 62.8% of AG Leventis (Nigeria) Plc and also
indirectly controls Kar Tess Holding, which holds approximately
23.0% (31 December 2019: 23.1%) of Coca-Cola HBC's total issued
capital. Frigoglass has a controlling interest in Frigoglass
Industries (Nigeria) Limited, in which Coca-Cola HBC has a 23.9%
effective interest, through its investment in Nigerian Bottling
Company Ltd (NBC).
The table below summarises transactions with Frigoglass,
Kar-Tess Holding and AG Leventis (Nigeria) Plc:
Six months ended 31
December Year ended 31 December
2020 2019 2020 2019
EUR million EUR million EUR million EUR million
-------------------------------- ------------ ------------ ------------ ------------
Purchases of coolers and other
equipment, raw
and other materials 31.8 38.9 97.8 138.7
Maintenance, rent and other
expenses 10.5 13.9 21.8 24.3
As at 31 December 2020, Coca-Cola HBC owed EUR11.8 million
(EUR16.4 million as at 31 December 2019) to and was owed EUR0.8
million (EUR0.9 million as at 31 December 2019) from Frigoglass and
its subsidiaries. As at 31 December 2020, Coca-Cola HBC owed EUR1.8
million (EUR1.9 million as at 31 December 2019) to AG Leventis
(Nigeria) Plc. Capital commitments to Frigoglass and its
subsidiaries as at 31 December 2020, amounted to EUR14.1 million
(EUR32.4 million as at 31 December 2019) including the Group's
share of its joint ventures' capital commitments to Frigoglass.
In 2019, Frigoglass West Africa Ltd. merged with Frigoglass
Industries (Nigeria) Limited. Frigoglass Industries (Nigeria)
Limited, associate in which the Group holds an effective interest
of 23.9% through its subsidiary Nigerian Bottling Company Ltd, is
guarantor under the amended banking facilities and notes issued by
the Frigoglass Group, as part of the debt restructuring of the
latter. The Group has no direct exposure arising from this
guarantee arrangement, but the Group's investment in this
associate, which stood at EUR23.9 million as at 31 December 2020
(31 December 2019: EUR25.2 million), would be at potential risk if
there was a default under the terms of the amended banking
facilities or the notes and the Frigoglass Group (including the
guarantor) were unable to meet their obligations thereunder.
c) Other related parties
Other
During the six months and the full year ended 31 December 2020,
the Group incurred other expenses of EUR7.4 million and EUR16.4
million (EUR9.1 million and EUR17.5 million in the respective
prior-year periods) mainly related to maintenance services for cold
drink equipment and installations of coolers, fountains, vending
and merchandising equipment as well as subsequent expenditure for
fixed assets of EUR0.9 million and EUR1.8 million (EUR1.0 million
and EUR2.1 million in the respective prior-year periods) from other
related parties. As at 31 December 2020, the Group owed EUR1.9
million (EUR1.2 million as at 31 December 2019) to and was owed
EURnil million (EUR0.1 million as at 31 December 2019) by other
related parties .
During the six months and the full year ended 31 December 2020,
the Group received dividends of EURnil and EUR1.3 million,
respectively, from BevService S.r.l. (EURnil in the respective
prior year periods), which are included in line "Net receipts from
non-integral equity method investments" of the condensed
consolidated cash flow statement.
d) Joint ventures
The below table summarises transactions with joint ventures:
Six months ended 31
December Year ended 31 December
2020 2019 2020 2019
EUR million EUR million EUR million EUR million
----------------------------- ------------ ------------ ------------ ------------
Purchases of inventory 4.7 8.6 10.9 18.3
Sales of finished goods and
raw materials 1.7 2.2 2.8 3.8
Other income 7.5 2.0 10.2 4.2
Other expenses 8.9 3.9 11.5 3.9
As at 31 December 2020, the Group owed EUR159.6 million
including loans payable of EUR86.3 million (EUR9.6 million as at 31
December 2019 including loans payable of EUR4.0 million) to, and
was owed EUR13.1 million including loans receivable of EUR7.0
million (EUR6.8 million as at 31 December 2019 including loans
receivable of EUR3.6 million) by joint ventures. During the six
months and the full year ended 31 December 2020, the Group received
dividends of EUR27.1 million from integral joint ventures
(dividends and capital returns from joint ventures of EUR7.7
million in the respective prior-year periods), which are included
in line "Net receipts from integral equity-method investments"
(2019: "Net receipts from equity investments) of the condensed
consolidated cash flow statement. As at 31 December 2020, the Group
was owed dividend receivable of EUR0.3 million (EURnil as at 31
December 2019) from BrewTech B.V. Group of companies.
e) Directors
There have been no transactions between Coca-Cola HBC and the
Directors and senior management except for remuneration for both
the six months and years ended 31 December 2020 and 2019.
There were no other significant transactions with other related
parties for the year ended 31 December 2020.
