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SEC calls into question US$12.991 million in Coca-Cola bottler assets

SEC calls into question US$12.991 million in Coca-Cola bottler assets

The United States securities regulator (SEC) opened a consultation regarding the accounting policy of Coca Cola Europacific (CCEP), the main bottler of the soft drink giantin which it calls into question intangible assets with an indefinite life valued at almost 12,000 million euros (about US$ 12,991 million).

The bottling company, chaired by the Spanish Sol Daurella, explains this in the annual financial report published this Friday.

The document indicates that these assets are related to bottling agreements with The Coca Cola Company, the parent company, and as of December 31, 2022, they were valued at 11,874 million euros.

It also details that there is an open comment from the SEC, the US stock market regulator, regarding the accounting policy and information that CCEP has been providing for some time in relation to the treatment of TCCC bottling rights, which “were recognized as a result of business combinations and were valued on the basis of perpetual cash flows.

CCEP’s contracts with the parent company have a duration of ten years and there is the option to renew them for another decade, as the SEC explains on its website.

The regulator questions whether the bottling company accounts for such contracts as intangible assets with an indefinite life, which could lead to a reevaluation of the company’s accounting policy to limit the useful economic life of these assets.

The company, for its part, assures that it has responded to the comments and that it will continue to collaborate with the SEC staff in case new observations are raised.

On the other hand, the results published this Friday have been prepared in accordance with the current accounting policies and judgments established by the SEC, which the bottling company considers “consistent” and “adequate.”

CCEP earned 1,669 million euros in 2023, 9.5% more than the previous year, and its income totaled 18,302 million euros, which represents an increase of 5.5% compared to 2022, according to the information provided this Friday to the National Commission of the Stock Market (CNMV).

This Friday the bottler also announced that it has completed the joint acquisition of Coca-Cola Beverages Philippines with Aboitiz Equity Ventures.

It also indicated that in Iberia (Spain, Portugal and Andorra) the turnover of 3,325 million euros in 2023, 9.5% more annual, according to provisional results.

In the fourth quarter of 2023 alone, revenues in Iberia totaled 755 million euros, 9% more, after growth in volume driven by consumption outside the home and “solid” consumer demand, the company said.

In Europe, the bottler’s income rose by 7.5% annually, to 14,553 million euros.

The firm’s CEO, Damian Gammell, noted that 2023 was “a great year,” as its “focus on leading brands, excellent customer relationships and strong market execution have been very favorable.”

The bottler reported a record dividend of 1.84 euros per share in 2023, which represents an annual increase of 9.5%, and the recent incorporation to the Nasdaq 100.

On the Madrid Stock Exchange, CCEP shares closed today with a price of 62.70 euros per share, 1.26% less than the previous day.

Source: EFE

Source: Gestion

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