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LONDON, 15 February 2018 - Coca-Cola European Partners plc (CCEP) (ticker symbol: CCE) today announces preliminary unaudited results for the fourth-quarter and full-year ended 31 December 2017, and provides full-year 2018 outlook. |
• | Full-year diluted earnings per share were €1.41 on a reported basis or €2.12 on a comparable basis, including a negative currency translation impact of €0.04. |
• | Full-year reported revenue totalled €11.1 billion, up 21.0 percent, or up 3.0 percent on a comparable and fx-neutral basis. Volume was up 0.5 percent on a comparable basis. |
• | Full-year reported operating profit totalled €1.3 billion, or €1.5 billion on a comparable basis, up 9.0 percent, or up 10.5 percent on a comparable and fx-neutral basis. |
• | Full-year free cash flow* was €1.0 billion. |
• | Fourth-quarter diluted earnings per share were €(0.13) on a reported basis or €0.49 on a comparable basis, including a negligible impact from currency translation. |
• | CCEP provides full-year guidance for 2018 including comparable and fx-neutral diluted earnings per share growth of between 6 percent and 7 percent when compared to 2017 comparable results. |
• | CCEP remains on track to achieve pre-tax savings of €315 million to €340 million through synergies by mid-2019. |
• | CCEP completes post-merger comparability adjustments related to final acquisition accounting and provides revised comparable financial information and quarterly phasing for 2016 and 2017 to reflect these adjustments. All adjustments are non-cash. |
• | CCEP declares quarterly dividend of €0.26 per share, an increase of approximately 24 percent. |
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Key Financial Measures Unaudited, fx impact calculated by recasting current year results at prior year rates | Fourth Quarter Ended 31 December 2017 | |||||||||||||||||||
€ million | % change | |||||||||||||||||||
As Reported | Comparable | Fx-Impact | As Reported | Comparable | Fx-Impact | Comparable Fx-Neutral | ||||||||||||||
Revenue | 2,662 | 2,662 | (20 | ) | 3.5 | % | 3.5 | % | (0.5 | )% | 4.0 | % | ||||||||
Cost of sales | 1,677 | 1,618 | (12 | ) | 7.5 | % | 3.5 | % | (0.5 | )% | 4.0 | % | ||||||||
Operating expenses | 787 | 703 | (6 | ) | (11.5 | )% | 0.5 | % | (0.5 | )% | 1.0 | % | ||||||||
Operating profit | 198 | 341 | (2 | ) | 50.0 | % | 9.5 | % | (0.5 | )% | 10.0 | % | ||||||||
Profit after taxes | (61 | ) | 240 | (1 | ) | (608.5 | )% | 19.5 | % | (0.5 | )% | 20.0 | % | |||||||
Diluted earnings per share (€) | (0.13 | ) | 0.49 | — | (750.0 | )% | 19.5 | % | (0.5 | )% | 20.0 | % |
Key Financial Measures Unaudited, fx impact calculated by recasting current year results at prior year rates | Year Ended 31 December 2017 | |||||||||||||||||||
€ million | % change | |||||||||||||||||||
As Reported | Comparable | Fx-Impact | As Reported | Comparable | Fx-Impact | Comparable Fx-Neutral | ||||||||||||||
Revenue | 11,062 | 11,055 | (142 | ) | 21.0 | % | 1.5 | % | (1.5 | )% | 3.0 | % | ||||||||
Cost of sales | 6,772 | 6,739 | (85 | ) | 21.5 | % | 2.0 | % | (1.5 | )% | 3.5 | % | ||||||||
Operating expenses | 3,030 | 2,838 | (31 | ) | 12.5 | % | (2.5 | )% | (1.0 | )% | (1.5 | )% | ||||||||
Operating profit | 1,260 | 1,478 | (26 | ) | 48.0 | % | 9.0 | % | (1.5 | )% | 10.5 | % | ||||||||
Profit after taxes | 688 | 1,035 | (19 | ) | 25.5 | % | 13.0 | % | (2.0 | )% | 15.0 | % | ||||||||
Diluted earnings per share (€) | 1.41 | 2.12 | (0.04 | ) | (0.5 | )% | 13.0 | % | (2.0 | )% | 15.0 | % |
Operational Review |
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Outlook |
Dividends |
Conference Call |
Financial Details |
Contacts |
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About CCEP |
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Forward-Looking Statements |
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Post-Merger Comparable Adjustments |
Note Regarding the Presentation of Alternative Performance Measures |
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Supplementary Financial Information - Income Statement |
Fourth-Quarter 2017 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||
CCEP | Merger effects[1] | Mark-to-market effects[2] | Restructuring charges[3] | Net tax items[4] | CCEP | |||||||||
Revenue | 2,662 | — | — | — | — | 2,662 | ||||||||
Cost of sales | 1,677 | (8 | ) | 3 | (54 | ) | — | 1,618 | ||||||
Gross profit | 985 | 8 | (3 | ) | 54 | — | 1,044 | |||||||
Operating expenses | 787 | 1 | 2 | (87 | ) | — | 703 | |||||||
Operating profit | 198 | 7 | (5 | ) | 141 | — | 341 | |||||||
Total finance costs, net | 21 | — | — | — | — | 21 | ||||||||
Non-operating items | (1 | ) | — | — | — | — | (1 | ) | ||||||
Profit before taxes | 178 | 7 | (5 | ) | 141 | — | 321 | |||||||
Taxes | 239 | 2 | (2 | ) | 36 | (194 | ) | 81 | ||||||
Profit after taxes | (61 | ) | 5 | (3 | ) | 105 | 194 | 240 | ||||||
Diluted earnings per share (€) | (0.13 | ) | 0.49 | |||||||||||
Diluted common shares outstanding | 489 |
Fourth-Quarter 2016 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||||
