COCA-COLA EUROPACIFIC PARTNERS PLC — FY2023 Form 20-F
Reporting period: Fiscal year ended 31 December 2023. This is an annual report, not a standalone Q4 filing; separate Q4 financial results are not clearly provided. Financial statements are prepared under IFRS as issued by the IASB and presented in euros.
Business context and performance
CCEP makes, sells and distributes beverages across Europe and Asia Pacific, operating in 31 countries. Reported revenue was €18.3 billion; the company reported 32,315 employees at year-end. The Philippines acquisition completed after the reporting period and is discussed below.
Key financial metrics
| Metric | FY2023 | Prior comparable period | Change / context |
|---|---|---|---|
| Revenue | €18.302bn | €17.320bn | +5.5% reported; +8.0% comparable and FX-neutral |
| Volume | 3.279bn unit cases | 3.300bn | Down 0.5%; revenue per unit case rose 8.5% comparable and FX-neutral |
| Gross profit / margin | €6.720bn / approximately 36.7% | €6.224bn / approximately 35.9% | Margin calculated from reported figures |
| Operating profit / margin | €2.339bn / approximately 12.8% | €2.086bn / approximately 12.0% | +12.0% reported; comparable operating profit €2.373bn, +11.0% |
| Profit after tax / diluted EPS | €1.669bn / €3.63 | €1.521bn / €3.29 | Profit +9.5%; comparable diluted EPS €3.71, +12.0% comparable and FX-neutral |
| Operating cash flow | €2.806bn | €2.932bn | Down 4.3%, mainly reflecting the prior-year working-capital benefit |
| Comparable free cash flow | €1.734bn | €1.805bn | Down €71m; excludes specified unusual cash proceeds |
| Net debt / comparable EBITDA | €9.457bn / 3.0x | €10.206bn / 3.5x | Leverage returned to the top end of management’s target range |
| Liquidity | €1.419bn cash; €568m short-term investments | — | €1.8bn undrawn committed credit facility, maturing 2029 |
| Dividends | €841m paid; €1.84 per share | €763m; €1.68 per share | Per-share dividend increased approximately 9.5% |
Europe revenue rose 7.5% reported (8.5% FX-neutral) and volume grew 0.5%. API revenue declined 1.0% reported but rose 5.5% FX-neutral; volume fell 5.0%, primarily reflecting softer Indonesian consumer spending and SKU rationalisation. Comparable API operating profit rose 3.5% reported and 10.5% FX-neutral. Cost inflation, notably sugar and aluminium, was partly offset by pricing, productivity and lower recycled-PET and energy costs.
Material changes, outlook and risks
- Philippines acquisition: CCEP and Aboitiz Equity Ventures completed the acquisition of Coca-Cola Beverages Philippines, Inc. on 23 February 2024, after year-end. Total consideration was US$1.68bn; CCEP paid US$1.0bn for its 60% interest. Purchase-price allocation was incomplete when the filing was prepared. CCEP said the deal was expected to be EPS-accretive from completion.
- 2024 outlook: Management emphasized continued investment, affordability and relevance amid uncertain consumer sentiment. It cited nearly €1bn of planned investment in technology, coolers, capacity and sustainability. No clear numerical 2024 revenue or earnings guidance is provided in the supplied filing text.
- Significant items: FY2023 included €94m of restructuring charges and €27m accelerated amortisation following the planned end of the Beam Suntory relationship in Australia and New Zealand. Other income included €54m of property-sale gains, €35m proceeds from mineral-rights sales and €18m of mineral-rights royalties. Comparable results exclude selected items; they are non-IFRS measures.
- Legal and tax exposure: The company disclosed €1.127bn of guarantees related to litigation and tax matters, without expecting significant additional liabilities from the guarantees. It contests a proposed Spanish VAT assessment of approximately €250m and has not recorded a liability for certain concentrate-purchase tax assessments it is defending. A €17m provision was established for an ongoing German labour-law matter.
- Business risks: Key exposures include inflation, commodity and currency volatility, geopolitical disruption, consumer affordability and private-label competition, packaging regulation and taxes, water scarcity, climate risks, cyber incidents, and dependence on The Coca-Cola Company (TCCC). TCCC products generated approximately 87% of FY2023 revenue; concentrate pricing and marketing support are substantially subject to TCCC’s terms and discretion.
- Other notable matters: One contractor fatality occurred in Indonesia. The auditor issued an unqualified opinion on the financial statements and found internal control over financial reporting effective. Customer marketing programmes totaled €5.4bn and accrued customer marketing costs were €1.34bn; both were significant audit focus areas. TCCC bottling rights of €11.8bn are treated as indefinite-lived intangible assets, a significant management judgement.
Important facts for investors to verify
- Review reported results alongside comparable and FX-neutral measures, including the items excluded from those measures and the lower year-on-year comparable free cash flow.
- Assess the Philippines acquisition’s integration, financing, purchase-price allocation and contribution to earnings and leverage after completion.
- Monitor volume and price/mix separately, especially continued weakness in Indonesia and the effect of affordability-focused pricing.
- Track debt maturities, the 3.0x net-debt-to-comparable-EBITDA ratio, acquisition-related borrowing and the company’s investment and dividend commitments.
- Follow developments in the Spanish VAT dispute, contested tax assessments, uncertain tax provisions and the German labour-law matter.
- Evaluate TCCC franchise dependence and the assumptions supporting indefinite lives for bottling rights, as well as packaging, water, climate and regulatory exposures.