18. Contingencies
In relation to the Greek Competition Authority's decision of 25
January 2002, one of Coca-Cola Hellenic Bottling Company S.A.'s
competitors had filed a lawsuit against Coca-Cola Hellenic Bottling
Company S.A. claiming damages in an amount of EUR7.7 million. The
court of first instance heard the case on 21 January 2009 and
subsequently rejected the lawsuit. The plaintiff appealed the
judgement and on 9 December 2013 the Athens Court of Appeals
rejected the plaintiff's appeal. Following the spin-off, Coca-Cola
HBC Greece S.A.I.C. substituted Coca-Cola Hellenic Bottling Company
S.A. as defendant in this lawsuit. The 2013 Court of Appeals
decision has been rendered final and irrecoverable and the case was
closed. On 19 April 2014, the same plaintiff filed a new lawsuit
against Coca-Cola Hellenic Bottling Company S.A. (following the
spin-off, Coca-Cola HBC Greece S.A.I.C.) claiming payment of EUR7.5
million as compensation for losses and moral damages for alleged
anti-competitive commercial practices of Coca-Cola Hellenic
Bottling Company S.A. between 1994 and 2013. The two lawsuits
partially overlap in the time period for which damages are sought
by the plaintiff. The hearing of the new lawsuit was scheduled for
17 January 2019. On 21 December 2018, the plaintiff served their
withdrawal from the lawsuit. However, on 20 June 2019, the same
plaintiff filed another new lawsuit against Coca-Cola HBC Greece
S.A.I.C. claiming payment of EUR10.1 million as compensation for
losses and moral damages again for alleged anti-competitive
commercial practices of Coca-Cola Hellenic Bottling Company S.A.
for the same period between 1994 and 2013. The parties filed their
briefs and exhibits with the Court and the hearing date of the case
took place on 18 November 2020 and the court decision is pending to
be issued. Coca-Cola HBC Greece S.A.I.C. has not provided for any
losses related to this case.
With respect to the ongoing investigation of the Greek
Competition Commission initiated on 6 September 2016, regarding
Coca-Cola HBC Greece S.A.I.C.'s operations in certain commercial
practices in the sparkling juice and water categories, on 29 May
2019 the Greek Competition Commission issued a Statement of
Objections to Coca-Cola HBC Greece S.A.I.C. and certain former and
current employees, for obstruction of its on-site investigation.
Coca-Cola HBC Greece S.A.I.C. collaborated fully with the
Commission. In connection with this Statement of Objections, a
hearing took place on 24 July 2019. On 4 March 2020, Coca-Cola HBC
Greece S.A.I.C. was served with the decision of the Greek
Competition Commission in respect of this Statement of Objections
and the procedural case regarding the obstruction of the on-site
investigation, based on which a fine amounting to EUR0.8 million
was imposed on and paid by Coca-Cola HBC Greece S.A.I.C. The Greek
Competition Commission in this decision accepted the proposal for
active co-operation and settlement of the case, which was submitted
by Coca-Cola HBC Greece S.A.I.C. in line with its policy of full
compliance with the principles of competition law and cooperation
with the regulatory authorities. The Greek Competition Commission's
investigation on Coca-Cola HBC Greece S.A.I.C.'s commercial
practices, is still ongoing.
Other than the above, there have been no significant adverse
changes in contingencies since 31 December 2019 (as described in
our 2019 Integrated Annual Report available on the Coca-Cola HBC's
web site:
www.coca-colahellenic.com ).
19. Commitments
As at 31 December 2020 the Group had capital commitments
including commitments for leases and the share of its joint
ventures' capital commitments of EUR115.4 million (31 December
2019: EUR221.7 million), which mainly relate to plant and machinery
equipment.
20. Number of employees
The average number of full-time equivalent employees in 2020 was
27,722 (2019: 28,389).
21. Subsequent events
In January 2021 a demerger of Acque Minerali S.r.l., our mineral
water and adult sparkling beverages integral joint venture with
TCCC in Italy, was completed. This transaction resulted in EUR15.6
million of goodwill being recognized as part of our Italian
cash-generating unit, while there was no significant impact to the
Group's net assets or income statement. Also, there was no cash
flow impact for the Group as a result of the transaction.
Volume by country for 2020 and 2019
% change
Unit cases (million)(1) 2020 2019 2020 vs 2019
------------------------------------------- -------- -------- -------------
Established Markets
Austria 75.5 85.1 -11%
Cyprus 13.7 17.3 -21%
Greece 89.4 112.6 -21%
Italy 224.7 261.1 -14%
Republic of Ireland and Northern Ireland 67.9 77.0 -12%
Switzerland 65.7 71.4 -8%
Total 536.9 624.5 -14%
------------------------------------------- -------- -------- -------------
Developing Markets
Baltics 33.0 33.3 -1%
Croatia 22.7 28.6 -21%
Czech Republic 50.8 53.9 -6%
Hungary 82.1 94.9 -13%
Poland 195.2 189.6 3%
Slovakia 21.5 23.5 -9%
Slovenia 6.8 7.3 -7%
Total 412.1 431.1 -4%
------------------------------------------- -------- -------- -------------
Emerging Markets
Armenia 10.8 11.6 -7%
Belarus 37.4 39.3 -5%
Bosnia and Herzegovina 18.6 21.4 -13%
Bulgaria 54.9 64.1 -14%
Moldova 6.9 8.0 -14%
Nigeria 309.2 272.5 13%
Romania 185.5 203.5 -9%
Russian Federation 315.6 352.2 -10%
Serbia (including the Republic of Kosovo)
and Montenegro 130.7 122.5 7%
Ukraine 117.0 113.8 3%
------------------------------------------- -------- -------- -------------
Total 1,186.6 1,208.9 -2%
------------------------------------------- -------- -------- -------------
Total Coca-Cola HBC 2,135.6 2,264.5 -6%
=========================================== ======== ======== =============
(1) One unit case corresponds to approximately 5.678 litres or
24 servings, being a typically used measure of volume. For Premium
Spirits volume, one unit case also corresponds to 5.678 litres. F
or biscuits volume, one unit case corresponds to 1 kilogram. Volume
data is derived from unaudited operational data.
- Our joint venture with Heineken in North Macedonia generated
volume of 21.5 million unit cases in 2020 (2019: 23.2 million unit
cases), down
7% compared to the prior year.
- Multon joint venture, our Russian juice business, generated
volume of 40.2 million unit cases, following its reorganisation in
May 2020, which is not included in the performance of the Russian
Federation for 2020.
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END
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