CCEP | Merger effects[1] | Mark-to-market effects[2] | Restructuring charges[3] | Merger and integration related costs[5] | Net tax items[4] | CCEP | ||||||||||
Revenue | 2,578 | — | — | — | — | — | 2,578 | |||||||||
Cost of sales | 1,559 | 6 | 1 | (1 | ) | — | — | 1,565 | ||||||||
Gross profit | 1,019 | (6 | ) | (1 | ) | 1 | — | — | 1,013 | |||||||
Operating expenses | 887 | 10 | 6 | (161 | ) | (41 | ) | — | 701 | |||||||
Operating profit | 132 | (16 | ) | (7 | ) | 162 | 41 | — | 312 | |||||||
Total finance costs, net | 33 | — | — | — | — | — | 33 | |||||||||
Non-operating items | 4 | — | — | — | — | — | 4 | |||||||||
Profit before taxes | 95 | (16 | ) | (7 | ) | 162 | 41 | — | 275 | |||||||
Taxes | 83 | (4 | ) | (2 | ) | 48 | 8 | (59 | ) | 74 | ||||||
Profit after taxes | 12 | (12 | ) | (5 | ) | 114 | 33 | 59 | 201 | |||||||
Diluted earnings per share (€) | 0.02 | 0.41 | ||||||||||||||
Diluted common shares outstanding | 488 |
[1] | Adjustments to reflect Germany and Iberia financial results as if the Merger had occurred at the beginning of each period (if applicable), the impact of acquisition accounting including final fair values of the acquired inventory, property, plant, and equipment and intangibles from Germany and Iberia, final acquisition accounting related adjustments and associated impact on depreciation and amortisation expense, and additional debt financing cost incurred by CCEP in connection with the Merger. |
[2] | Amounts represent the net out-of-period mark-to-market impact of non-designated commodity hedges. |
[3] | Amounts represent restructuring charges related to business transformation activities. |
[4] | Amounts represent the deferred tax impact related to income tax rate and law changes. The amount in fourth-quarter 2017 principally represents the net book tax impact of US tax reform. |
[5] | Amounts represent costs associated with the Merger to form CCEP. |
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Full-year 2017 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||||||
CCEP | Merger effects[1] | Mark-to-market effects[2] | Restructuring charges[3] | Merger and integration related costs[4] | Litigation provision[5] | Net tax items[6] | CCEP | |||||||||||
Revenue | 11,062 | (7 | ) | — | — | — | — | — | 11,055 | |||||||||
Cost of sales | 6,772 | 27 | 6 | (66 | ) | — | — | — | 6,739 | |||||||||
Gross profit | 4,290 | (34 | ) | (6 | ) | 66 | — | — | — | 4,316 | ||||||||
Operating expenses | 3,030 | (14 | ) | — | (169 | ) | (4 | ) | (5 | ) | — | 2,838 | ||||||
Operating profit | 1,260 | (20 | ) | (6 | ) | 235 | 4 | 5 | — | 1,478 | ||||||||
Total finance costs, net | 100 | — | — | — | — | (1 | ) | — | 99 | |||||||||
Non-operating items | 1 | — | — | — | — | — | — | 1 | ||||||||||
Profit before taxes | 1,159 | (20 | ) | (6 | ) | 235 | 4 | 6 | — | 1,378 | ||||||||
Taxes | 471 | (4 | ) | (2 | ) | 70 | 1 | 1 | (194 | ) | 343 | |||||||
Profit after taxes | 688 | (16 | ) | (4 | ) | 165 | 3 | 5 | 194 | 1,035 | ||||||||
Diluted earnings per share (€) | 1.41 | 2.12 | ||||||||||||||||
Diluted common shares outstanding | 489 |
Full-year 2016 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||||
CCEP | Merger effects[1] | Mark-to-market effects[2] | Restructuring charges[3] | Merger and integration related costs[4] | Net tax items[6] | CCEP | ||||||||||
Revenue | 9,133 | 1,732 | — | — | — | — | 10,865 | |||||||||
Cost of sales | 5,584 | 1,006 | 18 | (13 | ) | — | — | 6,595 | ||||||||
Gross profit | 3,549 | 726 | (18 | ) | 13 | — | — | 4,270 | ||||||||
Operating expenses | 2,698 | 911 | 17 | (547 | ) | (168 | ) | — | 2,911 | |||||||
Operating profit | 851 | (185 | ) | (35 | ) | 560 | 168 | — | 1,359 | |||||||
Total finance costs, net | 123 | 12 | — | — | (5 | ) | — | 130 | ||||||||
Non-operating items | 9 | (1 | ) | — | — | — | — | 8 | ||||||||
Profit before taxes | 719 | (196 | ) | (35 | ) | 560 | 173 | — | 1,221 | |||||||
Taxes | 170 | (29 | ) | (9 | ) | 156 | 39 | (23 | ) | 304 | ||||||
Profit after taxes | 549 | (167 | ) | (26 | ) | 404 | 134 | 23 | 917 | |||||||
Diluted earnings per share (€) | 1.42 | 1.88 | ||||||||||||||
Reported diluted common shares outstanding | 385 | |||||||||||||||
Adjust: Capital structure share impact related to the Merger | 103 | |||||||||||||||
Comparable diluted common shares outstanding | 488 |
[1] | Adjustments to reflect Germany and Iberia financial results as if the Merger had occurred at the beginning of each period (if applicable), the impact of acquisition accounting including final fair values of the acquired inventory, property, plant, and equipment and intangibles from Germany and Iberia, final acquisition accounting related adjustments and associated impact on depreciation and amortisation expense, and additional debt financing cost incurred by CCEP in connection with the Merger. |
[2] | Amounts represent the net out-of-period mark-to-market impact of non-designated commodity hedges. |
[3] | Amounts represent restructuring charges related to business transformation activities. |
