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The SEC questions the book value of 12 billion in assets of Coca-Cola Europacific

The SEC questions the book value of 12 billion in assets of Coca-Cola Europacific

The United States stock market regulator (SEC) opened a consultation regarding the accounting policy of Coca-Cola Europacific (CCEP), the main bottler of the soft drink giant, in which it calls into question intangible assets of 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 (US$ 12,867 million).

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 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 “coherent” and “adequate”.

CCEP earned 1,669 million euros (US$ 1,808 million) in 2023, 9.5% more than the previous year, and its revenues totaled 18,302 million euros (US$ 18,832 million), which represents an increase of 5.5% compared to 2022 , according to the information provided this Friday to the National Securities Market Commission (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 US$ 3,603 million in 2023, 9.5% more annual, according to provisional results.

In the fourth quarter of 2023 alone, Iberia’s revenues totaled US$ 818 million, 9% more, after growth in volume driven by consumption outside the home and “solid” consumer demand, the company said.

In Europe, the bottler’s revenue rose 7.5% annually, to US$15.77 billion.

The CEO of the firm, Damian Gammell, pointed out that 2023 was “a great year”, since your “focus on leading brands, the excellent relationship with its customers and the solid execution in the market have been very favorable.”

The bottler reported a record dividend of US$1.99 per share in 2023, representing an annual increase of 9.5%, and the recent addition to the Nasdaq 100.

On the Madrid Stock Exchange, CCEP shares closed today at US$67.94 per share, 1.26% less than the previous day.

Source: Gestion

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