[4] | Amounts represent costs associated with the Merger to form CCEP. |
[5] | Amount represents a provision recorded for ongoing litigation. |
[6] | Amounts represent the deferred tax impact related to income tax rate and law changes. The amount in fourth-quarter 2017 principally represents the net book tax impact of US tax reform. |
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Supplemental Financial Information - Revenue |
Revenue In millions of €, except per case data which is calculated prior to rounding | Fourth Quarter Ended | Year Ended | |||||||||||
31 December 2017 | 31 December 2016 | % Change | 31 December 2017 | 31 December 2016 | % Change | ||||||||
As reported | 2,662 | 2,578 | 3.5 | % | 11,062 | 9,133 | 21.0 | % | |||||
Adjust: Total items impacting comparability[1] | n/a | n/a | n/a | (7 | ) | 1,732 | (100.5 | )% | |||||
Comparable | 2,662 | 2,578 | 3.5 | % | 11,055 | 10,865 | 1.5 | % | |||||
Adjust: Impact of fx changes | 20 | n/a | (0.5 | )% | 142 | n/a | (1.5 | )% | |||||
Comparable & fx-neutral | 2,682 | 2,578 | 4.0 | % | 11,197 | 10,865 | 3.0 | % | |||||
Revenue per unit case | 4.41 | 4.28 | 3.0 | % | 4.46 | 4.35 | 2.5 | % |
[1] | Amounts include items impacting comparability during the periods presented. Additionally, for periods prior to 27 May 2016, amounts include the results of Germany and Iberia as if the Merger had occurred at the beginning of the presented period. |
Revenue by Geography Comparable | Fourth Quarter Ended | Year Ended | |||||||||||
31 December 2017 | 31 December 2016 | Revenue % Change | 31 December 2017 | 31 December 2016 | Revenue % Change | ||||||||
% of Total | % of Total | % of Total | % of Total | ||||||||||
Spain/Portugal/Andorra[1] | 23.0 | % | 23.0 | % | 3.0 | % | 24.5 | % | 24.0 | % | 3.0 | % | |
Germany | 21.0 | % | 20.5 | % | 6.5 | % | 20.0 | % | 20.0 | % | 2.5 | % | |
Great Britain | 19.0 | % | 20.0 | % | (0.5 | )% | 18.5 | % | 19.0 | % | (2.5 | )% | |
France/Monaco | 16.0 | % | 15.5 | % | 6.0 | % | 16.5 | % | 16.5 | % | 0.5 | % | |
Belgium/Luxembourg/Netherlands | 13.0 | % | 13.0 | % | 3.5 | % | 13.0 | % | 13.0 | % | 2.0 | % | |
Norway | 4.0 | % | 4.0 | % | 2.0 | % | 3.5 | % | 4.0 | % | 1.5 | % | |
Sweden | 3.0 | % | 3.0 | % | 1.5 | % | 3.0 | % | 3.0 | % | 1.0 | % | |
Iceland[2] | 1.0 | % | 1.0 | % | (4.0 | )% | 1.0 | % | 0.5 | % | 150.5 | % | |
Total | 100.0 | % | 100.0 | % | 3.5 | % | 100.0 | % | 100.0 | % | 1.5 | % |
[1] | Spain/Portugal/Andorra is also referred to as Iberia. |
[2] | Iceland was acquired in July 2016. |
Comparable Volume - Selling Day Shift In millions of unit cases, prior period volume recast using current year selling days[1] | Fourth Quarter Ended | Year Ended | |||||||||||
31 December 2017 | 31 December 2016 | % Change | 31 December 2017 | 31 December 2016 | % Change | ||||||||
Volume | 608 | 603 | 0.5 | % | 2,510 | 2,502 | 0.5 | % | |||||
Impact of selling day shift | n/a | n/a | n/a | n/a | (7 | ) | n/a | ||||||
Comparable volume | 608 | 603 | 0.5 | % | 2,510 | 2,495 | 0.5 | % |
[1] | A unit case equals approximately 5.678 litres or 24 8-ounce servings, a typical volume measure used in our industry. |
Comparable Volume by Brand Category Adjusted for selling day shift | Fourth Quarter Ended | Year Ended | |||||||||||
31 December 2017 | 31 December 2016 | Volume % Change | 31 December 2017 | 31 December 2016 | Volume % Change | ||||||||
% of Total | % of Total | % of Total | % of Total | ||||||||||
Sparkling | 87.0 | % | 87.0 | % | 1.0 | % | 85.0 | % | 85.5 | % | 0.5 | % | |
Coca-Cola Trademark | 65.5 | % | 66.5 | % | (0.5 | )% | 63.5 | % | 64.5 | % | (0.5 | )% | |
Sparkling Flavours and Energy | 21.5 | % | 20.5 | % | 5.0 | % | 21.5 | % | 21.0 | % | 4.0 | % | |
Stills | 13.0 | % | 13.0 | % | 0.5 | % | 15.0 | % | 14.5 | % | 1.0 | % | |
Juice, Isotonics and Other | 7.0 | % | 7.0 | % | 2.5 | % | 8.0 | % | 7.5 | % | 2.5 | % | |
Water | 6.0 | % | 6.0 | % | (2.0 | )% | 7.0 | % | 7.0 | % | (1.5 | )% | |
Total | 100.0 | % | 100.0 | % | 0.5 | % | 100.0 | % | 100.0 | % | 0.5 | % |
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Supplemental Financial Information - Cost of Sales and Operating Expenses |
Cost of Sales In millions of €, except per case data which is calculated prior to rounding | Fourth Quarter Ended | Year Ended | |||||||||||
31 December 2017 | 31 December 2016 | % Change | 31 December 2017 | 31 December 2016 | % Change | ||||||||
As reported | 1,677 | 1,559 | 7.5 | % | 6,772 | 5,584 | 21.5 | % | |||||
Adjust: Total items impacting comparability[1] | (59 | ) | 6 | (1,083.5 | )% | (33 | ) | 1,011 | (103.5 | )% | |||
Comparable | 1,618 | 1,565 | 3.5 | % | 6,739 | 6,595 | 2.0 | % | |||||
Adjust: Impact of fx changes | 12 | n/a | (0.5 | )% | 85 | n/a | (1.5 | )% | |||||
Comparable & fx-neutral | 1,630 | 1,565 | 4.0 | % | 6,824 | 6,595 | 3.5 | % | |||||
Cost of sales per unit case | 2.68 | 2.60 | 3.5 | % | 2.72 | 2.64 | 3.0 | % |
[1] | Amounts include items impacting comparability during the periods presented. Additionally, for periods prior to 27 May 2016, amounts include the results of Germany and Iberia as if the Merger had occurred at the beginning of the presented period. |
Operating Expenses In millions of € | Fourth Quarter Ended | Year Ended | |||||||||||
31 December 2017 | 31 December 2016 | % Change | 31 December 2017 | 31 December 2016 | % Change | ||||||||
As reported | 787 | 887 | (11.5 | )% | 3,030 | 2,698 | 12.5 | % | |||||
Adjust: Total items impacting comparability[1] | (84 | ) | (186 | ) | (55.0 | )% | (192 | ) | 213 | (190.0 | )% | ||
Comparable | 703 | 701 | 0.5 | % | 2,838 | 2,911 | (2.5 | )% | |||||
Adjust: Impact of fx changes | 6 | n/a | (0.5 | )% | 31 | n/a | (1.0 | )% | |||||
Comparable & fx-neutral | 709 | 701 | 1.0 | % | 2,869 | 2,911 | (1.5 | )% |
[1] | Amounts include items impacting comparability during the periods presented. Additionally, for periods prior to 27 May 2016, amounts include the results of Germany and Iberia as if the Merger had occurred at the beginning of the presented period. |
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Supplemental Financial Information - Free Cash Flow |
Free Cash Flow[1] In millions of € | Year Ended | ||
31 December 2017 | |||
Net cash flows from operating activities | 1,623 | ||
Less: Purchases of property, plant and equipment | (484 | ) | |
Less: Purchases of capitalised software | (36 | ) | |
Less: Interest paid | (94 | ) | |
Add: Disposals of property, plant and equipment | 32 | ||
Free cash flow | 1,041 |
[1] | Free cash flow is defined as net cash flows from operations, less capital expenditures and interest paid, plus proceeds from capital disposals. |
Supplemental Financial Information - Borrowings |
Net Debt In millions of € | As at | Credit Ratings As of 14 February 2018 | ||||||
31 December 2017 | Moody’s | Standard & Poor’s | ||||||
Total borrowings | 5,748 | Long-term rating | A3 | BBB+ | ||||
Add: fx impact of non-EUR borrowings | 66 | Outlook | Stable | Stable | ||||
Adjusted total borrowings | 5,814 | Note: Our credit ratings can be materially influenced by a number of factors including, but not limited to, acquisitions, investment decisions and working capital management activities of TCCC and/or changes in the credit rating of TCCC. | ||||||
Less: cash and cash equivalents | (360 | ) | ||||||
Net debt | 5,454 |
Supplemental Financial Information - Net Debt to Adjusted EBITDA |
Adjusted EBITDA In millions of € | Year Ended | ||
31 December 2017 | |||
Reported profit after tax | 688 | ||
Taxes | 471 | ||
Finance costs, net | 100 | ||
Non-operating items | 1 | ||
Reported operating profit | 1,260 | ||
Depreciation and amortisation | 490 | ||
Reported EBITDA | 1,750 | ||
Items impacting comparability | |||
Merger effects[1] | (20 | ) | |
Mark-to-market effects[2] | (6 | ) | |
Restructuring Charges[3] | 218 | ||
Merger and Integration Related Costs[4] | 4 | ||
Litigation provision[5] | 5 | ||
Adjusted EBITDA | 1,951 | ||
Net Debt to EBITDA | 3.1 | ||
Net Debt to Adjusted EBITDA | 2.8 |
[1] | Adjustments to reflect Germany and Iberia financial results as if the Merger had occurred at the beginning of each period (if applicable), the impact of acquisition accounting including final fair values of the acquired inventory, property, plant, and equipment and intangibles from Germany and Iberia, final acquisition accounting related adjustments and associated impact on depreciation and amortisation expense, and additional debt financing cost incurred by CCEP in connection with the Merger. |
[2] | Amounts represent the net out-of-period mark-to-market impact of non-designated commodity hedges. |
[3] | Amounts represent restructuring charges related to business transformation activities, excluding depreciation that is included in depreciation and amortisation above. |
[4] | Amounts represent costs associated with the Merger to form CCEP. |
[5] | Amount represents a provision recorded for ongoing litigation. |
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Supplemental Financial Information - Financial Position |
Statement of Financial Position In millions of € | As at | |||||
31 December 2017 | 31 December 2016 | |||||
Non-current assets | 14,880 | 15,143 | ||||
Current assets | 3,314 | 3,425 | ||||
Total assets | 18,194 | 18,568 | ||||
Non-current liabilities | 8,222 | 8,355 | ||||
Current liabilities | 3,287 | 3,752 | ||||
Total liabilities | 11,509 | 12,107 | ||||
Total equity | 6,685 | 6,461 | ||||
Total equity and liabilities | 18,194 | 18,568 |
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Supplementary Financial Information - First, Second, and Third Quarter of 2017 and 2016 |
First-Quarter 2017 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||
CCEP | Merger effects[1] | Mark-to-market effects[2] | Restructuring charges[3] | Merger and integration related costs[4] | CCEP | |||||||||
Revenue | 2,382 | — | — | — | — | 2,382 | ||||||||
Cost of sales | 1,468 | 23 | 11 | (3 | ) | — | 1,499 | |||||||
Gross profit | 914 | (23 | ) | (11 | ) | 3 | — | 883 | ||||||
Operating expenses | 695 | (4 | ) | (2 | ) | (17 | ) | (1 | ) | 671 | ||||
Operating profit | 219 | (19 | ) | (9 | ) | 20 | 1 | 212 | ||||||
Total finance costs, net | 24 | — | — | — | — | 24 | ||||||||
Non-operating items | — | — | — | — | — | — | ||||||||
Profit before taxes | 195 | (19 | ) | (9 | ) | 20 | 1 | 188 | ||||||
Taxes | 48 | (5 | ) | (2 | ) | 7 | — | 48 | ||||||
Profit after taxes | 147 | (14 | ) | (7 | ) | 13 | 1 | 140 | ||||||
Diluted earnings per share (€) | 0.30 | 0.29 | ||||||||||||
Comparable diluted common shares outstanding | 488 |
First-Quarter 2016 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||
CCEP | Merger effects(1) | Mark-to- market effects(2) | Restructuring charges(3) | Merger related costs(4) | CCEP | |||||||||
Revenue | 1,375 | 1,014 | — | — | — | 2,389 | ||||||||
Cost of sales | 867 | 601 | 3 | (3 | ) | — | 1,468 | |||||||
Gross profit | 508 | 413 | (3 | ) | 3 | — | 921 | |||||||
Operating expenses | 403 | 551 | 1 | (220 | ) | (13 | ) | 722 | ||||||
Operating profit | 105 | (138 | ) | (4 | ) | 223 | 13 | 199 | ||||||
Total finance costs, net | 22 | 8 | — | — | — | 30 | ||||||||
Non-operating items | 2 | — | — | — | — | 2 | ||||||||
Profit before taxes | 81 | (146 | ) | (4 | ) | 223 | 13 | 167 | ||||||
Taxes | 22 | (41 | ) | (1 | ) | 56 | 3 | 39 | ||||||
Profit after taxes | 59 | (105 | ) | (3 | ) | 167 | 10 | 128 | ||||||
Diluted earnings per share (€) | 0.25 | 0.26 | ||||||||||||
Reported diluted common shares outstanding | 232 | |||||||||||||
Adjust: Capital structure share impact related to the Merger | 255 | |||||||||||||
Comparable diluted common shares outstanding | 487 |
[1] | Adjustments to reflect Germany and Iberia financial results as if the Merger had occurred at the beginning of each period (if applicable), the impact of acquisition accounting including final fair values of the acquired inventory, property, plant, and equipment and intangibles from Germany and Iberia, final acquisition accounting related adjustments and associated impact on depreciation and amortisation expense, and additional debt financing cost incurred by CCEP in connection with the Merger. |
[2] | Amounts represent the net out-of-period mark-to-market impact of non-designated commodity hedges. |
[3] | Amounts represent restructuring charges related to business transformation activities. |
[4] | Amounts represent costs associated with the Merger to form CCEP. |
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Key Financial Measures Unaudited, fx impact calculated by recasting current year results at prior year rates | First Quarter Ended 31 March 2017 | |||||||||||||||||||
€ million | % change | |||||||||||||||||||
As Reported | Comparable | Fx-Impact | As Reported | Comparable | Fx-Impact | Comparable Fx-Neutral | ||||||||||||||
Revenue | 2,382 | 2,382 | (42 | ) | 73.0 | % | (0.5 | )% | (2.0 | )% | 1.5 | % | ||||||||
Cost of sales | 1,468 | 1,499 | (25 | ) | 69.5 | % | 2.0 | % | (2.0 | )% | 4.0 | % | ||||||||
Operating expenses | 695 | 671 | (9 | ) | 72.5 | % | (7.0 | )% | (1.0 | )% | (6.0 | )% | ||||||||
Operating profit | 219 | 212 | (8 | ) | 108.5 | % | 6.5 | % | (4.0 | )% | 10.5 | % | ||||||||
Profit after taxes | 147 | 140 | (6 | ) | 149.0 | % | 9.5 | % | (4.5 | )% | 14.0 | % | ||||||||
Diluted earnings per share (€) | 0.30 | 0.29 | (0.01 | ) | 20.0 | % | 11.5 | % | (4.0 | )% | 15.5 | % |
Revenue In millions of €, except per case data which is calculated prior to rounding | First Quarter Ended | |||||
31 March 2017 | 1 April 2016 | % Change | ||||
As reported | 2,382 | 1,375 | 73.0 | % | ||
Adjust: Total items impacting comparability[1] | n/a | 1,014 | (100.0 | )% | ||
Comparable | 2,382 | 2,389 | (0.5 | )% | ||
Adjust: Impact of fx changes | 42 | n/a | (2.0 | )% | ||
Comparable & fx-neutral | 2,424 | 2,389 | 1.5 | % | ||
Revenue per unit case | 4.44 | 4.34 | 2.5 | % |
Cost of Sales In millions of €, except per case data which is calculated prior to rounding | First Quarter Ended | |||||
31 March 2017 | 1 April 2016 | % Change | ||||
As reported | 1,468 | 867 | 69.5 | % | ||
Adjust: Total items impacting comparability[1] | 31 | 601 | (95.0 | )% | ||
Comparable | 1,499 | 1,468 | 2.0 | % | ||
Adjust: Impact of fx changes | 25 | n/a | (2.0 | )% | ||
Comparable & fx-neutral | 1,524 | 1,468 | 4.0 | % | ||
Cost of sales per unit case | 2.79 | 2.67 | 4.5 | % |
[1] | Amounts include items impacting comparability during the periods presented. Additionally, for periods prior to 27 May 2016, amounts include the results of Germany and Iberia as if the Merger had occurred at the beginning of the presented period. |
P a g e | 16 | |
Second-Quarter 2017 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||
CCEP | Merger effects(1) | Mark-to- market effects(2) | Restructuring charges(3) | Merger related costs(4) | CCEP | |||||||||
Revenue | 3,054 | (7 | ) | — | — | — | 3,047 | |||||||
Cost of sales | 1,853 | 10 | (9 | ) | (2 | ) | — | 1,852 | ||||||
Gross profit | 1,201 | (17 | ) | 9 | 2 | — | 1,195 | |||||||
Operating expenses | 785 | (10 | ) | (3 | ) | (31 | ) | (2 | ) | 739 | ||||
Operating profit | 416 | (7 | ) | 12 | 33 | 2 | 456 | |||||||
Total finance costs, net | 27 | — | — | — | — | 27 | ||||||||
Non-operating items | — | — | — | — | — | — | ||||||||
Profit before taxes | 389 | (7 | ) | 12 | 33 | 2 | 429 | |||||||
Taxes | 91 | (1 | ) | 2 | 13 | 1 | 106 | |||||||
Profit after taxes | 298 | (6 | ) | 10 | 20 | 1 | 323 | |||||||
Diluted earnings per share (€) | 0.61 | 0.66 | ||||||||||||
Comparable diluted common shares outstanding | 489 |
Second-Quarter 2016 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||||
CCEP | Merger effects(1) | Mark-to- market effects(2) | Restructuring charges(3) | Merger related costs(4) | Net tax items[5] | CCEP | ||||||||||
Revenue | 2,170 | 718 | — | — | — | — | 2,888 | |||||||||
Cost of sales | 1,362 | 391 | 11 | (4 | ) | — | — | 1,760 | ||||||||
Gross profit | 808 | 327 | (11 | ) | 4 | — | — | 1,128 | ||||||||
Operating expenses | 599 | 349 | 9 | (118 | ) | (106 | ) | — | 733 | |||||||
Operating profit | 209 | (22 | ) | (20 | ) | 122 | 106 | — | 395 | |||||||
Total finance costs, net | 39 | 4 | — | — | (5 | ) | — | 38 | ||||||||
Non-operating items | 2 | (1 | ) | — | — | — | — | 1 | ||||||||
Profit before taxes | 168 | (25 | ) | (20 | ) | 122 | 111 | — | 356 | |||||||
Taxes | 17 | 19 | (5 | ) | 32 | 25 | (3 | ) | 85 | |||||||
Profit after taxes | 151 | (44 | ) | (15 | ) | 90 | 86 | 3 | 271 | |||||||
Diluted earnings per share (€) | 0.45 | 0.56 | ||||||||||||||
Reported diluted common shares outstanding | 332 | |||||||||||||||
Adjust: Capital structure share impact related to the Merger | 156 | |||||||||||||||
Comparable diluted common shares outstanding | 488 |
[1] | Adjustments to reflect Germany and Iberia financial results as if the Merger had occurred at the beginning of each period (if applicable), the impact of acquisition accounting including final fair values of the acquired inventory, property, plant, and equipment and intangibles from Germany and Iberia, final acquisition accounting related adjustments and associated impact on depreciation and amortisation expense, and additional debt financing cost incurred by CCEP in connection with the Merger. |
[2] | Amounts represent the net out-of-period mark-to-market impact of non-designated commodity hedges. |
[3] | Amounts represent restructuring charges related to business transformation activities. |
[4] | Amounts represent costs associated with the Merger to form CCEP. |
[5] | Amounts represent the deferred tax impact related to income tax rate and law changes. |
P a g e | 17 | |
Key Financial Measures Unaudited, fx impact calculated by recasting current year results at prior year rates | Second Quarter Ended 30 June 2017 | |||||||||||||||||||
€ million | % change | |||||||||||||||||||
As Reported | Comparable | Fx-Impact | As Reported | Comparable | Fx-Impact | Comparable Fx-Neutral | ||||||||||||||
Revenue | 3,054 | 3,047 | (52 | ) | 40.5 | % | 5.5 | % | (2.0 | )% | 7.5 | % | ||||||||
Cost of sales | 1,853 | 1,852 | (31 | ) | 36.0 | % | 5.0 | % | (2.0 | )% | 7.0 | % | ||||||||
Operating expenses | 785 | 739 | (10 | ) | 31.0 | % | 1.0 | % | (1.0 | )% | 2.0 | % | ||||||||
Operating profit | 416 | 456 | (11 | ) | 99.0 | % | 15.5 | % | (2.5 | )% | 18.0 | % | ||||||||
Profit after taxes | 298 | 323 | (8 | ) | 97.5 | % | 19.0 | % | (3.0 | )% | 22.0 | % | ||||||||
Diluted earnings per share (€) | 0.61 | 0.66 | (0.02 | ) | 35.5 | % | 18.0 | % | (3.0 | )% | 21.0 | % |
Revenue In millions of €, except per case data which is calculated prior to rounding | Second Quarter Ended | |||||
30 June 2017 | 1 July 2016 | % Change | ||||
As reported | 3,054 | 2,170 | 40.5 | % | ||
Adjust: Total items impacting comparability[1] | (7 | ) | 718 | (101.0 | )% | |
Comparable | 3,047 | 2,888 | 5.5 | % | ||
Adjust: Impact of fx changes | 52 | n/a | (2.0 | )% | ||
Comparable & fx-neutral | 3,099 | 2,888 | 7.5 | % | ||
Revenue per unit case | 4.51 | 4.39 | 2.5 | % |
Cost of Sales In millions of €, except per case data which is calculated prior to rounding | Second Quarter Ended | |||||
30 June 2017 | 1 July 2016 | % Change | ||||
As reported | 1,853 | 1,362 | 36.0 | % | ||
Adjust: Total items impacting comparability[1] | (1 | ) | 398 | (100.5 | )% | |
Comparable | 1,852 | 1,760 | 5.0 | % | ||
Adjust: Impact of fx changes | 31 | n/a | (2.0 | )% | ||
Comparable & fx-neutral | 1,883 | 1,760 | 7.0 | % | ||
Cost of sales per unit case | 2.74 | 2.67 | 2.5 | % |
[1] | Amounts include items impacting comparability during the periods presented. Additionally, for periods prior to 27 May 2016, amounts include the results of Germany and Iberia as if the Merger had occurred at the beginning of the presented period. |
P a g e | 18 | |
Third-Quarter 2017 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||||
CCEP | Merger effects(1) | Mark-to- market effects(2) | Restructuring charges(3) | Merger related costs(4) | Litigation provision[5] | CCEP | ||||||||||
Revenue | 2,964 | — | — | — | — | — | 2,964 | |||||||||
Cost of sales | 1,774 | 2 | 1 | (7 | ) | — | — | 1,770 | ||||||||
Gross profit | 1,190 | (2 | ) | (1 | ) | 7 | — | — | 1,194 | |||||||
Operating expenses | 763 | (1 | ) | 3 | (34 | ) | (1 | ) | (5 | ) | 725 | |||||
Operating profit | 427 | (1 | ) | (4 | ) | 41 | 1 | 5 | 469 | |||||||
Total finance costs, net | 28 | — | — | — | — | (1 | ) | 27 | ||||||||
Non-operating items | 2 | — | — | — | — | — | 2 | |||||||||
Profit before taxes | 397 | (1 | ) | (4 | ) | 41 | 1 | 6 | 440 | |||||||
Taxes | 93 | — | — | 14 | — | 1 | 108 | |||||||||
Profit after taxes | 304 | (1 | ) | (4 | ) | 27 | 1 | 5 | 332 | |||||||
Diluted earnings per share (€) | 0.62 | 0.68 | ||||||||||||||
Comparable diluted common shares outstanding | 489 |
Third-Quarter 2016 Unaudited, in millions of € except per share data which is calculated prior to rounding | As Reported | Items Impacting Comparability | Comparable | |||||||||||||
CCEP | Merger effects(1) | Mark-to- market effects(2) | Restructuring charges(3) | Merger related costs(4) | Net tax items[6] | CCEP | ||||||||||
Revenue | 3,010 | — | — | — | — | — | 3,010 | |||||||||
Cost of sales | 1,796 | 8 | 3 | (5 | ) | — | — | 1,802 | ||||||||
Gross profit | 1,214 | (8 | ) | (3 | ) | 5 | — | — | 1,208 | |||||||
Operating expenses | 809 | 1 | 1 | (48 | ) | (8 | ) | — | 755 | |||||||
Operating profit | 405 | (9 | ) | (4 | ) | 53 | 8 | — | 453 | |||||||
Total finance costs, net | 29 | — | — | — | — | — | 29 | |||||||||
Non-operating items | 1 | — | — | — | — | — | 1 | |||||||||
Profit before taxes | 375 | (9 | ) | (4 | ) | 53 | 8 | — | 423 | |||||||
Taxes | 48 | (3 | ) | (1 | ) | 20 | 3 | 39 | 106 | |||||||
Profit after taxes | 327 | (6 | ) | (3 | ) | 33 | 5 | (39 | ) | 317 | ||||||
Diluted earnings per share (€) | 0.67 | 0.65 | ||||||||||||||
Comparable diluted common shares outstanding | 488 |
[1] | Adjustments to reflect Germany and Iberia financial results as if the Merger had occurred at the beginning of each period (if applicable), the impact of acquisition accounting including final fair values of the acquired inventory, property, plant, and equipment and intangibles from Germany and Iberia, final acquisition accounting related adjustments and associated impact on depreciation and amortisation expense, and additional debt financing cost incurred by CCEP in connection with the Merger. |
[2] | Amounts represent the net out-of-period mark-to-market impact of non-designated commodity hedges. |
[3] | Amounts represent restructuring charges related to business transformation activities. |
[4] | Amounts represent costs associated with the Merger to form CCEP. |
[5] | Amount represents a provision recorded for ongoing litigation. |
[6] | Amounts represent the deferred tax impact related to income tax rate and law changes. |
P a g e | 19 | |
Key Financial Measures Unaudited, fx impact calculated by recasting current year results at prior year rates | Third Quarter Ended 29 September 2017 | |||||||||||||||||||
€ million | % change | |||||||||||||||||||
As Reported | Comparable | Fx-Impact | As Reported | Comparable | Fx-Impact | Comparable Fx-Neutral | ||||||||||||||
Revenue | 2,964 | 2,964 | (29 | ) | (1.5 | )% | (1.5 | )% | (1.0 | )% | (0.5 | )% | ||||||||
Cost of sales | 1,774 | 1,770 | (17 | ) | (1.0 | )% | (2.0 | )% | (1.0 | )% | (1.0 | )% | ||||||||
Operating expenses | 763 | 725 | (7 | ) | (5.5 | )% | (4.0 | )% | (1.0 | )% | (3.0 | )% | ||||||||
Operating profit | 427 | 469 | (5 | ) | 5.5 | % | 3.5 | % | (1.0 | )% | 4.5 | % | ||||||||
Profit after taxes | 304 | 332 | (4 | ) | (7.0 | )% | 4.5 | % | (1.5 | )% | 6.0 | % | ||||||||
Diluted earnings per share (€) | 0.62 | 0.68 | (0.01 | ) | (7.5 | )% | 4.5 | % | (1.0 | )% | 5.5 | % |
Revenue In millions of €, except per case data which is calculated prior to rounding | Third Quarter Ended | |||||
29 September 2017 | 30 September 2016 | % Change | ||||
As reported | 2,964 | 3,010 | (1.5 | )% | ||
Adjust: Total items impacting comparability[1] | n/a | n/a | n/a | |||
Comparable | 2,964 | 3,010 | (1.5 | )% | ||
Adjust: Impact of fx changes | 29 | n/a | (1.0 | )% | ||
Comparable & fx-neutral | 2,993 | 3,010 | (0.5 | )% | ||
Revenue per unit case | 4.47 | 4.36 | 2.5 | % |
Cost of Sales In millions of €, except per case data which is calculated prior to rounding | Third Quarter Ended | |||||
29 September 2017 | 30 September 2016 | % Change | ||||
As reported | 1,774 | 1,796 | (1.0 | )% | ||
Adjust: Total items impacting comparability[1] | (4 | ) | 6 | (166.5 | )% | |
Comparable | 1,770 | 1,802 | (2.0 | )% | ||
Adjust: Impact of fx changes | 17 | n/a | (1.0 | )% | ||
Comparable & fx-neutral | 1,787 | 1,802 | (1.0 | )% | ||
Cost of sales per unit case | 2.67 | 2.61 | 2.5 | % |
[1] | Amounts include items impacting comparability during the periods presented. Additionally, for periods prior to 27 May 2016, amounts include the results of Germany and Iberia as if the Merger had occurred at the beginning of the presented period. |
P a g e | 20 | |
Year Ended | |||||||||
31 December 2017 | 31 December 2016 | 31 December 2015 | |||||||
€ million | € million | € million | |||||||
Revenue | 11,062 | 9,133 | 6,329 | ||||||
Cost of sales | (6,772 | ) | (5,584 | ) | (4,017 | ) | |||
Gross profit | 4,290 | 3,549 | 2,312 | ||||||
Selling and distribution expenses | (2,124 | ) | (1,615 | ) | (919 | ) | |||
Administrative expenses | (906 | ) | (1,083 | ) | (634 | ) | |||
Operating profit | 1,260 | 851 | 759 | ||||||
Finance income | 48 | 31 | 24 | ||||||
Finance costs | (148 | ) | (154 | ) | (134 | ) | |||
Total finance costs, net | (100 | ) | (123 | ) | (110 | ) | |||
Non-operating items | (1 | ) | (9 | ) | (5 | ) | |||
Profit before taxes | 1,159 | 719 | 644 | ||||||
Taxes | (471 | ) | (170 | ) | (131 | ) | |||
Profit after taxes | 688 | 549 | 513 | ||||||
Basic earnings per share (€) | 1.42 | 1.45 | 2.23 | ||||||
Diluted earnings per share (€) | 1.41 | 1.42 | 2.19 |
P a g e | 21 | |
31 December 2017 | 31 December 2016 | |||||
€ million | € million | |||||
ASSETS | ||||||
Non-current: | ||||||
Intangible assets | 8,384 | 8,344 | ||||
Goodwill | 2,520 | 2,427 | ||||
Property, plant and equipment | 3,837 | 3,993 | ||||
Non-current derivative assets | 2 | 35 | ||||
Deferred tax assets | 56 | 274 | ||||
Other non-current assets | 81 | 70 | ||||
Total non-current assets | 14,880 | 15,143 | ||||
Current: | ||||||
Current derivative assets | 20 | 23 | ||||
Current tax assets | 25 | 16 | ||||
Inventories | 650 | 673 | ||||
Amounts receivable from related parties | 75 | 95 | ||||
Trade accounts receivable | 1,732 | 1,860 | ||||
Other current assets | 452 | 372 | ||||
Cash and cash equivalents | 360 | 386 | ||||
Total current assets | 3,314 | 3,425 | ||||
Total assets | 18,194 | 18,568 | ||||
LIABILITIES | ||||||
Non-current: | ||||||
Borrowings, less current portion | 5,474 | 5,562 | ||||
Employee benefit liabilities | 162 | 278 | ||||
Non-current provisions | 48 | 89 | ||||
Non-current derivative liabilities | 93 | 1 | ||||
Deferred tax liabilities | 2,237 | 2,248 | ||||
Other non-current liabilities | 208 | 177 | ||||
Total non-current liabilities | 8,222 | 8,355 | ||||
Current: | ||||||
Current portion of borrowings | 274 | 875 | ||||
Current portion of employee benefit liabilities | 21 | 24 | ||||
Current provisions | 194 | 221 | ||||
Current derivative liabilities | 1 | 8 | ||||
Current tax liabilities | 86 | 44 | ||||
Amounts payable to related parties | 178 | 162 | ||||
Trade and other payables | 2,533 | 2,418 | ||||
Total current liabilities | 3,287 | 3,752 | ||||
Total liabilities | 11,509 | 12,107 | ||||
EQUITY | ||||||
Share capital | 5 | 5 | ||||
Share premium | 127 | 114 | ||||
Merger reserves | 287 | 287 | ||||
Other reserves | (503 | ) | (419 | ) | ||
Retained earnings | 6,769 | 6,474 | ||||
Total equity | 6,685 | 6,461 | ||||
Total equity and liabilities | 18,194 | 18,568 |
P a g e | 22 | |
Year Ended | ||||||
31 December 2017 | 31 December 2016 | |||||
€ million | € million | |||||
Cash flows from operating activities: | ||||||
Profit before taxes | 1,159 | 719 | ||||
Adjustments to reconcile profit before tax to net cash flows from operating activities: | ||||||
Depreciation | 443 | 333 | ||||
Amortisation of intangible assets | 47 | 39 | ||||
Share-based payment expense | 14 | 42 | ||||
Finance costs, net | 100 | 123 | ||||
Income taxes paid | (247 | ) | (187 | ) | ||
Changes in assets and liabilities: | ||||||
Decrease/(increase) in trade accounts receivable | 108 | 87 | ||||
Decrease/(increase) in inventories | 16 | 61 | ||||
Increase/(decrease) in trade and other payables | 142 | 155 | ||||
Increase/(decrease) in provisions | (67 | ) | 37 | |||
Change in other operating assets and liabilities | (92 | ) | (165 | ) | ||
Net cash flows from operating activities | 1,623 | 1,244 | ||||
Cash flows from investing activities: | ||||||
Purchases of property, plant and equipment | (484 | ) | (459 | ) | ||
Purchases of intangible assets | (36 | ) | (38 | ) | ||
Proceeds from sales of property, plant and equipment | 32 | 12 | ||||
Settlement of net investment hedges | — | (8 | ) | |||
Cash from acquisition of bottling operations | — | 110 | ||||
Net cash flows used in investing activities | (488 | ) | (383 | ) | ||
Cash flows from financing activities: | ||||||
Proceeds from borrowings, net of issuance costs | 350 | 3,174 | ||||
Repayments on third party borrowings | (1,180 | ) | (241 | ) | ||
Changes in short-term borrowings | 250 | (183 | ) | |||
Interest paid | (94 | ) | (110 | ) | ||
Dividends paid | (489 | ) | (204 | ) | ||
Exercise of employee share options | 13 | 18 | ||||
Repurchases of share-based payments | — | (27 | ) | |||
Repayment of loan with TCCC assumed in acquisition | — | (73 | ) | |||
Return of capital to CCE shareholders | — | (2,963 | ) | |||
Other financing activities, net | (2 | ) | (17 | ) | ||
Net cash flows used in financing activities | (1,152 | ) | (626 | ) | ||
Net change in cash and cash equivalents | (17 | ) | 235 | |||
Net effect of currency exchange rate changes on cash and cash equivalents | (9 | ) | (5 | ) | ||
Cash and cash equivalents at beginning of period | 386 | 156 | ||||
Cash and cash equivalents at end of period | 360 | 386 |
COCA-COLA EUROPEAN PARTNERS PLC | ||
(Registrant) | ||
Date: 15 February 2018 | By: | /s/ Nik Jhangiani |
Name: | Nik Jhangiani | |
Title: | Chief Financial Officer |